Shutdown Looms Large as U.S. House and Senate Advance Separate Spending Plans

The Democrat-led U.S. Senate forged ahead on Thursday with a bipartisan stopgap funding bill that aims to avert a fourth partial government shutdown in a decade. At the same time, in the House, they prepare to vote on partisan GOP spending bills.

The different paths of the two chambers increased the odds that federal agencies would run out of money Sunday, which would furlough hundreds of thousands of federal workers and halt a wide range of services from nutrition benefits to economic data releases.

The 76-22 vote in the Senate to open debate on a stopgap bill known as a continuing resolution (CR), which would extend federal spending until November 17 and authorize around $6 billion each for aid to Ukraine to defend itself against Russia and for domestic disaster response. 

The Senate measure has already been rejected by the GOP, who control the House of Representatives. 

The House planned to hold late-night votes on four partisan appropriations bills that wouldn’t alone prevent a shutdown, even if they could overcome the strong opposition from Dems and become a law. 

The House GOP, led by a small faction of the chamber’s hardline conservatives they control by a margin of 221-212, have rejected spending levels for fiscal year 2024 set in a deal Speaker of the House Kevin McCarthy negotiated with President Joe Biden in May.

The agreement included $1.59 trillion in discretionary spending for fiscal year 2024. Republicans in the House are demanding an additional $120 billion in cuts, along with tighter legislation that would halt the flow of immigrants at the southern U.S. border with Mexico. 

The funding fight focuses on a small slice of this fiscal year’s $6.4 trillion U.S. budget. Lawmakers aren’t considering cuts to popular benefits programs such as Medicare and Social Security. 

Rep. McCarthy is facing intense pressure from his caucus to achieve their goals. Several conservative hardliners have threatened to remove them from his leadership role if he passes a spending bill requiring any Democrat votes to pass. 

Former President Donald Trump has gone to social media to push his allies in Congress toward a shutdown. For his part, McCarthy suggested Thursday that a shutdown could be avoided if Democrats in the Senate agreed to address border issues in their stopgap measure. 

“I talked this morning to some Democratic senators over there that are more aligned with what we want to do. They want to do something about the border,” said McCarthy to reporters in the U.S. Capitol. We’re trying to work to see, could we put some border provisions in that current Senate bill that would actually make things a lot better,” said McCarthy.

Congress has ‘One option to avoid a shutdown’

The Senate measure passed two procedural hurdles this week with strong support from Republicans and Democrats. 

“Congress has only one option — one option — to avoid a shutdown: bipartisanship,” said Democrat Senate Majority Leader Chuck Schumer Thursday. “With bipartisanship, we can responsibly fund the government and avoid the sharp and unnecessary pain for the American people and the economy that a shutdown will bring.”

Without bipartisan agreement between senators to expedite the parliamentary process, the Senate is not likely to act on its stopgap measure until after the government shutdown.

Credit agencies have warned political polarization and brinkmanship are harming the U.S. financial outlook. Moody’s, the most recent rating agency to rate the U.S. government “Aaa” with a stable outlook, said Monday that a government shutdown would harm the country’s credit rating.

Fitch, a different significant rating agency, already downgraded the government of the U.S. to “AA+” after Congress flirted with defaulting earlier in the year on the nation’s debt.

The majority of Congress — including many Republicans in the Senate — has largely rejected House Republicans’ attempts to make the border situation the focus of the shutdown. 

“We can take the standard approach and fund the government for six weeks at the current rate of operations, or we can shut the government down in exchange for zero meaningful progress on policy,” said GOP Senate Minority Leader Mitch McConnell Wednesday.

The House is predicted to vote Friday on its short-term funding measure, a continuing resolution (CR). The success of it could depend on whether House GOP can pass fiscal 2024 spending bills for defense, homeland security, agriculture, and foreign and State Department operations in a voting session expected to end after midnight Thursday.

Three of the bills — foreign operations, agriculture, and defense — are opposed by some Republicans, legislators said. 

The House CR is expected to include conservative GOP border restrictions that won’t pass the Senate, meaning the risk of a shutdown remains high.