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U.S. Speaker of the House Kevin McCarthy (R-CA) makes his way to a Republican caucus meeting at the U.S. Capitol Building on September 20, 2023 in Washington, DC.
Kevin Dietsch | Getty Images
WASHINGTON — House Speaker Kevin McCarthy entered a crucial new phase Thursday in his grueling effort to pass a government spending bill through his fractured Republican caucus in time to avert a potentially damaging government shutdown set to begin Oct. 1.
Across the Capitol, Republicans in both the House and Senate held their breath to see what the California lawmaker and his lieutenants could pull off in the coming days.
“We want to avoid this shutdown however we can,” Oklahoma GOP Sen. Markwayne Mullin told CNBC Thursday.
“McCarthy is trying to work with his members to get the most conservative bill that they can pass, that can also be passed in the Senate,” Mullin said.
On Wednesday evening, House Republicans emerged from a two-hour caucus meeting in the basement of the Capitol expressing newfound optimism that McCarthy and his razor-thin majority would be able to resolve enough of their internal squabbles to pass a continuing resolution, or CR, to fund the government, potentially as early as this weekend.
“I think we made tremendous progress as an entire conference, we had a great discussion,” McCarthy told reporters as he left the meeting.
Markets opened Thursday morning on a negative note, weighed down by signs the Fed intends to raise interest rates later this year, and by the ongoing United Auto Workers strike.
But investors are also growing increasingly concerned that a government shutdown would cut into 4th quarter gross domestic product and, more broadly, that it would undermine global confidence in America’s ability to keep its own government open and operating.
“If we lapse in appropriations, a whole lot of very important things with the U.S. government begin a process of shuttering their services and it will impact people,” Rep. Steve Womack, R-Ark., a key House appropriator, told reporters Wednesday evening as he left the GOP caucus meeting.
During that meeting, Republicans largely agreed on the rough outlines of a continuing resolution that would slash topline government funding far below the levels McCarthy and President Joe Biden agreed to last summer during high-stakes debt ceiling talks.
This bill would also likely contain a number of poison-pill policy riders such as border security measures, while providing no emergency funding for Ukraine — a key White House demand.
Even if it were to pass the House this weekend on a party-line vote, which was far from certain Thursday, this CR would be dead on arrival in the Democratic-controlled Senate.
Instead of passing whatever the House sends over, the Senate is expected to drastically alter it by raising the topline funding numbers, stripping the border language, and inserting emergency funding for Ukraine and natural disasters.
By transforming the House CR into a bill that can win Democratic support and one that Biden would sign if it landed on his desk, senators would then pass the bill and send it back to the House, where McCarthy would have two choices.
First, he could decide to bring the Senate bill to the floor and pass it by relying on Democratic votes to make up the difference when a large bloc of conservatives balked.
“The House Republican majority has tried everything but working with Dems in the House,” Delaware Democratic Sen. Chris Coons told CNBC Thursday.
Alternatively, McCarthy could refuse to hold a vote on the Senate CR, effectively forcing the government to shut down by killing the only bill that could pass the Senate and that Biden would sign into law.
But this fight still seemed miles away on Thursday, as various factions both inside the Capitol and far from Washington sought to exert their own leverage over McCarthy’s next steps.
The 64 members of the bipartisan Problem Solvers Caucus, 32 of them House Republicans, released their own CR plan late Wednesday night. The compromise bill would set border security measures popular with Republicans alongside funding levels that Democrats can get behind.
Pressing McCarthy from the other side was Donald Trump, who encouraged his fellow Republicans to demand a bill that strips all funding from federal agencies that are prosecuting the ex-president on 44 criminal counts.
“This is also the last chance to defund these political prosecutions against me and other Patriots,” Trump wrote late Wednesday on Truth Social. Taking aim at McCarthy, Trump continued, “They failed on the debt limit, but they must not fail now. Use the power of the purse and defend the Country!”
Despite all the noise surrounding him, McCarthy was sanguine Wednesday about the prospects of passing a CR with Republican votes.
“We’re very close to there,” he told reporters. “I feel like just got a little more movement to go there.”
— CNBC’s Chelsey Cox contributed reporting from Washington.
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