Government shutdown threat looms as House spending battle intensifies.

The word “shutdown” has been bandied about Capitol Hill as the standoff over raising the nation’s debt ceiling has morphed into an appropriations battle in the House between hardline Republicans and Democrats.

An outline for 2024 federal spending was hammered out in negotiations between Speaker Kevin McCarthy (R-Calif.) and President Joe Biden, culminating in the bipartisan passage of the Fiscal Responsibility Act. The bill was signed into law on June 3, ending a four-month standoff over federal spending.

Democrats agreed to slight reductions in non-defense discretionary spending and modest increases in defense spending in 2024, with discretionary spending growth capped at 1 percent for 2025. In exchange, Republicans agreed to suspend the debt ceiling through Jan. 1, 2025.

The deal angered some of the most conservative House Republicans, who believed McCarthy had too easily surrendered their demands for even greater fiscal restraint.

Now Republicans are reinstating their original demand in 2024 appropriations bills by limiting spending to the 2022 level.

Leverage

Republicans hold a small majority in the house, which has enabled a relatively small number of conservative members to exert pressure on McCarthy since the beginning of the 118th Congress in January.

Twenty-one Republicans were able to delay McCarthy’s election as speaker through 15 ballots, a number not seen since before the Civil War. McCarthy ascended the rostrum only after making concessions to the group, six of whom voted “present” on the final ballot to avoid directly supporting his election.

After the passage of the Fiscal Responsibility Act, several members from the holdout group staged a protest against McCarthy’s handling of the bill by voting against the party on procedural rules on June 6, effectively bringing House business to a halt.

McCarthy met with the dissidents and was able to mend relations six days later.

“He just committed to us that he would forge ahead with a fiscally conservative agenda,” Rep. Tim Burchett (R-Tenn.) said in a CNN interview on June 15. “And he gave us his word that he would work with us and keep us in the loop.”

Line in the Sand

Meanwhile, the House Republican Study Committee (RSC) released a 2024 budget proposal on June 14 that would set non-defense discretionary spending at 2022 levels as originally proposed by Republicans.

Chairwoman Kay Granger (R-Texas) later said she would move 2024 bills through the Appropriations Committee at that level, apparently drawing a hard line on spending.

That angered Democrats, who believed the agreement codified in the Fiscal Responsibility Act would be binding.

“At the end of the day, any spending agreement that is arrived by the end of the year has to be consistent with the resolution of the [debt] default crisis. Otherwise, what was it all for?” House Minority Leader Hakeem Jeffries (R-N.Y.) said on June 15.

“We had a very clear, negotiated compromise with the president of the United States and the Speaker of the House,” Rep. Annie DeLauro (D-Conn.) said in a CNN interview on June 15. “And now they have just walked away from this deal.”

Republicans see it differently.

Rep. Ben Cline (R-VA.) said the spending levels McCarthy agreed to were maximums, not minimums. “If the appropriations committee chooses to spend less than those ceilings, that’s completely within the framework,” said Cline, who chairs the RSC budget task force.

Another Standoff

The Senate is expected to work on 2024 appropriations bills next week based on the provisions of the Fiscal Responsibility Act. Most observers consider it highly unlikely that the Democrat-controlled upper chamber will agree to cut spending to the 2022 level, setting up a standoff between the two houses.