Congress will probably avert a government shutdown — but the funding fight is far from over

Congress is once again at a spending stalemate, and it’s once again being driven by a familiar conflict: disagreement over how much to spend on social programs.

This particular impasse comes up frequently in spending fights, but the usual pushback from the GOP over funding domestic programs has intensified as Republicans argue that Democrats spent too much in recent years via bills like the Inflation Reduction Act and the American Rescue Plan.

“Our commander-in-chief and his party have spent huge sums on domestic priorities outside the normal appropriations process without a penny for the Defense Department,” Senate Minority Leader Mitch McConnell emphasized in a floor speech last week. “Obviously, we won’t allow them to now hijack the government funding process, too, and take our troops hostage for even more liberal spending.”

Democrats note that these bills served a specific policy purpose — the ARP helped bolster support for unemployed people and struggling families during the pandemic, for example — and did not address the same needs that a funding bill would.

“Those bills were meant to get us out of the pandemic, get the nation healthy, and get our economy back on track,” Sen. Patrick Leahy (D-VT), the chair of the Senate Appropriations Committee said in a floor speech last week. “They were not meant to fund the basic functions of the American government in fiscal year 2023.”

Lawmakers have until this Friday, December 16 to pass a short-term spending bill, also known as a continuing resolution (CR), that will keep the government funded for another week. If they fail to do so, the government could go into a shutdown, an outcome that’s unlikely given a Monday announcement from Senate Majority Leader Chuck Schumer committing to voting on a CR.

For now, there’s renewed optimism that lawmakers could use that extra week to get a deal on the full-year bills. To reach that point, however, they’ll have to resolve some key differences on social spending even as certain Republicans pressure leadership to push this fight into the new year. “Bipartisan and bicameral negotiations continue,” a Senate Appropriations spokesperson told Vox.

The ongoing impasse, briefly explained

A major sticking point for months has been the amount of money that these bills would include for domestic programs, or nondefense spending.

Thus far, Democrats and Republicans have already agreed on $858 billion in defense spending, 10 percent more than they allotted last time, when lawmakers approved $782 billion in defense spending. According to Roll Call, Republicans would like to slim down the $813 billion in nondefense spending that Democrats have called for, an amount that’s 11 percent higher than the $730 billion lawmakers approved for nondefense spending last year. As Sen. Richard Shelby (R-AL), the top Republican on the Appropriations Committee, told reporters last week, the two parties are about $26 billion apart on the nondefense figure.

This difference is driven by longstanding ideological disagreements about how much to invest in domestic programs, and Republican gripes that Democrats have already approved more social spending in the form of other budget bills they’ve passed. Specific cuts Republicans are looking for include funding for the IRS, which received a boost in the IRA, as well as climate initiatives.

The stalemate also comes as some Republicans argue that the party should hold off on approving the full-year bills until it has more leverage and control of the House next year. “We are 28 days away from Republicans having the gavel,” House Minority Leader Kevin McCarthy told Fox News earlier this month. “We would be stronger in every negotiation. So any Republican that is out there trying to work with them, is wrong.” Because Democrats need 60 votes to pass these bills in the Senate, Republicans have the ability to block them if they withhold their support.

McConnell has previously said there was “widespread” agreement regarding the need to approve an omnibus following a White House meeting in November. Since then, however, he’s suggested that time may be running short to finalize those bills as conservative members of his caucus have backed McCarthy’s approach.

“For the Senate to ram through a so-called ‘omnibus’ bill — which would fund the entirety of the Pelosi-Schumer spending agenda through most of next year — would utterly disempower the new Republican House from enacting our shared priorities,” six Republican senators, including Sens. Ted Cruz (R-TX), Rand Paul (R-KY) and Rick Scott (R-FL), wrote to McConnell last week.

If more Republicans were to follow through with this opposition, lawmakers could be forced to pass a CR through early 2023, setting up another, likely more contentious, fight over the full-year bills. That would significantly increase the possibility of a government shutdown in the next few months: In exchange for approving the spending bills, Republicans could try to demand spending cuts they’ve long sought to social programs and refuse their approval unless they obtained them.

The spending bill deadline is approaching

As is so often the case with spending bills, lawmakers are running up against a tight deadline to get something done.

First, Congress has to pass a one-week stopgap by December 16, and then it has to pass another spending bill by December 23.

“Later this week, members should be prepared to take quick action on a one-week CR so we can give appropriators more time,” Senate Majority Leader Chuck Schumer said in a Monday floor speech laying out Congress’s upcoming plan.

If both sides are unable to come to an agreement on the completed funding bills by December 23, it’s possible lawmakers could pass a full-year CR, though that’s not ideal since it freezes spending at current levels. “Our strong preference is to have a bipartisan omnibus bill, we still see a pathway to achieving that,” House Speaker Nancy Pelosi told reporters last week. “However, if we don’t have that, we may be forced to put forth a yearlong CR.”

A yearlong CR would make it tougher for the government to function because many services wouldn’t get funding boosts they need and new programs wouldn’t be able to get started. Leahy has noted that everything from investments in science and technology research to military readiness to highway transit programs would see shortfalls if no new funds are approved.

Alternatively, if enough Republicans oppose both full-year funding bills and a full-year CR, lawmakers could be forced to pass a CR that expires in the new term — and tee up one of the first battles of a split Congress.