Republican Feud Over ‘Root Canal’ Spending Cuts Increases Risk of US Government Shutdown, Reports Reuters

By David Morgan

WASHINGTON – A conflict over spending cuts between hardline and centrist Republicans in the U.S. House of Representatives is increasing the likelihood of a federal government shutdown this fall, potentially marking the fourth shutdown in a decade.

Members of the hardline House Freedom Caucus are advocating for a reduction in spending to fiscal 2022 levels of $1.47 trillion, which is $120 billion less than the amount agreed upon by President Joe Biden and House Speaker Kevin McCarthy in their May debt ceiling deal. This faction stated on Monday that they oppose any temporary funding measures that do not align with their demands.

With Republicans also pushing for increased funding in defense, veterans’ benefits, and border security, analysts point out that the hardline stance would necessitate cuts of up to 25% in sectors such as agriculture, infrastructure, science, commerce, water and energy, and healthcare.

Analysts at Goldman Sachs noted in a recent report that a government shutdown now seems "more likely than not."

Centrists, who refer to themselves as "governing" Republicans, argue that their hardline counterparts are disregarding the reality that Democrats, who control the Senate and the White House, will reject their priorities. They believe that spending will ultimately align closer to the levels agreed upon by McCarthy and Biden.

This situation poses a significant challenge for centrist Republicans representing swing districts that Biden won in 2020, as well as for those with constituents affected by the proposed spending cuts.

"The reductions are so deep," commented Representative Don Bacon, a centrist Republican from Nebraska. "They want to make everything a root canal."

Hardliners see the fiscal year 2024, which begins on October 1, as a critical moment for the Republican Party to demonstrate its commitment to reducing the federal debt and tackling the reform of social programs such as Medicare and Social Security.

"It’s essential for there to be an understanding that for there to be 218 Republican votes, spending needs to align with pre-COVID levels rather than the debt-limit agreement," stated Representative Ben Cline, a member of the Freedom Caucus and other groups.

A major source of frustration comes from hardline calls for cuts to bills that have already been reviewed by the House Appropriations Committee.

"We’re not just trying to give money away. We’re focusing on priorities," said Representative David Joyce, a member of the appropriations panel who leads the centrist Republican Governance Group.

With the Democratic opposition to hardline proposals, McCarthy can lose no more than four Republican votes to pass all 12 appropriations bills before funding ends on September 30.

"I do not know how they get themselves out of this situation," remarked William Hoagland, a former Senate Republican budget director now working at a think tank.

Tricky Path

When the House reconvenes from summer recess on September 12, lawmakers will have 12 days to finalize their bills and negotiate with the Senate or risk a partial government shutdown.

McCarthy admitted last week that they may need to consider a short-term funding bill, referred to as a "continuing resolution," to keep federal agencies operational.

However, this option could be complicated by new demands from the House Freedom Caucus, which calls for any stopgap measure to cut spending, reinstate certain border policies from the Trump administration, address perceived "weaponization" of the Justice Department, and eliminate diversity and transgender programs. They also oppose any new funding for Ukraine.

Some House Republicans believe the disputes over appropriations mirror issues McCarthy has navigated in past major legislation, including an April debt ceiling bill that strengthened his negotiating stance with Biden.

"The more appropriations bills we can successfully pass, the more leverage we’ll have in negotiating with the Senate," said Representative Dusty Johnson, chair of the Main Street Caucus, which is made up of pragmatic conservatives.

Failure to resolve these appropriations issues could lead to another costly government shutdown in October – the fourth in ten years.

Shutdown Risk

Members of the Freedom Caucus suggest a shutdown might be necessary to reach their goals.

"It’s not something that we generally wish for," said Representative Scott Perry, chair of the approximately three dozen conservatives within the caucus. "However, we also understand that difficult changes in Washington often require some level of confrontation."

Senate Majority Leader Chuck Schumer indicated last week that blame for any new shutdown would lie with Republicans if the House opts for a partisan route.

Disagreements over funding and policy have previously led to three government shutdowns in the last decade: once in 2013 over healthcare spending and twice in 2018 due to immigration issues. A 35-day shutdown that began in December 2018 and extended into January 2019 was estimated to have cost the economy 0.02% of GDP.

Currently, the slim 222-212 Republican majority in the House could face significant political repercussions, as a shutdown would disturb the lives of Americans just a year before the 2024 elections, during which Republicans must defend 18 House seats in districts that Biden won in 2020.

McCarthy may need to pursue a continuing resolution that requires bipartisan support to pass, effectively sidelining the hardliners, according to analysts. This move could jeopardize McCarthy’s leadership, as an arrangement exists allowing a single member to initiate a motion for his removal.

When questioned if the House Freedom Caucus might end McCarthy’s tenure over a continuing resolution, Perry responded, "I wouldn’t go that far. That’s a last resort. We want to collaborate with leadership. We’re hopeful we can work together."