Government Shutdown in January Looms as Congress Looks to Head Home

Bonnie Jo Mount/The Washington Post.
House Speaker Mike Johnson (R-La.) addresses the press after meeting with Ukrainian President Volodymyr Zelensky on Tuesday at the U.S. Capitol.

With a federal financing deadline looming in the new year, time is running out yet again for Congress to avert a government shutdown, as House Republicans heading home for the holidays attempt to renegotiate a financing deal reached months ago with the Biden administration.

Money for crucial government programs – including some veterans’ assistance and food and drug safety services – expires on Jan. 19, and money for the rest of the government runs out shortly after that, on Feb. 2. But lawmakers in both chambers of Congress have not yet agreed on how to pass full-year spending bills or more temporary funding. Without action by the first deadline, a partial government shutdown would begin.

Lawmakers and President Biden in the spring reached a deal on how much the federal government would spend in fiscal 2024, which began Oct. 1: $1.59 trillion. That agreement, the Fiscal Responsibility Act, or FRA, included an additional $69 billion in side agreements that were not written into the legislation to soften the blow of spending caps. But House Republicans, led by Speaker Mike Johnson (La.), who was not part of that negotiation, said this week they would not abide by the agreement, attempting to jettison the side deal in budget negotiations.

“As we know, we have looming deadlines and we all agreed on that. But what we also agreed to was what’s written in the law, and that’s the FRA numbers on top-line,” Johnson told reporters this week. “The Senate has been projecting and writing well above that to the, I don’t know, billions of dollars. That’s not what the law says. And so I came in as the new speaker and I said again, as the rule-of-law team, we’re going to follow the law.”

Senate negotiators have mostly abided by the agreement and the side deals when crafting year-long spending bills.

“I think there’s confusion among the members, including the appropriators because they weren’t involved with striking side deals for the most part, so it makes it hard to explain to people,” Rep. Tom Cole (R-Okla.), a key leader on the House Appropriations Committee, told The Washington Post. “The side deals that were cut were not cut with this speaker, so what their real meaning is, I think, is still very unclear.”

“If there was some side deal, most of the people in the House did not know about it,” said Rep. Michael Cloud (R-Tex.), another appropriator and member of the ultraconservative House Freedom Caucus.

Those side deals were widely reported when lawmakers voted on the Fiscal Responsibility Act, and the Freedom Caucus in a statement issued last week acknowledged their existence, calling the funding “gimmicks.”

Without a full-year spending deal in place, the U.S. government would have to cut tens of billions of dollars out of a vast array of domestic programs, under a provision in the FRA.

Lawmakers have less time than it appears to arrive at a solution. The House adjourned Thursday and will not return to business until Jan. 9 – leaving just eight legislative days after this week to pass trillions of dollars of spending through both chambers.

The Senate will remain in session at least until the beginning of next week to confirm a number of judges and military appointees, and to allow lawmakers to continue negotiations over legislation on aid to Ukraine and Israel and border security. That bill is technically separate from the dispute over 2024 spending, though rhetoric around the national debt features prominently in both.

“People need to feel a sense of urgency to get this wrapped up,” said Sen. Martin Heinrich (D-N.M.), a member of the Appropriations Committee.

Since Biden and congressional leaders cut their spring spending deal, the House GOP has ousted the speaker involved – Rep. Kevin McCarthy (R-Calif.), who’s now set to retire by year’s end – over spending disagreements, and Republicans have repeatedly tried to set spending levels below the agreed-upon cap.

“This is crazy, what they’re doing. If we set this precedent of every year that Congress has a negotiation, decides what the spending numbers are going to be, and then says six months later, ‘Oh, never mind, we’re not living up to that,’ we are never going to be able to trust a deal again. And we’re never going to be able to write our bills,” Sen. Patty Murray (D-Wash.), who chairs the Appropriations Committee, told The Washington Post. “Why would I spend all my time writing bills, making all the tough decisions, doing all the challenging work for the American people, only to be undermined at the end of every single year?”

Congress in November passed a bipartisan stopgap funding bill, called a continuing resolution, or CR, the second such temporary spending measure passed in the past few months. But the November legislation staggered the expiration dates for federal finances.

Funding for military and veterans programs, agriculture and food agencies, and the Transportation and the Housing and Urban Development departments – roughly 20 percent of the government – runs out on Jan. 19. Financing expires for State, Defense, Commerce, Labor, and Health and Human Services, among others, on Feb. 2.

Johnson employed that novel “laddered” approach to placate hard-right members of his GOP conference who are adamantly opposed to continuing resolutions, preferring instead to fund the government through 12 annual appropriations bills. But those longer-term measures can each take weeks or months to negotiate, time Congress does not have if lawmakers want the government to stay open.

“The big question, I think, is whether we get something like a regular appropriations process. I think that’s such a red line for so many folks in both the Senate and the House,” said Sen. J.D. Vance (R-Ohio), a regular interlocutor between budget hawks in the House and less deficit-minded Senate Republicans. “If that happens, and it looks like it’s happening, we probably don’t have too much drama in early January. But I think if the appropriations process breaks down, then you have a real pushback against what’s going on.”

Johnson pushed through the laddered approach – leaning on support from Democrats to pass the GOP-controlled chamber – while vowing not to take up another CR in January or February. He reiterated that pledge to House members in a letter last week.

“It continues to be my intention that the House and Senate complete action on full-year bills ahead of the January 19 and February 2 deadlines provided for in the last continuing resolution,” Johnson wrote. “I do not intend to have the House consider any further short-term extensions.”

However, Johnson has signaled the House could try to force the Senate to agree to a lower spending limit by leveraging the across-the-board spending cuts that could take effect in May unless Congress passes full-year appropriations bills.

The budget caps under the debt limit deal are enforced by a mechanism called sequestration, or an account-by-account cut to every federal discretionary program. Those cuts would kick in if the current CR is extended past April 30.

The idea was to satisfy Republicans who were frustrated with temporary funding bills and backstop their demands for regular budgetary processes and spending cuts. The provision was meant to force Congress not to rely on CRs, but so far it hasn’t done that.

Under sequestration, Murray said, every domestic federal program – save for Social Security, Medicare, veterans’ and debt payments – would face a 7 to 10 percent budget cut.

That would have disastrous consequences, Murray said: The Transportation Security Administration could see staffing cuts; Customs and Border Protection agents would face furloughs; government-backed medical research would grind to a halt; federal housing assistance would be cut off for nearly 700,000 households, and more.

(The Office of Management and Budget, the White House’s bookkeeping agency, could interpret the sequestration such that smaller cuts apply to both defense and nondefense discretionary spending, but that outcome is unlikely, nonpartisan budget experts say.)

“It would be absolutely devastating for families in every Zip code in this country,” Murray said. “It would be devastating for our national security, for our country’s economic future. It is very dangerous and a nonstarter.”

Lawmakers in January also face an urgent decision about the federal nutrition program known as WIC, which provides financial support to low-income pregnant and nursing women, as well as children up to age 5. The program faces an estimated $1 billion shortfall this fiscal year, according to the Biden administration, which has called on Congress for months to shore up its finances as part of any upcoming funding deal.

Top White House aides reiterated those calls Wednesday, warning that a failure to act may leave states little choice but to institute wait lists for benefits, which would subject potentially millions of poor families to cuts to their food aid as soon as this spring.

“If congressional Republicans pass a budget without fully funding WIC, states will have no choice but to cut the number of people they serve,” said Neera Tanden, the president’s top domestic policy adviser.

“In a country as wealthy as ours, there is no reason states should be forced to implement waiting lists or take other devastating measures,” she told reporters.

House Republicans say those impending budgetary shortfalls and the WIC situation give the speaker important leverage to force the Senate and the White House to negotiate and drop the billions in side-deal spending.

“The speaker needs the flexibility to negotiate. My answer is always give him that latitude,” said Rep. Mario Diaz-Balart (R-Fla.), another Appropriations Committee leader. “We in essence have a top-line number. The Senate is above that, even if they’ll argue that they’re not. We’re below that. But there has to be a clarification. I’m less stuck on a number than I am giving the speaker that flexibility.”