GOP Is Pushing for a Shutdown, Dems Warn

Democratic Leader Hakeem Jeffries
Sipa USA
By Yuval Rosenberg

Happy almost Friday! Here’s what’s happening.

Dems Warn Republicans Are Pushing for a Shutdown

House Republicans on Thursday set the stage for another fiscal showdown with Democrats by approving a controversial set of spending targets for the coming fiscal year that mostly fall short of the levels set in the recent deal negotiated by House Speaker Kevin McCarthy and President Joe Biden.

The allocations for 2024 total about $1.47 trillion, or some $119 billion less than the spending caps in the Biden-McCarthy deal — and $130 billion less than current funding (see more details on the proposed funding totals here or here).

Dueling interpretations: Republicans hailed the spending levels as responsible and in line with the parameters of the debt limit deal, enacted as the Fiscal Responsibility Act of 2023. Democrats said that their GOP counterparts are reneging on their deal with the president to appease hardline conservatives who revolted over the debt limit compromise. And, Democrats warned, by pushing spending bills at these levels, Republicans are setting the stage for a government shutdown in the fall.

“While the Fiscal Responsibility Act set the topline spending limit, it does not require that we mark up our bills to that level,” Appropriations Committee Chair Kay Granger, a Texas Republican, said. “Simply put, the debt ceiling bill set a ceiling, not a floor, for Fiscal Year 2024 bills. The allocations before us reflect the change members on my side of the aisle want to see by returning spending to responsible levels.”

Democrats vehemently disagreed.

“Why did we try avoiding a default to make sure that America pays its bills with a topline spending agreement? What was it all for? Because now all we're engaging in is right-wing theater designed to jam extreme, painful cuts down the throats of the American people. And Democrats will not let it happen,” House Minority Leader Hakeem Jeffries told reporters. He added of Republicans: “They don't care about government. And so what we see right now, taking place in the appropriations process, is perhaps an effort by some extreme MAGA Republicans to drive us toward a government shutdown. And that’s a shame.”

A dustup in the markup: Thursday morning’s 33-27 party-line vote to approve subcommittee allocations for fiscal year 2024 came after a tense markup session Wednesday evening in which Reps. Rosa DeLauro of Connecticut, the top Democrat on the appropriations panel, and Steny Hoyer of Maryland, the former House Majority Leader, castigated Republicans.

“These Republican allocations, secretly leaked to the press before they were shared with members of this committee, are a complete affront, an abrogation of the deal your speaker just reached with the president of the United States,” DeLauro said. “These allocations evince an agenda that will lead us back to gridlock. It appears that threatening a Republican default is insufficient and that the majority is now intent on driving a partisan appropriations process that will steer us into a prolonged continuing resolution at best, but more likely a government shutdown.”

Hoyer, who has been in Congress since 1981 and has reportedly served on the Appropriations Committee for 24 years, charged that roughly 20 Republicans are holding the rest of Congress hostage and forcing their own party members to go back on the deal they just approved. “What the hell is the point of making a deal if you’re then told, ‘Oh, well, that was the ceiling on the deal. What we really want is a lot less. Why? Because 20 people have us captive.”

How we got here: The deal to suspend the debt limit agreed to late last month by President Joe Biden and House Speaker Kevin McCarthy capped federal spending for the next two years. That deal was enacted in bipartisan fashion, but some Republican hardliners who objected to the process and the result effectively shut down the House floor in protest. Those rebels, who insisted that spending levels should be set at fiscal year 2022 levels, agreed this week to allow legislative action to resume after talks with McCarthy, who told reporters that he was open to writing spending bills at levels below the caps in his deal.

What’s next: Once again, McCarthy may have to decide whether to try to appease hardliners in his party or seek a deal with Democrats. Appropriators in the Senate, controlled by Democrats, are set to write their own spending bills to the $1.59 trillion caps in the Biden-McCarthy deal. The House and Senate will then have to try to reconcile their spending packages. “Senate appropriators are largely nonplussed about the House's decision to undercut the deal, acknowledging that the House and Senate were always going to have major differences to resolve on annual spending bills before federal cash expires Sept. 30,” Politico’s Caitlin Emma writes.

Why it matters: A shutdown could really be in the cards.

Conservatives’ Budget Plan Slashes Spending, Takes Aim at ‘Woke’ Policies

The House Republican Study Committee released a 2024 budget plan Wednesday that would slash federal spending by $16.3 trillion and cut taxes by $5.1 trillion over a decade, while balancing the budget in seven years.

The model budget from the largest Republican caucus, which includes about 75% of all GOP House members, would also gradually raise the retirement age for Social Security to 69, introduce market competition in Medicare, turn Medicaid funding into state-level blocks grants and build a wall at the border with Mexico.

“The RSC Budget is a reflection of our commitment to defending our constitutional rights, championing conservative values, and safeguarding the foundational principles that make our country great,” Rep. Ben Cline, chair of the RSC Budget and Spending Task Force, said in a statement.

A ‘values’ budget: The RSC plan, which includes more than 200 bills from individual members, explicitly links spending proposals with the cultural issues that are central to the Republican political project. “Nearly every major problem facing our nation can be traced back to a failure to budget,” said RSC Chairman Kevin Hern of Oklahoma.

“It all boils down to something we’ve heard the President say quite a few times this year: Show me your budget, and I’ll show you your values,” Hern added. “Our values are clearly on display with this budget.”

In their effort to protect conservative values, the RSC budget lays out a vision of smaller government funded by lower taxes on businesses and individuals. It calls for cuts in a wide variety of programs throughout the federal government, including rescinding IRS funding for additional personnel, eliminating climate funding at the Department of Energy, reducing foreign aid, prohibiting funding for high-speed rail, and eliminating the National Labor Relations Board, among many other things. And it takes aim at a variety of “woke” political enemies, including diversity programs in the military and proponents of “critical race theory.”

Democrats revive a line of attack: The White House was quick to highlight the fact that Republicans had renewed their efforts to reduce Social Security and Medicare benefits — something that GOP lawmakers seemed to have abandoned in the face of criticism from Democrats during the debt and budget negotiations earlier this year.

“The hardcore MAGA budget just released by the Republican Study Committee — which represents a majority of House Republicans — amounts to a devastating attack on Medicare, Social Security, and Americans’ access to health coverage and prescription drugs,” Press Secretary Karine Jean-Pierre said in a statement. “Worse yet, House Republicans want to impose these disastrous cuts for hardworking families alongside massive tax cuts for the super-rich and big corporations. In fact, they’re proposing a total of $5 trillion in tax cuts skewed to the wealthy and big corporations — cutting taxes by at least $175,000 per year for the wealthiest 0.1 percent with incomes over $4 million.”

Saying that “Republicans have shown us who they are this week,” House Minority Leader Hakeem Jeffries also hammered the RSC plan. “Extreme MAGA Republicans have a three-part economic agenda,” Jeffries told reporters at his weekly press conference Thursday. “One, they want to end Social Security as we know it. Two, massive tax cuts for billionaires and wealthy corporations. Three, dramatic spending cuts that will hurt the health, the safety and the economic well-being of the American people.”

Nancy Altman, president of Social Security Works, an advocacy group that seeks to protect and expand Social Security, Medicare and Medicaid, was also highly critical of the Republican proposal. “This budget would destroy Social Security as we know it,” Altman said in a statement. “The budget fearmongers about Social Security’s modest shortfall (still a decade away) but then rules out any options for raising revenue … That leaves benefit cuts as the only ‘solution.’”

Even some conservatives have been critical. Rick Moran, a writer at the right-wing commentary site PJ Media, rejected the plan as a work of fantasy. “The act of taking $16 trillion out of the economy in just a decade would destroy the nation’s finances, and force tens of millions of people into poverty,” Moran wrote. “It will never pass muster even in the House with the Republican majority. … Instead of playing politics, how about some serious thinking from the right?”

The bottom line: The RSC budget plan is largely a messaging device, and its message of smaller government, lower taxes and anti-woke politics arrived loud and clear. While it has no chance of becoming law at the moment, it plants a flag for Republicans as they seek to shape the nation’s fiscal trajectory in the future.

Nearly 6 in 10 Americans Encounter Problems with Heath Insurance: Report

Nearly six in 10 U.S. adults reported having at least one problem with their health insurance in the past year, according to a new analysis from the healthcare policy foundation KFF.

KFF, a nonprofit group formerly known as the Kaiser Family Foundation, conducted a survey of 3,605 U.S. adults with health insurance about their experiences, with 58% reporting at least one problem with their coverage in the past year. “People reported frustrations with their health insurance no matter if they get coverage through their employer, a marketplace plan or a public payer,” The Washington Post’s Rachel Roubein noted.

The insurance system provides all kinds of barriers. “People report an obstacle course of claims denials, limited in-network providers, and a labyrinth of red tape, with many saying it prevented them from getting needed care,” said Drew Altman, KFF’s chief executive. Of those who experienced problems with coverage, 17% could not get recommended care, another 17% encountered delays in care and 15% reported a decline in their health because of the problem.

Respondents also dealt with confusion and affordability concerns with their insurance. Half reported some level of difficulty understanding their insurance. “The consequences of care delayed and missed altogether because of the sheer complexity of the system are significant, especially for people who are sick,” Altman said. Four in 10 adults said they skipped medical care because of cost, and one in six said they had trouble paying their medical bills.

“This survey shows it’s not enough to just get a card in your pocket — the insurance has to work or it’s not exactly coverage,” Karen Pollitz, a senior fellow at KFF, told The New York Times.

Correction: This article has been corrected to reflect that Rachel Roubein works for The Washington Post. 

Send your feedback to yrosenberg@thefiscaltimes.com. And please encourage your friends to sign up here for their own copy of this newsletter.

Fiscal News Roundup

Views and Analysis