White House warns of shutdown’s impact on feds as GOP struggles to find a clear path forward on spending

House Republicans are struggling to advance any measure that would keep the government open past Sept. 30, spurring the White House to issue a warning about the dire consequences for federal agencies and their employees in the event of a shutdown. 

House Speaker Kevin McCarthy, R-Calif., was forced to pull a vote on a one-month continuing resolution that would have cut spending at most non-defense agencies by 8% after conservative members vowed to oppose the measure. He and other members involved in negotiations on Wednesday failed to outline any plan to avoid a shutdown. Republicans on Tuesday were also unable to advance their fiscal 2024 appropriations measure for the Defense Department after five conservatives joined Democrats in sinking the bill. 

McCarthy said Wednesday he remained optimistic, but was unable to say what he would do next. 

“Every major piece of legislation falls apart,” McCarthy said. “It goes up, it comes down, but the ones that don't pass are when people quit.” 

Rep. Garret Graves, R-La., one of McCarthy’s top allies, said his Republican colleagues had two options: to pass a stopgap funding bill that includes spending cuts and border security measures that Democrats oppose, or surrender their leverage and accept a bipartisan, “clean” CR from the Senate. 

“I think every day we get closer to a shutdown, I think the more leverage you're giving to [President] Joe Biden, the more leverage you're giving to [Senate Majority Leader Chuck] Schumer[, D-N.Y.,] and ultimately we get a clean CR, meaning existing funding levels, and you will get no conservative wins.” 

Graves suggested he and leadership would “go to the mat” for a more conservative CR if the House passed it and the Senate stripped out the partisan elements, but would not take the same approach if the Senate were forced to act first. 

The Senate on Wednesday failed to advance a three-bill package for full-year appropriations at the departments of Veterans Affairs, Agriculture, Transportation and Housing and Urban Development, despite all three winning unanimous approval at the committee level earlier this year. Senate Democrats were looking to work around an objection from Sen. Ron Johnson, R-Wis., but Republicans declined to add their support despite the majority of the caucus supporting the underlying bills. Johnson was aiming to include an amendment on the “minibus” package that would institute automatic CRs whenever appropriations would otherwise lapse. 

Sen. Susan Collins, R-Maine, the top Republican on the Senate Appropriations Committee, said on Wednesday leadership had agreed to an amendment vote on Johnson’s bill. She noted, however, there were a few other outstanding issues to resolve before all Republicans would allow the process to move forward unanimously. 

Collins added the Senate could instead use the underlying minibus package as a vehicle for the upper chamber to pass its own CR and send it to the House. She said she prefers the House to pass its own stopgap spending bill so the Senate can amend it and send it back to the lower chamber, but the Senate may be forced to pass something on its own. All spending bills must originate from the House, limiting the Senate’s ability to act first on a stopgap bill.  

“It is possible,” Collins said. 

Sen. Patty Murray, D-Wash., who chairs the appropriations committee, said on Wednesday she was working on a “bipartisan course” for CR that would include Biden’s request for emergency funding for Ukraine aid, disaster relief, border security and federal firefighter pay. 

“I will stay at the table and I will keep working,” Murray said. 

In an unusual move, McCarthy said he would hold lawmakers in Washington for potential votes Friday and Saturday.

‘Damaging consequences’

The White House on Wednesday cautioned the House’s CR proposal—which the chamber has so far been unable to pass—represented a “shutdown bill that doubles down on extreme, partisan proposals that can’t pass the Senate and will never become law.” 

The House Republican plan, or lack thereof, is charting a course for a shutdown that would have "damaging consequences across the country." Active duty military personnel and federal law enforcement—like all federal employees—would face delayed paychecks. 

The Food and Drug Administration would have to furlough employees who conduct food safety inspections, the White House added, while Environmental Protection Agency staff would have to pause oversight efforts related to clean air and water. It noted that air traffic controllers at the Federal Aviation Administration and Transportation Security Administration screeners would be forced to work without, which in the past has led to employee shortages and caused flight disruptions. Long-term rebuilding projects at the Federal Emergency Management Agency would remain halted, the White House said, while the Disaster Relief Fund that targets acute crises would face risk of depletion.

The White House, through its Office of Management and Budget, maintains some latitude in the exact consequences of a shutdown. Federal employees funded through mechanisms other than annual appropriations, as well as those necessary to protect life and property, are considered either “exempted” or “excepted” and work throughout shutdowns on only the promise of backpay. The rest of employees are sent home on furlough without pay, though, following the record-setting 35-day shutdown in 2018 and 2019, those workers are now also guaranteed backpay. Different administrations have taken varying approaches in determining who gets furloughed and who works, with the Trump administration taking an unusually aggressive approach to keeping staff at work. 

Accusing its predecessors of “weaponizing” shutdowns, Trump’s OMB instructed agencies to identify “carry-forward funding” and “transfer authority” to minimize the impact of shutdowns. That led to several agencies that in prior appropriations lapses sent home the vast majority of its workforce instead furloughing very few employees, though in some cases agencies were forced to increase the number of employees it furloughed as the shutdown dragged on. 

Other agencies, meanwhile, began calling employees back to the office as the lengthy shutdown caused more scenarios to crop up that the administration deemed as exempted work. 

The Biden administration may have its hands tied in how it carries out a shutdown this year. The Government Accountability Office, which enforces the Anti-Deficiency Act, the law that governs federal spending during shutdowns, ultimately found the Trump administration acted unlawfully during the 2018-2019 funding lapse. GAO said the Interior Department violated the law when it used recreation fees collected by the National Park Service to keep parks open and continue services such as trash collection and restroom maintenance. It also faulted the Agriculture Department for disbursing Supplemental Nutrition Assistance Program benefits early during the shutdown.

The Trump administration's decisions tore "at the very fabric of Congress’s constitutional power of the purse,” said GAO, which threatened fines and imprisonment for officials who acted similarly in the future. 

OMB declined to comment on the record on the approach the Biden administration would take this year. It has instructed agencies across government to update their shutdown contingency plans, though many have not yet publicly posted them. As is standard practice, OMB will convene a call with agency leaders to go over their shutdown plans one week prior to a funding lapse if Congress has still not taken action.