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Ryan King, Breaking Politics Reporter


NextImg:Debt limit: The government spending standoff that could come next

A first-ever national default may soon be averted, but already, some Republicans are eyeing a government shutdown-style fight that could be next.

Dismayed by the number of spending cuts in the debt ceiling deal, a handful of GOP lawmakers have suggested the party can leverage the appropriations process to extract additional concessions. But there are a few traps baked into the debt limit deal that could foil such attempts.

DEBT LIMIT: HOW THE COMPROMISE COMPARES TO THE ORIGINAL GOP DEBT CEILING BILL

Congress stipulates its spending and borrowing parameters via multiple avenues, including the debt ceiling, the appropriations process, spending authorizations, and typically untouched entitlements. The debt limit merely gives the government the ability to borrow additional money to foot its bills.

It does not, by itself, fund the government.

That part, funding the government, largely derives from the appropriations process. Every fiscal year, Congress is supposed to fund the government. If it fails to do so, either via a continuing resolution or the passage of 12 appropriations bills, before the new fiscal year on Oct. 1, then the government shuts down.

Chatter about an appropriations slugfest has been overshadowed by the debt limit ordeal. But the signs are there.

"Conditioning an increase in the debt limit upon opaquely negotiated concessions from the President is one way to get things done. But we can and should control spending more transparently and precisely using powerful Congressional tools such as the upcoming appropriations bills," Rep. Thomas Massie (R-KY) tweeted.


"What leadership has got to do is bear down on ... every Appropriations Committee of the 12 and show us upfront what they're going to be advocating for, and it's going to take severe cuts," Rep. Ralph Norman (R-SC) said during a recent interview with Real America's Voice. "If it's a bait-and-switch operation, which is what we had on this bill, we're going to fight."

Rep. Thomas Massie.

Some experts have given mixed interpretations of the Fiscal Responsibility Act as to whether a government shutdown is possible given the language in the bill outlining an automatic 1% cut. A top Democratic staffer told the Washington Examiner it is indeed still a threat.

"The final provision, as they translated it to text, does not automatically fund the government or prevent a shutdown," the staffer said.

Even Democratic leadership, as well as the White House, is acknowledging a government shutdown fight may be on the horizon.

"We have to avoid a government shutdown. There are some on the hard Right, just as they wanted to default, will try to push for a government shutdown. We'll try to do everything we can to avoid it. And there are provisions in the bill that make that less likely," Senate Majority Leader Chuck Schumer (D-NY) told reporters.

As Schumer alluded to, the passage of the Fiscal Responsibility Act of 2023 could pacify GOP attempts at an appropriations process shakedown.

Owning the spending numbers

For starters, Republicans may appear as though they are reneging on their budgeting agreement if they attempt to play hardball in the appropriations process.

"This [debt limit] deal sets the budget numbers," Joshua Huder, a senior fellow at the Government Affairs Institute, told the Washington Examiner. "Republicans will significantly own these numbers."

"They got pretty decent terms, too. So, it looks a little bit irresponsible/unreasonable to then turn back and say, 'Actually, that deal we negotiated in the past is not the deal that we wanted, so, therefore, we want more concessions,'" he said.

The debt limit agreement sets the top-line figures for discretionary spending by keeping spending growth down until 2024 before allowing roughly 1% annual increases starting in 2025. This translates to military spending clocking in at $886 billion for fiscal 2024 and nonmilitary discretionary spending at $704 billion, according to NBC.

Roughly 67%, or 149 members, of the House GOP caucus backed the debt limit deal, while 71 voted against it.

Auto 1% cut conundrum

If the "bad-faith negotiator" concerns don't deter the GOP from girding for more concessions, there may be a few procedural hiccups in the way.

A key silver lining for conservatives in the debt limit deal was a provision that stipulated there would be an automatic 1% cut on discretionary spending if Congress fails to pass the 12 appropriations bills before January 2024.

"This is meant to provide a very strong incentive for Congress to pass those bills. It would take a majority of both Houses and the president’s signature to override this provision of the Fiscal Responsibility Act," David Wessel, senior fellow in economic studies at the Brookings Institution and director of the Hutchins Center on Fiscal and Monetary Policy, said.

But that stipulation may prove to be a double-edged sword for two reasons.

First, the automatic 1% cut could undercut the depth of cuts Republicans may hypothetically seek.

"If the whole point is that if you don't do what we want, spending gets cut 1% — then [with] a demand to cut spending 5%, you don't have any leverage," Brian Riedl, a senior fellow at the Manhattan Institute, said. "You don't have any leverage then because the default is a 1% cut, not a 5% cut."

Second, the automatic cut applies to defense spending, which could alienate national security hawks. Already, some, such as Sen. Lindsey Graham (R-SC), have railed against the debt limit deal for not allocating sufficient funds toward the military and appear eager to hunt for workarounds.

"I think that, ultimately, what will happen is that you will have a combination of both defense hawks and progressives nervous about a 1% [cut]," Dan Caldwell, vice president at the Center for Renewing America, said. "There's incentives in this bill ... for both sides to come together."

Grasping for straws

Perhaps the main point of leverage Republicans would have in the appropriations process is the specter of a government shutdown if the debt ceiling bill allows one to go through. The last government shutdown concluded in early 2019.

Most experts the Washington Examiner consulted believe the language of the Fiscal Responsibility Act of 2023 doesn't inherently prevent a shutdown by funding the government automatically if Congress fails to pass the 12 appropriations bills. However, others interpret the 1% automatic cut language differently and believe there is a strong argument to be made that the bill guarantees the government won't shut down in the fall.

A shutdown could be hypothetically weaponized to exhaust the public and tire Democrats into submission, assuming the GOP could overcome grumblings from defense hawks and public relations dilemmas.

But Democrats appear far less willing to give in on appropriations after going through the debt limit battle. And there will no longer be a threat of default until January 2025, assuming the debt ceiling agreement passes. Stomaching a prolonged government shutdown is easier than a risk of default, which could tank the global economy.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

Regardless of whether an appropriations battle manifests, the debt ceiling agreement, should it become law, significantly shakes up the process for the next fiscal year. Traditionally, lawmakers enter those deliberations without top-line figures imposed by a debt ceiling deal.

Moreover, Congress hasn't passed all of its appropriation bills on time since 1997. Oftentimes, the government is kept funding via continuing resolution. The debt ceiling agreement significantly shakes up incentives on that front.