GOP ‘Civil War’ Over Spending Bills Threatens to Shut Down the Government

A new federal fiscal year is set to begin in less than two weeks—but Congress is yet to pass any of the dozen appropriations bills that need to be signed into law to keep the government running. Nor has Congress passed a stopgap spending law to buy lawmakers more time, raising the prospect of a politically treacherous government shutdown at the end of the month.

The stalemate has left leaders in Washington scrambling to come up with a plan to fund government programs and pay federal employees. Republican infighting over conservative culture war policies has left Congress embroiled in a bitter struggle over the annual spending bills, setting off alarms on Wall Street and putting House Speaker Kevin McCarthy in a precarious position as he tries to navigate his fractured conference. 

Over the weekend, members from both sides of the House Republican Conference reached a tentative deal on a short-term spending plan that would pair a 31-day continuing resolution (CR) with a House GOP-passed border security package. But the agreement faced immediate backlash from GOP hardliners who said they wouldn’t vote for a CR unless it had more conservative policies attached, such as language to address "woke policies" and "weaponization of the DOJ." Other Republicans have said they won't support any continuing resolution.

By Monday afternoon, at least 10 Republican lawmakers had announced their opposition to the deal—spelling trouble for McCarthy, who can only afford to lose four Republican votes. “We’re going to bring new ideas up,” McCarthy told reporters, “and we’re going to work until we get this done.”

Congress has until September 30—the end of the fiscal year—to pass the 12 appropriations bills, or the government will shut down for the fourth time in the past decade.

There are several sticking points that are holding up negotiations. Members of the Freedom Caucus, a prominent rightwing faction, insisted on a tougher stance in spending negotiations with President Joe Biden and the Senate, rejecting the idea of a "clean" stopgap bill to keep the government open past September and calling for concessions on border security and reductions in social program funding.

Some House Republicans have also pushed to incorporate abortion policy into major government spending bills. This tactic, aimed at winning over conservative members, led to fierce opposition from moderate Republicans. The battle centered on a provision in the agriculture funding bill, which sought to ban mail delivery of abortion pills nationwide. As disagreements over spending levels and abortion provisions intensified, senior Republicans had to abandon their plans to pass the agriculture funding bill in August, leaving McCarthy with limited leverage as Congress approaches a potential shutdown—and with the issue still unresolved.

The ongoing conflict over abortion policies underscores the challenges Republicans face in uniting around a cohesive strategy on this issue more than a year after the Supreme Court overturned Roe v. Wade. Democrats have predicted that the attempt to attach anti-abortion riders to various spending bills would hinder the passage of these bills in the House and give the Senate an advantage in negotiations.

The situation has attracted the attention of rating agencies, with Fitch downgrading the U.S. debt rating earlier this year due to repeated last-minute negotiations that threaten the government's ability to meet its financial obligations.

House Democratic leader Hakeem Jeffries of New York has characterized the situation as a Republican "civil war," highlighting the challenges of achieving consensus within the party. Last week, McCarthy was forced to halt the consideration of the annual defense funding bill, worth $826 billion, due to a lack of support from conservative lawmakers. Although the bill included provisions targeting culture war issues favored by conservatives—including proposals targeting Biden Administration officials, diversity programs, and Ukraine funding—it was overshadowed by a broader dispute within the GOP concerning federal spending talks and potential government shutdown tactics. 

While McCarthy has emphasized the importance of avoiding a government shutdown, some members of the Freedom Caucus view it as a bargaining tactic. Rep. Chip Roy of Texas, a Freedom Caucus member, suggested on Sept. 15 that a shutdown is becoming "almost" inevitable.

If the House fails to make progress on spending in the coming days, Republican leaders may consider bypassing hardliners and engaging directly in negotiations with Senate Democrats to pass bipartisan legislation. But such a move could have dire consequences for McCarthy, who is already facing the threat of removal from his position.

With the Sept. 30 spending deadline quickly approaching, McCarthy said on Monday that time is still on his side: “This isn’t the 30th—we’ve got a long ways to go.”