Congress Approaches Shutdown Deadline Without Deal

With a little more than one week remaining in fiscal year 2023, Congress has not yet enacted any FY24 appropriations bills or a continuing resolution (CR) to provide discretionary funding beyond September 30. A series of setbacks in the House this week has sharply increased the possibility of a government shutdown beginning on October 1.

In recent years, Congress has enacted at least one CR to keep the government funded and open while negotiating full-year appropriations, and despite some meaningful progress before the August recess, the expectation this year was the same. However, since returning to session this month, House leadership has been unable to identify a path forward on a CR with a small but empowered group of conservatives blocking action on various versions. These members, who are not entirely in agreement amongst themselves, continue to insist on much lower funding levels and a shorter term for the CR, inclusion of hardline border policies, and exclusion of requested emergency funding for Ukraine and natural disasters. In contrast, the Senate (both Democrats and Republicans) and Biden Administration appear united in their support for a CR of several months that continues funding at current levels and includes the emergency funding requests.

With the deadline looming and the necessity of beginning the legislative process in time to avert a shutdown, Speaker Kevin McCarthy (R-CA) has floated several options. In August, he along with Senate leaders expressed support for a CR that continued funding into early December, but conservative House members immediately shot that down as a surrender to ‘politics as usual.’ This week, another option emerged from discussions between House Republican moderates and conservatives: a month-long CR with an 8 percent cut to non-defense and non-veterans funding paired with border security and immigration restrictions. This option, which was expected on the floor today, fell apart with conservatives balking at what they viewed as “high” funding levels. Reports suggest leadership may be teeing up a Saturday vote on an even less-generous CR with cuts to non-defense and non-veterans funding in the double digits and the policy riders. At this first stage of the process – the House’s passing an initial funding bill – the Speaker appears to be looking to accommodate the demands of his conservative members, hold his moderates in the interest of moving something forward, and cobble together the votes to send a CR over to the Senate.

However, with a Democratic majority and Republicans mainly unified in opposition to a shutdown, the Senate is certain to reject the House approach and modify its CR to continue funding, likely at current levels, as well as adding in funding for Ukraine and emergencies, and stripping out contentious policy riders. The Senate would send that back to House, which would likely again trigger disagreement and among the narrow House Republican majority. The clearest path to avoiding a shutdown would involve the Speaker’s providing an opportunity for moderate House Republicans and Democrats to together provide a majority in support of the Senate-passed CR. That, however, would place the Speaker in a politically perilous position and jeopardize his hold on the Speakership.

Given these dynamics and the very short time left before October 1, a shutdown is increasingly likely, and it may not be short. House members, who have driven much of this debate, are dug in on their positions and seem unlikely to be motivated to compromise.

In the Event of a Shutdown

If Congress is unable to pass a CR, the government will shut down, meaning agencies and programs that receive funding through the annual appropriations process (or about 25 percent of the federal government), and are considered nonessential, will stop receiving funding. Federal employees deemed nonessential will be furloughed, and nonessential programs will be shuttered. Historically, government shutdowns are resolved in a few days, but the last partial government shutdown took place in 2018-2019 and lasted 35 days, the longest in history (The 2018-2019 shutdown was a partial shutdown because some agencies, including DOD, Labor, Health and Human Services and Education had received their full year funding, which blunted the negative effects). To prepare for this possibility, federal agencies have been publishing contingency plans in the event of a shutdown, and those are available for review on the White House Office of Management and Budget’s website here.

Contact Us

As always, our DC-based federal relations office remains closely engaged on the University’s priorities with colleagues across Harvard, and will stay in touch with developments. If you have any questions, please feel free to reach out to Suzanne Day (suzanne_day@harvard.edu), Kara Haas (kara_haas@harvard.edu), or Peter DeYoe (peter_deyoe@harvard.edu).