House Speaker McCarthy squeezed in government shutdown fight

WASHINGTON — House Speaker Kevin McCarthy failed a vital test Thursday of his ability to unite his fractured Republican caucus as he tries to rally support to pass a spending bill geared toward avoiding a government shutdown at the tip of the month.

The House did not pass a measure to set the principles for debate on a Pentagon funding bill, and served as a dress rehearsal for the bill itself, which had been expected to return to the House floor later Thursday.

Such measures are traditionally approved by wide margins.

More importantly, the vote would have rallied House Republicans around a shared cause and built momentum for a way more difficult vote in the approaching days: Passing a government spending bill in time to avert a potentially damaging government shutdown set to start Oct. 1.

After the failed vote, McCarthy, R-Calif., said, “It’s frustrating within the sense that I do not understand why anybody votes against bringing the concept up and having the talk and you then got all of the amendments if you happen to don’t love the bill.”

On Wednesday, two Republicans who had formerly opposed the principles bill signaled they’d switch sides to support it, raising hopes that it could pass.

But two conservative hardliners, Rep. Marjorie Taylor Greene, Ga. and Rep. Eli Crane, Ariz., who had supported an analogous bill earlier just days ago, surprised everyone once they voted No.

McCarthy vented his frustration with them after the vote.

“This can be a whole latest concept of people that just wish to burn the entire place down. That does not work,” he said.

“I comprehend it’s an obstacle but I find it as a challenge. We’re gonna solve it,” McCarthy added.

Once it was clear the vote would fail, House Rules Committee chairman Rep. Tom Cole, Okla., also modified his vote to “No,” making it easier for him to bring it up again in the long run.

Across the Capitol, Republicans in each the House and Senate held their breath to see what the California lawmaker and his lieutenants would do next.

“We wish to avoid this shutdown nevertheless we will,” Oklahoma GOP Sen. Markwayne Mullin told CNBC Thursday.

“McCarthy is attempting to work along with his members to get probably the most conservative bill that they will pass, that will also be passed within the Senate,” Mullin said.

On Wednesday evening, House Republicans emerged from a two-hour caucus meeting within the basement of the Capitol expressing newfound optimism that McCarthy and his razor-thin majority would give you the option to resolve enough of their internal squabbles to pass a unbroken resolution, or CR, to fund the federal government, potentially as early as this weekend.

“I feel we made tremendous progress as a whole conference, we had an ideal discussion,” McCarthy told reporters as he left the meeting.

Markets opened Thursday morning on a negative note, weighed down by signs the Fed intends to lift rates of interest later this 12 months, and by the continuing United Auto Staff strike.

But investors are also growing increasingly concerned that a government shutdown would cut into 4th quarter gross domestic product and, more broadly, that it might undermine global confidence in America’s ability to maintain its own government open and operating.

“If we lapse in appropriations, a complete lot of very essential things with the U.S. government begin a strategy of shuttering their services and it can impact people,” Rep. Steve Womack, R-Ark., a key House appropriator, told reporters Wednesday evening as he left the GOP caucus meeting.

During that meeting, Republicans largely agreed on the rough outlines of a unbroken resolution that may slash topline government funding far below the degrees McCarthy and President Joe Biden agreed to last summer during high-stakes debt ceiling talks.

This bill would also likely contain a lot of poison-pill policy riders equivalent to border security measures, while providing no emergency funding for Ukraine — a key White House demand.

Even when it were to pass the House this weekend on a party-line vote, which was removed from certain Thursday, this CR could be dead on arrival within the Democratic-controlled Senate.

As an alternative of passing regardless of the House sends over, the Senate is predicted to drastically alter it by raising the topline funding numbers, stripping the border language, and inserting emergency funding for Ukraine and natural disasters.

By transforming the House CR right into a bill that may win Democratic support and one which Biden would sign if it landed on his desk, senators would then pass the bill and send it back to the House, where McCarthy would have two selections.

First, he could resolve to bring the Senate bill to the ground and pass it by counting on Democratic votes to make up the difference when a big bloc of conservatives balked.

“The House Republican majority has tried every little thing but working with Dems within the House,” Delaware Democratic Sen. Chris Coons told CNBC Thursday.

Alternatively, McCarthy could refuse to carry a vote on the Senate CR, effectively forcing the federal government to shut down by killing the one bill that might pass the Senate and that Biden would sign into law.

But this fight still seemed miles away on Thursday, as various factions each contained in the Capitol and removed from Washington sought to exert their very own leverage over McCarthy’s next steps.

The 64 members of the bipartisan Problem Solvers Caucus, 32 of them House Republicans, released their very own CR plan late Wednesday night. The compromise bill would set border security measures popular with Republicans alongside funding levels that Democrats can get behind.

Pressing McCarthy from the opposite side was Donald Trump, who encouraged his fellow Republicans to demand a bill that strips all funding from federal agencies which can be prosecuting the ex-president on 44 criminal counts.

“This can also be the last probability to defund these political prosecutions against me and other Patriots,” Trump wrote late Wednesday on Truth Social. Taking aim at McCarthy, Trump continued, “They failed on the debt limit, but they have to not fail now. Use the facility of the purse and defend the Country!”

— CNBC’s Chelsey Cox contributed reporting from Washington.