What to Know in Washington: Hardliners Disrupt MCCarthy’s Plan

Republican hardliners dealt twin blows yesterday to Speaker Kevin McCarthy’s plans to avert a government shutdown, further ratcheting up the risk of a disruptive federal funding lapse.

Amid backlash from his right flank, McCarthy (R-Calif.) abruptly canceled plans to advance a short-term spending bill that would fund the government for 31 days while changing immigration rules and cutting domestic agencies by 8%.

Photographer: Al Drago/Bloomberg

McCarthy speaks to members of the media at the US Capitol in Washington, DC, on Tuesday.

Later in the day, five ultraconservatives, in protest of the broader spending negotiations, joined Democrats to block consideration of a military spending package laden with conservative priorities.

“I won’t give up,” McCarthy told reporters afterward. “I like a challenge.”

But some veteran House Republicans concede it may be time to start negotiating with Democrats to get a bill that can pass both the House and the Democratic-led Senate.

“There are 200 of us being dragged around by five of them,” Rep. Mike Simpson (R-Idaho) said of the Republicans who voted against the defense bill.

Behind the scenes, McCarthy’s lieutenants conducted hours of meetings with far-right holdouts over possible additional spending cuts to win their support.

Members of the bipartisan Problem Solvers Caucus say they’re discussing a backup plan to keep the government open using a bill stripped of ultra-conservative demands. McCarthy would either need to acquiesce to the plan or they would need to use a lengthy petition process to force a vote on the bill. If McCarthy were to permit a bipartisan approach, ultraconservatives could move to oust him.

Appropriations Committee Chair Kay Granger (R-Texas) was especially glum about the funding impasse and state of the House GOP.

“It’s terrible. Worst I’ve ever seen,” she said. Erik Wasson and Billy House have more details on the situation.

BIDEN’S AGENDA

• The president meets with Israel Prime Minister Benjamin Netanyahu shortly after 10 a.m. and with Brazil President Luiz Inácio Lula da Silva around 1 p.m.
• Afterward Biden attends two campaign receptions in New York after 4 p.m. and 6 p.m., with Second Gentleman Doug Emhoff joining Biden at the second. The president will depart for Washington after 7 p.m.

CONGRESS’ SCHEDULE

• House members return at noon to designate instructions for a fiscal ’24 defense policy bill conference with the Senate.
• The Senate meets at 10 a.m. to resume work on a fiscal ’24 spending bill minibus.
• For the full detailed agenda read BGOV’s Congress Tracker.

Federal Shutdown Continues to Loom

MCCARTHY’s short, rocky tenure leading the Republican conference is headed for the 11th US government shutdown since 1980. As in the past, the logic of shutting down the federal government is clear, if not compelling: The Republican instigators believe that the public will rally behind them and force Democrats and moderate Republicans to slash spending, enacting the cuts they have conspicuously failed to achieve through ordinary channels.

• What’s also clear is the record of shutdowns in bringing about the outcome their proponents desire: It’s 0-for-10—and, if Republicans don’t settle on a funding bill by Sept. 30, will likely soon be 0-for-11. Read more.

BIDEN’s top health priorities could be complicated by a shutdown occuring just before the Oct. 2 deadline for some drugmakers to report a slew of data to Medicare as part of how the agency will eventually determine new prices for medicines selected for negotiation.

• So far the Biden administration has been on time hitting deadlines created by the Inflation Reduction Act’s drug-pricing provisions. A shutdown’s impact on progress at the Centers for Medicare and Medicaid Services remains an open question. Read more.
• Related: Talks to craft a bill with tax breaks for businesses and an enhancement of the child tax credit simmer in the background, lawmakers say, though agreement wouldn’t likely emerge until closer to December. Read more.

FEDERAL COURTS could continue operating for at least two weeks if the government shuts down, the judiciary’s administrative arm said. If funding lapses, the judiciary could use court fees and other available money to continue hearing cases. Read more.

More News From the Hill

JULIE SU received a letter from Republican leaders on the House Committee on Education and the Workforce requesting enforcement information from the Labor Department’s Employee Benefits Security Administration. Prolonged investigations have persisted for years, sometimes without a clear objective, schedule, or endpoint, they wrote to the acting Labor secretary. Read more.

REP. JASON SMITH urged JANET YELLEN to clarify in regulations the definition of “foreign entities of concern” to prevent EV credits flowing to countries like China. Smith, the House Ways and Means chair, also requested more details from Tesla and Nissan over whether they have agreements with entities that may fall into that category. Read more.

TRAVELERS WITH DISABILITIES face risk of injury, wheelchair damage, and constant headaches every time they board a plane, where they are at the mercy of staff who assist them and aircraft not built to accommodate them. But Congress is weighing federal aviation legislation that aims to address some of the challenges. Read more.

US Strengthens Global Ties at UN Summit

Photo: Anna Moneymaker/Getty Images

President Joe Biden and Brazillian President Luiz Inácio Lula da Silva in the Oval Office in February 2023.

BIDEN and LUIZ INACIO LULA DA SILVA will call for improving labor conditions in their countries, when they meet in New York today, as the US also seeks to move the Brazillian president closer to allies helping Ukraine fight Russia’s invasion.

• The two presidents plan to say that their partnership will help workers address the transition to the gig economy and clean energy technology. The agreement will also focus on how to decrease worker exploitation, forced labor, child labor, and workplace discrimination against women, LGBTQI+, and racial and ethnic groups. Read more.

SRETTHA THAVISIN has been prime minister of Thailand for less than a month, but the US already sees this week’s UN Summit as the best opportunity in two decades to get its alliance with Thailand back on track after ties were strained under the previous military-backed regime.

• The democratically elected leader is seeking an audience with Biden and also plans to court investment from Microsoft, Google, and Tesla while in the U.S. Read more.

Energy Policy

NEW PERMITTING RULES will be activated by the Biden administration to speed the buildout of electric vehicle charging stations and promote semiconductor manufacturing—the first use of the powers, a White House official said yesterday. Read more.

EXXON is lobbying the Biden administration to allow hydrogen made from natural gas to qualify for some of the most lucrative subsidies available in Biden’s signature climate law, pushing for billions of dollars in tax credits intended to help phase out fossil fuels. Read more.

People, Politics, and Power

Photo: MATTHEW HATCHER/AFP via Getty Images)

United Auto Workers president Shawn Fain speaks to union members during a rally in Detroit, Michigan.

THE UNITED AUTO WORKERS is weighing an expansion of its strikes against Detroit’s automakers, after union President Shawn Fain said yesterday that more plants faced walkouts if carmakers didn’t sweeten their offers.

• The union has scheduled a Facebook Live event Friday at 10 a.m. local time in Detroit, where it will likely discuss whether more plants will joint the strike, a person familiar with the discussions said. Read more.

DONALD TRUMP’S return to the White House is already being planned by conservative Republicans who are identifying key cabinet and other possible top officials even months before the first nominating contest next year.

• The America First Policy Institute, which will detail their plans publicly at an event today in Washington, is focused on creating how-to guides for incoming staffers complete with policy recommendations from people who served during the first Trump administration. Read more.

To contact the reporters on this story: Giuseppe Macri in Washington at gmacri@bgov.com; Brandon Lee in Washington at blee@bgov.com

To contact the editors responsible for this story: Kayla Sharpe at ksharpe@bloombergindustry.com; Jeannie Baumann at jbaumann@bloombergindustry.com