October 16, 2023
A House Divided
Throughout its history, America has faced daunting challenges. One of the most consequential was overcoming the dysfunction-by-design of the original Articles of Confederation. Four leaders—George Washington, James Madison, Alexander Hamilton, and John Jay—played key roles in engineering what Pulitzer Prize-winning author Joseph Ellis called the second American Revolution. Washington wasn’t actively engaged in the Constitutional Convention, but it never would have happened without his support. The results altered the course of history producing, after ratification by the states, the U.S. Constitution, the Bill of Rights, and ultimately, the United States of America. Martin Luther King Jr said, “A true leader is not a searcher for consensus but a molder of consensus.” Washington, Madison, Hamilton, and Jay did that and more. Real leadership is something we could use a lot more of in Washington today.
Famously, upon exiting the Constitutional Convention in 1787, Benjamin Franklin was asked what sort of government the delegates had created. He responded, “A republic, if you can keep it.” Events over the past two weeks give Franklin’s warning real resonance.
On October 3, the House voted 216-210 for the first time in history to vacate the Office of the Speaker. Even with the support of 96% of the House Republican Caucus, Rep. Kevin McCarthy (R-CA) departed with a 1-16 record on House floor votes on his leadership. This political drama engineered by eight House Republicans with the unanimous support of House Democrats, puts Speaker Pro Tem Patrick McHenry (R-NC) in charge while House Republicans decide who should replace McCarthy. Despite the political drama that will extend into next week, the path forward for the 118th Congress is clear.
The identity of the Speaker of the House doesn’t change the following facts.
In 2022, voters chose a divided government. They gave Republicans a narrow four-vote majority in the House of Representatives, and Democrats a 52-48 Senate majority. President Biden now has a 39.7% approval rating.
The Fiscal Responsibility Act (FRA) P.L. 118-5 avoided a default and set caps on spending for FY24 and FY25. The FRA passed the House 314-177 with support from a clear majority of Republicans (149-71) and Democrats (165-46). FRA passed the Democrat-controlled Senate 63-36 with support from a majority of Republicans (31-17) and of those caucusing with Democrats (45-5). While a portion of those yes votes were based on avoiding a default, these votes signal clear bipartisan, bicameral support for a FY24 spending deal aligned with the FRA caps. Chart I shows how discretionary spending levels have evolved since the 2011 Budget Control Act was adopted.
The current continuing resolution (CR) P.L. 118-15 extended government operations through midnight on November 17. That measure also passed the House (335-91) and Senate (88-9) with support from a majority of Democrats and Republicans in both chambers. The results are clear. There is strong bipartisan, bicameral Congressional support for avoiding a shutdown.
House Republicans passed four FY24 Appropriations bills—HR 4365 Defense (218-210), HR 4366 MilCon-VA (219-211), HR 4367 DHS (220-208), and HR 4665 State-Foreign Ops (216-212)—despite veto threats from the Biden Administration on each bill for a combination of policy and funding reasons. Each House-passed appropriations bill fell at least 58 votes short of the number needed to override a Presidential veto.
A fifth House Appropriations bill—HR 4368 Agriculture—failed on a 191-237 vote.
These results send a clear message. House Republicans lack the votes needed to cut non-defense spending $119 billion below the FY24 FRA non-defense cap.
Meanwhile, Senate Appropriations Committee (SAC) Chair Murray (D-WA) and Vice Chair Collins (R-ME) worked with their Committee members to approve 12 FY24 Appropriations bills based on the FRA caps. Each bill passed with strong bipartisan support. Based on SAC’s work, Senate Majority Leader Schumer (D-NY) has no incentive to schedule Senate votes on House-passed appropriations bills.
Congress is on pause until a majority of House members vote to approve a new Speaker. With current vacancies, the magic number is 217. Two days after earning the GOP nomination for Speaker on a 113-99 vote Wednesday, House Majority Leader Scalise (R-LA) withdrew. Scalise realized that with less GOP Conference support, 75 fewer votes, and more Freedom Caucus hold-outs than McCarthy had in January, shoring up the votes needed for the Speaker’s gavel likely requires cooperation from House Democrats who last week voted unanimously to oust McCarthy. Late last week, two internal Republican caucus votes were held. Jordan faced off against Rep. Scott (R-GA) and scored victories of 124-81 and 152-55. But as with Scalise, Jordan’s vote totals were nowhere near the 217 needed to become speaker.
The smart move for House Republicans would be to resolve the speakership issue within their Conference and avoid a public multi-round feud like the one McCarthy endured in January. Here’s a twist. Since the leading potential candidates, House Majority Leader Scalise (R-LA) and House Judiciary Committee Chairman Jordan (R-OH), are avowed conservatives, GOP moderates now have an opportunity to exert more influence in an election that may soon involve additional candidates, additional votes, and potential rule changes.
At press time, 35 days remain before a potential partial government shutdown after midnight on November 17. The House impasse and the time required to restart negotiations on FY24 spending increase shutdown prospects to 45%. If the House fails to elect a Speaker by the end of next week, shutdown prospects increase daily.
If a clear path forward doesn’t emerge next week, Speaker Pro Tem McHenry may explore options to minimize the disruption and avoid a partial government shutdown. Scheduling a House vote on a short-term CR would be a good first step. The simplest option and the easiest to defend against critics would be a date extension on the CR that passed the House 335-91. There will be pressure to address military support for Ukraine and Israel, but opening up the process to amendments in the House or Senate is likely to result in a stalemate.
THE PATH FORWARD
With divided government, action-forcing events are often needed to break the gridlock. We’ve seen clear evidence of that this year. A looming default prompted a bipartisan breakthrough— the two-year FRA spending cap debt limit extension deal. At the eleventh hour, Speaker McCarthy pushed through a 45-day CR that garnered 335 House votes and sailed through the Senate.
With rising political tensions and President Biden’s anemic approval rating, don’t expect President Biden to sign many bills into law over the next 12 months. The CR was only the 15th public law enacted during the 118th Congress. The looming 2024 Presidential election increases pressure on both parties to finalize a FY24 spending deal before primary season begins. There will be talk of long-term CRs but because that’s particularly disruptive for the Department of Defense, we believe a long-term CR is highly unlikely for all but a handful of non-defense agencies.
The destination is clear. The path forward is not.