With the 2022 election still unsettled, congressional Democrats and Republicans returned to Washington on Monday and braced for a series of fast-approaching spending fights that threaten to push the economy to a familiar brink.
Yet the mere possibility of split-party control next year touched off fierce speculation and unease. Republicans under Rep. Kevin McCarthy (R-Calif.), the minority leader now angling to become House speaker, had pitched voters on the premise that GOP lawmakers would stymie President Biden at every turn — investigating the White House while insisting on drastic spending cuts.
Those battles are expected to play out starting in January, once the new Congress is sworn into office. But lawmakers face an urgent, early test next month, when a temporary federal funding measure is set to expire. If they cannot set aside their election acrimony and strike a deal, the U.S. government would shut down, disrupting federal services at a moment of great economic and geopolitical instability.
Some lawmakers are angling for a last-minute compromise on expiring tax breaks, including a renewed Democratic effort to revive payments to low-income families with children. And still other Democrats hope to make one final push to address the debt ceiling, which allows the U.S. government to borrow to pay its bills. Party lawmakers believe that raising or suspending the borrowing cap before it is reached sometime next year could forestall a showdown with Republicans, who have threatened to use the country’s credit as political leverage.
“I think it would be very important for us to do so,” House Speaker Nancy Pelosi (D-Calif.) said Sunday on ABC’s “This Week,” noting that GOP lawmakers could use it to force changes to Social Security and Medicare. “My hope would be that we could get it done in the lame duck.”
As they race to avert political and economic calamities, though, the two parties find themselves confronting a question that will likely loom large over the next two years: In a Capitol long wracked by partisan divides, can Democrats and Republicans actually govern together?
“I think voters basically decided to put some brakes on the car, so to speak, and that’s us,” said Rep. Tom Cole (R-Okla.), the top Republican on the House Rules Committee, describing what he expected would be a narrow GOP majority in the chamber. “By dividing power, they’re effectively saying, ‘We expect you to work together in some areas, but we don’t want you to continue down the path you’re on.’”
Cole stressed that both parties now have no choice but to compromise — or once again face the wrath of an angry electorate. “I think both parties are pretty much on probation by the American voters,” he said.
The political uncertainty on Capitol Hill reflected the stunning outcome of the midterms. In what was supposed to be a favorable electoral climate for Republicans, the party won far fewer seats than they had anticipated — and their “red wave” never materialized.
By Monday morning, Republicans approached the 218 seats needed to win control of the House. If they prevail, it would put an end to a period of Democratic control there that had helped the president achieve broad swaths of his agenda — including a $1.9 trillion coronavirus aid package, a $1.2 trillion infrastructure law and a roughly $370 billion investment to fight climate change.
Republicans have pledged to probe and potentially try to unwind some of those policies, which they say are the cause of the country’s high inflation. And McCarthy and his allies have promised to serve as a bulwark against further Democratic spending, a commitment they repeated as the nation continued counting ballots.
“Number one is an economy that’s strong, so reining in the reckless spending, bringing our budget back to balance and fiscal responsibility to stop the inflation,” said Rep Elise Stefanik (R-N.Y.), the chair of the House Republican Conference, during an interview on Fox News.
The immediate task facing Congress is funding the government: A temporary spending measure is set to expire on Dec. 16, at which point lawmakers must approve new money or Washington will shut down. Congress can either pass another short-term measure that largely sustains existing funding levels or cobble together a bigger package that covers federal agencies and operations through the remainder of the fiscal year, which will end Sept. 30, 2023.
Top lawmakers aspire to deliver on a longer-term deal, known in congressional parlance as an omnibus, that might satisfy both parties’ priorities. Staff for the four key negotiators — Reps. Rosa L. DeLauro (D-Conn.) and Kay Granger (R-Tex.) and Sens. Patrick J. Leahy (D-Vt.) and Richard C. Shelby (R-Ala.) — have discussed the matter for weeks in closed-door meetings, with more intense discussions set to begin now that lawmakers have returned to the Capitol.
“Only through an omnibus bill can Congress provide American families the assistance they need to deal with the impact of inflation on the cost of energy, food and housing and for national security,” Jay Tilton, a spokesman for Leahy, said in a statement.
The talks have taken on added political urgency since Leahy and Shelby, two senior members of their respective parties, are set to retire at the end of the session. Each hopes to secure one final deal that includes sizable sums for projects in their states, known as earmarks. The White House, meanwhile, has urged Congress to tack onto any deal an additional $47 billion in time-sensitive emergency funds. The request includes money to combat the coronavirus, bolster Ukraine’s defenses and respond to recent natural disasters.
The four top appropriators have found common cause in the past, solidifying a $1.5 trillion spending package that Congress adopted in the spring. But the deal at the time struck many as a surprise, especially after Republicans repeatedly seized on the funding process in the narrowly divided Senate to force votes on unrelated issues — including federal coronavirus vaccine policies. The disputes resulted in delays that pushed the country to the precipice of a shutdown, infuriating Democrats.
With few, precious legislative days left, Republicans must now decide whether to wait and see if negotiations produce a bipartisan deal — or try their luck again if they secure a House majority next year. Adding to the difficulty, some GOP lawmakers have signaled sustained opposition to the Biden administration’s emergency funding requests. Republicans repeatedly have refused to refill now-depleted federal pandemic programs, while McCarthy has led his party in questioning the need for new Ukraine money.
Anticipating a more favorable election outcome, some Republicans have been outspoken about using a shutdown as leverage to advance their agenda. Blake Masters, the Republican running for Senate in Arizona, at one point this year signaled he hoped to use the appropriations process to extract stricter immigration policies from Biden.
“I think he will capitulate,” Masters told the Washington Times. He is currently trailing incumbent Democratic Sen. Mark Kelly.
Sen. Chris Van Hollen (D-Md.), a member of the Appropriations Committee, said he thought the prospects for a deal are “better than 50-50 for getting an omnibus done by the middle of December,” noting the talks are proceeding well.
But, he added: “I’m sure there are some House Republicans who want to play games and kick that process into early next year … I think that would just create uncertainty in the economy, and the specter of threats of government shutdown would not serve anybody’s interest.”
Lawmakers have also weighed whether to use the must-pass government funding package as a vehicle to address a wide array of other last-minute priorities in the final hours of this Congress. That includes an expanded version of the child tax credit, which had been paying monthly sums to low-income families until congressional inaction led to its expiration earlier this year.
“The last few months of the Democratic majority … we’ve got to do everything we can in that time to protect working families,” Sen. Bernie Sanders (I-Vt.) said.
More difficult still is the debt ceiling, which Congress must either suspend or raise — or risk a default that the Biden administration says would spark a global recession. The country is not expected to hit its borrowing limit until sometime next year, but the fears of a protracted, costly showdown in a divided Congress already have touched off a scramble in Washington.
In recent weeks, Republicans have threatened to use a vote on the debt ceiling as a way to force future spending cuts. That could include Social Security and Medicare, after McCarthy said he would not “predetermine” if those entitlements would be on the table. Others in the party have sought to advance Republicans’ broader policy goals: Rep. Jason T. Smith (R-Mo.), the top GOP lawmaker on the House Budget Committee, previously said Congress should use “every tool at its disposal” to combat inflation and police the border.
“We’re not going to just keep raising the debt ceiling without structural reform,” GOP Sen. Rick Scott (Fla.) said during an appearance Sunday on Fox News.
Last week, Biden pledged at a news conference that “under no circumstances” would he sign a bill that cuts entitlement programs. His commitment came after the president pilloried Republicans in the final days of the campaign for raising the issue. But the mere possibility of such a battle has prompted Democrats to consider their options entering the lame-duck session.
“It serves no function except to create chaos,” Sen. Elizabeth Warren (D-Mass.) told NBC’s “Meet the Press” on Sunday. She noted that Republicans hoped to “create chaos in the economy” so that it might help their electoral prospects in 2024, potentially moving former president Donald Trump “one inch closer” to the White House.
The leader of the chamber’s tax-focused Finance Committee, Sen. Ron Wyden (D-Ore.), stressed that the party is “not taking any options off the table.” That could including raising or suspending the borrowing cap in a broader year-end deal, which would require bipartisan support, or trying to use the Senate’s special budget rules to avert GOP opposition.
The latter route, known as reconciliation, would allow Democrats to act using only their tiebreaking majority. But it is not clear if Democrats have enough time to invoke the procedure — or the support of those who believe the two parties should work together to protect the country’s credit. Democrats cited similar concerns when they opted against using reconciliation for a party-line vote on the debt ceiling in 2021, after Republicans refused to supply any votes in an attempt to force Biden to cut spending.
“We’re not going to sit around while these far-right Republicans try to haul in some ideological trophies by harming, really gutting, Social Security and Medicare,” Wyden said.
Republicans, in contrast, signaled early opposition to raising the debt ceiling in the final hours of the year. Citing the fact that plenty of time remains before the limit is reached, Rep. Adrian Smith (R-Neb.), who is vying to serve as chairman of the House Ways and Means Committee, said he didn’t “see a need to rush into something.”
Otherwise, Smith said Social Security and Medicare each needed to be strengthened to improve their finances, adding of the debate to come: “It is incumbent on us to work together.”