9 min read

Let the spending wars begin

The House will aim to kick off the government spending process today, amid battles over culture wars and funding levels.
Let the spending wars begin
“The U.S. Capitol awash with dollar bills, digital art.” (DALL-E)

Good morning! It’s Wednesday, July 26, 2023. The 2024 elections are 468 days away. If this newsletter was forwarded to you, subscribe here. If you want to contribute to support my work, donate here.

One of the main powers assigned to Congress under the Constitution is the “power of the purse,” the authority to set the federal budget and oversee government spending.

Over time, Congress has created a set of procedures — known as the “appropriations process” — for annually utilizing this power. Each year, there are 12 appropriations bills lawmakers must pass, each of which covers different buckets of federal agencies (one of them is “Commerce-Justice-State,” another is “Labor-Health and Human Services”). Together, these 12 bills make up the federal budget, divvying up hundreds of billions of dollars in spending between them.

The federal fiscal year ends on September 30 — that’s when last year’s appropriations bills expire and this year’s must be passed — so summer and fall in Washington are often dominated by fierce negotiations over government spending.

This week, House Republicans plan to kick off the spending battles, with GOP leaders aiming to bring two appropriations bills to the floor: “Military Construction-Veterans Affairs” and “Agriculture-Rural Development-Food and Drug Administration.” They would be the first of the 12 Fiscal Year 2024 appropriations measures to receive votes in either chamber.

However, GOP leaders are running into opposition from Democratic and Republican members alike, threatening passage of the “Milcon-VA” and “Ag-FDA” measures, as they are known on the Hill.

There are a few dimensions to these disagreements, but a major underlying dispute is over how much total money the government should spend in FY 2024.  

Here’s a quick cheat sheet. In FY 2023 (the period from September 2022 to September 2023), Congress allocated a total of $1.6 trillion across all 12 appropriations bills. The debt ceiling deal inked between President Biden and House Speaker Kevin McCarthy in May set a funding cap of $1.59 trillion, a slight decrease, for FY 2024.

But conservative Republicans in the House Freedom Caucus were unsatisfied with the debt ceiling deal and want McCarthy to go much lower than that cap. They have pushed him to return to the FY 2022 topline spending level, or $1.47 trillion.

McCarthy agreed to that demand, putting together an FY 2024 budget at FY 2022 levels. However, Republican leaders used a backdoor tool known as “rescissions,” which claw back unspent funds from last year and repurpose them as new spending this year. That way, on paper, McCarthy’s FY 2024 budget has a funding level of $1.47 trillion — but, if you include the extra $115 billion being repurposed from last year’s appropriations bills, the real total kicks up to approximately $1.586 trillion.

That number isn’t pleasing anyone. Since it’s lower than the spending outlined in the debt ceiling agreement, Democrats view it as McCarthy reneging on their deal. (Technically, the debt ceiling bill set funding caps — a “ceiling, not a floor,” McCarthy likes to say — but the amounts were widely seen at the time as the agreed-upon funding levels for the fiscal year.) And since the rescissions mean 2024 spending would be higher than 2022, the level McCarthy promised them, the Freedom Caucus is just as unhappy.

Six members of the Freedom Caucus held a press conference on Tuesday to outline their appropriations demands. These GOP members do not want all 12 appropriations bills packaged together into one piece of legislation (that’s known as an “omnibus” bill, and it’s generally how the appropriations process ends up). Instead, this year, they want each bill debated separately, on its own terms.

But they do want to wait for all 12 appropriations bills to arrive on the floor before voting on any of them, to assess the total spending level before they start to consider individual bills. There are still two spending measures that haven’t made it out of committee, so that throws a wrench in McCarthy’s plans to vote on the Milcon-VA and Ag-FDA packages this week.

The Freedom Caucus contingent also railed against the use of rescissions. “We want the ’22 levels, and we want no rescissions,” Rep. Ralph Norman (R-SC) said at the press conference. “No smoke and mirrors for the American people. We want a budget that trims the fat, goes to programs that will defend and protect this country.”

The first test of their resolve could come as early as today, when McCarthy plans to begin consideration of the Milcon-VA package. The $155.7 billion measure does not include any rescissions, so it is the most likely spending bill to receive conservative support, but voting today to advance the bill would still amount to considering an appropriations measure before all 12 have reached the floor.

As usual, McCarthy is operating with a slim margin: if all Democrats oppose the bill, he can only afford to lose four Republican votes. Most, if not all, Democrats are expected to oppose the GOP appropriations bills — not only because of the disagreement over funding levels, but because of culture war fights that have been injected into many of the measures.

Not even the Milcon-VA bill — which focuses on defense construction projects and veterans’ benefits, usually one of the least controversial appropriations bills — has been immune. The Republican-drafted package would block VA clinics from offering gender-affirming care or abortion services (except in cases of rape, incest, or risks to the life of the mother), while also banning Pride flags from being flown at VA facilities.

This week, the House will also consider a package of 41 amendments to the measure, which include conservative proposals to defund the VA diversity and inclusion office, block funds from being used to carry out Biden executive orders on climate change, and prohibit mask and vaccine mandates at the agency.

Another GOP amendment would block the VA from moving forward with the agency’s plans to adopt a new mission statement. The current mission statement, adopted in 1959, reads:

To fulfill President Lincoln's promise “to care for him who shall have borne the battle, and for his widow, and his orphan” by serving and honoring the men and women who are American veterans.

The proposed mission statement would be:

To fulfill President Lincoln’s promise to care for those who have served in our nation's military and for their families, caregivers, and survivors.

Of course, even if any of these culture war provisions pass the House, they will run into a buzzsaw in the Democratic-controlled Senate.

Just as the Senate has been running a more bipartisan process than the House on the annual military policy package (more on that below), the appropriations process has been much more conciliatory in the upper chamber.

So far, the Senate Appropriations Committee has approved its own versions of nine of the 12 spending bills, all with either unanimous or overwhelming bipartisan support.

The Senate panel also has its own 2024 funding level in mind, further complicating the spending debate. While the Senate bills were drafted to share the debt ceiling bill’s $1.59 trillion topline, Senate Appropriations Committee chair Patty Murray (D-WA) and ranking member Susan Collins (R-ME) announced a deal last week to allocate even more funding through “emergency” spending provisions.

The extra $13.7 billion would bring the Senate’s appropriations total to $1.6 trillion, on par with 2023 levels and therefore much too high for House Republicans.

There isn’t much time for the House and Senate to close their multi-billion-dollar gap. Although government funding doesn’t expire until September 30, Congress is set to be on recess for much of the next two months.

The Senate will leave for recess Thursday and not return until September 5. The House will leave on Friday and not return until September 12.

If lawmakers have not agreed on all 12 appropriations bills by then, they can pass a “continuing resolution” to temporarily maintain the current funding levels. If not even a stopgap CR can be approved by September 30, the government will shut down.

According to several news outlets, House Republicans increasingly expect a shutdown will take place. At their Tuesday press conference, the Freedom Caucus conservatives seemed unbothered by that prospect.

“We should not fear a government shutdown,” Rep. Bob Good (R-VA) said. “Most of what we do up here is bad anyway.”

Your daily DeSantis.

Florida Gov. Ron DeSantis is still resetting. (Gage Skidmore)

Last week, when the DeSantis campaign laid off about 10 staffers, I wrote that it wasn’t a major enough change to be considered a “reset,” the term du jour for the DeSantis campaign these days.

When John McCain reset his campaign in July 2007, I noted, he laid off closer to 100 staffers.

Well, yesterday, DeSantis initiated a larger-scale shakeup, laying off more than one-third of his campaign staff in an attempt to cut spending and streamline his operation.

Recent fundraising reports had shown DeSantis boasted the largest staff of any 2024 campaign — 92 employees, double the Trump payroll — and was burning through money at an alarming rate.

One of the newly fired staffers was Nate Hochman, a young speechwriter prominent in conservative circles. Per Axios, Hochman secretly created a recent pro-DeSantis video that featured a Sonnenrad, an ancient symbol used by Nazis and white supremacists. The video was reportedly made by Hochman and then posted by an outside account to look as though the campaign had not been involved.

More bad news for DeSantis: According to a Monmouth poll released yesterday, the Florida governor’s favorability rating has dropped 15 points among Republicans, plunging from 80% in February to 65% now — a sign that Trump’s attacks against him have stuck with the GOP electorate.

The poll also showed that one of DeSantis’ prime arguments against Trump — electability — is hardly resonating with GOP voters. 47% of Republicans in the poll said DeSantis would be a weaker general election candidate than Trump, while just 22% said he would be stronger.

More news to know.

Rudy Giuliani made a big admission this morning. (Gage Skidmore)

In a court filing this morning, Rudy Giuliani acknowledged that he made “false” statements about Ruby Freeman and Shaye Moss, two Georgia poll workers who are suing him for baselessly claiming they committed election fraud.

The Education Department has opened a civil rights investigation into Harvard’s legacy admissions policy.

U.S. consumer confidence is at its highest level in two years, a sign that the president’s “Bidenomics” push might be working as inflation eases.

In other promising economic news, UPS and the Teamsters announced a tentative deal they hope will avert a crippling strike next week.

House conservatives are urging Speaker Kevin McCarthy to prioritize impeaching President Biden rather than members of his Cabinet. McCarthy said Tuesday that if the Biden administration withholds information from lawmakers, the House will move forward with impeachment.

The day ahead.

Homeland Security Secretary Alejandro Mayorkas will be grilled by lawmakers today. (World Travel and Tourism Council)

In the Senate: The upper chamber will continue consideration of the FY 2024 National Defense Authorization Act, the annual military policy package. (Authorization bills, which are not passed for most agencies, lay out the policies under which government agencies can spend their money. But appropriations bills, like those discussed above, are the measures that actually give the money to the agencies.)

Continuing its bipartisan NDAA process, the Senate passed two amendments yesterday to prohibit Chinese investment in U.S. farmland (approved 91-7) and require U.S. companies to notify federal agencies of investments in Chinese technologies (approved 91-6). The Senate is set to vote today on an amendment by Sens. Raphael Warnock (D-GA) and Ted Budd (R-NC) designed to halt debt collector harassment of service members.

In the House: The lower chamber is set to begin consideration of the Military Construction-Veterans Affairs appropriations bill.

At the committee level: Homeland Security Secretary Alejandro Mayorkas will testify before the House Judiciary Committee. Health and Human Services Secretary Xavier Becerra will testify before the House Energy and Commerce Committee. The House Oversight Committee will hold a hearing on UFOs.

At the White House: President Biden and Vice President Harris have nothing on their public schedules.

At the Federal Reserve: Fed chair Jerome Powell will hold a press conference to announce whether the central bank will resume increasing interest rates.  

In Delaware: Hunter Biden is set to be arraigned on federal tax charges. He will plead guilty to not paying federal taxes on time in 2017 and 2018.

Thanks for reading.

I get up each morning to write Wake Up To Politics because I’m committed to offering an independent and reliable news source that helps you navigate our political system and understand what’s going on in government.

The newsletter is completely free and ad-free — but if you appreciate the work that goes into it, here’s how you can help:

If you have any questions or feedback, feel free to email me: my inbox is always open.‌‌‌‌

Thanks so much for waking up to politics! Have a great day.‌‌‌‌

— Gabe