US shutdown looms: Top House Republican Kevin McCarthy faces crucial test | ET REALITY

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WASHINGTON (Reuters) – U.S. House Speaker Kevin McCarthy faces the biggest challenge of his eight months as the top Republican in Congress as he tries to rally his fractured caucus to avoid a shutdown. government in less than two weeks without losing his position as speaker.

The Republican-controlled House and Democratic-led Senate have until Sept. 30 to avoid the fourth partial U.S. government shutdown in a decade by approving spending legislation that President Joe Biden can be enacted to keep federal agencies afloat.

But hardline activism on spending, policy and impeachment has divided House Republicans and slowed the Senate’s progress in passing bipartisan spending legislation.

The brinkmanship has begun to attract the attention of Wall Street, with ratings agency Fitch citing repeated last-minute negotiations that threaten the government’s ability to pay its bills as it downgraded U.S. debt to AA+ from its top designation. AAA. at the beginning of this year.

House Democratic leader Hakeem Jeffries warned Sunday that the situation amounts to a Republican “civil war.” The logjams are not limited to the House of Representatives, as a hardline Republican in the Senate, Tommy Tuberville, has blocked the confirmation of hundreds of top military officers in a dispute over abortion access.

McCarthy said he hopes to move forward this week on an $886 billion fiscal 2024 defense appropriations bill, which stalled last week when hardliners withheld support for demanding a level of spending. maximum for fiscal year 2024 of $1.47 trillion, $120 billion less than McCarthy and Biden agreed to. In May.

“I gave them an opportunity this weekend to try to figure this out,” the California Republican said in a Sunday interview with Fox News’ “Sunday Morning Futures.”

He said weekend negotiations with hardliners had made progress, but added: “We will take it to the room, win or lose, and show the American public who is for the Defense Department and who is for favor of our army.”

Late Sunday, moderate and hardline House Republicans reached an agreement on a short-term stopgap spending bill, known as a “continuing resolution,” or CR, that could help McCarthy advance in defense legislation.

The measure would keep federal agencies afloat until Oct. 31, giving Congress more time to approve large-scale appropriations by 2024. However, it was unclear whether it would gain enough Republican support to pass the House.

But like the defense bill, which the White House has already threatened to veto, the CR is unlikely to succeed with Democrats and become law.

It would impose a spending cut of more than 8% on agencies other than the Department of Defense and the Department of Veterans Affairs and includes immigration and border security restrictions that Democrats reject.

With a 221-212 majority, McCarthy himself can afford to lose no more than four votes to pass legislation that Democrats unitedly oppose.

He declared last week that “no one wins” from a shutdown and pledged to keep the House in session through next weekend if necessary until legislation to fund the government is adopted.

But some members of the hardline House Freedom Caucus are openly embracing a shutdown as a negotiating tactic to get their way on conservative spending and policy priorities.

“We have to stand firm,” Rep. Chip Roy, a member of the Freedom Caucus, said late last week. He told an enthusiastic Conservative audience that a shutdown is now “almost” inevitable and said Conservatives must be prepared for “the fight coming in October.”

Moderate Republicans predict that Congress will ultimately stick to the spending level set by the Biden-McCarthy deal.

“At the end of the day, that’s the only thing that will become law,” said Rep. Patrick McHenry, a close McCarthy adviser.

Unless the House can move forward on spending, Republican leaders say privately they could be forced to move directly into negotiations with Senate Democrats on appropriations bills, bypassing hardliners.

The goal would be bipartisan legislation that could be quickly passed by both chambers and signed into law by Biden. But the consequences could be dire for McCarthy, who already faces the threat of an overthrow.

“It would be the end of his term,” said Rep. Ralph Norman, another member of the Freedom Caucus.

Other House Republicans fear that McCarthy’s decision to open an impeachment inquiry into Biden could make it more difficult for Democrats to cooperate on spending. The White House has criticized the investigation as baseless, and many moderate Republicans say they have seen no tangible evidence of wrongdoing by the president.

“We are moving toward a government shutdown without making progress in reducing our runaway spending. Yet Republican leadership has decided to divert attention toward an impeachment inquiry,” Rep. Ken Buck said in an op-ed from the Washington Post late last week. “House Republicans longing for impeachment are relying on an imagined story.”

The graphic shows the timeline of the 14 US government shutdowns between 1981 and 2020, and the possible shutdown looming in October 2023 if Congress does not enact spending measures.

Reporting by David Morgan, additional reporting by Richard Cowan; Editing by Scott Malone, Sandra Maler and Shri Navaratnam

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