The Dispatch Podcast - On the Brink of a Government Shutdown

Episode Date: September 26, 2023

GOP hardliners aren’t negotiating with House Speaker Kevin McCarthy, as government shutdown looms. Government Relations Strategist Liam Donovan joins The Dispatch to break down how we got here and: -Ukraine’s funding -Senate pushing a Continuing Resolution to stave off a shutdown -McCarthy’s House resistance -Gaetz pushing for a betrayal Show Notes: -Watch this episode on YouTube Learn more about your ad choices. Visit megaphone.fm/adchoices

When you're with Amex Platinum, you get access to exclusive dining experiences and an annual travel credit. So the best tapas in town might be in a new town altogether. That's the powerful backing of Amex. Terms and conditions apply. Learn more at Amex.ca. www.ca.orgiax. Did you lock the front door? Check.

Close the garage door? Yep. Installed window sensors, smoke sensors, and HD cameras with night vision? No. And you set up credit card transaction alerts, a secure VPN for a private connection and continuous monitoring for our personal info on the dark web. Uh, I'm looking into it.

Stress less about security. Choose security solutions from TELUS for peace of mind at home and online. Visit TELUS.com. Total Security to learn more. Conditions apply. Welcome to the Dispatch podcast. I'm Mike Warren, senior editor at the Dispatch. And today we're talking with Liam Donovan, a Republican lobbyist and advisor who is my

go-to source for all questions on process and politics when it comes to Capitol Hill. We'll talk about the state of things right now as Congress barrels toward a government shutdown. Can the Senate save the government? Will the House Republican Conference get their act together? We're going to talk about all of that in just a moment. Liam Donovan, welcome to the Dispatch podcast. Okay, Liam, let's take stock of where we are.

We were recording this on Tuesday morning, September 26, It is, what, essentially five days until the government shuts down as we record it. And things are looking pretty bleak in terms of avoiding the shutdown, but the Senate is doing their darnness to try to come up with some kind of short-term strategy for getting the government funded. It would be 45 days' worth of Ukraine aid at the... at a certain level, disaster money. I guess that's what the Biden White House is pushing.

The Senate may be not able to get that. What is going on? How should we judge whether the Senate, after the House was unable to get something passed last week, how the Senate is doing, and how likely that is to actually pass? Sure. I think that's been the undercover story to some degree,

while everybody's had eyes on the House and their dysfunction, this work period was supposed to go very differently for the Senate. They were supposed to spend that first two weeks working through a series of non-controversial bipartisan appropriations bills that would make the pressure overwhelming on the House to accept whatever the Senate dictated. And it was expected at that point to be something longer on the CR side, something that included a full supplemental that likely included significant disaster relief and maybe a full complement for Ukraine. That did not turn out to be the case as we saw almost a mirror image where one or two members really were able to break down that process.

And because the Senate, while it's not the majoritarian body that the House is, it functions on consent largely in terms of moving process along. And without getting all hundred senators to be able to say, okay, we're going to move on in this fashion, they had to kind of throw up their hands. And we've now cycled through to the CR. We've left behind the appropriations bills themselves. And what that's left us with is, as you described, something that is not very ambitious, but I think that's actually very positive if you're looking at a relatively smooth, and I say relatively smooth resolution. because unlike it we might have expected heading into this month, the Senate isn't looking to shove it down the House's throat.

This is a pretty benign CR pitch. And even if it's not something that the House or McCarthy can take up right away, it's still what you'd probably imagine the House eventually go along with, even if it's painful to get there. So the problem for the Senate is, based again on the fact that they only move quickly, with full consent, they need that consent to get it done by Saturday, which is the deadline upon the government. You have three rounds of cloture. You have hours of debate here, there, and everywhere. So they are going to need to figure out how to give the squeaky wheels what they

want in order to speed up that timetable and get anything over to the house to even be in a position to avoid a technical shutdown. Yeah, it seems functionally things are all topsy-turvy here, right? I mean, as you point out, the Senate, it's deliberative. It is supposed to slow things down. It should not be the body that's taking the lead on how to fund the government from here on now. This should be the purview of the House of Representatives. It's action-oriented. It is majoritarian. And yet, the House couldn't get its act together. Well, my question with the Senate is, is Senate leaders, the Democratic Senate leadership thinking in terms of what could potentially pass in the House, this narrow House majority that Kevin McCarthy has, are they really having to tweak things here

and are making decisions based on the sort of chaos that they're seeing on the other side of the Capitol is, how is what they're watching in the House affecting how Senate leadership is thinking this through? This less ambitious proposal is essentially a recognition that the House Republican leadership is in a bind, right? You know, I think there's some of that, but it's not only that. And that's why I raised the fact that the Senate has not been able to move as smoothly as they expected. And so I think the less ambitious version of a CR is also a reflection and a recognition that the Senate hasn't been able to exert the sort of leverage you might have expected. I do think that this is all about the path of least resistance. The thing we haven't talked about that I think is also relevant is that Rand Paul spoke up and indicated that he would not support moving forward with anything that included significant Ukraine additional spending.

And so I think that helped the house in a major way because, you know, CRs aren't usually sturdy enough to sustain anything that's not fairly – consensus. And so if the Senate sent something over with significant chunk of Ukraine funding, it would be really tough on the House. I don't think they're necessarily only doing it out of courtesy to the House. I think is as much about trying to get through something through the Senate chamber as well and a realization that later in the year, the subsequent funding package that's going to be required will be sturdier and more able to carry that kind of a load. Again, before we get to the House here, is Ukraine funding in real trouble? Or is this just something that Congress is going to have to deal with after they get through the general

spending issue? I mean, it's certainly a problem. Look, they are, they are eliding the problem for now. But that doesn't make it any tougher. I think the will of these majorities ends up carrying out. I mean, you do have 60 votes, more than 60 votes in the Senate. And, you know, 300-some votes in the house. But that doesn't make it easy. And part of why you hitch it to bigger things is so it can't be singled out and, you know, sort of picked apart. But it also means that when you have a vocal minority,

you have an overwhelming majority that is not that, by and large, not that vocal, but you have this screeching minority that is very loud and powerful in some ways with the standard bearer of one of the major parties out there making a big issue of it. So it's a pain point for sure. If I'm a betting man, I think it will get done later in the year. But I think it's overly sanguine to say, oh, no issues. They're just, you know, we're still in a strong position.

If they could do it here and now they would and they're not able to, and that's not a good sign for, you know, proponents of you. granted. Okay, let's turn to the House and the House Republicans. It feels like certainly you and I and I'm not the only journalist you talk to about these issues. It feels like we're having the same conversation all the time for years

now about the House Republican conference and now that they're back in the majority it's the same old song to quote the four tops. We were talking back in January and then back in May just over text. I think we did a podcast

it's the same problem. You've got this very small number of Republicans in the House who are essentially intractable. They don't want to give Kevin McCarthy or the House majority any wins unless their demands are met. That's at least what they're saying. It's what it appears to be. Eventually, Republicans were able to get Kevin McCarthy

over the finish line to become Speaker. Kevin McCarthy was very successful earlier this year at pushing forward a spending bill or I guess I should say actually it's hard to keep all of these straight, Liam. It was the debt ceiling deal and there was a threat, it seemed, to his speakership there. And yet here we are again.

Kevin McCarthy is once again on a knife's edge and you have people like Matt Gates and others, people from the House Freedom Caucus, who are making problems for Kevin McCarthy. Zoom us back. Why do we keep seeing this problem? And is there any sense that we're going to, the story's going to change at some point.

Maybe not now, but maybe soon. I mean, it is Groundhog Day in every respect. I think, you know, the last nine months have been instructive in a lot of ways. We are full circle to January, the same cast of characters involved in creating the problems. But as you mentioned, there was a relatively functional period when the house had its first big test. And I think, you know, what's notable here, and it's not just like looking at the past year, but it's looking at the past really 10 to 12 years, these same members and their forebearers have always been, sort of pushed aside by speakers and marginalized because they weren't necessarily.

What's different about this Congress and what's different about this speaker was that he had no choice but to sort of put them in the game and take his chances, put him on the rules committee. He's been begging, pleading, doing whatever he could to get their support. Now, this is a function not only of the narrow majority, right? Now, at this point, it's four seats, essentially, that Republicans have. but also that the conference itself is ideologically less moderate or more conservative. It's sort of both of those aspects working together. I don't mean to interrupt you.

I just think that's an important context. No, no, I think it's, you're right. I mean, it's compounded. I think that this wing of the party has long existed, certainly post-T party. It has only grown and the incentives have only. reinforced this style while pushing out people that didn't want to stick around

in a conference where this is how things were going. But the truly I think indelible part of this Congress is that margin so that even if you had the same number of people that does in 20 people, you think back to Boehner and

the mutineers trying to come after him, it was never quite enough, same thing with Ryan. But that same number is more than enough under MacArthur. And so what he managed to forge in January and what they ultimately sort of demanded was what they referred to as a coalition

type arrangement, almost a parliamentary approach to governing. They're almost a third party in a way and their ongoing participation and buy-in was necessary to keep going. You saw proof of concept for this back in May and June, and I know we talked about it at the time as it was happening, but you saw what nominal success looked like of the House passing what the unified House could pass, establishing a bargaining position, empowering the Speaker to go to the Democratic Senate and the Democratic White House, and in that case, I guess, just directed the White House and negotiate what could be gotten, right? turned out going through that exercise, having empowered him, you know, given him their votes to, to find victory, incremental victory or otherwise, they didn't like what was possible.

And I think that's what this is a function of is a realization that wait, if we do everything right and we trust the speaker and we all stick together, we are team players, we're still going to end up with a bill that we don't. don't like that our constituents are going to complain about. And so why bother? And so I think that's the reality that we're dealing with. And that's not going to change. When you only have the House with a Democratic Senate and Democratic White House, and that House majority is paper thin, you only have so much leverage. And doesn't matter how intransent you are. It doesn't matter whether you shut it down or defaults or anything like that, your leverage is only as much as you can muster for what you can be for. And that just doesn't really work in this arrangement.

And so you get back into the same dysfunction where the individual incentives of these members is to just say, forget this, let's shut it down. The catch is that the majority is ultimately, well, you can't get to 218 without these handful of holdouts And really, you have to think about this. Like, as you mentioned, the conference has gotten more ideologically conservative or populist or however you want to say it. But we're really only talking about about five, six, maybe a handful more at any given time that are truly not willing to take yes for an answer, not willing to name their price because they don't really want anything except to make leadership squirm.

And that's what is going to, that's what's the problem here. that's what's going to continue to be a problem and what McCarthy's goal and ultimately his challenge is is to really consolidate his support among the 210 or so members who can who can be reasoned with and marginalize the others such that his ongoing speakership is is safe because you're only talking about a handful of unreasonable people that that are holding this thing up for everyone else. Not long ago, I saw someone go through a sudden loss, and it was a stark reminder of how quickly life can change and why protecting the people you love is so important. Knowing you can take

steps to help protect your loved ones and give them that extra layer of security brings real peace of mind. The truth is the consequences of not having life insurance can be serious. That kind of financial strain on top of everything else is why life insurance indeed matters. Ethos is an online platform that makes getting life insurance fast and easy to protect your family's future in minutes, not months. Ethos keeps it simple. It's 100% online, no medical exam, just a few health questions. You can get a quote in as little as 10 minutes, same day coverage, and policies starting at about two bucks a day, build monthly, with options up to $3 million in coverage. With a 4.8 out of five-star rating on trust pilot and thousands of families already applying

through ethos, it builds trust. Protect your family with life insurance from ethos. Get your free quote at ethos.com slash dispatch. That's E-T-H-O-S dot com slash dispatch. Application times may vary, rates may vary. Maybe it's Mabelene is such an iconic piece of music. Hit the check. Everyone in the studio that I worked on this jingle with all had like childhood stories or memories around either watching these commercials on TV or sitting with our mom. while they were doing their makeup, and it became really personal for us. Maybe it's Maple Lane.

Maybe it's Maple Lane. This episode is brought to you by Squarespace. Squarespace is the platform that helps you create a polished professional home online. Whether you're building a site for your business, your writing, or a new project, Squarespace brings everything together in one place. With Squarespace's cutting-edge design tools,

you can launch a website that looks sharp from day one. Use one of their award-winning templates or try the new Blueprint AI, which tailors a site for you based on your goals and style. It's quick, intuitive, and requires zero coding experience. You can also tap into built-in analytics and see who's engaging with your site and email campaigns to stay connected with subscribers or clients. And Squarespace goes beyond design. You can offer services, book appointments, and receive payments directly through your site. It's a single hub for managing your work and reaching your audience, with a single hub for managing your work. out having to piece together a bunch of different tools.

All seamlessly integrated. Go to Squarespace.com slash dispatch for a free trial. And when you're ready to launch, use offer code dispatch to save 10% off your first purchase of a website or domain. Well, and, you know, I think we saw this. And as a reporter, I'm always looking for, okay, we may say it's the same old story, but hey, something different is happening here.

And this happened when I thought McCarthy did a pretty savvy job of putting two pretty strident members of the House Freedom Caucus in a room with two members of the, we call them moderate, but they're really not moderate. They're pretty conservative, but from sort of moderate districts from the Main Street caucuses of the problem solving kind of group to come up with some kind of proposal before it was completely skis. guttled by Matt Gates and that crew of four or five others of some kind of spending CR proposal that they could at least start the negotiations with the Democratic Senate with. That was Scott Perry, a very populist pro-Trump Freedom Caucus chairman, and Byron Donalds, again, another sort of outspoken, always on Fox News, conservative. They came up with a plan, and I was struck by how, And I don't mean this as an insult, although they may take it as one.

How sort of establishmentarian they were in their defense, you know, in the media, and it sounded like in their private conference meeting last week, how establishmentarian they were. Hey, guys, let's all, we've got to come together. This is the best we can do at this point. And I started to see those fissures, which I guess have always existed, even in the sort of populist far-right freedom caucus, between people who weren't to get something done, and people who really are there just to be the fly in the punch bowl for Kevin McCarthy, is there any sense that the sort of even these populist strident conservatives

throwing their hands up? Because that, and saying, you know, I'm very right wing, but these guys are really nuts and don't, we'll take yes for an answer. Is there any movement because they're are, they have now experienced the pain and frustration that Kevin McCarthy has been experiencing. I mean, the frustration is definitely building within the conference. There's no question about that. And it really does go back full circle January because remember

there were 20 some holdouts. When you think about the first ballot and that kind of thing. Right. And it was, it was the same people. It was Scott Perry and Shiproy who were negotiating the agreement or the understanding with McCarthy. And they ultimately got it down by the

seventh ballot to like six people. or whatever it was, the same exact people, and that's because they were able, he gave them whatever they wanted. The store was open. He was bargaining. What do you need? What do you need? What's, let's make a deal. Let's make something happen. It's the exact same thing here. Not only did Perry and did the Freedom Caucus Main Street kind of framework come out, even after that, they went to conference and said, go to Byron Donald's, tell them what you need. We will give you whatever you need. So it's the same exact thing where at a certain point you're not dealing with people that actually want anything that you can give them because what they want is for you to

suffer political pain and discomfort. I do think that that begins to alienate elements of the conference, but at the end of the day, you know, you have to get around them or go through them. And I don't think we're there yet. And that's what the balance is here is. McCarthy needs to play this out such that he's met that threshold for the overwhelming majority of his conference to be with him, to feel like they have cover. And, you know, look, at the end of the day, we know, I mean, two points, I guess. One, the government will be funded, and it will be funded with Democratic votes because it needs to be signed by a Democratic president and go through a Democratic Senate.

That means it's going to have Democratic votes in the House. So the only question is when and how does that happen by what means? There is at once no immediate acute pain that is likely to be felt through the shutdown from a political standpoint, which on the one hand may feel like, well, it could go on forever. It could be like the last one. It goes on indefinitely and nobody feels any pain. The flip side of that, the flip side of that is that if there's no pain, there's no actual leverage, and there's no agreed upon objective here. So other than blowing off some steam, there's diminishing returns.

So it becomes that threshold question for McCarthy, at which point you have to say, okay, we've indulged this, we've demonstrated there's no leverage on the other side of this cliff. and most of your conference is probably going to be with you if it comes time to let's say there's only a limited number of ways that this can be resolved. One is you just make a deal with Democrats because the Senate version of the CR is fine and they'll work with you on the rule.

That's the real problem here is that rule layer, that procedural layer that the majority has to carry if you don't have a majority on your own, you're sort of hat in hand. This is, and just for just for listeners to sort of understand them, the House of Representatives operates based on the majority set rules. And if the majority, if you can't get Republicans in Congress to agree on the rule by which

you are then voting on the thing you are voting on, you're in deep trouble. And it is not the kind of place like in this. Senate where, you know, people will accept other members from the other side of the aisle to get, to get cloture, as they call it in the Senate, to get the rule passed in the House. It's kind of a big no-no, right? You know, majority's rule in the House, and that could be a real problem. It brings me to a question, Liam, that maybe pedestrian. This is, like, this is sometimes I will text Liam questions, and he will basically be like,

no, that's not going to happen. And so this is how I learn and try to figure this out. But I think it is worth asking because we have been focused in our coverage and others as well on the 18 Republicans from districts that Joe Biden won in the 2020 election. And some of them are more vocal than others, but they're getting really frustrated too. They have their seats to be concerned about in 2024. Is there, either on the spending issue in the micro sense or in the macro sense, is there any chance that some kind of consensus across the aisle group kind of takes control

out of Kevin McCarthy's hands or out of the four or five hard right members of the Republican conference and actually tries to forge something. It sounds crazy to anybody who covers the house and knows the house

and yet these are crazy times. Am I crazy for bringing this up? No, you're not. I mean, I'll say this. There was an inordinate amount of attention too much, I would say, on the mechanism of the so-called discharge petition. And so when nobody can figure out

how the debt limit was going to be raised that one of the theories was, well, we have this discharge petition. That was never really going to happen and it never needed to happen because the House got its act together and actually bargained sort of in good faith. But what that left in its wake was there is a vehicle that has ripened and has the signatures of I believe $212,000, maybe it's 213 Democrats, and therefore would only require a handful of Republicans to cross over sign that petition and in an interesting trick of sort of rules magic it creates a vehicle that is fill in the blank it's whatever in this case richy neale whatever the ranking member of the ways and means committee offers as an amendment the day before

becomes what the house considers now there are various reasons why that's a big no-no to sign a discharge petition there are reasons why there might be missing trust as to what the Democrats would offer if you signed that line. But if you are those members in those districts and have that level of frustration, one, you might genuinely be willing to do it. And two, indicating a willingness to do it is about the only thing you can do to give, provide leverage to McCarthy, to have leverage yourself to make these guys buckled. At the end of the day, I compare it to the legislative version.

of saw where these guys are just kind of torturing McCarthy and the only tool he has there to free himself is some sort of avenue with Democrats other than using Democrats to get around this rules problem it's discharge that keeps his hands free right there's no fingerprints on this if if you know Mike Lawler and Don Bacon who ever signed this discharge petition and let's say they put in the Senate version of CR great your immediate problem is solved, but the long-term problem persists, which is, number one, you're right back at square one in 45 days or two months or whatever, because you still have to fund the government for the rest of the year. So we're going to be right back in the same position, only you're going

to have an even more intractable and ticked off, you know, base of nihilistic members standing in your way. So there are a couple tricks that you can use, but as a sustainable majority, it's really hard to muster that, short of an understanding with your counterparts on the Democratic side, which again, remember at the end of the day, that's really what Matt Gates and those guys want, is to force McCarthy into that position where he has to betray them, right? That is very obviously what's happening here, you know, the problem for them as ever, and it might not be a problem because they're not really after anything, is there's nobody obvious who would come in McCarthy's wake.

It's not clear who could do the job and get the votes. It's not clear who would want to do the job or get the votes. So I think that the song remains the same in that regard. But I think that's the thing that people need to bear in mind. For all the drama this week, next week, maybe the next few weeks or months, this is all just a wind-up for what's going to be a much more painful process with much bigger stakes at the end of the year when we have to, God forbid, do an omnibund. or take up, because this is just

the CR, this is just keeping the government lights on. The funding levels on September 30th are the same as October 1st unless you screw this up. And so the CR should be the easy part, especially with what the Senate's they're not trying to shove it down your throat, this shouldn't be hard, but at this point, it's not

entirely rational what we're doing. So at the end of the year, it's going to be that much trickier and weight year. And remember, part of the debt limit deal was if we don't pass those full year bills, there's a 1% across the board haircut. And that's, that's only in the event that we have a CR that continues into next year and it has to go significantly into next year. But that's not

nothing. That's going to be real, that's going to be real potential pain as opposed to right now. We have several months for Congress to get their act together. You've now put a new sort of image or metaphor in my head on this, Liam, which is Kevin McCarthy in the discussion. bathroom chained to the wall like Carrie Elway's and saw and Matt Gates wearing the mask of the serial killer in that movie. It works too well

and I'm a little disturbed by it and I don't know if I'm going to be able to sleep at night. Liam Donovan, thanks so much for joining us. We've got we'll have to do this again in December as you just said. So let's find some time to discuss that. Who knows? Maybe by the time

this podcast posts, everybody will come to their senses. They'll have some kind of agreement, the Senate will fast track it, and we'll avoid a government shutdown. I'm not counting on it, and I don't think you are either. I'm not holding my breath. Okay, okay, all right. Well, you know, hope springs eternal. Liam Donovan, thanks so much for joining the dispatch podcast. Thanks, Mike. Anytime. Calling all book lovers. The Toronto International Festival of Authors brings you a world of stories all in one place.

Discover five days of readings, talks, workshop and more, with over 100 authors from around the world, including Rachel Maddow, Ketouru Isaku, and Kieran Desai. The Toronto International Festival of Authors, October 29th to November 2nd. Details and tickets at festivalofauthors.ca.