Congress returns with the clock ticking to avert government shutdown, fund U.S. disaster response

A deeply divided Congress returned Tuesday from a monthlong summer vacation with the clock ticking to pass spending legislation to avoid a government shutdown and boost U.S. emergency response funding following multiple natural disasters.

The U.S. government will shut down at midnight on Sept. 30 if Congress fails to pass spending legislation. While the Senate is back in session Tuesday, the House will not return to work until Sept. 12, leaving nearly three weeks to pass funding before the deadline.

The White House on Thursday asked Congress to pass a single short-term measure, called a continuing resolution, to fund the federal government at current levels and avoid a shutdown while negotiations continue over a dozen long-term funding bills.

The leaders of both chambers agree that a short-term measure is the best way to avoid a government shutdown. Senate Majority Leader Chuck Schumer, D-NY, said in August that he and House Speaker Kevin McCarthy, R-Calif., agreed that Congress should pass a continuing resolution to extend funding at existing levels for a few months.

The continuing resolution is a stopgap measure that would set up for a potential shutdown at a later date if Congress cannot in the interim pass the longer-term spending bills. The Republican-led House of Representatives has only passed one of a dozen bills needed to fund the federal government through 2024.

McCarthy came out publicly in support of a continuing resolution to keep the government running during an interview with Fox News last month. He sought to cajole House Republicans into supporting the measure with a warning that investigations into the Biden administration would grind to a halt if the government shuts down.

“If we shut down, all of government shuts it down, investigations and everything else. It hurts the American public,” McCarthy told Fox News.

But far-right members of the House GOP are pushing back against McCarthy. The House Freedom Caucus is trying to tie government funding to legislation that would crack down on undocumented immigration and restart construction of the border wall.

And Rep. Marjorie Taylor Greene, R-Ga., told constituents during a town hall last Thursday that she would not vote to fund the government unless the House votes to open an impeachment inquiry into President Joe Biden.

Bank of America analysts in a note Tuesday put the chances of shutdown as a flip of the coin given the conditions conservative Republicans are putting on funding legislation. If a shutdown does occur, it will have a minimal impact on financial markets, UBS analysts said in a note Tuesday.

Bank of America believes a shutdown is unlikely to last long if it does occur given the potential political consequences for the GOP and the added pressure to fund the government given the devastating wildfires in Maui, Hawaii, and the destruction from Hurricane Idalia in Florida and the Southeast last week.

The battle over funding the U.S. government comes as the Federal Emergency Management Agency is running low on money with hurricane season kicking into high gear this month.

FEMA Administrator Deanne Criswell said last week that a shutdown would not affect operations that are addressing the immediate needs of the victims of Maui wildfires, Hurricane Idalia and other disasters in the near future.

But FEMA expects to use up the $3.4 billion left in its disaster relief fund and run a deficit by the middle of the month in the absence of additional money. The Biden administration has called on Congress to pass separate funding that includes a total of $16 billion to bolster the fund.

“We need this money done. We need this disaster relief request met and we need to do it in September — we can’t wait,” Biden told FEMA personnel during a visit to the agency’s headquarters in Washington, D.C., last week.

The administration’s request to boost the relief fund could also run into Republican opposition to U.S. military aid for Ukraine. The White House linked the disaster money to a request for more than $20 billion to back Kyiv during its counteroffensive against the Russian invasion.

Florida Sens. Marco Rubio and Rick Scott, both Republicans, have called for Congress to consider the disaster funding and Ukraine aid separately. Scott vowed to introduce a bill to replenish FEMA’s disaster fund with $12.5 billion and push for an immediate vote when the Senate returns from summer vacation

Scott accused the Biden administration of “playing games” by tying the FEMA funding to aid for Ukraine. Rubio told Fox News, “No matter how anybody feels about Ukraine funding those two things should never be one for the other.”