It turns out that avoiding the self-inflicted fiscal damage of a government shutdown was merely the beginning of a historic and even more highly chaotic period in the US House of Representatives.  Just before noon on Tuesday, October 3rd a rebellion led by Representative Matt Gaetz, a far-right Republican from Florida led to the House voting 216-210 to oust McCarthy. Why? Because on Saturday the Speaker relied on Democratic votes to help pass a bill to avoid a partial government shutdown. That’s where TCS president Steve Ellis picks up the story with analysis from TCS VP Autumn Hanna and TCS Senior Policy Analyst Josh Sewell.

Episode 55: Transcript

Announcer:

Welcome to Budget Watchdog All Federal, the podcast dedicated to making sense of the budget, spending, and tax issues facing the nation. Cut through the partisan rhetoric and talking points for the facts about what’s being talked about, bandied about, and pushed to Washington. Brought to you by Taxpayers for Common Sense. And now the host of Budget Watchdog AF, TCS President Steve Ellis.

Announcer:

Welcome to Budget Watchdog All Federal, the podcast dedicated to making sense of the budget spending and tax issues facing the nation. Cut through the partisan rhetoric and talking points for the facts about what’s being talked about, bandied about and push to Washington. Brought to you by Taxpayers for Common Sense. And now the host of Budget Watchdog AF, TCS President Steve Ellis.

Steve Ellis:

Welcome to All American Taxpayers Seeking Common Sense. You’ve made it to the right place. For over 25 years, TCS, that’s Taxpayers for Common Sense, has served as an independent non-partisan budget watchdog group based in Washington DC. We believe in fiscal policy for America that is based on facts. We believe in transparency and accountability because no matter where you are in the political spectrum, no one wants to see their tax dollars wasted. We’re back on the air faster than ever with this new episode of the pod. Budget Watchdog faithful, you know what didn’t happen last weekend and so do we.

American tax dollars were not wasted on a government shutdown, but as it turns out, avoiding that self-inflicted fiscal damage was merely the beginning of a historic and even more highly chaotic time in the House of Representatives. Just before noon on Tuesday, October 3rd, a rebellion led by representative Matt Gaetz, a far right Republican from Florida, led to the House of Representatives, voting 216 to 210 to oust McCarthy with a handful of conservative joining Democrats to remove him. Why? Because on Saturday the speaker relied on democratic votes to help pass a bill to avoid a partial government shutdown. And that’s where we pick up the story with my trusted colleagues, TCS VP, Autumn Hanna, and TCS senior policy analyst, Josh Sewell. Wow.

Autumn Hanna:

Wow, wow, wow.

Steve Ellis:

Let’s start with the continuing resolution. I mean, who doesn’t love a buzzer beater?

Autumn Hanna:

Yeah, really talk about down to the wire. I think the president signed the bill at 30 minutes before midnight.

Steve Ellis:

Yeah, that sounds about right. And I got to say clearly not gambling is the right move for me.

Autumn Hanna:

Yeah, I think last week we were all saying 99.9% we were going to have a shutdown, and I think we hit just that 0.1%. And really we were all happy to be wrong in our prediction, and thought we had the CR and we were under the gun with these 45 days and then this week happened. So it’s a long ways off to agreement here. But I do think… I remember last week that I had said the long weekend and that was what we came closest to.

Steve Ellis:

Yeah. And that’s fair, but I also got to say it’s like some soul-searching for me. I think maybe those crop insurance lobbyists are right and I have no idea what I’m talking about. So I don’t know. I think it’s probably more that it’s just frankly not possible to guess what’s going on in a politician’s head. And kind of scary to guess what’s going on in some politicians’ heads.

Autumn Hanna:

Yeah. And what this next go around is going to look like on a budget deal, which is what we had really planned to talk about. We knew on Saturday what would happen, and we got to this deal and now so much more has happened.

Steve Ellis:

I want to get more into that later in the show and that about the speaker and what’s happening there. But we’re a budget group, so let’s get into it. The CR kept government running with 32 minutes to go was the actual time that the president tweeted or X’d out that he’d signed the bill. So we know that much. But let’s get to the substance. What else was in the CR, Autumn?

Autumn Hanna:

So what they passed was a 71-page funding patch. It was pretty clean, it keeps spending at the same levels through November 17th and just included a handful of Add-ons.

Steve Ellis:

Pretty clean, as you said, means that there are still some ads. So what else caught a ride on this continuing resolution package?

Autumn Hanna:

So that’s right, just a few things were added on, like things that were expiring, extending the authorization of the national and flood insurance program and the Federal Aviation Administration were added. And a few things that have really strong bipartisan support, like a base salary increase for the wildland firefighters, and then the refill of the $16 billion for the disaster relief fund, which we have talked about on the podcast. So that was included, $15.5 billion for declared major disasters plus a go ahead for FEMA to spend faster than usual. There were a few other normal anomalies, like the ability to meet spending needs for the WIC program, but really all and all pretty clean deal.

Steve Ellis:

And one notable item that wasn’t included is the Ukraine aid, which has strong bipartisan support, but certainly was a non-starter for certain elements. And I think that maybe Speaker McCarthy thought that would get him in the clear with his conference, but certainly didn’t work for all of them.

Autumn Hanna:

Yeah, there’s a lot of talk about that Ukraine aid now and what’s going to happen. So there’s a lot of support as you said for that.

Steve Ellis:

Right. So one of the things we talked about last week on the pod, Josh, was the mood among credit agencies such as Moody’s not being good and downgrade of the US debt being expected. So what came about from that, Josh?

Josh Sewell:

Well, so far I haven’t seen anything, but it’s only been a couple days, let’s not forget. But we should remember that last week when Moody’s sent out a press release basically saying that as the last of the three major credit agencies who have not downgraded our AAA rating, they’re the only one who hasn’t. They said a shutdown would put that at risk. And I think I looked it up and specifically what they said was “intensifying political polarization” was the risk they were concerned about. So no shutdown, that’s great. One, there’s always the threat of another shutdown starting November 17th. But I think even more important right now is that Moody’s didn’t say anything about what would happen if there was a lack of a speaker. So not having a speaker wasn’t something they did not appear to factor into their announcement. So it’s like a brave new world now.

Steve Ellis:

It certainly adds to the dysfunction, and we mentioned Representative Matt Gaetz, the top, the trigger puller on the motion to vacate that ultimately toppled Speaker McCarthy. And he was ironically sort of talking about these issues recently as well, although kind of in a self-serving manner.

US Rep. Matt Gaetz:

I think that the downgrade from Fitch was largely driven by the fact that there’s no real backstop to spending. So here’s what we need no matter who’s the speaker, we need a top line budget that at least in the House of Representatives returns to pre-COVID spending levels, and then we need to be able to have single subject spending bills with open amendments to have programmatic review of agency spending.

Steve Ellis:

Well, that’s interesting. I mean certainly the latter part of that, we’ve discussed and we’ve talked about many times on Budget Watchdog AF and that is that we should be going back to regular order where there is a budget resolution that sets top line spending levels. And that there are annual spending bills that are considered individually and with amendments available, and that’s regular order and we’re certainly for that. Unfortunately, what you’re looking at is is that there was top line spending agreement created in the Fiscal Responsibility Act, the debt ceiling deal, and that the House has been moving some bills along, and we’ll get into that too.

And so it’s an interesting time where you see some alignment from somebody like Representative Gaetz and Congresswoman Jayapal for instance, on these issues. But in reality, the House has to govern and they have to deal with the cards that are in front of them. And in this case, the government was about to shut down and they needed to do a CR and they needed to do the spending bills. They can walk and chew gum at the same time, at least we hope so.

Josh Sewell:

Yeah. So I’d say I completely agree with that. And one thing that we’ve talked about another venues is that this isn’t the only bite at the apple. So I feel like you had an agreement, it’s not great as far as the debt limit deal. Let’s get this done. We’re already into this fiscal year a few days, and who knows what’s going to happen over the next month. Let’s move on, take what wins we got, and then go on to next year’s budget. Because they still have to do the budget next year. We’re going to have this whole, it’s the same actors in the same stage, so let’s just move on, I mean frankly, and also address some of the bigger issues in the spending realm that’s not just discretionary spending.

Steve Ellis:

Right. Which we all know is not the biggest portion of the budget, not even close. And certainly if you’re taking out defense, you’re talking about 15% of the budget. I think you’ve pointed that out before too, Josh. I’m Steve Ellis, and you’re listening to Budget Watchdog All Federal, the podcast dedicated to making sense of the budget, spending, and tax issues facing the nation. We continue now with TCS Vice President, Autumn Hannah, and TCS senior policy analyst, Josh Sewell. Josh, when we last talked and the shutdown clock was winding down, the Senate was working on enacting a continuing resolution to keep the government running. So what happened with that?

Josh Sewell:

Well, the Senate seemed like they were going to have something and just sort of jam the House. But once the House got their package together, the Senate Republicans sort of pulled back and did what the Senate does and slowed things down to see if the House could actually get their spending bill, their CR done, and then it didn’t happen. So that’s where we are.

Steve Ellis:

Autumn, shifting to you. I mean, we talked about just now about the House actually moving spending bills fiscal year ’24 spending bills. They moved three last week. Is that still the plan to continue moving forward like that?

Autumn Hanna:

That’s still the plan. Even with the speaker issues going on and being an uncharted territory here, the House bills have become even more conservative, which may not align with the Senate and the President’s priority. So we are still going to be at a likely impasse, but there is a calendar here of bills that the House had put out and has plans to move on.

Steve Ellis:

Right. So they’ve got four of them done, which is a third of the way, and they still got eight more to go. Okay. We mentioned this at the top, Autumn mentioned the speaker. So let’s adjust the elephant in the room. Josh, what the hell happened?

Josh Sewell:

That’s a great question. So actually I’d like to point out that one of the last things that they had done two days ago since we were taping this, was they had voted on a rule to say, “Let’s go ahead and debate the alleged branch and energy and water bills.” So that was the last thing they did. And then Matt Gaetz stood up and said, “Hey, let’s throw a wrench in everything in watching for quite a while.” So just to get back to the details. So one of the changes that happened in this Congress, when they set the rules every Congress, they have to vote on the rules for those two years. One of the House rule changes made by ex-Speaker McCarthy was a concession to the hard-right faction in his caucus to allow any one individual member to make a motion to vacate the chair. So this is what’s known as a privileged motion, and it challenges the speaker.

It basically says, “I don’t want this person to be speaker.” And so there’s a lot of details on it, but basically what happened was Congressman Gaetz from northern Florida made the motion right after they had agreed to start talking about a spending bill, and then seven other Republicans joined him and all the Democrats to boot speaker McCarthy from office. It should be noted that normally speakerships, voting on the speaker is a partyland affair. If you remember back in January, I think it was 14, maybe 15 votes-

Steve Ellis:

15.

Josh Sewell:

It took 15 rounds for then Representative McCarthy to become speaker. And so that’s in large part because no Democrats going to vote for a Republican to be speaker. You don’t do that. And so in this voting to vacate the chair, there was some talk about maybe Democrats would save McCarthy, but this is one of those votes that’s going to be partisan. So the fact that a handful of Republicans in such a tight Congress where it only takes five basically to lose your majority, this is unprecedented, but it happened. And frankly it’s just kind of crazy.

Steve Ellis:

Right. And back in January in those 15 votes, every single Democrat, every single time voted for eventually minority leader, Hakeem Jeffries, to be speaker. Because technically it’s not a party position because it was created in the Constitution when there weren’t parties, and we don’t have to get into that sort of stuff. But bottom line is is whichever party’s in the minority is going to vote for their candidate for speaker and not for the majority candidate for speaker. And so it wasn’t up to Democrats to save McCarthy’s skin, it was up to Republicans to save that. And it’s been a hundred years since this tactic, more than a hundred years, this tactic has been used.

And to some extent it’s kind of interesting because then Speaker Joe Cannon, he actually brought it up against himself to kind of dare his naysayers in his conference to vote him out. And to some extent, Congress McCarthy did the same thing and they did it. So Josh, these hard rate faction members, they have a plan, they have their candidate, they know what’s going to happen next. Tell me there’s a plan.

Josh Sewell:

No, there’s no plan other than dysfunction. And I think it’s important to point out that this vacating the chair privileged motion has been around for a hundred years. So it’s had different rules for it where sometimes it required five members, sometimes it required a lot more than five members to do it. But the fact is that you don’t do this to your own party has always been the norm. And so the fact that there are a handful of folks who are willing to do this, you would hope that there was some next step, but it appears no, it’s just we’re all just twiddling our thumbs and prognosticating and just trying to figure out what happens.

Steve Ellis:

Okay. So Autumn, we talked about electing a speaker at the beginning of Congress, and we know that the House can’t actually act. They can’t form committees. They can’t bring up legislation until there’s actually a speaker. Is that the situation now?

Autumn Hanna:

That’s correct. But to ensure continuity in government in the House, they adopted a procedure post 9/11 that they are tapping here in this situation. After he was elected speaker, Congressman McCarthy submitted a sealed list of names that would be tapped to be speaker pro temp if he was incapacitated. So right now, Congressman McHenry has the gavel, and the House continues to operate until a speaker is elected.

Steve Ellis:

Which could take a while.

Autumn Hanna:

Certainly if past is prologue.

Josh Sewell:

Yeah. So as of taping, I checked right before we got on, there have been two candidates that have emerged. So Judiciary Committee Chairman Jim Jordan from Ohio, and Majority Leader Steve Scalise, Louisiana. So two very different people. But how either gets a majority of votes I think is just… I can’t circle that square.

Steve Ellis:

Okay. So now we’ve got this speaker race going on houses potentially. And we’re in uncharted territory, there’s never been a speaker pro temp in the house, and so there’s arguments about the caretaker or how it moves. And so some of it’ll be to see how Speaker pro temp McHenry operates. But our last prediction from the previous podcast trying to look at these was on the outcome of the FY24 spending bills. And that would’ve depend on the willingness of lawmakers to address the major issues and come to a compromise. And that’s certainly still true, but the appetite for that remains to be seen. Josh, give me some hope here at the end of the podcast.

Josh Sewell:

Well, I mean, we all know I am the most optimistic person at TCS, so I can definitely do that. But in all honesty, one thing that has emerged, it comes about I think in every Congress, but I think is getting a little more momentum in just the last couple of days, is an effort to create a fiscal commission to tackle our bending and revenue issues. Because Congress repeated congresses have shown that they are apparently incapable of doing their job and making the tough decisions to get our spending train back on the right tracks. And so it’s Bill Huizenga, Republican from Michigan, he and Scott Peters, a democrat from California, have a bill to create a fiscal commission. And it’s cosponsored by 13 other members in the House, basically equally Republican and Democrat.

And it would create this commission that would put responsibility on finding solutions to our spending and revenue issues upon folks who aren’t all members of Congress. And actually, we don’t have to get into all the details because it could always change once if this bill moved along, but essentially it would empower the four corners, they’re called, so the speaker, once we have one, the speaker, the minority leader in the house, and then the majority leader, and the minority leader in the Senate, to then each appoint four people. So you’d have 16 people, three of them would have to be members of Congress, one would not be a member of Congress from each of those groups.

So you’d have three House Republicans, three House Democrats, plus one expert, could be TCS’s Steve Ellis if they wanted, or anybody who has an experience in this. Well, technically I guess they don’t need experience. But four outsiders, 12 insiders, equally partisan from both chambers, half-and-half. And then they would be given some authority to go make some proposals, and then Congress would be required to vote on them. There’d be deadlines, and there’d be an actual product that comes out of this.

Autumn Hanna:

Yeah. And they don’t have to start from scratch either, they can use things that came out of, like Simpson-Bowles, and use those previous recommendations.

Steve Ellis:

And we have seen… Skeptical in how it is kind of punting by Congress. We have seen that commissions can have an effect and can be helpful. Certainly the one I think back to is before he was actually the chair of the Federal Reserve, Alan Greenspan led a commission that increased solvency to social security and got us to where we are today. And that was something that was in the early eighties and something where there can be success, and there’ve been other commissions as well. So it’s an extraordinary measure, but we’re in extraordinary times, and I have a hard time even saying that emphatically enough. So Autumn, Josh, thank you for joining. I couldn’t do it without you.

Josh Sewell:

No, that’s pretty clear, and I’m always happy to help.

Autumn Hanna:

Yeah. Thanks, Steve.

Steve Ellis:

Well, there you have it, podcast listeners. Politics, legislating, and governing thing ain’t for the faint of heart, that’s for sure. This is the frequency, mark it on your dial, subscribe and share. And know this, Taxpayers for Common Sense has your back, America. We read the bills, monitor the earmarks, and highlight those wasteful programs that poorly spend our money and shift long-term risk to taxpayers. We’ll be back with a new episode soon. I hope you’ll meet us right here to learn more.