The financial year in the Capitol ends October 1st. Before then, a divided Congress must agree on not 1, not 2 but 12 budget proposals for FY24– or so-called appropriations bills. This will be an impossible feat. Plain and simple. Representatives from both sides of the aisles are already warning about an imminent government shutdown.

In this article, we will explain why the upcoming budget negotiations are looking more hopeless than the debt ceiling stand-off ever did.

Where has the debt ceiling deal left us

When Biden and McCarthy reached an agreement on suspending the debt limit earlier this month, part of the bargain included a cap on federal discretionary spending for FY24 at $1.590 trillion: $886 billion for defense and $704 billion for nondefense spending.

Normally, agreeing on top levels is the most tiresome point in Congress’ budget negotiations. Thus, when the bipartisan debt ceiling bill laid out spending limits for FY24 and 25, hopefuls were eyeing the possibility of a timely budget agreement for the first time in 27 years.

They are about to be gravely disappointed.

The Republican House Freedom Caucus have made it clear that McCarthy’s debt ceiling deal with Biden is an outright abandonment of his promises during the Speakership election in January. In a press conference, FC members referred to the bill as classic D.C swamp “sleight of hands” trick to cover up inadequate reductions to the federal debt.

Double-Crossed Democrats

Not a week after the debt limit bill was passed, The FC made good on their threats. In a blatant act of defiance against Speaker McCarthy, they blocked a rules vote (a preliminary formality before a bill can be introduced on the House floor) on a mixture of seemingly uncontroversial law proposals including gas stove regulations. The mini-revolt was an embarrassment for the Speaker who had to put his name on the first failed rule vote in the House in nearly 21 years.

Behind closed doors, The Speaker managed to dampen the temper tantrum of the far-right representatives. We don’t know what McCarthy said to FC members to overcome the momentary gridlock but to the press, he has continuously emphasized that the debt limit standoff was “just a warmup” before the FY24 budget negotiation “super bowl”. These statements should have been a clear signal that House Republicans’ appetite for spending cuts hadn’t been satisfied with the debt ceiling deal.

In this light, it was a somewhat naïve display of indignation put on by the Democratic leadership 2 weeks ago, when House Republicans announced their appropriations proposal would have an overall top line $119 billion short of what both parties had agreed upon in the debt limit bill. The Democrat-controlled senate is sticking with an expanded budget matching the $1590 trillion cap from the debt ceiling agreement which puts the two chambers on a coalition course toward economic collapse once again.

Funding for FY 2023 compared with FY 2024 302(b) allocations from the House and Senate.

Source: Committee for a Responsible Federal Budget

Why is government shutdown a highly likely scenario?

1. Congress is obliged to pass 12 individual mini-budgets or ‘appropriation bills’ covering 12 different areas of discretionary federal spending before the new financial year. These include areas such as defense, financial services, labor, education and health services and foreign operations. Since 1977, Congress has only managed to pass these 12 appropriations bills on time on four occasions. The complicated and lengthy process is accredited to the oftentimes split Congress and special rules that dictate that appropriations bills must pass by a supermajority (60 votes) in the Senate.