Why the U.S. is racing toward a government shutdown

President Biden is having a rough September.

Autoworkers are striking, inflation is still not at prepandemic levels, the president’s son has been indicted on federal gun charges and House Speaker Kevin McCarthy has taken the first step toward impeaching Biden.

On top of all that, the federal government now seems to be barreling toward an unavoidable shutdown.

House Republicans, who have a slim majority in the lower chamber, can’t seem to agree on a measure to temporarily fund the government. Their lack of unity does not suggest they will be able to come to a deal with Senate Democrats to send a spending bill to Biden’s desk — and does not bode well for the future of McCarthy’s speakership.

Hello, friends. I’m Erin B. Logan, a reporter covering national politics for the L.A. Times. This week, we are going to discuss the impending federal shutdown and lawmakers’ efforts to thwart it.

Deal or no deal?

Earlier this week, McCarthy (R-Bakersfield) proposed passing a short-term funding bill that would extend the Sept. 30 deadline and give his party more time to negotiate with Senate Democrats over a spending bill.

The stopgap proposal, which cut most domestic spending by at least 8%, was negotiated between center-right and arch-conservative GOP members and would extend the shutdown deadline by one month. The measure would also require the government to restart construction of former President Trump’s border wall. But McCarthy has discovered that a handful of Republicans may be able to stop this measure from being passed on the floor.

If McCarthy cannot get enough support from his party, he could try to win Democratic votes by stripping conservative priorities from the text. But far-right members have warned that trying to work with House Democrats could cost McCarthy his gavel. On Tuesday afternoon, a Hill freelance reporter Matt Laslo discovered what appeared to be a draft of a resolution to remove McCarthy from his job on a baby-changing table in a Capitol bathroom.

Even if McCarthy can win near-universal GOP support for the deal, he would still face an uphill battle with Senate Democrats, who are very unlikely to accept a measure stuffed to the brim with GOP priorities. On Tuesday, media outlets reported the speaker would delay a procedural vote on the stopgap measure, leaving the path to averting a government shutdown uncertain.

The stakes

Though the American economy has continued to expand under Biden, it remains in a precarious position. The Federal Reserve is still pushing to ease inflation without triggering a recession. But a shutdown could make the central bank’s job harder, likely roiling markets and stalling the release of the key Bureau of Labor Statistics data on inflation and unemployment the Fed relies on when setting interest rates.

On Monday, U.S. Treasury Secretary Janet L. Yellen told CNBC that she didn’t “see any signs that the economy is at risk of a downturn.” Inflation is falling and the labor market is strong. But, she added, there is no need for a government shutdown, which could create a “situation that could cause a loss of momentum is something we don’t need as a risk at this point.”

“Speaker McCarthy needs to find a way to do his job,” Yellen told MSNBC on Tuesday. “We really don’t need a shock to the economy in the form of a slowdown. There’s no reason for it at all.”

The latest from the Immigrant Dreams project

— Widespread lack of knowledge about U.S. immigration law and its many requirements makes immigrants vulnerable to being taken, Times writer Jon Healey reported. According to a groundbreaking nationwide poll, nearly half of immigrants in California, and 45% nationwide, feel they don’t have enough information about U.S. immigration policy to understand how it affects them and their families.

— Immigration officials do not consider food, housing and healthcare programs when deciding whether someone is a public charge, Times writer Karen Garcia reported. But some immigrants — 8% of immigrants nationwide — have been so concerned about being deemed public charges that they’ve avoided even assistance programs that are not part of the determination, the poll found.

The latest from Washington

—Hunter Biden sued the Internal Revenue Service on Monday, alleging that two agents who claimed interference into the case against him wrongly shared his personal tax information amid escalating legal and political struggles as the 2024 election looms, the Associated Press reported.

— Five American citizens held for years in Iran under what U.S. officials describe as brutal conditions were freed Monday and allowed to fly out of the country, the result of months of secret negotiations, Times writers Tracy Wilkinson and Courtney Subramanian reported.

— The criminal indictment against Hunter Biden for illegal gun possession could run afoul of the new and broader 2nd Amendment interpretation that has been gaining traction in conservative courts, Times writer David Savage reported.

The latest from California

— Nurses are streaming into California, a striking contrast to the recent flight of thousands of frustrated residents to other parts of the country, Times writer Don Lee reported. California is the only state to mandate minimum nurse staffing levels at hospitals and experts say those nurse-to-patient ratios have helped reduce the increasingly heavy workloads that are driving many to quit or retire early.

— The union energy that has fueled strikes by actors, writers and hotel workers this summer clearly hit Sacramento’s corridors of power this year, Times writer Laurel Rosenhall reported. Even in a Capitol where unions have long held clout, the run of wins for organized labor was remarkable. Whether Newsom will sign labor’s legislative wins into law remains to be seen.

— In the last decade, California home prices and rents have soared, an upswing that’s put homeownership further out of reach and helped drive thousands into homelessness, Times writer Andrew Khouri reported. Given the laws of supply and demand, one might think fewer people and more homes would equal lower prices. But California housing costs remain stubbornly high and have barely fallen — if at all.

The Associated Press contributed reporting. Sign up for our California Politics newsletter to get the best of The Times’ state politics reporting and to follow me on Instagram for the latest updates of my dear fur child, Kacey.