Good morning. A split Congress could lead to government shutdowns and economic turmoil. |
 | | The CapitolAl Drago for The New York Times |
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Republicans are likely to secure a slim majority in the House. What does that mean for Congress? Most likely a return to the gridlock and brinkmanship that have defined a divided federal government in recent years. |
A split between a Republican-controlled House and a Democratic-run Senate almost certainly means neither party will have the votes to enact major legislation. Democrats will probably be forced to set aside remaining items on their agenda, such as abortion rights protections and an expansion of tax credits for families with children. |
Republicans are positioned to trot out an old strategy: When a Democrat has been in the White House over the past few decades, congressional Republicans have embraced calls for reducing government spending, arguing that the debt and deficits were out of control. In the 2010s, Republicans used these threats to block spending bills and make it harder for Barack Obama to carry out his presidential agenda — at times risking government shutdowns and economic calamity. |
It is a political play. When Donald Trump was in the White House, Republican lawmakers approved budgets and tax measures that raised the debt and deficits to new highs. |
But the approach is nonetheless poised for a comeback once House Republicans can use the threat of shutdowns and economic consequences to restrain President Biden. Trump, who announced his run for the 2024 Republican presidential nomination last night, has pushed the party's lawmakers to use these tactics to get concessions from Democrats. |
Today's newsletter will break down what could be one of the biggest impacts of a Republican-held House: the potential fights over government spending, and the crises they may bring. |
 | | Representative Kevin McCarthy, the minority leader.Al Drago for The New York Times |
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One of Congress's main responsibilities is to allocate funding for the federal government's services and programs, such as Social Security, the military and scientific research. Because the government usually spends more than it takes in, Congress also has to increase the cap set by lawmakers limiting the federal government's ability to borrow money. |
Both chambers of Congress have to approve funding allocations and debt limit increases. Representative Kevin McCarthy, who won his party's support yesterday to become the next House speaker, has suggested his caucus may be unwilling to do so: "We'll provide you more money, but you got to change your current behavior," he said. "We're not just going to keep lifting your credit card limit, right?" |
If Congress doesn't approve spending bills, it can force the government to shut down, as it did in 2013 and twice in 2018. During a shutdown, some parts of government stop working at full capacity, such as national parks and environmental or food inspections. (Others, like Medicare and the military, largely continue running.) A shutdown not only disrupts services that many Americans rely on but also means hundreds of thousands of government workers in the affected agencies go unpaid. |
But the bigger threat is if Republicans refuse to raise the debt limit, which the federal government could hit early next year. The details can get wonky quickly, but here's a brief explanation: When the government borrows money, it issues U.S. Treasuries. Because the U.S. government always pays its debts, these Treasuries are purchased around the world with the expectation that they are essentially risk-free investments. They are seen as so risk-free, in fact, that much of the global financial system is built on them. |
But if the U.S. government hits its debt limit, it no longer has legal authorization to keep up with debt payments and could be forced to default. That would destroy the trust underpinning the value of Treasuries, causing the once risk-free investment to collapse and taking much of the financial system with it. |
Under Obama, Republican lawmakers repeatedly invoked the threat of the debt limit to push for government spending cuts. And they appear ready to do the same under Biden. |
Democrats might try to pre-empt these crises this year, before Republicans would take control of the House in January, by passing spending bills or increasing the debt limit. |
Even without Democratic action, another factor could constrain Republicans: their razor-thin majority. More moderate Republicans in swing districts, which the House majority relies on, might not want to take on risky fights that could shut down the government or cause economic chaos. |
At the same time, McCarthy might not have the support needed within his party to pass spending bills. The lack of votes could force him to rely on Democrats to get bills through the House. But that idea is unpopular with McCarthy's most conservative members, who do not want to compromise with Democrats on many issues. |
How that dynamic plays out will decide whether Congress can function — or if a divided government will spawn more federal dysfunction and crises. |
 | | Donald Trump at Mar-a-Lago last night.Saul Martinez for The New York Times |
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After almost 10,000 performances, more people have seen "The Lion King" than any other show on Broadway. But a quarter century ago, when it premiered, that success was far from guaranteed. |
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 | | David Malosh for The New York Times |
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The pangrams from yesterday's Spelling Bee were flooding, folding and fondling. Here is today's puzzle. |
Thanks for spending part of your morning with The Times. See you tomorrow. — German |
Matthew Cullen, Lauren Hard, Lauren Jackson, Claire Moses, Ian Prasad Philbrick, Tom Wright-Piersanti and Ashley Wu contributed to The Morning. You can reach the team at themorning@nytimes.com. |
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