Shutdown looms as US House Republicans again block own spending bill

By David Morgan and Richard Cowan

WASHINGTON (Reuters) -U.S. House Speaker Kevin McCarthy's attempt to restart his stalled spending agenda failed on Thursday when Republicans for a third time blocked a procedural vote on defense spending, raising the risk of a government shutdown in just 10 days.

The House of Representatives voted 216-212 against beginning debate on an $886 billion defense appropriations bill, with five hardline conservative Republicans joining Democrats to oppose the measure.

It represented a setback for McCarthy the morning after his fractious 221-212 majority met for 2-1/2 hours seeking common ground on legislation to avert the fourth government shutdown in a decade beginning Oct. 1.

As the vote failed, McCarthy told reporters that he will pursue the "same strategy I had from January: just keep working; never give up."

Federal agencies will begin to shut down on Oct. 1 unless Congress passes either a short-term continuing resolution, known as a CR, or a full-year funding bill. So far House Republicans have failed to unify around either possibility, and the ideas they have considered have only Republican support, making them unlikely to win support in the Democratic-majority Senate or be signed into law by President Joe Biden.

"Instead of decreasing the chance of a shutdown, Speaker McCarthy is actually increasing it by wasting time on extremist proposals that cannot become law in the Senate," top Senate Democrat Chuck Schumer said.

The defense bill had been scheduled for a five-minute vote that Republicans kept open for over a half hour in a vain hope of winning additional votes. The defense bill also failed in a similar vote on Tuesday and had to be pulled from consideration earlier this month, all due to hardline opposition.

Representative Dan Bishop, one of Thursday's five Republican holdouts, cited a lack of trust in McCarthy's leadership.

"Let's be honest with each other. How about a little candor, not what you think the people would like to hear," Bishop told reporters without referring to McCarthy by name.

"Just tell them squarely what you're going to do. Do that!" the North Carolina Republicans said.

TRUMP WADES IN

Donald Trump, the front-runner for the 2024 Republican presidential nomination, added to McCarthy's distractions with a call to shut the government, as occurred three times during his four years in the White House.

"Republicans in Congress can and must defund all aspects of Crooked Joe Biden’s weaponized Government that refuses to close the Border, and treats half the Country as Enemies of the State," the former president said on his Truth Social platform.

Trump is awaiting four criminal trials, including two brought by federal prosecutors, over charges including his attempts to overturn his 2020 election defeat. He has claimed without evidence that all four prosecutions are politically motivated.

Political brinkmanship has begun to attract the attention of Wall Street, with rating agency Fitch citing repeated down-to-the-wire negotiations that threaten the government's ability to pay its bills when it downgraded U.S. debt rating to AA+ from its top-notch AAA designation earlier this year.

"The unpredictability is sad for the country," said Representative Rosa DeLauro, top Democrat on the House appropriations panel. "They have stopped our ability to respond to the needs of the American people."

The Republican spending agenda has run afoul of a small group of Republican hardline conservatives, who want assurances that fiscal 2024 appropriations will not exceed a 2022 top line of $1.47 trillion, $120 billion less than McCarthy and Biden agreed to in May.

Bishop criticized a McCarthy proposal to set a 30-day CR at the 2022 level but a top line for fiscal 2024 appropriations at nearly $1.53 trillion. "The only way that's possible is if something isn't genuine," Bishop said.

A bipartisan group of 64 lawmakers known as the "Problem Solvers Caucus" proposed a measure that would fund the government through Jan. 11, though without McCarthy's support it is unclear how the measure would advance.

(Reporting by David Morgan and Richard Cowan, additional reporting by Makini Brice; Editing by Scott Malone, Leslie Adler, Mark Porter and Timothy Gardner)