Shutdown averted, for now. But here’s what’s at stake in the next 45 days

by | Oct 1, 2023

Happy October 1st, the first day of the new fiscal year for our federal government. Believe it or not, Democrats joined forces with GOP House Speaker Kevin McCarthy to thwart Florida’s own U.S. Rep. Matt Gaetz and 90 of his conservative House allies in order to avert a government shutdown.

In a dramatic turn of events late Saturday afternoon, McCarthy broke from his party’s hard-right flank to pass a stop-gap 45-day funding bill, narrowly avoiding a government shutdown that many across Florida were dreading. With a deadline looming and the Senate prepped for a rare weekend session, the bill passed by a 335-91 vote as McCarthy abandoned many of his conservative demands.

McCarthy’s Dramatic Pivot

McCarthy had originally been insistent on a budget that catered to conservative Republicans, featuring steep spending cuts that could have gone up to 30% for most government agencies. His initial reluctance to consider the Democrat-controlled Senate’s proposals led to a precarious position that brought the nation to the brink of a shutdown. But his position shifted dramatically on Saturday when it became evident that a large swath of conservative House Republicans weren’t going to compromise on their demands.

The Republicans hold a slim majority in the House, with a 221-212 divide and two vacancies. McCarthy chose to break from his conservative base to ensure the government remained open, relying heavily on Democratic votes. But the new package, at least temporarily, excluded aid to Ukraine while still meet President Biden’s request for a $16 billion increase in federal disaster assistance. That last item wasn’t a hard sell for for Florida Republicans like Gaetz, with the Sunshine State still recovering from a series of devastating hurricanes over the last few years.

A Fractured GOP: The Next 45 Days

McCarthy’s bold move to rely on Democratic support exposes a fractured Republican party and puts his leadership under scrutiny. With 90 Republicans voting against the measure, it is evident that McCarthy has alienated a significant portion of his caucus.

But in McCarthy’s words, someone had to step up and be “the adult in the room.” The line is pointed at Gaetz and his allies, who stubbornly refuse to budge even when there is little chance that a staunchly conservative budget could make it past the Democrat-controlled Senate, let alone survive a Presidential veto.

The GOP dissenters aren’t just any group of Republicans; many are allies of former President Donald Trump and even Florida Governor Ron DeSantis, both of whome have encouraged the party to fight hard for conservative priorities. The divide within the party, and specifically the strong pushback against McCarthy’s decisions, signal that the Speaker will have a tumultuous 45 days ahead of him. Although a motion to remove McCarthy is possible, it’s uncertain whether it would garner enough votes to oust him. Nonetheless, the internal divide could create an impasse on future legislation and make it exceedingly difficult to negotiate a more permanent funding solution.

The Business and Economic Impact in Florida

The avoidance of a shutdown comes as a relief to the business community. According to a recent Goldman Sachs survey, 91% of small business owners emphasized the importance of averting a government shutdown. Notably, 70% said their business would be negatively impacted, and 93% believed their revenue would suffer if the government did shut down. Even beyond the small businesses, large corporations in the state would also feel the pinch, especially those with federal contracts.

For Florida, a state with a vibrant small business community and various sectors that rely on federal funding, the implications could have been severe. From tourism to agriculture and tech industries, the disruption of federal services or funding delays would have created a ripple effect, particularly in areas that are still recovering economically from Hurricanes Ian and Idalia.

The shutdown threatens not just business and family incomes but also critical services. The flow of FEMA disaster relief funds could be dramatically slowed, delaying recovery efforts from Hurricane Ian and Idalia while potentially delaying certain responses to new storms during the final months of Florida’s hurricane season.

In summary, while McCarthy’s last-minute decision avoided immediate catastrophe, it opened a Pandora’s box of political challenges that will shape the next 45 days and potentially far beyond. The political strife not only threatens McCarthy’s leadership but also leaves the country and its economy vulnerable to the consequences of continued gridlock.

McCarthy vs. Gaetz: what to expect

While many business owners and others dependent on government are breathing a sigh of relief after today’s events, the relief is only temporary. The immediate question that looms is whether or not McCarthy’s own party will reward him for doing what was necessary to keep the government open, or punish him for his business-as-usual approach.

One of the most glaring numbers coming out of Saturday’s events are the 90 House Republicans who voted against McCarthy’s plan to avert a shutdown. That’s a far cry from the media’s portrayal of a “handful” of GOP hardline rebels led by Gaetz. But 90 Republicans by themselves aren’t enough to oust McCarthy. Unlike the speaker vote last year, the difference now is that it requires 218 votes to oust him, and Democrats aren’t likely to let that happen if it means an even more conservative speaker could replace him.


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