McCarthy rejects Senate spending bill while scrambling for a House plan that averts a shutdown

A government shutdown appeared all but inevitable as House Speaker Kevin McCarthy dug in Thursday, vowing he will not take up Senate legislation designed to keep the federal government fully running despite House Republicans' struggle to unite around an alternative.

Congress is at a crossroads days before a disruptive federal shutdown that would halt paychecks for many of the federal government's roughly 2 million employees, as well as 2 million active-duty military troops and reservists, furlough many of those workers and curtail government services.

But the House and Senate are pursuing different paths to avert those consequences even though time is running out before government funding expires after midnight on Saturday.

The Senate is working toward passage of a bipartisan measure that would fund the government until Nov. 17 as longer-term negotiations continue, while also providing $6 billion for Ukraine and $6 billion for U.S. disaster relief.

The House, meanwhile, has teed up votes on four of the dozen annual spending bills that fund various agencies in hopes that would cajole enough Republicans to support a House-crafted continuing resolution that temporarily funds the government and boosts security at the U.S. border with Mexico. It's a longshot, but McCarthy predicted a deal.

“Put your money on me; we're going to get this done,” he said in a CNBC interview. “I think we can work through the weekend. I think we can figure this out."

Lawmakers were already weary from days of late-night negotiating. The strain was evident at McCarthy's closed-door meeting with Republicans Thursday morning, which was marked by a tense exchange between the speaker and Rep. Matt Gaetz, R-Fla., according to those in the room.

Gaetz, who has taunted McCarthy for weeks with threats to oust him from his post, confronted the speaker about conservative online influencers being paid to post negative things about him. McCarthy shot back that he wouldn’t waste his time on something like that, Gaetz told reporters as he exited the meeting.

McCarthy's allies left the meeting fuming about Gaetz’s tactics.

With his majority splintering, McCarthy is scrambling to come up with a plan for preventing a shutdown and win Republican support. The speaker told Republicans he would reveal a Republican stopgap plan, known as a continuing resolution or CR, on Friday, according to those in the room, while also trying to force Senate Democrats into giving some concessions.

But with time running out, many GOP lawmakers were either withholding support for a temporary measure until they had a chance to see it. Others are considering joining Democrats, without McCarthy's support, to bring forward a bill that would prevent a shutdown.

With his ability to align his conference in doubt, McCarthy has little standing to negotiate with Senate Democrats.

Senate Majority Leader Chuck Schumer, D-N.Y., said Congress and the White House had already worked out top-line spending levels for next year with an agreement this summer that allowed the government to continue borrowing to pay its bills. But McCarthy was deviating from that deal and courting a shutdown by catering to Republicans who say it didn't do enough to cut spending, he said.

“By focusing on the views of the radical few instead of the many, Speaker McCarthy has made a shutdown far more likely,” Schumer said.

McCarthy reiterated to CNBC that the House will have its say. “Will I accept and surrender to what the Senate decides? The answer is no, we’re our own body.”

He acknowledged divisions within his own conference, saying members have made it difficult to pass appropriations bills. But he added that he still is working with the Republicans who won't support short-term funding legislation.

"Well, if you won’t do any of that, it’s hard to govern," McCarthy said, before adding, “I don’t give up on any single one of them, and I try to find a place that we can bring it all together.”

President Joe Biden also sought to apply more pressure on McCarthy, urging him to compromise with Democrats even though that could threaten his job.

"I think that the speaker is making a choice between his speakership and American interests," Biden said.

Many Republicans have voiced fears they would be blamed for a shutdown — including in the Senate, where many GOP members are aligned with Democrats on a temporary bill.

Senate Republican leader Mitch McConnell said he agrees with many of the goals of the House Republicans, but warned a shutdown will not achieve any of them.

“Instead of producing any meaningful policy outcomes, it would actually take the important progress being made on a number of key issues and drag it backward," McConnell said.

But McCarthy's House allies were hoping the threat of a shutdown could help conservatives gain ground on their push to limit federal spending and combat illegal immigration at the U.S-Mexico border.

“Anytime you have a stopgap situation like this, you have an opportunity to leverage," said Rep. Garret Graves, R-La. “This is another opportunity. America does not want an open Southern border. The polls are crystal clear. It’s having a profound impact on us.”