It took until the clock had just about run out before the US government was funded in the new financial year — but only for 45 more days. Until Saturday night, it seemed as if the Congress was going to fiddle until the financial house collapsed in an untidy heap. The government was going to have no money appropriated for programmes, salaries, or pretty much anything else. Yes, the military and many other (but not all) government employees would be on duty, but they would be unpaid volunteers until a budget was finally passed and an effort was likely made to pay them retroactively for the missing wages.

At the last minute, the Republican leadership of the House of Representatives finally agreed to put a “pure bill” on the budget to a floor vote that was close to — but not exactly the same — as the handshake agreement about the budget that had been made between President Joe Biden and Senate Minority Leader Mitch McConnell some months ago. That agreement called for a continuing resolution that would carry forward government spending in line with the then current financial year until final appropriations measures could be hammered out. To clarify, a “pure bill” is one that does not have all manner of generally non-budget provisions worked into the language to satisfy special interests or the considerations of some legislators.

In the end, the Republican Speaker of the House, Kevin McCarthy, ditched the extreme measures that were being pushed by ultra-conservative Republican representatives. Those would have cut overall government spending by 30% and imposed a whole range of conservative causes such as prohibiting the military from funding abortions for active-duty servicewomen. However, that version of a budget bill would not have been accepted by the Senate — controlled by Democrats — or the president, and so, the inevitable result would have been the dreaded federal shutdown. 

As a result, the bill that passed gained the support of many Democrats in the House, then passed in the Senate, and was signed by the president as the minutes ticked past. The measure that passed did not, crucially, include new aid for Ukraine or further enhancements to US border security regimens.

While the ultra-conservative Republicans, it should also be pointed out, insist they want to cut federal spending, in their budget proposal they did not include non-discretionary spending cuts (such as Social Security and Medicare), nor do they wish to build in any tax increases to meet their expressed desire to reduce the deficit. Their way was not a realistic plan, but if adopted it would probably increase the actual deficit and thus add to the national debt.

What the measure that passed did achieve was to enrage ultra-conservative Republicans in the House over the role of the Speaker, because he had turned to Democrats to get a budget bill passed. In retribution, conservative House Republicans like Florida Congressman Matt Gaetz now want to force a vote as early as this week on whether Speaker McCarthy will continue in that job, given his apparent apostasy to their cause of extreme social measures and carving back big chunks of the government. In effect, McCarthy chose to keep the government wheels turning at the possible personal cost of his losing the very job he had fought so hard to gain only months earlier.

Costly gamesmanship

But beyond the near-chaos of the negotiations up to the moment of a successful 45-day continuing resolution, have there been other costs beyond the specific harms to running the government?

First of all, what has happened in full view of the entire country (and the world) is the embarrassing way the US Congress manages what is, after all, a core function of that branch of government — funding government operations. Polling data supports the view that many US citizens are disgusted with how this has played out — the gamesmanship, the seeming irreverence and the inability to behave like adults dealing with major, serious business. The result is a public that wishes for Congress, “A plague on the whole lot of you.” It should come as no surprise that Congress is barely ahead of used car salesmen on the trust continuum.

Then there are the costs in the financial markets. Two of the major rating agencies have already downgraded the US to AA+ from its prior AAA level and the third might follow. That means borrowing costs will run higher over the longer term, with a real impact on a country that has been running a continuing deficit in government spending and thus has to borrow to make up the difference. Higher interest rates on its debt mean more of the federal budget must be allocated to cover interest payments rather than spending on actual programmes and personnel. 

This new, temporary budget measure has not included increased funding for border control and security efforts to deal with the continuing flow of migrants from Latin America across the Rio Grande river border. This flow is a real challenge to the US government — and specifically to the electoral hopes of the incumbent president and a number of congressional and senatorial candidates who may be seen by voters as less than enthusiastic about extreme border measures.

The presumption in Washington is that somehow, some way, the budget will be resolved in whatever happens by 15 November. But there is not, as yet, a real consensus among US politicians and administration officials about how to stem the migrant flow, let alone to propose and pass major reforms of the country’s immigration laws and procedures. Especially as the country heads into the 2024 presidential election cycle, it is almost a guarantee that this issue will be a key element of policy debates in the election.

Similarly, because further, newly appropriated aid to Ukraine is not in the 45-day budget, this will come as something of a shock to the Ukrainian government — even if they were somehow half expecting this to happen, given the way Ukrainian President Zelensky was treated by Republican representatives during his recent visit to Washington.

Ripples on the battlefront

How this will be resolved in November will be of great consequence to the ability of the Biden presidency to carry out its forcibly articulated foreign policy — and, of course, the ability of Ukraine to pursue its resistance effectively to the Russian invasion. This is also likely to ripple across to the other Western nations supporting Ukraine — if the US cannot sort out how to help Ukraine militarily, will that also become something leaders in those other nations should reconsider as well for their own nations?

One thing is certain. Even if they have remained shtum on the matter in public so far, we can be pretty certain Russian diplomats have already reported their analysis of these events back to Moscow. If we listen really, really carefully, we might even hear the popping of a few bottles of Georgian sparkling wine and the clinking of champagne flutes in the Kremlin over this turn of events. Similarly, we should not forget about Chinese diplomats. They, too, have almost certainly reported their analysis of what the budget means for Ukraine — and possibly for the US’s bolstering of Taiwan’s defences over the longer term. 

Republicans (or at least many of them), in their obdurate, single-minded search for a tactical win in Congress through performative politics rather than adult-style compromise and negotiation, have made their country that much less respected abroad. It’s likely, too, that they are going to lead US allies to begin some painful rethinks about what it means — longer-term — to be a US friend or ally. Importantly, too, there will be some head-shaking over whether the US’s verbal and tangible expressions of support mean all that much — over the longer term. There are no free lunches in politics. There are always costs. DM