B (3:11)

Yeah, look, it's a very good question. People are very confused about it. And let me do my best to explain, number one, what this fight is about and then some. Some basic principles to think about it because there are a lot of people who are wr now yelling, but it's hard to understand what's going on. So for the federal government to operate, Congress has to appropriate funds. Appropriating funds is voting to spend money. Unless Congress appropriates funds, money can't be spent. Now, there are three principal ways money gets appropriated. The first and the best one is Congress actually passing appropriation bills through the regular order, through the process of legislating. There are typically 13 appropriations bills for each of the major cabinet areas and subject matters. And the way it should operate is Congress takes up an appropriation bill, the House passes it, the Senate passes it, the President signs it. That's the way it normally works. It almost never works that way anymore, especially when you have what we have now, which is divided government. We have right now a Republican House, barely a very, very small Republican majority in the House. We have a Democrat Senate and Democrat president. And so as a result, appropriations bills will not pass. And they will not pass because the Republican House and the Democrat Senate fundamentally disagree on what should be in those appropriation bills. There's a second way you fund the government and that's through what's called an omnibus, or sometimes you call it a minibus. Basically what that is is a bunch of appropriation bills jammed together. So instead of 13 separate bills, you can get an omnibus would be all 13. A minibus is sometimes say four, five, six of them. But it is a specific appropriation for a portion of government that is frequently how things are done all crammed together. Again, we can't get agreement. Doing it in divided government is very difficult. And I will point out that Joe Biden and the Democrats are providing zero leadership to do anything other than embracing radical positions that, of course, Republicans in the House aren't going to agree with. So the third way, and there are really only three, is what's called a continuing resolution. So a continuing resolution typically does not specify how money will be appropriated. It simply says what we're doing now, let's continue going forward. And a continuing resolution is typically for a set period of time. Continuing resolution is usually abbreviated acr. And a CR basically set, a continuing resolution basically says what we're spending today, keep spending tomorrow, and you sometimes will get a. You can get a long term cr. Like you could get say, a year long CR that says for the next year we're just going to spend what we're spending right now. You can get a short term cr. Sometimes crs are short as, as short as a day or two or a week or more. Now, why is this fight happening? This fight is happening because at midnight Friday night, funding for the government expires. And that was set in the last funding battle. Congress funded it through midnight Friday night. That means at 12:01am on Saturday, funding for the government will expire. Now, if we get to 12:01am and I gotta say, sitting here right now, that seems like a very likely outcome that we're gonna get to 1201 without this being resolved. The result will be a quote, unquote, government shutdown. Now, what does a government shutdown mean? Well, that phrase is overstated because much of government does not shut down. Number one, mandatory spending. Mandatory spending is government spending that is written, that is automatically spent, that doesn't need to be appropriated. Mandatory spending is not affected. What does that mean? It means Social Security checks will go out regardless. It means Medicare will go out regardless. It means Medicaid will go out regardless. It means anything that is written as mandatory spending happens regardless because you don't need appropriations. That's just written to automatically be spent. What else does it mean? Well, if you have a government shutdown, it is existing law that even in the case of a shutdown, when Congress has not appropriated funds, essential services continue. So, for example, if at 12:01am on Friday we have a government shutdown, the military is not going to suddenly cease to operate. We have soldiers and sailors and airmen and marines who are deployed in harm's way. The military is the very definition of essential services. So they'll continue to defend this nation. It means there are a host of positions throughout government that are deemed essential. And by the way that's decided, typically agency by agency, it is up to each agency to decide how many, which ones of their employees are essential. At some cabinet departments, you take it. A cabinet department like the Commerce Department, historically you have 70% or more of the employees that are deemed non essential. If you're deemed non essential, when there's a government shutdown, you stay home, you don't go to work, you don't do anything. And by the way, typically all government employees stop being paid. So one of the consequences of a shutdown is if you're a federal government employee, your paycheck doesn't come. Now, sometimes Congress will make exceptions. So for example, in past shutdowns, we have made exceptions with some frequency for active duty military. But that actually takes Congress moving in and legislating and saying, you know what? We, we're gonna pay our soldiers, sailors, airmen, and Marines. But if Congress doesn't act, they don't get paid. In the last big shutdown we had when Trump was president, I went to the Senate floor and fought to pay Coast Guardsmen. Look, the Coast Guard was saving people who were drowning. They were guarding our border, they were working, and yet they weren't being paid. And the Democrats stood up and objected to paying Coast Guardsmen during the shutdown. So the basic principle is the vast majority of federal government employees don't get paid during a shutdown. And by the way, if you're a young enlisted man, I mean, you might need like your paycheck to pay your rent next month. You might need your paycheck to pay your food. Like many of these, these government employees are not wealthy and they are living paycheck to paycheck. So having the paycheck stop puts real burdens, particularly on the low to median income federal workers. On top of that, when the shutdown ends, the federal workers all get paid. They get paid back pay. So what we end up doing is having a significant chunk of federal workers not work for a period of time, and then they don't get paid during that period of time. And then after the fact, they get paid on the back end. So we waste a bunch of government money. That's what's at stake. Now, how do we think through this fight? What does it mean? I'm going to suggest four key principles that are important. I want to start with one that almost no one talking about this is talking about, but it's a very simple one. Count to 218. I want to repeat that, Ben. Count to 218. 218 is a majority of The House of Representatives. The House of Representatives has 435 representatives. 218 is half of it. Unless you have absences or vacancies, nothing can pass the House without 218 votes. So we have seen there have been two different attempts so far by House leadership to pass a cr. A continuing resolution. The first attempt was a continuing resolution that extended until the middle of March, and it included a variety of different programs. Now, I want you to understand, I want you to imagine for a second, Ben, that you wake up tomorrow morning and your name is Mike Johnson. You're the speaker of the House. I want you to engage in some simple math. You need to get to 218.

A (11:15)

Okay?

B (11:16)

If you don't get to 2 18.

A (11:18)

I don't think I've wanted to get to that name in the morning because I know how stressful that job's got to be.

B (11:23)

So I want to walk through just the simple reality that Mike is facing. He needs 218. Now, a continuing resolution continues. Funding. The current discussion is through mid March. On top of that, you've got a significant number of House members who are insisting at least two things be included in the continuing resolution. Number one is $110 billion in funding for farmers and ranchers and ag that have just been hammered across this country. So if you don't add that money for farmers and ranchers and ags, you. You lose debt. Dozens of Republicans, you. You lose a ton of votes if you don't have ag there. So you're sitting there going, okay, we need to take care of our farmers and ranchers. We need to have that money. Secondly, you've got disaster relief. And in particular, two states that have been just hammered by disasters recently, Florida and North Carolina. Now, the Florida and North Carolina members are saying, if you do not have disaster relief in this bill, I'm voting no. So here's the challenge. The first version, Mike Johnson sits down. He extends government funding. He puts funding for farmers and ranchers in there. He puts disaster relief in there. Now, there are a significant number of Republicans who as a matter of principle, say they will never, ever, ever vote for a continuing resolution. So if you're only looking to Republicans, you can't get to 218 because there are a bunch of them. They're going to vote no no matter what. They're just like, no, no, no, I will not vote yes. I'm a no. So you're Mike Johnson. You got to get to get to 218. You look at Republicans. There are not 218 Republicans who will vote yes. Your only choice is to get Democrat votes. If you've got to get to 218, where you'd like to start is give me 218 Republicans. There are not, I don't believe there are 218 Republicans who will vote vote for any CR. That means you must get Democrats. Now, Democrats, let's look at something like relief for farmers and ranchers. Most Democrats today, the Democrats, by and large, don't care about farmers and ranchers. So the Democrats are like, I'm not going to vote for aid for farmers and ranchers. Why would I do that? And Florida and North Carolina are both Republican states. So most of the Democrats are like, why would I give disaster relief to Florida and North Carolina? I'm not from there. I'm a liberal New Yorker. Why would I help out Florida? And so what happens is the Democrats say, okay, if you want my vote, I need X, Y and Z. Now, these are demands made by Democrat members of Congress. So they're bad. They're bad policies. They're terrible. And so the first bill that Mike Johnson rolled out had some elements in it that were really bad. Now, I don't like elements that are bad, but what is Mike Johnson supposed to do? If there were 218 Republican votes there, he would not have to agree to really bad Democrat provisions. There are a bunch of Republicans who are like, hell no. No matter what, I won't vote for you. So Mike Johnson on the first version, I think, felt he had no choice but get the Democrat votes to pass it. Now, when he rolled it out, Twitter went crazy and a whole bunch of people criticized it and they said there are Democrat provisions in here that are terrible. Now mind you, just, just remember the, the very simple principle. Count to 2:18. If you can get to 2:18 on a better bill, awesome. And by the way, 2:18 doesn't even get it done because you've also got got to get it to pass the Senate, which Chuck Schumer and the Democrats control. But let's just focus on the House. If you can't get to 2:18, nothing will pass. All right, let me talk about a second principle. I've got four principles that I want to lay out. Number one is count to 218. And just remember this, because almost all of the commentary is ignoring the fact that nothing will pass unless you can get to 218. And by the way, so the first bill, Johnson had a CR through mid March, had farm aid, had disaster relief, and had a bunch of gives. He had to give to Democrats because he had to get Democrat votes to get it to pass. Twitter went crazy, blasted him. You terrible rhino. How could you possibly propose Democrat asks? Well, the answer would be because he's got to get to 218. And so the first one crashed and burned. Then Trump wants to raise the debt ceiling. Now, what's the debt ceiling? Let's talk about that. Because there's sort of two elements in these battles. One is funding the government. The other is the debt ceiling, which is a cap on how much the federal government can borrow. Now, every president hates the debt ceiling. When Trump is president, he's got to raise the debt ceiling because if he doesn't raise the debt ceiling, we will run into the debt ceiling. And if we did not actually raise it, the United States would default on its debt, which would be disastrous for this country. So Trump wants to raise the debt ceiling. Now, Trump is also angry with Kevin McCarthy, the former speaker of the House, because he extended the debt ceiling. The debt ceiling is scheduled to expire next summer, I think June or July. I don't remember next summer. So six months into the Trump presidency, the debt ceiling's scheduled to hit. And Trump is very focused on. He's mad at McCarthy, very mad at McCarthy, that six months into his presidency is going to hit the debt ceiling because he's got to raise it. And that's true of every president. And so Trump is demanding, he wants us part of this continuing resolution, raising the debt ceiling. So he demanded that, well, Mike Johnson came back as a second version, and he came back with what was called a skinny cr. So it included funding for the government through mid March, it included farm relief and it included disaster relief. So those are the asks principally of Republicans. And because Trump demanded, suspended the debt ceiling for two years, so it gave two of the four years of the Trump presidency no debt ceiling, which is what Trump is, is insisting be in this bill. So this second bill was by and large the bill that was being demanded by Republicans. Well, we had a vote tonight. What was the vote result, Ben?

A (18:09)

It didn't pass.

B (18:11)

Okay, as I said, rule number one is count to 218. The vote was 174 to 235. Now, I'm going to make a simple observation. 174 is not 218. 174 of the yeses, 235 of the nos, the breakdown, every Democrat but two voted no. Look, the Democrats want Trump to fail, so they're all happy to vote no. There were only Two Democrats who voted yes. Now, we still had the Republican votes to pass it. Well, what happened? 38 Republicans voted no. You cannot get to 218 in this narrow Congress. If 38 Republicans vote no, you end up with 174, which is where we were. So as we're sitting here tonight, I don't know what the hell is going to happen. But on the debt ceiling, and to be clear, this, this skinny proposal was. Was almost exactly what President Trump demanded. He put out a statement urging every Republican vote for this. Now, he was unequivocal. The Great Deal, vote for it now. Because it had almost entirely what was asked for by Republicans and it had very few of the things asked for by Democrats. And it didn't just fail, it failed. 174 is way, way, way below 218. And to be clear, it failed because 38 Republicans voted no. So what's next? Let me move to the second principle. I told you, I got four principles to think through this. Here's the second principle. Funding should be about leverage. Listen, we're living in a time right now. You spend a lot of time on Twitter. I spend a lot of time on Twitter. I get that sense. You're frustrated with Washington. Washington's the swamp. You don't like government, just shut it down.

C (20:08)

Rawr.

B (20:10)

In my view. Now listen, there are some Republicans, there are SWAMPY Republicans, Mitch McConnell, who are terrified of a government shutdown, who on every battle over government spending, they want to surrender on everything because they think the government shutting down is the end of the universe. That view is wrong. The government shutting down is not the end of the universe. However, I think you should use battles over government funding as leverage to get something. So if you think back to 12 years ago, when I was a brand new baby senator and I led a filibuster against Obamacare and we had a government shutdown. And I was painted by the media as the point of the government shutdown. To be clear, my position was not shut the government down. Rawr. My position was we should fund the entirety of the federal government, but don't fund Obamacare, that we should use funding as leverage. And I had a very detailed and, and laid out plan to get to victory. Now, we failed in 2013 with that objective in significant part because Republican leadership, Mitch McConnell and John Boehner waged war against me. They joined with the Democrats and said, nope, we want to fund all of Obamacare. To hell with you. And when you're fighting the Democrats and leadership in your own party, you lose But I will say to everyone tweeting, shut it down. Shut it down. Shut it down. I get you're on your phone. That feels good. What do I care? Shut it down. Well, let me tell you, when you have a shutdown, number one, if you have a bunch of soldiers stationed abroad who are not getting paid, who are not able to feed their families, that ain't good. By the way, it is also important to recognize the last big shutdown we had was when Trump was president. So when Trump's president, if you have a shutdown and you want to navigate through it, and by the way, Chuck Schumer forced the last shutdown when Trump was president. His administration was able to mitigate the harms of the shutdown because they wanted to. If we have a shutdown 24 hours from now, Joe Biden and the Democrats will do everything they can to make it as painful as possible. So it means a crap ton of federal workers will not get paid going into Christmas. That doesn't make them thrilled. And by the way, it's not just federal workers that we're not big fans of. It's not bureaucrats that are regulating the hell out of business and destroying jobs. They're among them. But it's also prosecutors. It is also Border Patrol agents. It is also Marines. I mean, it's Coast Guardsmen. It's a lot of people who are good people doing great work who get their pay cut off. But Biden will also implement the policies in ways. So, for example, what will they do? They'll shut down every national park in America. So maybe you and your family, over Christmas break, we're planning to go see a national park. Maybe you're planning to go see the Smithsonian. Now, Christmas is not a huge time for that. But shutting down the museum, shutting down the national parks, it is 100%. Biden will do that. And that is done to inflict maximum pain. Let's say you're taking your family on vacation and you want your passport processed. Well, you know what? Biden's gonna shut that down. You're not gonna get your passport processed. Every consumer faces.

A (23:38)

They wanna make it hurt is what they're saying. They're saying they wanna make it hurt. And they want you to blame Republicans and they want you to say, this is what they did, this is their fault. It's a blame game.

B (23:49)

It is a blame game. And they wanna make it painful and they wanna blame Republicans. So I will just say to everyone, and look, I'm reading Twitter, I'm reading people that I like and agree with. They're just like, shut it down. Shut that. I get. There's a lot about government that frustrates the heck out of me. But let me just ask, okay, what's the end game? Do you really think if we have a government shutdown for the next month and Trump arrives on January 20th with the government shutdown for a month, that that helps Trump? Do you really think that helps the incoming administration? By the way, come January 20th, it stays shut down. You still got to get to 2:18. Um, there are people around. Trump will say, well, no, no, no. Everyone will blame the shutdown on Joe Biden. I promise you they won't. In significant part. Because when it's Republicans screaming, we want a shutdown, it's actually not ridiculous of Democrats to say, well, if the Republicans want a shutdown, then it's the Republican shutdown. I mean, that. That's not an insane thing to say. The media will say it, the Democrats will say it. And when you have Republicans screaming, I want to shut down, that becomes not a very difficult narrative to tell. So if you're arguing, who cares about the shutdown, let's shut it down. Let me just ask, what are you trying to accomplish with that? What's the leverage you're trying to get? And what's the end game? When does the shutdown end? Or do you really think we should never pay our active duty military again? And I don't think there are many people. And that's one of the dangers of people just yelling when they don't actually look at, well, what does this mean? And let me be clear, I have been vigorous in saying we should use funding as leverage, but leverage for an achievable, concrete, discrete outcome. I'm not hearing anyone who's saying, shut it down, shut it down. Now, some people are saying, all right, here's what we should get leverage for. We should get leverage for Trump's demand that we suspend the debt ceiling. And, and here's the third principle I want to say there are some people arguing for eliminating the debt ceiling permanently, altogether, just getting rid of the debt ceiling, never again having to worry about it. And by the way, one of the plans that's discussed is, well, the Democrats have always wanted to eliminate the debt ceiling, so let's just do that. And that's how we get out of this. I pray that is not the end game here. Eliminating the debt ceiling would be the single worst step we could possibly take. If you care about spending or deficits or debt. Now, why is that? Okay? Let's do a little history. Historically, the debt ceiling has been the single greatest leverage Republicans have had to force spending restraint. Now this has only happened and it's only worked against the opposing party. So one of the challenges with the debt ceiling is when your own party is in power. Trump wants the debt ceiling raised. Every president wants the debt ceiling raised. Republicans, as a general matter, are not willing to exert massive leverage on their own party's president and for spending restraint. So when Trump was president the first time, the debt ceiling was not leverage against Trump because Republicans didn't want to do that. I understand that. But when Democrats are in the White House, Republicans, the debt ceiling is the single most effective lever point that has been used against Democrats to force spending restraints. And I want to point to a couple of examples. Number one, Graham Rudman Hollings. Graham Rudman Hollings, passed decades ago, remains the single most effective spending restraint that has ever been passed into law. Phil Graham, former senator from Texas, was the lead author. How did that get passed? It got passed because of the debt ceiling, got passed because Republicans forced it and said, we won't raise the debt ceiling unless you pass meaningful structural reform to rein in spending. And Graham Hollings was in effect for many years and had a very positive effect, reining in the growth of spending. I'll point to a second example, 2010, the Budget Control Act. 2010, Barack Obama was president, and Republicans used the debt ceiling to force Barack Obama to agree to something called the Budget Control Act. The Budget Control act again significantly constrained the growth of federal spending. It was only through the debt ceiling. We got that. Now the argument. And by the way, today we Republican senators, we all had lunch. J.D. vance came to express his views to the lunch. There were a number of Republicans saying, well, we should just get rid of the debt ceiling now. And I'll tell you, I expressed my views. If we get rid of the debt ceiling, it would be utterly disastrous. If you care remotely about government spending, eliminate the debt ceiling would be a massive mistake. And I just pointed out, if we get rid of the debt ceiling, there will come another Democrat president. I get the urge to live in the moment of we're in charge. Woohah. But unfortunately, there will come another time when the American people elect a Democrat. And for anyone who has an attention span beyond 12 seconds, you recognize throughout history that politics has been a pendulum and it goes from one party to the other. So we will get another Democrat president. And I told my colleagues today at lunch, I said, all right, you get rid of the debt ceiling, get ready for President Elizabeth Warren. And if you don't like a $36 trillion debt, get ready for a $50 trillion debt. Because the Democrats, Elizabeth Warren wants to eliminate the debt ceiling. AOC wants to eliminate the debt ceiling. Chuck Schumer wants to eliminate the debt ceiling because they want to spend us into oblivion. So I will say one potential way out of this is to cut an absolute deal with the Democrats that gets rid of the debt ceiling forever. We will have given away what history has proven. And by the way, I'll go back, I'll go back to about a decade. I don't have the most recent stats, but about a decade ago it was the case that of the previous 51 times Congress had raised the debt ceiling, 28 of those times it had attached meaningful conditions to the debt ceiling. So it's leverage. Remember, my principle number two is use spending for leverage. This is related. On principle number three, the debt ceiling is about getting leverage for concessions. Now here's the problem I mentioned to you. There are a bunch of Republicans in the House who say they'll never vote for continued resolution. There are also a bunch of Republicans in the House who say they will never, ever, ever vote to raise the debt ceiling. I gotta tell you, I don't think that makes any sense. I've never said it and I consider myself very much a fiscal conservative. But 40% of every dollar the federal government spends is borrowed. Unless you're prepared to slash the federal government budget by 40% tomorrow. And by the way, there is literally no serious person on planet earth who is prepared to do that and is able to do that. Even if you would with a magic wand do that, there's no way to make that happen. Unless you're prepared to do that, the debt ceiling will have to be raised. My position has always been I'm willing to vote to raise the debt ceiling if we are getting concessions that are reining in the out of control spending that's bankrupting our country. However, in the House there are a bunch of Republicans who simply say, I will never, ever, ever vote to raise the debt ceiling. No matter what. It doesn't matter what we get. My answer is no. That is a real problem. Let me make one final principle. Mike Johnson, who's the speaker of the House. There are a bunch of voices on tv, a bunch of voices on talk radio, a bunch of voices on Twitter saying get rid of Mike Johnson, Throw him overboard. I'm going to tell you something that I believe is an absolute fact. Mike Johnson is the single most conservative speaker of the House that will ever be speaker of the House in our lifetime. He is undoubtedly the most conservative speaker of the House we have ever had in our lifetime. It's not even close. It's not even arguable. And I'm here to tell you, listen, Mike Johnson may lose his job over this. He has a very perilous. It's a tiny majority in the House. You got a bunch of House members saying I'm going to vote against him. I will tell you this. If Mike Johnson is toppled as speaker of the House and he might be, Kevin McCarthy was. Mike Johnson is orders of magnitude more conservative than Kevin McCarthy. It's not even close. If Mike Johnson is toppled as speaker of the House, we will end up with a Speaker of the House who is much, much more liberal than Mike Johnson. I think that is indisputable. I know Mike well. He's a good man. He's a decent man. He's. He's a strong Christian. He is a man of humility. And everyone on Twitter is saying, but he gave the Democrats concessions. I want to go Back to the first principle. I said count to 2:18. If Mike Johnson could draft a bill that makes it out of the House with 218 Republicans, he would. I don't believe that is possible. There's certainly nothing to indicate it is possible. Right now if you cannot get to 2:18 with Republicans because a bunch of Republicans say I will not vote for anything you propose no matter what, then Mike Johnson is forced to get Democrat votes. To get Democrat votes, he must give Democrats things they want. And so I don't know what will happen. I think there's a reasonable chance somehow out of this we get some very short term cr. A week or two or three and then in mid January we're back in the middle of this mess again. That's possible. I'll tell you in the Senate, we're all sitting there, we have no idea what's going to happen. I gotta tell you, I feel, I feel for Mike Johnson. I think he is trying with all his might. And I would just encourage you to focus on. Listen, I think we need people to be serious about changing the direction of the battleship of government. And to do so you actually need a strategy that can get the votes to prevail. If you can't get the votes, it's easy to tweet about it. I mean that's from the cheap seats. 38 Republicans voted no. 174 is not 218. And so I don't know what the result is here. I think it is chaotic. We will get through this one way or another. But the fundamental structural dynamics and it's one of the things. Look, going forward into the next year, I'm really optimistic about the Trump presidency. I'm really optimistic about a Republican Senate and House. But I'll tell you, the Senate's gonna be a lot easier. We've got 53 Republicans coming in next year. By the way, we still have a Democrat Senate today. So I haven't even. This whole discussion has ignored the fact that you gotta get Chuck Schumer and the Democrats to agree with whatever you do, which is even harder. But next year, we'll have 53 Republicans in the Senate. 53 is a big enough majority that we can lose three votes and still get things done. So I think the Senate will be able to pass pretty good legislation. Not fantastic, not wonderful, but surprisingly good. The House worries me enormously next year because the majority is so excruciatingly small that if you lose a handful of votes, you cannot get to 2:18. And so I think Mike Johnson is trying to work miracles right now. But the single hardest challenge of the next two years in terms of passing good legislation is going to be getting to 218 in the house. And I don't know what the answer is to that.

A (36:09)

I will say this. I really, really hope that people that are listening to this, listen to what you had to say, and they understand that we do this show not to just go out there as you described it, and throw things out there from the cheap seats without doing the math. And I think most people listen to show, want to know what's really happening. And I hope that this gives them at least a map to understand the reality of a situation instead of just gaining Twitter followers. Because you take a position knowing that people are going to retweet it and knowing that people are going to like it in general, and then you're going to build your popularity, because there's a lot of people that are doing that right now. But like you said, the number comes down to the number, and 218 is the number. And we're nowhere close to that right now.

C (36:58)

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A (39:10)

Don't forget, we do this show three days a week. Hit that subscribe auto download button. And on those in between days, grab my podcast, the Ben Ferguson Podcast. I'll keep you updated. And when we get a deal done, I promise you we'll be here for you. We'll explain it. If we don't get a deal done right now, there's government shutdown. We'll explain that as well, even in more detail and how we got to where that point is. But the center, I will see you back here in a couple of days.