Congress faces a partial government shutdown at midnight over Department of Homeland Security funding—but the border enforcement operations at the center of the fight will continue largely uninterrupted. Last summer’s reconciliation bill locked in $170 billion for immigration enforcement through 2029, sitting outside the annual appropriations process. This means agencies like FEMA, TSA, and the Coast Guard could shut down while ICE operations continue with their massive funding increase. TCS Director of Research Josh Sewell joins Steve Ellis to break down how Congress gave up the power of the purse, why this shutdown is different from previous ones, and what taxpayers need to understand about budget gimmicks that prioritize political expediency over fiscal accountability.
Transcript
Announcer:
Welcome to Budget Watchdog All Federal, the podcast dedicated to making sense of the budget spending and tax issues facing the nation. Cut through the partisan rhetoric and talking points for the facts about what’s being talked about, bandied about and pushed to Washington, brought to you by taxpayers for common sense. And now the host of Budget Watchdog AF TCS President Steve Ellis.
Steve Ellis:
Welcome to All American Taxpayers Seeking Common Sense. You’ve made it to the right place for 30 years. TCS that’s taxpayers for common sense, has served as an independent nonpartisan budget watchdog group based in Washington DC We believe in fiscal policy for America that is based on facts. We believe in transparency and accountability because no matter where you are in the political spectrum, no one wants to see their tax dollars wasted. It’s January 30th, 2026, and we’re staring down yet another government shutdown deadline at midnight tonight. Podcast listeners. This one’s different. This time the fight is over to the Department of Homeland Security. After federal immigration authorities killed another American citizen during enforcement operations in Minneapolis, Congress is hurdling towards a shutdown that would affect much of the federal government, but the agency at the center of the dispute is largely insulated from a shutdown. Joining me today to break down this budget Shell Game is our very own director of research and policy. Josh Sewell. Welcome back, Josh.
Josh Sewell:
Hey, thanks Steve. It’s good to talk.
Steve Ellis:
So Josh, as I said, we’re heading into another potential shutdown, but as we pointed out in the weekly waste basket, there’s something fundamentally different about this one. The border enforcement operations that sparked this crisis aren’t really at risk of being shut down, are they?
Josh Sewell:
Yeah, not really. So Steve, remember last summer Congress used budget reconciliation to lock in years of record funding for immigration and border enforcement priorities of the President. So the one big beautiful Bill Act, oba, as we call it, provided roughly 170 billion for the various immigration and border activities that the president was pursuing, including 75 billion for the Immigration and Customs Enforcement Agency alone. So to put that into perspective, the fiscal year 2024 ice budget was less than $10 billion. And the entire Department of Homeland Security of which ICE is apart, was a little over $60 billion back in 2024. So the OBA money is available through 2029, and it sits largely outside of the annual appropriations process. So basically whatever happens this week in between the Senate and the House border enforcement operations that are contentious right now, they could continue largely uninterrupted.
Steve Ellis:
So even in a shutdown, the agency at the center of this shutdown fight got a massive funding increase that largely sits outside the annual appropriations process. That’s quite a contrast to the typical shutdown scenario where agencies actually stop operating. Okay. Back to the present Senate, Democrats want to separate the DHS spending bill from the broader package that includes bills like labor health and human services, transportation, housing and urban development, state and foreign operations, financial services and defense. What’s their strategy there?
Josh Sewell:
Well, to be clear, their strategy is to use whatever tools they can. There’s been a groundswell of opposition and questioning of the administration’s actions related to border enforcement and especially in Minneapolis. And so Democrats and some Republicans are responding to what their constituents are asking. And to be clear here, support for the DHS spending, bill was always shaky even three weeks ago when they were trying to get this through. And they actually did pass it in the house two weeks ago in the house. They voted for it separately from all the other bills, those others that you just mentioned, because it was contentious. And the DHS bill only passed two 20 to 2 0 7. There were seven Democrats in the house that voted for it and all but one Republican. And you can compare that with the other five bills that were packaged together, they passed with broad bipartisan support, 3 41 to 88.
So a majority of Democrats even came on board. Now, recent events made the vote for that whole package back together as it moved to the Senate untenable. And so majority leader Thune, when he brought it up for a vote, which was yesterday, since we’re recording here on a Friday, every Democrat opposed and seven Republicans also opposed. I mean, because of the Republican holdouts, the majority leader, he will need a lot of Democrats to vote for it to get it over the line unless all the Republicans decide to vote for it too. But you’re still going to have to have Democratic support to get past the filibuster.
Steve Ellis:
So it sounds like because the administration is negotiating with the Democrats on some changes to these immigration tactics, that they’re going to do a continuing resolution to fund the Department of Homeland Security for another two weeks while they negotiate those accountability measures and then also at the same time pass those other five bills. So they’re clearing the deck of that. But Josh, if DHS shuts down, what actually stops operating?
Josh Sewell:
Well, remember DHS, it funds a number of agencies, the DHS bill, so agencies like FEMA and TSA could be disrupted. The Coast Guard, you think of it as a military branch, most of us, but it’s actually funded. It’s a part of DHS and it’s funded by that bill. And so the border enforcement operations, which were mostly funded through oba, so ICE and CBP, the customers of border protection, they’re not necessarily going to be disrupted because they have this bucket of funding that was provided last year. And so they don’t, in a shutdown, they wouldn’t necessarily be directly impacted,
Steve Ellis:
Which seems backwards from what Congress is trying to accomplish here.
Josh Sewell:
Yes, it is. And I think wherever you stand on these issues, it’s clear from public polling and from coverage that there is significant, we’ll call it disagreement about what’s happening. And there’s an upswell of support for having a debate about how the administration is implementing some of its priorities. And so we’re talking about this as a budgetary issue because it is, and it gets to a bigger problem that we at TCS have been warning about in many of our podcasts and since our founding 30 plus years ago. Now, when Congress uses tools outside of the budget process, the normal budget process in this instance, budget reconciliation, it allows Congress to lock in years of funding outside any normal process outside of the regular order that allows the minority party to have a little more input. And they’re essentially giving up the power of the purse and locking in their priorities with less debate and less opportunity to reform those programs if the circumstances on the ground change.
Steve Ellis:
And this happened not just last summer, this also was part of the Inflation Reduction Act during the Biden administration, where there was some spending that was put into budget reconciliation. And actually that was never what budget reconciliation was intended for. It was to actually reduce the deficit, whereas the OBA was going to increase deficits by $1.4 trillion over the next 10 years. And to the extent that former Republican senate majority leader Bill Frist and former senior budget staffer, bill Hoagland, actually Penn an op-ed recently saying that they should reform budget reconciliation so that you cannot add to the deficit through reconciliation to make it so that you actually had a bill that was just trying to reign in some of the excesses rather than create the excesses.
Josh Sewell:
Exactly. And I’m not trying to give short shrift to the important debates around federal actions related to immigration enforcement in Minneapolis specifically, or border control, border enforcement border protection writ large by talking about us as a budgetary issue. But that’s the point that we’ve had from our founding is that budgets are about priorities and the way we spend our money, what we spend it on, the way we build our tax code, that all reflects what we prioritize as a country. And to have an opportunity to debate what we need to do with that money, you need to follow a process if you end up doing reconciliation. This is one of the many examples of it just makes it, yes, it’s easier, so to speak, for the majority to get its way. But we have had, as you said, the IRA in the Inflation Reduction Act that was really about getting some climate focused spending and conservation related spending that did not have enough support in the Senate from Republicans to pass. It was a partisan process to get that done. This immigration stuff was basically a partisan, there are other things that were funded in OBIT that did not have a majority support in the time. So reconciliation has become a partisan process that does not necessarily produce the best policy and public interest, and it definitely shuts out the minority party, whoever that is at the time.
Steve Ellis:
Alright. Let’s get back to the looming shutdown. What are some of the other agencies caught in the middle of this?
Josh Sewell:
Half of the spending bills are being debated here. We had the other six of the 12 spending bills were taken care of at the end of last year. So we’re talking about some of the big ones. So in defense, civilian Pentagon employees, they could be furloughed, OSHA inspections are suspended. If you don’t have the bill affordable housing services, CDC and NIH programs could be affected. So you’re talking some of the things around disease and research. We mentioned TSA and fema. There are a number of agencies that those folks would still be considered essential for a lot of them, but they would end up working and not necessarily and not getting paid. This is all because of, again, a dispute over an agency who’s, even if you do have this partial government shutdown, you’re not going to probably see a difference on the ground when it comes to ICE or CBP or these other immigration related agencies.
Steve Ellis:
Yeah, I mean, this is a perfect example of what we’ve talked about in our shutdown episodes. Budge, watchdog af, faithful shutdowns, impose real economic costs while accomplishing very little. What does TCS estimate the economic hit would be if we go into a shutdown tonight?
Josh Sewell:
Well, I think first of all, it’s not an if. I think it’s when we go into a shutdown, because even if the Senate passes the package right now, while we’re on this podcast taping, the house is not in session and it’s not going to be until at least Monday, they have a 72 hour rule that they follow. They have a 72 hours before they’re allowed under their house rules to come back into session. And I guess we’re following rules again. And so if they follow that rule, then they can’t be here until at least Monday. So there will be a shutdown, which is a question of how long. It’s at least a weekend shutdown, which it’s weird to say, but if you’re going to have a shutdown, the weekends are usually a little less busy. You may not notice it as much, but they’re going to have to have a vote. And then actually whatever happens in the next few days, they’re going to have it another vote in two weeks because it’s going to be a two week cr it looks like for DHS.
Steve Ellis:
So for taxpayers, Josh, watching this unfold, what’s the bottom line? What should they understand about what’s really happening here?
Josh Sewell:
Well, I think, again, I don’t want to downplay the important debates that are going on, and I think this instance reminds me a little of, I don’t know if I have the Donald Rumsfeld quote exactly right. But you don’t go to the legislative fights with the bills you want to have or you hope to have one day. You have that debate with what you have. And so we’re not fans of shutdowns. We’re not fans of partisanship getting in the way of good public policy, but we are where we are. And so I think Congress and the Senate clearly need to have a debate about immigration enforcement and executive agency, how they’re implementing the law and the land. And so we’re going to have that debate. And there are plenty of mechanisms to avoid a shutdown if we want.
Steve Ellis:
We’re four months into the fiscal year. We’re a third of the way through the fiscal year, and they’re still haggling over the funding for it’s six bills, half of the appropriations bills, but it’s about 75% because of the Pentagon, mostly of the discretionary budget that is unwrapped in these bills. And so it’s past time to get this done.
Josh Sewell:
And also February is right around the corner. So the president should be releasing his budget request in the next week or two if he’s following the normal procedure. And that gives Congress an opportunity to take that, digest it, and then have the hearings to talk about these priorities. And so our priorities as a country and how we’re going to spend our money, we have a real opportunity over the next month. Whatever happens in this particular CR and DHS bill discussion to these issues are going to stay in the forefront. And it’s a time for Congress to do its job and use its power of the purse to ensure that we do have public policies that are serving our interests and are in line with our values and our constitutional rights and just what we want as voters
Steve Ellis:
Here here. And budget was faithful. You can be sure that we’ll be back to talk about the budget when that gets released. Josh Sewell, thank you as always for bringing us the very latest on budget watchdog all federal.
Josh Sewell:
Yeah, it’s always good to talk Steve.
Steve Ellis:
Well budget Watchdog Af Faithful. Here we are again. Another shutdown deadline, another crisis manufactured by Congress refusal to do its basic job of passing appropriations bills through regular order on time and individually the one big beautiful act locked in years of border enforcement funding. And now when accountability is needed, Congress has fuel tools left except threatening to hurt completely unrelated agencies and programs. This is exactly what happens when lawmakers trade the power of the purse for political expediency. This is the frequency. Mark it on your dial, subscribe and share and know this taxpayers for common sense has your back America. We read the bills, monitor the earmarks, and highlight those wasteful programs that poorly spend our money and shift long-term risk to taxpayers. We’ll be back with a new episode soon. I hope you’ll meet us right here to learn more.
