Congress has roughly eight, maybe nine actual working days in which to simultaneously fund the government and pass a tax cuts bill that would starve the government of funding and eventually destroy it. The governing party seems to be unaware that they are working at cross purposes here, or they just don't give a damn. They passed a very short-term government funding bill last Friday, putting off the hard decision-making by two weeks until December 22. As usual, at least since the Republican party lost its collective mind, the majority party is fighting with itself. The House Freedom Caucus maniacs are refusing, as usual, to accept the fact that any bill that passes the Senate will have to have the votes of eight Democrats. Which means it’s House Republicans against one another and two separate House factions against the Senate. That leaves, again, Democrats with a pretty high degree of bargaining power, if they're willing to let government shut down, or at least credible in saying they're willing to let that happen.
There are three options for moving ahead on government funding, and multiple points of contention between and among all the parties. Here's those options:
The first option is to negotiate with Democrats to get a bill through the Senate. Some conservative House Republicans may oppose such a deal, possibly enough to require the GOP to get Democratic support in the House too.
Option two is to put together a bill that funds defense for the full fiscal year, through September 2018, while leaving the rest of the government on temporary funding. Democrats strongly oppose that idea. The House may be able to pass it with only Republican votes—and the GOP then would dare Senate Democrats to oppose it and shut down the government.
If they can't work an agreement with either Democrats or conservative Republicans, the third possibility passing another short-term spending bill keeping the government open after Dec. 22 until sometime in January.
For what it's worth, number three has pretty much become the way things operate under what passes for Republican leadership. A series of short-term continuing resolutions to keep the doors open without resolving permanently any of the fights. That seems the most likely outcome this time, too, because there are a lot of fights. That's even before you add in the unstable and capricious demands of the White House.
First, there's the the ongoing Budget Control Act from 2011 that ties together defense and non-defense spending—when one goes up, the other is supposed to follow. This year, those caps are at $549 billion for defense and $516 billion for non-defense. House Republicans want to boost defense spending by $73 billion and the White House by $54 billion and Democrats are insisting that there be a dollar-for-dollar increase in non-defense spending either way. Republicans are toying with agreeing to that if they can find places to hike fees paid to the federal government or enough stuff to sell off—like the petroleum reserve—or enough money they can shift around from other places. This is the big issue now—guns versus butter—because it sets the limits for the entire spending bill fight. The Freedom Caucus and Trump are pretty much united here, which complicates the rest.
The rest includes appeasing one Republican senator—Susan Collins—who has demands on the funding bill stemming from her agreeing to vote on the tax bill. Her insistence on Obamacare fixes in the budget bill strengthens Democrats' hands a little bit in both chambers on getting that issue done, but the maniacs in the House are dead-set against it. Along with that, Sen. Jeff Flake (R-AZ) had a pretty weak demand in seeing action on the immigration status of young undocumented people, the Dreamers. Democrats are also pushing for that, the House maniacs are uniformly against that, as well.
There are critical funding issues: the Children's Health Insurance Fund, which expired 72 days ago and is now being held totally hostage; there's flood insurance which also expired but has been extended to December 22; there's still billions in disaster aid needed for hurricane and wildfire relief in Texas, Florida, Puerto Rico and California.
Democrats, particularly House leader Nancy Pelosi have made one thing very clear: Ryan and McConnell are going to have to figure this one out without counting on votes from House Democrats. That puts Ryan and McConnell in a vise between the House maniacs and the eight Democrats necessary to pass a bill in the Senate. It's legislative hardball and it's exactly what Democrats need to be playing.