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If government shuts down, blame McCarthy and MAGA right: Sen. Merkley

As members of the House GOP continue to debate spending bills, the October 1st government shutdown deadline draws near. With a deal no where in sight, a government shutdown seems inevitable with Senator Jeff Merkley, D-Oregon, telling Yahoo Finance Live that the "odds of a shutdown are increasing." "Adult, modern, mature governments should not be shutting down," Merkley says. When it comes to who would be to blame for a shutdown, Merkley points the finger at "Kevin McCarthy and the MAGA Right."

When asked if there was a way out of future shutdowns Merkley outlined his vision for a more simple, streamlined process to vote on spending bills and that with certain adjustments "we could do an appropriation bill a day," thus avoiding "extensive time delays that exist in the current rule."

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video transcript

- Speaker Kevin McCarthy and house republicans recently proposed a 30-day stopgap funding bill that would set the current government spending level at $1.48 trillion a year. For more on the possibility of a shutdown and the impacts it could have, let's bring in senator Jeff Merkley, democratic senator of Oregon.

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Senator, it's good to talk to you today. I realize the discussions are continuing within the house GOP, but you're on the hill. What are you hearing about progress being made and the prospects of a shutdown as we get closer to that deadline?

- Well, right now, the odds of a shutdown are increasing. What we're seeing is that Matt Gaetz has said, hey, let's-- let's have a shutdown and then bring up individual spending bills during the-- during the shutdown. Well, that-- that is a terrible route to go.

I think this is, you know, adult, modern, mature governments should not be shutting down. It's certainly a crazy impact, probably an impact on the markets and impact on the economy and impact on all of the government operations essential to keep society humming along.

And right now, the house is talking about going out for five days and coming back next Tuesday. And at that point, they would just have until midnight Saturday to work out a continuing resolution. So things are looking worse than they did a couple days ago.

- And if there is a shutdown, Senator, who, in your opinion, gets the blame for that?

- Oh, absolutely Kevin McCarthy and the MAGA right. You have a bipartisan process in the senate, where every single spending bill has come out of committee. Most of them, unanimously with D's and R's. A lot of support for bipartisan continuing resolution. That will be in place while we get those bills passed and reconciled with the house.

But over on the house side, they're talking about, if they even put forward a proposal, it'll be very short for a month. They're talking about an 8% reduction from the deal that Kevin McCarthy pledged himself to with a handshake three months ago, with the president and the senate leadership. There's no way that's flying in the-- in the senate. So all of this comes down on Kevin McCarthy and the MAGA right.

- Senator, it does feel like we are having this conversation every few years, and you have to wonder if there is a way out of this constant threat of a government shutdown. You have Oklahoma Senator Lankford introducing this bill that would essentially automatically provide continued appropriations, if spending bills don't get enacted. Is that something that you would support?

- You know, it's an idea that's been floated for some time. But it has a downside also, which is then those who want to make sure that there is no increase in government spending to address challenges we're facing can be the ones who obstruct the possibility of passing spending bills.

So I wouldn't leap onto that onto that bill. I don't think it's a balanced presentation. What I would say is, we should have a process on our spending bills, whereby if they come out of committee in a bipartisan fashion, substantial bipartisan support, they are guaranteed to get to the floor, with a certain number of germane amendments from each side.

And then it would be appropriate to be able to have a vote to close debate. It would still take 60 votes. But you could do all that without the extensive time delays that exist in the current rule. We could do an appropriation bill, a day under that type of rule adjustments.

- How realistic is that process, do you think, given the current political environment.

- I think the-- it's really hard to change a senate rule. But if there's enough frustration on the republican and democratic side to say, this is the way it used to work. It was done however by social contract. And bringing the appropriation bill to the floor, you have a bunch of amendments from both sides. They pertain to that bill. That means they're germane.

And then we say, OK, let's get this one done because, you know, we've got 12 of these to do. And if you can't do it by social contract, the way it was done before, setting out a set of guidelines that allows you to achieve it is logical. I will not say that we're anywhere close to driving a rule change that would give us something like that, but that's the way to functionally address these continuous shutdowns.

- And senator, I want to switch gears here to another topic. You know, you have been very involved in this push to end congressional stock trading. I realize that's not an issue that's on the front burner right now, but any optimism you have about that issue moving forward?

- Well, I do have some optimism because we have 24 sponsors on the ethics act that would end that stock trading. We have another bill that Senator Gillibrand has done with Josh Hawley. That only has two people on it, but at least it's a bipartisan.

I do think that there is a possibility of the committee that has control or jurisdiction here. I've held conversations with the with the chair. I think he is interested in holding a hearing and a markup, and I certainly am encouraging that to happen.

- It does feel like we've had a number of bills being introduced, but we haven't really reached that finish line. Is there any way to move the needle, you think, on this particular issue, short of passing legislation?

- Well, short of passing legislation, no. Senators have their complex financial lives. They have their trusts and their blind trusts. They have their spouses who have complicated lives. They own businesses. And without legislation, they're going to say, I'm just going to keep doing what I want to do.

There is some social pressure now from constituents to say, hey, why are you trading stocks? So there may be a little more reluctance and recognizing that this not only creates the opportunity for corruption because you get a lot of special information. Maybe it's not technically inside information.

It's always hard to get it, you know, under the law. It's hard to prosecute for inside information. But I hear stuff all the time that makes me think, boy, oh, wouldn't that be a good investment? That's why I don't trade individual stocks. And nobody else should either.

Because it's not just that members of congress end up having an advantaged position. It also means that the public looks at it and goes quite appropriately. That's corrupt to have people writing drug laws and simultaneously trading in drug stocks or getting special classified briefings that tell them what might be happening down the road and deciding to hedge their risk by trading in advance of everybody else.

That's just wrong. It needs to end. We are closer than we've been in the past to have a quarter of the congress or the quarter of the senate on a single bill. That's never happened before. And so I want to keep-- keep this in the limelight. It may take another scandal to put it across the finish line.

- Well, senator, we'll be watching closely. And we appreciate your time. That was senator Jeff Merkley of Oregon.

- Great to be with you.