Senate feeling good about avoiding pre-election shutdown

Senators on both sides of the aisle are quietly hopeful about avoiding a third government shutdown this year.

Why it matters: Time is short, patience is wearing thin and neither party wants to head into the campaign's final sprint under the cloud of a funding lapse.

• "People understand that it would be helpful to have a [continuing resolution] that extends beyond the election," Sen. Jeanne Shaheen (D-N.H.) told Axios. "So it doesn't get all bound up in partisan discussions around the elections."
• "I just think everybody's trying to give ourselves room to find a bipartisan agreement, and we are not there yet," Sen. Brian Schatz (D-Hawaii) told Axios.
• Asked whether the vibes were positive, Schatz replied: "Not negative."

Republicans were even more optimistic about a bipartisan CR.

• "Perhaps we can get ours passed, and then when the House comes back the last week of August, they can pass it there," Sen. Roger Wicker (R-Miss.) said.
• "I don't think there's going to be much controversy there, unless the Democrats change their minds."

State of play: The House passed a short-term spending bill late Tuesday night. Senate Majority Leader John Thune (R-S.D.) will essentially ignore it. For now.

• The same fate likely awaits the budget resolution Speaker Mike Johnson (R-La.) narrowly pushed through Wednesday afternoon on a 216-214 vote.

The intrigue: House Republicans are still steaming over Thune's decision to declare, in advance, that he won't take up reconciliation until the government is funded.

• "He's the leader of the Senate. I think it's a mistake to hold up such an important piece of legislation," House Budget Chair Jodey Arrington (R-Texas) told Axios.
• But his new Senate counterpart, Ron Johnson (R-Wisc.), appears far more comfortable with Thune's timeline and sequencing.
• "With [Senate Appropriations Chair] Susan [Collins] apparently showing progress toward a CR — even talking about a defense supplemental in that agreement — that would, to a certain extent, negate having to do one," Johnson said, referring to a separate reconciliation package.

What to watch: There's no guarantee a major news event won't derail bipartisan funding talks, just as Medicaid cuts and the ICE shootings did earlier this year.

• President Trump's escalation of the conflict with Iran is already complicating defense spending negotiations, with Democrats largely opposed and Republicans split over the scope of additional funding.
• Any effort to attach supplemental defense money tied to Iran to the CR could make the vote significantly more difficult.

Zoom out: The CR is only one item on the Senate's crowded pre-recess agenda.

• FISA Section 702 remains lapsed, leaving the intelligence community without a key surveillance authority.
• The Senate also must take another run at the National Defense Authorization Act after the bill stalled this month.
• Thune also wants to reserve time for the CLARITY Act, but both sides acknowledge that more work needs to be done to find 60 Senate votes for the cryptocurrency bill.

There is also building pressure for Thune to bring a Russia sanctions package to the floor, especially after the death of Sen. Lindsey Graham (R-S.C.), who had pushed hard for the bill's passage.

• And leadership is trying to clear a backlog of nominations, including Jay Clayton to serve as director of national intelligence and Todd Blanche to serve as attorney general.

The bottom line: On Tuesday, Thune slyly suggested that he was prepared to use a reconciliation package to fund the government along party lines -- if needed.

• He may not have to act on that threat if the bipartisan Senate progress continues.