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Politicsgovernment shutdown

Despite missing deadline, Congress avoids government shutdown by passing spending bill without Trump’s debt ceiling raise

Sasha Rogelberg
By
Sasha Rogelberg
Sasha Rogelberg
Reporter
Sasha Rogelberg
By
Sasha Rogelberg
Sasha Rogelberg
Reporter
December 21, 2024 at 5:45 PM UTC
Mike Johnson, standing behind a podium, speaks to members of the press
Republican Speaker of the House Mike Johnson is working to pass a government spending package that will avert a government shutdown.Kevin Dietsch/Getty Images
  • After a week of turmoil, Congressapproved a spending package that will continue government funding until mid-March and provide additional relief for natural disaster survivors as well as aid to farmers. 

Congress lawmakers averted a government shutdown after finally passing a spending package that will continue to fund the government at current levels until mid-March, though the Senate missed the midnight deadline.

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The legislation will also provide $110 billion in funding for natural disaster survivors and aid to farmers, as well as grant an extension to the farm bill, a multiyear law that provides farm loans and conservation programs to enhance water quality and combat soil erosion.

On Friday evening, the bill easily cleared the two-thirds majority needed to pass in the House by a vote of 366 to 34. Most Republicans voted in favor, except for 34 who opposed it. All Democrats voted for it except one who voted “present.”

At about 12:40 a.m. ET, the Senate passed the legislation by a vote of 85 to 11, following hours of debate and votes on other bills. President Joe Biden signed the bill midday Saturday.

“This agreement represents a compromise, which means neither side got everything it wanted,” Biden said in a statement. “But it rejects the accelerated pathway to a tax cut for billionaires that Republicans sought, and it ensures the government can continue to operate at full capacity.”

While lawmakers technically blew past the deadline, the Office of Management and Budget said it didn’t shut down government operations because the Senate was expected to approve the bill soon after midnight.

But the spending package will come at the expense of President-elect Donald Trump’s demand to raise the debt ceiling, which he admitted he wanted now so Biden could take the blame for increased borrowing.  

Instead of lifting the debt limit before Trump takes office, Republicans are considering a handshake deal promising to raise the debt limit by $1.5 trillion early next year and cull future government spending by $2.5 trillion. This will not be voted upon and does not have the force of law.

Meanwhile, the new spending bill also excluded a key priority for Democrats, namely provisions to fund pediatric cancer research.

After questioning hours earlier whether the spending package was “a Republican bill or a Democrat bill?“, Elon Musk, co-head of the Department of Government Efficiency, took to X again to congratulate House Speaker Mike Johnson while voting was underway.

“The Speaker did a good job here, given the circumstances,” he wrote. “It went from a bill that weighed pounds to a bill that weighed ounces.”

What’s next for the debt limit?

There have been 10 government shutdowns since 1981 in response to funding gaps, the most recent of which was under Trump’s watch in 2018. The 35-day partial shutdown impacted an estimated 800,000 government workers, resulted in an $11 billion loss in economic output, and chipped off 0.2% of the U.S.’s annual growth forecasts, according to the Congressional Budget Office.

In the latest standoff, Johnson was placed in a bind after Trump and Musk pushed him to scrap a bipartisan government funding bill earlier in the week.

Instead, Johnson and Republican leaders then cobbled together a slimmed-down bill that would suspend the debt ceiling for two years until Jan. 30, 2027. But that bill also failed after a bloc of conservatives voted against it. Some Republicans have historically opposed raising the debt limit out of fear it would add to red ink and encourage more government spending.

Without an increase to the borrowing cap now, Trump will have to deal with a funding deal and debt limit in the early days of his administration, postponing his ability to push legislation, such as extending his Tax Cuts and Jobs Act enacted in 2017 in his first term.

Congress has until Jan. 2, 2025 to raise the debt limit. After that, the Treasury Department will likely enact temporary “extraordinary measures” to push the debt deadline into next summer, an action Treasury Secretary Janet Yellen took after the U.S. last reached its debt ceiling in January 2023.

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About the Author
Sasha Rogelberg
By Sasha RogelbergReporter
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Sasha Rogelberg is a reporter and former editorial fellow on the news desk at Fortune, covering retail and the intersection of business and popular culture.

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