President Joe Biden has signed a bill into law that averts a US government shutdown.
It brings a final close to days of upheaval after Congress approved a temporary funding plan just past the deadline and refused US President-elect Donald Trump’s core debt demands in the package.
The deal funds the government at current levels until March 14 and provides 100 billion dollars in disaster aid and 10 billion dollars in agricultural assistance to farmers.
House of Representatives speaker Mike Johnson had insisted members of Congress would “meet our obligations” and not allow federal operations to close. But the outcome at the end of a tumultuous week was uncertain after Mr Trump had insisted the deal include an increase in the government’s borrowing limit.
Mr Johnson’s revised plan was approved by 366 votes to 34, and it was passed by the Senate by an 85-11 vote after midnight. By then, the White House said it had ceased shutdown preparations.
Mr Johnson, who had spoken to Mr Trump after the House vote, said the compromise was “a good outcome for the country” and that the president-elect “was certainly happy about this outcome, as well”.
The final product was the third attempt from Mr Johnson, the beleaguered speaker, to achieve one of the basic requirements of the federal government – keeping it open. The difficulties raised questions about whether Mr Johnson will be able to keep his job, in the face of angry Republican colleagues, and work alongside Mr Trump and his billionaire ally Elon Musk.
One House Republican, representative Andy Harris of Maryland, criticised Republicans for the deficit spending in the bill and said he was now “undecided” about the party’s leadership. Others are signalling unhappiness with Mr Johnson as well.
Yet Mr Trump’s last-minute debt limit demand was almost an impossible ask, and Mr Johnson had almost no choice but to work around that pressure. The speaker knew there would not be enough support within the slim Republican majority alone to pass any funding package because many Republican deficit hawks prefer to cut the federal government and would not allow more debt.
The federal debt stands at roughly 36 trillion dollars, and the spike in inflation after the coronavirus pandemic has pushed up the government’s borrowing costs such that debt service next year will exceed spending on national security. The last time Congress raised the debt limit was June 2023. Rather than raise the limit by a dollar amount, Congress suspended the debt limit until January 1, 2025.
There is no need to raise that limit right now because the Treasury Department can begin using what it calls “extraordinary measures” to ensure that America does not default on its debts. Some estimate these accounting manoeuvres could push the default deadline to the summer of 2025. But that is what Mr Trump wanted to avoid because an increase would be needed while he was president.
Republican leaders said the debt ceiling would be debated as part of tax and border packages in the new year. Republicans made a so-called handshake agreement to raise the debt limit at that time while also cutting 2.5 trillion dollars in spending over 10 years.
It was essentially the same deal that flopped on Thursday night – minus Mr Trump’s debt demand. But it is far smaller than the original deal Mr Johnson struck with Democratic and Republican leaders – a 1,500-page bill that Mr Trump and Mr Musk rejected, forcing him to start again. It was stuffed with a long list of other bills – including much-derided pay rises for members of Congress – but also other measures with broad bipartisan support that now have a tougher path to becoming law.
Mr Trump, who has not yet been sworn into office, is showing the power but also the limits of his sway with Congress, as he intervenes and orchestrates affairs from Mar-a-Lago alongside Mr Musk, who is heading up the new Department of Government Efficiency.
