US Senate passes spending legislation to avert government shutdown

The US Congress passed spending legislation early on Saturday in a down-to-the wire burst of activity that will avert a destabilising government shutdown ahead of the busy holiday travel season.

The Democratic-controlled Senate in an 85-11 vote passed the bill to continue government funding 38 minutes after it expired at 5am Irish time on Saturday. The US government did not invoke shutdown procedures in the interim.

The Bill will now be sent it to White House, where outgoing president Joe Biden is expected to sign it into law.

The package had earlier cleared the Republican-controlled House of Representatives with bipartisan support.

The late-night vote capped a frantic week that saw president-elect Donald Trump and his billionaire ally Elon Musk defeat an initial bipartisan deal, throwing Congress into disarray.

The final version stripped out some provisions championed by Democrats, who accused Republicans of caving in to pressure from an unelected billionaire who has no experience in government.

Congress did not act on Mr Trump’s demand to raise the debt ceiling, a politically difficult task, before he takes office on January 20th.

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The federal government spent roughly $6.2 trillion last year and has more than $36 trillion in debt, and congress will need to act to authorise further borrowing by the middle of next year.

The legislation would extend government funding until March 14th, provide $100 billion for disaster-hit states and $10 billion for farmers, and extend farm and food aid programs due to expire at the end of the year.

Some Republicans voted against the package because it did not cut spending. House speaker Mike Johnson said the party will have more influence next year, when they will have majorities in both chambers of congress and Mr Trump will be in the White House.

“This was a necessary step to bridge the gap, to put us into that moment where we can put our fingerprints on the final decisions on spending,” he told reporters after the House vote. He said Mr Trump supported the package.

A government shutdown would have disrupted everything from law enforcement to national parks and suspended paychecks for millions of federal workers.

A travel industry trade group warned it could cost airlines, hotels and other companies $1 billion per week and lead to widespread disruptions during the busy Christmas season. Authorities warned travellers could face long lines at airports.

The package resembled a bipartisan plan that was abandoned earlier this week after an online fusillade from Mr Trump and Mr Musk, who said it contained too many unrelated provisions, such as a pay raise for lawmakers and a crackdown on pharmacy benefit managers.

Republicans struck most of those elements from the Bill – including a provision limiting investments in China which Democrats said would have conflicted with Musk’s interests.

“He clearly does not want to answer questions about how much he plans to expand his businesses in China and how many American technologies he plans to sell,” Democratic representative Rosa DeLauro said on the House floor.

Mr Trump has tasked Mr Musk, the world’s richest person, with heading a budget-cutting taskforce but he will hold no official position in Washington.

Mr Musk wrote on his social media platform X that he was happy with the package. “It went from a Bill that weighed pounds to a Bill that weighed ounces,” he posted.

House Democratic leader Hakeem Jeffries said his party still achieved some of its goals and prevented Republicans from enacting a debt-ceiling hike that would make it easier to cut taxes.

“We have successfully advanced the needs of everyday Americans, but there are still things to be worked on and we look forward to that fight in the new year,” he told reporters.

Mr Trump’s demand to lift the debt ceiling was resoundingly rejected by the House – including 38 Republicans – on Thursday.

Mr Johnson said lawmakers would look at the issue in January.

Representative Rich McCormick, one of 34 Republicans who voted against the Bill, said it did nothing to change the nation’s fiscal trajectory and would only add to the debt load.

“We will be the country of the past if we continue doing what we’re doing,” he said.

The federal government last shut down for 35 days during Mr Trump’s first White House term over a dispute about border security.

Previous fights over the debt ceiling have spooked financial markets, as a US government default would send credit shocks around the world. The limit has been suspended under an agreement that technically expires on January 1st, though lawmakers likely would not have had to tackle the issue before the spring. – Reuters