US government avoids shutdown following political dispute

The United States government has passed a budget measure, preventing a potential shutdown, though the contentious agreement omits President-elect Donald Trump’s demand to raise the federal borrowing limit. On Saturday morning, US President Joe Biden formally signed the spending bill into law. The Senate had approved the accord by a vote of 85-11 shortly after a midnight deadline, following its earlier passage by the House of Representatives with a vote of 336-34. The absence of a funding agreement would have resulted in millions of federal employees being placed on temporary unpaid leave or continuing to work without compensation. The United States government’s debt currently totals approximately $36 trillion (£29tn), with expenditures for interest payments now surpassing those for US national security. A government shutdown would have led to the closure or significant reduction of operations for various public services, including parks, food assistance programs, and federally-funded preschools, in addition to restricting aid for farmers dependent on assistance and individuals recovering from natural disasters. Earlier this week, legislators had successfully brokered an agreement to finance government agencies; however, this deal collapsed subsequent to calls from Donald Trump and tech billionaire Elon Musk for Republicans to reject it. The most recent government shutdown occurred during Donald Trump’s initial presidential term in 2019, extending for 35 days, which marked the longest such event in US history. The recently approved American Relief Act, 2025, comprises 118 pages, a significant reduction from the 1,547-page bill that Trump and Musk opposed earlier this week. This act will provide funding for the US government at its current levels until 14 March. Donald Trump’s demand to raise the debt ceiling, a contentious issue for Democrats and certain Republican budget conservatives, was excluded from the final legislation. Nevertheless, Republican leaders indicated that this particular measure would be subject to debate in the new year. This significant budget dispute serves as an indication of potential legislative conflicts anticipated when Trump assumes office next month. House Democratic minority leader Hakeem Jeffries stated prior to the vote that “Trying to jam a debt ceiling suspension into the legislation at the 11th hour was not sustainable.” Subsequently, he commended the bill’s approval, remarking: “House Democrats have successfully stopped the billionaire boys club.” The agreement omits several provisions that Democrats had sought in the initial version of the bill, such as the first pay increase for lawmakers since 2009, healthcare reforms, and clauses designed to prevent hotels and live event venues from engaging in deceptive advertising. Conversely, the bill incorporates $100bn in disaster relief funding for hurricane recovery and other natural disasters, alongside an allocation of $10bn in aid for farmers. Furthermore, it provides full federal funding for the reconstruction of Baltimore’s Francis Scott Key Bridge, which collapsed in March after being struck by a cargo ship. Elon Musk, whom Trump has assigned the responsibility of reducing government spending within his administration, had actively campaigned against the previous iteration of the bill. Throughout the debate, Republicans expressed anticipation for a “new era” commencing with Trump’s inauguration on 20 January and the Republican Party gaining control of both legislative chambers. Presently, the Senate is controlled by Democrats. The budgetary negotiations reportedly left Republican House Speaker Mike Johnson facing difficulties, as he encountered criticism from within his own party, casting doubt on his ability to secure a vote on 3 January in the chamber to retain his position. Following Friday’s vote, Johnson informed reporters: “We are grateful that everyone stood together to do the right thing and having gotten this done now as the last order of business for the year, we are set up for a big and important new start in January.” He additionally mentioned having engaged in frequent discussions with both Trump and Musk throughout the negotiation process. On X, the social media platform he owns, Musk commended the Louisiana congressman’s efforts regarding the budget. He posted: “The Speaker did a good job here, given the circumstances.” He added, “It went from a bill that weighed pounds to a bill that weighed ounces.”