US Senate approves extension of government funding after shutdown deadline missed

The U.S. Senate has passed legislation to expand public funding and end a temporary government shutdown after missing a midnight deadline to avert the shutdown.

The temporary shutdown came after the Republican-controlled House of Representatives passed legislation on Friday that would prevent a midnight shutdown of Capitol Hill in Washington, despite President-elect Donald Trump’s calls to approve trillions of dollars in new debt.

The Senate had until midnight local time (3pm AEST) on Saturday to pass this legislation, but was delayed by senators voting on other matters.

At 12:38 a.m., the Senate announced that the bill had passed with a vote of 85-11.

President Joe Biden is expected to sign his final approval of the bill later Saturday.

The new legislation extends federal funding through March 14, providing $100 billion ($159.9 billion) for disaster-hit states and $10 billion for farmers.

The bill also does not include raising the country’s debt ceiling, something Trump urged Congress to do before he took office on Jan. 20.

Senate Majority Leader Chuck Schumer announced after the midnight deadline that senators had reached an agreement and that the bill would pass.

“There will be no government shutdown right before Christmas,” Senator Schumer said on the Senate floor at 12:15 a.m.

“After a chaotic few days in the House of Representatives, it is good news that the bipartisan approach prevailed in the end.

“This is a good lesson for next year – both sides have to work together.”

In the minutes after the midnight deadline, the US Budget Office also confirmed that it had halted preparations for the government shutdown because it had “a high level of confidence” that the Senate would pass the legislation to continue government funding.

House Speaker Mike Johnson said earlier that Republicans would have more power to influence government spending next year if they had majorities in both chambers of Congress and Trump was in the White House.

“This was a necessary step to bridge the gap and get us to the moment where we can leave our fingerprints on final spending decisions,” he told reporters after the House vote.

The package passed the House of Representatives on a bipartisan vote of 366-34 after Republicans removed elements from the bill that were heavily criticized by Trump and his billionaire efficiency adviser at the Department of Government Efficiency, Elon Musk.

Those elements included a provision limiting investment in China, which Democrats said would have been contrary to Mr. Musk’s interests.

“He clearly doesn’t want to answer questions about how much he wants to expand his business in China and how much American technology he wants to sell,” Democratic Rep. Rosa DeLauro said on the House floor earlier Friday.

House Democratic leader Hakeem Jeffries said the package still achieved key goals such as providing disaster relief, averting a shutdown and preventing Republicans from raising the debt ceiling, which would make tax cuts easier.

“We have been successful in advancing the needs of everyday Americans, but there are still things to work on and we look forward to that fight in the new year,” Jeffries told reporters Friday.

Raising the debt ceiling rejected

Trump’s call to raise the US debt ceiling was soundly rejected by the House of Representatives – including 38 Republicans – on Thursday.

The federal government spent about $6.2 trillion last year and has more than $36 trillion in debt. But Congress must take action to authorize more loans by the middle of next year.

Mr Johnson said politicians would address the issue in January.

Rep. Rich McCormick, one of 34 Republicans who voted against the bill, said it doesn’t change the country’s fiscal trajectory and would only increase the debt burden.

Most recently, the federal government closed for 35 days during Trump’s first term in the White House due to a dispute over border security.

How high is the debt limit?

The debt ceiling is the total amount the U.S. government can borrow to meet its existing legal obligations.

In order for the U.S. Treasury to borrow beyond this amount, Congress must raise the cap.

A surge in inflation following the coronavirus pandemic has pushed up the government’s borrowing costs, causing debt service to exceed national security spending next year.

The last time politicians raised the debt limit was in June 2023.

Instead of raising the limit by a dollar amount, they suspended the debt limit until January 1, 2025. From this point onwards, the limit will automatically increase to match the amount of debt issued by the Treasury.

The debt limit vote has recently been used as political leverage, a must-pass bill that can be loaded with other priorities.

AP/Reuters