The United States has narrowly averted a federal government shutdown following the passage of a budget deal in both the Senate and the House of Representatives. The legislation, finalised just after midnight, now awaits President Joe Biden’s signature to become law.
In the Senate, the bill passed with an overwhelming majority of 85-11, reflecting bipartisan support for the measure. The House of Representatives had approved the same legislation hours earlier. Without this agreement, millions of federal employees faced furloughs or working without pay, while essential services and public programmes risked severe disruption.
Averting the First Shutdown Since 2019
The agreement prevented what would have been the first government shutdown in nearly five years. The last such event, under former President Donald Trump in 2019, lasted a record-breaking 35 days, affecting government operations across the board.
Without a funding deal, critical public services such as national parks, federally funded preschools, and food assistance programmes would have been closed or severely reduced. Disaster recovery and aid to farmers, both dependent on federal funds, were also at risk.
Key Provisions of the Legislation
The 118-page “American Relief Act, 2025” includes $100 billion (€92 billion) in disaster relief funds, designed to support hurricane recovery and other natural disasters, alongside $10 billion (€9.2 billion) for struggling farmers. However, several contentious provisions were removed from the final draft, including:
- A demand from President-elect Donald Trump to raise the federal debt ceiling, which had drawn opposition from Democrats and some Republicans.
- Federal funds for rebuilding a collapsed bridge in Baltimore.
- Healthcare reforms and measures aimed at preventing deceptive advertising in hotels and live event venues.
Efforts to include a pay increase for lawmakers—the first since 2009—were also abandoned.
Political Tensions in Negotiations
The budget negotiations highlighted significant divisions within the Republican Party, as well as friction with Democrats. Notably, Trump and tech billionaire Elon Musk played prominent roles in opposing earlier drafts of the legislation. Musk, who has been tasked with advising on spending cuts in Trump’s future administration, was a vocal critic of the initial proposals.
Democratic lawmakers expressed concerns over Musk’s involvement, emphasising that he is an unelected figure with substantial influence over the process. Despite the criticisms, Musk praised the final version of the bill, lauding it as a “lighter and more streamlined” solution.
House Speaker Mike Johnson, who led negotiations in the lower chamber, faced internal criticism from his party but ultimately secured passage of the bill. Speaking to reporters after the vote, Johnson described the agreement as a “critical step” and expressed optimism for the legislative term ahead.
“We are grateful that everyone stood together to do the right thing,” Johnson stated, adding that the bill positions Congress for a “big and important new start in January.”
A Preview of Legislative Battles Ahead
With Trump set to assume office in January and Republicans poised to control both chambers of Congress, the passage of the budget deal serves as a glimpse into the contentious legislative battles likely to come.
While the Senate remains under Democratic control until the new session begins, Republican lawmakers are already signalling their intentions to push forward with their legislative agenda. This includes potentially revisiting some of the provisions excluded from the current budget deal.
The successful passage of the budget, however, underscores a rare moment of bipartisan cooperation, averting immediate crisis and allowing the federal government to continue operations without interruption.
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