US avoids government shutdown after days of political turmoil

The US government has enacted a budget to avert shutting itself down, but the bitterly disputed deal doesn't include a call from President-elect Donald Trump to increase the federal borrowing limit.

US President Joe Biden signed the spending bill into law on Saturday morning. The Senate passed the agreement shortly after a midnight deadline by 85-11. The House of Representatives approved it hours earlier by 336-34.

Without a funding deal, millions of federal employees would have ended up either on temporary unpaid leave or working without pay.

US government debt stands at about $36 trillion (£29tn), with more money now being spent just on the interest payments than on US national security.

A shutdown would have closed or severely reduced operations for public services like parks, food assistance programmes and federally-funded preschools, while limiting assistance to aid-reliant farmers and people recovering from natural disasters.

Lawmakers earlier this week successfully negotiated a deal to fund government agencies, but it fell apart after Trump and tech billionaire Elon Musk called on Republicans to reject it.

The last government shutdown was during Trump's first presidential term in 2019 and lasted 35 days - the longest in US history.

The American Relief Act, 2025 that just passed is 118 pages, stripped down from a 1,547-page bill that Trump and Musk rejected this week. It will fund the US government at current levels until 14 March.

Trump's call to lift the debt ceiling - which was a sticking point for Democrats and some Republican budget hawks - was not included in the final bill, but Republican leaders said that measure would be debated in the new year.

The dramatic budget fight is a preview of the legislative fights that may lie in store when Trump takes office next month.

"Trying to jam a debt ceiling suspension into the legislation at the 11th hour was not sustainable," House Democratic minority leader Hakeem Jeffries said ahead of the vote.

He later praised the bill's passage, saying: "House Democrats have successfully stopped the billionaire boys club."

The deal removes measures sought by Democrats in the first version of the bill, including the first pay rise for lawmakers since 2009, healthcare reforms, and provisions aimed at preventing hotels and live event venues from deceptive advertising.

It does include $100bn in disaster relief funds to help with hurricane recovery and other natural disasters, and allocates $10bn in aid to farmers.

It also includes full federal funding to rebuild Baltimore's Francis Scott Key Bridge, which collapsed when it was struck by a cargo ship in March.

Musk, who Trump has tasked with cutting government spending in his administration, had lobbied heavily against the earlier version of the bill.

During the debate, Republicans said they looked forward to a "new era" with Trump taking office on 20 January and Republicans in control of both chambers of Congress. Currently, the Senate remains under Democratic control.

The budget wrangling left Republican House Speaker Mike Johnson bruised as he faced criticism from members of his own party, raising a question mark over whether he can win a 3 January vote in the chamber to keep his job.

"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," Johnson told reporters after Friday's vote.

He also said that he had spoken frequently to both Trump and Musk during the negotiations.

Musk praised the Louisiana congressman's work on the budget in a post on X, the social media platform he owns.

"The Speaker did a good job here, given the circumstances," he posted. "It went from a bill that weighed pounds to a bill that weighed ounces."