Government Funding and Debt Ceiling Crisis Unfolding as Deadline Approaches

In a dramatic announcement just a day before a potential government shutdown, President-elect Donald Trump declared a “success” in crafting a new plan aimed at funding the government and extending the debt ceiling. He urged Congress to act swiftly, with voting in the House scheduled for Thursday evening.

Trump’s message came as Republicans scrambled to reconvene the House for discussions on a provisional agreement following intense negotiations behind closed doors. The proposed plan pledges to keep the government operational for an additional three months, allocate $100.4 billion for disaster relief—including aid for states affected by recent hurricanes—and permit further borrowing until January 30, 2027, according to Republican sources.

“SUCCESS in Washington! Speaker Mike Johnson and the House have come to a very good Deal,” Trump posted on social media.

However, the next course of action appeared uncertain, with indications that the new proposal might struggle to gain traction. It was clear that Democratic support was crucial for any legislation to pass, especially given staunch resistance from hardline Republicans. The Democratic caucus expressed no urgency in accommodating the demands from Trump or influential figures like Elon Musk.

House Democratic Leader Hakeem Jeffries criticized the new plan, maintaining loyalty to the original agreement with Johnson, which he deemed “laughable.”

“It’s not a serious proposal,” Jeffries remarked as he headed into a closed-door caucus meeting, where Democrats rallied together, chanting “Hell, no!”.

With a potential government shutdown looming, Johnson was grappling with how to fulfill Trump’s unexpected demands while trying to secure his own leadership position, as federal offices braced for possible closures ahead of a crucial deadline at midnight on Friday.

The revised proposal drastically reduced the length of the original 1,500-page bill to just 116 pages, eliminating various provisions including the first pay increase for lawmakers in over ten years, which could have reached a 3.8% raise. This cut drew particular ire from Musk, who used his influence to rally opposition against the bill.

Trump emphasized early Thursday that Johnson could easily continue as speaker of the House if he responded firmly and decisively regarding the debt limit increase, which could have severe consequences as the Christmas holidays approach, placing Johnson in a precarious situation.

The former president further warned that any legislators who back a bill that does not address the “Democrat quicksand” of the debt ceiling “should be primaried and disposed of as quickly as possible.”

The unfolding scenario served as a stark reminder of the turmoil that characterized Trump’s leadership style in Washington. During the 2018 holiday season, he orchestrated the longest government shutdown in American history, and he also disrupted holiday plans in 2020 by rejecting a bipartisan COVID-19 relief agreement.

Johnson faced challenges ahead of a January 3 vote to retain his position as speaker, with Trump’s expectations keeping him at the Capitol late into the night to negotiate new terms. Vice President-elect JD Vance even participated in these late-night discussions, bringing along his young son in pajamas.

In an even more unconventional suggestion, allies of Trump proposed the idea of appointing Musk as speaker, given that the role does not require membership in Congress.

“Here we are once again in chaos,” commented House Democratic Whip Katherine Clark, emphasizing the negative impact a government shutdown would have on Americans. “And what for? Because Elon Musk, an unelected man, said, ‘We’re not doing this deal,’ and Donald Trump followed suit.”

The pared-down proposal was expected to head for a vote that evening, requiring a two-thirds majority in the House for passage—a significant hurdle. Should it fail, Republicans planned to pursue alternative procedures the next day.

While the new plan included federal funding for the rebuilding of the Key Bridge in Baltimore, it withdrew support for a separate land transfer that could have facilitated the construction of a new stadium for the Washington Commanders. Additionally, the proposal abandoned a series of bipartisan bills that had garnered support from both sides as lawmakers tried to conclude their work for the session, and it extended government funding until March 14.

Nevertheless, combining an increase in the debt ceiling with what was initially a bipartisan package poses a significant challenge for Republicans, who typically oppose additional borrowing.

Although Democrats have previously floated ideas to eliminate or raise the debt limit caps—an issue that has caused significant contention in Congress—they do not seem inclined to negotiate to alleviate Johnson’s predicament with Trump, even before the new administration officially begins.

The current debt ceiling is set to expire on January 1, 2025, potentially hampering the new administration’s onset with months of deliberations necessary to address it. Trump has expressed a desire to resolve this issue before he assumes office.

After exiting a Thursday morning meeting in the Speaker’s office, senior Republicans left without a clear resolution, hinting at the challenges that lay ahead with a Republican-controlled Congress and Trump back in the White House in the upcoming year.

Rep. Steve Womack, a senior Republican from Arkansas, suggested that the failure to establish a bipartisan stopgap funding arrangement this week might serve as a telling preview for the forthcoming 119th Congress.

As the clock ticks down to midnight on Friday, the urgency increases regarding federal funding, which is poised to expire once the current temporary government funding bill concludes.

Conservatives expressed outrage over the bipartisan compromise brokered between Johnson and the Democrats, anticipating backlash from their constituents for its perceived excessive spending and additional measures. Musk, taking a more active role in politics, utilized his platform on X to sway GOP lawmakers, inundating them with calls to oppose the proposed plan.

Trump instructed Johnson to start anew with negotiations that now hinge on raising the debt limit—an undertaking that typically demands extensive discussions and is often met with skepticism from his own party.

The Office of Management and Budget was reported to have communicated initial shutdown planning with government agencies as early as last week, underscoring the gravity of the situation as the deadline looms.