US government avoids shutdown after funding bill clears Congress

The US government has narrowly avoided a crippling shutdown after politicians agreed on a last-minute spending deal.

Failure to reach an agreement would have meant federal employees would have missed pay ahead of the festive season, impacting various public services.

Plans to approve the government's budget were thrown into disarray this week after billionaire Elon Musk hit out at a bill put forward by Republicans and Democrats.

His opposition was backed by president-elect Donald Trump who wanted to increase the debt ceiling, which caps the amount the government can borrow.

But his revamped plan to suspend the cap for two years lost in a vote on Thursday, putting Congress in a race against time to agree a deal before midnight local time.

A restructured plan from House Speaker Mike Johnson dropped Mr Trump's demands for a debt limit increase into the new year.

Mr Johnson had insisted Congress would "meet our obligations" and avoid a federal shutdown.

"This is a good outcome for the country," said Mr Johnson, adding he had spoken with Mr Trump and he "was certainly happy about this outcome, as well".

Late on Friday, the new plan cleared the Republican-controlled House of Representatives with bipartisan support by 336-34 votes.

Hours later, the Democratic-controlled Senate passed the bill in an 85-11 vote, 38 minutes after it expired at midnight US time (5am UK time).

Even though the deadline was missed, the government did not invoke shutdown procedures.

Mr Musk wrote on X that he was happy with the package. "It went from a bill that weighed pounds to a bill that weighed ounces," he posted.

The final version stripped out some provisions pushed by Democrats, who accused Republicans of caving in to pressure from the unelected billionaire, Mr Musk.

The bill will now be sent to the White House where President Joe Biden is expected to sign it into law later on Saturday.

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What is a government shutdown?

If the Senate failed to approve a spending bill, or extend the deadline, a government shutdown would have impacted federal employees and the public services they provide.

Essential government agencies like the FBI, Border Patrol and the Coast Guard would remain open.

But national parks and monuments would close, and while troops would stay at their posts, many civilian employees in agencies like the Department of Defence would be sent home.

Sometimes federal workers are furloughed, meaning they keep their jobs but temporarily do not work until the government reopens.

Courts would also be affected, with civil proceedings paused, while criminal prosecutions continue. And the Internal Revenue Service would stop auditing tax returns.

The last government shutdown - the longest in history - took place in December 2018 and January 2019 during Mr Trump's first term in the White House.

(c) Sky News 2024: US government avoids shutdown after funding bill clears Congress