trump intervened to sink our debt ceiling bill. what happens next The United States Congress has until midnight Friday to pass a bill raising the country's borrowing limit, also known as the debt ceiling, without which large sections of the government could stop operating.
However, a bill extending the date to March 14—compiled by both Democrats and Republicans—sunk after President-elect Donald Trump came out in public opposition against the legislation on Wednesday after another ally of billionaire Elon tried to bring in even more opposition through a letter.
A Trump-endorsed Republican spending bill that would have tied the extension of government funding with a two-year suspension of the federal debt limit collapsed in the US House of Representatives on Thursday evening, continuing the impasse.
But what is the debt ceiling, why is it so contentious, and what can this latest episode tell us about the billionaire entrepreneur Musk and his growing influence in US politics?
Why does Trump want to raise the debt ceiling
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President-elect Donald Trump, Vice President-elect JD Vance, and billionaire Elon Musk blew up the GOP-backed deal to fund federal agencies until March, piling pressure on Republican congressional leaders to devise a plan to avoid a government shutdown right before the holidays.
In a statement Wednesday, Trump and Pence blasted the pact for its provisions embraced by Democrats. But in turn, the incoming president and vice president also brought into negotiations an entirely new wrinkle that is momentously important for Congress to raise or eliminate the debt ceiling now rather than next year.
"Increasing the debt ceiling is not great but we'd rather do it on Biden's watch," Trump and Vance said in their statement. "If Democrats won't cooperate on the debt ceiling now, what makes anyone think they would do it in June during our administration? Let's have this debate now."
CNN government shutdown
House Speaker Mike Johnson late Tuesday released a spending bill that would keep the government running if it passes in the House and Senate before the funding expires on Saturday.
The continuing resolution is supported by both parties.
It would fund the government through March 14, setting up another spending showdown in the early days of the Trump administration. Republicans will control both the Senate and House come January, but the party will have slim margins in both chambers.
The deal includes almost $100 billion in disaster aid and $10 billion more in banking relief for farmers in rural communities. It would also extend the farm bill by one year, keep more seniors allowed to use telehealth, and reform how pharmacy benefit managers, known as PBMs, operate.
Government shutdown 2024 update
Republican congressional leaders Thursday night failed to pass a revamped plan to avoid a government shutdown looming Friday night -- and to satisfy President-elect Donald Trump's explosive demand that the debt limit be raised, or eliminated, at the same time.
Thousands of federal workers could have to work without pay, others could be furloughed and many government services could be affected.
Democrats say Republicans will own the consequences since Trump and his ally Elon Musk blew up a funding deal GOP House Speaker Mike Johnson had proposed.
Government shutdown updates
The House of Representatives on Wednesday voted down President-elect Donald Trump's new plan to fund federal operations and suspend the debt ceiling a day before a government shutdown.
Almost three dozen Republicans joined Democrats in voting against Trump's sudden demands and the quick fix cobbled together by GOP leaders. The bill fell 174-235, failing to earn even a majority of votes.
American farmers, small business owners, and wildfire survivors are casualties if a standoff between Democrats and Republicans fails to yield a spending bill after Trump suddenly axed a bipartisan plan chock-full of over $100 billion in disaster aid.
Here are just a few people who will be gluing themselves to what Congress does now:
Asheville Tea Co. founder and CEO Jessie Dean is waiting to see if North Carolina will get support after Hurricane Helene and Milton slammed into the state one after another, causing an estimated $60 billion in damage. The company's building was washed away along with all its equipment and inventory. The earlier version of the spending bill included funding for low-interest loans for businesses, nonprofits and homeowners trying to rebuild after a disaster.
Georgia pecan farmer Scott Hudson isn’t sure if he can farm much longer without federal assistance. The earlier spending bill included a provision that would’ve allocated $21 billion in disaster aid to those who lost crops in the hurricanes. “Whether you’re a Democrat or Republican, the farmers need this money,” he said. “American ag needs this money. not to be profitable, to just stay in business.”
Maui Mayor Richard Bissenis says a potential allocation of $1.6 billion in the original bill would have been critical to continuing disaster recovery from the 2023 Maui fire, the deadliest U.S. wildfire in more than a century.
Government shutdown: what happens
President-elect Donald Trump announced Thursday evening that Republicans had reached an agreement to fund the government and raise the debt ceiling as Congress rushed to avoid a government shutdown set to start Saturday.
"SUCCESS in Washington!", Trump posted on Truth Social.
An IMPORTANT piece, VITAL to the America First Agenda, was added as well — The date of the very unnecessary Debt Ceiling will be pushed out two years, to January 30, 2027. "The future of the GOP-negotiated deal was left in the air.".
House lawmakers worked out a near-bipartisan agreement earlier in the week on legislation that could've funded the government at the levels applicable through March 14, 2025--though that also would've added in an add-on $100 billion extra in disaster relief and also another $10 billion in addition to it to farm interests.
Trump and the big boys, including Elon Musk — whom he has nominated to lead the newly dreamed-up, quasi-governmental "Department of Government Efficiency" — effectively nuked the deal Wednesday by denouncing it in public. Trump said he would want a measure to lift the debt limit attached to the spending bill and he wanted it done before incoming Democratic President Joe Biden was out of the White House rather than when he comes in.
Trump said the spending agreement he cut with GOP House Speaker Mike Johnson to keep the government open would include funds for "Great Farmers and others, and relief for those hit extremely hard by the catastrophic hurricanes." He didn't say how much money or how long it would last.
Congress may vote as soon as Thursday night.
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