USA: Deadlock averted – Congress approves transition budget

The US Congress averted an impending shutdown of government business at the last moment. After the House of Representatives, the Senate passed an interim budget in a night session shortly after a corresponding deadline had expired, thereby preventing a longer government shutdown. This ended a day-long dither that President-elect Donald Trump and his confidant, tech billionaire Elon Musk, had triggered with a political blockade maneuver.

US President Joe Biden still has to sign the budget law in order to bring it into force – but this is considered a formality and, according to the White House, should happen during the course of Saturday. The vote in the Senate only began shortly after midnight – just after the deadline by which a budget had to be presented had passed. From a purely technical point of view, this meant that a “shutdown” mode was activated for a short time. However, this does not have an actual effect due to the minimal duration. The White House said ministries and agencies could continue their normal operations and would not be paralyzed.

Without the budget agreement, this would have happened because the federal government would not have had any fresh money available. As a result, state institutions would have had to partially stop working and many state employees would not receive a salary for the time being – especially around Christmas. Republicans and Democrats in Congress therefore struggled intensively to find a solution.

The last-minute deal followed frantic days in Parliament after Trump, spurred on by Musk, unceremoniously torpedoed a previous budget deal. Trump forced renegotiations of the budget draft to produce a significantly slimmed-down version. In the end, he was unable to get through with one core demand. The blockade campaign by Trump and Musk was nevertheless a special kind of political maneuver that caused a great stir.

Democrats are particularly bothered by the fact that a billionaire without any political mandate and with his own economic interests is significantly intervening in the fortunes of parliament. Various Democratic members of Congress scoffed that Musk – the richest man in the world – was the one in charge with the Republicans – not Trump. They smugly referred to the Tesla boss as “President Musk.” The 53-year-old supported Trump’s campaign with a lot of money during the election campaign and has hardly left the Republican’s side since his election victory.

Musk celebrated the agreement on a revised interim budget on his Platform X as a victory for public opinion. “Vox populi, vox dei” (People’s voice (is) God’s voice), he wrote there – a Latin saying that the billionaire often uses.

Trump – seconded by Musk – tried, among other things, to include an issue that was not actually planned for in the budget negotiations and to achieve a suspension of the debt ceiling for several years. The limit determines the maximum amount government debt can rise to finance current expenses such as salaries, social benefits, defense spending and interest on existing debt. If the cap is reached and not increased, the US government will not be allowed to take on any new debt. The debate over the debt ceiling regularly leads to conflict between Republicans and Democrats because it is often used as a pressure tool for other political goals.

Trump will be sworn in as president on January 20th and was probably hoping to gain some freedom in office by raising the debt ceiling early. He was unable to do this in the current budget negotiations. An interim bill had provided for a regulation according to his wishes, but had encountered resistance from Democrats and some Republicans and therefore did not receive a majority.
The Republican chairman of the House of Representatives, Mike Johnson, said that he spoke to Musk and Trump shortly before the final draft was voted on in his chamber and discussed the procedure with them. The Democratic minority leader in the House of Representatives, Hakeem Jeffries, argued that his group had ensured that the “billionaire boys’ club” did not ultimately prevail in demanding a suspension of the debt ceiling.

The passage of the budget regularly causes heated debate in the USA. Parliament often only agrees on a draft at the very last moment – it usually moves from one transitional budget to the next. This also applies now: The budget that has now been approved only lasts until mid-March. Then the tug of war in Parliament will probably start again.