Government crisis resolved – US Congress prevents a shutdown at the last minute

This puts an end to a day of hesitation that newly-elected President Donald Trump and Elon Musk caused with a political blockade maneuver.

US President Joe Biden still needs to sign the budget bill for it to come into effect – but this is considered a formality and should happen during Saturday, according to the White House. The vote in the Senate did not begin until shortly after midnight – just after the deadline for submitting a budget had passed. From a purely technical point of view, this meant that a ‘shutdown’ mode was activated for a short time. However, due to the minimum duration, this has no actual effect. The White House said ministries and agencies could continue normal activities and would not be paralyzed.

Forced renegotiations in parliament
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 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 hectic days in Parliament after Trump, egged on by his confidante, technology billionaire Musk, unceremoniously torpedoed an earlier budget deal. Trump forced renegotiations of the budget draft to arrive at a significantly slimmed-down version. Ultimately, he was unable to meet one core demand. Trump and Musk’s blockade campaign was nevertheless a special kind of political maneuver that caused a lot of commotion.

The shadow president
The Democrats are particularly bothered by the fact that a billionaire without any political mandate and with his own economic interests is significantly interfering with the fate of parliament. Several Democratic members of Congress mocked the fact that Musk – the richest man in the world – was the one leading 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 side of the Republicans 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” (the voice of the people (is) the voice of God), he wrote there – a Latin saying that the billionaire often uses.

The battle over the debt ceiling
Trump – seconded by Musk – tried, among other things, to include an issue that had not actually been planned in the budget negotiations and to achieve a suspension of the debt ceiling for several years. The limit determines the maximum amount that the national debt can incur to finance current expenditure such as salaries, social benefits, defense expenditure and interest on existing debts. If the limit is reached and not increased, the U.S. government will be barred from taking 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 means of pressure for other political purposes.

Trump will be sworn in as president on January 20 and probably hoped to give himself some freedom in office by raising the debt ceiling early. He has not succeeded in this in the current budget negotiations. An interim bill provided a settlement according to his wishes, but met resistance from Democrats and some Republicans and therefore failed to gain a majority.

Republican Speaker of the House of Representatives Mike Johnson said he spoke with Musk and Trump shortly before his chamber voted on the final draft and discussed the procedure with them. Democratic House Minority Leader Hakeem Jeffries argued that his group had prevented the Billionaire Boys Club from ultimately gaining the upper hand by demanding a debt ceiling suspension.

The last minute pattern
The approval of the budget regularly causes heated discussions in the US. Parliament often only agrees on a draft at the very last minute; it usually goes from one transitional budget to another. This also applies now: the budget that has now been approved only applies until mid-March. Then the tug-of-war in Parliament will probably start again.