Government Shutdown Averted in Last-Minute Flurry

Updated on Jan. 2.

Although the midnight deadline was breached, technically, Congress narrowly averted shutting down the government on the cusp of the holidays.

At 12:39 a.m. Eastern time on Dec. 21, the Senate votedto approve a short-term spending deal that will fund the government through mid-March and extend the farm bill for another year.

President Joe Biden signed the measures later that day, officially ending the latest threat of a shutdown.

The late funding dramatics have become standard operating procedure for the current House of Representatives, but this round had some new wrinkles, thanks largely to the imminent arrival of a new president and GOP control of both houses of Congress.

In the end, the Senate vote (85-11) was quick and undramatic, especially compared to events in the House over the preceding days.

Background

Before the start of each fiscal year, which begins on Oct. 1, Congress must pass 12 appropriations bills that fund the government. In September, Congress passed a short-term spending bill that extended funding until midnight on Dec. 20.

The action kicked off on Dec. 17 when lawmakers introduced a bipartisan deal that would have punted the deadline again, this time to March 14, in addition to other policy and funding measures.

Almost as soon as it was unveiled, the deal was declared kaput after it was denounced by President-elect Donald Trump, soon-to-be Vice President JD Vance, Trump’s new heads of the Department of Government Efficiency — Elon Musk, and Vivek Ramaswamy — and other conservatives.

At the time, Trump and Vance said in a joint statement on X: “Republicans want to support our farmers, pay for disaster relief, and set our country up for success in 2025. The only way to do that is with a temporary funding bill WITHOUT DEMOCRAT GIVEAWAYS combined with an increase in the debt ceiling.”

The debt ceiling had not been a factor in earlier discussions. Trump elaborated in an interview with NBC News on Dec. 19, saying he would support getting rid of the debt ceiling entirely. The debt ceiling is the amount the government must borrow to pay for its legal obligations, and is currently suspended — but that suspension lifts after Jan. 1.

On Dec. 19, with the shutdown looming, House Speaker Mike Johnson regrouped and introduced a second continuing resolution — one that would have extended funding by three months and suspended the debt ceiling for two years. It also failed in the House, sending lawmakers back to the drawing board once again.

On Dec. 20, with just hours to spare, Johnson put forth another package comprising two separate bills. The first bill includes an extension of current funding levels through March 14, along with another extension of the expiring farm bill, which is due for reauthorization. It also includes $110 billion in aid to farmers and relief for survivors of natural disasters. The deal did not include a suspension of the debt limit. The House approved the deal hours before the shutdown.

With the shutdown clock reset to March 14, the new Republican-led Congress must pass a spending bill for the fiscal year or another continuing resolution by then, or face another shutdown crisis.

Gamesmanship over the funding the government has become almost routine. In March, the Senate belatedly approved a $1.2 trillion spending bill for the 2023-2024 fiscal year, narrowly averting a shutdown. Since September 2023, Congress has had to rely repeatedly on last-minute maneuvering and short-term funding stopgaps.» MORE: How would a government shutdown affect you?

What happened during the last threat of a shutdown?

On March 23, 2024, the Senate finally approved a $1.2 trillion spending bill for the 2023-2024 fiscal year, which funded roughly 70% to 80% of the government. Had the Senate failed to approve the package, the lapse would have put nonessential federal workers on furlough without pay during the shut down, but otherwise caused minimal impact to government services. Since September 2023, Congress had to rely repeatedly on last-minute maneuvering to avoid a shutdown.

What is a government shutdown?

When the government shuts down, many federal agencies must suspend all non-essential services. Each federal agency must develop its own contingency plan for shutdowns, which includes employee furloughs and service reductions.

For consumers, a government shutdown could result in various problems and inconveniences. But unless you work for the federal government, a government shutdown might not have an immediate impact on you.

When will the government shut down?

The incoming GOP-majority Congress must now pass either another a full spending package or another continuing resolution before March 14, or risk a shutdown.

Who is affected by a government shutdown?

• The brunt of the disruption would fall on furloughed government workers. But all federal workers go without pay during a shutdown even if they’re not furloughed. Federal workers are paid retroactively once funding is restored.

• Non-essential services that would be suspended likely include national parks, the Internal Revenue Service’s customer service and Federal Student Aid assistance, although you can still apply for aid.

• Any programs that receive mandatory funding will continue operations. That includes essential services, such as air traffic control, law enforcement, power grid maintenance, in-hospital medical care and border protection, according to the Center for a Responsible Federal Budget.

• If you have travel plans, a shutdown could get in your way.

• It could hamper your homebuying plans if you are trying to get a reverse mortgage or Title I loan insured by the Federal Housing Administration or a loan from the U.S. Department of Agriculture.

Some essential services will continue, but service may be reduced including:

• Social Security, Medicare and Medicaid. Checks will continue, but benefit verifications may be suspended. 

• Supplemental Nutrition Assistance Program funding is mandatory, but benefits may stop altogether after 30 days of a shutdown.

• Food and environmental inspections through the Food and Drug Administration and the Environmental Protection Agency would likely be halted or reduced.

• The Centers for Disease Control and Prevention as well as the National Institutes of Health could also see reduced operations.

When was the last government shutdown?

There have been 21 government shutdowns since 1976. The most recent government shutdown was also the longest yet, beginning on Dec. 22, 2018 and lasting until Jan. 25, 2019 — a total of 34 full days. However, most past shutdowns lasted less than a week.

Government shutdowns are costly in more ways than one: The 2018 to 2019 partial shutdown cost $18 billion in federal discretionary spending and reduced Gross Domestic Product (GDP) by $11 billion, according to the Congressional Budget Office.

When Congress passes some but not all of the required appropriations, the result is a partial shutdown.