Senate Passes Delayed Budget Deal in Bid to End U.S. Shutdown

donald-trumpThe U.S. President-elect Donald Trump
  • Senate Passes Delayed Budget Deal in Bid to End U.S. Shutdown

The Senate passed a two-year budget agreement early Friday that would boost federal spending by $300 billion and suspend the debt ceiling for a year, as lawmakers sought to end a partial government shutdown that began at midnight after Congress missed a funding deadline.

The measure passed 71-28 after a day-long delay prompted by objections from Republican Senator Rand Paul over its cost. It now moves to the GOP-controlled House, where opposition from many Democrats and a faction of conservatives threatened to scuttle the bipartisan deal. House leaders are planning a vote early Friday morning.

If it passes the House, funding would be restored before most government workers arrive at their jobs and financial markets open. A failure would trigger the second full government shutdown in three weeks and would be another signal to voters and investors of Congress’s dysfunction.

The drama was playing out against a backdrop of tumbling global stock markets. The benchmark S&P 500 index fell 3.75 percent Thursday — down more than 10 percent since its Jan. 26 peak.

The budget accord appeared to be headed for quick passage in the Senate on Thursday with a strong endorsement from Majority Leader Mitch McConnell and Democratic leader Chuck Schumer and backing from President Donald Trump.

Senator’s Protest

But Paul of Kentucky, protesting the huge spending increases that are central to the deal, delayed the vote until after midnight deadline to fund the government by demanding a vote on an amendment to keep existing budget limits in place.

“Are we to be conservative all the time or only when we’re in the minority?” he said.

Objections to increased domestic spending were being raised by a group of Republican conservatives in the House. Representative Mark Meadows, chairman of the House Freedom Caucus called the deal “fiscally irresponsible.”

The nonpartisan Committee for a Responsible Federal Budget, analyzing a report from the Congressional Budget Office, said the deal would add a net $320 billion to deficits over a decade, or $418 billion counting the additional interest costs. That’s in addition the estimated $1 trillion added to the deficit over a decade by the Republican tax cut legislation passed in December.

Democrats Object

On the other side, House Democratic leader Nancy Pelosi called the agreement “a good bill” but said she would vote against it because House Speaker Paul Ryan refused to promise an open debate and vote on immigration legislation.

With the prospects of Republican defections denying Ryan a majority, many — though not all — Democrats lined up behind Pelosi.

Representative Luis Gutierrez, an Illinois Democrat, urged his party to kill the bill unless it includes a path to protecting young immigrants brought to the U.S. illegally as children and have been protected under the soon-to-end Deferred Action for Childhood Arrivals, or DACA, program. He said that if the legislation passes, “all the leverage is gone” to force a solution for the young immigrants.

Ryan’s Pitch

Ryan made a public pitch for votes on Thursday, emphasizing the increased funding for the Pentagon to assuage the concerns of Republicans who’ve said they’ll vote no because it also raises spending on domestic programs. But his promise to bring up an immigration bill “that the president will sign” fell short of demands from Democrats.

Before the Senate adjourned just before 2 a.m. McConnell set up a procedural vote for Monday on shell legislation that will be used as the vehicle for the chamber’s debate on immigration. That was a key part of his agreement with Schumer that ended the last shutdown.

The budget measure would temporarily finance the government at current levels through March 23 while lawmakers fill in the details on longer-term spending, which includes raising the caps on defense spending by $80 billion over current law in this fiscal year and $85 billion in the one that begins Oct. 1. Non-defense spending would rise by $63 billion this year and $68 billion next year.

It’s filled with long-stalled or long-sought priorities for both sides. Republican defense hawks get more funds for the military, while Democrats get extra money for domestic priorities like combating opioid addiction, the National Institutes of Health budget and community health centers.

The agreement also repeals a piece of Obamacare — a Medicare cost-cutting board aimed at ensuring the program’s long-term solvency. And it would provide $90 billion in disaster assistance for California, Texas, Florida, Puerto Rico and the U.S. Virgin Islands.

The bill authorizes the sale of 100 million barrels from the Strategic Oil Reserve to pay for some of the new spending, and raises customs and airport security fees in the next decade. It also renews a number of expired tax breaks for calendar 2017 including for cellulosic biofuel, while extending a nuclear power tax credit that was scheduled to expire so that it is available after 2020.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of, a digital business media, with over 10 years experience as a foreign exchange research analyst and trader.

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