The Republicans presented the new proposal after US President-elect Donald Trump rejected a previously reached bipartisan agreement and demanded a renegotiation. The transition financing is necessary because an agreement on a full annual budget for 2025 failed months ago.
On the one hand, the new proposal would have regulated the financing of the federal authorities, but on the other hand, as Trump subsequently requested, the suspension of the debt ceiling would have been extended for two years, i.e. for the first two years of his second term in office, which begins in January.
Congress has often passed such an extension in recent years so that the US government can fulfill its obligations. However, this was not part of the current budget negotiations, so Trump’s request came as a surprise to MPs. A suspension of the debt ceiling is usually preceded by lengthy negotiations.
In order for the budget legislation to be passed by the House of Representatives and the Senate, the Republicans also need votes from the Democrats. Trump praised the new proposal as a “very good deal for the American people,” while the head of the Democratic minority in the House of Representatives, Hakeem Jeffries, immediately rejected it as “ridiculous” and “not serious.” The White House spoke of a “gift for billionaires.”
The high-tech billionaire Elon Musk, who was appointed government advisor by Trump, first vehemently protested against the cross-party agreement between Republicans and Democrats. Trump later agreed with the entrepreneur and instructed his party to bury the compromise with the Democrats.
The multi-billionaire’s intervention in budget legislation is a highly unusual event. Trump hired Musk as an outside government advisor to reduce government costs; he has no formal government office and no mandate from voters. Above all, the conflicts of interest associated with the advisory position for the Tesla and SpaceX boss are causing sharp criticism.
The further procedure for averting the shutdown is not clearly outlined. On the one hand, the Republican leader of the House of Representatives, Mike Johnson, is confronted with demands from Democrats to return to the original agreement, while on the other hand, a number of Republicans are now linking the billions in spending planned in it with demands for cuts elsewhere. “We will reorganize and find a different solution, so stay tuned,” Johnson told reporters.
The deadline for the agreement expires on Saturday night. In the event of a shutdown, hundreds of thousands of state employees are sent on unpaid compulsory leave and the federal authorities are limited to carrying out only the most important tasks.
In this case, there would be restrictions on government services, border controls and numerous public facilities such as national parks and state museums over the Christmas holidays. The longest shutdown occurred in Trump’s first term in office at the turn of the year 2018/2019. The administrative shutdown lasted a total of 35 days.
