Congress Unveils USD 1.2 Trillion Plan To Avert Federal Shutdown And Bring Budget Fight To A Close

Lawmakers introduced a USD 1.2 trillion spending package on Thursday that sets the stage for avoiding a partial government shutdown for several key federal agencies this weekend and allows Congress, nearly six months into the budget year, to complete its work in funding the government through September.

Democrats were largely able to swat back hundreds of policy mandates and some of the steeper budget cuts that House Republicans were seeking to impose on non-defence programmes, though House Speaker Mike Johnson, R-La., highlighted some policy wins, including a nearly 24 per cent increase in detention beds for migrants awaiting their immigration proceedings or removal from the country.

This year's spending bills were divided into two packages. The first one cleared Congress two weeks ago, just hours before a shutdown deadline for the agencies funded through the bills.

Now Congress is focused on the second, larger package, which includes about USD 886 billion for the Defence Department, about a 3  per cent increase from last year's levels. The 1,012-page bill also funds the departments of Homeland Security, Health and Human Services, Labor, and others.

Non-defense spending will be relatively flat compared with the prior year, though some, such as the Environmental Protection Agency, are taking a hit, and many agencies will not see their budgets keep up with inflation.

When combining the two packages, discretionary spending for the budget year will come to about USD 1.66 trillion. That does not include programmes such as Social Security and Medicare, and financing the country's rising debt.

The House is expected to take the measure up first, on Friday. Then it would move to the Senate where senators would have to agree on taking it up expeditiously to avoid a partial shutdown. Usually, such agreements include votes on proposed amendments to the bill.

Johnson promoted the bill as a serious commitment to strengthening national defence by moving the Pentagon toward a focus on its core mission while expanding support for those serving in the military. The bill provides for a 5.2 per cent pay increase for service members.

One of the changes Johnson cited for Republicans was prohibiting funding through March 2025 funding for the UN Relief and Works Agency, which is the main supplier of food, water and shelter to civilians in Gaza.

Republicans are insisting on cutting off funding to the agency after Israel alleged that a dozen employees of the agency were involved in the attack that Hamas conducted in Israel on October 7.

But the prohibition does concern some lawmakers because many relief agencies say there is no way to replace its ability to deliver the humanitarian assistance that the United States and others are trying to send to Gaza, where one-quarter of the 2.3 million residents are starving.

Democrats also emphasised that humanitarian assistance will increase overall, though.

Sen. Patty Murray, the chair of the Senate Appropriations Committee, also highlighted a USD 1 billion increase for Head Start programmes and new child care centres for military families. And Democrats played up a USD 120 million increase in funding for cancer research and a USD 100 million increase for Alzheimer's research.

“We defeated outlandish cuts that would have been a gut punch for American families and our economy," said Murray, D-Wash.

She also said Democrats successfully fought off scores of policy measures, known as riders, that House Republicans were seeking to add.

“From Day 1 of this process, I said there would be no extreme, far-right riders to restrict women's reproductive freedoms — and there aren't, she said.

Among the few policy provisions that House Republicans did secure was a requirement that only allows for the American flag and “other official flags” to fly over US diplomatic facilities. Under the Biden administration, US embassies have been invited to fly the pride flag or light up with rainbow colours in support of the LGBTQ community.

There is also a provision that prevents the Consumer Product Safety Commission from banning gas stoves. But the White House has said President Joe Biden would not support a ban, and the commission, an independent agency, says no such ban was in the works.

The spending in the bill largely tracks with an agreement that former Speaker Kevin McCarthy worked out with the White House in May 2023, which restricted spending for two years and suspended the debt ceiling into January 2025 so the federal government could continue paying its bills.

McCarthy, R-Calif., was ousted from the speaker's role a few months after securing the debt ceiling deal. Eight Republicans ended up joining with Democrats in removing McCarthy as speaker. And some of those unhappy with that debt ceiling deal also expressed misgivings about the latest package.

“I hope there will be some modest wins. Unfortunately, I don't expect that we will get much in the way of significant policy wins based on past history and based on our unwillingness to do use any kind of leverage to force policy wins, meaning a willingness to walk away and say no,” said Rep. Bob Good, R-Va.

Work on the spending bills has been more bipartisan in the Senate. Murray issued a joint statement after the bill's release with Sen. Susan Collins, R-Maine, praising the package of bills and urging colleagues to vote for it.

“There is zero need for a shutdown or chaos — and members of Congress should waste no time in passing these six bills, which will greatly benefit every state in America and reflect important priorities of many Senators,” Murray and Collins said.

Johnson said that after the spending package passes, the House would next turn its attention to a bill that focuses on aiding Ukraine and Israel, though lawmakers are scheduled to be away from Washington for the next two weeks. The Senate has already approved a USD 95.3 billion aid package for Ukraine, Israel and Taiwan, but Johnson has declined to bring that up for a vote.