House Approves Spending Plan, Easing Risk of Government Shutdown

(Bloomberg) -- US House lawmakers overcame partisan animosity Tuesday to pass a temporary government funding bill that greatly lowers the risk of a shutdown even as it delays fights over Ukraine aid, border policies and deep cuts to federal programs.

Most Read from Bloomberg

Democrats bailed out newly elected Speaker Mike Johnson, a Republican whose plan drew opposition from hardliners in his party because it doesn’t cut government spending or change border policies.

A total of 209 Democrats voted with 127 Republicans in support of the measure, which needed a two-thirds majority to pass using an expedited process. Ninety-three Republicans voted against their new leader’s plan, along with two Democrats.

“Once again the Republican majority needs Democratic votes to govern,” said Rosa DeLauro of Connecticut, the top Democrat on the House spending panel.

The outcome is a reprieve for Johnson, who will have until next year to negotiate annual spending.

Illustrating the stakes, Moody’s Investors Service on Friday lowered the US’s credit-rating outlook to negative from stable. Moody’s cited increasing risks to the country’s fiscal strength and specifically pointed to political polarization in Congress.

The legislation now goes to the Senate where majority Democrats are expected to back it even though it doesn’t include Ukraine and Israel aid they support. Senate leaders will need the cooperation of all senators to overcome procedural hurdles and meet a late Friday evening deadline, when federal funding lapses.

Senate Majority Leader Chuck Schumer said in a statement on Tuesday night that he would work with his Republican counterpart, Mitch McConnell, “to pass this bipartisan extension of funding as soon as possible.”

And a White House official said President Joe Biden would sign the measure if it passes the Senate. The official added that Congress must now turn to full-year spending bills and approve assistance for Israel and Ukraine.

The White House had a harsh initial reaction to the measure, but later softened its stance.

The Johnson bill would fund some parts of the government through Jan. 19 and others through Feb. 2, setting up the possibility of yet another shutdown deadline on Groundhog Day.

Johnson, elected less than a month ago, took a risk in relying on Democrats to pass the measure. Former speaker Kevin McCarthy was ousted in early October by eight fiscal hawks angered over his decision to allow a vote on a strings-free temporary spending bill that passed with Democratic support.

Johnson has said the delayed fiscal 2024 spending bills are a problem he inherited and argued he needs more time to notch spending cuts.

“I’ve been on the job less than three weeks, but it’s been like drinking from Niagara Falls,” he said Tuesday on CNBC.

For now, the speaker is not being threatened with the loss of his job.

The conservative House Freedom Caucus opposed the bill over the lack of immediate cuts, but members signaled they’re willing to give Johnson a pass, for now.

“Mike’s a good friend,” Freedom Caucus member Chip Roy said. “I oppose this bill.”

The bill would extend until Jan. 19 funding for the departments of Veterans Affairs, Energy, Agriculture, Transportation as well as Housing and Urban Development, with the rest of the government including the Pentagon extended to Feb. 2. The goal is to prod the Senate to speed up negotiations on those first set of bills. The Johnson stopgap also extends farm subsidies set to run out in January through Sept. 30.

Ukraine Outlook

The White House had requested over $61 billion in additional assistance for Ukraine as part of a nearly $106 billion overall package that includes funding for Israel, operations on the US-Mexico border, and bolstering allies in the Indo-Pacific.

Yet hardliners have resisted the fresh Ukraine aid. Johnson opposed the first tranche of Ukraine war aid in May 2022 but has said he now sees the assistance as a priority.

However, Johnson wants to tie money for Ukraine to Republican demands on border security. Such immigration changes, including reducing the right of migrants to seek asylum in the US, will be very tough to negotiate between the parties.

He said this will allow Republicans to pursue “real policy changes on the southern border, which we desperately need, to get proper oversight of additional Ukraine funding, if that materializes, and get Israel funded.”

--With assistance from Allyson Versprille, Ari Natter, Maeve Sheehey, Zach C. Cohen, Steven T. Dennis and Michelle Jamrisko.

(Updates with White House official, starting in ninth paragraph.)

Most Read from Bloomberg Businessweek

©2023 Bloomberg L.P.