US Lawmakers Strike Deal to Avoid Imminent Government Shutdown

(Bloomberg) -- Congressional leaders reached a last-minute deal to avoid a disruptive US government shutdown, setting up another clash with ultra-conservatives who swiftly blasted the agreement. 

The deal would provide one week of temporary funding to avert a March 2 partial shutdown and fund parts of the government through Sept. 30. The remainder of the US government, including the Defense and Homeland Security departments, would still face a potential March 23 shutdown. 

Hardline Republicans condemned the deal, with Representative Ralph Norman of South Carolina telling Bloomberg TV's “Balance of Power” that it is “an insult to the American people.” But all signs point to Speaker Mike Johnson ultimately defying his right flank and compromising to keep the government open.

The White House backed the agreement. Press Secretary Karine Jean-Pierre said it “would help prevent a needless shutdown while providing more time to work on bipartisan appropriations bills.” 

Financial markets had shrugged of the risk of a shutdown, with many investors assuming Congress would once again reach a last-minute deal.

Read More: How Looming US Government Shutdowns Became Routine

House and Senate leaders said in a joint statement that Congress would vote in coming days on one week of temporary funding to avoid a Saturday shutdown of parts of the US government. The House plans to go first, with a floor vote Thursday. 

It will be the fourth time since the Oct. 1 start of the federal fiscal year Congress has turned to interim spending.

That short-term funding is needed because technical work remains on the package, which has been agreed to in principle. While negotiators haven't yet agreed on spending for the remainder of the government, the temporary funding also covers those parts of government through March 22.

Johnson's office had said that, without an agreement on full-year spending bills, he was prepared to allow a shutdown. 

Republican leaders are backing the deal despite a risk of backlash among conservatives who have demanded new immigration restrictions to avoid a government shutdown. GOP congressional leaders have instead chosen to hold up emergency funding for Ukraine assistance to wring concessions from President Joe Biden.

“It seems we are just doing what the Democrats want,” said Virginia Republican Bob Good, who leads the ultraconservative House Freedom Caucus.

The agreement includes funds for the departments of Agriculture, Transportation, Housing and Urban Development, Veterans Affairs and Energy, along with the Food and Drug Administration. The deal also includes full-year funding for the the Environmental Protection Agency and departments of Commerce, Justice and Interior, removing the possibility national parks will close.

The inclusion of the Justice Department funding is a surprise given a push by conservatives to use it to defund investigations into Donald Trump. 

The agreement is in line with a $1.59 trillion overall spending level for fiscal 2024 that Republican and Democratic negotiators agreed to in January.

Funding for the remainder of the government, including the Homeland Security Department, will be tougher to negotiate due to disputes over asylum policies at the US southern border.

--With assistance from Jordan Fabian, Kailey Leinz and Joe Mathieu.

(Updates throughout)

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