Shutdown Scrapped: Congress Unveils Last-Minute Deal to Keep U.S. Government Open

A Midnight Save on Capitol Hill

Washington breathed a collective sigh of relief late Tuesday as House and Senate negotiators released a 1,050-page compromise bill that keeps federal lights on past Friday’s funding cliff. The measure, hammered out in a 19-hour final sprint, now heads for rapid votes in both chambers before the 11:59 p.m. Friday deadline.

The Price of Peace: $1.66 Trillion

The package sets discretionary spending at roughly $1.66 trillion for the remainder of fiscal 2024, splitting the difference between dueling House GOP and Senate Democratic blueprints. It also shelves the 8 % across-the-board cuts that conservatives had floated, instead relying on steeper IRS enforcement and a one-year extension of expiring Medicare tele-health waivers to paper over a $69 billion gap.

“We’re not kicking the can; we’re picking it up and recycling it,” quipped Sen. Susan Collins (R-ME), the lead GOP appropriator, as she exited the final conference committee shortly after 3 a.m.

What’s In, What’s Out

• Defense: An $886 billion top-line—$28 billion above last year—delivering on the Pentagon’s request for submarine-building funds and a 5.2 % pay raise for service members.
• Border Security: $8.1 billion for Customs & Border Protection, including $650 million to accelerate asylum-case processing, but no new money for the Trump-era wall.
• Disaster Aid: $16 billion in fresh FEMA relief for hurricane-hit Southeastern states and Maui wild-fire recovery.
• Left on the cutting-room floor: A House-passed provision blocking federal funding for abortion providers and a Democratic bid to restore the expanded Child Tax Credit.

Speed-Run to the President’s Desk

House Speaker Mike Johnson (R-LA) told reporters he will suspend the 72-hour rule to bring the bill to the floor Wednesday evening, betting that a coalition of moderate Republicans and Democrats can offset expected defections from his right flank. Senate Majority Leader Chuck Schumer (D-NY) has scheduled back-to-back procedural votes Thursday, aiming to send the legislation to President Biden for signature before the weekend.

Markets React—Briefly

Stock-index futures ticked up 0.3 % in overnight trading while the yield on the 2-year Treasury note eased below 4.6 %, a sign investors view the deal as removing a key tail-risk. Economists at Goldman Sachs estimate a shutdown would have shaved 0.2 percentage points off first-quarter GDP growth.

The Next Cliff: March

Despite Tuesday’s breakthrough, Congress has merely postponed, not eliminated, fiscal friction. A second tranche of appropriations bills must pass by March 8 to fund the departments of Commerce, Justice, Science and related agencies. Lawmakers also remain at loggerheads over a $60 billion Ukraine aid package and a fresh immigration overhaul, both of which could resurface as bargaining chips in the spring.

For now, federal workers can shelve those contingency plans and museum-goers can keep weekend reservations—an all-too-rare bipartisan victory in a city that thrives on deadline drama.