Americans were in danger of chaotic holidays on Friday, when it remained unclear whether their parliament would be able to reach an agreement in time on further financing of the federal government. This could, among other things, lead to long lines at airports during one of the busiest travel weeks of the year, because the aviation agency TSA can deploy fewer staff.
A government shutdown or so-called ‘shutdown’ is looming, because Republicans in the House of Representatives are at loggerheads with each other. On Tuesday, the party of incoming President Donald Trump reached a compromise on a temporary budget law with Democrats who currently still have power in the Senate, shortly before the Christmas recess.
This agreement should have ensured that the government had enough money at least until mid-March. Trump himself will take office on January 20 and can then draw up a full budget with his double majority in Congress.
Threatening tweets
However, under pressure from tech billionaire Elon Musk, Trump’s mega-donor this fall and an influential government advisor since then, this bridging law was defeated on Wednesday. The CEO of electric car manufacturer Tesla and the private space company SpaceX informed the Republicans via his social medium a few threatening tweets successfully persuaded people to distance themselves from the agreement.
According to Musk, too much had been given away to the Democrats. He has been asked by the incoming president to find 2,000 billion in cuts to the budget. Trump needs this mega restructuring to extend the tax cut introduced in 2017, as he promised. The richest, such as Musk, would benefit most from this.
After Musk’s sabotage action, Mike Johnson, the Republican speaker of the House, had to feverishly look for a plan B, which he presented on Thursday. The previous compromise was reduced, but did include an increase in the debt ceiling, as Trump had suggested.
When Johnson put the proposal to the vote, it was not only Democrats who did not support the proposal. 38 members of the Republican faction also dared to defy Trump (and Musk) by rejecting it.
Johnson then had to look for a plan C on Friday. This became a stripped-down law cut into pieces, which mainly no longer included an increase in the debt ceiling. After all, there is still plenty of time for that: the US will not come across it until June.
However, Trump would like to see the latter settled now, because he knows that fiscal hawks are opposed to exploding the national debt through large tax cuts. Radical right-wing faction members, on the other hand, fully supported Trump’s and Musk’s approach.
Deadline at midnight
On Friday afternoon, Johnson reported that he had a text that could satisfy all the different factions. But it was not immediately clear whether he will get enough Democrats on board for this third plan. If Johnson fails to do so, the shutdown would come into effect at midnight (6 a.m. Dutch time on Saturday morning).
Trump suggested earlier in the day that Republicans should allow this to happen if necessary: rather a shutdown under his predecessor Biden than under his own administration. But Republicans in the House appear concerned that citizens would place the blame for any Christmas chaos on their party – and not on Biden’s. The interests of the president and his party begin to diverge even before he takes office – not to mention those of Musk.