The US narrowly averted a disruptive and costly shutdown of federal agencies as Congress passed compromise legislation to keep the government running until Nov 17.

The legislation, passed in both chambers on Saturday (Sep 30) just hours before a midnight deadline, buys Democrats and Republicans time to negotiate longer-term federal funding. It does not include new funding for Ukraine.

President Joe Biden signed the bill late on Saturday night, capping an extraordinary day in Washington that began with the country careening towards what appeared to be an inevitable and prolonged federal funding lapse.

“Tonight, bipartisan majorities in the House and Senate voted to keep the government open, preventing an unnecessary crisis that would have inflicted needless pain on millions of hardworking Americans,” Biden said in a statement. 

Final passage by the Senate was set in motion earlier in the day by embattled House Speaker Kevin McCarthy, who called the bluff of the far-right Republicans and pushed the last-minute compromise. They had threatened to oust him from leadership if he did not shut down the government, a move most in Congress see as highly unpopular with voters. 

“If somebody wants to remove me because I want to be the adult in the room, go ahead and try,” McCarthy told reporters.

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In unusually swift action in the typically slow-moving Capitol, the bill made it through both chambers in less than 12 hours. 

“Total roller coaster,” Representative Guy Reschenthaler, the House GOP chief deputy whip, said of the day’s events.

Americans to investors globally have been watching Washington closely in recent days as the risk of a shutdown grew. Even a short-term funding breach would pause many federal functions and pay cheques, while economists predicted that a long-term shutdown could impede the Federal Reserve’s efforts to quell inflation without widespread job losses. Markets also considered how an impasse could further harm perceptions of US governance.

The legislation, which is devoid of deep spending cuts and border policies demanded by Republican hardliners, marks a rare bipartisan victory in a fiercely divided Washington. 

“After trying to take our government hostage, Maga (Make America Great Again) Republicans won nothing,” Senate Majority Leader Chuck Schumer said after final passage.

But the exclusion of the Ukraine aid  – at least for now – is a blow to President Volodymyr Zelenskiy, who a week ago met Biden and lawmakers and personally pleaded for new weapons systems, including F-16 fighter jets and longer-range ATACMS (Army Tactical Missile System) missiles.

Biden and other lawmakers sought to assure Ukraine that the US remains committed to the war effort. The US has sent US$44 billion to Ukraine since the Russian invasion last year, and Biden has requested an additional US$24 billion to refill accounts that the Pentagon says are nearly depleted. 

“We cannot under any circumstances allow American support for Ukraine to be interrupted,” Biden said, adding that McCarthy has committed to the passage of a separate Ukraine aid package. 

The bill passed the Senate on an 88-9 vote, just hours after an overwhelming House vote that included nearly all Democrats and more than half of Republicans.  

The legislation includes US$16 billion in disaster relief funding but not aid for Ukraine. Lawmakers in both parties who support the Ukraine funding said that would be handled separately.  BLOOMBERG