End in sight for longest shutdown in U.S. history as Senate advances temporary funding bill

By: Xiao Yanyan

Source: Jinshi Data

The U.S. Senate took a crucial step forward in restarting the government: several moderate Democrats broke through the blockade by party leadership and voted in support of a deal to end the record-long government shutdown.

The Senate advanced the bill with a 60-40 procedural vote on Sunday evening local time, though the final vote timing remains uncertain. The bill must still be approved by the House before being sent to Trump for signing into law.

Under the agreement, Congress would provide full-year funding for the Department of Agriculture, the Department of Veterans Affairs, and congressional offices themselves, while funding for other federal agencies would last until January 30 next year. The bill will cover back pay for furloughed workers, restore federal grants to state and local governments, and rehire federal employees dismissed during the shutdown.

When the government shutdown will end remains uncertain. The Senate needs unanimous consent to expedite proceedings, and any single senator could delay the process by days through procedural tactics.

House Speaker Mike Johnson has said he will notify lawmakers two days in advance to return for the vote. Trump told reporters upon returning to the White House on Sunday evening: "The end of the shutdown seems to be drawing near."

Bolstered by optimism over easing shutdown risks, S&P 500 futures rose 0.7% in Asian trading, while Nasdaq 100 futures climbed 1.1%. Asian stock markets advanced in tandem, Treasury yield curves steepened across the board, and the 10-year Treasury yield rose 3 basis points to 4.13%. The traditional safe-haven yen weakened 0.3% against the dollar.

Virginia Democratic Senator Tim Kaine expressed support for the deal on Sunday, noting that his state is home to a large number of federal employees. He particularly emphasized that the bill prohibits new federal layoffs before January 30 next year.

Passage in the House is not guaranteed. Democratic leaders have publicly opposed any agreement that does not extend Affordable Care Act subsidies—the current version lacks this provision. Conservative Republicans demand a bill funding the entire government through September 30 next year.

This face-saving deal also falls far short of the stated goals of Democratic leaders in both chambers of Congress. They had previously insisted on extending expiring Obamacare premium tax credits and repealing the Republican Medicaid cuts passed earlier this year.

According to sources, Democrats secured a Republican commitment to hold a vote by mid-December on legislation renewing Affordable Care Act tax credits. However, this promise, made weeks ago by Senate Majority Leader John Thune, has failed to satisfy all Democrats.

"We will oppose the Republican bill in the House," House Democratic leader Hakeem Jeffries said in a statement on Sunday evening local time.

The nearly 40-day shutdown nearing resolution mirrors previous partisan standoffs: parties attempting to leverage government shutdowns for policy gains ultimately fail. Trump did not secure border wall funding during the 2018–2019 shutdown, and Republicans failed to repeal Obamacare during the 2013 shutdown.

Democrats have rejected 14 times the House’s unconditional continuing resolution passed on September 19, which would have kept agencies operating through November 21.

Senate Democratic leader Chuck Schumer announced on Sunday evening that he would oppose the deal. He had previously said Democrats were willing to restart the government in exchange for a one-year extension of expiring Obamacare tax credits. Republicans swiftly rejected the proposal, with several members demanding a yet-to-be-revealed Republican plan fully replace Obamacare.

Since September 19, Republicans have adjourned the House to block Democrats’ proposed $1.5 trillion new spending plan. The White House has continued applying pressure through mass firing of government workers, threatening to withhold pay from 600,000 furloughed federal employees, and resisting court orders to fund food stamp benefits.

With the Thanksgiving travel peak approaching, Transportation Secretary Sean Duffy ordered airlines to cancel flights, severely disrupting travelers. He warned conditions could worsen over the holiday period.

Republican pressure tactics have proven effective in pushing Senate Democrats toward compromise. Despite controlling both chambers, Republicans still need eight Democratic votes to overcome Senate debate rules and pass the temporary funding bill.

Negotiations accelerated noticeably after Democrats swept key seats in New York City, New Jersey, Virginia, California, and elsewhere during the midterm elections. Republicans noted that Democrats appear concerned that abandoning shutdown-related demands before voter turnout could affect election results.

It remains unclear whether Congress can reach an agreement to extend Obamacare subsidies before they expire at the end of December. House Republican leaders explicitly oppose an extension, instead advancing conservative priorities such as expanding short-term health insurance plans to compete with Obamacare exchanges and implementing abortion-related restrictions.

Senate Republicans stress that any extension must include major reforms—such as setting income caps for subsidy recipients and requiring beneficiaries to pay part of their premiums. Some senators insist on comprehensive revisions to the Affordable Care Act before supporting any proposal.

The shutdown crisis is costing the U.S. economy approximately $15 billion per week. The Congressional Budget Office estimates that by mid-November, the shutdown will reduce real GDP's annualized quarterly growth rate by 1.5 percentage points. Amid deepening anxiety over the shutdown, prices, and the labor market, consumer confidence has plunged to a three-year low.

The release of most government economic data has been suspended, leaving the Federal Reserve navigating persistent high inflation and rising unemployment under a "blind flight" decision-making scenario.

The full-year spending bill secured some wins for Democrats, including blocking the Trump administration’s proposed cuts to international food aid and increasing security budgets for Capitol Police protecting lawmakers.

If passed, the bill would give the beer industry a significant advantage by restricting sales of intoxicating cannabis products. The cannabis industry claims this rule could jeopardize 325,000 jobs.