Going down to the wire with possible government shutdown

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House Republican leaders on Friday were scrambling to come up with a plan to avert a government shutdown hours ahead of a deadline that would force U.S. troops, border patrol agents, air traffic controllers and millions of other federal workers to work without pay during the holidays.

Just three days ago, bipartisan House and Senate leaders struck an agreement to keep the government’s lights on, but President-elect Donald Trump and his billionaire confidant Elon Musk killed the deal, insisting at the 11th hour it needed to extend or abolish the debt limit to make way for Trump's agenda next year.

A backup plan — endorsed by Trump and Musk — then went down in flames on the House floor, tanked by Democrats as well as 38 Republicans who objected to the debt extension.

Embattled Speaker Mike Johnson, R-La., who is fighting to keep his leadership job, is now moving forward with Plan C. It calls for breaking up the larger package into three separate parts — government funding until March 14, disaster aid and a farm bill extension — and having lawmakers vote on them individually on the floor, according to two Republican sources familiar with the plan.

A debt limit extension would not receive a vote, the sources said. Rep. Thomas Massie, R-Ky., a Johnson critic, and other conservatives said they had floated the multi-prong approach directly to the speaker earlier this week.

But there is no guarantee critical parts of the plan can pass the House or the Senate, or get signed into law by President Joe Biden.

“The lines of communication have been reopened,” House Minority Leader Hakeem Jeffries, D-N.Y., told reporters as he left a meeting with House Democrats, without committing support.

On top of that, it could take days for the usually slow-moving Senate to debate and vote on any House funding package, meaning the federal government will very likely shut down into the weekend — if not over the Christmas, Hanukkah and New Year's holidays.

But Johnson has a major problem: He cannot pass a bill without Democrats, who still control the Senate and the White House and are determined not to give in to Trump's 11th-hour demands. If Johnson fails to deliver for Trump, it could jeopardize his prospects of being re-elected as speaker in two weeks, on Jan. 3, with a wafer-thin House majority.

"This is a defining moment for his career as speaker," said Rep. Rich McCormick, R-Ga., a Johnson critic. "What he does and how he handles this, how he handles our conference ... will define who he is, if he is a serious leader, and if he's going to survive this leadership vote."

Jeffries said Friday that Trump was rushing to set aside the debt limit so Republicans can pass a tax cut for the wealthy next year.

Senate Democrats have called on Johnson to return to the bipartisan deal that Trump and Musk blew up.

“It’s time to go back to the original agreement we had just a few days ago. It’s time for that. It’s time the House votes on our bipartisan CR [continuing resolution],” Senate Majority Leader Chuck Schumer, D-N.Y., said Friday on the floor. “It’s the quickest, simplest and easiest way we can make sure the government stays open while delivering critical emergency aid to the American people.”

In the midst of the battle, Democrats believe they have found a populist economic message to rally voters to their side, depicting Musk as an oligarch who is pulling Trump’s strings.

If the government shuts down days before Christmas, holiday travel could be hit but holiday shipping spared.

There hasn't been a government shutdown since 2019 — under the Trump administration. That 35-day budget standoff cost the U.S. economy an estimated $3 billion, according to the Congressional Budget Office.

The duration of any fresh shutdown, should one occur in the coming days, would be anyone's guess. But these are a few of the ways consumers might feel the impact, and where major services would continue running as usual.

Air travelers could see delays
During the 2019 shutdown, many travelers endured longer lines at airports as some security staffers and air traffic controllers chose not to report to work. Transportation Security Administration workers are deemed essential, meaning they're required to stay on the job even if the government shuts down.

But without funding flowing, TSA employees' paychecks would be halted, which could lead to many to simply stay home. If that happens, airport checkpoints could see bottlenecks during the busy holiday travel period, when the TSA has been projecting a 6.2% increase in screening volumes.

During the last shutdown, TSA officer call-outs increased by up to 300% at Dallas-Fort Worth International Airport, with the national absence rate among airport screeners rising from 3% to 10%, according to research firm Tourism Economics.

Mail and Social Security checks would keep flowing
Although travelers may hit snags in a shutdown, holiday deliveries likely wouldn’t be impacted.

The U.S. Postal Service runs as usual through shutdowns because the independent entity is generally funded by its own sales and services, not by tax dollars. As a shutdown neared in September 2023 — before being resolved just hours before it was set to begin — the Postal Service clarified that it would be able to deliver packages uninterrupted.

However, the deadline for deliveries to arrive by Christmas Day has already passed this year for ground advantage and first-class mail. The Christmas cutoff date for priority mail express is fast approaching, at Dec. 21.

The nearly 73 million people who receive Social Security benefits would keep receiving their checks if the government shuts down. That's because Social Security is considered a mandatory program that doesn't rely on the short-term funding that hangs in the balance on Capitol Hill.

But anyone who may need to reach the Social Security Administration for help could experience longer wait times as agency staffers are furloughed. The agency's staffing is already at a 50-year low, as House Republicans rejected boosting funds for it in the package passed in September.

Stock markets would digest the fallout day by day
A government shutdown threatens more turmoil in a stock market that has endured a rough few weeks, risking higher anxiety for those eyeing their retirement accounts or stock portfolios ahead of the new year.

Stocks rose Friday morning even as investors monitored the turmoil in Washington, which came on the heels of a 10-day string of declines for the Dow Jones Industrial Average, its longest losing streak since 1974. The Dow was up nearly 1% in mid-morning trading Friday, buoyed by encouraging inflation data.

"Government shutdowns have historically had little lasting impact on equity performance," the investment and tax advisory firm Edward Jones said in a note . "Stocks were positive half the time during the government closures and were higher in most cases three and six months later."

Prospective government shutdowns, on their own, usually trigger on Wall Street a "very short emotional reaction followed by not very much," Hackett said, in line with the Edward Jones analysts. But, he added, the combined impact of the Fed decision and the shutdown risk has affected an already sensitive market like "two cans of gasoline being thrown on a fire."

The Republican-controlled House on Friday evening passed a short-term bill to avert a government shutdown, just hours ahead of a deadline that would force U.S. troops, Border Patrol agents, air traffic controllers and millions of other federal workers to work without pay during the holidays.

The vote was 366-34, with all opposition coming from Republicans and one member voting present. It capped a tumultuous week in the House that foreshadowed how the new Congress in January might deal with a mercurial Donald Trump back in the White House. A two-thirds vote was needed because the bill came to the floor under a fast-track process.

The legislation now heads to the Senate, which must pass it before 12:01 a.m. to avert a shutdown.

The package funds the government at current levels through March 14, and includes $100 billion in disaster aid and a one-year farm bill — while stripping out a debt limit extension demanded by President-elect Trump earlier in the week.

On Wednesday, Trump had threatened to primary “Any Republican” who voted for a funding bill without a debt limit extension; on Friday, 170 House Republicans did just that.

“We are really grateful that tonight, in bipartisan fashion, with overwhelming majority of votes, we passed the American Relief Act of 2025. This is a very important piece of legislation,” House Speaker Mike Johnson, R-La., told reporters after the vote. “It funds the government, of course, until March of 2025. That was a big priority for us.”

“We are really grateful that tonight, in bipartisan fashion, with overwhelming majority of votes, we passed the American Relief Act of 2025. This is a very important piece of legislation,” House Speaker Mike Johnson, R-La., told reporters after the vote. “It funds the government, of course, until March of 2025. That was a big priority for us.”

Earlier Friday, leaders floated breaking up the package into three separate parts and having lawmakers vote on them individually on the floor, according to GOP sources familiar with the plan. But the one-package proposal was seen as an easier lift with the clock ticking down.

Exiting the private GOP meeting, Johnson told reporters there would not be a shutdown and that House Republicans are “unified.”

“We will not have a government shutdown, and we will meet our obligations for our farmers who need aid, for the disaster victims all over the country, and for making sure that military and essential services and everyone who relies upon the federal government for a paycheck is paid over the holidays,” Johnson said.