Instant Reaction: Trump-Backed Funding Plan Fails
Bloomberg Daybreak: US Edition
Deep Dive
Why did the Republican-led House reject the temporary funding plan backed by President-elect Trump?
The plan was rejected because it failed to gain support from both Democrats and conservative Republicans. Conservative Republicans opposed the suspension of the federal debt limit for two years, while Democrats had their own reservations. Additionally, President-elect Trump and Elon Musk publicly criticized the bill, further undermining its chances.
What role did Elon Musk play in the rejection of the funding bill?
Elon Musk heavily criticized the bill on social media, calling it wasteful and urging lawmakers to vote against it. His influence, combined with his status as the richest man in the world and a major political donor, swayed President-elect Trump to also oppose the bill, contributing to its defeat.
What are the potential consequences of the government funding lapse?
If no congressional action is taken, the government will face a shutdown starting Friday night. This could lead to the suspension of non-essential government services and unpaid employees. A prolonged shutdown would have significant economic and operational impacts, though a short-term lapse over the weekend might have minimal immediate effects.
What was the significance of the federal debt limit suspension in the bill?
The suspension of the federal debt limit for two years was a major sticking point. President-elect Trump wanted to avoid raising the debt limit during his presidency, preferring it to be handled under Biden's administration. Conservative Republicans generally oppose raising the debt limit, which further complicated the bill's passage.
How does Elon Musk's influence extend beyond his social media presence?
Elon Musk's influence stems from his role as one of Trump's key advisors, his status as the richest man in the world, and his position as the largest political donor in the U.S. His financial power and advisory role give him significant leverage over political decisions, particularly within the Republican Party.
What is the likelihood of a temporary patch to avoid a government shutdown?
There is a possibility that Congress could pass a temporary patch to extend government funding, potentially into the next year. However, this depends on negotiations and whether President-elect Trump and conservative Republicans are willing to compromise. The situation remains uncertain as the deadline approaches.
- House rejected Trump-backed funding plan
- Failure to secure support from Democrats and conservative Republicans
- Elon Musk's public criticism influenced the outcome
- Government funding will lapse Friday night
Shownotes Transcript
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Bloomberg Audio Studios. Podcasts, radio, news. From Bloomberg World Headquarters in New York, I'm Doug Krisner with special coverage of the U.S. House vote on a stopgap funding bill to avert a government shutdown. This bill has just been defeated.
after more than 30 Republicans voted against it. Government funding will now lapse Friday night without congressional action. By the way, this bill did include a suspension of the federal debt limit for two years, and it did have the support of President-elect Trump. For a closer look now, let's bring in Bloomberg's Mike Dorning. He covers Congress for us from our bureau in Washington, D.C. Mike, was this really a surprise, the outcome here? It wasn't at all a surprise. We've
We've been expecting this since this deal was announced. They weren't able to get support from Democrats and they weren't able to get support from conservative Republicans. It was late yesterday, though, that President-elect Trump came out against it. Wasn't that after Elon Musk voiced his opinion?
Absolutely, you're right. Elon Musk just savaged the bill online all day long Wednesday, and then by the end of the day, Trump joined with him and came out against the bipartisan deal. So what was the biggest sticking point here? Was it the suspension of the federal debt limit for two years?
Well, Trump wanted to suspend the debt limit because he didn't want to do it with him as president. He wanted to do it with Biden as president. And also that is often something where you have to give something up to Congress to get them to raise the debt limit. And he didn't want to do that. So that's why...
but one of the reasons why a lot of democrats didn't vote for it and definitely a reason why the conservative republicans voted against that date most of them don't like raising the debt so government funding as we know will lapse friday night without congressional action where do we go from here
Well, it's quite possible that they'll come up with some temporary patch to keep things going a little longer. That might be something that lasts into next year, but it might just be something that lasts a little while. It's also possible that...
He was the negotiator of that earlier bipartisan agreement, and I was reading today that maybe his leadership is now in doubt. Is that a fact?
Well, this is definitely a failure by the speaker. The job of a congressional leader is to kind of figure out the parameters of what's acceptable. And he failed to have a sense or incorporate a sense of what Trump and Musk would tolerate. And as a result, either because Trump
He didn't think through that, that they would go far as far as they did or because maybe they changed their minds along the way. As a result, this fell apart. So is President-elect Trump still in control? Does he have the upper hand on any deal that may be worked out before that Friday night deadline?
He has the ability probably in most instances to scuttle a deal. So he essentially already has a veto power over congressional Republicans, at least. Now, one of the things that Musk was saying in his tweet about
about the earlier agreement was that he saw it as being a crime and that anyone who voted in favor of it should be voted out of office in two years. Do you think that Musk's influence over the process will remain as strong as it has been in the last 24 hours?
He will remain influential over the process if he chooses to use that influence. Because remember, he was the largest political donor in the United States this past year. He was also the richest man in the world. So if you have Donald Trump, the leader of the Republican Party, and the richest man in the world, the
biggest political donor against you in a republican primary that's a big problem for you so you have to think twice before you defy them speaking with bloomberg's mike darning there in response to the bill on stopgap funding to avert a government shutdown it has been defeated after more than thirty republicans voted against it and now government funding will lapse friday night
without congressional action. So, Mike, back to you in terms of what the day will be like Friday. Will it really be incumbent upon Mike Johnson, Speaker of the House, to get leadership together to try to get people on the same page first thing in the morning?
He'll probably be already working on this tonight. Now, part of it is also maybe he's hoping that this will get Trump to believe it's not possible to do a debt limit increase this year. But he may not be able to persuade Trump of that. It might be that Trump would rather have a shutdown than forego a debt limit increase before he
comes into office. And we know where Mr. Musk is, particularly with this new committee setting up to look for more efficiencies in the way in which the U.S. government operates. Doge, I think, is how it's being referred to. Is there anything to suggest that Musk was trying to make a point in sabotaging this bill?
I think one of the things he did want to show is that he's serious about cutting back what he considers to be wasteful spending and show that the members of Congress, that he has some power to get them to cut back spending. Because remember, his group is just like an advisory group. It doesn't really have any power. His power is twofold.
His power is because he's one of Trump's key advisors and he can influence the president. And his power is because of his money and his social media platform. So he was using both of those levers of power to gain concessions on this. So as we know, government funding will lapse at 12.01 a.m. Saturday. Is there a risk that we could get a partial government shutdown first thing in the morning on Saturday?
There's definitely a risk, a high risk that we'll have a government shutdown first thing in the morning Saturday. Now, it's also possible that they come up with something and, you know, if they miss the Friday night at midnight deadline and, you know, the government's formally, you know, officially shut down for a few hours or for Saturday and Sunday, it's probably not going to have a big effect on the country. The bigger problem
thing that would have an effect is a drawn out shutdown in which non-essential government services would stop and none of the employees would be paid. Mike, we'll leave it there. Thank you so much. Bloomberg's Mike Dorning. He covers Congress for us here on Bloomberg. Just to recap, the stopgap funding bill to avert a government shutdown has been defeated. We'll have more on this throughout the night here on Bloomberg Radio.
Welcome back, Ms. Klein.
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