US Senate Passes Last-Minute Bill to Avoid Gov’t Shutdown

The US Senate voted on Thursday to approve a stopgap funding measure to keep the government open until 3 December.

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The measure, passed by a 65-35 majority, made it through the Senate after Democrats and Republicans reached an emergency agreement on Wednesday to keep the government from shutting down.

This agreement came after a debate on raising the debt ceiling brought a congressional deadlock earlier in the week, thus preventing the president from getting its proposed $3.5 trillion, ten-year budget approved. 

Senate Minority Leader Mitch McConnell considered the vote as a victory for Republicans, since it does not include a debt limit increase among its provisions

Government funding for the current fiscal year will expire at midnight Thursday. The deadlock threatened to halt payments to all federal employees, as well as a range of public services and social support.

House Speaker Nancy Pelosi promised earlier on Thursday that the Democratic Party-controlled House would vote on the bill to avert a shutdown as soon as the Senate passed it and send it on to the president's desk for his signature.

Earlier in the week, Treasury Secretary Janet Yellen warned that the United States would likely run out of money to service its immense financial obligations by 18 October, unless lawmakers raised or suspended the debt limit.

Yellen's concerns were echoed Wednesday by the Congressional Budget Office. The issue at stake is that Congress has till late October or early November to increase the debt limit or face delays of payments of some government activities, a default on the country's debt obligations, or both.

The issue of the world's largest economy defaulting on all or part of its financial obligation is not clear for debt experts. The total U.S. Treasury debt amounts to almost $21 trillion, a staggering figure, and experts are not even sure how that would look like from a technical standpoint, given the assumptions of the improbability of a default. 

However, Secretary Yellen and others have raised concerns that a default would strike the dollar down from its pedestal as the world reserve currency. Fears have also been voiced by market experts, banks, and credit rating agencies pointing to the major economic crisis such a default would spark. The effect would be particularly devastating among those countries which hold large amounts of U.S. debt, or which are dependent on U.S. consumers' buying power for their economic health.