The US Senate has taken a critical step towards passing a Republican-backed spending bill, effectively ending the threat of shutting down the US government.
But the move sparked a fierce division within the Democrats over how to counter President Donald Trump’s efforts to expand his enforcement.
The Senate approved the funding package with 62-38 votes, putting Congressional Democrats in a position to abandon what they see as their strongest leverage for Trump and billionaire entrepreneur Elon Musk’s aggressive cost-cutting measures, including drastically reducing the federal workforce and eliminating the entire government seat. As legislative options decrease, opponents are expected to shift their efforts to court legal agendas.
Senate Majority Leader Chuck Schumer played a key role in the decision-making process. Less than 30 hours before the closure, the veteran lawmaker announced that he would put the spending bill on the party’s hold, prioritizing continuity of government services over political conflict.
Schumer’s reversal is a major victory for Trump and House Speaker Mike Johnson, paving the way for final approval of spending measures. The bill ensures that Musk’s newly created government efficiency office will maintain its authority to make sweep budget cuts while securing government funding through the end of the fiscal year of September 30th.
The political impasse coincides with financial market turmoil as Trump’s tariff policies have sparked widespread investor uncertainty. By Thursday, the S&P 500 had entered the revision, losing more than 10% in three weeks. But news that the Senate had made progress on spending bills sparked a 2% recovery on Friday.
Nine Democrats and one independent joined forces with almost all Senate Republicans to pass the bill later that day with a simple majority and passed a 60-vote threshold.
*This is not investment advice.
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