US government avoids shutdown as Democrats and Republicans agree concessions – until September at least

Jasper Jolly
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U.S. Capitol In Washington
Politicians in the US Congress have agreed a deal on funding (Source: Getty)

Congressional negotiators from both sides of the US political divide late last night agreed on a funding bill preventing large parts of the federal government from shutting down.

The bill, which is expected to pass this week, will fund the government until 30 September, while releasing the first funds for a big boost to military spending promised by President Donald Trump, Reuters reports.

Politicians had on Friday extended a deadline to avoid non-essential government functions from closing down on Saturday, Trump’s 100th day in office.

Read more: Trump backs down on Mexico wall to avoid government shutdown 100 days in

If confirmed the $1.1 trillion bill will give a $12.5bn increase in military spending, although Democrats have also managed to secure increases in funding for medical research and infrastructure.

A shutdown in the US is not unprecedented, with the government forced in 2013 to temporarily lay off hundreds of thousands of workers in federal agencies not deemed to be essential, such as environmental regulators, museums and national parks.

Trump was forced last week to back down on including the first money for his promised Mexican border wall in the funding bill after Democratic opposition denied him the 60 votes needed to pass the bill through the 100-member Senate.

Read more: 100 days of Trump: Has he actually achieved anything on economic policy?

Despite holding the Presidency and both Houses of Congress, the Republican party has struggled since Trump was inaugurated in January to assert its policy agenda in the face of both Democratic opposition and mutiny from within its own ranks.

In March the administration was forced into an embarrassing withdrawal of a healthcare bill to repeal and replace former President Barack Obama’s legislation, after it failed to muster enough support from its own Republican party.

Markets took heart from the aversion of government shutdown, with the US dollar gaining against the safe-haven Japanese yen to reach its highest point in a month, just short of ¥112 per dollar.

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