Congress faces funding and debt limit decisions as Republican majorities near end

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Congress funding, debt deadlines

Highlights

Congress faces a Dec. 11 government funding deadline, with bipartisan Senate support needed to avoid a shutdown amid Democratic leverage concerns.
Republicans push to raise the debt limit before losing control, as federal debt nears $41.1 trillion and borrowing capacity may be exhausted by mid-summer.
Senate to vote on energy permitting reform Monday, but Democrats' election gains may weaken incentives to maintain current compromises on key measures.

Funding deadline and debt ceiling pressures

As reported by CNBC, lawmakers are returning with government funding as the most immediate priority because current funding runs out on Dec. 11 and Congress must either pass another continuing resolution or approve full-year appropriations to avoid a shutdown.

Any spending package will need bipartisan support in the Senate because of the 60-vote filibuster threshold. Democrats are seen as unlikely to negotiate a full-year funding deal before the new Congress is sworn in, as their expected majorities in both chambers could give them more leverage in later talks with the White House.

Some Republicans, including Sen. Kevin Cramer of North Dakota, are also pushing to raise the debt limit before the party loses control. The federal debt reached $40 trillion in September, nearing the $41.1 trillion cap set in the GOP's 2025 budget reconciliation law, while the Bipartisan Policy Center says Treasury is likely to reach its maximum borrowing capacity by mid-summer and Bank of America estimates the U.S. may be unable to meet all obligations by November 2027.

Permitting and other measures face narrower path

Beyond spending and borrowing, Congress is also weighing the National Defense Authorization Act and a permitting reform proposal that energy committee leaders in the Senate agreed before the election. The Senate is expected to hold a procedural vote on that measure Monday evening, according to a Senate aide familiar with the schedule, but Democrats' election gains could reduce their incentive to preserve the current compromise if they believe a stronger deal is possible in the next Congress.

Other items could still reach the floor, though their path appears uneven. The Senate approved a bipartisan package in September to create federal rules for college athlete compensation, but that bill faces resistance in the House, especially from Democrats, and a separate long-running effort to ban members of Congress from owning or trading individual stocks remains unresolved.

Attendance and timing may further constrain what lawmakers can complete in the post-election session. That leaves congressional leaders balancing immediate fiscal deadlines with a shrinking opportunity to move broader policy changes before control of Capitol Hill shifts.

In our earlier article on rising long-term Treasury yields and the growing deficit burden, we explained how higher borrowing costs are tightening financial conditions for both households and the federal government as annual shortfalls near $2 trillion. We also noted that political gridlock in Washington makes a near-term fiscal deal less likely, even as total U.S. debt climbs and interest expenses add to the strain.

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