By Richard Cowan, Bo Erickson, Andy Sullivan and Katharine Jackson
WASHINGTON (Reuters) - The Republican-controlled U.S. House of Representatives passed legislation on Friday that would avert a midnight government shutdown, defying President-elect Donald Trump's demand to also greenlight trillions of dollars in new debt.
Next (LON:NXT), the Democratic-controlled Senate would need to pass the bill to ensure the government will be funded beyond midnight (0500 GMT Saturday), when current funding expires. The White House said President Joe Biden intends to sign it into law if they do.
The legislation would extend government funding until March 14, provide $100 billion for disaster-hit states and $10 billion for farmers. It would not raise the debt ceiling -- a difficult task Trump has pushed Congress to do before he takes office on Jan. 20.
House Speaker Mike Johnson said Republicans would have more power to influence government spending next year, when they will have majorities in both chambers of Congress and Trump will be in the White House.
"This was a necessary step to bridge the gap, to put us into that moment where we can put our fingerprints on the final decisions on spending," he told reporters after the vote. He said Trump supported the package.
A government shutdown would disrupt everything from law enforcement to national parks and suspend paychecks for millions of federal workers. A travel industry trade group warned that a shutdown could cost airlines, hotels and other companies $1 billion per week and lead to widespread disruptions during the busy Christmas season. Authorities warned travelers could face long lines at airports.
The package, which passed by a bipartisan vote of 366-34, resembled a bipartisan plan that was abandoned earlier this week after an online fusillade from Trump and his billionaire adviser Elon Musk, who said it contained too many unrelated provisions, such as a pay raise for lawmakers and a crackdown on pharmacy benefit managers.
Republicans struck most of those elements from the bill -- including a provision limiting investments in China which Democrats said would have conflicted with Musk's interests.
"He clearly does not want to answer questions about how much he plans to expand his businesses in China and how many American technologies he plans to sell," Democratic Representative Rosa DeLauro said on the House floor.
Trump has tasked Musk, the world's richest person, with heading a budget-cutting task force, but Musk holds no official position in Washington.
Musk wrote on his social media platform X that he was happy with the package. "It went from a bill that weighed pounds to a bill that weighed ounces," he posted.
House Democratic Leader Hakeem Jeffries said the package still accomplished important goals, such as delivering disaster aid, averting a shutdown and stopping Republicans from enacting a debt-ceiling hike that would make it easier to cut taxes.
"We have successfully advanced the needs of everyday Americans, but there are still things to be worked on and we look forward to that fight in the new year," he told reporters.
NO DEBT CEILING HIKE
Trump's demand to lift the debt ceiling was resoundingly rejected by the House -- including 38 Republicans -- on Thursday.
The federal government spent roughly $6.2 trillion last year and has more than $36 trillion in debt, and Congress will need to act to authorize further borrowing by the middle of next year.
Johnson said lawmakers would look at the issue in January.
Representative Rich McCormick (NYSE:MKC), one of 34 Republicans who voted against the bill, said it did nothing to change the nation's fiscal trajectory and would only add to the debt load. "We will be the country of the past if we continue doing what we're doing," he said.
The federal government last shut down for 35 days during Trump's first White House term over a dispute about border security.
Previous fights over the debt ceiling have spooked financial markets, as a U.S. government default would send credit shocks around the world. The limit has been suspended under an agreement that technically expires on Jan. 1, though lawmakers likely would not have had to tackle the issue before the spring.
(This story has been refiled to remove an extraneous word in paragraph 10)