The US House of Representatives yesterday overwhelmingly rejected a Republican-led funding bill aimed at averting a Government shutdown, with federal agencies due to run out of cash tomorrow and cease operations starting this weekend.

The contentious legislation would have suspended the country’s borrowing limit for President-elect Donald Trump’s first two years in office and dozens of debt hawks in the Republican ranks rebelled against their own leadership to sink the package.

It was a defeat for the Republican leader, who with tech billionaire Elon Musk — his incoming “efficiency czar” — had thrown his weight behind the plan.

It was supposed to fix a mammoth bipartisan package both men had sabotaged on Thursday amid conservatives’ complaints about extras in the package ballooning its overall cost.

The retooled version was considered under a fast-track method that required two-thirds support but Democrats had been clear that they would deny Republicans the votes they needed to make up for the rebels in their ranks and it failed to win even a straightforward majority.

“The... proposal is not serious, it’s laughable. Extreme Maga Republicans are driving us to a Government shutdown,” Democratic Minority Leader Hakeem Jeffries said ahead of the vote. The White House described it as a “giveaway for billionaires”.

Republicans will likely try again with a more pared-down version, although the party leadership offered no clear path forward, telling reporters they would have to meet to discuss a Plan C.

A shutdown now looks almost certain — meaning the closure of all manner of federal agencies and potentially sending almost a million workers home without pay over Christmas.

Funding the Government is always fraught and lawmakers are under pressure this time around because they failed to agree on full-year budgets for 2025 despite months of negotiations.

Party leaders had landed on a stopgap bill — known as a “continuing resolution” (CR) — to keep operations functioning through mid-March.

Major Trump donor and ally Musk spent much of Thursday bombarding his 208 million followers on X with posts trashing the deal, and amplifying complaints from debt hawks in the House who baulked at numerous expensive add-ons shoehorned into the package.

Twelve hours later, Trump, who appeared to be playing catch-up, began threatening the re-election prospects of Republicans thinking of supporting the package and demanding out of the blue that the bill increase or even scrap the country’s debt limit.

Government functions were due to begin winding up today, with an estimated 875,000 workers at risk of being furloughed without pay and essential staff working during the holidays without a pay cheque.

Republican House Speaker Mike Johnson has been facing criticism from all sides for his handling of the negotiations and his gavel looks likely to be under threat when he stands for re-election in January.

The Louisiana congressman appeared to have misjudged his own members' tolerance for the original CR’s spiralling costs, and for allowing himself to have been blindsided by Musk and Trump.

Elon Musk speaks with Donald Trump at a viewing of the launch of the sixth test flight of the SpaceX Starship rocket. Photo / Getty Images

Democrats, who control the Senate, have little political incentive to help Republicans and Jeffries has insisted they will only vote for the bipartisan package, meaning Trump’s party will have to go it alone on any further efforts.

This is something the fractious, divided party — which can afford to lose only a handful of members in any House vote — has not managed in any major bill in this Congress.

While voicing frustration over spending levels, Trump’s main objection to the original CR was that Congress was leaving him to handle a debt-limit increase — invariably a contentious, time-consuming fight — rather than including it in the text.

President Joe Biden’s spokeswoman Karine Jean-Pierre said the veteran Democrat “supports the bipartisan agreement to keep the Government open... not this giveaway for billionaires that Republicans are proposing at the 11th hour”.

-Agence France-Presse