US House approves bill to avert government shutdown rejecting Donald Trump’s debt ceiling demand

The Republican-controlled US House of Representatives has passed legislation that will avert a midnight government shutdown, defying President-elect Donald Trump’s demand to also greenlight trillions of dollars in new debt.

The House voted 366-34 on Friday to approve the bill, the day after rejecting Trump’s debt ceiling demand.

The Democratic-controlled Senate will also need to pass the bill to advance it to President Joe Biden, who the White House said would sign it into law to ensure the government will be funded beyond midnight, when current funding expires.

The legislation would extend government funding until March 14, provide $US100 billion ($A160 billion) for disaster-hit states and $US10 billion ($A16 billion) for farmers. However, it would not raise the debt ceiling - a difficult task that Trump has pushed Congress to do before he takes office on January 20.

A government shutdown would disrupt everything from law enforcement to national parks and suspend paycheques for millions of federal workers. A travel industry trade group warned that a shutdown could cost airlines, hotels and other companies $US1 billion ($A1.6 billion) per week and lead to widespread disruptions during the busy Christmas season. Authorities warned that travellers could face long lines at airports.

The package 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. Most of those elements were struck from the bill - including a provision limiting investments in China that Democrats said would conflict with Musk’s interests there.

“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.

Musk, the world’s richest person, has been tasked by Trump to head a budget-cutting task force but holds no official position in Washington.

The bill also left out Trump’s demand to the nation’s debt ceiling, which was resoundingly rejected by the House - including 38 Republicans - on Thursday.

The federal government spent roughly $US6.2 trillion ($A9.9 trillion) in 2023 and has more than $US36 trillion ($A58 trillion) in debt, and Congress will need to act to authorise further borrowing by the middle of 2025.

Sources said the White House has alerted government agencies to prepare for an imminent shutdown. 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 US government default would send credit shocks around the world. The limit has been suspended under an agreement that technically expires on January 1, though lawmakers likely would not have had to tackle the issue before the spring.