Government funding deal extends farm bill

WASHINGTON — President Joe Biden signed a bill into law Saturday that averts a government shutdown, bringing a close to days of upheaval — for now — after Congress approved a temporary funding plan that extends current spending levels to March and adds another year to the massive agriculture assistance and antipoverty measure known as the farm bill.

But the bill denies President-elect Donald Trump’s demand that the debt ceiling — which sets the government’s capacity to borrow — be lifted.

“This agreement represents a compromise, which means neither side got everything it wanted,” Biden said in a statement, adding that “it ensures the government can continue to operate at full capacity. That’s good news for the American people.”

The deal funds the government at current levels through March 14 and provides $100 billion in disaster aid and $10 billion in agricultural assistance to farmers. It extends the farm bill — which expired in September but was still being funded — to next September.

The comprehensive farm bill package supports several key farm and safety net programs, like crop insurance, as well as agriculture research, rural development, conservation projects and food assistance for low-income families. It is supposed to be updated every five years, but partisan gridlock got in the way over funding for SNAP benefits and incentives for capturing greenhouse gases, among other issues.

Next year, as Congress continues negotiations over a new farm bill, Republicans will control both chambers and the White House, and a new agriculture secretary will be in place.

“While I am disappointed that a new Farm Bill did not pass during this Congress, a one-year extension of the current bill provides Iowa farmers with some added certainty at a time when the ag economy remains soft,” Republican Iowa Agriculture Secretary Mike Naig said in a statement late Friday. “We must now focus on enacting a modernized 5-year Farm Bill, and I am eager to work with the new Congress and the Trump Administration to get this priority accomplished early next year.”

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The extension comes as an Iowa Farm Bureau analysis shows that large agriculture-related employers in Iowa cut their workforces by more than 4,000 jobs this year as farm income continues to decline. And, a study by Iowa State University found, farmland values declined in 2024 for the first time in five years.

While the temporary extension offers some certainty to farmers, the last-minute compromise did away with another priority of corn producers — making year-round sales of a higher blend of ethanol permanent. Sales of E15 during the summer months are precluded in most states out of environmental concerns, but have been allowed across the county under temporary waivers from the Biden administration.

E15 sales now are allowed year-round in eight Midwestern states, including Iowa, but a move by U.S. Sen. Deb Fischer, a Nebraska Republican, to make it permanent and nationwide was stripped out of the deal, according to the States Newsroom.

What is the future of the debt limit?

House Speaker Mike Johnson, R-La., had insisted lawmakers “meet our obligations” and not allow federal operations to close. But the outcome at the end of a tumultuous week was uncertain after Trump had insisted the deal include an increase in the government's borrowing limit. If not, he had said, then let the closures “start now.”

Johnson's revised plan — without Trump’s debt ceiling demand — was approved 366-34, and it was passed by the Senate by a 85-11 vote after midnight Friday.

“There will be no government shutdown,” said Senate Majority Leader Chuck Schumer, D-N.Y.

Johnson, who had spoken to Trump after the House vote, said the compromise was "a good outcome for the country” and that the president-elect “was certainly happy about this outcome, as well.”

The final product was the third attempt from Johnson, the beleaguered speaker, to achieve one of the basic requirements of the federal government — keeping it open.

But the difficulties raised questions about whether he will be able to keep his job, in the face of angry Republican colleagues, and work alongside Trump and his billionaire ally Elon Musk, who was calling the legislative plays from a distance.

The House is scheduled to elect the next speaker on Jan. 3 when the new Congress convenes. Republicans will have an exceedingly narrow majority, 220-215, leaving Johnson little margin for error as he tries to win the speaker's gavel again.

One House Republican, Rep. Andy Harris of Maryland, criticized Republicans for the deficit spending in the bill and said he was now “undecided” about the GOP leadership. Others are signaling unhappiness with Johnson as well.

Yet Trump's last-minute debt limit demand was almost an impossible ask, and Johnson had almost no choice but to work around that pressure. The speaker knew there wouldn’t be enough support within the slim Republican majority alone to pass any funding package because many Republican deficit hawks prefer to cut the government and would not allow more debt.

Instead, the Republicans, who will have full control of the White House, House and Senate in the new year, with big plans for tax cuts and other priorities, are showing they must routinely rely on Democrats for the votes needed to keep up with the routine operations of governing.

The federal debt stands at roughly $36 trillion, and the spike in inflation after the pandemic struck has pushed up the government’s borrowing costs such that debt service next year will exceed spending on national security. The last time lawmakers raised the debt limit was June 2023. Rather than raise the limit by a dollar amount, lawmakers suspended the debt limit through Jan. 1.

There is no need to raise that limit right now because the Treasury Department can begin using what it calls “extraordinary measures” to ensure that America does not default on its debts. Some estimate these accounting maneuvers could push the default deadline to summer 2025. But that’s what Trump wanted to avoid because an increase would be needed while he is president.

GOP leaders said the debt ceiling would be debated as part of tax and border packages in the new year. Republicans made a handshake agreement to raise the debt limit at that time while also cutting $2.5 trillion in spending over 10 years.

The Chicago Tribune, Bloomberg and Tom Barton of The Gazette Des Moines Bureau contributed to this report.