Federal Budget Update

March 12, 2025

The House of Representatives passed a spending bill Tuesday that funds the government and a number of expiring health programs through September, but leaves intact a cut to physicians’ Medicare pay.  The move sends the bill to the Senate, where Republicans need the cooperation of several Democrats to move it past a filibuster and to passage before a midnight deadline on Friday.

The legislation passed 217-213, with one Democrat voting in favor of the bill, known as a continuing resolution, and all but one Republican voting for it. 

The positive outcome for Republicans meant Johnson initiated next week’s recess early, as the chamber has now taken the rest of the current week off. The spending measure — which would keep the federal government funded through Sept. 30 — now lies with the Senate, which has until midnight Saturday to pass it or incur a shutdown.

While the bill fails to address the 2.93% cut to physician fees that the Centers for Medicare and Medicaid Services implemented at the start of the year, it does preserve for six months telehealth and hospital-at-home authorities under Medicare. It also forestalls cuts to Medicaid disproportionate share hospital payments for safety-net providers. Community health centers, graduate medical education and other health programs due to expire on March 31 would get six-month extensions, as well.

The funding bill must pass the Senate by Friday night to avoid at least a partial government shutdown. Republicans hold a 53-47 majority there, but the bill likely will have to meet the 60-vote threshold to overcome a filibuster. Seven Democrats would have to join Republicans in support. Senate Minority Leader Chuck Schumer (D-N.Y.) declined to say whether his members would help.

The bill would keep last year’s spending levels largely flat, but would increase spending for the military by $6 billion. It would slightly decrease spending overall, because it would not include funds for any projects in lawmakers’ districts or states. 

Senate Democrats are under fierce pressure from their base to show that they are willing to fight President Donald Trump and Elon Musk as they make cuts to the federal government. But they’ve also been wary of trying to lean into shutdown brinkmanship — a move that could easily backfire if voters blame them for shuttering the government. The situation will require some creativity or budging from Democrats, however, as the chamber’s filibuster rules mean the stopgap will need to overcome an affirmative 60-vote threshold to pass. Support from at least eight Democrats will be needed to get the bill to Trump’s desk — assuming Sen. Rand Paul (R-Ky.) upholds his pledge to vote against it — but if they decide a shutdown is worse than supporting a bill they don’t like, they may ultimately find themselves falling in line with the Republican majority.

Senate Majority Leader John Thune (R-S.D.) said Americans would blame Democrats for a shutdown if they don’t help the GOP pass the bill.

“I think the American people are going to be interested to see whether the Democrats are going to filibuster, and by filibustering, shut down the federal government,” Thune told reporters. “It is on them if this happens.”

Senate Democrats are under fierce pressure from their base to show that they are willing to fight President Donald Trump and Elon Musk as they make cuts to the federal government. But they’ve also been wary of trying to lean into shutdown brinkmanship — a move that could easily backfire if voters blame them for shuttering the government.

While the Senate can move quickly when every member consents, it must adhere to various procedural schedules if any single member objects, and the vote could be stalled until the end of the week.