Congress returns to funding fight and debt limit in lame duck

Congress returns to Washington on Monday with a crowded legislative agenda and a December 11 government funding deadline, CNBC reported.

The lame duck session of the 119th Congress must pass a continuing resolution or full-year appropriations to avoid a shutdown. Lawmakers also need to pass the National Defense Authorization Act, and they may tackle permitting reform, college athlete compensation rules, and a ban on congressional stock trading. But the dynamic has shifted: Republicans come back diminished after substantial midterm losses, and Democrats have little incentive to cut deals before they take commanding majorities in January.

Democrats swept to at least 255 seats in the House and could emerge with as many as 56 seats in the Senate. With those majorities looming, the party’s calculus is to wait rather than compromise. Why give Republicans concessions now when you can write the bill yourself in two months?

Government funding

Current funding expires December 11. Congress must pass another continuing resolution to maintain current spending levels or a full-year suite of appropriations bills before then to avoid a shutdown. Appropriations bills require bipartisan majorities due to the Senate’s 60-vote filibuster threshold.

Democrats are unlikely to negotiate a full year of government funding before the new Congress is sworn in. They will soon hold commanding majorities in both chambers and can use that power to extract concessions from the White House, as CNBC’s politics coverage has detailed. The most likely outcome is a short-term continuing resolution that kicks the funding fight into January, when Democrats control the gavels.

Sen. Patty Murray, D-Wash., the presumptive chair of the Appropriations Committee, made the posture clear in a post on X. “This former preschool teacher is going to teach President Trump a simple lesson: The power of the purse belongs to CONGRESS! It’s NOT Trump’s money. Taxpayer dollars belong to the American PEOPLE.”

The electoral loss of Sen. Susan Collins, R-Maine, who chairs the Senate Appropriations Committee, adds another wrinkle. Collins lost reelection to Democrat Troy Jackson, ending a five-term career. Her departure removes one of the “four corners” of spending talks and reduces the Republican negotiating capacity.

The debt ceiling

The federal debt hit $40 trillion for the first time in September, bumping up against the $41.1 trillion ceiling written into the GOP’s 2025 budget reconciliation law. The Bipartisan Policy Center said Treasury is likely to hit its maximum borrowing capacity by mid-summer, and Bank of America estimates the U.S. may no longer be able to meet all its obligations by November 2027.

Some lawmakers, including Sen. Kevin Cramer, R-N.D., have called for Congress to raise the debt limit before Republicans lose control. Republicans could theoretically do it in a budget reconciliation package, as they did with their 2025 law. But cobbling together a post-election coalition with narrow margins and defeated members who may not show up to vote would be difficult.

Democrats may prefer to use the debt limit as a bargaining chip in the next Congress. If they let the limit become a crisis in 2027, they can use it to force concessions from the White House. The political calculation is that a debt limit crisis under a Republican president hurts the president more than it hurts Congress, especially if Congress is controlled by Democrats.

The defense bill

The House passed a version of the NDAA in July, authorizing more than $1 trillion in defense spending. But Senate Democrats blocked their chamber’s version over concerns about the Iran war. “Donald Trump is dragging America deeper into a war in Iran with no authorization, no plan, and no exit strategy. Democrats will not go along,” Senate Minority Leader Chuck Schumer, D-N.Y., said at the time.

The NDAA is typically seen as must-pass, bipartisan legislation. But the Iran war has politicized it, and Defense Secretary Pete Hegseth faces a vote on articles of impeachment upon Congress’s return. Democrats have been skeptical of the Pentagon’s budget asks as the expensive war drags on, and the impeachment vote will further poison the well.

The legislation also drew pushback from businesses over a provision restricting Pentagon contractors from executing stock buybacks and paying dividends without Defense Department approval. That provision is opposed by the defense industry, which argues it would reduce capital returns to shareholders and make defense stocks less attractive.

Permitting, NIL, and stock trading

The Senate plans a procedural vote on an energy permitting reform deal struck before the election. The deal could be in jeopardy now that Democrats have won commanding majorities. Hakeem Jeffries, the likely next House Speaker, did not support the permitting deal, Politico reported. Democrats may want to secure a better deal in the next Congress.

The Senate approved a bipartisan package in September establishing federal rules for college athlete compensation, but the legislation faces opposition in the House. The yearslong effort to ban members of Congress from trading individual stocks could also get floor time. Sen. Todd Young, R-Ind., called for action in the lame duck, and Jeffries listed it as a priority for the next Congress.

The stock trading ban has been stymied by leadership from both parties in previous Congresses. The current dynamic is different: Democrats want to claim the issue as part of their anti-corruption agenda, and Jeffries explicitly listed it in his letter announcing his candidacy for speaker. “We must root out corrupt price gouging, clean up the mess at the Supreme Court and ban Members of Congress from trading stocks. Accountability begins at home,” he wrote.

What I think

The lame duck session is going to be messy. Republicans are demoralized and diminished, Democrats are emboldened and waiting for January, and the legislative calendar does not care about either party’s feelings. The December 11 funding deadline is real, and a shutdown would be politically damaging for everyone.

The most likely outcome is a short-term continuing resolution that funds the government through January or February, when Democrats can write their own bill. That is the path of least resistance, and it is the path that both parties have taken in similar situations before. The risk is that a faction of House Republicans refuses to go along, as has happened in previous funding fights, and forces a shutdown.

The debt limit is the bigger issue. If Republicans do not raise it in the lame duck, it becomes a Democratic problem in the next Congress. Democrats could raise it on a party-line vote using reconciliation, but doing so would require them to own the debt increase politically. The smarter play is to force Republicans to raise it now, while they still have the ability to do so without Democratic votes. But Republicans may not have the votes, and Democrats may not want to help.

The Hegseth impeachment vote is the wild card. If Democrats push it in the lame duck, it could derail everything else. The NDAA, the funding resolution, and the debt limit all require bipartisan cooperation, and an impeachment vote would make cooperation impossible. The smart play for Democrats is to hold the impeachment vote for January, when they have the majority and can afford to spend political capital on it. But the base will want a vote now, and the base is energized.

The stock trading ban is the one item that could actually pass. It has bipartisan support, it is popular with the public, and both parties have an incentive to claim credit. If anything gets done in the lame duck beyond a continuing resolution, this is the most likely candidate.