After a record funding disruption for the U.S. federal government last year, Congress has finally taken a crucial step. On Thursday (January 15), the Senate passed a package of three spending bills, marking the completion of the first funding measures since the government shutdown ended. These bills will provide funding support to several key departments until the end of the current fiscal year, thus averting another shutdown before the end of this month's deadline. While this represents significant progress, a large number of government programs still urgently need funding to maintain the continuity of federal operations. The following details the background, specifics, challenges, and future prospects of this process.

Detailed process of the passage of the first batch of bills

The Senate approved the spending package by an overwhelming majority—82 to 15. The bill covers core departments such as the Department of Justice, the Department of the Interior, the Department of Commerce, and the Department of Energy, and also includes funding for the Environmental Protection Agency, water resources programs, and federal science initiatives. This funding will continue until the end of the fiscal year, ensuring uninterrupted operation in these areas.

Meanwhile, another spending bill targeting the Treasury and State Department passed the House of Representatives on Wednesday and will be submitted to the Senate for consideration after the Senate recess ends next week. The progress of these two bills reflects an initial consensus between the two parties in Congress on the allocation of funds, avoiding the risk of another government shutdown in the short term.

Major developments and remaining challenges after the shutdown crisis

Last year, the U.S. government experienced its longest funding disruption in history, and the bill passed this time is undoubtedly a significant milestone in restoring normal operations. However, it only covers a small portion of the government's funding needs; more than 75% of discretionary funding remains unavailable, including budgets for the Pentagon and numerous large non-defense programs.

If Congress fails to allocate the remaining funds in time, it may be forced to adopt temporary measures to keep the federal government running beyond January 30. Senate Appropriations Committee Chairwoman Susan Collins emphasized in her remarks that the remaining legislation must continue to be considered, avoiding reliance on continuation resolutions that lock in old priorities and are unsuitable for the current reality. She specifically pointed out that a government shutdown would be a completely unnecessary and highly destructive disaster, requiring comprehensive legislation to completely prevent it.

The Negotiation Dilemma of a Tricky Bill

The next two weeks will be a tough test for both houses of Congress, as the most complex bills remain under intense negotiation between the two parties and both houses. Among them, the texts of bills providing funding for the Department of Defense, the Department of Transportation, Housing and Urban Development, and the Department of Labor, Health and Human Services, and the Department of Education are expected to be released midway through the upcoming long weekend, giving lawmakers optimism.

However, the Department of Homeland Security funding bill is stalled, largely due to recent tensions in Minnesota—where Immigration and Customs Enforcement agents shot at least two people, killing one. This incident has complicated negotiations. South Dakota Republican Senator Mike Rounds said appropriations officials are working hard to find a breakthrough.

A new proposal from House Republicans calls for the Department of Homeland Security to equip immigration enforcement agents with body cameras, but Democrats are insisting on further restrictions. Connecticut Democratic Senator Chris Murphy pointed out that the way the Department of Homeland Security's budget is being diverted is unprecedented and requires truly effective constraints. Senate Majority Leader John Thune acknowledged that if one of the 12 annual appropriations bills were to be converted to short-term funding, it would most likely be the Department of Homeland Security's bill.

Details of internal disputes and expenditure adjustments

The complexity of this process is further compounded by the Senate's planned recess next week, while the House of Representatives will enter its constituency work period the following week.

Meanwhile, the House of Representatives is struggling to function with a slim Republican majority, and Speaker Mike Johnson has recently dealt with serious attendance issues and internal party strife, particularly over disputes over funding for specific programs.

Fiscal conservatives, such as Texas Republican Representative Chip Roy, have called these grants “corrupt currency” and criticized specific funds that lawmakers are securing for their own districts.

Nevertheless, the Senate's "small comprehensive" funding bill successfully thwarted hardliners' attempts at massive cuts. It rejected the White House's drastic reductions, opting instead for more moderate adjustments. For example, funding for the National Park Service will be reduced modestly, far less than the 37% cut sought by the White House; the Environmental Protection Agency will be cut by 4%, or $320 million, instead of the more than $4 billion proposed by President Trump.

At the same time, some sectors received increased funding, such as the Office of the United States Trade Representative, which grew by 18%, and the Office of Export Controls at the Department of Commerce, which grew by 23%, which helps in trade enforcement against China and other countries.

Overall, the passage of these first appropriations bills offers hope that the US government will emerge from the shadow of the shutdown, but the urgency of the remaining work and the complexity of the negotiations remind us that the risk of funding disruptions has not been completely eliminated. Congress needs to overcome internal divisions and external pressures within a limited timeframe to ensure all bills are successfully signed into law, thereby achieving the long-term goal of fiscal stability.

Market Impact Analysis

Impact on gold prices: This development will slightly weaken safe-haven demand in the short term, as successfully avoiding a shutdown reduces political uncertainty and risk appetite may rebound slightly, leading to some downward pressure on gold prices. Currently, gold prices are already at a high level (around $4600-$4630 per ounce), but long-term structural support (such as continued central bank gold purchases and expectations of a potential weakening dollar) still dominate. Therefore, the impact will be more of a short-term fluctuation than a trend reversal, and gold prices are expected to maintain an overall strong trend.

Impact on the US Dollar Index: The passage of the bill helps stabilize market confidence in US fiscal policy and may provide slight support for the dollar in the short term, limiting its further decline (the dollar index rose to a six-week high on Thursday). However, in the overall environment of 2026, expectations of Fed easing, fiscal pressure, and global diversification trends will still dominate the dollar's weak trend. This event is unlikely to reverse the medium- to long-term downward pressure on the dollar, and will play a more temporary rather than reversing role.

At 09:31 Beijing time, spot gold was trading at $4605.23 per ounce.