By Libby Cantrill, Managing Director and Head of U.S. Public Policy

1. What happened? What seemed impossible on Friday – a pivot by Speaker McCarthy to work with Democrats – became inevitable on Saturday morning when Congress passed the 45-day stop-gap funding bill on a wide-bipartisan margin (which also entailed the Senate waiving its usual procedural obstacles). Congress still needs to figure out how to pass the various appropriations bills to fund the government to avoid a shutdown in 45 days (November 17th), as well as find some common ground on both Ukraine funding and border funding. In other words, this is a respite from a shutdown, not a complete reprieve from one.

2. What is next? We are likely to see an effort to begin to try to oust Speaker McCarthy – the third time in history such a formal effort will have been made (1910 and 2015 were the other two times in history; see here) – with possible votes on his speakership later this week. Given Republicans’ four seat majority in the House and the rumored ~6 to 25 Republican members who may vote to eject him, it seems very likely that McCarthy will need Democratic support to save his speakership.

3. Bottom line: After a dramatic weekend with a surprise outcome (to many, including us), the government remains funded, and a potential economic headwind is taken off the table at least for now, but in the process, Speaker McCarthy’s speakership is at risk (to what extent we will find out this week most likely). Congress still needs to find a way forward with broader funding bills, and it is too early to say what is the most likely outcome – do we see a productive next 45 days of bipartisan legislating, or are we in the exact same position in a month and a half? Regardless, Speaker McCarthy has found a way to “keep dancing” for now – although many expect the music to stop for him at some point.