On Thursday, the House turned down a contingency plan proposed by House Speaker Mike Johnson (R-La.) aimed at averting a government shutdown and suspending the debt limit.

What Happened: Johnson's measure, introduced only hours before the vote, failed to secure the necessary two-thirds majority for approval, receiving a 174-235-1 vote, reported The Hill. The bill encountered opposition from Democrats, led by Minority Leader Hakeem Jeffries (N.Y.), along with a few conservative Republicans, mainly due to its inclusion of a two-year debt limit suspension, a provision requested by President-elect Donald Trump.

The future course of action for Johnson remains uncertain. With the Republican opposition, the bill is unlikely to pass if Johnson tries to push it through a regular rule process that only requires a simple majority.

If no legislation is approved by Congress by 11:59 p.m. on Friday, the government will face a shutdown. This failed vote is a setback for Johnson, who is striving to prevent a shutdown by the impending deadline and retain his leadership position in the coming year.

The proposed bill would have maintained the government funding at existing levels through March 14, suspended the debt limit for two years, and allocated approximately $100 billion in disaster relief and about $10 billion for farmer economic assistance.

Despite President-elect Trump's endorsement of the package, a few Republicans promptly rejected the legislation. Democrats also overwhelmingly opposed the bill, with lawmakers reportedly chanting "hell no" during a closed-door House Democratic Caucus meeting after the bill's introduction.

Why It Matters: Earlier, U.S. Congressional leaders had reached a bipartisan agreement to extend government funding and avert a shutdown. However, this agreement was rejected by House Republicans under pressure from President-elect Trump, Vivek Ramaswamy and Elon Musk, leading to the current situation. Ramaswamy and Musk are the leaders of the Department of Government Efficiency, a body whose task it is to cut wasteful government spending.

Trump's unexpected dismissal of the bipartisan proposal has escalated the fears of a U.S. government shutdown ahead of Christmas. However, research firm Edward Jones suggests that markets tend to remain positive half the times during past government shutdowns since 1976, despite the short-term volatility introduced by such political events.

This story was generated using Benzinga Neuro and edited by Shivdeep Dhaliwal