On Tuesday, the House of Representatives passed a budget blueprint, beginning the process of creating Donald Trump’s major spending bill. Speaker Mike Johnson cobbled together MAGA Republicans excited about spending cuts and moderate Republicans concerned that aggressive cuts to programs like Medicaid could cost them elections back home.
Prediction markets suggest the funding resolution was an important step in avoiding a government shutdown this year. In the wake of the resolution’s passage, commercial prediction market platform Kalshi’s odds of a government shutdown this year dropped from 62% to 42% before settling in the high 40s on Wednesday morning.
House representatives voted 217-215 to pass the funding resolution, which is the opening move to craft Trump’s tax bill. The current funding blueprint calls for $4.5 trillion in tax breaks and $2 trillion in spending cuts.
House Democrats accused Republicans of fiscal malfeasance for supporting a bill that would add $3 trillion to the country’s deficit. Democrats also spoke out against potential Medicaid cuts that they suspect—and some Republicans fear—will be in the final bill.
Speaker Johnson’s position remains precarious
While government shutdown odds dropped by 20%, Johnson’s odds of leaving his job before the end of the year only dipped by about 5%. His odds of leaving office in 2025 have mostly hovered around the 20s since the government shutdown scare in December 2024.
Current odds suggest that Johnson is reasonably safe in his position, but the “Will Johnson Leave Before 2026” market has spiked during negotiations at close deadlines. In December, Johnson’s odds of leaving the speakership before 2026 peaked at 65% as he struggled to unite Trump, Elon Musk, and House Republicans behind a spending deal.
When the March 14 funding deadline approaches, Johnson’s position as speaker could become much more tenuous than it is after this small legislative victory. He won’t be able to rely on easy victories when Republicans have to face the consequences of large federal program cuts to their constituents.
