US politicians have rejected a spending bill endorsed by president-elect Donald Trump – leaving Congress with no clear plan to avert a fast-approaching government shutdown.

On Wednesday, Mr Trump dismissed a bipartisan compromise, which Republicans and Democrats had reached to prevent a shutdown just days before the Christmas winter break.

Instead, he urged Republicans in the House of Representatives to back a new deal which included a three-month extension of government funding and a two-year suspension of the debt limit into January 2027. The debt ceiling caps the amount the federal government can borrow.

Hakeem Jeffries, the House minority leader and top Democrat in the chamber, called the revamped Republican proposal “laughable” – and the bill was rejected on Thursday night by a 175-235 vote, with all but two Democrats and 38 Republicans voting against it.

Several Republicans had said they were not interested in getting rid of the debt ceiling if they did not also cut spending.

“It’s like… increasing your credit card limit, while you don’t do anything to actually constrain spending,” said Republican Representative Chip Roy.

The outcome is a massive setback for Mr Trump and his billionaire ally Elon Musk, who has been tasked by the incoming president with pruning the federal budget.

Musk, a tech entrepreneur and the world’s richest person, led the charge earlier in the week against the bipartisan funding deal in dozens of posts on his social media platform X, describing it as “criminal”. His opposition led support for the package to quickly crumble.

Congress now has until midnight on Friday to approve a spending bill that would avert a government shutdown.

“We’re going to regroup and we will come up with another solution, so stay tuned,” House Speaker Mike Johnson said after the vote.

But Mr Trump remained defiant, insisting Congress scrap the debt ceiling, or extend it to 2029.

“Congress must get rid of, or extend out to, perhaps, 2029, the ridiculous debt ceiling. Without this, we should never make a deal,” he said in a post on Truth Social on Friday morning.

He has repeatedly urged Republicans in the House to tie up loose ends before he takes office on 20 January.

It leaves the government in limbo with just hours to thrash out a new bill to put to a vote.

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What a government shutdown means

If the House fails to approve a spending bill or extend the deadline a government shutdown will begin impacting federal employees and the public services they provide.

Essential government agencies like the FBI, Border Patrol and the Coast Guard would remain open.

But the Transportation Security Administration has warned travellers could face long lines at airports.

National parks and monuments would close, and while troops would stay at their posts, many civilian employees in agencies like the Department of Defence would be sent home.

Sometimes federal workers are furloughed, meaning they keep their jobs but temporarily don’t work until the government reopens.

Other federal staff may stay on the job but without pay, with the expectation they would be paid back in full once the government reopens.

Courts would also be affected, with civil proceedings paused, while criminal prosecutions continue.

Automated tax collection would stay on track, but the Internal Revenue Service would stop auditing tax returns.

The last government shutdown – the longest in history – took place in December 2018 and January 2019 during Mr Trump’s first term in The White House.

The post may be seen as glittering and the man as controversial and divisive but beyond those truths, the role of British ambassador to Washington is pivotal and relationship-defining.

That is particularly the case right now: to navigate the “special relationship” through Donald Trump‘s second presidency.

And so this is not a decision that would have been taken without serious consideration despite the baggage some may see Lord Mandelson as carrying.

It follows months of speculation over who could get the job.

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Back last summer, before Trump won the election, a candidate had already been identified by former prime minister Rishi Sunak. He’d given the nod to his national security advisor Sir Tim Barrow, a former ambassador to Russia and the EU.

But then Sunak lost the election. He was out along with his pick. One of diplomacy’s best jobs and Washington’s finest buildings was almost to be Barrow’s, but not quite. What a blow.

Trump’s victory focused minds. It required a particular candidate and doubtless a particular type of character – not necessarily the same type as would have been chosen to navigate a Harris administration.

Lord Mandelson is a political shapeshifter. He is a sharp and agile operator. He is decisive and direct. But he also understands the sensitivities of navigating Trump’s unpredictable and transactional style.

All those traits could be applied to the person Lord Mandelson will take over from.

Dame Karen Pierce became ambassador in 2020 towards the end of Trump’s first term.

A career diplomat, she moved into the role after the previous ambassador, Sir Kim Darroch, was effectively kicked out of America by Trump after a series of less-than-complementary diplomatic cables were leaked.

Dame Karen and her team rebuilt the relationship with Trump’s team and then fostered good terms with the Biden administration with close work on issues like Ukraine.

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And under her leadership the embassy has forged close ties with the incoming Trump administration.

Some view Trump’s presidency as an existential challenge for global diplomacy. Pierce does not see him in quite those terms and nor does Peter Mandelson.

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While an extension of her term was an option for Sir Keir Starmer, sources tell me that it seems more sensible to build on the work she has done with a new ambassador who can get to know the incoming White House team from day one.

His trade background will be seen as vital. It’s a background Pierce doesn’t have. Carving out some sort of trade deal with America at a time when Trump is promising stinging tariffs will be a challenge.

Where Mandelson may fall short is foreign and military policy. In a particularly unstable world, US-UK foreign policy alignment is vital. Mandelson’s experience here does not compare to that of Karen Pierce.

Hours after the Lord Mandelson announcement, embassy staff gathered for their Christmas party in the ambassador’s residence.

No Ferrero Rocher but certainly a nostalgic vibe. Pierce has been diplomatically very effective and is very popular among staff.

Luigi Mangione, the man accused of shooting dead UnitedHealthcare boss Brian Thompson, has arrived in New York where he faces new charges.

The 26-year-old was flown to Manhattan by plane and helicopter after he agreed to be extradited from Pennsylvania, where he was arrested last week after five days on the run.

He now faces fresh federal charges in relation to the shooting of father-of-two Brian Thompson outside a Hilton hotel in Manhattan on 4 December.

The additional charges include murder using a firearm, two charges of stalking and an additional firearms offence.

The charge of murder by firearm could bring the possibility of the death penalty if he is convicted – but prosecutors have not said whether they will pursue such a punishment.

Mangione waived his right to an extradition hearing at Blair County Court in Pennsylvania and was immediately turned over to at least a dozen New York Police Department (NYPD) officers.

The NYPD quickly led him to a waiting SUV and he then boarded a small plane bound for New York.

Mangione was arrested on 9 December after he was spotted at a McDonald’s and charged with murder the next day.

On 18 December, he was charged with murder as an act of terrorism. He could face life in prison without parole if convicted. He could appear in New York state court for arraignment today or tomorrow.

Sky News previously reported how court documents said Mangione began shaking when officers asked if he had been in New York recently.

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Upon being arrested, authorities said Mangione was carrying the gun used to kill Mr Thompson, a passport, a fake ID and about $10,000 in US and foreign currency.

Mangione, a computer science graduate from a prominent Maryland family, was carrying a handwritten letter that called health insurance companies “parasitic” and complained about corporate greed, according to a law enforcement bulletin obtained by The Associated Press last week.

In Pennsylvania, Mangione has been charged with forgery and illegally possessing an unlicensed gun.