Last Updated:
This marks the first shutdown since the longest in history that lasted 35 days and will stop work at many federal departments & agencies, affecting thousands of government workers
A government shuts down when Congress fails to pass—or the President fails to sign—the necessary appropriations or continuing resolution (CR) bills to fund federal agencies, and no temporary funding measure is in place. (AFP)
The government of the United States began shutting down after midnight on Wednesday as lawmakers and President Donald Trump failed to break a budget impasse during acrimonious talks that hinged on Democratic demands for health care funding.
Wednesday marks the first shutdown since the longest in history that lasted 35 days and will stop work at multiple federal departments and agencies, affecting hundreds of thousands of government workers.
Recommended Stories
Warning of impending job cuts, Trump blamed Democrats over the stalled talks and said: “So we’d be laying off a lot of people that are going to be very affected. And they’re Democrats, they’re going to be Democrats.”
News18 takes a look at what a government shutdown means, how it affects you and what is the way forward.
What’s A Government Shutdown?
A government shuts down when Congress fails to pass—or the President fails to sign—the necessary appropriations or continuing resolution (CR) bills to fund federal agencies, and no temporary funding measure is in place. According to Britannica, under the Anti-deficiency Act, agencies lacking appropriations must suspend non‑essential operations until funding is restored.
What Went Wrong In US?
The Guardian reported that things came to a head when Democrats blocked a “stopgap” funding bill proposed by Republicans, demanding that it include extensions of Affordable Care Act (ACA) premium subsidies and undo cuts to health programs. Republicans, who control the House, have tried to use the shutdown as negotiating leverage to force spending priorities and cuts, which Democrats oppose.
Almost all Senate Democrats voted against a House-passed, seven-week stop-gap funding measure hours ahead of the midnight deadline, thus shutting down the government.
However, there is more to the situation than what meets the eye. According to AP, the current administration is directing agencies to prepare not just for temporary furloughs but for permanent layoffs in places where programmes don’t align with the administration’s priorities.
This is a sharper posture than in many past shutdowns, where the assumption was that workers would return and get back pay. Thus, experts say, the standoff is not just about short-term funding but about deeper debates over size, scope, and priorities of the federal government.
What Happens When A Shutdown Begins?
Non‑essential (non‑excepted) employees are put on furlough: they keep their jobs but are barred from working until the shutdown ends once the government shuts down, CNBC reported. According to The Guardian, essential or “excepted” employees continue working even without pay, because their functions protect lives, property, or national security.
Once the shutdown ends, furloughed employees are generally guaranteed retroactive pay for the period they were not working. However, government contractors are not guaranteed compensation for the shutdown period.
How Does It Affect You, The Common Citizen?
The services that are halted or continue depend on whether they are deemed non‑essential or mandatory:
The services and agencies that are likely to be shut or suspended include national parks, museums, and public attractions, which may close or operate with limited staff. Routine inspections (food safety, environmental, etc.) may be suspended, The Washington Post reported. Apart from this, new permitting, licensing, or grant-making tends to be halted. Many programmes in education, research, non‑critical health functions and regulatory oversight may be scaled back or suspended.
Services and programmes that continue include mandatory spending programmes (not requiring annual appropriations) such as Social Security, Medicare, and Medicaid. Essential functions tied to public health, safety, national defence, law enforcement, air traffic control, and border security often remain operational. The US Postal Service, which is an independent agency, continues operations. However, even for continuing functions, there can be indirect disruptions—for instance, staffing shortages or supply constraints may degrade performance.
Key economic reports (jobs data, inflation, unemployment claims) may be delayed or suspended, Reuters reported. Agencies like the IRS will largely stop nonessential tax processing, audits, and phone support. Apart from this, the Department of Education may furlough large portions of its staff; processing of new federal grants may stall, though existing student aid and loan servicing may continue in some fashion.
Why Is This Shutdown Different?
The federal government has shuttered 21 times since 1976, when Congress enacted the modern-day budget process, an AFP report said.
Some stoppages have lasted only a few hours, not long enough to affect government operations. The longest began on December 22, 2018, when Democrats and Trump found themselves at an impasse over $5.7 billion that the President was demanding for a border wall during his first term.
While government shutdowns are not unprecedented in US history, several features make the 2025 standoff stand out:
• Shift toward permanent job cuts: The Guardian reported that agencies have been asked to draft plans not just for furloughs, but for reductions in force, which is permanent layoffs in programmes not aligned with the administration’s goals.
• Greater tension over health/subsidy funding: Disagreement over ACA subsidies and Medicaid funding has become a central fault line in the negotiations. Democrats insist on maintaining or restoring subsidies; Republicans push to tie those to broader spending cuts. If subsidies lapse, millions could lose coverage.
• Potential ripple effects in wider economy and markets: Analysts warn that delays in economic data issuance or a prolonged shutdown could undermine investor confidence and complicate Federal Reserve decisions. Some estimates suggest each week of a shutdown could shave off significant GDP growth.
• Higher stakes for federal employees and contractors: With the possibility of permanent layoffs, many federal employees may face greater uncertainty. Contractors, especially, may see suspended payments with no guarantee of retroactive compensation.
How Does A Shutdown End?
There are three main paths to resolution
• Pass a full-year appropriations package: The Congress completes and the President signs all required funding bills, restoring authority and reopening suspended operations.
• Pass a continuing resolution (CR): A CR is a stop-gap arrangement extending existing funding levels (often slightly adjusted) until a fuller deal is reached.
• Use a hybrid or piecemeal approach: Sometimes, Congress passes partial funding bills for certain departments or agencies to reinstate core functions, while negotiating others.
Once a funding measure is adopted, agencies move to restore operations. Furloughed employees return, excepted workers are retroactively paid, and suspended services are restarted.
What Are The Challenges In Ending A Shutdown?
To start with, there’s no built‑in deadline. Shutdowns last until Congress acts or the President signs a funding bill. Also, the longer a shutdown continues, the more political and economic pressure builds. Public opinion, media, federal workers’ distress, and business impacts can push both parties toward compromise, according to The Business Insider. Some crucial services may be restored first, while less urgent functions remain offline until full funding is cleared.
What Happens If The Shutdown Drags On?
A stretched shutdown could lead to delayed paychecks and financial strain for hundreds of thousands of federal workers who are furloughed or working without pay. If permanent layoffs materialise, the impact will be much bigger.
Services and public access too could be hit, with delays in passport processing, visa services, and immigration proceedings. Apart from this, there could be halting of clinical trials, research funding, or nonemergency health programmes and suspension of environmental and safety inspections, which could pose public risk.
National parks and tourist attractions may be shuttered or operate with reduced services, hitting tourism and local economies.
The Federal Aviation Administration (FAA) would furlough many staff; air traffic controllers would continue but without immediate pay, potentially causing delays or reduced capacity, a Reuters report said. TSA agents and airport security workers are essential, but some may call in sick if unpaid for long, leading to longer lines.
Suspension or delays in the release of critical economic indicators (jobs, inflation) also muddles market signals and complicates monetary policy. Increased uncertainty may dampen business investment and consumer confidence.
About the Author
Apoorva Misra is News Editor at News18.com with over nine years of experience. She is a graduate from Delhi University’s Lady Shri Ram College and holds a PG Diploma from Asian College of Journalism, Chennai. S…Read More
Apoorva Misra is News Editor at News18.com with over nine years of experience. She is a graduate from Delhi University’s Lady Shri Ram College and holds a PG Diploma from Asian College of Journalism, Chennai. S… Read More
United States of America (USA)
October 01, 2025, 12:14 IST
Loading comments…
Read More
