U.S. Government Slips into Shutdown After Congress Fails to Pass Funding Bill

1 October 2025

South Dakota Sen. John Thune and President Donald Trump at a White House meeting in 2018. Chris Kleponis - Pool/Getty

In the early hours of October 1, 2025, the federal government of the United States entered an official shutdown after Congress failed to agree on appropriations to keep agencies operational beyond the fiscal year deadline. The impasse stems largely from a fierce battle over healthcare funding and the continuation of key subsidies under the Affordable Care Act, which Democrats insist must be preserved while Republicans resist restoring funding that had been cut.

As the clock struck midnight Eastern Time, nonessential federal services were halted, and hundreds of thousands of federal employees were put on furlough without pay until the standoff is resolved. Essential functions such as air traffic control, border security, and postal operations will continue — though staff may have to work without immediate compensation. Meanwhile, Social Security and Medicare payments are expected to remain in place, though delays on processing new applications may follow. Many national parks, museums, and discretionary programs will see temporary closures or scaled-back services.

The shutdown marks the first of its kind since Trump’s prior term, when a 35-day shutdown stretched from December 2018 into January 2019. Complicating matters this time is a directive by the White House’s Office of Management and Budget, under Russ Vought, to explore permanent reductions in the federal workforce during this lapse, which could alter how agencies approach staffing during and after the shutdown.

In public remarks, House Democratic Leader Hakeem Jeffries criticized the shutdown as purposefully engineered by Republicans and Trump to ram through policy priorities while sidestepping normal legislative process. The Republican response has largely blamed Democrats for insisting on restoring ACA subsidies and Medicaid spending that were cut earlier this year demands Republicans say they consider separate from the core funding bills.

Analysts warn the economic fallout could be steep. The Congressional Budget Office’s projections suggest daily losses of roughly $400 million in federal compensation alone, not to mention downstream costs on consumer confidence, markets, and local economies. Some sectors already are bracing: contract workers dependent on federal projects are left in limbo, grant programs may stall, and research efforts could slow as agencies scale down operations.

Observers note that this shutdown differs from past ones because of the possibility of structural shifts in how federal agencies may staff and operate going forward. The administration’s apparent aim to leverage the shutdown to shrink parts of the federal government and reconfigure certain programs signals a shift in how funding lapses might be weaponized politically.

For ordinary Americans, immediate concerns now hover over disrupted services, delayed approvals, and uncertainty about who will get paid and when. For federal workers and contract employees, the shutdown means weeks of financial strain. Whether the shutdown will be brief or drawn out remains unknown. Past closures have lasted hours, days, or weeks and this one could test how deeply partisan politics can affect daily life and governance in the US.