If you have been following the news, you may have noticed talk of another government shutdown, and as of today, it has officially begun. October 1st marks the beginning of the new fiscal year for Congress, when a new budget is supposed to take effect each year. However, because Congress failed to pass all of the appropriations bills from the fiscal year 2025 budget cycle, the government has shut down. The last shutdown occurred in 2018 and was the longest in U.S. history at 35 days.
For context, the federal fiscal year runs from October 1st to September 30th. The president submits a budget proposal each February, and Congress works through the spring and summer to approve 12 separate spending bills that fund specific programs and agencies. If those bills are not approved by October 1st, lawmakers can pass a temporary “continuing resolution” to keep the government running. This year, that did not happen.
So what does this mean, and why did the government shut down? Since not all 12 appropriations bills were approved by the start of the new fiscal year, many government functions are now suspended until Congress reaches an agreement. Federal workers are divided into “essential” and “nonessential” groups: those deemed essential, such as air-traffic controllers, border patrol agents, and law enforcement, must keep working without pay, while nonessential workers are furloughed and sent home, also unpaid.
The reason for this shutdown is that the Democrats and Republicans could not agree on how the funds should be allocated. Even though Republicans control both the House and the Senate, they still needed 60 votes in the Senate to pass a budget or temporary funding bill, and they could not get there. Democrats want to extend tax credits that make health insurance more affordable for millions and undo cuts to Medicaid and other health programs. Republicans are pushing back, focusing on defense spending and tax policies instead. They were able to pass their plan in the House, but it stalled in the Senate.
As a result, many government services are now on hold until Congress reaches a deal. Around 750,000 federal workers have been furloughed without pay, while “essential” employees must keep working without a paycheck. Social Security and Medicare benefits will continue, but programs like passport processing, food assistance programs, and federally funded preschools could face delays. Agencies like the Centers for Disease Control and Prevention (“CDC”) and the National Institute of Health (“NIH”) are furloughing staff and pausing research, and national parks might stay open but without staff, which has caused issues in past shutdowns.
Shutdowns also have serious effects on the economy. During the last shutdown in 2018, an estimated $11 billion was lost from the US economy. Economists believe the 2025 shutdown could be worse than the last, reducing US economic growth by 0.1 to 0.2 percentage points every week. Those numbers might sound small, but the effects compound quickly. If the shutdown continues, it could create instability in the financial markets, which could hurt the US economy in the long run.
Right now, both parties are refusing to budge. Democrats say they are protecting healthcare, while Republicans blame Democrats for blocking spending. Until they reach a compromise, hundreds of thousands of workers and everyday Americans will continue to feel the impact. As it stands, no one knows when the shutdown will end, leaving everyone waiting to see what happens next.
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