In A First In 6 Years, US Govt Shuts Down As Congress Fails To Reach Funding Deal

Last Updated:October 01, 2025, 10:48 IST

The US government officially shut down at 12:01 a.m. on Wednesday, October 1.

US President Donald Trump. (AFP photo)

For the first time in nearly seven years, the United States federal government has entered a shutdown after the Senate failed to approve a stopgap funding bill. The measure, which required bipartisan backing, fell short in a 55-45 vote late on Tuesday. With no agreement reached before the midnight deadline, the government officially shut down at 12:01 a.m. on Wednesday, October 1.

The immediate impact includes the suspension of “non-essential" government services. This could disrupt air travel, delay key economic reports, and shut research labs and small-business loan offices. Agencies have already begun preparing furlough notices for employees.

What did Trump say?

President Donald Trump escalated the political crisis by openly threatening federal job cuts. “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," he told reporters. He added that “a lot of good can come down from shutdowns," suggesting he would use the pause to eliminate programmes linked to Democrats.

The threats come against a backdrop of significant upheaval within the federal workforce. More than 150,000 government employees are already leaving under a buyout scheme the largest such departure in eight decades while tens of thousands have been fired earlier this year.

Political blame game

The deadlock highlights bitter divisions between Republicans and Democrats. Senate Democratic Leader Chuck Schumer accused Republicans of trying to “bully" Democrats by stonewalling on health care subsidies and other priorities. “It’s only the president who can do this. We know he runs the show here," Schumer said after a fruitless White House meeting.

Democrats insist the dispute is about protecting health care for millions of Americans. They want to extend subsidies under the Affordable Care Act and reverse cuts to Medicaid enacted as part of Trump’s tax reforms earlier this year. Republicans, however, accuse Democrats of exploiting the budget to advance partisan demands.

What is a shutdown?

A government shutdown occurs when Congress fails to pass the necessary spending bills or stopgap measures, leaving agencies without legal authority to spend money. Non-essential employees are furloughed without pay, while essential staff such as air traffic controllers, border agents, and military personnel will continue working but without pay until a deal is struck.

The current shutdown will see the Education Department furlough nearly 90% of its workforce, while the Environmental Protection Agency will halt some pollution clean-up projects. The Small Business Administration will suspend loan approvals, and the Labour Department’s monthly unemployment report will be postponed.

What stays open?

Essential services remain operational. Social Security payments, Medicare and Medicaid services, immigration enforcement, and postal services will continue. The military, federal law enforcement, and border security agencies will stay on duty, albeit without immediate pay. Air traffic controllers will continue working, though past shutdowns have shown this can lead to staff shortages and flight delays.

What closes down?

parks and tourist attractions often shut during shutdowns, though policies vary. Visitor centres, guided tours, and Smithsonian museums are likely to close if the stalemate persists. Federal courts may also face curtailed operations in the coming weeks, potentially delaying trials.

Economic consequences

Economists warn that the shutdown could weaken the US economy. Kathy Bostjancic and Oren Klachkin of Nationwide estimated that GDP growth could fall by 0.2 percentage points for every week the government remains closed.

Past shutdowns suggest the effects may take time to materialise. During the 2018-2019 shutdown, the longest in US history at 35 days, air travel became increasingly strained, with unpaid air traffic controllers forced to seek alternative work, raising safety concerns. parks also deteriorated due to the suspension of basic services, leaving garbage uncollected and facilities unusable.

With the House not in session and no breakthrough in sight, the path forward remains uncertain. Senate Republican leader John Thune suggested lawmakers may try again later in the week, but both sides appear entrenched.

As Trump signals he may use the shutdown to push through permanent cuts, and Democrats demand protections for health care, the stalemate threatens to drag on with federal workers and the public bearing the brunt of the consequences.

News world In A First In 6 Years, US Govt Shuts Down As Congress Fails To Reach Funding Deal

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