Government Shutdown – What to Know and How It Could Affect You

It has been seven years since the last time the United States government entered a shutdown. The last instance occurred during President Trump’s first term of presidency in 2018 due to the disagreement between Trump and the Democrat-led Congress on funding Trump’s $5.7 billion wall on the US-Mexico border. The disagreement lasted 35 days, marking it as the longest government shutdown in U.S. history.

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Beginning October 1, 2025, seven years later in Trump’s second term of presidency, the U.S. government officially entered a shutdown. The current disagreement relates to two bills brought from House Republicans and Democrats that proposed budget resolutions for the 2026 Fiscal Year. Both of which were voted down in the Senate by the opposite party. 

 Republicans proposed bill H.R. 5371, as a “clean” continuing resolution bill that offered a short-term funding solutions that would have kept federal spending levels the same as the 2025 Fiscal Year, allowing the government to remain open through November 2025 or until appropriation bills could be passed. Clean in political terms refers to a bill without policy change, however, the republicans continuing resolution bill came with significant policy change. In return Republicans tied the bill to policies and spending cuts they originally wanted to enact.

One policy included domestic spending reductions to federal programs outside of defense, homeland security, and veteran affairs in order to shield defense spending from cuts. Another major policy was border security provisions that restore many of Trump’s immigration restrictions such as stricter asylum rules and continuing border wall construction. Ultimately, Republicans were trying to corner Democrats into agreeing to their continuing resolution bill by making the government’s funding conditional on policies that they do not agree with. 

Democrats proposed bill S. 2882, an alternative bill similar to the Republicans that offered a short-term funding solution to keep the government from avoiding a shutdown until October 31, instead of November as the Republicans bill had planned for. The Democrat’s bill was introduced to the House and Senate as “keeping the government funded through October 31” with protections to health care and other social programs. Democrats did not introduce a clean bill however the policies introduced with their continuing resolutions seems to be reversing policies that Republicans have enacted within Trump’s presidency.

The Democrats biggest request was insisting Congress decides and controls spending decisions, not the president. This is a direct pushback against executive overreach of funding without legislative approval. Other policies they included were reversing cuts or changes to Medicaid that Republicans pushed for, extend or maintain the premium tax credits under the Affordable Care Act, and protection against unilateral funding changes. Just as the Republicans did, Democrats put these policies into their bill to convince Republicans into agreeing with the policies they disagree on by using the shutdown as leverage.  

The U.S. government shutdown did not happen overnight. Congress essentially had to pass 12 full appropriation bills for the Fiscal Year 2026 to avoid a government shutdown. Appropriation bills provide funds from the U.S. Treasury to specific federal departments, agencies, or programs for their services to continue. Congress failed to pass all the 12 appropriation bills, therefore; to prevent funding lapse, continuing resolutions were introduced with hopes to stall a government shutdown until September 30^th. However, political disagreement between the Republicans and Democrats made new continuing resolutions impossible to be agreed on in the Senate, ultimately causing a lapse in funding and a government shutdown. 

To end the government shutdown, one of several routes could be taken. Congress can pass new continuing resolution or appropriation bills with enough votes from both chambers and with the President’s signature. A compromise deal also known as a “minibus” or “omnibus” can be arranged that combines multiple appropriation bills and address key disputes for both parties to support a bill. Another viable yet unlikely solution is policy concession, where one party agrees to the policy terms of the other party causing the end of the shutdown. In very rare cases emergency funding mechanisms could be placed that allows lawmakers to insert emergency appropriations or use supplemental legislation to maintain funding temporarily. Historically, shutdowns have been short but there is a possibility of a multi-week shutdown. Once a justified funding law is in place, the shutdown will end, and the impact will be reversed.

The first group of Americans to be impacted by the government shutdown are federal employees and contractors. Beginning October 1, 2025, federal employees will be categorized as essential or nonessential. The essential roles such as air traffic controllers/TSA, active-duty military/law enforcement, mail distribution, and benefits distribution are required to work through the shutdown with backpay being reimbursed after the shutdown ends. Nonessential roles are considered ones whose work is not considered critical to national security or the protection of life and property such as administrative staff, national park rangers, or museums staff. Because of the nonessential roles lack of importance to the government, those employees will be furloughed until the government reopens.

In contrast to past shutdowns, Trump’s administration has directed agencies to prepare for a “reduction in force” or mass layoffs. The shutdown significantly impacts nonessential employees with uncertainty if they will have their government job again as they use the pay to provide for their family’s wellbeing. For essential employees, where they still have their jobs, they are being forced to work for free until the shutdown is over and funds return to backpay them. This causes essential employees to have to provide for their families without a stable income for an unknown timeframe. 

As of now, mandatory programs funded through entitlement spending like Social Security, Medicare, and Medicaid will continue to operate their services as normal. Depending on the longevity of the shutdown eventually those programs will be affected. However, low-income families relying on nutrition assistance through food programs will see a decline in services being offered. Individuals relying on timely processing for things like immigration or licenses will face delays. Overall, a macro-economic drag will be faced due to the mass decline in Americans spending during the shutdown. The Congressional Budget Office estimated roughly $11 billion in gross domestic product was lost in the 2018-19 shutdown. 

The 2025 government shutdown highlights the deep partisan divide in Washington, with both Republicans and Democrats using budget negotiations to advance their policy priorities. While lawmakers debate continuing resolutions and long-term spending bills, millions of Americans are left uncertain about their jobs, benefits, and daily services. Whether resolved through compromise, concession, or a sweeping omnibus deal, the outcome will shape not only the nation’s budget but also public trust in government’s ability to function. Until then, the shutdown remains a reminder that political gridlock in Congress carries real consequences for everyday people.