Government Shutdown 2025: What Happened and What’s Next
The federal government has officially shut down as of 12 a.m. on Wednesday, October 1, 2025, due to Congress’s failure to reach an agreement on extending government funding. This shutdown is the result of weeks of disagreements between Republicans and Democrats over how to fund the government, with Democrats pushing for negotiations on health care tax credits to be included in a funding measure. According to the Congressional Budget Office, the last funding lapse, which occurred from December 2018 to January 2019, caused a permanent loss of about $3 billion.
The government funding process typically involves Congress approving a spending bill by the start of the new fiscal year on October 1. However, this year, Democrats have refused to help Republicans extend government funding without addressing health insurance subsidies that are set to expire at the end of the year. Republicans, on the other hand, believe that health care and other issues should be negotiated outside the context of funding the government. As Senate Majority Leader John Thune stated, “We expect the upper chamber to take additional votes to open up the government this week.”
How Congress Funds the Government
Each year, Congress must approve government funding by the start of the new fiscal year. The Constitution outlines that Congress must approve any money spent by the federal government, and bills to approve that spending must originate in the House, pass the Senate, and be signed by the president. The funding process often stretches late into the fiscal year, and Congress has nearly always resorted to stopgap measures to keep the government funded. In recent decades, these funding fights have often gone down to the wire, with the minority seeking to use its leverage to extract concessions.
A meeting between President Trump and congressional leaders on Monday failed to yield an agreement, with both sides trading blame for the shutdown. On Tuesday, both proposals to extend government funding again fell short in the Senate. The House-passed bill, which would have kept the government funded until November 21, was deemed insufficient by Democrats, who pushed for their own proposal to avert a shutdown. Their bill included a permanent extension of enhanced tax credits for Americans who purchase health insurance through the Affordable Care Act marketplace.
Effects of the Shutdown
The shutdown will result in hundreds of thousands of workers being placed on furlough, with essential employees staying on the job but going without pay for the duration of the funding lapse. The Congressional Budget Office estimated that about 750,000 federal employees could be furloughed, with a total daily cost of their compensation around $400 million. Active-duty military members, federal law enforcement officers, and employees at federally funded hospitals will be deemed essential and continue to work. The White House’s Office of Management and Budget has instructed federal agencies to consider reduction-in-force notices, or layoffs, for federal employees in discretionary programs.
The shutdown’s duration remains uncertain, with the last shutdown lasting 34 days. Senate Majority Leader John Thune expects the Senate to take additional votes to open up the government this week, although the chamber will observe the Jewish holiday, Yom Kippur, which begins at sundown on Wednesday and ends Thursday evening. For more information on the government shutdown, visit Here
Image Source: www.cbsnews.com
