After Democrats blocked a short-term funding bill supported by Republicans that did not satisfy their demands, the US government officially went into shutdown. At midnight, funding expired, leaving the Capitol unsure of what to do and lawmakers at a standstill.

This is the first government shutdown since the five-week shutdown that occurred during former President Donald Trump's first term in 2018–2019. Similar to past shutdowns, the ramifications will be extensive: numerous federal services will be suspended, social safety net programs may be interrupted, and hundreds of thousands of civil servants will not be paid.

Essential vs. Non-Essential Services

Under shutdown regulations, federal agencies are required to suspend the activity of "non-exempted" employees. "Exempted" personnel, including those in public security and safety, are required to continue working but will not receive pay until the deadlock is broken. This implies hospital medical care, border patrolling, law enforcement, air traffic control, and Social Security and Medicare benefits payment will go on. Yet, activities such as benefit verification and issuance of new cards may be suspended.

Meanwhile, numerous everyday activities would come to a stop. Federally funded food aid programs, food safety inspections, student loan operations, immigration court hearings, government pre-schools, and national parks would have to reduce their services or shut down for a while. If the shutdown continues, air and road travel would be delayed, especially if unpaid federal workers fail to report to work.

The Human Impact

The nonpartisan Congressional Budget Office has estimated that as many as 750,000 federal workers may be furloughed. Typically, these employees receive back pay after funding is restored, though President Trump has suggested he may move toward permanent layoffs. “We’ll be laying off a lot of people,” he said, suggesting that many of those affected would be Democrats.

Such comments have increased tensions, particularly coming at a time when the federal government is already facing its largest staffing reduction in decades. More than 150,000 workers will be leaving this week as part of buyouts, and tens of thousands more have already been terminated this year.

Economic Stakes

Though its immediate economic effects might be restricted, experts caution that a long-term closure would chip away at growth, shake markets, and further undermine public confidence. Economists put the cost of the shutdown at 0.1 to 0.2 percentage points of US GDP growth for each week it lasts. This shutdown could have even wider implications than the one in 2018, as additional funding bills are still in limbo.

A Political Deadlock

The current standoff indicates growing divides in Washington. Democrats demand that any spending bill must contain permanent subsidies under the Affordable Care Act, which expire at the end of the year. Otherwise, healthcare premiums for about 24 million Americans will increase substantially especially in Republican-controlled states like Texas and Florida, which have opposed wider coverage expansion. Democrats also demand assurances that Trump will not be able to reverse these steps if they are enacted into law.

Republicans, in turn, believe that healthcare can be addressed independently of government funding, staging a high-stakes confrontation. Trump has further ratcheted up the stakes by threatening to cut programs popular with Democrats and widening the possibility of federal firings.

What Lies Ahead

The shutdown placed Washington in a stalemate, with no obvious route to agreement. The government has shut down 15 times since 1981, although the majority lasted only a few days. The latest Trump shutdown was the longest in US history.

This time, the battle is over healthcare an issue with enormous ramifications for millions of Americans. Until there is a deal between lawmakers, instability will ripple through federal services, the economy, and the everyday lives of government employees and citizens alike.

About the Author

Ryan Parker

Ryan Parker is a Managing Editor at Business Minds Media.