Why Did the Federal Government Shut Down? And What Happens Now?
The federal government officially shut down many of its operations at 12:01 a.m. on October 1, 2025.1 This is the 15th government shutdown since 1980. Most were short, lasting one to three days. The longest lasted 34 full days, from December 2018 to January 2019.2
It’s impossible to predict how long the current shutdown might last, but it may be helpful to know more about why it happened and what you can expect if it continues.
Zero Out of 12 Appropriations Bills
The federal fiscal year begins on October 1. Under normal procedures, Congress should pass 12 appropriations bills by that date. These bills fund federal activities such as employee salaries, national parks, food safety inspections, and defense programs.
These bills fall under discretionary spending, which allows Congress to set funding levels each year. Federal agencies benefit when they know their budgets before the fiscal year starts. However, Congress has failed to pass all 12 bills on time since FY 1997.
Past Precedent
During the 2018–19 shutdown, Congress passed five of the 12 appropriations bills before the shutdown began. That partial funding helped limit damage to government operations.
This year, Congress has passed none of the 12 bills. Some agencies, mainly within the Department of Defense and the Department of Homeland Security, received funding through the One Big Beautiful Bill Act passed this summer. That funding may allow limited operations to continue.
Continuing Resolutions and Omnibus Spending Bills
To gain time for negotiations, Congress usually passes a continuing resolution (CR). A CR temporarily extends funding at current or prior-year levels. These bills keep the government open while lawmakers work on full-year funding.
Congress rarely passes appropriations bills individually. Instead, lawmakers often bundle them into omnibus spending bills. These large bills may also include unrelated policy provisions.
Current Political Situation
The U.S. Constitution gives the House of Representatives the power to initiate revenue bills. The House typically passes funding legislation first and sends it to the Senate.
The House requires a simple majority to pass legislation. The Senate usually needs 60 votes due to the filibuster rule. This rule forces bipartisan cooperation.
Senate Vote Outcome
The House passed a continuing resolution that would extend funding for seven weeks. Senate Republicans, except one, supported the bill. Three Democrats also voted in favor, bringing the total to 55 votes. The bill fell five votes short of the required 60.
Earlier that evening, a Democrat-sponsored continuing resolution also failed.
Dispute Over Health Care Funding
Democrats want to reverse Medicaid spending cuts. They also demand an extension of Affordable Care Act (ACA) subsidies, which are set to expire on December 31, 2025.
If Congress allows the subsidies to lapse, many Americans could face higher health insurance premiums. Republican leaders say they may support an extension, but not within the continuing resolution.
Legal Limits During a Shutdown
Federal law prevents the U.S. Treasury from spending money without congressional approval. As a result, agencies that rely on discretionary funding cannot pay employees or maintain normal services.
Each agency follows its own shutdown plan. Agencies continue essential services, mainly related to public safety. Congress usually authorizes retroactive pay once funding resumes.
Impact on Key Services
Services That Continue
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Mail delivery continues because the U.S. Postal Service is self-funded.
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Social Security, Medicare, and Medicaid payments continue because they do not rely on annual appropriations.
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Interest payments on Treasury securities continue.
Federal Workers and Contractors
Federal employees do not receive pay during a shutdown. Essential workers must continue working without pay. Nonessential workers face furloughs.
The Trump administration has instructed agencies to use the shutdown to reduce their workforce. Previous shutdowns did not include such measures.
Congress usually reimburses lost wages after funding resumes. Private contractors, however, do not receive guaranteed back pay.
Transportation and Travel
Air travel may suffer disruptions. During the 2019 shutdown, TSA absenteeism caused long lines, flight delays, and gate closures.
Inspections and Public Services
Environmental inspections and food safety checks may stop. Some national park areas remain open, especially those supported by visitor fees. Visitor services and staffed facilities may close.
IRS Operations
The IRS can operate for the first five business days using special funding. After that, furloughs may halt income and Social Security number verifications. These delays could affect mortgage approvals and tax refunds.
Education and Financial Aid
Federal student loans and grants should continue. FAFSA processing also continues. Extended shutdowns could slow processing and reduce support. Schools on federal land may temporarily lose funding.
Assistance Programs
SNAP and WIC benefits continue for now. Officials remain unsure how long funding will last without congressional action.
Economic Impact
Short shutdowns usually have a limited economic impact. Congress often restores lost wages, which offsets short-term losses.
Long shutdowns cost more. The Congressional Budget Office estimated that the 2018–19 shutdown reduced GDP by $11 billion. About $3 billion of that loss never recovered.
Past shutdowns caused only mild market volatility. A prolonged shutdown, however, could have a larger temporary impact. Monitoring agency updates remains important if the shutdown continues.
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