Wednesday 01 / October / 2025
Washington DC: The US federal government has officially entered a shutdown as Democratic and Republican lawmakers have failed to reach a funding deal.
US President Donald Trump's administration has threatened mass federal layoffs in the case of a shutdown.
The shutdown brings uncertainty not only for federal workers, but also the US economy as a whole.
What does the US federal government shutdown mean?
The US federal government must now furlough hundreds of thousands of employees, while essential services remain in place.
By law, agencies must suspend "non-excepted" staff, while "excepted" employees protecting life and property stay on the job without pay until the shutdown ends. The White House budget office sent instructions on Tuesday evening to initiate shutdown procedures.
The Congressional Budget Office estimates about 750,000 workers could be furloughed daily, with a total cost of $400 million (about €340 million) in compensation each day.
Ahead of the shutdown, the National Transportation Safety Board, for example, said it would temporarily suspend a quarter of its staff.
Work considered essential continues, including police and intelligence investigations, air traffic control, airport security, and military duties. Programmes funded through mandatory spending also carry on, meaning social security payments, Medicare services, and veterans’ health care are not interrupted.
Some other government functions, such as NASA's space missions and border protection, will also continue.
The White House itself has suggested that a shutdown could lead to large-scale layoffs across the government.
"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," Trump said late on Tuesday before the shutdown came into effect.
The move would add to the pain of government workers after large-scale firings orchestrated by billionaire Elon Musk's Department of Government Efficiency, or DOGE, earlier this year.
Why couldn't the Republicans and Democrats agree on a funding bill?
Although the Democrats are in the minority in the Senate, the Republicans didn't have enough of a majority to pass a federal government funding bill without the Democrats (check out the post below for more explanation).
Democrats wanted to use this leverage to get the Trump administration to reinstate hundreds of billions of dollars in health care spending for low-income households.
Republicans refused to negotiate on this.
Ahead of the shutdown, members of both parties angrily blamed each other for the stalemate.
"It's only the president who can do this. We know he runs the show here," Senate Democratic Leader Chuck Schumer said Tuesday, after a meeting between top Republican and Democrat leaders at the White House failed to find an agreement.
"Republicans have until midnight tonight to get serious with us," Schumer said.
US President Donald Trump and his fellow Republicans said they wouldn't entertain any changes to the legislation, arguing that it's a stripped-down, "clean" bill that should be noncontroversial.
Trump also posted an AI-generated deepfake video slamming Schumer and House Minority Leader Hakeem Jeffries.
The clip mocked Jeffries and Schumer in vulgar terms, falsely depicting them announcing plans to entice illegal immigrants with benefits, while showing Jeffries wearing a sombrero and bushy mustache as mariachi music plays.
