On Oct. 1, 2025, the federal government officially shut down as Congress failed to pass funding bills and annual appropriations bills that Congress must pass every year to keep the federal government operating for the new fiscal year 2026 before Sept. 30.
The core dispute was over how to divide the $6 trillion-plus federal budget between social programs, defense and security and whether to extend pandemic-era aid and health subsidies. Partisan disagreements between republicans and democrats in Congress led to a deadlock.
When no compromise was reached, funding for these agencies expired, triggering the government shutdown on Oct. 1, 2025.
About 1.5 million federal workers were affected by the shutdown and about 800,000 were furloughed, while another 700,000 were continuing to work without pay in essential roles, disrupting operations in departments such as education, commerce and labor departments.
The White House froze approximately $26 billion in federal funding, primarily targeting infrastructure and clean-energy projects in Democratic-led states.
In an unusual move for a shutdown, President Trump’s administration directed agencies to prepare for possible permanent layoffs, known as “reduction-in-force (RIF)” plans, rather than just temporary closures.
Currently, national parks are partially closed and many public services, including federal research and grant programs, are paused. Social Security and Medicare payments continue, but agency offices are providing limited support.
Negotiations remain stalled, with neither chamber scheduling a new vote. President Trump has said he will not sign any funding deal unless it includes spending cuts and immigration measures, while Democrats insist they will not support any bill that excludes health care and social program funding.
Economists estimate the shutdown is costing the U.S. economy about $15 billion per week and both parties continue to blame each other.
What’s Next? Republicans say democrats are unwilling to compromise, while Democrats argue the GOP’s proposal unfairly targets critical social programs. Meanwhile, business groups, governors and federal unions are applying pressure to end the shutdown quickly, but so far, no compromise is in sight.
