2025 U.S. FEDERAL GOVERNMENT SHUTDOWN

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2025 U.S. federal government shutdown

What causes a shutdown — background

  • Every fiscal year (Oct 1 to Sep 30), Congress must pass appropriations bills (or a continuing resolution) to fund federal agencies. 

  • If funding is not approved by the deadline, a funding lapse occurs and non-essential operations must cease until a new funding law is passed. 

  • In 2025, the funding for FY 2026 was not finalized by September 30, triggering the shutdown at 12:01 a.m. on October 1, 2025. 

  • The OMB has instructed agencies to activate contingency plans (i.e. which employees or operations are “excepted/essential” vs “furloughed”) and in some cases prepare for permanent reductions (not just temporary furloughs). 

What the shutdown means for people & government employees

  • Furloughs and unpaid work: Employees in non-essential roles are placed on unpaid leave (furloughed). Some “excepted” employees are required to work without pay until funding resumes.

  • Retroactive pay: Under the Government Employee Fair Treatment Act (2019), most furloughed federal employees are entitled to retroactive pay once the shutdown ends. 

  • Delays & backlogs: Processing of benefit applications, permit requests, visa / immigration cases, regulatory approvals, and grant management will slow or stall.

  • Economic & community impact: A prolonged shutdown stresses workers, contractors, local economies, and public service dependent populations.

  • Pressure on Congress: The political and public pressure mounts to pass appropriations and reopen government functions.Here’s a detailed explanation of what it means when the U.S. government “shuts down” after Congress deadlocks on a spending deal, including mechanics, effects, and examples (especially in 2025).

    What leads to a government shutdown

    1. Appropriations must pass each fiscal year.
      The U.S. fiscal year begins October 1. Congress must pass (and the President must sign) appropriations bills to fund federal agencies. If they don’t, there is a “funding lapse.”

    2. Deadlock in Congress.
      A shutdown occurs when the House, Senate, and President cannot agree on one or more of those funding bills (or a continuing resolution to temporarily extend funding). In 2025, disagreements over health care subsidies, foreign-aid rescissions, and federal spending levels contributed to the impasse.

    3. Start of the shutdown.
      In 2025, funding expired at 12:01 a.m. on October 1, 2025. The government entered a partial shutdown at that moment. 

    What happens during a shutdown

    Legal basis & decision of “essential” vs “nonessential”

    • The Antideficiency Act prohibits federal agencies from incurring expenditures when there is no appropriation. That forces the cessation of most discretionary functions.

    • The Office of Management and Budget (OMB), guided by the President, issues directives to agencies: which personnel are “excepted” (i.e. must continue working) and which are furloughed (i.e. sent home without pay).

    • Some functions are exempt because they’re funded outside annual appropriations (i.e. “mandatory spending” such as Social Security) or via independent funding sources.

    Who keeps working (and how)

    These functions generally continue:

    • National security, military, law enforcement: Active duty troops, border security, intelligence, etc.

    • Air traffic control and flight safety

    • Postal Service: Because it’s funded from its own revenues, operations usually continue.

    • Mandatory benefits: Social Security, Medicare, Medicaid (insofar as legal funding exists)

    • Emergency, disaster, public health: Essential functions, including disaster relief and urgent health response

    • Other safety/oversight roles: Some parts of regulatory agencies remain active if deemed critical

    Meanwhile, many discretionary and non‐essential areas are suspended or operate at reduced capacity.

    Who gets furloughed or cut back

    • Nonessential personnel (those whose work can be delayed without immediate harm) are furloughed (i.e. temporarily laid off, no pay)

    • Contractors often are not protected and may lose payments or work

    • Research, grants, inspections, regulatory oversight: many of these are put on hold

    • Museums, national parks, visitor centers: closures or reduced services

    • Issuing new permits, visa processing (nonurgent), agency rulemaking: slowed or paused

    • Statistical data releases, publications: many are delayed or canceled

    Special twists in 2025

    • The 2025 shutdown is especially contentious because the Trump administration has directed agencies to draft plans for permanent layoffs (reductions in force, RIFs), not just temporary furloughs. 

    • Some agencies with independent or non-appropriated funding lines, like the Consumer Financial Protection Bureau (CFPB), have declared they will continue operations even amid the shutdown. 

    • The number of affected federal employees is high: estimates suggest around 900,000 furloughed and 700,000 working without pay. 

    Effects & consequences of the shutdown

    • Back pay: Under the Government Employee Fair Treatment Act of 2019, many furloughed employees will receive back pay once the shutdown ends (though that does not mitigate immediate financial strain). 

    • Delays and backlogs: Applications, permits, grants, visa/immigration adjudication, and regulatory reviews pile up.

    • Economic hit: Lost wages mean reduced consumer spending, hurting local economies, especially in places with heavy federal employment.

    • Public services disrupted: Citizens see delays or suspensions in otherwise routine federal services

    • Political pressure: The shutdown puts strong pressure on Congress and the President to compromise

    • Risk of permanent cuts: Because of the push for reductions in force, some positions or programs might not return even after funding is restored

    What sets the 2025 shutdown apart / key takeaways

    • It's the first federal shutdown since 2018–2019. 

    • The political stakes are higher: the administration is not only tolerating furloughs but is actively planning long-term cuts and restructuring.

    • The impasse centers not only on how much to spend, but on which policies to include (e.g. health insurance subsidies, Medicaid cuts, foreign aid).

    • Some agencies will attempt to continue work via non-appropriated funds or independent structures (like CFPB).

    • The shutdown’s duration matters: the longer it goes, the deeper the economic, administrative, and human costs.

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