US Government Shutdown 2025: Causes, Impacts, and What Services Will Continue Operating

US Shutdown 2025: Federal government operations have ground to a halt as funding expires.

Washington:

US Government Shutdown Updates: The US government has formally entered shutdown mode after Democrats rejected a Republican temporary funding proposal that failed to address their key concerns. Government funding officially expired at midnight, leaving Capitol Hill in uncertainty about the path forward.

This marks the first government shutdown since the 2018-2019 episode, which lasted five weeks including over the New Year's holiday during President Trump's first administration.

The shutdown means non-essential government operations will cease functioning, with hundreds of thousands of civil servants temporarily unpaid and potential disruptions to social safety net benefit payments.

Essential personnel, including military members, must continue working without immediate compensation, while non-essential federal employees face furlough. According to the nonpartisan Congressional Budget Office, approximately 750,000 federal workers could be temporarily furloughed, even without President Trump implementing permanent dismissals.

The president escalated tensions on Tuesday, telling reporters his administration might permanently terminate "a lot" of federal workers during the shutdown. Typically, the federal government temporarily furloughs non-essential employees during funding gaps and provides back pay once funding resumes.

What Will Remain Functional During Shutdown

When funding lapses, federal law requires agencies to suspend activities and furlough "non-excepted" employees. "Excepted employees" - those performing work essential to protecting life and property - continue working without pay until the shutdown concludes.

Consequently, in-hospital medical services, border protection, law enforcement, and air-traffic control will likely continue operating. Social Security and Medicare payments will still be distributed, though benefit verification and card issuance may pause.

Government functions including NASA missions, President Trump's immigration enforcement initiatives, and certain public health activities at the FDA and USDA will also continue throughout the shutdown.

However, travel disruptions may increase if the congressional impasse extends and unpaid workers begin staying home.

What Can Pause During Stoppage

Generally, essential workers maintain normal operations during shutdowns, sometimes without regular paychecks, while non-essential federal employees are placed on temporary unpaid leave. Historically, these workers receive retroactive payment.

Services potentially curtailed or suspended include federally funded food assistance programs, food inspections, government pre-schools, student loan processing, immigration hearings, and national park operations.

Will The Closure Affect The Economy?

While immediate impacts on the broader economy may not be apparent, a prolonged shutdown could reduce economic growth, disrupt markets, and undermine public confidence.

According to BBC reporting, this shutdown will likely exceed the late 2018 shutdown during Trump's first term, when Congress had passed some funding legislation.

Analysts estimate each week of shutdown could reduce economic growth by approximately 0.1 to 0.2 percentage points.

Trump's Fuel To Fire

US budget standoffs have become commonplace amid increasing political dysfunction. In the current situation, Democrats insist any spending legislation must include additional healthcare subsidies, while Republicans maintain these issues should be addressed separately.

President Trump has intensified the conflict. Before Tuesday's vote, he threatened to eliminate Democrat-favored programs and terminate more federal employees if the government shuts down.

"We'll be laying off a lot of people," he informed reporters. "They're going to be Democrats."

Such layoffs would accelerate government brain drain. Over 150,000 workers are scheduled to leave federal employment this week after accepting buyouts, representing the largest exodus in eight decades. Tens of thousands more have already been terminated this year. Trump has also refused to utilize billions in congressionally approved funds, prompting some Democrats to question the purpose of voting for any spending measures.

What's Next

With compromise seemingly distant on Capitol Hill, the shutdown's duration remains unclear. Congress has initiated 15 government shutdowns since 1981, most lasting only a day or two. The most recent shutdown during Trump's first term was also the longest.

Healthcare represents the current impasse's central issue. Democrats argue any spending bill must permanently extend Affordable Care Act subsidies scheduled to expire this year. Without resolution, healthcare costs will sharply increase for 24 million Americans, disproportionately affecting Republican-controlled states like Florida and Texas that have declined to implement other coverage provisions for low-income residents. Democrats also seek assurances that Trump cannot reverse these changes if enacted.

Republicans express openness to addressing the issue but accuse Democrats of holding the budget hostage to appease their voter base ahead of the 2026 midterm elections, when congressional control hangs in the balance.