The United States officially entered a government shutdown at midnight on Tuesday (2 p.m. Wednesday Melbourne time), after Republicans and Democrats failed to reach an agreement on federal spending. The shutdown is expected to place hundreds of thousands of federal employees on unpaid leave and halt numerous government programs and services.
The current shutdown comes after the Republican-controlled Senate failed to pass the appropriations bill, marking the first such event since 2018. That shutdown lasted 35 days, cost the US economy an estimated $11 billion, and left 800,000 federal employees without pay.
What Happens During a Shutdown
Each fiscal year, beginning October 1, Congress must approve funding for federal services. Without either a full budget or a temporary continuing resolution, many agencies suspend operations. Not all government functions stop: border security, hospital services, policing, and air traffic continue, but thousands of employees are placed on mandatory unpaid leave. While affected staff have historically received retroactive pay, ordinary citizens experience disruptions in daily services.
Services likely to be affected include national parks, food inspections, preschool programs, student loan processing, and social welfare services. Medicare and Social Security payments continue, but processing of new claims may halt. Prolonged shutdowns can also create travel delays and broader economic impacts. During the 2019 shutdown, students faced difficulties with tax documentation for scholarships, and the Department of Agriculture warned that food stamp programs could run out within weeks.
Historical Context
Since 1980, the US has experienced 15 shutdowns, either partial or full. The upcoming shutdown is considered a full shutdown, as none of the 12 appropriations bills that comprise the federal budget have been passed by both the House and Senate.
The previous shutdown in 2018 occurred during Donald Trump’s first term over funding for a border wall with Mexico. It lasted 35 days—the longest in US history—and cost approximately $11 billion, $3 billion of which was permanently lost. Shutdowns have become increasingly common in American politics, with eight occurring under President Ronald Reagan alone.
Analysts note that the unique structure of the US system, where the budget is not tied to a confidence vote, makes these crises likely to recur. Current observers highlight that the Trump administration showed willingness to use shutdowns as leverage to permanently reduce “non-essential” federal positions, a strategy that could reshape the rules of American governance.
