United States Federal Government Shutdown, 2025

The 2025 United States federal government shutdown began on 1 October 2025 following the failure of Congress to pass appropriations legislation for the 2026 fiscal year. This funding lapse marked the eleventh significant shutdown in American history and the third under President Donald Trump. The event was driven by sharp partisan conflict over federal spending levels, foreign aid rescissions, and health insurance subsidies, creating widespread disruption across federal agencies and services.

Background and Causes

The United States Constitution vests the power of the purse in Congress, mandating that no funds may be withdrawn from the Treasury without legislative approval. Since 1977, the federal government has operated on a fiscal year running from 1 October to 30 September, during which twelve separate appropriations bills are expected to fund the government. Political polarisation has repeatedly hindered this process, often resulting in temporary continuing resolutions (CRs) to avert shutdowns.
In this instance, the Full-Year Continuing Appropriations and Extensions Act, 2025, had temporarily extended funding through the end of September. When Congress failed to agree on new appropriations by the midnight deadline, the Office of Management and Budget (OMB) ordered agencies to commence shutdown procedures. Approximately 900,000 federal employees were furloughed, while a further 700,000 continued to work without pay, maintaining essential operations such as Medicare, Medicaid, air traffic control, and national security functions.
Key disputes included the Trump administration’s attempt to rescind US$9 billion in foreign aid and public broadcasting funds, and disagreements regarding health insurance subsidy extensions under the Affordable Care Act (ACA). These issues led to a legislative impasse between the Republican-controlled House and a narrowly divided Senate.

Legislative Impasse and Political Developments

The budget conflict evolved over several months. Early in 2025, Democrats had opposed Trump’s moves to centralise control over federal operations through the Department of Government Efficiency (DOGE), which aimed to cut staffing and funding across numerous agencies. Although a temporary resolution passed in March 2025, tensions resurfaced in the summer when the administration introduced the Rescissions Act of 2025, codifying its earlier budget cuts.
Senate negotiations in July and August centred on funding for defence, veterans’ affairs, and agricultural programmes. Disagreements emerged over Republican demands for permanent spending reductions and Democratic insistence on protecting healthcare subsidies. When both the Republican spending proposal and the Democratic counterproposal failed in back-to-back Senate votes on 30 September 2025, the government officially entered a shutdown.

Presidential Use of Rescissions

Historically, U.S. presidents possessed limited authority to withhold funds appropriated by Congress, known as impoundment. This practice was curtailed by the Congressional Budget and Impoundment Control Act of 1974, following President Richard Nixon’s unilateral deferrals of spending. Under the revised framework, presidents may propose rescission bills, which Congress must approve within 45 days.
President Trump revived the use of rescissions in early 2025 through the Department of Government Efficiency, targeting foreign aid, cultural programmes, and public broadcasting. This reactivation of rescission authority complicated bipartisan negotiations, as Democrats feared that any funding compromises could later be reversed unilaterally by the executive.

Shutdown Implementation and Negotiations

At 12:01 a.m. EDT on 1 October 2025, the shutdown commenced after appropriations expired. Senate leaders attempted renewed discussions to shorten the duration of the Republican-backed continuing resolution, yet no consensus was achieved. Subsequent efforts on 2 and 3 October similarly failed to break the deadlock, with the House of Representatives extending its recess, further delaying legislative activity.
Reports later surfaced that furloughed staff at the Department of Education found their out-of-office emails modified to include political messages blaming Democrats for the shutdown. Ethics experts suggested these incidents could constitute violations of the Hatch Act, which prohibits federal employees from engaging in political activity while performing official duties.

Impact on Federal Agencies

The shutdown caused extensive disruption across numerous federal departments:

• Department of Defense: Approximately 335,000 of 741,000 civilian staff were furloughed, though military personnel remained on active duty.
• Department of Health and Human Services: 41% of employees were furloughed, significantly reducing operations at the National Institutes of Health (NIH) and Centers for Disease Control and Prevention (CDC).
• Environmental Protection Agency (EPA): Nearly 90% of staff were sent home, halting environmental monitoring and enforcement.
• Department of Education: Over 2,000 employees were furloughed, affecting student aid processing.
• NASA: About 15,000 of its 18,000 employees were furloughed, though work continued on critical missions such as the International Space Station and Artemis II lunar project.

Essential services, including Social Security payments and veterans’ benefits, continued, albeit with administrative delays. Economic data releases from the Bureau of Labor Statistics and Census Bureau were suspended, hindering financial forecasting.

Economic and Social Effects

Financial markets reacted negatively in the days preceding the shutdown, with declines in U.S. Treasury securities and the U.S. dollar amid investor uncertainty. The shutdown’s prolonged continuation risked delaying federal contracts and disrupting food assistance programmes such as WIC (Women, Infants, and Children), while contingency funding for the Supplemental Nutrition Assistance Program (SNAP) faced potential depletion.
Health impacts were particularly pronounced. The NIH halted new medical research and peer reviews, while the CDC’s public communication capacity was curtailed. The absence of renewed ACA insurance subsidies created instability in state-run healthcare markets, notably in California.

Mass Layoff Controversy

In late September, the OMB instructed federal agencies to prepare reduction-in-force (RIF) plans for potential implementation during the shutdown. This directive, which implied permanent layoffs rather than temporary furloughs, generated significant controversy. Critics, including Democratic leaders Chuck Schumer and Hakeem Jeffries, accused the administration of intimidation and abuse of authority.
President Trump later stated that layoffs would help “get rid of a lot of things that we didn’t want,” suggesting a political motive behind the cuts. The American Federation of Government Employees and the American Federation of State, County and Municipal Employees subsequently filed lawsuits alleging that such layoffs would violate the Antideficiency Act, which restricts government operations during funding gaps.

Partisan and Public Reactions

The Trump administration and Republican Party attributed the shutdown to Democratic obstruction over health insurance subsidies, claiming Democrats demanded benefits for undocumented immigrants. These assertions were disputed by independent fact-checkers and oversight bodies. The administration further drew criticism for disseminating politically charged messages through federal agency websites and employee email systems, prompting multiple Hatch Act and Anti-Lobbying Act complaints.
Democratic leaders called for a livestreamed discussion forum to maintain public awareness of the crisis. Many Democratic legislators accused Republicans of prioritising political theatre over governance, citing the circulation of an AI-generated video mocking Democratic figures as evidence of deteriorating political norms.

Public Opinion and Polling

As in prior shutdowns, public opinion largely attributed responsibility to the Republican Party and President Trump.

• A Morning Consult survey conducted days before the shutdown found 45% of respondents blaming Republicans and 32% blaming Democrats.
• Post-shutdown polling by The Washington Post indicated that 47% of Americans primarily blamed Trump and congressional Republicans, compared with 30% who blamed Democrats.
• Independent voters tended to assign shared responsibility to both parties, though a consistent historical pattern has shown greater public blame directed toward Republican administrations during shutdowns.

Significance

The 2025 shutdown displays the deepening partisan polarisation and erosion of cooperative budgeting processes in the United States. It also highlighted the executive branch’s expanding influence over appropriations through revived rescission mechanisms and administrative control. Economically, the shutdown threatened to dampen growth and delay statistical reporting, while politically it reinforced perceptions of institutional dysfunction within Washington.