The United States government entered a shutdown on Wednesday, October 1, following a failure by Senate Democrats and Republicans to reach an agreement on a short-term funding plan. The shutdown commenced at 4:01 GMT, coinciding with the start of the new fiscal year, as the previous year’s funding expired. Despite Republican control of both chambers of Congress, they were unable to secure consensus to pass a bill that would fund government operations until November 21. Democrats withheld their support, demanding that Republicans reverse recent Medicaid cuts enacted under Trump’s One Big Beautiful Bill in July. While Democrats proposed alternative solutions, these were rejected, leaving Congress in a stalemate.
As a result of the shutdown, federal agencies are required to furlough non-essential employees, who will not receive pay during the shutdown. However, most furloughed workers are expected to receive back pay once the government resumes operations, thanks to a 2019 law. Contract workers, such as cleaning staff, are not covered by this law and will only be paid if their contracting firms have allocated funds for such scenarios. Each agency has already submitted staffing plans in anticipation of the shutdown.
The Congressional Budget Office (CBO) estimates that approximately 750,000 federal employees could be furloughed daily, resulting in a daily wage loss of around $400 million. Unlike previous shutdowns, the White House has instructed agencies to prepare for large-scale layoffs, as indicated in a September 24 memo from the Office of Management and Budget (OMB). This unprecedented move raises concerns about the long-term impact on federal employment and government operations.