Plunged into a government shutdown, the U.S. is confronting a fresh cycle of uncertainty after President Donald Trump and Congress failed to strike an agreement to keep government programs and services running by Wednesday’s deadline.
Roughly 750,000 federal workers are expected to be furloughed, some potentially fired by Trump’s Republican administration. Many offices will be shuttered, perhaps permanently, as President Donald Trump vows to “do things that are irreversible, that are bad” as retribution. His deportation agenda is expected to run full speed ahead, while education, environmental and other services sputter. The economic fallout is expected to ripple nationwide.
The president appeared unable to negotiate any deal between Democrats and Republicans to prevent the shutdown. This is the third time Trump has presided over a federal funding lapse.
Here’s the latest:
Shutdown’s economic fallout is expected to ripple nationwide
An economic jolt could be felt in a matter of days. The government is expected Friday to produce its monthly jobs report, which may or may not be delivered.
While the financial markets have generally “shrugged” during past shutdowns, according to a Goldman Sachs analysis, this one could be different partly because there are no signs of broader negotiations.
“There are also few good analogies to this week’s potential shutdown,” the analysis said.
Across the government, preparations have been underway. Trump’s Office of Management and Budget, headed by Russ Vought, directed agencies to execute plans for not just furloughs, as are typical during a federal funding lapse, but mass firings of federal workers. It’s part of the Trump administration’s mission, including its Department of Government Efficiency, to shrink the federal government.
Vance stresses shutdown pain while urging Democrats to reopen the government
In a pair of TV interviews, Vice President JD Vance described how taxpayers will be affected by the shutdown.
He cited people on low-income food programs, potential flight delays for air travelers and service members reporting for duty without getting paid.
“It’s craziness and people are going to suffer because of this,” Vance said on Fox News Channel’s “Fox & Friends.”
The Republican vice president, who was also interviewed on “CBS Mornings,” said the GOP will negotiate with Democrats but only after government resumes operating.
Republicans and Democrats are at odds over extending expiring subsidies that help consumers afford health care insurance.
Plenty of blame for the shutdown being thrown around
The Democrats picked this fight, which was unusual for the party that prefers to keep government running, but their voters are eager to challenge the president’s second-term agenda. Democrats are demanding funding for health care subsidies that are expiring for millions of people under the Affordable Care Act, spiking the costs of insurance premiums nationwide.
Republicans have refused to negotiate for now and have encouraged Trump to steer clear of any talks. After the White House meeting, the president posted a cartoonish fake video mocking the Democratic leadership that was widely viewed as unserious and racist.
What neither side has devised is an easy offramp to prevent what could become a protracted closure. The ramifications are certain to spread beyond the political arena, upending the lives of Americans who rely on the government for benefit payments, work contracts and the various services being thrown into turmoil.
How the government shutdown will affect student loans and the Education Department
Already diminished by cuts by the Trump administration, the U.S. Education Department will see more of its work come to a halt due to the government shutdown.
The department says many of its core operations will continue in the shutdown kicking off Wednesday. Federal financial aid will keep flowing and student loan payments will still be due. But investigations into civil rights complaints will stop, and the department will not issue new federal grants. About 87% of its workforce will be furloughed, according to a department contingency plan.
Since he took office, President Trump has called for the dismantling of the Education Department, saying it has been overrun by liberal thinking. Agency leaders have been making plans to parcel out its operations to other departments, and in July the Supreme Court upheld mass layoffs that halved the department’s staff.
▶ Read more about the shutdown’s effect on the Education Department
What closes during a shutdown?
All administrations get some leeway to choose which services to freeze and which to maintain in a shutdown.
The first Trump administration worked to blunt the impact of what became the country’s longest partial shutdown in 2018 and 2019. But on Tuesday, Trump threatened the possibility of increasing the pain that comes with a shutdown.
“We can do things during the shutdown that are irreversible, that are bad for them and irreversible by them,” Trump said of Democrats. “Like cutting vast numbers of people out, cutting things that they like, cutting programs that they like.”
Each federal agency develops its own shutdown plan. The plans outline which workers would stay on the job during a shutdown and which would be furloughed.
▶ Read more about what happens in a government shutdown
Will furloughed federal workers get paid?
Yes. In 2019, Congress passed a bill enshrining into law the requirement that furloughed employees get retroactive pay once operations resume.
While they’ll eventually get paid, the furloughed workers and those who remain on the job may have to go without one or more of their regular paychecks, depending upon how long the shutdown lasts, creating financial stress for many families.
Service members would also receive back pay for any missed paychecks once federal funding resumes.
What government work continues during a shutdown?
A great deal, actually.
FBI investigators, CIA officers, air traffic controllers and agents operating airport checkpoints keep working. So do members of the Armed Forces.
Those programs that rely on mandatory spending generally continue during a shutdown. Social Security payments still go out. Seniors relying on Medicare coverage can still see their doctors and health care providers can be reimbursed.
Veteran health care also continues during a shutdown. Veterans Affairs medical centers and outpatient clinics will be open, and VA benefits will continue to be processed and delivered. Burials will continue at VA national cemeteries.
What happens in the shutdown?
Now that a lapse in funding has occurred, the law requires agencies to furlough their “non-excepted” employees. Excepted employees, which include those who work to protect life and property, stay on the job but don’t get paid until after the shutdown ends.
The White House Office of Management and Budget begins the process with instructions to agencies that a lapse in appropriations has occurred and they should initiate orderly shutdown activities. That memo went out Tuesday evening.
The Congressional Budget Office estimates that roughly 750,000 federal employees could be furloughed each day of the shutdown, with the total daily cost of their compensation at roughly $400 million.
