- 17:25
Every year, as September draws to a close, Washington is confronted with a critical deadline: passing the federal budget for the next fiscal year. When the White House and Congress fail to reach an agreement, the dreaded “government shutdown” can occur.
Now a familiar term in American politics, a shutdown refers to the partial closure of federal agencies due to a lack of approved funding. With the prospect of another shutdown in 2025, it is worth examining how the process works, its history and its potential consequences.
What Happens During a Shutdown?
The US budget process relies on Congress passing 12 appropriations bills that allocate funds to federal agencies. Under the Antideficiency Act, passed in 1884 and amended in 1950, no discretionary spending – funds requiring annual congressional approval – can occur without legislative authorization.
If these bills are not passed and no temporary funding agreement (a “continuing resolution”) is reached, federal agencies must suspend all “non-essential” activities, a situation known as “government shutdown.”
However, essential functions, such as border security, air traffic control, emergency medical services and Social Security payments, continue, as they are considered mandatory spending, funded by permanent or multi-year legislation. Meanwhile, auxiliary services such as passport issuance, national park operations and health inspections may be paused.
Programs at Risk
According to the Rockefeller Institute for Government, authorization for many programs expires on September 30: temporary assistance for low-income families, electric vehicle tax credits, the national flood insurance program and funding for community health centers. Without renewed approval, these programs would halt, affecting beneficiaries and local administrations, particularly in states like New York, which rely heavily on federal support for healthcare.
Impact on Citizens and the Administration
Past shutdowns have caused significant disruptions. During the 2013 shutdown, the Environmental Protection Agency halted 1,200 inspections related to drinking water and hazardous waste, while the Food and Drug Administration delayed nearly 900 checks. Temporary closure of national parks cost local economies more than $500 million, according to the Committee for a Responsible Federal Budget (CRFB).
Daily life is also affected: delays in loan processing, blocked Social Security number verifications (complicating access to mortgages or employment) and interruptions in the delivery of certain social benefits.
Federal employees face furloughs without pay, nearly 850,000 were affected in 2013, while contractors generally receive no retroactive compensation.
A Recurring Political Weapon
Shutdowns often stem from deep partisan conflicts. In the 1990s, clashes between President Bill Clinton and a Republican-led Congress triggered two shutdowns totaling 26 days. In 2013, the dispute centered on Obamacare. In 2018–2019, Donald Trump’s demand for a border wall led to the longest shutdown in US history, 35 days.
This year, disagreements focus on subsidies tied to the Affordable Care Act and proposed Medicaid cuts. The Republican-controlled Senate (53 seats) must persuade at least seven Democrats to meet the 60-vote threshold needed to pass a temporary budget. The Brookings Institution warns that both parties may use the threat of a shutdown as a bargaining chip.
Economic Costs
Short shutdowns are mostly symbolic, but extended ones carry measurable costs. The Congressional Budget Office estimated that the 2018–2019 shutdown reduced economic growth by $11 billion, $3 billion of which was permanently lost.
Brookings notes that each week of shutdown reduces GDP growth by 0.2 percentage points, with partial recovery in the following quarter. Permit delays, blocked federal loans and investor uncertainty add further strain.
A Governance Challenge
Shutdowns also highlight Congress’ struggle to meet its budgetary responsibilities. They reflect a structural tension between fiscal oversight and partisan politics, fueling public distrust as each side blames the other.
For now, uncertainty prevails: the House has passed a temporary resolution extending funding until November 21, but the Senate has yet to reach a compromise. Without agreement, the US risks another period of administrative paralysis with real costs for its citizens and economy.
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