US government enters first shutdown since 2019
Photo: US Capitol building (Getty Images)
The US government has suspended operations for the first time in seven years, after Congress failed to pass a budget in time to fund several federal agencies, according to CNN and Bloomberg.
The US federal government has officially shut down after a divided Congress failed to pass a funding bill, marking the first government shutdown since 2019.
Leaders of both the Republican and Democratic parties have insisted, publicly and privately, that they are not to blame for the halt in funding.
Republicans are demanding that Democrats simply agree to extend current funding for seven weeks, while Democrats refuse to do so without major concessions in exchange for their votes on any funding bill in the Senate.
Senators left the Capitol late on September 30 (Washington time) amid deep uncertainty over how long the shutdown might last.
On the morning of October 1, the Senate is expected to vote again on the same Republican funding plan. Republican leaders have vowed to bring it to a vote daily until enough Democrats relent and agree to reopen the government.
What shutdown means
A government shutdown means that hundreds of thousands of federal employees will be placed on unpaid furlough.
Employees in essential agencies are required to continue working, though many will not receive pay until Congress restores funding.
Some essential positions, however, will continue to be paid since their salaries are financed outside of annual congressional appropriations.
The Trump administration reportedly plans to use the shutdown to carry out mass layoffs of federal workers, in addition to placing about 750,000 civil servants on temporary leave, a move that could worsen the economic impact and extend it beyond the government sector.
Historically, much of the economic loss from previous shutdowns has been recovered afterward, but not entirely.
The Congressional Budget Office estimated that the US economy failed to recover $3 billion of the $11 billion lost in output during the 2018–2019 partial shutdown, which lasted five weeks, the longest in US history.
Reasons for shutdown
On September 19, the House of Representatives passed a bill to fund the government through November 21 without major additions, a measure drafted without Democratic participation.
However, the Senate Democrats blocked the bill the same day; the initiative twice failed to secure the eight Democratic votes needed for passage.
Opponents of President Donald Trump are trying to pressure Republicans into negotiating an extension of expanded subsidies under the Affordable Care Act (ACA).
Just hours before the deadline, the Office of Management and Budget instructed federal agencies to prepare for the shutdown.
Days earlier, President Trump held a meeting with Democratic Party representatives, which ended without success.
On September 30, Trump confirmed that a shutdown of the US government was inevitable.
Read more about the risks and consequences of the US government shutdown in RBC-Ukraine’s full analysis.
