At midnight on October 1, 2025, the United States federal government entered a shutdown after Congress failed to enact appropriations or a continuing resolution to fund agencies into the new fiscal year.
Both parties remain deadlocked over enhanced Obamacare (ACA) subsidies and broader spending priorities.
Why the Shutdown Happened
- Congress is supposed to pass 12 appropriations bills or a continuing resolution (CR) before the start of the fiscal year (October 1). Because no such measure passed, discretionary funding lapsed.
- Republicans and Democrats traded blame. Speaker Mike Johnson accused Senate Minority Leader Chuck Schumer of “handing the keys of the kingdom” to the executive branch, saying the White House OMB now has power to decide which services will continue.
- The core dispute centers on whether to extend and expand ACA (“Obamacare”) premium subsidies. Democrats are insisting on this; Republicans say they won’t fund it via appropriations.
- In advance of the lapse, OMB instructed agencies to prepare for mass firings/“reductions in force” (RIF), a more aggressive posture than past shutdowns that relied mostly on furloughs.
What Continues vs. What Stops
Not all government functions halt during a shutdown. The law, doctrine, and agency contingency plans create a patchwork of which services continue, which are suspended, and which are partially maintained.
Essential (“Excepted”) Functions Remain
By law and practice, services tied to protection of life or property must continue. Examples include:
- National security, law enforcement, border protection, military operations
- Air traffic control and related functions, though employees often work without pay.
- Emergency medical care, public safety
- Agencies with mandatory or independent funding (not reliant on annual appropriations) may continue: e.g. Social Security and Medicare.
What Gets Furloughed or Suspended
Discretionary programs not deemed essential are suspended or delayed. Agencies submitted plans identifying non-essential personnel to be furloughed. Some impacts:
- The Department of Education plans to furlough most employees; its civil rights enforcement, program grants, and many services will pause.
- Health and Human Services (HHS) will furlough ~41% of its workforce.
- Departments’ research, oversight, inspections, regulatory activity, non-emergency grants may largely be suspended.
- The federal judiciary may not sustain full operations past a few days. While judges are paid, many supporting staff could be furloughed.
- FAA/transportation: over 11,000 employees are expected to be furloughed; critical control and safety functions persist.
- Immigration courts (non-detained cases) may pause, while enforcement (ICE, CBP) is “essential” and continues.
Payroll, Benefits, and Retroactive Pay
- Paychecks for work performed before October 1 are unaffected; payroll was processed in advance.
- Furloughed employees generally receive retroactive pay once funding is restored, under the Government Employee Fair Treatment Act of 2019.
- Excepted employees (those working during lapse) also receive retroactive pay.
- Paid leave and holidays during the lapse are usually canceled and restored post-shutdown.
Legal & Constitutional Tensions
Authority & Constraints
- The Antideficiency Act prohibits the government from obligating funds beyond appropriations unless exempted by law (life, property, national security).
- Agencies must follow OMB’s guidance in defining “excepted” functions. Today’s OMB has pushed controversial interpretations, especially with mass-layoff plans.
- Critics argue the administration’s push for permanent cuts or “reduction in force” during shutdown strays beyond typical legal norms.
Lawsuits Emerge
- Two major labor unions (AFGE, AFSCME) filed suit against OMB and OPM, alleging illegal threats to mass firing and misapplication of the Antideficiency Act by directing agencies to prepare RIFs.
- Judicial branch warns it may not sustain operations beyond early October amid funding exhaustion.
Checks and Balances
- Congress retains the only power to appropriate funds — the President cannot unilaterally end a lapse.
- The shutdown tests the balance between executive discretion and legislative authority over spending.
- Federal courts may need to hear challenges to the legality of any RIF actions or reinterpretations of “excepted functions.”
What Happens Next & Risks
- Duration is uncertain. The longer it drags on, the more severe disruptions become. The CBO warns of heavy economic costs.
- Social safety net programs (nutrition, housing, assistance) may be delayed due to suspension of discretionary funding.
- State and local governments may need to step in to maintain services usually supported by federal funding.
- Legal battles over firings, pay, and essential services are almost inevitable.
- Public opinion may influence congressional resolve — blame-shifting is already underway.
