The Federal Government Shutdown of October 2025: A Consequence of Disunity in the United States of America
The uniquely American phenomenon of a Federal government shutdown recently took effect yet again, at 0:01 AM EDT on 1 October 2025- for the fifteenth time since 1981. The US Senate had failed to agree on Federal funding for Fiscal Year (FY) 2026 by the midnight deadline on 30 September, which marked the end of FY 2025. A minimum of seven Senators, from the ranks of 45 Democrats and two Independents, should have voted with their 53 Republican counterparts to secure the sixty votes to approve Republican Budget proposals for the coming fiscal year. The US Constitution requires Congress to set limits on spending by Federal agencies, programmes, and projects and then provide the allocated money to the executive branch, in the form of 12 full-year lump-sum appropriations. If these funds are not made available, a government shutdown is inevitable.
The present shutdown has arisen as the Senate Democrats seek to retain tax credits that subsidise health insurance premiums under the Affordable Care Act (aka Obamacare), which benefit 24 million otherwise uninsured Americans, and also prevent cuts to Medicare funding. So far, they have held tight, in a show of unity and strength, against the Republicans, some of whom appear to believe that these proposals are both costly and will divert Federal funds in the direction of undocumented migrants.
A government shutdown may be best described as a “lapse in discretionary appropriations”, which leads to the shutting down of “non-essential” government operations. Shutdowns have occurred in America since 1976. During the early 1980s, it was decided to address funding gaps, whereby federal agencies continued to function despite running out of funds. Benjamin Civiletti, US Attorney General at the time, interpreted the Antideficiency Act in 1980 and 1981 to ensure that this could no longer happen, except in certain exceptional circumstances. The last shutdown took place over 34 days during Trump’s first administration, between 22 December 2018 and 24 January 2019, and resulted from Congressional rejection of the President’s demand for $5.7 billion to build a border wall along the Mexican border. It was only a partial shutdown, with Congress having already enacted five of the 12 appropriations bills.
According to the Congressional Budget Office (CBO), the Antideficiency Act “requires federal employees whose salaries depend on annual appropriations to stop working during a lapse in appropriations unless they are considered excepted.” These exceptions apply to essential services where suspension of activity would threaten the safety of human life or the protection of property. Border security, law enforcement, inpatient and emergency medical care, disaster aid, and power grid maintenance are considered essential services, while Social Security, Medicare, and the US Postal Service are not funded by Congress and hence do not depend on annual appropriations bills. Federal agencies that are funded through annual appropriations cannot incur obligations or spend federal funds “in advance of, or in excess of, an appropriation” and also cannot accept voluntary services in lieu. The Antideficiency Act, which dates back to 1870 and has been amended since, thereby ensures Congressional control of the public purse.
During a shutdown, Federal spending on goods and services falls. Furloughed “non-essential” Federal employees are on unpaid leave and consequently suffer financial hardship, while providers of essential services may have to work without pay. Unemployment rises, albeit mostly temporarily Visits to food banks and food pantries became more frequent. The government loses revenue as visitor attractions are closed to the public. Employees at National Parks, National Forests, museums and galleries, Federal prisons and courthouses, the Transportation Security Administration, and the Internal Revenue Service are among those vulnerable during a shutdown. Federal funding for low-income families on the Supplemental Nutrition Assistance Program (SNAP) is due to end on 1 November. SNAP is the largest food assistance programme in the US, serving 41 million Americans at a cost of $8 billion per month. On 28 October, Democratic attorney generals in 25 states, led by California, Massachusetts, and New York, and also the District of Columbia thus filed a lawsuit before District Judge Indira Talwani in Boston, Massachusetts, in the hope of averting the impending cuts to the “food stamps” programme. The US Department of Agriculture has so far refused to tap into a $6 billion emergency contingency fund to allow SNAP benefits to continue beyond 1 November. With the Senate adjourned from 30 October and not due to return until 3 November, any immediate decisive action in this matter seems most unlikely.
A CBO report, titled ‘A Quantitative Analysis of the Effects of the Government Shutdown on the Economy Under Three Scenarios, as of October 29, 2025’, has shed some light on the potential impacts of the ongoing shutdown. According to this non-partisan Federal agency, annualised real GDP growth is expected to be 1 to 2 percentage points lower in the fourth quarter of 2025 than might have been had the government remained open, with a net loss to the economy of between $7 billion and $14 billion-all depending on how long the shutdown lasts. Estimates of any temporary negative effects on the American economy have been provided by the CBO for three scenarios, depending on whether the shutdown ends after either four weeks (on 29 October), six weeks (on 12 November), or eight weeks (on 26 November).
The latest shutdown is a direct result of the deeply polarised nature of politics in America, where bipartisan solutions are frequently eschewed, and also reflects a lack of willingness to makes compromises in the better interests of the nation’s poorest and neediest. Such is life in the ‘United States’ today.
Ashis Banerjee