Another US government shutdown is here – why does it keep happening?

WASHINGTON – Government shutdowns have become a recurring feature of US politics, the product of partisan stand-offs over spending that force federal agencies to halt a wide range of services.

The latest shutdown

– the third under US President Donald Trump across his two terms – began at midnight on Oct 1, when Congress failed to pass a stopgap funding measure, triggering the nation’s first government closure in almost seven years.

Democrats are demanding that a stopgap Bill include an extension of Affordable Care Act premium subsidies and a reversal of Medicaid funding cuts – conditions Republicans have rejected, leaving the two sides deadlocked and the shutdown unresolved. Democrats also want new restrictions on Mr Trump’s ability to refuse to spend money appropriated by Congress.

The White House’s budget office ordered agencies to begin executing their plans for a funding lapse, shuttering the government aside from essential duties. Mr Trump has threatened to use the shutdown to fire federal workers en masse.

Here’s what to know about how US shutdowns work and what they mean for government services.

Why does the government shut down?

The US government runs on 12 appropriations Bills passed each year by Congress and signed by the president. In fiscal years like the one about to begin, when all 12 Bills are not adopted by the start of the fiscal year on Oct 1 – the current count is zero, for those keeping score – Congress and the president keep the machinery of government humming by passing short-term extensions of current funding, known formally as continuing resolutions (CR).

If they can’t agree to a CR, the government has what is called a funding gap and federal agencies may need to take steps to shut down.

For fiscal year 2025, Congress has passed three such temporary funding patches, with the final one coming in March. At the end of September, it failed to pass a fourth, triggering a shutdown.

How many times has this happened?

There have been 15 shutdowns since 1981, ranging in duration from a single day to the 35-day shutdown from 2018 to 2019. (Before 1981, agencies operated mostly as normal during funding gaps, their expenses covered retroactively once a deal was reached.)

Shutdowns over spending disagreements are different (and less grave) than what would happen if the US government breached its debt ceiling and defaulted on some of its obligations. That has never happened, though the country came close in 2023.

Memories remain fresh of the longest shutdown in US history – 35 days in late 2018 to early 2019 – over Mr Trump’s insistence on adding US$5.7 billion (S$7.3 billion) to the budget for a wall on the border with Mexico.

What does a shutdown mean?

It means many, though not all, federal government functions are suspended, and many, though not all, federal employees are furloughed.

Services that the government deems “essential”, such as those related to law enforcement and public safety, continue. These essential employees work without pay until the shutdown ends.

In 2019, Congress passed a law guaranteeing that federal workers who are furloughed will receive back pay once the government is funded again.

The Congressional Budget Office estimates that about 750,000 employees will be furloughed at a cost per day of US$400 million in lost compensation during the current shutdown.

Which workers are ‘essential’?

Individual government departments – and the political appointees who run them – have a say over who comes to work and who stays home. In theory at least, a federal employee who works during a shutdown, but is not supposed to, could face fines or a prison term under what is called the Anti-Deficiency Act.

What government services cease in a shutdown?

Among the most noticeable disruptions of past shutdowns were closures of national park facilities and the Smithsonian museums in Washington, and delays in processing applications for passports and visas.

Oversight of financial swap markets and investigations of workplace civil-rights complaints have traditionally stopped. Economic reports from the Labour and Commerce departments have sometimes been delayed.

According to a Bloomberg News review of agency contingency plans for the current shutdown, the National Park Service will keep sites open to visitors. Their plan calls for tapping park fees to provide basic visitor services.

However, disruptions across the government are significant. For example, the Bureau of Labour Statistics is shutting down, leaving the Federal Reserve and investors without official benchmarks.

The Centres for Medicare and Medicaid Services are halting casework, and the Food and Drug Administration will stop accepting new drug applications. The Census Bureau and the Bureau of Economic Analysis will halt all data collection.

Which government functions are unaffected?

Military operations, air traffic control, medical care of veterans and federal criminal investigations are among the essential activities that go on. US troops continue to work, though pay could be delayed. (In the 2019 shutdown, air traffic controllers threatened to walk off the job after a month of working without pay – a development that hastened the end of the shutdown.)

The US Postal Service and Federal Reserve have their own funding streams so are largely unaffected.

What happens to federal contracts?

Private companies that rely on federal contract work – ranging from billionaire Elon Musk’s SpaceX to janitorial service providers for local federal buildings – typically face lost revenue.

Service contract employees historically have been furloughed during shutdowns and have not received back pay when the government resumes operations.

What happens to government cheques?

Entitlement programmes such as Social Security and Medicare are considered mandatory spending, meaning they do not need annual appropriations to continue distributing money. That does not mean that such programmes are guaranteed to be unaffected.

During a 1996 shutdown, even as Social Security cheques continued to go out, “staff who handled new enrolments and other services, such as changing addresses or handling requests for new Social Security cards, were initially furloughed”, according to the Committee for a Responsible Federal Budget.

And during the 2018 to 2019 shutdown, the Department of Agriculture had to rely on a special authority included in the previous continuing resolution to continue issuing food stamps. According to the Department of Agriculture’s plan for the current shutdown, food stamps and child nutrition programmes can keep operating temporarily with carry-over funds. BLOOMBERG