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What is a government shutdown and why is this year’s threat more serious?

The federal government is once again on the brink of a shutdown, unless Congress can reach a funding agreement before the start of the new fiscal year, on 1 October.

With the clock ticking and both Democrats and Republicans seemingly dug in, there is little time left to avoid a lapse in government funding. And in a sharp escalation, the White House has threatened permanent mass layoffs of government workers in the event of a shutdown, adding to the roughly 300,000 it forced out earlier this year.

What is a government shutdown?

If a compromise isn’t reached by midnight on 30 September, parts of the government will begin shutting down. Until Congress acts, a wide range of federal services could be temporarily halted or disrupted as certain agencies cease all non-essential functions.

In a polarized Washington, with the chambers narrowly divided, shutdown threats have become a feature of recent Congressional budget battles. A standoff in 2018, during Trump’s first term, resulted in a 34-day shutdown, the longest in the modern era. At the time, roughly 800,000 of the federal government’s 2.1 million employees were sidelined without pay.

What’s causing the fight this time?

The federal government’s new fiscal year begins on Wednesday, and Congress has yet to strike an agreement on a short-term funding bill.

Republicans, who control both chambers of Congress, are refusing to compromise and in effect daring Democrats to reject a stopgap measure that would extend funding levels, mostly at current levels, through 21 November. That bill narrowly passed the House but fell short in the Senate earlier this month.

Donald Trump has said he expects the government to shut down this week. “If it has to shut down, it’ll have to shut down,” he said on Friday, blaming the Democrats.

Republican and Democratic congressional leaders remained at an impasse after a Monday afternoon meeting with Trump at the White House. “I think we’re headed into a shutdown because the Democrats won’t do the right thing,” JD Vance told reporters after the summit.

Democrats, locked out of power in Washington, have little leverage, but their votes are needed to overcome the filibuster in the Senate. Democrats are demanding an extension of subsidies that limit the cost of health insurance under the Affordable Care Act and are set to expire, a rollback of Medicaid cuts made in Trump’s One Big Beautiful Bill Act, and the restoration of funding to public media that was cut in the rescissions package.

Leaving the White House on Monday, Senate Democratic leader Chuck Schumer said: “There are still large differences between us.”

Congressional Democrats are under pressure to use their leverage to stand up to Trump and his administration. In March, Schumer lent the necessary Democratic votes to approve a short-term funding, Republican-written measure without securing any concessions – a move that infuriated the party’s base.

Why is this year’s threat more serious?

This time, the impact on federal workers could be even more severe. In a memo released last week, the White House’s Office of Management and Budget told agencies not just to prepare for temporary furloughs but for permanent layoffs in the event of a shutdown.

The memo directed agencies to ready reduction in force notices for federal programs whose funding sources would lapse in the event of a shutdown and are “not consistent with the president’s priorities”.

OMB led the administration’s earlier efforts to shrink the federal workforce as part of a broader government efficiency campaign led by Elon Musk’s “department of government efficiency”.

In a statement on Thursday, AFL-CIO’s president, Liz Shuler, said government employees had “already suffered immensely” this year under the Trump administration’s vast cuts to the federal workforce. “They are not pawns for the president’s political games,” she said.

Asked about the memo on Thursday, Trump blamed Democrats, saying a shutdown was what the party wanted. “They never change,” he said.

At a news conference, House minority leader Hakeem Jeffries said on Thursday that Democrats “will not be intimidated” by the Trump administration’s threats to fire more federal employees if the federal government shuts down. He added that his message to Russell Vought, the head of OMB, was simple: “Get lost.”

What happens if the government shuts down?

In the event of a full or partial government shutdown, hundreds of thousands of federal workers may be furloughed or required to work without pay, though the Trump administration has not yet made public its updated contingency plans.

Operations deemed essential – such as social security, military duties, immigration enforcement, and air traffic control – continue, but other services may be disrupted or delayed. Mail delivery and post office operations will continue without interruption.

The effect can be wide-ranging and long-lasting. Previous shutdowns have closed national parks and the Smithsonian museums in Washington; slowed air travel; delayed food safety inspections and postponed immigration hearings.

While the broader economy may not feel the effects immediately, analysts warn that a prolonged shutdown could slow growth, disrupt markets, and erode public trust.

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