The United States government entered a shutdown phase on Wednesday at 00:01 EDT (04:01 GMT), coinciding with the start of the new fiscal year. This came after Democrats and Republicans in the Senate could not reach an agreement regarding a short-term funding plan.
With the expiration of funding for government operations, the fallout has begun to unfold, particularly for federal employees.
Despite Republican control of both chambers of Congress, their proposed funding bill, which aimed to extend operations until November 21, failed to garner sufficient support. Democrat opposition was rooted in a demand for the reversal of cuts to Medicaid that were part of Trump’s One Big Beautiful Bill enacted in July. Alternatives offered by Democrats were rejected, leading to a congressional deadlock.
As a consequence of the government shutdown, agencies implement furloughs for non-essential employees, categorizing them as “non-excepted.” These furloughed workers will receive no pay during the shutdown, though a 2019 law guarantees back pay once operations resume. However, this law does not extend to contract employees, including janitorial and related services, who may only receive payment if their contracting firms have budgeted for it.
Essential employees, defined as those who protect life and property, will continue to work during the shutdown, albeit unpaid until the government reopens. According to the Congressional Budget Office, this shutdown could result in approximately 750,000 federal employees being furloughed daily, leading to a daily loss of about $400 million in wages.
It’s important to note that given the current situation, many federal employees may not return to their jobs. A recent directive from the White House’s Office of Management and Budget (OMB) suggested preparing for large-scale layoffs rather than just furloughs, which adds further uncertainty to the employment landscape.
Furloughs mean that employees are temporarily suspended without pay. Commentators, like Scott Lucas from the University College Dublin’s Clinton Institute, emphasize the human cost involved. Many employees during previous shutdowns, such as the 35-day partial government shutdown in December 2018, were compelled to take out loans or depend on friends and family for financial support. Food banks also became necessary resources for those struggling financially during these challenging times.
As the shutdown continues, various government services will see different levels of functionality. For example, the Social Security Administration will still issue disability and retirement benefits as it operates with mandatory funding. However, approximately 12 percent of its staff will be furloughed and all marketing campaigns have been halted.
Medicare and Medicaid will also maintain their functions, given that they are funded through mandatory spending.
Federal law enforcement agencies like the FBI, CIA, and Drug Enforcement Administration will remain operational during the shutdown, with employees continuing in their roles but without pay until the resolution of the funding impasse. The US Postal Service, in contrast, operates independently from tax revenue and will continue its services uninterrupted throughout the shutdown.
The IRS will remain fully staffed for the first five days of the shutdown, but its longer-term plans remain uncertain in light of potential extended furloughs due to inadequate funding. The agency, which has already experienced a significant reduction in workforce, currently employs around 75,000 individuals.
Air traffic controllers, numbering over 13,000, will continue their essential duties, but likewise without pay during the shutdown. Most of the Transportation Security Administration (TSA) personnel will also remain on the job under the usual circumstances.
Interestingly, courts may soon face operational challenges, with warnings issued that they could run out of funds to continue functioning by as early as Friday. This is a significant shift from prior shutdowns when courts managed to remain open for longer periods.
Around two million military personnel will remain on duty throughout the shutdown, although they too will be unpaid until government operations resume. Notably, operations related to immigration will persist as mandated by President Trump’s declaration of illegal migration as a “national emergency.” Employees coordinating with local officials for immigrant arrests will also maintain their posts.
While Democrats appear unlikely to compromise regarding Medicaid funding cuts, the political stalemate raises concerns about the state of government operations.
Trump’s administration is under scrutiny for its handling of the situation, with many Democratic leaders condemning the memo outlining potential layoffs. They perceive it as intimidation, a view shared by Congressman Hakeem Jeffries who emphasized the party’s resolve against such tactics.
Political analysts suggest the Democrats’ unwillingness to back down could stem from a desire to hold Trump accountable for previous administrative actions that negatively affected government operations.
Speculation persists regarding Trump’s potential use of the shutdown to further his agenda. He has suggested that shutdowns can yield positive outcomes by eliminating “Democrat” initiatives, hinting at desires to curtail certain government functions and departments. In the past, Trump’s executive moves have already targeted areas like the Department of Education.
Experts believe that Trump could leverage this shutdown to push for dismantling or significantly reducing the operational capacities of agencies counter to his agenda, such as the Environmental Protection Agency and the Department of Justice.
Furthermore, conversations surrounding the shutdown have invoked market reactions, suggesting apprehensive stability. The US stock markets have remained relatively unshaken, exhibiting slight increases in the Dow Jones Industrial Average, S&P 500, and Nasdaq indices, attributed partly to anticipated government shutdown scenarios.
Market experts indicate the stability is due to prior adjustments in expectations regarding potential governmental disruptions and the broader impact of various global financial factors. The unpredictability and complexity of the situation continue to loom over both federal agencies and the economy at large as the shutdown persists.
image source from：aljazeera
