U.S. Government Shutdown2025: What it Means + What to Know

What Is a Government Shutdown?

A government shutdown happens when Congress fails to pass funding bills (or a temporary funding measure) before the new fiscal year begins. When that happens, many federal agencies don’t have money to operate, so non-essential functions pause. Essential services — ones tied to safety, defense, or health — often continue.

Why Did It Happen in 2025?

Fiscal year 2026 funding bills weren’t passed in time, and neither was a stop-gap “continuing resolution.” As a result, when the clock struck 12:01 a.m. on October 1, 2025, the new fiscal year began without approved budgets — triggering the shutdown.  

Key disagreements include how to fund health insurance subsidies under the Affordable Care Act, how much to spend on various programs, and other funding priorities. 

Who Gets Furloughed vs. Who Works (Without Pay)

Federal employees are often split into two groups during a shutdown:

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• Furloughed employees: Non-essential workers who are told not to report to work and typically don’t receive pay while the shutdown is ongoing.
• “Excepted” or essential employees: Those whose work is vital to public safety, national security, or other required operations must still work — often without immediate pay. 

Historically, after the shutdown ends, Congress provides *retroactive pay* for furloughed employees via laws like the Government Employee Fair Treatment Act of 2019 (GEFTA).

What Services / Programs Are Affected or Paused

Not all federal services shut down. Here’s what tends to happen:

• Essential services continue: military, law enforcement, border security, air traffic control, some health services (Medicare / Medicaid usually persist) 
• Non-essential services pause or slow: many research programs, national parks, some regulatory and permit processing, agencies without funding to cover operations 
• Public-facing benefits often continue: Social Security, Medicare, and Medicaid aren’t usually halted by shutdowns because they are funded through mandatory spending or prior law. 

Economic & Broader Effects

A shutdown can slow the economy, reduce consumer spending (especially from furloughed federal workers), and delay key economic data that helps policymakers. Some agencies announce sharp staff cuts: for example, the IRS plans to furlough nearly half its workforce during this shutdown. Markets may become jittery, especially if the shutdown drags on, and some programs or projects reliant on federal funding can be delayed or canceled.

What You Should Know / Watch Out For

• Federal benefits: If you rely on services linked to federal agencies (e.g. housing assistance, permits, grants), plan for delays.

• IRS / tax services: Many assistance, processing, audits, and support centers might slow or pause. 
• Immigration & cases: Delays in immigration courts, visa processing, etc., are likely in impacted agencies. 
• Permits & grants: Projects dependent on federal funding (e.g. for nonprofits, small businesses) might stall.
• Court cases & filings: Some courts or legal processes that rely on federal funding could face backlog or delays. )

How Long Could It Last & What Ends It?

The shutdown continues until Congress passes — and the President signs — a funding measure (a full appropriations bill or a continuing resolution).

Length is unpredictable — could be days, weeks, or more. The longer it goes, the more severe the downstream effects. 

Next Steps / What You Can Do

• Watch announcements from agencies you rely on (IRS, health, grants, etc.) for updates on delays or new guidance.
• If you’re a federal employee, explore community-level supports, financial planning, or local relief options.
• Avoid assuming everything will operate as normal — if you need something from a federal office, call ahead to confirm.
• Stay informed via trustworthy sources (agency websites, official statements, major news outlets).