US stares at govt shutdown: What it means, what's causing it and how it will hit Americans | Explained

The United States is again on the verge of a government shutdown as Congress struggles to approve a new funding bill before the September 30, 2025 deadline. (File photo)

The United States is once again staring at a government shutdown as a deeply divided Congress scrambles to reach a funding agreement before the September 30, 2025 deadline. Federal funding is set to expire at 12:01 a.m. on Wednesday unless lawmakers can strike a deal. If no resolution is reached, large portions of the federal government will be forced to suspend operations, leaving hundreds of thousands of federal workers without pay and disrupting essential services relied on by millions of Americans.

The confrontation has become about far more than just budget numbers, pitting President Donald Trump’s push for sweeping federal workforce reforms against Democratic leaders’ resistance to cuts in healthcare and domestic programmes.

Trump is scheduled to meet the top four congressional leaders at the White House today in what both sides are calling a crucial effort to avert a shutdown. The meeting will bring together House and Senate Democratic leaders Hakeem Jeffries and Chuck Schumer, both of New York, alongside their Republican counterparts, House Speaker Mike Johnson of Louisiana and Senate Majority Leader John Thune of South Dakota.

This will be the first face-to-face discussion since Trump abruptly cancelled a scheduled meeting with Democratic lawmakers earlier in the week, dismissing ongoing talks as “pointless.” The White House insists the president is committed to keeping the government open, but Democrats accuse him of deliberately steering the country toward a shutdown.

What a shutdown means

A shutdown occurs when Congress fails to pass appropriations bills or a temporary funding measure before the start of the fiscal year on October 1. Large parts of the federal government must suspend operations because agencies cannot spend money without congressional approval. Employees in positions deemed non-essential are furloughed while others must work without pay until funding is restored.

Some functions continue because they are funded differently or considered essential to public safety. Social Security checks go out, air traffic controllers remain on duty and military operations continue, though with potential delays and strain. National parks, public museums and many administrative offices close. Food inspections, immigration hearings and other services slow down or stop altogether.

Standoff over priorities

At the heart of the impasse is a clash of priorities. Republicans, who control both the White House and Congress, are determined to assert their authority over the budget, while Democrats want to secure influence over health care policy, particularly by extending key Affordable Care Act subsidies. Six months ago, Democrats accepted a GOP-written funding bill without major concessions, but they now insist that any new deal must reflect their input.

Although Republicans hold both chambers, Democrats retain leverage in the Senate, where 60 votes are needed to pass a bill and the GOP has only 53 seats. “We need the meeting,” Senator Schumer told NBC’s “Meet the Press.” “It’s a first step, but only a first step. We need a serious negotiation. Now, if the president at this meeting is going to rant and just yell at Democrats… we won’t get anything done.”

Senator Thune countered that Republicans will not negotiate on a short-term funding measure but are open to compromise on a longer-term bill. “What the Democrats have done here is take the federal government as a hostage -- and by extension, the American people -- to try and get a whole laundry list of things they want,” he said.

Impact on services and federal workers

The timing of the funding fight coincides with Trump’s plan to shrink the federal workforce on a scale not seen since the 1940s. According to a July report by Senate Democrats, more than 100,000 federal workers are set to formally resign this week under a deferred resignation programme. Employees are placed on administrative leave for up to eight months while continuing to receive pay and benefits before leaving government service. The buyout is expected to cost $14.8 billion but the administration argues it will save $28 billion annually.

A White House spokesperson defended the programme, saying there was “no additional cost to the government” because the employees would have been paid regardless. “In fact, this is the largest and most effective workforce reduction plan in history,” the spokesperson added.

Thousands of other employees have been fired under reduction-in-force orders. Combined with retirements, the total reduction is projected to reach 275,000 employees this year. Last week the Office of Management and Budget told agencies to prepare for permanent layoffs in the event of a shutdown, a move that has heightened anxiety among federal workers. House Democratic Leader Hakeem Jeffries, speaking at a press event, directly addressed OMB head Russell Vought, saying, “Get lost.”

Federal labour unions have pushed back. The American Federation of Government Employees and other groups have filed a lawsuit against the deferred resignation programme, saying it violates statutory requirements and cripples agencies. AFL-CIO president Liz Shuler said, “They are not pawns for the president’s political games.”

If no deal is reached, hundreds of thousands of federal employees will either be furloughed or forced to work without pay. National parks and Smithsonian museums could close, food safety inspections may be postponed and immigration backlogs could grow. Postal services would continue because they are funded separately. Economists warn that even a short disruption could rattle financial markets and slow growth.

What is at stake politically

This funding showdown has become a test of whether Democrats can use their limited leverage to constrain the president’s agenda. In recent weeks Trump has deployed federal troops to Portland, intervened in Justice Department matters, announced plans to challenge birthright citizenship at the Supreme Court and backed controversial claims about vaccines promoted by Health and Human Services Secretary Robert F Kennedy Jr. Critics see these moves as part of a broader effort to centralise power.

Government shutdowns are risky for both presidents and lawmakers. Voters often punish whoever they perceive as responsible, especially when essential services are disrupted. The 34-day shutdown in 2018, also under Trump, sidelined about 800,000 federal workers and damaged public confidence in Washington’s ability to govern.

Trump appears less concerned about those risks. With most Republicans unified behind him, he has shown little inclination to compromise. Democrats, meanwhile, face pressure from their base to resist what they view as harmful cuts. Monday’s meeting at the White House may clarify positions more than it produces a deal. As Schumer warned, “If the president at this meeting is going to rant, and just yell at Democrats… we won’t get anything done.”