With a funding deadline just hours away, President Donald Trump and Democratic leaders left the White House on Monday without a deal, raising the risk of a government shutdown as early as Wednesday.
Vice President JD Vance captured the mood bluntly: “I think we’re headed to a shutdown,” he told reporters outside the West Wing, calling the standoff “preposterous” and adding, “You don’t shut the government down.”
If no agreement is reached by midnight Tuesday, thousands of federal employees could be furloughed and services from NASA to national parks could halt, according to Reuters.
The immediate sticking point is whether to extend funding while also addressing health benefits at risk of expiring. Democrats insist both issues must be tied together, while Republicans argue they should be handled separately.
Senate Democratic leader Chuck Schumer said there were still “very large differences.” House Democratic leader Hakeem Jeffries warned that without an extension, 24 million Americans could see health costs soar as Affordable Care Act subsidies expire. “We believe that simply accepting the Republican plan to continue to assault and gut healthcare is unacceptable,” he said.
Republicans counter that Democrats are using healthcare as leverage. “They had some ideas that I actually thought were reasonable, and they had some ideas that the president thought was reasonable,” Vance said. “What’s not reasonable is to hold those ideas as leverage and to shut down the government.”
Failure to act would immediately disrupt federal courts, small business grants, and government paychecks. Shutdowns are not new in Washington; there have been 14 since 1981, but Trump’s approach has added uncertainty.
He has already refused to spend billions previously approved by Congress and has threatened a broader purge of the federal workforce if lawmakers fail to meet his terms.
The fight centers on $1.7 trillion in discretionary spending, about a quarter of the $7 trillion federal budget. Democrats proposed a weeklong extension, while Republicans pushed for funding through November 21. Schumer rejected the GOP plan after it returned to the Senate floor for another vote.
The last shutdown, sparked by a border wall fight in Trump’s first term, dragged on for 35 days, the longest in US history. Democrats fear another could politically damage them ahead of the 2026 midterms if they are seen as simply anti-Trump, while Republicans accuse Democrats of what Senate GOP leader John Thune called “Trump Derangement Syndrome.”
The looming shutdown could also disrupt the release of critical economic data. The Labor and Commerce departments confirmed Monday that their statistical agencies would suspend key reports if funding lapses.
The Bureau of Labor Statistics (BLS) identified itself as among the agencies that would halt operations, potentially delaying September’s employment report, scheduled for Friday. That data is considered essential for decisions by the Federal Reserve, businesses, and households.
While the BLS will publish Wednesday’s Metropolitan Area Employment and Unemployment report, other releases, including international trade figures due October 7 and the initial estimate of third-quarter GDP set for October 30, could be postponed. A prolonged shutdown might also delay the Consumer Price Index, potentially affecting the Social Security Administration’s annual Cost of Living Adjustment announcement.
The BLS has long faced underfunding and staffing challenges. “Once funding is restored, BLS will resume normal operations and notify the public of any changes to the news release schedule on the BLS release calendar,” the agency said in a statement. It also warned that reduced data collection during the shutdown could “impact the quality of future estimates produced.”
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
