What Happens Now That the Government is Shutdown

What Happens Now That a Government Shutdown Is Underway

With Congress deadlocked over Medicaid cuts and health care subsidies, the federal government has shut down—furloughing hundreds of thousands of workers and disrupting critical services.

WASHINGTON — The federal government has officially shut down after lawmakers failed to pass a funding bill by the midnight deadline. Republicans backed a short-term measure to keep agencies funded through November 21 at current levels, but Democrats blocked it, demanding action on health care: reversing Medicaid cuts from President Donald Trump’s summer tax and spending package and extending Affordable Care Act premium tax credits that help millions afford insurance.

Republicans dismissed the Democratic proposal as fiscally reckless, estimating it would cost over $1 trillion. With neither side willing to budge, the shutdown began Wednesday.

The U.S. Capitol at sunset, where funding negotiations collapsed. (Public domain via Wikimedia Commons)

What Happens During a Shutdown?

When federal funding lapses, agencies must furlough “nonexcepted” employees—those not involved in protecting life or property. “Excepted” workers, including military personnel, FBI agents, air traffic controllers, and TSA officers, continue working but do not receive pay until funding resumes.

The Congressional Budget Office estimates about 750,000 federal workers could be furloughed daily, representing roughly $400 million in lost wages per day.

Thanks to a 2019 law, all affected employees—furloughed or working without pay—will receive retroactive pay once the shutdown ends. However, they may miss one or more regular paychecks depending on its duration.

What Government Services Continue?

Many critical functions remain operational:

Social Security and Medicare benefits continue uninterrupted.

Veterans Affairs (VA) medical centers and clinics stay open; VA benefits are processed and delivered; burials continue at national cemeteries.

National defense and public safety operations—including the armed forces, CIA, and airport security—continue.

The U.S. Postal Service is unaffected—it’s self-funded through product sales, not taxpayer dollars.

The Jack C. Montgomery VA Medical Center in Muskogee, Oklahoma. (Public domain via U.S. Department of Veterans Affairs)

What Gets Shut Down?

Each agency implements its own contingency plan:

• Department of Health and Human Services (HHS): About 41% of its 80,000 employees will be furloughed. The CDC will monitor disease outbreaks but halt most public health research.
• National Institutes of Health (NIH): Current patients in clinical trials continue receiving care, but new enrollments and studies are paused.
• Food and Drug Administration (FDA): Will not accept new drug or medical device applications that require user fees, delaying public access to new treatments.
• National Park Service: Parks remain largely open—roads, trails, and monuments stay accessible—but two-thirds of staff are furloughed. Sites may close if vandalism or trash accumulation becomes severe.
• Smithsonian Institution: Museums and the National Zoo will remain open through at least Monday using reserve funds.

Valley View in Yosemite National Park during summer. (Public domain via National Park Service)

Nutrition Assistance and Economic Impact

The Supplemental Nutrition Assistance Program (SNAP), or food stamps, will continue through October. The Women, Infants, and Children (WIC) program has enough carryover funding to operate for about one to two weeks, according to the National WIC Association.

“A short shutdown doesn’t have a huge impact on the economy,” said CBO Director Phillip Swagel, noting retroactive pay softens the blow. “But if a shutdown continues, it creates uncertainty about the government’s role and fiscal stability.”

Historically, financial markets have remained resilient. Goldman Sachs research shows equity markets typically end flat or higher after past shutdowns—even if they dip initially.

A More Aggressive Approach

In a sharp departure from past practice, the Trump administration signaled a harsher stance. A memo from the Office of Management and Budget instructed agencies to consider issuing Reduction-in-Force (RIF) notices—effectively eliminating positions—for programs that lost funding in Trump’s summer budget and are “not consistent with the President’s priorities.”

This could mean some furloughed workers never return—a significant escalation from previous shutdowns, where employees typically resumed their roles once funding was restored.

President Trump blamed Democrats for the impasse, falsely claiming they sought health care funding for undocumented immigrants, and vowed to use the shutdown to make “irreversible” policy changes.

Key Takeaways:

1. 750,000 federal workers may be furloughed daily; most will get back pay.
2. VA care, Social Security, mail, and defense continue; FDA, NIH, and parks scale back.
3. SNAP runs through October; WIC may last 1–2 weeks.
4. This shutdown may include permanent job cuts—a first in modern history.

As the shutdown unfolds, hundreds of thousands of federal workers—and millions of Americans who rely on government services—face growing uncertainty about when normal operations will resume.