THE United States government largely ground to a halt on Wednesday after Congress failed to pass a funding extension, jeopardising the release of critical economic indicators and foreshadowing the furlough of hundreds of thousands of federal employees.
Reuters reported today that the breakdown followed the Senate’s rejection of a stopgap spending bill intended to keep government operations running through 21 November. The impasse reflects entrenched partisan divisions, with Democrats opposing the measure for its exclusion of expiring health benefits and Republicans refusing to attach them.
The shutdown, the 15th since 1981, threatens to withhold the September non‑farm payroll report, slow air travel, suspend scientific research, deny pay to US troops and force the furlough of 750,000 federal workers—at a cost of $400 million per day.
President Donald Trump, who has already initiated plans to cut some 300,000 workers by December, warned that the shutdown might pave the way for “irreversible” reductions in jobs and programmes.
Adding fuel to the uncertainty, new labour data showed softening in the jobs market. The August JOLTS report revealed sluggish gains in job openings and a decline in hiring, reinforcing market expectations of imminent interest rate cuts by the Federal Reserve. Futures traders now assign a 97 per cent probability to a 25‑basis‑point cut this month, and 76 per cent for another in December.
Market reactions were swift. Wall Street futures dipped, gold surged to record highs, and Asian stock markets wavered amid fears over job losses and interrupted data releases. The dollar weakened to a one‑week low against major currencies.
The longest US government shutdown in history, lasting 35 days, occurred during December 2018 to January 2019 under Trump’s first administration.
Senate Democratic Leader Chuck Schumer accused Republicans of political brinkmanship, saying, “All they want to do is try to bully us. And they’re not going to succeed.” Senate Majority Leader John Thune countered that the failed bill was a nonpartisan measure lacking policy riders, blaming the shutdown on Trump’s agenda.
Though Republicans control both chambers, Senate rules require 60 votes to advance spending legislation. With that threshold unmet, deadlock looms large.
Democrats have pushed to include long-term healthcare extensions in any funding package, arguing that Republicans should not spend billions without protections for expiring health benefits. Trump has insisted those issues be dealt with separately.
Political scientist Robert Pape noted that in an increasingly polarised US, both sides face pressure from their bases not to yield. He observed that leaders “would have to backtrack against tens of millions of truly aggressive supporters, which is going to be really hard for them to do.”
Amid the chaos, Trump drew criticism for circulating a deepfake video manipulating appearances of Senate Democrats — “childish,” Schumer said — reflecting the bitterness of the standoff. - October 1, 2025
