The US Government Shutdown

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As of 12:01 AM PST on October 1st, 2025, the United States government shut down. This sudden shutdown has raised numerous questions about Medicaid, funding, travel restrictions, visa delays, and related issues. To understand how this happened, we need to look back at the events leading to the shutdown. U.S. Representative Ami Bera, M.D., explains that a government shutdown occurs when Congress fails to pass funding bills for federal agencies for the next fiscal year. He states that if no agreement is reached by 11:59 PM on September 30, 2025, a partial shutdown will begin at 12:01 AM ET on October 1. This process follows the same constitutional rules that caused previous shutdowns. Such as those in 2013 and 2018-2019, when disputes over healthcare and immigration funding stalled budget talks. This leads us to the second important question: what funding bills led us to this situation?

The Issue

According to BBC News, although Republicans control the Senate and House, they still lack the 60 votes needed to pass a bill that would stop the Affordable Care Act’s subsidies for the upcoming fiscal year. This shortfall forces them to either compromise or risk a shutdown, showing how the Senate’s supermajority requirement often results in gridlock during times of strong partisanship.

Democratic Stance

Democrats have been advocating for the subsidies provided by the Affordable Care Act to become permanent. They argue that the advantages

of keeping such a program outweigh the drawbacks for both individuals and the government. The Congressional Budget Office (CBO) claims that extending these subsidies could prevent an estimated 16% rise in premiums for middle-income families and would maintain health coverage for about 14 million Americans. Democrats contend that eliminating these supports would not only disrupt care but also destabilize the private insurance market as millions drop their coverage, leading to higher uncompensated hospital expenses.

Republican Stance

Republicans have been hesitant to move forward with funding for this act and prefer to delay discussions until later. They argue that the subsidies are financially reckless and contribute to the national debt, which surpassed $35 trillion in 2025. Many Republicans, including members of the House Freedom Caucus, see this moment as a chance to cut federal spending and prompt a broader discussion on entitlement reform. They assert that the ACA’s structure overreaches federal power and discourages private competition in healthcare markets.

What is the Affordable Care Act?

Healthcare.gov defines the Affordable Care Act, commonly known as Obamacare, as a law that makes affordable health insurance available to more people. This law provides consumers with subsidies, known as the “premium tax credit,” that lower costs for households with incomes between 100% and 400% of the federal poverty level (FPL).

The ACA is a U.S. law passed in 2010 aimed at making health insurance more affordable and accessible. It has significantly impacted households by expanding coverage, lowering the uninsured rate, and increasing access to preventive care. The U.S. Census Bureau reports that the uninsured rate fell from 16% in 2010 to below 8% in 2023. Families benefit from protections such as allowing young adults to remain on their parents’ insurance until age 26 and eliminating lifetime caps on coverage.

However, the law also has its downsides. People who do not qualify for subsidies can face higher premiums, and in some areas, limited insurer competition means fewer plan options. The law’s complexity can also create confusion around enrollment for some individuals and employers.

Impact of the ACA on Healthcare Systems, Employers, and Families

For healthcare overall, the ACA has changed how hospitals, providers, and insurance companies operate. It has pushed for a shift toward preventive care and payment models that reward healthcare providers for improving patient outcomes rather than just performing procedures.

For government workers and public employees, the ACA requires that most large employers, including government agencies, offer affordable coverage to employees, thus helping to maintain broad access to insurance.

In everyday life, the ACA affects families by ensuring that preventive care, like vaccinations, cancer screenings, and maternity services, is covered at little or no cost. It has provided millions of families with greater financial stability by reducing unexpected medical expenses and medical debt. However, access to ACA benefits can vary by state, as not all states have expanded Medicaid.

Currently, a large portion of the federal funding related to the ACA is spent on subsidies for marketplace coverage and Medicaid expansion. However, new legislation continues to influence the program’s future. Congress regularly debates extending or modifying subsidies, and some new bills suggest limiting Medicaid eligibility or reducing funding for certain groups, including immigrants. Overall, the ACA remains one of the most significant and contentious healthcare laws in U.S. history.

Why the 2025 Shutdown Happened

The 2025 U.S. government shutdown occurred because Democrats and Republicans could not agree on the federal budget. A major sticking point was healthcare funding. Democrats sought to extend subsidies that help people afford health insurance, while Republicans argued that these subsidies should be addressed separately from the funding bill. Disagreement also arose over spending priorities. Republicans pushed for cuts to specific programs and reductions in foreign aid, while Democrats wanted to maintain funding for essential services like health and social programs.

The ongoing conflict between the two parties comes from a standoff about health insurance subsidies from the pandemic era and cuts to Medicaid services. Democrats have insisted on including these subsidies in short-term funding measures, claiming that their expiration would increase premiums and reduce coverage for millions. Republicans have dismissed this connection, viewing the subsidies as a separate issue and insisting that funding bills should not be tied to long-term health policy reforms. This disagreement has led to a legislative deadlock and the potential for a government shutdown.

The Impact on Federal Aid

The shutdown significantly impacts several federal aid programs, with the Federal Student Aid program one of the most affected. During a shutdown, the government may halt new grants and pause some operations, like civil rights investigations, which limits access to new federal assistance.

Programs such as Pell Grants and federal student loans may continue temporarily using existing funds, but extended shutdowns could cause delays or funding shortages for schools and students. The Department of Education also reduces its staff during this period, which results in slower processing and fewer services.

Other programs, such as Medicare, Medicaid, and Veterans Affairs benefits, continue to operate but may face delays due to reduced staffing. Overall, the longer a shutdown lasts, the greater the disruption to education funding, healthcare services, and other vital federal aid programs.

The U.S. Office of Management and Budget reported that about 800,000 federal employees were furloughed during the 2019 shutdown, and similar numbers are expected in 2025, causing further strain on financial aid processing, research funding, and disaster relief efforts.

Why Does the Government Shut Down?

A government shutdown occurs when Congress fails to pass the necessary funding bills, called appropriations, which keep federal agencies running for the next fiscal year, starting on October 1. If no agreement is reached by 11:59 PM on September 30, 2025, a partial shutdown begins at 12:01 AM ET on October 1. Some essential services continue during a shutdown, but others may be interrupted or delayed. Shutdowns are not uncommon. The U.S. has experienced more than 20 since 1976. However, in recent years, they have become longer and more politically charged, reflecting the growing polarization in Congress.

Effects on the Country

During a shutdown, essential services related to national security and public safety, such as emergency medical care, air traffic control, law enforcement, border security, disaster aid, and power grid maintenance, keep functioning, although they may face interruptions.

For instance, during the 2018-2019 shutdown, air traffic controllers worked without pay, resulting in significant delays and even temporarily halting incoming flights at LaGuardia Airport. Programs like Social Security and Medicare continue, but may face disruptions due to reduced staff.

Shutdowns negatively impact both the public, who face disruptions, and federal employees, who are either furloughed or required to work without pay. They also strain government resources, diverting time and energy from public services. The Congressional Budget Office estimated that the 2018-2019 shutdown cost the U.S. economy $11 billion, mainly from less spending by unpaid federal workers. Even after getting back pay, a large amount of this lost spending was never recovered. The CBO warns that if the 2025 shutdown goes on for more than three weeks, the GDP could shrink by up to 0.2%, further stressing the national economy.

Impact on Daily Life

Travel: Many TSA and FAA employees are essential workers and will continue their usual operations. However, due to staffing shortages from furloughs, air travelers should expect longer wait times, delays, and possible cancellations. Visa and passport services likely will not be directly affected by a government shutdown since U.S. Citizenship and Immigration Services and the State Department’s Bureau of Consular Affairs mainly rely on processing fees for funding. Still, a funding shortfall could disrupt operations in these agencies. The longer a shutdown lasts, the more we might see longer TSA lines, flight delays, cancellations, national parks in disrepair, and unnecessary delays in updating travel infrastructure. This is according to Geoff Freeman, president and CEO of the U.S. Travel Association.

With more workers facing pay cuts or furloughs, Americans could feel the increasing pressure on public services and infrastructure as the shutdown continues.

Impact on Jobs

The shutdown affects hundreds of thousands of jobs. Air traffic controllers and TSA agents remain on duty, so flights go on. But without pay, leading to longer lines and slower service.

Hundreds of thousands of federal workers are furloughed and do not receive pay until Congress takes action, impacting local economies. Agencies like the CDC, NIH, and FDA lose much of their staff, hindering research, disease tracking, and food or drug inspections. Small businesses that depend on federal loans or contracts face uncertainty. The Small Business Administration (SBA) stops approvals, delaying funding for countless entrepreneurs. National parks often close or remain unstaffed, while federal loan programs freeze, affecting small business owners, farmers, and homebuyers. Courts also slow down, postponing hearings and cases.

Impact on Trade

The shutdown also interferes with trade operations. While some essential functions like tariff collection, cargo inspections, and passenger processing at ports continue, most planning, policy, research, and training activities stop. The Office of the U.S. Trade Representative (USTR) states that during a government shutdown. It’s necessary for the President’s constitutional responsibility to conduct foreign relations will continue. However, worker furloughs and financial uncertainty can greatly slow down trade-related work and logistics.

The U.S. Chamber of Commerce cautions that the 2025 shutdown could further disrupt supply chains still recovering from post-pandemic bottlenecks, particularly in agricultural exports and manufactured goods, which rely on timely inspections and customs processing.

Impact on Taxes

The IRS continues to operate with limited staff during a shutdown, meaning taxpayers must still file and pay taxes on time, but refunds and audits may be delayed. Reduced staffing can also slow customer service responses. Social Security and SSI payments continue without interruption, but certain IRS functions. Like processing paper returns or answering taxpayer calls are on hold. During the last shutdown in 2018-2019, about 14,000 IRS workers did not report to work without pay, resulting in significant delays in tax refunds. If this happens again in 2025, the Treasury Department estimates that up to $2 billion in refunds could be delayed each week.

Conclusion

The 2025 U.S. government shutdown highlights the deep divides between the parties over healthcare and spending priorities. While essential services continue, millions of Americans face the impacts of delayed aid, slower services, and reduced access to federal programs. The longer the deadlock lasts, the greater the cost, both economic and social. This shutdown serves as a reminder that partisan gridlock in Washington has real consequences. Not just for federal employees and lawmakers. But for everyday Americans who rely on government programs to secure their lives, health, and livelihoods.