Congress faces a critical deadline at midnight on Friday to formulate a plan for government funding; if they fail to do so, federal agencies may be forced to close. This potential shutdown could impact hundreds of thousands of federal workers, who might either be furloughed or compelled to work without pay during the holiday season.
On Wednesday, Republican leaders abandoned a bipartisan strategy aimed at preventing a government shutdown after prominent figures such as President-elect Donald Trump and billionaire Elon Musk criticized the approach. Trump urged House Speaker Mike Johnson to renegotiate the agreement just days before the deadline for federal funding.
In response to this pressure, Republicans presented a revised funding proposal on Thursday that intended to maintain government operations for an additional three months while also suspending the debt ceiling for a two-year period, set to last until January 30, 2027. However, the bill encountered an overwhelming defeat in a House vote later the same day, leaving the next steps in limbo.
The implications of a government shutdown are significant. It occurs when Congress fails to pass essential funding legislation, which the president then does not sign. If no new funding measures are approved by Friday, the federal government will effectively cease operations. Following the end of the fiscal year on September 30, Congress had already enacted a temporary measure to keep the government functioning, but this will expire at the end of the week.
Each federal agency has the discretion to decide how to manage a shutdown. Typically, operations classified as non-essential would cease, impacting crucial services and disrupting the activities of numerous federal employees. Some workers may be furloughed, remaining in their positions but temporarily inactive, while others might work without pay, anticipating they will receive their full compensation once operations resume.
The guidelines for determining which employees continue to work date back to the 1980s. Under directives established during Ronald Reagan’s administration, certain personnel, especially those involved in national security or essential services that “protect life and property,” are exempt from furloughs. Agencies such as the FBI, the Border Patrol, and the Coast Guard would continue to function, as would TSA officers at airports. The U.S. Postal Service would also operate as it is considered independent.
Conversely, national parks and monuments would close their gates, and while military personnel would maintain their positions, many civilian workers with the Department of Defense might find themselves sent home. Court operations would be disrupted, with civil court activities halted, though criminal proceedings would remain in effect. The Internal Revenue Service would continue to process automated tax collections but would suspend audits of tax returns.
Importantly, Social Security and Medicare recipients would not face disruptions in their benefits during a shutdown, as these are funded through mandatory spending not reliant on annual appropriations. However, the processing of new applications may come to a standstill, as demonstrated during a previous government shutdown in 1996 when many Medicare applicants were turned away.
The term “continuing resolution,” or “CR,” often arises in last-minute funding discussions. A CR serves as a temporary measure that permits the federal government to continue operations until a more durable budget agreement is finalized. A “clean CR” simply extends current funding at prior fiscal levels without introducing new changes.
Alternatively, an omnibus bill contains multiple funding measures compiled into a single vote, often leaving lawmakers little time to consider agreements thoroughly. This strategy can arise if individual funding bills falter in the legislative process, but Republicans have opted out of pursuing an omnibus bill this time, indicating they would prefer to tackle spending negotiations next year when Trump assumes the presidency and they regain control of both legislative chambers.
As for whether a government shutdown will indeed occur, the outcome remains uncertain. Historically, Congress often scrambles to finalize funding packages just before deadlines to avert shutdowns. However, past instances illustrate that shutdowns are not uncommon, with the last significant one occurring six years ago when Trump insisted on funding for a U.S.-Mexico border wall, which ultimately led to the longest shutdown in U.S. history. Previous presidencies, including those of Jimmy Carter and Ronald Reagan, also experienced multiple shutdowns during their terms.
