The federal government’s fiscal year 2026 will begin on October 1, but Congress has not reached a consensus on budget allocations so far. If Congress fails to pass a provisional allocation bill or pass individual allocation bills before midnight on September 30, the government’s unnecessary departments will be “closed” due to funding interruptions.
△ ABC reported that the Democratic Party and the Republican Party are currently deadlocked on the issue of temporary funding. If MPs still fail to reach a consensus as soon as possible after returning to work on September 29th, the government will fall into a "shutdown" on October 1st.
In the United States, although the government shutdown is not a new code, this year's shutdown risk is different from previous years, and the logic behind the scenes is more complicated because, in addition to the usual two-party confrontation and delay, the White House this year has made a new move unlike before.Federal agencies are required to prepare "mass layoff plans", that is, for the first time, "layoff" is a possible option。 This adds a layer of institutional risk to the originally reversible fiscal deadlock, making the consequences of this fiscal tug-of-war more unpredictable.
How the impasse forms.
Every federal fiscal year in the United States begins on October 1st and ends on September 30th of the following year. To ensure the smooth operation of the new fiscal year, Congress must pass the budget authorization of various departments in advance. This should have been completed one by one through 12 regular appropriation bills, but because party differences are difficult to solve all the year round, Congress often delays it until the last minute. If regular appropriations cannot be agreed on in time, the temporary appropriations bill becomes a "firefighting brigade". The provisional appropriation bill will "renew the life" of the government according to the expenditure level of the previous fiscal year, which can usually last for several weeks or months.
This year, however, even “help from fire” became a problem. Early in the spring and summer, Congress fell into a crackdown on health insurance subsidies, foreign aid, and immigration law enforcement funds, leading to discussions about 12 regular appropriations almost stagnating. By September, Republicans in the House of Representatives rushed to throw a temporary appropriation bill, wanting to keep the funds up until November 21, but were rejected by the Democrats because of the clause cutting some medical aid expenses and accompanying conservative policy demands. Nearly at the same time, the Democratic Party also proposed another version of the temporary appropriation bill in the Senate,ining the “Obama Doctor” reform subsidy and increasing social spending projects, and the result was unwarranted by the Republican opposition.
As the two plans failed one after another, the time window was constantly compressed. For most of late September, Congress was adjourned again, so the real working days available for negotiation and voting were compressed to the last two or three days of the month.
The U.S. media Federal News Network, which focuses on the administration and policy of the federal government, that despite the government's "stagnation", the two parties' differences on the main issues were far from agreed.
But at this critical moment, the White House is in trouble. On September 25, the White House Office of Management and Budget ordered agencies to prepare for Reduction in Force (RIF), not just the usual unpaid leave for people in non-essential positions. It should be noted that "RIF" is a term in the field of personnel and labor management of the U.S. government. It usually refers to layoffs, streamlining of personnel, and revocation of posts due to funding, establishment, organizational adjustments and other reasons. Therefore, this move is not only a contingency plan, but also seen as putting pressure on Congress. If the stalemate continues,The consequences may not only be short-term shutdowns, but also permanent changes in institutional and employee structures.
The Essence of Differences: The Double Sewing of Policy and Procedure
On the surface, this crisis is a matter of "money", but in essence it is a contest of policy direction.
In terms of policy, Democrats insist on continuing to maintain the increased subsidies in the provisional subsidies of the “Obama Medicine Reform Act”, protecting the medical subsidies of low-income groups, and restore some of the public health and public broadcast funding. Republicans view these as “benefit expansions” and oppose binding them in provisional subsidies. In addition, immigration and border security also become a barrel of fire. Republicans hope to increase the provisional subsidies of border security and immigration repatriation, cutting asylum and resettlement funds; Democrats consider this to be a code for hostages with humanitarian and immigration policies. In addition, foreign aid has also become a controversial, and Democrats are willing to maintain flexible support for Ukraine, Israel and others, and some Republicans
In the process, the Senate is a threshold that is difficult to cross. Though the Republican Party has a majority in the Senate, it cannot be pushed alone by the party itself because of the Senate's "long debate" rule.Require any bill to be put into final vote,BothmustFirstlyobtained60The supportThe vote ends the debate.This means that the bill can only be pushed forward if at least a portion of the opposing parliamentarians overthrew it, otherwise the opposition can prolong the debate indefinitely to hinder the agenda. At the moment, the atmosphere between the two parties is extremely opposite, and there is hardly any room for overthrew, as a result,The House and Senate call back votes, and temporary appropriations become a zero-sum game。
Jeffries, the Democratic leader of the U.S. House of Representatives, accused Trump of being a chaos maker, while House Republican lawmaker Johnson and others said that government shutdowns could be avoided if the Democrats abandoned their demands.
The White House has complicated the situation.Often, the government's "stop" means that unnecessary people are given temporary unpaid leave and can immediately resume work after funding is restored.The legal community believes the government can’t cut jobs directly because of shutdowns, and the trade unions also believe it’s a threat to surrender to Congress with cuts.This approach breaks past political conspiracies and makes the “stop” likely to be no longer just a reversible fiscal impasse, but a potential institutional damage.
More dangerous this year than last year.
The government’s “shutdown” almost became an annual drama code in Washington politics, especially as the party’s polarization intensified, the Congress’s difficulty in passing the annual budget increased, and the shutdown threat also appeared every year. According to CBS reports, since 1980, the United States has experienced 14 government shutdowns, such as in 2013 because of the “Obama Medicine Reform” dispute, the federal government closed for 16 days; and in 2018 around the border wall funding confrontation, creating a 34-day historical record.
As political mutual trust has dropped to the bottom, the new Congress has been sharply opposed since the beginning of the year on issues such as health insurance, immigration and foreign aid, with little incentive to negotiate regular allocations in advance. The relationship between the White House and Congress leadership is also more cold than in previous years, and several key consultations have been suddenly cancelled, breaking the last-minute communication channels.
A more significant change is the gesture of the administrative department.Even in the past, the White House tended to maintain the integrity of the government structure in a “temporary freeze” way, which means that after the budget has been restored, these employees can almost always return to their original jobs. This year, the White House rarely asked institutions to prepare a “cutting-down” plan, which means that even after the budget is in place, some jobs may not be restored and employees may not be able to return to work. This attitude is seen as a negotiation code, but also transformed the original financial impasse into tangible occupational and organizational panic.
△ Reuters reported that Trump canceled the meeting scheduled to discuss temporary funding with senior Democratic leaders on September 23rd, which increased the risk of government shutdown.
At the same time, the patience of the economy and the market for this political confrontation is weakening. Rating agencies have previously criticized the chaotic fiscal management of the United States, and investors' worries about the unpredictability of policies have accumulated for a long time. If this "shutdown" gets out of control, it may be transmitted to the consumption, credit and capital markets faster than in previous years. All these variables are intertwined, making this year's shutdown crisis no longer just a political performance, but more uncertain.
Once the door is closed, what will be the impact?
Once the provisional allocation bill could not be passed before midnight on September 30, the government’s “stop” from October 1 would soon be felt by ordinary people.
The first is direct “suspension” and delay.Approximately 800,000 unnecessary federal employees will be forced on unpaid leave and contractor bills will not be paid on time. Smithsonian museums, national parks and monuments may be closed or shortened opening hours. Some of the U.S. Consulates and Immigration Office windows will slow down work and even shut down, and the processing time for passports, green cards, visas and other documents will be extended. While mandatory expenses such as social security funds will still be issued, employment services such as changing addresses, issuing cards, telephone consultations will likely be stuck.
For low-income families, the blow will come sooner.Food stamps for millions of pregnant women and children will be affected, housing assistance and energy subsidies will also be delayed due to the shortage of funds, the federal government's support for preschool education and school lunches may be forced to be advanced by local governments, and the financial pressure of states and counties will increase sharply.
In addition, transportation, travel, medical care, public health, etc. will be affected.Not only will staffing shortages lead to delayed flights and frequent queues, but new route approvals, pilot training and licensing will also stop; In addition, the daily statistical update and drug approval speed of CDC and Food and Drug Administration will also slow down, and services such as telephone customer service and case appeal of government medical insurance institutions will be difficult to obtain.
CBS reports that once the government "stops", it will have a series of impacts on government staff, social security, medical insurance, transportation and other aspects of society.
The wider economic costs should not be overlooked.Analysts generally believe that the government shutdown may cost about $7 billion in GDP per week, the delayed payment of federal employees' salaries will affect consumer spending, and the market's anxiety about policy uncertainty will aggravate volatility. If the "shutdown" drags on for a long time and is intertwined with issues such as debt ceiling and fiscal deficit, it may also trigger new warnings from rating agencies and increase the borrowing cost of the US government.
Final game and key signals
As September 30 approaches, there are three ways to solve the problem.
The most likely outcome is called“Limited Line”FormulacompromisedSince Congress was not reunited until September 28th, it was really spent time on negotiations and legislative voting.Only 29 and 30 September.The House of Representatives may have put together a short-term and acceptable temporary allocation bill in the last 48 hours, temporarily circumventing disputes such as health insurance subsidies and immigration law enforcement, providing only weeks or even a month of “extended life” funding to ensure the government continues to operate, but the crisis is only temporarily postponed, and the same impasse may reappear in October or November.
Another situation isA short technical shutdownIf negotiations fail at the last minute, the government may start a partial "stop" on October 1st, lasting days to a week, when the parks will be immediately closed, documents delayed, low-income nutritional subsidies discontinued, and hundreds of thousands of federal employees short-term unpaid. High pressure on the market and public opinion may force both sides to quickly return to the negotiating table and negotiate a price agreement.
The third, also less likely outcome, isThe crisis is completely out of controlIf the Senate fails to advance the temporary allocation bill that breaks the 60 vote threshold, the White House does not recall the dismissal statements, congressional two-party leaders continue to refuse face-to-face communication, institutional emergency plans remain untransparent, and public confidence is rapidly lost, this means not only that funding is disrupted, but also that it could trigger administrative restructuring and a financial and political crisis.
In summary,The last 72 hours are essentially only two days valid.。 To judge the risk direction, the key lies in whether there is a cross-party compromise plan, whether the White House can downplay the threat of layoffs, and whether high-level negotiations can be restarted. If these signals are absent one after another, the United States will probably fall into the most complicated and costly government "shutdown" in recent years. (CCTV reporter Wu Weihong)