The United States government has entered a shutdown for the first time in over six years, following a failure to reach a federal funding agreement by the midnight deadline on October 1 (2pm AEST). As a result, numerous federal agencies have been instructed to prepare for the impact, affecting the pay of hundreds of thousands of federal employees.
During this shutdown, non-essential federal workers, such as park rangers, will be placed on unpaid leave, while essential personnel, including military and airport security staff, will remain at work, though they will not receive payment until the shutdown concludes. It is estimated that around 750,000 workers will be furloughed daily, with the total daily cost of their wages amounting to approximately $400 million (A$600 million).
Government shutdowns typically occur due to budget disagreements and can act as leverage in negotiations. The latest impasse arises from disputes over healthcare benefits, with Democrats advocating for the extension of tax credits that subsidise health insurance, which are set to expire at the end of the year. In contrast, Republicans are refusing to negotiate on this matter, insisting on a straightforward funding bill.
The last government shutdown occurred during Donald Trump’s presidency, lasting 34 days and resulting in the furloughing of around 800,000 federal workers. Since then, there have been 21 shutdowns in the last 50 years, with the longest previously recorded being 21 days under Bill Clinton in 1996.
The current shutdown began at 12:01 am today (2:01 pm AEST). It remains uncertain how long it will persist, but historical data suggests previous shutdowns have averaged eight days. This shutdown is notably different as Trump has indicated a possible focus on reducing the federal workforce, suggesting large-scale layoffs if a resolution isn’t reached. Over 100,000 federal workers are also expected to resign under Trump’s deferred resignation programme as part of his workforce reduction strategy, potentially leading to one of the largest mass resignations in US history.
Despite the shutdown, essential services, such as immigration and airport security, will not be affected, ensuring that travel to the US will remain largely uninterrupted for Australians. However, visitors may experience limited federal services during this period. The government’s shutdown underscores ongoing partisan tensions and the complexities of federal budgeting in the current political climate.