A government shutdown affects many sectors and people, primarily federal employees and contractors, along with various public services and programs.
Impact on Federal Employees and Military
- Hundreds of thousands of federal workers could face furloughs or temporary layoffs, potentially losing paychecks during the shutdown period, with the first missed paycheck projected around late October 2025. Military personnel on active duty would also face pay interruptions though generally continue working. Congressional and presidential salaries persist by law, but other federal employees do not receive pay during the shutdown period.
Public Services and Programs
- Essential government operations related to national security, air traffic control, and some emergency services continue but might experience staff shortages over time.
- Passport and visa services might slow down or face delays as some staff would be furloughed.
- Nutrition assistance programs like WIC (Special Supplemental Nutrition Program for Women, Infants, and Children) and SNAP (Supplemental Nutrition Assistance Program) may quickly run out of funds, risking disruption in food support for vulnerable populations.
- Regulatory activities, such as FDA food safety inspections and EPA hazardous waste site inspections, would be delayed or paused, impacting public health and environmental safety.
- Housing assistance programs, including some mortgage insurance and new loan processing, could be disrupted.
Economic Effects
- Payments by public administrations to suppliers would suspend, impacting companies dependent on government contracts, potentially threatening jobs and causing bankruptcies if the shutdown is prolonged.
- The overall economy may slow slightly due to reduced federal spending and consumer confidence drops, with potential downward pressure on GDP growth.
- Interest rates on U.S. government bonds may rise, increasing borrowing costs and potentially worsening the existing real estate crisis.
Important to Note
- Programs like Social Security, Medicare, and Medicaid generally continue during a shutdown because funding is permanent, but service delivery might see delays.
- The U.S. Postal Service will continue operating normally as it is funded independently from government appropriations.
In summary, a government shutdown disrupts federal employee pay, delays certain public services and safety programs, impacts nutrition assistance, and exerts downward pressure on the economy with potentially broader financial effects if prolonged. The most immediate hardships generally befall federal workers and vulnerable populations who rely on federal aid programs.
