U.S. shutdown impact: What it means for workers, federal programs and the economy

A sign that reads "Closed due to federal government shutdown," is seen outside of the National Gallery of Art on the 6th day of the government shutdown, in Washington, Monday, Oct. 6, 2025. (AP Photo/Jose Luis Magana)

WASHINGTON — The federal government shutdown is quickly approaching the second longest on record with no end in sight. Some lawmakers are predicting it could become the longest, surpassing the 35 days from U.S. President Donald Trump’s first term.

The Trump administration is using the current shutdown to buttress priorities it favors while seeking to dismantle those it doesn’t. Nevertheless, Democrats are insisting that any funding bill include help for millions of Americans who will lose health insurance coverage or face dramatically higher monthly premiums if Congress does nothing.

The shutdown began Oct. 1. Here’s a look at its impact so far on workers, the economy and the services the government provides.

Furloughs and firings

The federal government employed nearly 2.3 million civilian employees as of March 31. The Congressional Budget Office estimated that about 750,000 of those employees would be furloughed each day during a shutdown. That means they don’t report to work until the shutdown ends. Others are considered “excepted” and do go to work, helping to protect life and property and perform other essential services.

Both groups of workers will get paid, but on a retroactive basis. That means they are facing the prospect of missing a full paycheck later this month after receiving a partial one earlier for work performed in late September.

The nation’s 1.3 million active-duty service members got a temporary reprieve. They were looking at missing a paycheck on Wednesday. But Trump directed the Pentagon to redirect money. A second reprieve looks unlikely.

Of note for taxpayers, the government tab for paying furloughed workers while they are at home comes to roughly $400 million a day, according to a CBO estimate provided at the request of Sen. Joni Ernst, R-Iowa.

The administration is also trying to fire thousands of federal workers in agencies that don’t align with its priorities. Republican leaders in Congress have said that’s part of the fallout from a shutdown. Past presidents, however, did not use shutdowns to engage in mass firings.

The Republican administration has announced one reduction in force affecting 4,100 workers, with the biggest cuts happening at the departments of Treasury, Health and Human Services, Education and Housing and Urban Development.

White House budget chief Russ Vought said in an interview on “The Charlie Kirk Show” that many more are planned.

“I think we’ll probably end up being north of 10,000,” Vought said.

“We want to be very aggressive where we can be in shuttering the bureaucracy,” Vought said. “Not just the funding, but the bureaucracy, that we now have an opportunity to do that.”

A federal judge has temporarily blocked the firings, saying the cuts appeared to be politically motivated and were being carried out without much thought. White House press secretary Karoline Leavitt said Thursday that the administration was “100%” confident that it will prevail on the merits in subsequent legal action.

Lawmakers acknowledge that many federal workers live paycheck to paycheck and will face some financial stress during the shutdown. Food banks in some communities have boosted efforts to help them. The Capital Area Food Bank, for example, said it would hold additional food distributions in the Washington region beginning Monday to support federal workers and contractors.

Economic Impact

Past shutdowns have had slight impacts on the economy, reducing growth in the quarter during which the shutdown occurs, but growth increases slightly in the following three months to help make up for it.

One estimate from Oxford Economics said a shutdown reduces economic growth by 0.1 to 0.2 percentage points per week. A shutdown that lasts the entire quarter, which has never occurred, would reduce growth for those three months by 1.2 to 2.4 percentage points.

Some industries are hurt worse than others.

The U.S. Travel Association said the travel economy is expected to lose $1 billion a week as travelers change plans to visit national parks, historic sites and the nation’s capital, where many facilities such as Smithsonian Institution museums and the National Zoo are now closed to visitors.

The U.S. Chamber of Commerce noted that the Small Business Administration supports loans totaling about $860 million a week for 1,600 small businesses. Those programs close to new loans during the shutdown. The shutdown also has halted the issuance and renewal of flood insurance policies, delaying mortgage closings and real estate transactions.

The Federal Aviation Administration has reported air controller shortages in cities across the United States, from airports in Boston and Philadelphia, to control centers in Atlanta and Houston. Flight delays have spread to airports in Nashville, Tennessee, Dallas, Newark, New Jersey and more.

Political fallout

The party that insists on conditions as part of a government funding bill generally doesn’t get its way. That was the case in 2013 and 2018 for Republicans. It remains to be seen how things will shake out this time, but neither side appears to be budging.

So far, the public is rather split on who is to blame for the impasse. Roughly 6 in 10 U.S. adults say Trump and Republicans in Congress have “a great deal” or “quite a bit” of responsibility for the shutdown, while 54% say the same about Democrats in Congress, according to the poll from The Associated Press-NORC Center for Public Affairs Research.

Perceptions could change depending upon how much the White House uses the shutdown to eliminate Democratic priorities and Democratic-leaning states and cities.

The administration has put on hold roughly $18 billion to fund a new rail tunnel beneath the Hudson River between New York City and New Jersey and an extension of the city’s Second Avenue subway. It canceled $7.6 billion in grants that supported hundreds of clean energy projects in 16 states, all of which voted for Democrat Kamala Harris in last year’s presidential election. The administration cited reasons apart from the shutdown for the funding changes.

In the end, there does not appear to be an easy way out of the shutdown. Republicans insists any negotiations on health care occur after the government is fully open for business. “We’re not conducting negotiations in a hostage situation,” said Senate Majority Leader John Thune, R-S.D.

Across the Capitol, House Democratic leader Hakeem Jeffries of New York said Democrats “are not going to bend and we’re not going to break because we are standing up for the American people.”

Kevin Freking, The Associated Press