US facing govt shutdown as Trump administration gets tables turned

The U.S. federal government may be heading into a shutdown beginning at 12:01am (local time) on Oct. 1.

U.S. vice president JD Vance said on Sep. 29 that the shutdown is likely to happen, owing to an absence of a funding deal between Republicans and Democrats.

His announcement came after high-level leaders from both parties met with U.S. president Donald Trump at the White House, which concluded with "very large differences" on how federal government funding should be used, CNN reported.

Deja vu

In this case, the dispute is over the government's funding of healthcare, according to the BBC.

Democrats argued that a healthcare bill crafted by the Republicans will make it harder for Americans to afford healthcare, and are calling for a reversal of Medicaid cuts made by Trump.

They are also seeking extensions to tax credits, which would make health insurance cheaper for Americans.

The bill has since passed the House, but is facing resistance in the Senate, where on Sep. 30, Democratic leaders said that there were "very large differences" between them and Trump.

What is a government shutdown?

Although the Republicans have majorities in both the House and the Senate, they do so by razor-thin margins, and they cannot muster the 60 out of 100 votes they need to pass the bill in the Senate.

The bill unofficially needs to be passed before a new fiscal year begins on Oct. 1.

If no agreement is reached before then, the federal government cannot receive any funding and a shutdown will happen as departments and agencies will not have money to continue operations.

This will essentially grind the U.S. government to halt, potentially harming investor confidence in the country.

Shutdowns only end when Congress eventually passes the bill, the president signs it, and departments that have been shut down are re-funded.

They can last days or weeks, but may not always mean a return to normalcy.

What happens in a shutdown?

Non-essential government services must be brought to a temporary halt in a shutdown.

Federally-funded places like national parks will be closed, services shut down and non-essential government employees will be put on unpaid leave.

Some essential employees, however, like military personnel, could be forced to work without pay.

Shutdowns are also costly to the government.

The last one in 2018 was estimated to reduce economic output by about US$11 billion (S$14.1 billion), including US$3 billion (S$3.9 billion) that was never recovered.

Deja vu

If this talk about a shutdown feels familiar, it's because the tactic has grown increasingly common over the past decade.

Barack Obama faced an 18-day shutdown in 2013, while Trump faced three in his first term, the longest of which lasted 35 days.

But most notable was a showdown that occurred in December 2024, when an incoming Trump and vice-president-elect JD Vance scuppered an agreement between the two parties as they prepared to enter into power.

Then, Trump and Vance almost welcomed the prospect of a shutdown, with Trump saying regarding the Democrats that he would "CALL THEIR BLUFF", as quoted by the BBC.

But in 2025, Vance accusingly said the government was heading into shutdown because of Democratic demands and that they "won't do the right thing" and accused them of putting a "gun to the American people's head", unless they got exactly what they wanted.

The 2024 shutdown was ultimately averted, the 2025 one seems on track.

Top image via AFP