The federal government shut down at 12:01 a.m. this morning. It’s the first government shutdown since 2019.
We’ll reiterate that such shutdowns are harmful, counter-productive and a major detriment to the country. The party looking to force a policy change via a shutdown rarely gets what it wants.
We know that from the Republicans’ 2013 shutdown seeking to repeal Obamacare; the Democrats’ 2018 shutdown over DACA; and the 2018-2019 shutdown, during which Republicans tried to secure money for President Donald Trump’s border wall. All of these failed.
Hundreds of thousands of federal workers are going to be furloughed, a real-world impact for families nationwide. The remainder of “essential employees” will work without getting paid.
Active-duty military service members could miss a paycheck if this drags on, although Pentagon brass may redirect previously approved funds to cover salaries. Trump and OMB Director Russ Vought could implement mass layoffs or program revisions, igniting even more fights with Democrats.
The House is out of town. Senate leaders aren’t negotiating. Trump is openly mocking Senate Minority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries on social media. The chances of a quick resolution to the impasse are low — unless one side abruptly folds.
On Tuesday, the Senate again voted down two stopgap funding bills designed to avert a shutdown. Democrats blocked Republicans’ clean Nov. 21 CR. Republicans rejected Democrats’ bill that would extend enhanced Obamacare subsidies, roll back Medicaid cuts and stop Trump from enacting rescissions.
In an interesting development, two additional Senate Democrats voted for the GOP CR on Tuesday night, bringing that total to three. Sens. Catherine Cortez Masto (D-Nev.) and Angus King (I-Maine) crossed the aisle to vote yes, along with Sen. John Fetterman (D-Pa.). Both funding bills will come back up today.
One of the most important factors to look at during a shutdown isn’t just how you get into one, but how you plan to get out. And that’s where we want to focus this morning — what to expect next, and what might shift the incentives or momentum in this process.
Moderates crumble. Schumer has been able to maintain his hardline posture largely because he’s gotten continued backing from moderates in his caucus, as well as retiring Democrats. That unity has bolstered Schumer’s position.
But with two new Democratic defections, Senate Majority Leader John Thune is betting that pressure will continue to build on those moderates to cave the longer the shutdown drags on. Thune needs at least eight Democrats to fold to get to the 60-vote threshold since GOP Sen. Rand Paul (Ky.) will be a no on anything.
Thune could also promise votes on various Obamacare-related proposals or commit to bipartisan negotiations on the issue as a way to win over more Democrats, although this would be seen as a cave by the left.
At a press conference Tuesday night, Schumer declined to say whether he can guarantee that there won’t ever be 60 votes for the GOP bill. Schumer was very careful not to box himself in.
“Our guarantee is to the American people that we’re gonna fight as hard as we can for their health care,” Schumer said. That’s a far cry from keeping the government shut down until Democrats get what they want.
Trump and Vought make it too painful. During the last 24 hours, Trump has made dire threats about the consequences of a shutdown.
On Tuesday, Trump mused about using the shutdown as a pretext to take “irreversible” actions such as benefit cuts, “cutting programs that [Democrats] like” and “trimming the budget to a level that you couldn’t do any other way.” Trump also said “a lot of good can come from shutdowns.”
This is Trump saying he’ll use the shutdown as an opportunity to implement massive changes to the government without congressional approval. It has the potential to be very painful for Democrats.
Up until this point, Democrats have dismissed Vought’s threats — including layoffs outlined in an OMB memo — as an intimidation tactic.
But if Trump and Vought follow through on some of their more dramatic threats, that could be enough to push Democrats to fold.
Public backlash. Nothing lights a fire under lawmakers like constituent anger. And Americans dislike their government, but they especially dislike it when the government is shut down and they’re still paying taxes.
Think about all the unpleasant things that can occur during a shutdown. National parks close. People have trouble signing up for Social Security or Medicare. Government services are interrupted. Constituents try to call agencies and no one picks up. Permits are slowed. Flood insurance — which also expired on Tuesday — languishes.
The Bureau of Labor Statistics has already said it won’t release jobs data this Friday. Will this rattle markets? Would a market swoon convince lawmakers to relent? We know that the president is incredibly focused on markets.
A long shutdown. One critical danger of a shutdown for both parties is the missed paychecks for federal workers. Some federal workers will start missing paychecks by next week.
Paydays for military service members generally fall on the 1st and 15th. That means the next payday is in jeopardy if the crisis drags on. The Defense Department signaled over the weekend that it could dip into that $150 billion included in the One Big Beautiful Bill Act if money runs out. Democrats would be furious over that move.
Republicans decide to negotiate. We see this as the least likely scenario. But what if Trump decides that he actually wants a deal on enhanced Obamacare subsidies and pushes Thune and Speaker Mike Johnson to agree to tie it to government funding?
There are tons of implications to such a move, yet Trump is unpredictable. He’s also obsessed with polls, and he’s shown vulnerability on economic issues. There’s also at least some truth in the Democratic assessment that Trump is open to a deal while GOP congressional leaders aren’t. What if Trump decides that he wants an agreement to re-open the government and isn’t too worried about what Hill leaders say?
