This commentary was broadcast on Friday September 26. By October 1, either Congress will have agreed on a spending bill or the government will have shut down. Now before everybody panics, remember a federal government shutdown does not mean the armed forces will go home and social security checks will stop being mailed. A so-called government shutdown means all activities not considered “essential” will cease. So national parks will close, and essential workers such as air traffic controllers will have to work without pay. Though social security checks will continue to be mailed out, the work of many people in social security offices will be disrupted. These folks usually issue new cards, verify changes of addresses, etc. They will probably also be furloughed thereby interrupting these services to social security recipients. Sometimes, if shut downs last long enough, some essential workers who are not being paid may just not show up creating enough shortages to interfere with services. Thus, if enough TSA or air traffic controllers do not show up at a particular airport, the actual flow of air travel may be interrupted. In other words, if the government actually shuts down, it will not be the end of the world, but it can create severe difficulties for members of the public. It also forces lots of public servants deemed “essential” to go without pay until the dispute within Congress is resolved.
For some general Q's and A's on federal government shutdowns see https://www.crfb.org/papers/government-shutdowns-qa-everything-you-should-know
Usually, shut downs occur because there is an unbridgeable gulf between Congress and the President about spending priorities. This happened in the very famous government shutdowns of 1995 and 1996 when President Bill Clinton was confronted by a new Republican majority in Congress that offered its own version of long-term budgeting that Clinton vetoed.
[The shutdowns were November 14-19, 1995 and December 17 to January 6, 1996. For details of what was shut and what stayed open see The New York Times, December 17, 1995: 40]
A similar conflict occurred in 2018 into 2019.(December 22 to January 6.).This was however a partial shutdown because Congress had passed some spending bills so the government did not pause as many services as in the 1990s. BUT --- nine executive departments with around 800,000 employees had to shut down partially or in full, affecting about one-fourth of government activities and causing employees to be furloughed or required to work without being paid.[3] The Congressional Budget Office estimated the shutdown cost the American economy at least $11 billion, excluding indirect costs that were difficult to quantify.[4]
In both of those shut-downs, there was conflict between Congress and the President. This time it is different. The Republicans hold majorities in both houses of Congress and, of course, the Presidency. Since Congress has not completed ANY of their appropriation bills, in order to keep the government open they need to pass a continuing resolution which basically extends current spending levels for, say, a month. Because a continuing resolution needs 60 votes to pass the Senate, the minority Democrats have a little bit of leverage. The only way a continuing resolution can pass the Senate is if seven Democrats join the Republicans. And this time around, the Democrats are insisting on some concessions from the Republicans in return for support.
The Democrats’ proposal wants the GOP to agree to restore the $1 trillion in Medicaid cuts that were included in the alleged Big Beautiful Bill and to extend the Affordable Care Act subsidies due to expire at the end of this year. If the ACA subsides expire, out-of-pocket premiums will rise by an average of 75% for millions of people.
[On the ACA premiums, see
https://www.nytimes.com/2025/09/24/health/obamacare-cost-aca-health-insurance.html?nl=breaking-news®i_id=59542766&segment_id=206519]
The following is an imaginary dialogue (from a Democratic perspective to be sure!) between Democrats and Republicans about the conflict over what to do as the country barrels towards a shutdown:
Democrats: You need us to pass the funding bill so let’s negotiate, we want health care money.
Republicans: No. Trump said we shouldn’t bother with you. Here is our bill extending funding through Nov 21.
Democrats: No, we have to negotiate. That’s how this works. We can’t just give you our votes for free. We’re not on your team. Here is our counter-offer.
[The counter-offer is better than expected. Instead of asking for what they think they can realistically win, they asked for what they want. The bill would reinstate Republicans' harmful Medicaid cuts from the Big Ugly Bill, make the enhanced ACA tax credits permanent, restore environmental funds and make it harder for the President to refuse to spend the funds Congress allocates - I’m told this is very robust language.]
House Republicans passed their bill in the House along party lines and kicked it to the Senate. The only Democrat to vote with Republicans was Rep. Jared Golden of Maine.
Senate Democrats forced a vote on their counter offer bill and it failed.
Republicans tried to pass the House funding bill in the Senate and it failed at 48-44 (60 votes is the threshold). Senator Fetterman (D-PA) was the only Democrat to vote with Republicans.
Senator Rand Paul (R-KY) voted against the bill because he doesn’t believe in funding the federal government.
Senator Murkowski (D-AK) voted against the bill purportedly because she wants to attach an extension of the ACA tax credits to the bill - otherwise 4 million people lose Medicaid. Really, she wants people to forget that she traded special funding and policies for Alaska and handouts to Big Oil in exchange for voting to cut a trillion dollars in health care spending for the rest of the country.
Democratics: Now, will you negotiate?
Republican leadership: No, we’re going to recess and take next week off. We’ll deal with this two days before the deadline and hope that Trump distracts everyone from health care.
After the House and Senate recessed, the two Democratic leaders, Jeffries in the House and Schumer in the Senate, wrote to Trump asking for a meeting:
We will not support a dirty spending bill that continues the Republican assault on healthcare, which includes devastating Medicaid and Medicare cuts; skyrocketing premiums, co-pays, and deductibles; the refusal to extend the Affordable Care Act tax credits; unprecedented attacks on medical research and the public health system; the suppression of vaccine availability; and the forced closure of hospitals, nursing homes and community-based health clinics nationwide.
Trump responded refusing to meet with the Democrats.
"After reviewing the details of the unserious and ridiculous demands being made by the Minority Radical Left Democrats in return for their Votes to keep our thriving Country open, I have decided that no meeting with their Congressional Leaders could possibly be productive. They are threatening to shut down the Government of the United States unless they can have over $1 Trillion Dollars in new spending to continue free healthcare for Illegal Aliens (A monumental cost!), force Taxpayers to fund Transgender surgery for minors, have dead people on the Medicaid roles, allow Illegal Alien Criminals to steal Billions of Dollars in American Taxpayer Benefits, try to force our Country to again open our Borders to Criminals and to the World, allow men to play in women’s sports, and essentially create Transgender operations for everybody."
Perhaps most readers already realize this but virtually every factual assertion in this message is a lie. The $1 trillion dollars is not in “new spending” it is an attempt to STOP the cutting of $1 trillion in “OLD” spending. I could go on but I bet anyone reading this can google the actual Democratic proposal and realize that none of those things at the end of Trump’s message are true.
As of Thursday night, September 25, there were no moves towards compromise and in fact many government departments are being told to plan not just furloughs (temporary suspension of work) of “non-essential” workers but actual firings. The Democrats of course responded that this was an intimidation tactic.
Thus, the issue remains a tough political issue. Neither party wants to be blamed for a shut down but on the Democrats’ issues neither wants to budge. Thus, for the next few days we should see a lot of posturing and strong efforts being made on both sides to make sure the public blames the other for a shutdown should it occur.
Michael Meeropol is professor emeritus of Economics at Western New England University. He is the author with Howard and Paul Sherman of the recently published second edition of Principles of Macroeconomics: Activist vs. Austerity Policies.
The views expressed by commentators are solely those of the authors. They do not necessarily reflect the views of this station or its management.
