The US government officially shut down early Wednesday after both Republican and Democratic funding bills failed in the Senate, leaving federal agencies without a budget and triggering the suspension of nonessential services.
A Democratic proposal to extend Affordable Care Act subsidies and reverse Medicaid cuts was blocked, as was a Republican stopgap bill aimed at keeping the government open for another seven weeks. With no agreement in place, the White House Office of Management and Budget ordered agencies to begin an “orderly shutdown.”
The fallout will be immediate: hundreds of thousands of federal workers will be furloughed, public services will be disrupted, and economic data releases could be delayed—potentially clouding the Federal Reserve’s policy decisions.
Global markets are watching closely. The shutdown adds fresh uncertainty to an already volatile economic landscape marked by inflation, high interest rates, and geopolitical tensions. Delays in US data reporting and slower government spending could ripple into global supply chains and investment flows.
Senate Minority Leader Chuck Schumer blamed Republicans for refusing to negotiate. “We want to sit down and negotiate, but the Republicans can’t do it in their partisan way,” he said.
President Donald Trump met with bipartisan leaders earlier this week to try to avoid the shutdown, but talks collapsed.
The Senate is expected to vote again Wednesday, though prospects for a quick resolution remain dim.
