The U.S. federal government officially shut down Wednesday after negotiations collapsed, leaving no clear timeline for a resolution as Democrats and Republicans hardened their positions over expiring health care subsidies.
Democrats insist that renewed funding for Affordable Care Act subsidies is nonnegotiable, while President Donald Trump and GOP leaders argue the matter can wait. The deadlock has paralyzed Congress and triggered one of the most far-reaching shutdowns in recent memory.
The White House has threatened to go beyond the typical furloughs and proceed with permanent layoffs in the coming days, seizing the moment to shrink the size of government. “Let’s be honest, if this thing drags on,” Vice President JD Vance told the media following a visit to the White House briefing room, “we are going to have to lay people off.”
An estimated 750,000 federal workers face furloughs, with some bracing for dismissal. Trump officials have suggested shuttering entire offices, while allowing his deportation agenda to continue at full speed. Programs tied to health, education, and the environment are expected to be hit hardest. Economists, in AP’s report, warn that the fallout could quickly spill into the broader economy.
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House Democrats, led by Hakeem Jeffries, described their demands as a moral fight, though some members are showing signs of wavering. A Republican plan to keep the government running without health subsidies failed in the Senate, but drew a handful of Democratic votes. “I certainly pray they will come to their senses,” House Speaker Mike Johnson said after the measure collapsed.
This marks the third government shutdown under Trump and the first since his return to the White House this year. For Democrats, the decision to pick this battle is unusual, but their base has been pressing for a stand against the president’s second-term agenda. They argue millions of families will see insurance premiums soar if subsidies expire.
The atmosphere around the negotiations has been anything but serious. At a White House meeting with congressional leaders, Trump handed out “Trump 2028” caps and later released a doctored video ridiculing Democrats. “President Trump’s behavior has become more erratic and unhinged,” Jeffries and Senate Majority Leader Chuck Schumer said in a joint statement. “Instead of negotiating a bipartisan agreement in good faith, he is obsessively posting crazed deepfake videos.” Asked about one video that depicted Jeffries with a sombrero and mustache, Vance called it “funny.”
For now, neither side has an exit plan. The Office of Management and Budget, led by Russ Vought, has ordered agencies to prepare not only for temporary furloughs but also for outright firings. Vought reportedly told House Republicans that layoffs would begin within days.
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Markets reacted nervously as the shutdown took hold after midnight, though stocks managed to climb back to new highs later in the day. Still, federal services began scaling back. Medicare and Medicaid will continue but may face delays due to staffing shortages. The Pentagon remains open, while Homeland Security will keep most employees on duty. Smithsonian museums are expected to operate until Monday, but former park officials urged the administration to close national parks, warning that unsafe, understaffed sites put visitors and resources at risk.
On Capitol Hill, both parties have failed to rally enough support to keep the government running. The GOP’s temporary funding bill collapsed on a 55-45 vote, falling short of the 60 votes needed in the Senate despite a Republican majority. A Democratic proposal also failed. Three Democrats crossed party lines to support the Republican plan, and one Republican voted against it.
Amid the deadlock, some senators are floating alternatives, including a one-year extension of the subsidies. “It’s just one thought, and there are other ideas that are out there,” said Sen. Mike Rounds of South Dakota. GOP leaders, however, say they are open to discussing health care only after reopening the government.
Schumer faces pressure from the left flank of his party to stand firm. Meanwhile, Johnson sent lawmakers home but promised they would reconvene next week.
The impasse recalls earlier shutdowns: Trump’s first term produced a record 35-day closure over border wall funding, and in 2013 Republicans forced a 16-day shutdown under Obama in an attempt to repeal the Affordable Care Act. Both left lasting scars, and the current one could be even more disruptive.
