The Senate’s last-minute effort to avert a lapse in federal funding failed late Tuesday, leaving the United States poised to enter a government shutdown at 12:01 a.m. Eastern on Wednesday unless lawmakers reach an agreement. A Republican-authored short-term continuing resolution designed to carry appropriations through mid-November was defeated 55–45, falling well short of the 60 votes required to overcome a filibuster; Senate Democrats withheld support because the measure did not address their demands on health-care policy.
Senate Majority Leader John Thune, R-S.D., talks to reporters outside the West Wing of the White House, Monday, Sept. 29, 2025, in Washington, as House Speaker Mike Johnson of La., listens. (AP Photo/Alex Brandon)
Democratic leaders made clear that their opposition was strategic: they said they would not support a “clean” stopgap that left intact recent cuts to Medicaid and allowed expanded Affordable Care Act premium tax credits, enacted during the pandemic, to expire at year’s end. Republicans countered that a short-term extension was the pragmatic way to avoid immediate disruption and pledged to reopen negotiations afterward; floor exchanges between Senate leaders grew increasingly sharp in the hours before the deadline.
Senate Minority Leader Chuck Schumer, D-N.Y., right, and House Minority Leader Hakeem Jeffries, D-N.Y., speak to members of the media outside the West Wing at the White House in Washington, Monday, Sept. 29, 2025, in Washington. (AP Photo/Evan Vucci)
Operational preparations escalated as the deadline approached. The White House Office of Management and Budget and the Office of Personnel Management issued guidance directing agencies to implement contingency plans, and OMB advised agencies to consider reduction-in-force (RIF) notices for programs that would lose discretionary funding — language that raised alarms among federal employee unions and legal advocates. That guidance has broad practical consequences for agency staffing decisions if appropriations lapse.
The nonpartisan Congressional Budget Office estimated that roughly 750,000 federal workers could be furloughed each day under a funding lapse, with the daily cost of their compensation on the order of $400 million; the precise numbers will vary by agency and by how long the shutdown endures. Many essential functions — including key national security, public-safety and other mission-critical activities — would remain funded, but large swaths of discretionary programs would be suspended or sharply curtailed, producing immediate service disruptions and economic ripple effects.
The political calculus is stark on both sides. Democrats are wagering that holding the line will force Republicans to negotiate on health-care provisions they say are vital to millions of Americans facing rising premiums. Republicans and the White House argue that allowing funding to lapse is unnecessary and that continuing resolutions are the appropriate short-term fix while substantive policy negotiations continue. With the House out of session until next week and the Senate adjourned for the night after the vote, the timeline for resolution is compressed and uncertain, increasing the likelihood of at least a brief shutdown.
For the public and for federal employees, the immediate effects will be operational: furlough notices, delays in permit and licensing processes, reductions in customer service and potential interruptions to discretionary programs that depend on annual appropriations. Legal challenges are already being filed over administration guidance that contemplates layoffs rather than ordinary furlough procedures, and those suits could shape how agencies implement staffing and pay decisions if funding actually lapses. Economists will judge the broader economic impact largely by the duration of the shutdown; a short lapse typically produces localized disruption, while a protracted standoff amplifies costs for households and local economies.
