US government enters Shutdown; Understand what happens

He expired at the beginning of the early hours of this 4th (1st.out.2025) the deadline for the US Congress to avoid government stoppage – known as shutdown. This outcome was expected after the Senate rejected two proposals, one of the Republican Party and one from the Democrat, to keep federal agencies running until November 21,

There were 55 votes in favor of the Republican proposal and 45 against. It was necessary 60 to pass the measure approved in the House on September 19. In addition to this, an alternative text presented by the Democratic Party was also rejected at the High House: 47 votes in favor and 53 against.

the term shutdown It refers to the partial stoppage of government activities due to lack of resources, affecting from the operation of federal agencies to the payment of employees considered “not essential”.

The origin of the mechanism lies in the anti -deficiency law of 1884, which prohibits federal agencies from spending above the authorized without the approval of Congress. Annually, congressmen need to pass 12 appropriation laws that finance public spending. If there is no consensus, sectors without approved funds go into stoppage.

Without consensus, Republicans and Democrats now need to negotiate a new text to avoid prolongation of stoppage.

According to the newspaper New York Timesthe stoppage will make at least 13 US agencies have their activities interrupted. Significant part of your employees will be on unpaid license. The administration of general services, responsible for the operation of the agencies, will be the most affected, with about 98% of employees away.

Important government ministries such as the Departments of Education (87%) and the State (61%) will also suffer from a shutdown Long, like the Pentagon, which has the largest number of civil servants and can have 45% of their absent workforce.

Trump indicated that he can enjoy the shutdown To make new cuts in federal positions. With this, employees on leave may be dismissed.

“We are going quite as a country, so the last thing we want is to paralyze it, but many good things can come from stopping. We can get rid of many things we don’t want.”Trump said at the White House this Thursday (30.set).

Understand the impasse

The House approved an extension of spending by November, but in the Senate, the Republican majority needs votes from at least 7 democrats to pass the law. The problem is that the sides disagree with how to structure the budget.

Republicans want deeper cuts on social programs and reduce federal spending. They argue that the government deficit is in the unsustainable trajectory.

Democrats advocate the maintenance of investments in health, education and infrastructure. They claim that the cuts proposed by Republicans would directly undermine millions of US families. Without consensus, none of the proposals advance.

If there is stoppage, the effects will be felt quickly in the US.

In financial markets, the stoppage tends to increase the volatility of actions, interest and exchange rates. It also causes search for refuge assets such as treasuries and gold, and punishes sectors dependent on government contracts or approvals.

The impact is often limited if the stoppage is short, but the threat of mass layoffs increases potential gravity.

Impact of SHUTDOWN

If there is a stoppage, experts assess that the effects will be felt quickly. The consequences include:

• temporary reduction in GDP growth (gross domestic product);
• Delay of public services and regulatory processes;
• suspension or postponement of government contracts;
• expansion of the perception of political risk.

According to information from the official website of the US Federal Deputy Sarah Elfrth (Democratic Party), in practice, services such as:

• Issuance and processing of visas, citizenship and passports (with delays);
• FDA and Regulatory Security Inspections by FDA (ANVISA equivalent agency in the USA);
• Epidemiological data analysis, disease surveillance and public health support;
• the approval of loans and warranties for small businesses;
• granting housing financing by federal agencies;
• Veteran Support and Support Services (call centers, benefits) – although veteran hospitals follow operating;
• National parks and monuments may remain open, but with reduced services (closure of visitors centers, maintenance, bathrooms);
• Social Assistance programs such as SNAP (Supplementary Nutrition Assistance Program) have limited coverage via contingency funds – if Shutdown is long, these funds can run out;
• Social Security Payments (Social Security/SSI) continue, but many auxiliary services (checks, record corrections) are suspended during the period;
• Medicare/Medicaid services are not interrupted immediately, but face administrative delays;
• The USCIS (immigration agency) maintains operations, but with a reduced team, causing slow processes.

The areas considered “essential”, such as defense, public safety, air control and emergency health services, continue to work.

Longer stoppage on Trump 1

The longest shutdown in US history was from December 2018 to January 2019, during the 1st Government of Donald Trump. According to the Budget Office (CBO), the 2019 episode reduced US GDP by about 0.1 percentage point in the affected quarter.

Since 1976, when the US has changed the beginning of the fiscal year to October 1, the government has already undergone 21 partial stoppages. Among these, stand out:

• 1995 (21 dias) – During the Bill Clinton (Democratic Party) government, disagreements about budget cuts between the chief executive and then -mayor Newt Gingrich led to the stoppage;
• 2013 (16 dias) – Congress, led by Republicans, tried to use financing approval as a bargaining chip to change the accessible assistance law. The government of Barack Obama (Democratic Party) did not accept cuts in the program and public services were suspended.