🌋 U.S. government shutdown drags on: what’s next?
posted 16 Oct 2025
Day sixteen without a federal budget has turned America’s shutdown into a drawn‑out political marathon and a country where civil servants check their bank balances more often than the news. In the Senate, a ninth attempt to advance a Republican stopgap package failed; a tenth vote is slated for Thursday.
Democrats are demanding an extension of Affordable Care Act tax credits in exchange for votes, while Republicans still lack the handful of senators they need: there’s no breakthrough in sight.
The White House is implementing targeted stopgaps: unspent R&D funds were used to pay military personnel, and the FBI director confirmed agents will receive pay as well. But the Speaker of the House warns these are only temporary measures. Without a deal, the risk of missed paychecks will return by the end of the month.
Courts are also restraining the sharpest administrative moves. After a wave of layoff notices, a federal judge in California temporarily barred firing civil servants during the shutdown, cooling talk of “bureaucracy reform,” but not solving the core question of how to reopen the government.
Meanwhile, the economy is tallying the damage. The Treasury revised its impact estimate to roughly $15bn a week in lost output. The investment impulse in AI and manufacturing that the Trump administration is banking on could lose steam if the stoppage drags on.
A useful mood barometer (prediction markets) now puts the probability that this shutdown becomes the longest in U.S. history above 60%, crossing the 35‑day record threshold. That suggests normal bargaining logic still isn’t working.
Signals from the private sector echo the strain: the SEC’s civil case against Adani has been paused due to the regulator’s freeze, a textbook example of how a government halt ripples into corporate transactions and courts.
What’s next? Near‑term forks in the road:
- A Pentagon‑only funding bill to which other spending lines could be “stitched on.”
- A short continuing resolution (CR) pairing limited reopening with a health‑care compromise.
- A late‑stage trade of political concessions as payroll deadlines loom (i.e., toward the end of October).
If no signed package materializes by early November, a chain of delayed pay and regulatory pauses will raise the political cost for both sides. Beyond that, services voters notice without prompts will begin to misfire from airports and rail to public insurance and the courts.
A compromise may look expensive today, but tomorrow it will almost certainly cost even more.
