We live in turbulent times — something new pops off every single day! Back again with the News Corner, this is Chubby mom’s correspondent. Today I’m going to put together and explain the U.S. government’s shutdown announcement. I’ll walk you through what a shutdown means, why shutdowns happen, what effects they cause, and how a shutdown can be resolved — step by step — so stick with me!
Below is a table of contents where you can click and jump directly to the section you want to read. Please refer to it.
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Meaning and Causes of a Shutdown
A shutdown refers to a situation in which part or all of the U.S. federal government temporarily halts operations due to a lack of budget.
The U.S. government operates on an annual budget, with the fiscal year running from October 1 to September 30 of the following year. For example, Fiscal Year 2026 runs from October 1, 2025, to September 30, 2026. Therefore, the government needs a new budget starting October 1 each year. If Congress fails to pass a budget bill by that date, the government has no funds to operate, and a shutdown may occur.
The federal budget is secured through approval by both chambers of Congress (Democrats and Republicans) and then signed by the President. If the two chambers fail to agree on a budget bill, or if the President vetoes it and sends it back to Congress, a shutdown takes place. There can be a full shutdown, when no budget is available at all, or a partial shutdown, when only specific departments lack funding.
When Congress fails to pass a budget, leaving no funds available, the U.S. government cannot pay federal employees, run various programs, or provide services. As a result, some employees are placed on unpaid leave, and certain government functions are temporarily suspended — this is what’s called a shutdown.
Some may wonder if a shutdown could also happen in South Korea. The answer is no. Unlike the U.S., South Korea’s Constitution (Article 54, Clause 3) includes provisions for a provisional budget. This allows the government to continue executing essential expenditures based on the previous year’s budget, even if the National Assembly fails to pass a new budget bill on time. Therefore, a shutdown like in the U.S. cannot occur in Korea.
Past U.S. Government Shutdowns
Below is a list of past shutdowns that have occurred in the United States. Before the 2025 shutdown, the most recent one took place in December 2018, seven years earlier. It can be seen that most shutdowns have typically occurred between late September and December. (Source : https://en.wikipedia.org/wiki/Government_shutdowns_in_the_United_State)
Background of the 2025 Shutdown
On October 1, 2025, the U.S. government entered a partial shutdown after budget negotiations broke down. The 2025 shutdown occurred because the U.S. Congress failed to pass 12 appropriations bills by the October 1 deadline. The failure to pass the budget was due to conflicts over specific provisions, mainly concerning the extension of subsidies for Obamacare and the restoration of Medicare funding.
For reference, Obamacare refers to the U.S. health care reform led by former President Barack Obama, which went into effect in January 2014. Its official name is the Patient Protection and Affordable Care Act (PPACA), but it is more commonly known as Obamacare or the Affordable Care Act (ACA). The system aimed to expand free government-provided health coverage for the elderly and lower-income groups, while requiring private health insurance enrollment for the rest of the population, thereby creating a system of near-universal coverage.
At the time, Republicans strongly opposed the law, and even within Democratic support bases, there was resistance against moving toward a full public health insurance system. Unlike South Korea’s National Health Insurance, the ACA adopted a structure closer to South Korea’s mandatory automobile liability insurance, where individuals must subscribe to one of several private insurance plans.
In 2025, ahead of the 2026 midterm elections, Democrats requested budget allocations for the extension of Obamacare subsidies. However, Republicans opposed this and demanded that it be handled as a separate bill. Many argue that this budget conflict, along with broader political gridlock between parties in Congress, ultimately triggered the 2025 shutdown.(Source: htps://en.wikipedia.org/wiki/Affordable_Care_Act)
Impact of a Shutdown
When a shutdown occurs, there is no budget available to implement related services and policies. As a result, national parks close, passport and visa issuance is delayed, and the release of economic indicators is postponed. Public services are suspended, and some federal employees are placed on unpaid leave, work without pay, or may even be laid off.
For example, the 2018 shutdown caused an estimated $3 billion in economic losses, equivalent to 0.02% of GDP. Economic damage can therefore be significant, and during shutdowns there is often an increased preference for safe-haven assets such as gold.
Lastly, private companies that rely on federal contracts may also suffer losses and damages.
Duration of a Shutdown and How to Resolve It
As seen in the historical examples of U.S. government shutdowns above, the duration of a shutdown varies. Some last as short as one day, while others have extended for more than a month. Shutdowns end immediately once the budget is passed.
To resolve a shutdown, Congress must pass the budget, and the President must sign it into law. If the budget passage is delayed, a Continuing Resolution (CR) can be used to temporarily maintain government functions. Resolving a shutdown generally requires political negotiation and compromise between parties to quickly reach an agreement.
Outlook for the 2025 Shutdown
The 2025 shutdown is expected to potentially be prolonged due to ongoing political conflicts and budget disputes. This situation is significantly affecting the functioning of the U.S. government and could pose challenges to future policy decisions and service delivery. It is hoped that through the passage of the budget and political negotiations, the shutdown will be resolved as soon as possible, allowing government operations to return to normal and stable functioning.
That concludes today’s post.