What is causing the longest government shutdown in US history?

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What's Happening

The U.S. government has been shut down since October 1st. Funding for federal agencies lapsed after Congress could not agree on a spending bill, leaving government workers without paychecks and millions of Americans facing loss of essential services. This shutdown has become the longest in U.S. history, with the previous record of 35 days being set during Donald Trump’s first term in 2018-2019.

The shutdown matters because it has real consequences for federal workers, families, and businesses that depend on government services, while also fueling confusion about why it happened. With so much speculation and partisan noise, it’s important to clarify the actual reasons behind the impasse and provide an accurate understanding of what is driving the political and fiscal disagreement.

Breakdown

1 - The enhanced premium tax credits that help Americans afford health care coverage are scheduled to expire

The enhanced premium tax credits were first enacted via the American Rescue Plan Act (ARPA) of 2021 to improve health coverage affordability and smooth the tax cliff in the ACA's original subsidy schedule.

The ACA credits were always set to expire at the end of 2025.

John Fetterman acknowledged that the ACA tax credits were "designed by the Democratic Party to expire" at the end of the year and were not something "taken from" by the Republicans.

2 - The US government shutdown is rooted in fundamentally different positions on the enhanced ACA tax credits.

Republicans want to keep current budget levels, while Democrats seek more health care funding and provisions to limit Trump's ability to freeze or redirect approved funds.

Democratic leadership and many members have made extending enhanced ACA subsidies a central demand in their budget negotiations.

The loss of the enhanced federal subsidies, which were put in place during the COVID-19 pandemic, are expected to leave many people unable to buy health insurance.

Republicans are reluctant to fund the health care program without reforms, but negotiating a compromise with Democrats is expected to take time, if a deal can be reached at all.

The most recent CBO and Joint Committee on Taxation (JCT) analysis estimates that permanently enacting the expanded premium tax credit (PTC) structure would increase federal deficits by $349.8 billion.

3 - Republicans control Congress but lack a filibuster-proof majority, giving Democrats leverage in negotiations over measures like ACA subsidies and government funding

Republicans currently control both chambers of Congress. But in the Senate they are short of the 60 votes needed to pass the spending bill, which gives opposition Democrats some negotiating power.

The Senate usually needs 60 votes to advance a bill like a continuing resolution. With Republicans holding 53 seats, at least 7 Democrats must vote yes in order for the government to resume.

Trump wants the Senate to drop the filibuster rule so Republicans can end the shutdown with a simple majority vote.

4 - Trump has shown limited urgency in ending the shutdown, prioritizing Republican demands and accusing Democrats of intransigence. While both sides blame each other, there is no clear evidence of Trump personally leading bipartisan outreach.

President Trump has shown limited urgency to end the shutdown, using it to restructure federal agencies, cut programs, and advance broader efforts to remake the federal bureaucracy.

President Donald Trump has refused to negotiate with Democrats over their demands to salvage expiring health insurance subsidies until they agree to reopen the government.

The president has threatened on social media to deny food subsidy payments for 42 million Americans until the end of the government shutdown, in apparent defiance of a court order.

5 - The prolonged shutdown inflicts significant hardship and economic damage that may eventually force a resolution

The shutdown has suspended the work of at least 600,000 workers since Oct. 1. Many more employees are required to report to work without pay until funding is restored.

About 13,000 air traffic controllers, who are government employees, have been working without pay due to the shutdown.

In a shutdown, government offices continue essential work, but tasks deemed nonessential come to a halt, paychecks stop and many workers are furloughed until Congress passes new funding.

Thousands of federal workers have already missed paycheques, and there are growing fears of increased impacts to air travel across the us as air traffic controllers and airport staff work without pay.

Economists estimate that the shutdown will trim between 0.1 and 0.2 percentage points off annual growth in economic output for each week it drags on.

Some have argued that the deeper reason for the shutdown is to prevent taxpayer dollars going towards healthcare for illegal immigrants. Mike Johnson has been quotes saying "we don't want illegal immigrants to get funding for ACA subsidies", pointing to a potential motivation for the lack of movement from the GOP. However, it is also true that no money from Medicare, Medicaid or ACA can go to an undocumented immigrant. Given this, it seems unlikely that this is the primary motivation for the lack of support from the GOP for extending the subsidies.

Feedback and corrections welcome.

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What is causing the longest government shutdown in US history?

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What's Happening

Breakdown