U.S. Government shutdown as funding bill fails

(Photo: ABC News)

The U.S. government has officially shut down as Congress failed to pass a last-minute funding bill, marking the first such closure in nearly seven years.

Al Jazeera reports that senators rejected competing proposals, and the funding lapse took effect at 12:01 a.m. Wednesday. The shutdown has forced furloughs for an estimated 750,000 federal employees and threatens a daily economic loss of roughly US$400 million. Essential services, such as national security, Medicare, and Medicaid, will continue, though staff may work without pay.

According to Reuters, one of the most immediate impacts will be on aviation: the FAA plans to furlough over 11,000 employees, while over 13,000 air traffic controllers and some 50,000 TSA staff will continue operations without immediate compensation. Airline groups warn that inspection delays and staff shortages could disrupt flights and harm the travel sector.

The core of the impasse, as per the Financial Times report, lies in disagreement over health care subsidies. Senate Democrats demanded that the Republican proposal include protections for Affordable Care Act tax credits, which Republicans refused to accept. Senate Republicans had proposed a short-term “stopgap” measure to keep government funding through mid-November, but it failed to gain the 60 votes needed.

In his response, House Speaker Mike Johnson blamed Senate Democrats for obstructing a simple funding extension, calling their strategy “reckless.” Meanwhile, Republicans have warned of possible permanent layoffs if the shutdown drags on.

CBS News reports that as of now, there is no resolution in sight. Lawmakers remain deadlocked, with both sides exchanging blame as federal operations stall and critical services face disruption.