US on brink of government shutdown as lawmakers remain deadlocked

Unlock the White House Watch newsletter for free

Your guide to what Trump’s second term means for Washington, business and the world

Washington hurtled towards the first US government shutdown in nearly seven years on Tuesday evening as lawmakers failed to break a stalemate in crunch funding talks.

President Donald Trump said a shutdown was “likely” and that his administration was prepared to fire “a lot” of federal workers, as he blamed Democratic lawmakers for the impasse.

“The Democrats want to shut it down,” Trump told reporters in the Oval Office on Tuesday afternoon. “When you shut it down, you have to do lay-offs, so we’d be laying off a lot of people that are going to be very affected.”

Hours later on Capitol Hill senators mounted an ill-fated attempt to break the gridlock, but a series of votes failed to avert a shutdown as they divided largely along party lines.

The split set the stage for the federal government to shut down at 12.01am on Wednesday — the first government shutdown since late 2018.

Neither the Republicans’ continuing resolution, a short-term agreement to keep the government funded at current levels, nor a Democrat-drafted counterproposal gained the backing of the required 60 senators.

The Senate voted 55-45 in favour of the Republican-led bill. All but three Democratic senators — Catherine Cortez Masto of Nevada, Angus King of Maine and John Fetterman of Pennsylvania — opposed the proposal. Republican Rand Paul of Kentucky also opposed the continuing resolution.

With just hours to go until a shutdown was set to go into effect, Republican and Democratic leaders traded blame about who was responsible for the gridlock.

Democratic leaders had refused to endorse the Republican resolution, arguing any agreement needed to include an extension to health insurance subsidies that are due to expire at the end of the year.

Previous shutdowns have led to the furloughing of hundreds of thousands of federal workers. But the White House has suggested in recent days that a future government closure could provide an opening for federal departments and agencies to permanently fire staff deemed “non-essential”.

The most recent government shutdown took place during the first Trump administration, lasting more than a month and resulting in the furlough of about 800,000 workers.

The non-partisan Congressional Budget Office on Tuesday said it expected that about 750,000 workers could be furloughed this time, at a cost of roughly $400mn per day.

The CBO estimated the last shutdown reduced economic output by $11bn, including $3bn that was never regained.

But the CBO said the effects of another shutdown on business activity were “uncertain,” adding: “Their magnitude would depend on the duration of a shutdown and on decisions made by the administration.”

Lawmakers have appeared on the brink of a shutdown several times in recent years but have struck last-minute agreements to keep the government funded.

However, hopes of an eleventh-hour deal faded late on Monday after vice-president JD Vance emerged from an Oval Office meeting with Trump and congressional leaders and warned the government was “headed to a shutdown”.

Later, Trump posted an AI-generated video to his Truth Social platform that mocked the Democrats’ Senate minority leader Chuck Schumer and House minority leader Hakeem Jeffries.

Schumer responded to the video on X, saying: “If you think your shutdown is a joke, it just proves what we all know: You can’t negotiate. You can only throw tantrums.”

Mike Johnson, the Republican Speaker of the House, told CNBC on Tuesday morning that Schumer was “not being honest” and was threatening a shutdown for political gain. Schumer has come under pressure from Democrats to be more aggressive in his opposition to Trump.

“Their position right now is pure politics. They’re doing this for Chuck Schumer’s backside, not for the American people,” Johnson said. “They are willing to inflict pain to do that.”