The budget crisis in the United States

Deadline passed: US government shuts down

The shutdown of the US government has come into effect, as the Senate failed to break the deadlock. The deadline expired at midnight, local time.

The Republicans' short-term budget proposal that would have kept the government running for a few more weeks was voted down by a vote of 55–45. The Democrats' counter-proposal was also not heard and the shutdown is now a fact – for the first time in seven years.

The shutdown is expected to affect air traffic and the publication of monthly unemployment statistics, among other things.

Thousands laid off as authorities shut down

A total of around 750,000 employees are expected to be laid off when contingency plans are activated in connection with the US shutting down large parts of the government, according to statistics from the independent Congressional Budget Office, several media outlets report.

The Bureau of Labor Statistics is shutting down, delaying the important jobs report on Friday, the news agency writes.

Among the agencies affected are the IRS, the SEC and CFTC, and the FTC.

Fewer than 400 employees are expected to remain on duty during the shutdown at the SEC, focusing on the most urgent matters, while the lion's share of reviews of stock market listings and corporate deals is paused. The CFTC is keeping about a dozen employees for basic supervision of derivatives markets. At the FTC, a third of its staff is expected to remain working, according to the agency's contingency plan.

The shutdown comes after the Senate failed to agree on new funding for the start of the new fiscal year. It is the first shutdown since 2018.

Analysis: Deadlock sets the stage for a long shutdown

Political commentators in the United States predict a prolonged shutdown of the government. On previous occasions when Democrats have been blamed for a shutdown, they have rushed for a quick solution, but this time they seem to be preparing for a protracted showdown, writes Carl Hulse in the New York Times.

He writes that the party has shifted to the left at the same time as the Republicans under President Donald Trump have moved to the right, and that the room for compromise is thus decreasing. The Democrats believe they have a strong message on the health insurance issue, as many Americans risk significantly higher premiums if the Republicans do not agree to extended subsidies. Something that, according to Hulse, means that the party does not feel as much pressure to back down.

The Washington Post's Paul Kane notes that no one has tried to resolve the Senate battle in smaller negotiating groups, without the party leaders in the Senate having been given a lot of space to pursue their strategies, which are largely based on winning the PR battle after a shutdown.

He also says that it is because the senators do not feel much political pressure.

“Most of them are in secure positions, and for many a possible re-election campaign is far in the future,” he writes.