US government shutdown looms: What will be its impact and has it happened before?

The US stands on the brink of another government shutdown, a crisis that could disrupt the lives of millions of Americans just days before Christmas.
Republicans withdrew support for a bipartisan plan to prevent a government shutdown on Wednesday after President-elect Donald Trump and billionaire Elon Musk voiced their opposition. Trump urged House Speaker Mike Johnson to renegotiate the deal just days before federal funding was set to expire.
Responding on Thursday, Republicans proposed a new funding plan to extend government operations for three months and suspend the debt ceiling until January 30, 2027. However, the revised bill was decisively rejected in a House vote hours later, leaving the path forward unclear.
The package, cobbled together hastily by GOP leaders to appease Trump’s calls for $5.7 billion in funding for a border wall with Mexico, was struck down 174-235.

This deadlock, unless resolved, will result in a partial government shutdown at 12:01 am Saturday, setting the stage for disruptions that will resonate across federal agencies and into American households.
History of shutdowns
The United States has experienced 13 government shutdowns since 1981, following a revised interpretation of the Antideficiency Act. Most have been brief, but notable exceptions include the 21-day shutdown from December 1995 to January 1996 under President Bill Clinton and House Speaker Newt Gingrich, and the longest, 35-day impasse in 2018-2019 during Trump’s first term.

The 2013 shutdown, which lasted 16 days, was driven by disputes over funding for the Affordable Care Act. Modern shutdowns, once rare and short, have become significant standoffs with lasting impacts on government operations and the public.

What will be the impact of a shutdown?

A government shutdown, although partial, would have tangible consequences. Federal workers face the brunt of the crisis, with many set to be furloughed while essential personnel, including law enforcement and air traffic controllers, would continue working without immediate pay.
History has shown the strain such scenarios place on employees; during the 2018-2019 shutdown, which lasted 35 days and remains the longest in US history, unpaid workers turned to food pantries and other forms of aid to survive.
In total, over 2 million federal workers could be affected, and crucial public services would be interrupted. For travelers, airport security lines could lengthen as TSA agents, who would be required to work without pay, may call out sick in protest, as they did during the last prolonged shutdown. Public safety inspections, including those at water treatment plants and chemical facilities, could be paused, heightening concerns over community welfare.
While benefits like Social Security and Medicare are expected to continue, there could be delays in processing new applications and disbursements if the shutdown drags on. Food assistance programs, such as WIC and SNAP, may also face interruptions, posing risks to low-income families reliant on such support.

What would remain open?

While a shutdown halts much of the federal government’s activities, some services will continue. Essential operations tied to life and property—law enforcement, national security, and air traffic control—are expected to remain functional. The US Postal Service, which operates independently of federal funding, will continue to deliver mail.
However, many federal departments, including Homeland Security, State, Treasury, and Justice, will see reduced operations.

Economic consequences

The economic repercussions of a government shutdown can be substantial. Historically, shutdowns have trimmed economic growth by approximately 0.2 percentage points, according to Thibault Denamiel of the Center for Strategic and International Studies.
The longer a shutdown persists, the deeper the strain on both public services and private sector activities tied to government contracts and operations.
In 2018-2019, federal employees who missed paychecks faced mounting financial pressure, which rippled out to local economies as consumer spending fell.
To avert a shutdown, Congress and the President must reach an agreement to restart funding through either a compromise or a one-sided concession. In past shutdowns, public opinion has often played a pivotal role in shaping the outcome, pressuring one side to relent.