As the shutdown continues, its negative impacts are expected to deepen further.
As of Wednesday, the U.S. federal government shutdown has officially entered its third week. The White House managed, through a temporary reallocation of funds, to deliver paychecks to U.S. troops, while over 1 million federal employees remained furloughed or working without pay.
RELATED:
Eighth Failed Vote Keeps U.S. Government Shutdown in Place
Staff shortages among air traffic controllers have worsened flight delays, and the postponement of economic data releases has increased uncertainty. As the shutdown continues, its negative impacts are expected to deepen further.
Meanwhile, there are still no signs of progress in breaking the congressional deadlock over funding bills. On Wednesday, the Senate again failed to pass a short-term funding bill, marking the ninth unsuccessful attempt. Republicans and Democrats continue to trade blame, with no plans for negotiation in sight. Many now anticipate a prolonged standoff that could even set a new record for the longest government shutdown.
THIRD WEEK, GROWING IMPACT
On Wednesday, the White House paid U.S. troops by reallocating Pentagon research and development funds, marking the latest extraordinary measure amid the government shutdown deadlock.
At a press conference, House Speaker Mike Johnson, a Republican from Louisiana, said the move was merely a “temporary fix,” warning that if the two parties fail to reach an agreement soon, the U.S. military could once again face a paycheck crisis by the end of the month.
Over the past two weeks, the impact of the government shutdown has gradually become apparent. About 750,000 federal employees in so-called “non-essential” positions have been furloughed without pay, while hundreds of thousands in “essential” roles remain on the job — also without pay.
Against the backdrop of rising food prices and high mortgage costs, the inability to receive timely paychecks has placed significant financial pressure on many federal workers. On Wednesday, the nonprofit Capital Area Food Bank announced that starting next week, it will provide special free food distributions to federal employees and contractors.
Beyond delayed paychecks, some federal employees risk losing back pay or even their jobs. On Oct. 7, President Donald Trump said that federal employees furloughed due to the shutdown might not receive back pay. On Oct. 10, over 4,000 federal employees received layoff notices.
The impact of the government shutdown is also spreading to the public. “Essential” federal employees, such as air traffic controllers and transportation security officers, are under increasing pressure. Absenteeism rates are higher than usual, contributing to flight delays, cancellations and longer security screening times. U.S. Transportation Secretary Sean Duffy recently said that staffing shortages among air traffic controllers have caused 53 percent of flight delays, compared with just 5 percent under normal circumstances.
Another closely watched impact is the delay of important economic data releases. The Consumer Price Index (CPI) data, originally scheduled for release on Oct. 15, was delayed by nine days due to the shutdown. In an analysis, J.P. Morgan Wealth Management noted that policymakers and investors rely heavily on the CPI and other federal data sources for decision-making, and delays in the monthly report could increase uncertainty.
Treasury Secretary Scott Bessent told Fox News on Monday that the government shutdown is starting to affect the real economy. “We believe that the shutdown may start costing the U.S. economy up to 15 billion dollars a day,” Bessent said on Wednesday. The Treasury Department later clarified that he had meant 15 billion dollars a week.
DEADLOCK PERSISTS, DEMOCRATS STAND FIRM
In the latest round of negotiations between the two parties over the funding bill, healthcare spending has emerged as one of the core points of contention.
The Democratic Party’s main demands are, first, to extend the enhanced subsidies under the Affordable Care Act (commonly known as “Obamacare”), which were established during the Biden administration and are set to expire at the end of this year; and second, to reverse the cuts to federal Medicaid funding that Congress previously enacted in the “One Big Beautiful” tax and spending bill.
The Democratic Party insists that any agreement must address its demands regarding healthcare benefits. The Republican Party, meanwhile, advocates passing a short-term funding bill at existing levels to keep the government running, allowing more time for negotiations. Both parties introduced their own versions of the bill, but neither secured enough Senate votes to pass it.
Some analysts believe that, with the three branches of power — the White House, Congress and the Supreme Court — all controlled by Republicans, the Democrats view the shutdown fight as an opportunity to push their policy agenda and consolidate party solidarity.
“In March, the Democrats suffered a serious drop in support from their own ranks when they did not fight harder, including accepting a shutdown,” Clay Ramsay, a researcher at the Center for International and Security Studies at the University of Maryland, told Xinhua.
“Even if Democrats gain very little from the current shutdown in policy terms, they will have proven that they are not a doormat, which is important to them internally,” Ramsay said.
Although the Trump administration has exerted pressure on the Democratic Party through measures such as firing federal employees and cutting funding for projects supported by Democrats, the Democratic camp has so far shown no significant fractures.
Over the past two weeks, in multiple procedural votes in the Senate, the Republican-backed short-term funding bill passed by the House received support from three Democrats — a number that has not increased. This indicates that the Democratic camp has remained united so far and has not seen any defections.
LONGEST SHUTDOWN?
As the impact of the shutdown spreads, both parties continue to blame each other. Since Oct. 9, the Trump administration has been circulating a video at airports nationwide, attributing the shutdown and aviation disruptions to the Democrats. According to U.S. media reports, several airports across the country recently refused the Homeland Security Department’s request to play the video, citing that its partisan content violates regulations.
Johnson recently said that “Washington Democrats are prolonging the shutdown to satisfy their radical base” and has also slammed expiring Obamacare subsidies as a “boondoggle.”
Meanwhile, Senate Minority Leader Chuck Schumer said on X that the government is shut down because Trump and the Republicans “are hellbent on taking health care away from you.” “This is not about politics. It’s about people,” said the Democratic leader.
As the shutdown drags on, its impact is expected to gradually expand. Dean Baker, co-founder of the Center for Economic and Policy Research, told Xinhua that “the impact has for the most part been limited, but it is about to increase.”
Brookings Institution Senior Fellow Darrell West is concerned about the larger picture. “The shutdown weakens global opinion towards the United States and makes it look like our leaders are incompetent. Other nations will argue America does not know how to govern itself,” West told Xinhua.
Lee Stephens, who works in commercial banking, said that a government shutdown can potentially affect the U.S. dollar’s status as the world’s key reserve currency, noting that the current administration is not “as concerned about the standing that everybody else historically has been concerned about, which is the primacy of the U.S. dollar.”
As both parties stick to their positions and wage a “war of words,” many observers expect the shutdown could turn into a protracted standoff. Yahoo Finance reported that the likelihood of the government shutdown extending into November is increasing. House Speaker Johnson recently warned, “We’re barreling toward one of the longest shutdowns in American history.”
The last U.S. government shutdown, from late 2018 to early 2019, lasted 35 days — the longest on record. According to betting data from New York-based prediction market platform Kalshi, as of Wednesday night, users estimated a 60 percent chance that the current shutdown would exceed 35 days, potentially setting a new historical record.
