U.S. Government Shuts Down Over ACA Immigrant Credit Fight

The U.S. federal government shut down after midnight on October 1, 2025, when Congress failed to pass stopgap funding — the first funding lapse since 2018. An estimated 700,000–750,000 federal employees are expected to be furloughed or placed on unpaid leave while essential services (military, law enforcement, air traffic control, FBI/CIA, Social Security and some food assistance) continue, often without immediate pay; many offices, national parks, museums, loan approvals and economic releases — including September’s jobs report — could be halted or delayed. The impasse centers on Democrats’ push to extend enhanced Affordable Care Act tax credits for immigrants, which Republicans argue would effectively provide benefits to undocumented immigrants. President Donald Trump has warned he could use the shutdown to fire federal workers and pursue irreversible budget cuts, raising the prospect of broader disruption than past shutdowns. Markets initially appeared to shrug, but the lack of timely labor data and the potential for a prolonged funding lapse have increased economic uncertainty as lawmakers remain deadlocked.