Washington is on track for a government shutdown

The US federal government is poised to shut down at 12:01 am ET tomorrow morning, unless Congress can pass a short-term funding measure between now and then—an agreement that seems increasingly unlikely to happen.

State of play: Senate Republicans need seven votes from Democrats to approve a bill that funds the US government beyond September. But Democrats say they won’t agree to pass any spending bill unless the GOP extends Obamacare subsidies, reverses cuts to Medicaid, and restores other health programs cut by the Trump-backed One Big Beautiful Bill Act this summer.

• President Trump met with top Republican and Democratic lawmakers yesterday afternoon in a bid to reach a seven-week stopgap funding deal.
• However, the meeting resulted in little progress, with VP JD Vance afterwards saying “I think we’re headed to a shutdown.”

What happens during a shutdown?

It’s difficult to establish exactly which federal programs or services would immediately end if the government shuts down, given that agencies have been slow to release their latest contingency plans.

But here’s what we do know:

• Historically, ~60% of federal employees have remained on the job as part of services deemed essential—including in-hospital medical care, border patrol, air-traffic control, and law enforcement—while the other ~40% were furloughed.
• Mandatory spending like Social Security, Medicare, Medicaid, and VA benefits would continue to function, but there could be some delay in services.
• The Bureau of Labor Statistics says it won't issue any economic reports, meaning there wouldn’t be a September jobs report published this coming Friday.

It would also be the first shutdown since the Trump admin began significantly cutting the federal workforce. White House officials are threatening even more layoffs in the event of a shutdown, which would give the President broad discretion to decide which services are essential, and which employees can be let go.

Bottom line: With the House out on recess this week, reaching an agreement in the Senate is the only option available to avoid a government shutdown by midnight tonight.