Breaking: U.S. Government Shuts Down After Congress Fails to Pass Funding Bill

Michael Adeleke
5 hours ago Updated 1 hour ago
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U.S. government shutdown halts operations after failed negotiations on health care and spending, sparking economic and political risks.

Highlights

  • U.S. government officially enters first shutdown since 2019 after failed budget talks.
  • Thousands of federal workers furloughed; essential services suspended until deal reached.
  • Deadlock stems from disputes over health care subsidies and Medicaid cuts.

The U.S government has entered its first shutdown since 2019 after lawmakers failed to reach an agreement on the country’s spending package. This triggered immediate disruptions across federal agencies.

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Stalemate Pushes U.S Government Into Shutdown

According to The New York Times, at 12:01 a.m. on Wednesday, the U.S. Government officially shut down after a bruising budget standoff between President Trump and congressional Democrats. The collapse in negotiations means thousands of federal workers are now furloughed. This also applies while core government services face suspension until lawmakers break the deadlock.

This marks the first federal shutdown since 2019, when a 35-day impasse unfolded over Trump’s proposed border wall. This time, the clash centers on Democrats’ demand to extend expiring health care subsidies. They also proposed plans to roll back Medicaid cuts introduced earlier this summer as part of the administration’s tax and spending reforms.

The shutdown became unavoidable late Tuesday, when the Senate rejected both parties’ competing stopgap proposals. Republicans failed to advance a bill that would have extended funding through November 21. They fell short of the 60 votes required. Democrats’ plan, which called for financing through October alongside more than $1 trillion in health-related spending, was also blocked.

Following the votes, White House budget director Russell T. Vought directed agencies to “execute their plans for an orderly shutdown.” This signals the start of what could become a prolonged standoff.

The funding crisis is also complicating legislative progress on other critical measures. For instance, the CLARITY Act is facing fresh delays. Senate Banking Republicans had targeted a September 30 markup session. However, sources now say the timeline is “effectively off the table” amid Capitol Hill gridlock.

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Nation Deadlock Spurs Market Reactions

The shutdown drama unfolded as investors braced for wider economic uncertainty. Hedge assets such as Bitcoin, gold, and silver rallied in recent days. This comes as traders bet that fiscal instability could strengthen demand for alternative stores of value.

Polymarket data showed odds of a government shutdown had climbed as high as 85% before the midnight deadline. Markets responded accordingly, with Bitcoin extending a two-day rally, moving from $108,650 to near $114,000. The appearance of a bullish double-bottom pattern was noted by analysts.  This implies that as the crisis worsens, the flagship cryptocurrency may see additional gains.

For the administration and lawmakers on both sides, the shutdown creates both political and economic risks. Federal employees face weeks without pay, national parks and services are closed to the public, and contractors may experience cascading delays. 

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Michael Adeleke is a passionate crypto journalist known for breaking down complex blockchain concepts and market trends into clear, engaging narratives. He specializes in delivering timely news and sharp market analysis that keeps crypto enthusiasts informed and ahead of the curve. With an engineering background and a degree from the University of Ibadan, Michael brings analytical depth and precision to every piece he writes.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.