White House announces imminent government shutdown as U.S. Senate fails to pass federal funding bill.

White House announces imminent government shutdown as U.S. Senate fails to pass federal funding bill.

Washington (AP) — The White House has announced that the federal government is expected to shut down at 12:01 a.m. on Wednesday, September 12, 2025, unless lawmakers strike a last-minute compromise. This announcement comes after the U.S. Senate failed to pass a federal funding bill, marking nearly seven years since the last government shutdown.

The last federal shutdown, which ran for 35 days from December 22, 2018, to January 25, 2019, was the longest in U.S. history. At the time, the Senate failed to pass a funding bill that included $5.7 billion requested by President Donald Trump to help construct the U.S. southern border wall. This shutdown was a partial shutdown, where Congress approved funding for certain agencies, allowing them to stay open while other federal departments closed .

The current shutdown is expected to be a full shutdown, where many government offices will temporarily shut down and nonexempt federal employees will be furloughed. This will add strain to workers and the nation's economy, similar to the 2019 shutdown, which cost the United States an estimated $3 billion in lost GDP and resulted in 300,000 federal workers being furloughed and unpaid .

Congressional leaders have been meeting at the White House with President Trump in an effort to avoid a shutdown, but both sides have shown little willingness to budge from their entrenched positions. Democrats are demanding that Congress take up legislation to extend health care benefits, while Republicans are daring Democrats to vote against a bill that would keep government funding mostly at current levels .

The failure to pass a federal funding bill has led to a stalemate, with Democrats using their leverage to push for an extension to Affordable Care Act tax credits that are set to expire at the end of the year. Some Republicans are open to extending the tax credits but want changes to address "waste, fraud and abuse" .

The current budget process was established in 1976, and there have been 10 shutdowns since then. The White House has warned that a shutdown could result in the furlough of federal employees and the disruption of essential services, including national parks, museums, research projects, and certain IRS taxpayer services. Essential service workers will work without pay but will receive backpay after the shutdown ends .

Investors and financial professionals should monitor the situation closely, as a shutdown could have significant economic implications. The 2019 shutdown ended when Trump signed legislation that provided funding again for the government, but the current situation is more complex, with both sides holding firm on their demands.