Economic Toll Rises as ACA Funding Deadlock Extends Record Shutdown

The U.S. government shutdown, now in its 36th day, has surpassed the 2019 record to become the longest in history, with economic and social repercussions intensifying by the day. Speaker of the House Mike Johnson has signaled a "less optimistic" outlook for resolution, as negotiations between Democrats and Republicans remain deadlocked over funding for the Affordable Care Act (ACA) subsidies and agency reopenings, according to a Fox5DC report. The standoff has left 42 million Americans without full SNAP benefits, while air traffic controllers, federal workers, and small businesses face mounting disruptions, according to an NBC News report.

Goldman Sachs has warned that the economic toll could be unprecedented, projecting a 1.15 percentage-point drag on fourth-quarter GDP growth.

Analyst Alec Phillips attributed this to the broader scope of the current shutdown compared to previous closures, which partially funded agencies. "A longer shutdown could spill over into private sector activity," Phillips said, noting that the impact on federal purchases and investment is more severe this time, as reported in a Quartz article. Moody's Analytics echoed these concerns, estimating $30 billion in weekly economic losses, according to a Yahoo Finance piece.

The political impasse shows no sign of easing. President Donald Trump, in a CBS interview, reiterated his refusal to negotiate until the government reopens, calling Democrats "extortionists" and the ACA "terrible," the Fox5DC report said. Senate Democrats, meanwhile, have rejected 14 reopening attempts, demanding assurances for ACA subsidies before supporting any deal, the Fox5DC report added. Senate Majority Leader John Thune, R-S.D., has urged Republicans to consider ending the filibuster to bypass Democratic roadblocks, a move Senate Republicans have historically resisted, according to the Fox5DC report.

The social safety net programs are among the hardest-hit. The Department of Agriculture initially withheld $8 billion in SNAP benefits until federal courts ordered partial payments to resume by November 5, according to an Economic Times article. Treasury Secretary Scott Bessent acknowledged the administration was "waiting for guidance from the courts," while House Democrats accused Trump of "weaponizing hunger," the Economic Times article said. Similarly, the National Flood Insurance Program (NFIP) has halted, delaying home closings and increasing risks for coastal properties, according to an Economic Times report.

The aviation sector is also under strain. Transportation Secretary Sean Duffy warned of worsening airport delays due to staffing shortages, with Newark Airport already experiencing ground delays, the Fox5DC report noted. Allegiant Air executives cautioned that prolonged disruptions could threaten Thanksgiving travel, while United Airlines CEO Scott Kirby raised safety concerns over understaffed TSA and air traffic control operations, according to an El Balad report.

Economists remain divided on the long-term fallout. The Congressional Budget Office (CBO) estimates $7 billion to $14 billion in permanent economic losses, though Goldman Sachs expects a rebound in early 2026 as back pay is distributed and delayed spending resumes, according to a CNN article. However, Trump's recent refusal to guarantee back pay for furloughed workers has raised fears of lingering damage, the CNN article added.

With both parties entrenched, the shutdown's legacy may extend beyond economic metrics. As Jonathan Millar of Barclays noted, "This time might be different," given the current economy's fragility and the unprecedented scale of the crisis, according to a Futunn post. For now, the nation braces for a holiday season marked by uncertainty, with no clear path to resolution in sight.