Government shutdown begins amid funding standoff in Congress

The U.S. government began a shutdown just after midnight on Wednesday morning amid disagreements over healthcare spending that have gridlocked budget appropriations for 2026.

A short-term spending extension known as a continuing resolution failed to garner the needed support to become law by Tuesday evening, the last day of the government’s fiscal year. That bill, which already cleared the House of Representatives earlier this month, would have kept the government open through Nov. 21, giving lawmakers time to advance more comprehensive spending legislation for 2026.

Republicans control 53 seats in the chamber—seven votes short of the 60-vote threshold needed to overcome a filibuster.

Congress last passed spending legislation in March in a bill that extended the government’s funding through September. Until new funding is approved, portions of the government will remain closed. Some of the country’s most essential functions, such as the active military, will continue to operate. More visible portions of the government, such as national parks, nonessential air travel support services, and small business loan processing, will reduce activity or close altogether.

What’s the holdup on spending for 2026? The House and Senate have struggled for years to return federal spending to the regular 12-bill process laid out by the 1974 Congressional Budget and Impoundment Control Act. For much of the past 40 years, Congress has passed mammoth, all-at-once omnibus bills that fiscal conservatives believe have obstructed a clear review of government spending year-over-year and reduced the ability of individual legislators to offer input.

This year, Congress is resolving differences on its first three of its 12 funding bills, with another nine to go. U.S. House Speaker Mike Johnson, R-La., has said he intends to pass the rest of the individual spending bills with the additional time afforded by a continuing resolution.

How does healthcare play into the picture? Alongside other disagreements about spending cuts Republicans have enacted, Democrats are using the moment to force a conversation on a COVID-era supplemental healthcare program. In 2021, Congress temporarily expanded the qualifying criteria of the Affordable Care Act’s premium tax credits, allowing a wider pool of applicants to receive federal assistance to pay for health insurance during the pandemic. With those emergency provisions expiring at the end of 2025, Democrats have urged Congress to make that expansion permanent. Fiscal conservatives, looking to return the government to pre-COVID spending levels, want to eliminate the credits or phase the policy out over time.

While the enhanced premium tax credits are a central component of Democratic messaging, there may be other priorities they will attempt to secure through shutdown negotiations as well. One area of consideration could be the presidential power of pocket recissions—a way for the president to reduce spending that Congress has already approved but the government hasn’t yet disbursed. Democrats have called for restrictions to prevent the president from unilaterally making spending cuts that Congress hasn’t approved.

Dig deeper: Read my report on why 2025’s spending extension was an unusual moment for fiscal conservatives in the Republican Party.