US Government Shuts Down for First Time Since 2019

By Jim Pytell, Managing Editor On Oct 1, 2025

The federal government officially shut down at 12:01 a.m. on Wednesday for the first time since 2019 after Republican and Democratic lawmakers failed to resolve a budget stand-off.

Each year, Congress must pass legislation to fund the federal government for the coming fiscal year. A shutdown occurs if Congress can’t wrap up the appropriations process on time. Today, Oct. 1, marks the start of the 2026 fiscal year.

The current impasse stems from major partisan disagreements over federal spending, health care subsidies, foreign‑aid cuts, and more.

The shutdown is expected to put 40% of the federal workforce – about 750,000 people – on unpaid leave.

Many nonessential operations will pause or severely scale back. Affected agencies and services include those in financial regulation, transportation and aviation, national parks and public lands, as well as some economic data releases, such as Friday’s scheduled jobs report.

Mandatory programs like Social Security, Medicare, Medicaid, and veterans’ benefits are expected to continue, since they are funded outside the annual appropriations process.

One major point of contention is the expiration of Affordable Care Act (ACA) health insurance subsidies. Democrats are insisting on extending those subsidies as part of any funding deal, while Republicans have resisted linking them to the continuing resolution.

Mark Zandi, chief economist at Moody’s, told CNBC that a shutdown that lasts for less than two weeks is unlikely to have a material or lasting impact on the US economy or household finances — though the negative effects mount as the weeks pass, with some estimates suggesting that each additional week of a shutdown could shave 0.1 to 0.2 percentage points off GDP growth.

At a White House press briefing today, Vice President JD Vance told reporters he did not think the government shutdown would last long. 

“I don’t think it’s going to be that long of a shutdown, that’s just a pure guess from the vice president of the United States,” he said. 

Federal Employees in NJ

According to the  New Jersey Department of Labor & Workforce Development (NJDOL), furloughed federal employees assigned to work in New Jersey are eligible to apply for unemployment insurance benefits during the ongoing shutdown. Benefits will be paid to eligible federal workers for the duration of the shutdown, regardless of when the claim is filed.

“Our department is ready to support furloughed federal workers across New Jersey throughout this shutdown. We are committed to ensuring that impacted employees receive the assistance they need in a timely manner,” said Labor Commissioner Robert Asaro-Angelo.

Furloughed federal workers must apply for unemployment benefits in the state where they are assigned to work. Applicants will need to provide proof of wages, such as pay stubs or federal pay statements. Employees who are furloughed may be eligible for benefits, provided they meet all other standard requirements under New Jersey unemployment law.

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