With just hours remaining until the federal government funding expires, negotiations between Congressional leaders and President Trump failed to produce a breakthrough on Monday.
The government runs out of money at midnight on Sept. 30, marking the start of fiscal year 2026. Without Congressional action to pass either full-year appropriations bills or a continuing resolution (CR), federal agencies will be forced to suspend non-essential operations and furlough hundreds of thousands of workers.
The federal fiscal year begins Oct. 1, and without funding legislation, a lapse in appropriations will occur for the first time since the 34-day shutdown during the first Trump administration from December 2018 to January 2019.
Congressional leaders from both parties met with President Trump at the White House on Monday afternoon, but the session ended with finger-pointing and no progress toward a resolution. Vice President JD Vance emerged from the meeting declaring, “I think we’re headed to a shutdown because the Democrats won’t do the right thing.”
Trump initially canceled a meeting with Democratic leaders on Sept. 24, calling their demands “unserious and ridiculous”. The September 29 meeting only occurred after Democratic pressure and Republican concerns about appearing unwilling to negotiate.
Democratic leaders struck a more measured tone but emphasized that significant differences remain. Senate Minority Leader Chuck Schumer (D-N.Y.) suggested Trump seemed amenable to some Democratic proposals but noted “large differences” persist between the parties. House Minority Leader Hakeem Jeffries (D-N.Y.) characterized the discussion as “frank and direct” while highlighting that “significant and meaningful differences remain.”
House Republicans passed their continuing resolution on Sept.19 by a narrow 217-212 vote, but the measure failed in the Senate with a 44-48 cloture vote. The GOP proposal would:
- Fund the government through November 21, 2025
- Maintain current FY 2025 funding levels
- Provide $88 million in additional security funding for government officials
- Include extensions for Medicare-dependent hospital programs, telehealth flexibilities, and veterans’ benefits
- Delay Medicaid Disproportionate Share Hospital cuts scheduled for October 1
While Republicans are placing blame on the Democrats, Republicans currently hold control of the House, Senate and presidency.
Senate Democrats rejected the Republican CR and introduced their own alternative that also failed, falling short in a 47-45 Senate vote. The Democratic proposal would have:
- Extended funding through October 31, 2025
- Permanently extended enhanced Affordable Care Act premium tax credits set to expire December 31, 2025
- Reversed healthcare spending cuts from the One Big Beautiful Bill Act
- Provided the same security funding as the Republican measure
- Limited future rescissions of previously appropriated funding
The ACA subsidies are Democrats’ primary negotiating demand. These enhanced premium tax credits help over 20 million Americans afford health insurance and would cost an estimated $350 billion over 10 years if made permanent.
A shutdown would have widespread effects across federal operations:
- Non-essential federal employees would be furloughed without pay until funding resumes
- Essential services would continue, including national security, law enforcement, and mandatory spending programs like Social Security and Medicare
- Veterans’ benefits, federal courts, and national parks could face service disruptions
- Economic impacts would grow more severe the longer a shutdown persists
The Senate would need at least eight Democrats to support any Republican measure to reach the 60-vote threshold, while Republican Sen. Rand Paul is expected to oppose the GOP continuing resolution.
