For the first time since 2018, an impasse on federal spending shut down the government at midnight. The Congressional Budget Office estimates over 750,000 workers will be furloughed. Caitlin Huey-Burns reports the impact will ripple across the U.S. economy.
On the other side of the aisle, Democrat Angie Craig blamed the GOP.
“People are not going to be able to afford their health care,” said Craig.
The battle is focused on roughly $1 trillion in Medicaid and Affordable Care Act (ACA) — aka “Obamacare” — cuts in President Trump’s so-called “Big Beautiful Bill.” It would have a major impact on health care premiums and even determine who qualifies for ACA subsidies.
ACA tax credits that were passed in 2021 expanded access to Medicaid funding from 11 million people to 24 million people. Those tax credits expire at the end of 2025.
The Kaiser Family Foundation estimates that for a Minnesota family with a household income of $100,000, premiums on the exchange would go from $523 a month to $830 a month starting Jan. 1, 2026.
“I mean, they say that they’re going to terminate folks that end up getting furloughed as part of a shutdown,” said federation vice president Ruark Hotopp. “That’s going to be, you know, thousands of employees without paychecks, and that’ll hurt them directly, but then that’s going to have an impact on the economy and the jobs market as well.”
For both sides, there is frustration that this entire debate, and the entire possible government shutdown, is over a funding bill that would fund the government for only six weeks, until Nov. 21. Then it’s likely they will have to do it all over again.
Esme Murphy, a reporter and Sunday morning anchor for WCCO-TV, has been a member of the WCCO-TV staff since December 1990. She is also a weekend talk show host on WCCO Radio. Born and raised in New York City, Esme ventured into reporting after graduating from Harvard University.
What powers does the president have during a government shutdown? Experts weigh in with just hours to go before government funding runs out.
Photo from the White House
In the event of a government shutdown, President Donald Trump would have broad authority to reshape the federal workforce — though only temporarily, according to legal experts.
With no spending deal in sight and the Oct. 1 funding deadline fast approaching, such a shutdown now seems increasingly unavoidable.
The deadlock in Congress stems from conflicting spending plans, with Republicans pushing for a clean bill, while Democrats have conditioned their support on extending Affordable Care Act subsidies.
Trump warned that major changes could occur — which could be detrimental to Democrats — if the government runs out of funding.
“We can do things during the shutdown that are irreversible, that are bad for them and irreversible by them, like cutting vast numbers of people out, cutting things that they like, cutting programs that they like,” he said on Sept. 30, according to Reuters.
‘Broad latitude’
If a government shutdown occurs, “the president has broad latitude” to restructure the federal workforce, Matthew Lawrence, a professor at Emory University School of Law, told McClatchy News.
“During a shutdown, all government programs and activities without funding stop, except for limited exceptions,” Sam Berger, a senior fellow at the Center on Budget and Policy Priorities, told McClatchy News. “The Executive Branch has some discretion in how it interprets the scope of those exceptions.”
The law governing government shutdowns is the Antideficiency Act, which prohibits agencies from spending non-appropriated federal funds except in emergency situations.
Presidents have the authority to designate which federal employees are essential and must remain on duty, and which are non-essential and subject to furlough, experts said.
During past shutdowns, the White House Office of Management and Budget (OMB) has published a list of employees deemed essential, Josh Sewell, the director of research and policy at Taxpayers for Common Sense, told McClatchy News.
“The gist of this is that OMB is responsible for approving each agency’s contingency plan,” Sewell said.
Presidents, and agency heads, have broad discretion in deciding what employees stay on.
“The president can push the boundaries of what’s essential in order to permit more of the government to operate in a shutdown,” Lawrence said. “Or the president can be stingy and not allow programs to operate.”
The blame game is a major factor in such decisions.
“Generally speaking, if presidents think the other party is going to be blamed then they will potentially ramp up the pain by determining very narrowly exceptions to the Antideficiency Act,” Lawrence said.
For example, during the 2013 government shutdown, former President Barack Obama’s administration decided to close the national park system. A Rutgers poll conducted at the time indicated many Americans blamed the shutdown on congressional Republicans.
Government employees and other organizations can also fight furloughs in court, Lawrence said, but past shutdowns have not lasted long enough for this to happen.
Long-lasting changes
The Trump administration has threatened to move beyond temporary furloughs and carry out mass firings if a government shutdown occurs.
An OMB memo obtained by Politico revealed the agency plans to permanently reduce the federal workforce amidst a shutdown.
But, legal experts said the executive branch only has the power to make temporary changes.
“The laws regulating shutdowns do not give any power to the president to do broad restructuring that will last past the shutdown,” Lawrence said.
“A reduction in force (RIF) is allowed when an agency lacks funding, is decommissioned by Congress, or there is a legal restructuring,” Sewell said. “There is a whole process for this and it is separate from any temporary furlough due to a governmental shutdown … Any long term changes would need to rely on other statutory authorities, not the temporary lapse in funding.”
Brendan Rascius is a McClatchy national real-time reporter covering politics and international news. He has a master’s in journalism from Columbia University and a bachelor’s in political science from Southern Connecticut State University.
With a government shutdown just hours away, one of the sticking points between Republicans and Democrats involves health care, specifically whether to extend premium subsidies under the Affordable Care Act.
With a government shutdown just hours away, one of the key sticking points between Republicans and Democrats involves health care, specifically whether to extend premium subsidies under the Affordable Care Act.
The debate centers on enhanced tax credits that help millions of Americans afford insurance through ACA marketplaces. These subsidies are currently scheduled to expire at the end of 2025, but Democrats are pushing for action now to avoid disruptions during the upcoming open enrollment period.
“Twenty-two million people across the country get their coverage through the Affordable Care Act marketplaces,” said Anne Reid, policy director of the Funders Forum on Accountable Health at the Milken Institute School of Public Health at George Washington University.
“The vast majority of those folks have some level of subsidization of their coverage, which is tied to their income.”
Reid warns that without an extension, millions could lose coverage or face unaffordable premiums.
The credits were expanded in recent years to raise income thresholds, allowing more Americans to qualify for help.
“The credits were enhanced in the sense that a higher minimum income was set so more people could qualify to receive some relief toward these premiums,” Reid said.
Reid previously served as a senior congressional staffer, where she contributed to health workforce policy during the development of the Affordable Care Act.
Democrats want the extension included in the continuing resolution needed to keep the government open. Reid said they view it as a must-pass provision.
“Democrats are arguing that we need to handle this in must-pass legislation, which at the moment is the appropriations bill.”
They also want to reverse earlier Medicaid cuts that could result in more than 10 million people losing coverage.
But Republicans argue the funding bill should be a “clean” continuing resolution, focused solely on keeping the government running.
“Let’s just keep the government going on current fiscal year levels through the middle of November, to give us some time to work things out and negotiate a longer-term package,” Reid said, summarizing the GOP position.
University of Maryland finance professor David Kass said Democrats are pushing to extend the expanded benefits into 2026, but Republicans want to debate the issue separately from the stopgap funding measure.
“Fewer Americans would be able to purchase health insurance” if the premium help isn’t available as open enrollment begins, Kass said.
Reid said the timing is critical, not just for consumers, but for insurers who need clarity to set rates.
“Days and weeks matter in terms of being able to rightsize the premium levels.”
The potential shutdown could also hit the D.C. region particularly hard, given its large federal workforce.
“Job security and financial security would very acutely be felt in the D.C. region, given our demographics and who all comprises the federal workforce,” Reid said.
With open enrollment approaching and budget negotiations stalled, Reid said the lack of clarity could leave consumers in limbo and millions of Americans at risk of losing affordable health coverage.
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Americans worried that a looming U.S. government shutdown could derail their plans to take out a mortgage or refinance their home loan can breathe easy — mostly. Housing experts says lenders will continue processing mortgages as usual even if federal agencies close shop, while noting that a shutdown could lead to hitches for borrowers applying for government-backed loans.
“If you’re expecting to close in a week or a month, there could be some slight delay,” said Jeff Ostrowski, a housing analyst at Bankrate. “But I think for most people, it’s probably going to be a blip more than a real deal killer.”
The bulk of the mortgage market consists of loans originated by private lenders. But some government agencies have a hand in the process, such as the Federal Housing Administration (FHA) insuring private loans or Federal Emergency Management Agency (FEMA) managing flood insurance policies.
Impact on government-backed loans
Borrowers applying for a conventional mortgage issued by a bank, credit union or other private lender are unlikely to encounter problems if the government closes shop. However, those applying for government-backed loans from agencies like the FHA, Department of Veteran Affairs an Department of Agriculture (USDA) could face minor delays lining up their mortgages, Holden Lewis, a senior writer at NerdWallet, told CBS MoneyWatch in an email.
The National Association of Realtors (NAR) notes in an online explainer that the FHA will continue to approve most single-family mortgage loans in the event of a shutdown. The VA will also continue to guarantee home loans, but worker furloughs at the agency could lead to processing delays, the group said.
“It creates a little bit of extra stress and uncertainty, but I haven’t seen a shutdown in either of those programs” when politics led the government to shut it doors in the past, Ostrowski said.
The VA and FHA account for up to a quarter of all mortgage applications, according to Redfin. NAR advises U.S. veterans applying for or refinancing a government-backed loan to check with their lender on how long it will take to complete the process if the government shuts down.
Another segment of the housing market that could feel the impact of a shutdown are people applying for mortgages through the USDA, which issues loans to buyers in eligible towns and rural areas. NAR said the USDA will halt issuance of new direct and guaranteed home loans during a shutdown. Pre-scheduled direct‑loan closings will also be postponed.
The USDA did not respond to a request for comment. The VA referred CBS News to its shutdown contingency plan, which says the agency will continue issuing “housing benefits.”
Fannie Mae and Freddie Mac, the government-sponsored entities that support roughly 70% of the mortgage market, don’t rely on federal funding and have continued to operate during past shutdowns. However, they could face bottlenecks if federal agencies close down this week, said Anthony Smith, an applied economist at Realtor.com.
“They rely on other federal processes like the IRS for tax transcript verifications,” he said. “So if the IRS shuts down or significantly cuts back on its transcript services, then Fannie and Freddie might be able to approve a loan, but they can’t get the final verification piece.”
Possible flood insurance delays
People purchasing a house in a flood zone could also face delays during a government shutdown, experts told CBS News. That’s because homebuyers applying for a federally backed mortgage in high-risk flood areas are required to get flood insurance. A shutdown could hamper the FEMA-administered National Flood Insurance Program, which underwrites more than 4 million flood insurance policies in the U.S.
“The government shutdown could complicate your closing because it might be harder to just secure flood insurance,” Ostrowski told CBS News.
FEMA did not respond to a request for comment.
According to the White House, the flood insurance program cannot sell new or renewal insurance policies during a government shutdown.”A potential lapse of the NFIP authorization would negatively impact many thousands of Americans who would be left unable to renew/transfer their coverage or to buy the required coverage for their homes,” a White House official said in an email.
Mary Cunningham is a reporter for CBS MoneyWatch. Before joining the business and finance vertical, she worked at “60 Minutes,” CBSNews.com and CBS News 24/7 as part of the CBS News Associate Program.
The Small Business Administration plans to furlough roughly 23 percent of its workforce if the government shuts down–and more than a dozen core agency services will halt if funding lapses.
The SBA’s capital access office, field operations, and general counsel are among those that are most impacted in terms of head count.
Core loan program services including the agency’s flagship 7(a) loan program will halt, meaning that the agency will neither approve new loans nor service existing ones. The same can be said for the agency’s 504 loan program and its microloan program.
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That said, the agency will continue to disperse direct loans under its disaster aid program.
SBA staffers will also be on tap to help with loan forgiveness and repayment options for pandemic-era programs, including the Covid-19 Economic Injury Disaster loan program, plus the Paycheck Protection Program.
And the agency will continue to dole out awards for the Small Business Innovation Research program and the Small Business Technology Transfer program, which help fledgling startups with R&D efforts to encourage innovation.
Businesses owned by Native Americans will continue to receive aid from the agency as well.
Procurement support for women-owned small business contracting and service-disabled veteran-owned small business contracting will get put on ice. No new applications will be processed.
But the agency will retain some staffers to assist with small business set-aside programs for federal contractors that will continue to work throughout a shutdown. The agency’s HUBZone program, which helps entrepreneurs in “historically underutilized business zones” with federal procurement, will continue to accept and process new applications.
The SBA will also pause all support for the 8(a) Business Development program, the secondary market loan program, and the Small Business Investment Company program.
It operates on revenue from postage, products and services rather than taxpayer dollars appropriated by Congress, so it doesn’t rely on the annual federal budget process that a shutdown affects.
A postal worker delivers mail on Carneros Creek Road in west Charlotte. Observer staff
When is mail delivery impacted?
Mail delivery could be impacted by natural disasters, special events and other changes, according to USPS.
Post offices across the country also closed in January for a national day of observance to honor former President Jimmy Carter, who died the previous month, The Charlotte Observer reported.
Danielle Battaglia contributed to this story.
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Evan Moore is a service journalism reporter for the Charlotte Observer. He grew up in Denver, North Carolina, where he previously worked as a reporter for the Denver Citizen, and is a UNC Charlotte graduate.
Republicans have advertised, or perhaps threatened, that they will seize more power if there is a shutdown: Last Wednesday, Russell Vought, the head of the Office of Management and Budget, released a memo in which, according to Politico the office “told agencies to identify programs, projects and activities where discretionary funding will lapse Oct. 1 and no alternative funding source is available.” The memo also revealed that OMB was instructing agencies to begin planning so-called reduction-in-force plans “that would go beyond standard furloughs, permanently eliminating jobs in programs not consistent with President Donald Trump’s priorities in the event of a shutdown.”
Lest you think Vought is making an idle threat, he is not. He is one of the architects of Project 2025. Vought believes that the federal government is “costly, inefficient, and deeply in debt.”
“If I were a Democrat and Russ Vought was in charge of OMB, I would have nightmares about what Russ could do that you couldn’t undo when government reopens,” Erick Erickson, a conservative talk show host who’s reportedly known the OMB director for decades, told The Boston Globe’s Tal Kopan. “Russ has waited for this moment his whole life.”
This is the threat Republicans used when government funding was running out earlier in the year, and ultimately Schumer and the Democrats ended up supporting an extension. But a lot has happened since March; the Big Beautiful Bill has expanded ICE to the tune of billions of dollars, and Republicans have continued to DOGE the federal government. And the ruling party’s popularity has been in decline.
If the government shuts down, Vought and Trump “will have enormous latitude to determine which services, programs, and employees can be sidelined, decisions that could go far beyond what has occurred during past shutdowns,” writes Max Stier, chief executive of the Partnership for Public Service. This is a real worry; Democrats have a much lower pain threshold than Republicans. Republicans want to shrink the government because it’s part of their larger gestalt, whereas Democrats worry that if thousands of Americans lose access to health care it might be hard for them to get it again.
When I talked to Democrats, it really felt like they wanted a deal and thought maybe they could push the administration into some kind of agreement. Probably all that was squashed last night when Trump posted a vulgar AI-generated deepfake video with mariachi music and Jeffries in a sombrero. Ultimately Democrats are going to have the same problem everyone else does when they’re negotiating with Trump: He’s Trump.
“Every day is like a dog year. It’s exhausting,” Democratic Rep. Sydney Kamlager-Dove, a California Democrat, told NOTUS. “And I’m sure the American people are as exhausted as I am with theater and disingenuousness.”
“I think the level of acrimony and the violence has made people more wary of this work,” she added.
When NOTUS asked dozens of lawmakers returning to Congress on Monday how they were feeling, the most common response was a deep, weary sigh. Multiple senators, including Democrat Amy Klobuchar, laughed at the premise of the question. After all, it’s become almost a given on Capitol Hill that the vast majority of lawmakers are utterly miserable.
Sen. Lisa Murkowski, an Alaska Republican, had a single word to describe her mood: “Crappy.”
“I used to say that public service, when I was in the state senate, was a joy most days,” Rep. Emily Randall, a Washington state Democrat, told NOTUS. “I definitely don’t say that anymore. There are highs and lows, and the lows are really low.”
“I’m not 40 yet, but I feel very old,” she added.
The impending government shutdown has been a particularly trying affair. Republicans are attempting to extend current funding levels through Nov. 21. Democrats — seizing on a rare moment of leverage in the minority — are demanding that Republicans attach an extension for expiring Affordable Care Act tax subsidies, as well as language that would restrict Republicans from turning around and rescinding the congressionally approved funding. Neither side has budged for weeks. The conversations on Capitol Hill have turned from whether a government shutdown will happen to how long it might last.
President Donald Trump revealed that he wants to use American cities as training grounds for the armed forces and joined Defense Secretary Pete Hegseth on Tuesday in declaring an end to “woke” culture before an unusual gathering of hundreds of top U.S. military officials who were abruptly summoned to Virginia from around the world.Hegseth announced new directives for troops that include “gender-neutral” or “male-level” standards for physical fitness, while Trump bragged about U.S. nuclear capabilities and warned that “America is under invasion from within.”“After spending trillions of dollars defending the borders of foreign countries, with your help we’re defending the borders of our country,” Trump said.Hegseth had called military leaders to the Marine Corps base in Quantico, near Washington, without publicly revealing the reason until this morning. His address largely focused on his own long-used talking points that painted a picture of a military that has been hamstrung by “woke” policies, and he said military leaders should “do the honorable thing and resign” if they don’t like his new approach.Meetings between top military brass and civilian leaders are nothing new, but the gathering had fueled intense speculation about the summit’s purpose given the haste with which it was called and the mystery surrounding it.Video below: Defense Secretary Pete Hegseth gives remarks in QuanticoAdmirals and generals from conflict zones in the Middle East and elsewhere were summoned for a lecture on race and gender in the military, underscoring the extent to which the country’s culture wars have emerged as a front-and-center agenda item for Hegseth’s Pentagon, even at a time of broad national security concerns across the globe.‘We will not be politically correct’Trump is used to boisterous crowds of supporters who laugh at his jokes and applaud his boasts during his speeches. But he wasn’t getting that kind of soundtrack from the generals and admirals in attendance.In keeping with the nonpartisan tradition of the armed services, the military leaders sat mostly stone-faced through Trump’s politicized remarks, a contrast from when rank-and-file soldiers cheered during Trump’s speech at Fort Bragg this summer.During his nearly hour-long speech, Hegseth said the U.S. military has promoted too many leaders for the wrong reasons based on race, gender quotas and “historic firsts.”“The era of politically correct, overly sensitive don’t-hurt-anyone’s-feelings leadership ends right now at every level,” Hegseth said.That was echoed by Trump, who said “the purposes of America military is not to protect anyone’s feelings. It’s to protect our republic.″″We will not be politically correct when it comes to defending American freedom,” Trump said. “And we will be a fighting and winning machine.”Loosening disciplinary rulesHegseth said he is loosening disciplinary rules and weakening hazing protections, putting a heavy focus on removing many of the guardrails the military had put in place after numerous scandals and investigationsHe said he was ordering a review of “the department’s definitions of so-called toxic leadership, bullying and hazing to empower leaders to enforce standards without fear of retribution or second guessing.”The defense secretary called for “changes to the retention of adverse information on personnel records that will allow leaders with forgivable, earnest, or minor infractions to not be encumbered by those infractions in perpetuity.”“People make honest mistakes, and our mistakes should not define an entire career,” Hegseth said. “Otherwise, we only try not to make mistakes.”Bullying and toxic leadership has been the suspected and confirmed cause behind numerous military suicides over the past several years, including the very dramatic suicide of Brandon Caserta, a young sailor who was bullied into killing himself in 2018.A Navy investigation found that Caserta’s supervisor’s “noted belligerence, vulgarity and brash leadership was likely a significant contributing factor in (the sailor)’s decision to end his own life.”Gender-neutral physical standardsHegseth used the platform to slam environmental policies and transgender troops while talking up his and Trump’s focus on “the warrior ethos” and “peace through strength.”Hegseth said the department has been told from previous administrations that “our diversity is our strength,” which he called an “insane fallacy.”“They had to put out dizzying DEI and LGBTQE+ statements. They were told females and males are the same thing, or that males who think they’re females is totally normal,” he said, adding the use of electric tanks and the COVID vaccine requirements to the list as mistaken policies.Hegseth said this is not about preventing women from serving.“But when it comes to any job that requires physical power to perform in combat, those physical standards must be high and gender neutral,” he said. “If women can make it excellent, if not, it is what it is. If that means no women qualify for some combat jobs, so be it. That is not the intent, but it could be the result.”Hegseth’s speech came as the country faces a potential government shutdown this week and as Hegseth, who has hammered home a focus on lethality, has taken several unusual and unexplained actions, including ordering cuts to the number of general officers and firings of other top military leaders.Hegseth has championed the military’s role in securing the U.S.-Mexico border, deploying to American cities as part of Trump’s law enforcement surges, and carrying out strikes on boats in the Caribbean that the administration says targeted drug traffickers.
QUANTICO, Va. —
Defense Secretary Pete Hegseth summoned hundreds of U.S. military officials to an in-person meeting Tuesday to declare an end to “woke” culture in the military and announce new directives for troops that include “gender-neutral” or “male-level” standards for physical fitness.
Hegseth and President Donald Trump had abruptly called military leaders from around the world to convene at the Marine Corps base in Quantico, near Washington, without publicly revealing the reason until this morning. Hegseth’s address largely focused on his own long-used talking points that painted a picture of a military that has been hamstrung by “woke” policies, and he said military leaders should “do the honorable thing and resign” if they don’t like his new approach.
Meetings between top military brass and civilian leaders are nothing new, but the gathering had fueled intense speculation about the summit’s purpose given the haste with which it was called and the mystery surrounding it.
Admirals and generals from conflict zones in the Middle East and elsewhere were summoned for a lecture on race and gender in the military, underscoring the extent to which the country’s culture wars have emerged as a front-and-center agenda item for Hegseth’s Pentagon, even at a time of broad national security concerns across the globe.
Video below: Defense Secretary Pete Hegseth gives remarks in Quantico
During his nearly hour-long speech, Hegseth said the U.S. military has promoted too many leaders for the wrong reasons based on race, gender quotas and “historic firsts.”
“The era of politically correct, overly sensitive don’t-hurt-anyone’s-feelings leadership ends right now at every level,” Hegseth said.
He said he is loosening disciplinary rules and weakening hazing protections, putting a heavy focus on removing many of the guardrails the military had put in place after numerous scandals and investigations
Hegseth said he was ordering a review of “the department’s definitions of so-called toxic leadership, bullying and hazing to empower leaders to enforce standards without fear of retribution or second guessing.”
He called for “changes to the retention of adverse information on personnel records that will allow leaders with forgivable, earnest, or minor infractions to not be encumbered by those infractions in perpetuity.”
“People make honest mistakes, and our mistakes should not define an entire career,” Hegseth said. “Otherwise, we only try not to make mistakes.”
Bullying and toxic leadership has been the suspected and confirmed cause behind numerous military suicides over the past several years, including the very dramatic suicide of Brandon Caserta, a young sailor who was bullied into killing himself in 2018.
A Navy investigation found that Caserta’s supervisor’s “noted belligerence, vulgarity and brash leadership was likely a significant contributing factor in (the sailor)’s decision to end his own life.”
Hegseth used the platform to slam physical fitness and grooming standards, environmental policies and transgender troops while talking up his and Trump’s focus on “the warrior ethos” and “peace through strength.”
Hegseth said the department has been told from previous administrations that “our diversity is our strength,” which he called an “insane fallacy.”
“They had to put out dizzying DEI and LGBTQE+ statements. They were told females and males are the same thing, or that males who think they’re females is totally normal,” he said, adding the use of electric tanks and the COVID vaccine requirements to the list as mistaken policies.
Hegseth said this is is not about preventing women from serving.
“But when it comes to any job that requires physical power to perform in combat, those physical standards must be high and gender neutral,” he said. “If women can make it excellent, if not, it is what it is. If that means no women qualify for some combat jobs, so be it. That is not the intent, but it could be the result.”
Hegseth’s speech came as the country faces a potential government shutdown this week and as Hegseth, who has hammered home a focus on lethality, has taken several unusual and unexplained actions, including ordering cuts to the number of general officers and firings of other top military leaders.
A possible U.S. government shutdown on Wednesday could hinge on a deal to maintain a tax credit that helps 22 million Americans lower their health insurance costs when they buy policies through the Affordable Care Act’s marketplaces.
Known as the enhanced premium tax credit, the subsidy has been used by millions of low- and middle-class households since it was authorized under the American Rescue Plan Act in 2021. Since then, spurred by the tax credit, the number of people who have enrolled in ACA marketplace health insurance plans has almost doubled, according to health care publication KFF.
But it is set to expire at the end of 2025, and leading Democratic lawmakers are making a funding deal to keep the government open contingent on Republicans agreeing to extend the credit.
Even as the outcome of the funding negotiations in Washington, D.C., remains uncertain, expiration of the premium health care credits could inflict financial pain on millions of Americans, experts told CBS News.
“Insurers are already preparing to send notices to households that they will see increases starting in January 2026,” said Alex Jacquez, chief of policy at Groundwork Collaborative, a liberal economic advocacy group, and former a White House economic official under former President Joe Biden, on a conference call Friday to discuss the tax credit.
He added, “People are more and more concerned about the cost of living, and [this is] a hit to their pocketbooks that they will start seeing in weeks.”
The White House didn’t respond to a request for comment.
Here’s what to know about the enhanced ACA premium tax credits set to expire at the end of 2025.
How much could ACA premiums increase?
The cost of premiums for people who buy their insurance through the ACA marketplaces could rise by an average of 75% after the tax credits expire, according to KFF. About 4 million people would likely drop their insurance coverage if the credit is allowed to expire because they would’t be able to afford the costs, the Congressional Budget Office has estimated.
The premium tax credit is aimed at people who earn too much to qualify for Medicaid, the health insurance program for low-income Americans, and who can’t get affordable health care through an employer. The credit is available for those who earn between 100% to 400% of the poverty level, which means a family of four with annual income of up to $128,600 would qualify for the credit.
With expiration of the ACA coverage credit only months away, some policy holders have already received noticed that their premiums — the monthly fee paid for insurance coverage — are poised to surge next year. Insurers have sent out notices in nearly every state, with some proposing premium increases of as much as 50%.
Insurers are already planning on substantial premium hikes in 2026, according to a Peterson KFF Health System Tracker survey published last month. The poll found that 312 insurers participating in ACA marketplaces are proposing median increases of 18% next year, about 11 percentage points higher than in 2025.
That increase would represent the largest rate hike since 2018, and is driven by higher costs for medical care as well as the expiration of the premium tax credits. Sharply higher ACA premiums would likely cause healthier people to drop coverage, making it more expensive to insure those who remain, the group said.
The proposed hikes range from a high of 39.9%, from Blue Cross Blue Shield of Oklahoma, to a low of 4.6% for Oscar Garden State Insurance Corporation, their survey found.
In Iowa last month, the state’s insurance commissioner weighed increases ranging from 3% to 37%, arousing public concerns. One woman who runs a garden center in Cedar Falls, Iowa, said she was considering dropping health insurance altogether.
“I am already living as frugally as I possibly can while working as hard as I possibly can, putting in as many hours as I am allowed to at my job, never missing a day of work,” one woman, LuAnn, wrote in a comment published on the commissioner’s website.
Signs of financial fragility
The potential hike in insurance costs comes as many Americans continue struggling with the cost of living, said Rohit Chopra, former director of the Consumer Financial Protection Bureau, on the conference call with Jacquez, organized by Groundwork, which supports extending the credits.
“Some people will need to drop their insurance all together, but households with someone with a chronic illness will have to pay those big, big increases,” Chopra said. That would require some families to make tough financial choices, such as not paying other bills or accumulating debt to cover their expenses, he addd.
Although inflation around the U.S. has eased significantly since its post-pandemic peak in 2022, costs continue to inch higher. The Federal Reserve’s 2% inflation target is slipping further from reach this year, with the Consumer Price Index climbing higher in recent months. Some consumers are showing signs of increasing financial stress, with credit card delinquencies on the rise and balances creeping higher.
Meanwhile, many Americans aren’t aware that the ACA enhanced premium tax credits will expire in a matter of months, KFF found in a survey.
“Consumers should not panic, but they do need to prepare,” Louise Norris, a health policy analyst at insurance website Healthinsurance.org, said in an email.
People should make sure to compare various plans available to them on the marketplaces and explore options such as Health Savings Plans, which allows people to set aside money to pay for medical expenses, she said.
“Being proactive will help minimize financial surprises,” Norris said.
Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.
Washington seems fairly resigned to the fact a government shutdown will begin at midnight, the first to occur since 2018. Of course, this could be feigned acceptance to call the bluff of political opposition—or it could be a true reflection of the stalemate within Congress. Whatever the reason, Wall Street is caught in the middle.
Casualties of the potential shutdown (caused by a standoff over how to fund government) are already significant: This Friday’s payroll data won’t be released, the Bureau of Labor Statistics has confirmed, if it goes ahead. This means analysts will be trading without a relatively key piece of contemporaneous data which markets have been watching closely.
The further fallout from a potential pause to data releases is the Fed’s decision-making process. While shutdowns have been known to last only a matter of days, there is the chance it could rumble on for weeks. While it is unlikely the shutdown could last near a month, it does mean the Fed’s meeting at the end of October could be skewed by either a lack of data or economists frantically playing catch up with reporting.
Trump isn’t afraid of a government shutdown—they’ve occurred under his administration before—and his vice president JD Vance said yesterday he believed the White House was headed for a stalemate despite efforts for negotiations.
The will-they-won’t-they of the highest office in America is precisely the environment Wall Street doesn’t like: Uncertainty.
“The United States is still heading for another government shutdown this evening, it may or may not happen as this political theater is a well-worn routine and very often a solution is created at the last possible moment,” chimed UBS’s Paul Donovan. “This all lowers the productivity of economists … as pointless hours are spent analyzing the effects. The [BLS] has said that they will not publish any economic data in the event of a shutdown—of course the BLS economic data is subject to quality criticism, but the problem is that the alternatives like sentiment surveys are even worse, and that’s all that markets will be left to work with in the absence of official numbers.”
While the time taken to focus on this “pseudo-drama” will “unfortunately allow rumor and unreliable survey evidence to gain influence over markets,” Donovan noted, it does present an opportunity for private businesses. Companies can sneak through price increases—for profit as opposed to tariff-driven—because they know it will go “undetected” for some time, added Donovan. Of course, those increases will ultimately be identified when inflation reporting resumes but by then, consumers will already have felt the sting and have adjusted their inflation perceptions accordingly.
Macro effects
Potentially braced for volatility, UBS is reminding its clients to see through shutdown fears and “focus on other market drivers, such as the mix of continued Fed rate cuts, strong corporate earnings, and robust AI capex and monetization.”
The bank’s chief investment officer, Mark Haefele, wrote in a note this morning that temporary delays to data shouldn’t delay cuts to the base rate–which the market has priced in—and any shutdown effects on the macro side are “typically minimal and quickly reversed.”
For more significant—but still relatively minimal—effects to be felt, the shutdown would have to be “lengthy” added Thierry Wizman, global FX and rates strategist at Macquarie Group, in a note Friday: “The last government shutdown … was also the lengthiest one to date. Afterward, a Congressional Budget Office (CBO) investigation concluded that the economic impact was small, but not trivial. As a share of quarterly real GDP, the level of real GDP in Q4 2018 was reduced by 0.1% (unannualized), and the level of real GDP in the first quarter of 2019 was estimated to be reduced by 0.2%.”
“However, in subsequent quarters, GDP would be temporarily higher than it would have been in the absence of a shutdown, as activity ratchets back. As such, only a very small (0.02%) of GDP is permanently ‘lost’.”
But the latest shutdown also comes with the threat that President Trump would permanently let go some of the furloughed workers, with Wizman noting: “If that were to happen, it could deepen whatever adverse impact on GDP would normally take place. It would also raise new hackles about ‘governability’ in the U.S.”
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House Democratic Leader Hakeem Jeffries has responded after President Donald Trump posted an artificial intelligence (AI) video on his social media page mocking him and other Democrats.
In the video, Jeffries is seen wearing a sombrero and a mustache, while Senate Minority Leader Chuck Schumer speaks in a fake voice and argues for undocumented immigrants to get “free healthcare.”
Jeffries and Schumer met with Trump just hours before at the White House to discuss the looming government shutdown.
Shortly after Trump posted the video, Jeffries wrote on X, “Bigotry will get you nowhere. Cancel the Cuts. Lower the Cost. Save Healthcare. We are NOT backing down.” In a separate post, he shared a photo of Trump and Jeffrey Epstein. “This is real,” he wrote.
Schumer commented on X, “If you think your shutdown is a joke, it just proves what we all know: You can’t negotiate. You can only throw tantrums.”
Jeffries also appeared on MSNBC, where he called the video “disgusting.”
“It’s a disgusting video and we’re going to continue to make clear bigotry will get you nowhere. We are fighting to protect the healthcare of the American people in the face of an unprecedented Republican assault on all the things—Medicaid,” he said.
With a federal government shutdown possible, most of the 27,000 workers in Minnesota will be furloughed and won’t get paychecks.
Those deemed essential will continue working, but also won’t get paid until after the shutdown. That includes air traffic controllers and TSA agents.
In the longest government shutdown in 2018 and 2019 — 35 days in all — there were very long lines at the Minneapolis-St. Paul International Airport, when the TSA agents stopped showing up for work
Now, a number of people at MSP told WCCO they would be very concerned about flying during a government shutdown.
“If they are not getting paid, they won’t be able to put food on the table and live their life every day,” Jeff Reynolds said.
President Trump is threatening to fire thousands of furloughed workers during a shutdown. Republicans need 60 votes in the Senate to pass a spending bill that would keep the government open.
There are only 53 Republican Senators, and Democrats say they won’t budge unless Republicans restore $1 trillion in Medicaid cuts.
“I think that Democrats are quite united,” Minnesota Sen. Tina Smith said. “That this is a moment where we really need to be fighting for our constituents and not just going along with whatever the Republicans want.”
During a shutdown, federal offices in Minnesota will close. People will still receive Social Security, Medicare and Medicaid payments. Other programs, like a supplemental nutrition program for women and children, will eventually run out of funds.
Post offices will remain open and mail delivery will continue.
Esme Murphy, a reporter and Sunday morning anchor for WCCO-TV, has been a member of the WCCO-TV staff since December 1990. She is also a weekend talk show host on WCCO Radio. Born and raised in New York City, Esme ventured into reporting after graduating from Harvard University.
Republican and Democratic congressional leaders emerged from a late afternoon meeting with President Trump sounding no closer to a deal to avoid a government shutdown. Caitlin Huey-Burns has the latest.
This week, editors Peter Suderman, Katherine Mangu-Ward, Nick Gillespie, and Matt Welch discuss whether the impending government shutdown will actually rein in the federal bureaucracy. They consider whether there is anything to gain from a shutdown, how past shutdowns have played out, and whether the risk of growing executive power outweighs the risk of uncontrolled spending.
They also examine the indictment of former FBI Director James Comey and whether it’s about retribution or substance, President Donald Trump’s deployment of federal troops to Portland, and New York Mayor Eric Adams’ decision to exit the mayoral race. A listener question prompts a conversation about cyclical theories of history and whether frameworks like The Fourth Turning help explain our current moment or merely provide the illusion of clarity.
0:00—Shutdown showdown and shrinking the government
9:24—Russell Vought and the growth of executive power
25:34—James Comey faces an indictment
31:38—Eric Adams drops out of NYC mayoral race
40:42—Listener question on cyclical frameworks in history
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Unless Congress comes to a funding deal ahead of October 1, the government will shut down, forcing active-duty service members to continue to serve without pay until a deal is made.
During a government shutdown, all active-duty personnel, as well as National Guard who are currently deployed, must carry out their assigned duties with their pay delayed until the shutdown is over. Civilian personnel whose work the Defense Department considers essential, or “excepted,” will also continue to work, while other civilians are furloughed for the duration of the shutdown.
“After the government shutdown, all government employees will automatically receive back pay, based on the terms of the Government Employee Fair Treatment Act of 2019,” said Seamus Daniels, a fellow for Defense Budget Analysis at the Center for Strategic and International Studies.
Active-duty service members won’t get paid on time unless Congress passes a separate piece of legislation, as it did in 2013 with the “Pay Our Military Act,” which ensured military pay and allowances continued during a government shutdown.
Republican Rep. Jen Kiggans of Virginia introduced a bill earlier this month with bipartisan support, the “Pay Our Troops Act of 2026,” which would keep members of the military and Coast Guard paid during a shutdown, but it’s unlikely to pass in time because the House is out of session until Oct 7.
During the last shutdown in 2019, the Navy Federal Credit Union and USAA offered special loans to members of the military, and they plan to do so again if there’s a shutdown in October. The Navy Federal Credit Union said in a press release it would “offer 0% APR loans to eligible members whose pay may be affected, continuing a tradition of assistance seen during previous shutdowns in 2011, 2013 and 2018-2019, when nearly 20,000 members received support.” USAA plans to offer eligible members who have accounts with the bank a “no-interest loan equal to the amount of one net paycheck.”
The Defense Department published contingency guidance on Friday, outlining its priority missions and stating that unused funds passed in the reconciliation bill over the summer could be considered to support them. The list includes, in order: operations to secure the U.S. Southern Border, Middle East operations, the U.S. missile defense project Golden Dome for America, depot maintenance, shipbuilding and critical munitions.
The guidance estimates about 406,000 of the department’s 741,000 civilian employees will be required to work in the event of a shutdown because their mission is critical and not easily carried out by any U.S. service member.
While a memo from the White House Office of Management and Budget said some civilians could be laid off during the shutdown, the guidance released by the Defense Department outlines furloughs but no cuts to the civilian workforce.
During the shutdown, medical care and dental care would be excepted, according to the contingency guidance, but elective surgeries and other elective procedures would be delayed unless they’re necessary for military readiness. Private health care using the Defense Department’s TRICARE medical insurance would continue uninterrupted.
Washington — Much of the federal government is on the verge of shutting down if Congress does not reach a deal to approve new funding by Wednesday, Oct. 1, 2025.
Republicans have proposed extending government funding at current levels until Nov. 21 to allow for members to continue working on full-year appropriations bills. Democrats made a counteroffer to keep the government open through October, but attached health care provisions and restrictions on President Trump’s ability to withhold funding, both of which are nonstarters with most Republicans.
The two sides are dug in on their positions, increasing the chances of a shutdown beginning Wednesday. Congressional leaders met with President Trump at the White House on Monday to search for a path forward, but walked away in the same position.
A government shutdown occurs when Congress fails to pass funding for some or all agencies, which can’t spend money that hasn’t been approved by lawmakers. There have been 14 shutdowns since 1980, with the most recent coming in 2018. That shutdown lasted 34 days.
Here’s what to know about what happens during a government shutdown:
What is a government shutdown?
Tourists walk by a sign announcing that the Statue of Liberty is closed due to a government shutdown in New York on Oct. 1, 2013.
AFP PHOTO/Emmanuel Dunand
Most federal government agencies are funded annually by a dozen appropriations bills that need to be passed by Congress and signed by the president before the start of the new fiscal year on Oct. 1. These are often grouped together into one large piece of legislation known as an “omnibus” bill to speed up the process when Congress inevitably needs to pass a number of them at the last minute.
If the funding deadline passes without Congress authorizing more spending, the government must fully or partially shut down, depending on which agencies are already funded.Ahead of this year’s deadline, none of the 12 appropriations bills have been enacted. Some agencies got an infusion of money in the Republican-passed “one big, beautiful bill” earlier this year, meaning certain programs and functions in some departments will remain funded in the event of a shutdown, chiefly the Defense Department and Department of Homeland Security.
Lawmakers regularly buy themselves more time to finish spending bills by passing what’s known as a continuing resolution, which temporarily extends current funding levels to keep agencies functioning while they work to reach an agreement on new spending.
The Constitution says the Treasury Department cannot spend money without a law authorizing it. Under a statute known as the Antideficiency Act, agencies are required to cease operations — with certain exceptions — in the absence of funding authorized by Congress. The act, a version of which first passed in 1870, with several significant updates since, also prohibits the government from entering into financial obligations without congressional sign-off.
“Treasury cannot pay out any money if there’s not a law providing for who gets the money,” said Matt Glassman, a senior fellow at the Government Affairs Institute at Georgetown University. “If those annual bills expire, then there is no law appropriating money for certain functions.”
What happens during a government shutdown, and who is affected?
Federal employees express their disappointment with Congress’ inability to end the federal government shutdown on Tuesday, Oct. 15, 2013, in Houston.
Marie D. De Jesus/Houston Chronicle via Getty Images
In a shutdown, the federal government must stop all non-essential functions until funding is approved by Congress and signed into law, except for programs that are funded by other means, like fees or other legislation. Each agency determines what work is essential and what is not. Members of Congress make that determination for their own staff, as well.
“No money can come out of Treasury whether you’re essential or not essential. But who can keep working and incur obligations, even when there are no appropriations — there are three exceptions,” Glassman said.
Those exceptions are defined by the Antideficiency Act. They allow the government to fundoperations to protect life and property, and keep officials involved in the constitutional process on the job, like the president, his staff and members of Congress.
All active-duty military members, many federal law enforcement officers and employees at federally funded hospitals are considered essential, along with air traffic controllers and Transportation Security Administration officers. Each agency determines which of its employees can stay on the job.
In a step that differs from previous shutdowns, the Office of Budget and Management last week told federal agencies to consider permanent mass layoffs for programs or projects that have discretionary funding that runs out on Oct. 1 or that don’t have any alternative sources of funding. The reduction-in-force notices would be in addition to any furlough notices issued during a shutdown, according to a memo sent to the agencies.
“Programs that did not benefit from an infusion of mandatory appropriations will bear the brunt of a shutdown, and we must continue our planning efforts in the event Democrats decide to shut down the government,” the memo said.
Whether employees are essential or not, if their pay is dependent on annual appropriations, they won’t get paid during a shutdown.
Essential employees continue to work during the shutdown, but don’t get paid until funding is restored to their agency. Employees in nonessential positions are typically furloughed until the government is funded again, although that could look different this time if there are widespread layoffs. Under a 2019 law, furloughed employees are guaranteed to receive back pay once the shutdown is over.
A Senate report published in 2019 found that government shutdowns in 2013, 2018 and 2019 cost taxpayers nearly $4 billion, including at least $3.7 billion in back pay to furloughed workers who were not permitted to work.
What is open and closed during a shutdown?
Entitlement programs like Social Security, Medicare and Medicaid continue to function during a shutdown because benefit payments are funded through permanent appropriations that don’t require renewal. Entitlement payments keep going out, but the working budgets of the agencies that oversee the programs require approval by Congress. That means staff could be furloughed, causing delays in enrolling new beneficiaries or other service interruptions.
“Any type of interaction you’re having at a customer service level with the federal government could definitely be affected,” Glassman said.
For example, travel plans could be disrupted if air traffic control and airport security, who are essential workers, do not show up to work in protest for not being paid immediately. Many national parks stayed open during the last shutdown in 2018 and 2019, but understaffing led to vandalism and cuts in visitor services. The parks largely closed during the 2013 shutdown. The U.S. Postal Service continues to operate, since it is self-funded.
A woman walks past trash piled next to a garbage bin at Ocean Beach in San Francisco on Jan. 3, 2019.
Jeff Chiu / AP
Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, said the public may not notice the effects if the shutdown is short-lived.
“The truth is, most people won’t really feel much of a difference,” MacGuineas said. “If you’ve got a vacation planned to a National Park, you’re going to be [upset] and disappointed. But most people will go on with their everyday lives and interact with the government the same way they do and not feel a big difference. That could get worse, the longer it lasts.”
The Senate report found the 2018-2019 shutdown had widespread impacts across a variety of government functions that ceased or were curtailed during the lapse in funding. It noted that furloughs in many agencies like the SEC, Federal Trade Commission and Consumer Product Safety Commission hampered enforcement and investigations. The report said the Justice Department canceled 60,000 immigration hearings.
The effects could be even more pronounced this time around, given the possibility that the administration could use the shutdown to implement mass layoffs, furthering the president’s aim of permanently reducing the federal workforce.
When was the last government shutdown?
The last government shutdown stretched from December 2018 until January 2019, when congressional funding for nine executive branch departments with roughly 800,000 employees lapsed.
The five-week partial shutdown cost the economy $11 billion, according to a Congressional Budget Office report. The CBO said most of that would be recovered once the shutdown ended, but estimated a permanent loss of about $3 billion.
Businesses across the country that relied on government customers reported a slowdown in business and some said they had to lay off employees. Tens of thousands of immigration court hearings were canceled. Government contractors struggled to feed their families and pay their bills.
Federal workers line up outside chef and activist Jose Andres’ World Central Kitchen to receive free meals and goods amid a partial government shutdown in Washington on Jan. 22, 2019.
Yasin Ozturk/Anadolu Agency/Getty Images
The shutdown stemmed from a standoff over Mr. Trump’s demand for $5.7 billion to fund a wall along the border with Mexico. Mr. Trump had vowed to close the government if the funding wasn’t included in spending legislation, but Democrats refused to give in.
Mr. Trump conceded after insisting for weeks that he would not reopen the government without money for the wall, signing a bill to reopen the government for three weeks while Congress negotiated a spending deal.
Three weeks later, Mr. Trump signed a compromise spending bill to avert another government shutdown, ultimately accepting a bill that did not meet his $5.7 billion demand for his long-promised border wall.
When was the longest government shutdown?
Before the early 1980s, the government would typically continue operating as usual even when funding bills hadn’t been passed, but that changed after the attorney general issued opinions stating that it was illegal for the government to spend money without congressional approval.
Since 1980, there have been 14 shutdowns, most of which lasted just a few days.
The longest shutdown in U.S. history was the 2018-2019 lapse, which lasted 34 full days. Before that, the record was 21 days in 1995 and 1996, when President Bill Clinton held out against steep spending and tax cuts favored by Republican House Speaker Newt Gingrich.
Caitlin Yilek is a politics reporter at CBSNews.com, based in Washington, D.C. She previously worked for the Washington Examiner and The Hill, and was a member of the 2022 Paul Miller Washington Reporting Fellowship with the National Press Foundation.
President Donald Trump met with top lawmakers on Monday, but deliberations between Democrats and Republicans failed to reach much progress that’d alleviate shutdown concerns. If they don’t reach a deal, a shutdown will kick in Wednesday after the clock strikes midnight.
Much of the debate falls on healthcare, specifically expiring funds established under the Affordable Care Act that will cause insurance premiums to soar, in addition to reversing cuts to Medicaid. Democratic lawmakers want to extend funding to keep health care costs lower, while Republican lawmakers are seeking to cut medical funding to help pay for tax cuts instead.
Trump acknowledged the possibility of a shutdown in an interview with NBC. He also directed federal agencies to provide a list of permanent staff cuts in the event of the government does shut down. This strays from the usual furloughs that transpire when the government shuts down.
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But it’s not entirely offbeat for an administration that plans to cut more than 300,000 federal jobs by the end of the year. The workforce restructuring plan was largely outlined by the Heritage Foundation’s Project 2025, which is seen as a blueprint for many of the administration’s policies including the mass-consolidation of the federal government.
“The Democrats response to Trump’s threat [is …] we’re not taking that seriously because you’ve been doing this all along,” says Thom Hartmann, a political commentator and host of The Thom Hartmann program, a radio show. “And anybody that you’re going to fire as a result of this threat is probably somebody you’re going to fire anyway once you get around to it.”
The economic impacts of a shutdown largely depend on how long one transpires. In usual shutdowns, federal employees are furloughed, but they receive back pay—for that reason, the economic impact is relatively muted, according to Wafa Hakim Orman, an economist and professor at the University of Alabama Huntsville’s College of Business.
“There was a lot of inconvenience to people who couldn’t access any federal services during the shutdown, but past that inconvenience, it wasn’t a major lasting economic impact of any kind,” Hakim Orman says. But Hakim Orman explains the potential for permanent layoffs may have more lasting consequences, depending on size.
The shutdown may also impact the publication of a much anticipated jobs report from the Bureau of Labor Statistics set to be published on Friday, as most federal services that are considered non-essential get put on ice. In August, Trump fired the previous BLS commissioner accusing them of producing a “rigged” report to make the administration look bad.
The jobs report is one key indicator that the Federal Reserve—which stays open during a shutdown since it operates independently—turns to when orchestrating monetary policy. If the shutdown stretches out more than two weeks, the reports delay could complicate the upcoming Fed meeting which starts on Oct. 28, says George Mateyo, Chief Investment Officer at Key Private Bank. Mateyo adds a delay in the jobs report could push the Federal Reserve to pause rather that cut interest rates in October.
“That said, there are other data points that the Fed considers in its interest rate policy decisions,” Mateyo adds. “If they suggest a significantly weaker outlook for employment, the Fed may be inclined to move forward with its cutting cycle.”
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