About 750,000 federal workers furloughed as Senate votes fail amid ACA subsidy fight

The federal government shut down at 12:01 a.m. EDT on Oct. 1, 2025, after the Senate failed to invoke cloture on competing stopgap funding measures. The Senate needed 60 votes to end debate but repeatedly fell short with tallies like 55-45 and 47-53.

Approximately 750,000 federal employees were furloughed without pay, while 700,000+ essential workers were required to continue working without immediate paychecks. This affected agencies across the executive branch.

The shutdown centered on a dispute over extending enhanced Affordable Care Act premium tax credits set to expire Dec. 31, 2025. Democrats demanded immediate extension; Republicans wanted to negotiate separately.

President Donald Trump publicly urged Republican senators to hold firm in the dispute and met with GOP leadership to coordinate strategy. Trump used the shutdown as leverage for policy concessions.

OMB Director Russell Vought issued contingency guidance on Sep. 30, 2025, directing agencies to prepare reduction-in-force and shutdown staffing plans. This guidance went beyond standard shutdown procedures.

Labor unions AFGE and AFSCME filed suit on Sep. 30, 2025, in U.S. District Court for the Northern District of California, challenging OMB and OPM guidance that directed agencies to consider RIFs during the funding lapse.

The 2018-2019 government shutdown lasted 35 days and cost the economy $11 billion according to Congressional Budget Office estimates. That shutdown permanently reduced GDP by $3 billion as economic activity was lost forever.

Federal contractors faced $2 billion in losses during the 2018-2019 shutdown and were not guaranteed back pay, unlike federal employees who receive back pay under the Government Employee Fair Treatment Act of 2019.