U.S. faces likely government shutdown at funding deadline
The U.S. government is on the brink of a shutdown as Congress struggles to pass funding legislation by midnight on September 30, 2025. Prediction markets now peg the odds at 70%, raising concerns over impacts to federal services and financial markets. While essential payments like Social Security would continue, other programs face delays.
As the fiscal year ends on September 30, 2025, lawmakers in Washington have yet to agree on a spending bill, making a partial government shutdown increasingly probable. According to prediction markets tracked by CNBC, the likelihood jumped to 70% on September 29, up from lower estimates earlier in the week. This standoff stems from partisan disagreements over budget priorities, echoing past fiscal battles that have led to shutdowns in 2013 and 2018-2019.
The immediate effects would vary across federal operations. Social Security payments, which support over 70 million Americans, are expected to proceed uninterrupted, as the program's funding is on autopilot through reserves. However, unemployment insurance checks could face delays, with state agencies relying on federal funds potentially halting processing after initial reserves run dry. The IRS, already under strain, would see non-essential staff furloughed, slowing tax processing and refunds, though core enforcement activities might persist.
Markets are bracing for volatility. Traders on Wall Street floors, as reported by CNBC, are discussing potential risks, including short-term dips in stock indices similar to those seen in previous shutdowns. Historical data shows the S&P 500 fell about 0.5% on average during the 2013 shutdown's early days, though longer-term impacts were muted once resolved. A MarketWatch analysis notes that while bond markets might see safe-haven buying, broader economic growth could slow if the shutdown drags on, affecting GDP by an estimated 0.1% per week.
No resolution appeared imminent as of September 29. House Speaker Mike Johnson has pushed for a short-term funding extension, but Senate Democrats demand protections for certain programs. 'We're working around the clock, but divisions run deep,' a congressional aide told reporters. Economists warn that prolonged uncertainty could erode consumer confidence and delay federal contracts, hitting sectors like defense and agriculture.
Past shutdowns offer context: the 35-day 2018-2019 event furloughed 800,000 workers and cost the economy $11 billion. This time, with inflation concerns lingering, the stakes feel higher for everyday Americans reliant on government services.