Dispute over funds: how the shutdown exposed a political split within the United States

On October 1, for the first time in six years, a shutdown occurred in the United States again. The federal government has suspended its work due to the fact that Republicans and Democrats could not agree on a draft budget for next year. The parties disagreed on the issue of healthcare costs and neither of them wants to give up their positions, which is why the shutdown may last more than 35 days, breaking the previous record, experts told Izvestia. Government employees have become the main victims: about 4 million Americans may lose their salaries by taking forced vacations or doing work, in fact, for free. What other consequences are fraught with a prolonged shutdown, — in the Izvestia article.

Why couldn't the US Congress agree on a budget

On October 1, at 0:01 a.m. ET, the 22nd shutdown in U.S. history and the fourth under President Donald Trump began. The federal government shut down its work for the first time since 2019, when the country was rocked by a record shutdown of 35 days.

The reason was the disagreement in the Congress of Republicans and Democrats, who could not agree on the draft budget. This time, the health sector turned out to be a stumbling block — the parties disagreed on the issue of government spending on health insurance. Democrats are demanding $350 billion to extend subsidies for the Obamacare program, which expires at the end of this year. They also want to cancel the $1 trillion cut in spending on the federal Medicaid program, which pays for medical expenses for the poor, the disabled and other socially vulnerable people.

Recall that Obamacare is a large—scale healthcare reform involving universal health insurance. It was initiated by President Barack Obama in 2010 in order to help more citizens receive medical services and medicines through insurance.

Republicans oppose such spending. At the same time, neither side wants to concede, so it will be very difficult for them to find a compromise, American scholar Malek Dudakov told Izvestia.

— Trump is cutting all this under the pretext that a lot of subsidies for health insurance go into the pockets of illegal migrants, which, by the way, is true. Democrats claim that this will also hit the pockets of ordinary Americans, and the cost of health insurance in the event of the cancellation of subsidies will soar by 75-100%, that is, almost twice," the political scientist notes.

In addition, the Democrats' demands to repeal the cuts to the Medicaid program are in serious conflict with the "big beautiful bill" — it was adopted by the 119th US Congress and contains tax and spending policies that form the basis of the agenda of the second term of President Donald Trump. The current leader, having signed the document in July of this year, called it the largest law in the history of America. Among other things, he is cutting funding for a number of social programs, increasing military spending and lowering taxes for business corporations. In fact, the Democrats want to repeal Trump's law, says Yegor Toropov, an American analyst at the National Research University Higher School of Economics.

"Republicans rightly point out that the cancellation of Republican cuts in health insurance, linked to an additional $50 billion in funding for rural hospitals under the One Big Beautiful Bill signed by Donald Trump on July 4, will automatically lead to the cancellation of this support measure," the expert explained.

Meanwhile, both sides continue to blame each other for what happened, unwilling to find a compromise. Donald Trump continues to say that the Democrats, having lost the last congressional elections, have not changed in any way. After a meeting with the leaders of the Democratic Party, where the parties unsuccessfully tried to negotiate and agree on a budget, the president said: "I didn't see the slightest concession on their part." Identical rhetoric is being used towards the Republicans.

— There is not a drop of Democratic participation in their bill. We've never done this before. When I was the leader [of the majority of Democrats in the Senate], we entered into negotiations with Republicans four times, and we never had a shutdown," said Chuck Schumer, the leader of the Democratic faction in the Senate.

During a conversation with Trump, the Democratic leader told about a meeting with a tearful woman who could not find a place for herself because her daughter, who was suffering from cancer, was losing her health insurance. In response, Republicans said they would consider extending Obamacare subsidies later this year, while refusing to include these costs in the budget law.

How the shutdown will affect the lives of Americans

The suspension of government work, as a rule, has a number of negative consequences. The main one is that millions of officials go on unpaid leave and lose their salaries. From October 1, up to 4 million civil servants may be left without pay, ABC News reported. For example, the U.S. Department of Health and Human Services will send 41% of its employees on forced leave. The worst of all are air traffic controllers, law enforcement officers and 2 million military personnel who will have to work for free. Nevertheless, according to the law adopted in 2019, civil servants are retroactively paid for all the days of the shutdown.

— Indeed, full-time employees of federal government agencies will receive their salaries. However, there are no contract, freelance, or outsourced employees," Egor Toropov clarified.

Due to the lack of staff, small businesses and individuals will not be able to receive loans, which exacerbates the already difficult economic situation. In addition, the issuance of federal loans for housing construction will stop. Another unpleasant consequence of the shutdown is the closure of national parks or the unavailability of basic services on their territory.

The partial suspension of the government's work is causing serious damage to the entire economy — according to experts, in 2013 these losses amounted to about $24 billion. And the shutdown of 2019, which lasted a record 35 days, cost the American economy $11 billion. The White House intends to take advantage of the situation by launching a mass dismissal of officials, Politico previously wrote, citing an internal memo that the government sent to government agencies. The US president has been talking about such plans for several years. According to experts, this is unlikely to have a positive impact on the US labor market.

— To drain the swamp and eradicate the deep underground (the term deep state, or "deep state", is used in the United States in relation to that part of the bureaucracy — employees of the special services, the State Department, ministries that continue to work regardless of the change of president. — Ed.), we need to simplify the possibility of firing unruly bureaucrats who deliberately undermine democracy or at least want to keep their positions,— Trump said back in 2022.

The partial suspension of the activities of the US federal government may last for several days or a couple of weeks, said Republican Senator Ted Cruz. Many Wall Street analysts believe that the shutdown will last at least two weeks, but it cannot be ruled out that this time it will break the previous record of 35 days, Malek Dudakov believes. According to him, it will be very difficult for Republicans and Democrats to come to an agreement.

The American scientist Egor Toropov does not agree with this, believing that it is not worth waiting for a prolonged government shutdown.

— The shutdown will develop and end according to the standard scenario for American political mechanics: after the rhetorical heat from both sides, which was instigated in this case by the Democrats in opposition, a budget compromise will be found and legislated. Given that three Democratic senators have already sided with the Republicans, it will be in favor of the centrist position of the ruling party, the expert is sure.

The shutdown story once again exposes the political and cultural divide in the United States, Dudakov says. This time, budget squabbles are taking place against the backdrop of the recent murder of Conservative activist Charlie Kirk. In response to the rise in political violence, Trump will continue to "tighten the screws" and conduct military and police operations in American megacities. This will give the Democrats more motivation to confront him on all fronts, including the budget, the political scientist concluded.