The shutdown began on Wednesday, Oct. 1, after Democrats refused to support legislation extending government funding into fiscal year 2026. Republicans have put forward clean bills to restart government operations, while Democrats have pressed for an extension of enhanced ObamaCare subsidies implemented during the pandemic that are set to sunset at the end of this year.
While a shutdown of the federal government's operations may seem as though it would reduce federal spending, that hasn't been the case in past shutdowns due to the costs of compensating federal workers with their back pay, suspending and resuming government operations, and foregone economic activity.
Essential federal workers are continuing to work during the shutdown and will forgo paychecks until funding is restored, while workers deemed non-essential have been furloughed and will also receive back pay under federal law.
A 2019 report by the Senate Homeland Security and Governmental Affairs Committee found that the three prior government shutdowns cost at least $3.7 billion in back pay to federal workers for 54 furlough days between those three shutdowns.
It also identified $338 million in other costs stemming from the shutdowns, such as extra administrative work, lost revenue and late fees on interest payments. The elevated administrative workload comes from federal workers having to prepare for a shutdown before it begins, as well as taking steps to restore normal operations once it ends.
The Congressional Budget Office (CBO) wrote in a letter to Sen. Joni Ernst, R-Iowa, before the shutdown that about 750,000 workers may be furloughed at a cost of about $400 million per day.