U.S. Government Shutdown Continues into Third week

(MENAFN) As the federal government shutdown stretches into its third week, economic fallout is accelerating and political divisions remain entrenched, raising fears of prolonged disruption to services and jobs nationwide.

Treasury Secretary Scott Bessent sounded the alarm Monday, telling media, "This is getting serious. It's starting to affect the real economy," as agencies scramble to prioritize military pay while suspending other federal operations.

Bessent confirmed that the government has been forced to "shuffle things around" to ensure active-duty service members are paid, resulting in deferred or halted payments across other departments. Key public institutions, including the Smithsonian museums and the National Zoo, have shuttered, and widespread furloughs are underway.
According to USA Today, nearly 750,000 federal employees have been furloughed, while essential workers — such as military personnel and air traffic controllers — are reporting for duty without pay.

The shutdown’s economic toll is escalating. On October 1, consultancy EY-Parthenon projected that each week of closure would shave 0.1 percentage point off U.S. GDP — an estimated $7 billion weekly loss. Meanwhile, Media, citing a White House memo, reported the hit could climb to $15 billion per week, potentially wiping out 43,000 jobs if the standoff drags on.

The Senate is scheduled to reconvene Tuesday to vote once again on a funding bill passed by the House, though it has already failed to clear the 60-vote hurdle seven times. Despite repeated efforts, Senate Republicans have struggled to secure Democratic backing.

At the heart of the impasse are conflicting demands over health insurance subsidies under the Affordable Care Act. Democrats insist on maintaining the subsidies before reopening the government, while Republicans demand the government resume operations first.

House Speaker Mike Johnson doubled down Monday, saying he would not enter talks with Democrats until they abandoned their healthcare policy demands. "We don't negotiate with a person who has taken the entire federal government hostage over a health care policy dispute," said Vice President JD Vance on Sunday, accusing Democrats of obstruction.

Public frustration is growing. A Reuters/Ipsos poll last week found that 67% of Americans blame Republicans, while 63% also fault Democrats — a sign of deep voter dissatisfaction with both parties.

Meanwhile, the Trump administration has greenlit mass layoffs across major agencies, including Commerce, Education, Energy, Health and Human Services, and Treasury, as the fiscal deadlock paralyzes operations.

The U.S. has experienced 15 government shutdowns since 1980. The longest — a 35-day standoff from 2018 to 2019 over border wall funding — forced 800,000 federal workers to either stay home or work without pay.

Now, as negotiations remain stalled, Johnson warns the country may be heading for another record-breaking shutdown. "We're barreling toward one of the longest shutdowns in American history," he said.

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