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A Potential Shutdown Looms

Dailyfed Staff

March 7, 2025

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The U.S. federal government faces a potential shutdown on March 14, 2025, unless Congress passes a new spending plan or extends current funding. This deadline stems from the latest continuing resolution (CR), signed into law by President Biden on December 21, 2024, which extended government funding at fiscal year 2024 levels through March 14, 2025. Without further action by this date, non-essential government operations will halt due to a lack of appropriated funds, as mandated by the Antideficiency Act.

Why a Shutdown Looms

Lack of Agreement on Spending Bills: Congress must pass 12 annual appropriations bills to fund the government for fiscal year 2025 (which began October 1, 2024). So far, none have been fully enacted. The House has passed five, the Senate none, and differences in funding levels, priorities, and policy riders remain unresolved. With Republicans controlling both chambers and the White House, negotiations have grown contentious.

Trump Administration Policies: Since President Trump’s inauguration on January 20, 2025, his administration has pushed aggressive spending cuts and unilateral actions, like the DOGE (Department of Government Efficiency) initiative led by Elon Musk, which Democrats argue bypass congressional authority. This has eroded bipartisan trust, with Democrats threatening to withhold votes unless these moves are curtailed.

Partisan Standoff: Republicans, with a slim House majority, can lose only a few votes to pass legislation without Democratic support, but internal divisions (e.g., hardline conservatives demanding steep cuts) complicate this. The Senate’s 60-vote filibuster rule also requires some Democratic cooperation, which is currently in doubt. Democrats, traditionally supportive of keeping government running, are now leveraging the shutdown threat to resist Trump’s agenda, including what they call a “reckless Republican budget” favoring tax cuts for the wealthy.

Timing and External Pressures: With the deadline just days away, talks have stalled. House Speaker Mike Johnson and Senate Majority Leader John Thune are exploring options like another CR or a solo GOP plan, but Democrats warn this could give Trump unchecked spending flexibility. Meanwhile, looming issues like the debt ceiling (reinstated January 1, 2025) and expiring 2017 tax cuts add pressure, potentially tying into a larger fiscal clash.

If no deal is reached by March 14, a partial shutdown will begin, furloughing non-essential federal workers, delaying services like tax processing, and closing national parks, painful outcomes both parties may blame each other for as the 2025 political landscape takes shape.

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