🔗 Share this article

Shutdowns have become a recurring element of US politics – but this one feels especially difficult to resolve because of political dynamics and bad blood among the two parties.

Some government services face a temporary halt, with approximately 750,000 people likely to be placed on unpaid leave as both political parties remain unable to reach consensus regarding budget legislation.

Legislative attempts to resolve the impasse have repeatedly failed, with little visibility on a clear resolution path this time because each side – including the nation's leader – perceive advantages in digging in.

These are several key factors that make things feel different currently.

First, For Democrats, it's about Trump – not just healthcare

Democratic supporters have insisted over recent periods that their party more forcefully fights the current presidency. Currently Democratic leaders have an opportunity to demonstrate they have listened.

Earlier this year, the Senate's top Democrat faced strong criticism after supporting a Republican spending bill and averting a government closure in the spring. Now he's digging in.

This presents an opportunity for the Democratic party to show their ability to reclaim some control from an administration that has moved aggressively on its agenda.

Opposing the Republican spending plan comes with political risk that the wider public will grow frustrated with prolonged negotiations and impacts accumulate.

The Democrats are using the budget standoff to highlight concerns about expiring health insurance subsidies together with GOP-backed government healthcare cuts for the poor, both facing public opposition.

Additionally, they're attempting to restrict executive utilization of his executive powers to cancel or delay funding authorized legislatively, a practice demonstrated with foreign aid and various federal programs.

Second, For Republicans, they see potential

The administration leader and one of his key officials have openly indicated of the fact that they smell a chance to make more of reductions in government employment that have featured in the Republican's second presidency so far.

The President himself stated recently that the government closure provided him with an "unprecedented opportunity", adding he intended to reduce funding for "opposition-supported departments".

The White House stated they would face the "unenviable task" involving significant workforce reductions to maintain critical federal operations should the impasse persist. An administration spokesperson said this was just "fiscal sanity".

The scope of the potential lay-offs is still uncertain, but the White House has been in discussions with federal budget authorities, or OMB, under the leadership of the administration's budget director.

The administration's financial chief has previously declared the suspension of federal funding for regions governed by of the country, including New York City and Chicago.

Third, Trust Is Lacking on either side

Whereas past government closures have been characterised by late-night talks among political opponents aimed at restoring federal operations, there appears to be minimal cooperative willingness of collaboration this time.

Instead, animosity prevails. The bad blood continued over the weekend, with Republicans and Democrats exchanging accusations for causing the impasse.

House Speaker from the majority party, accused Democrats of not being serious toward resolution, and maintaining positions over a deal "for electoral protection".

Simultaneously, the opposition's chief made similar charges against their counterparts, saying that a majority party commitment regarding health funding talks after operations resume can not be taken seriously.

The President himself has inflamed the situation through sharing a computer-created controversial depiction featuring the opposition leader along with another senior opposition figure, in which the representative appears wearing traditional headwear and a moustache.

The representative and other Democrats called this racist, a characterization rejected by the administration's second-in-command.

4. The US economy is fragile

Experts project approximately two-fifths of government employees – over 800,000 workers – to be put on unpaid leave as a result of the shutdown.

This will reduce consumer expenditure – and also have wider ramifications, as environmental permitting, delayed intellectual property processing, payments to contractors along with various forms of federal operations tied to business cease functioning.

A shutdown also injects new uncertainty within economic systems already being roiled from multiple factors including trade measures, previous budget reductions, immigration raids and technological advancements.

Analysts estimate potential reduction of as much as 0.2 percentage points off US economic growth for each week it lasts.

But the economy typically recoups most of that lost activity after a shutdown ends, as it would after disruption caused by a natural disaster.

This might explain partially why the stock market has appeared largely unfazed to the ongoing impasse.

Conversely, analysts say that if the President carries out proposed significant workforce reductions, economic harm might become extended in duration.