U.S. Government Enters Partial Shutdown Amid Partisan Clash Over ACA Tax Credits
October 1, 2025 – The U.S. federal government entered a partial shutdown at midnight after Congress failed to pass a critical funding bill, plunging Washington into a fresh crisis centered on a dispute over Affordable Care Act (ACA) tax credits.
The political impasse stems from a deep partisan divide. Democrats are pushing to extend the ACA tax credits, arguing they are essential to prevent health insurance premium increases for an estimated 20 million Americans. Republicans, however, have resisted, contending that the provisions could potentially indirectly benefit undocumented immigrants.
The shutdown led to the immediate furlough of hundreds of thousands of federal workers. National parks have closed, and services such as IRS tax refunds are facing delays. Essential operations, including military pay and air traffic control, are expected to continue unaffected.
Despite Republican control of the White House under President Donald Trump and both chambers of Congress, the funding measure stalled. A “clean” continuing resolution, which would have extended funding at current levels without policy changes, failed to pass. Notably, several Democratic senators, including John Fetterman, Catherine Cortez Masto, and Angus King, broke with their party to vote for the clean bill in an effort to avert the shutdown.
