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Absent a last-minute funding deal between the political parties in Congress, the United States heads toward a shutdown on Wednesday with incalculable consequences for the American economy.
But what exactly does that mean?
The current annual federal budget expires on September 30, 2025. The next budget for fiscal year 2026 must run from October 1, 2025, to September 30, 2026.
Certain public expenditures deemed essential such as social security, air traffic control and the military are considered mandatory and must continue to operate. They are therefore automatically authorised on a permanent basis.
However, other expenditures are considered discretionary and must be formally authorized each year by 12 appropriation bills voted on by Congress – this concerns practically everything else from national parks through farm loans to financial regulators.
If these appropriations bills are not passed, there will be a “shutdown,” which is the suspension of non-essential public services, unless Congress instead
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