Overview

• Republicans’ short-term funding bill fell 55–45 in the Senate, and a Democratic alternative also failed, leaving no path before the Oct. 1 deadline without a last‑minute deal.
• High-level talks at the White House yielded no breakthrough, with leaders in both parties citing significant differences and Vice President JD Vance saying a shutdown is likely.
• Agencies were instructed by the Office of Management and Budget to activate shutdown plans, with media reports noting consideration of permanent layoffs and President Trump warning of potentially irreversible actions.
• Democrats are conditioning support on extending enhanced Affordable Care Act tax credits and reversing recent Medicaid cuts, while Republicans hold 53 Senate seats but still need at least seven Democratic votes.
• If funding lapses, non‑essential services would halt and many federal workers would be furloughed or work unpaid, travel groups warn of up to $1 billion in weekly losses, and key economic data releases could be delayed, affecting Federal Reserve timing.