A shutdown halts federal operations because there are no appropriations bills or continuing resolutions (CR) to fund them. Essential services — like air traffic control and military pay — continue, but if the shutdown lasts longer than a few days, many agencies are expected to run out of funds. Some experts believe that the broader economy will suffer as well, since businesses that support commerce may delay hiring or investing as they wait for the uncertainty to end.
But the human cost is the most severe. Thousands of federal workers are furloughed and not being paid, even though Congress has passed laws guaranteeing their back pay once the shutdown ends. Other employees will be impacted by delays in processing passport applications, small business loans, and federal benefits; closed visitor centers and bathrooms at national parks; and missed food-safety inspections.
Shutdowns also cost taxpayers, not only during and after they occur but also as a result of the preemptive spending that goes into creating contingency plans for them. That cost is not reflected in the final budget, but it is real nonetheless. And a prolonged shutdown may change the perception of government work and deter talented people from entering it, especially young people who make up the majority of federal new hires.
Finally, shutdowns damage state economies by reducing the amount of money they receive from the federal government. This time, state leaders worry that the Trump administration could stop paying out Medicaid reimbursements after the impasse ends, forcing states to cut their own budgets.