The federal government experienced its second day of a partial shutdown Thursday, a high-stakes lapse in funding that has already furloughed more than half a million workers, frozen services across the country, and reignited bitter partisan battles on Capitol Hill.

The shutdown — the first since the 35-day standoff of late 2018 and early 2019 — took effect at 12:01 a.m. Wednsday after lawmakers failed to pass spending bills for fiscal 2026. Roughly 600,000 federal employees are furloughed, another 1.4 million are working without pay, and agencies from the Defense Department to the FDA are rolling out contingency plans that touch nearly every corner of American life.

At the heart of the impasse: Republicans, who control both chambers and the White House, are pressing for steep spending cuts, border enforcement provisions, and rollbacks of green energy subsidies. Democrats, shut out of the majority, are demanding extensions of Affordable Care Act subsidies and protections for social programs they say millions depend on. Neither side blinked before the deadline — and neither appears willing to now.

House Republicans muscled through a stopgap funding measure Sept. 19 by the slimmest of margins, but the continuing resolution died in the Senate. Negotiations collapsed completely Sept. 29 during a heated White House meeting with President Donald Trump, Speaker Mike Johnson, Senate Majority Leader John Thune, and Democratic leaders Chuck Schumer and Hakeem Jeffries. Hours before the deadline, dueling CRs failed on the Senate floor. At midnight, the lights went out.

By Thursday morning, OMB Director Russell Vought had ordered “orderly shutdowns” across departments and directed agencies to prepare reductions in force — permanent layoffs — if the stalemate drags on. The White House has openly signaled the prospect of mass dismissals, an unprecedented escalation that experts say could scar the federal workforce for years.

The impact is immediate: 334,000 civilian Defense Department workers sidelined, NIH research halted, unemployment claims delayed, IRS refunds put on hold, and national parks left unstaffed. Food safety inspections are curtailed. Passport processing is bogged down. Travelers are bracing for airport chaos if unpaid TSA agents begin calling in sick, recalling the 10 percent absenteeism rate that snarled flights in 2019.

For contractors, the damage is worse. Unlike federal employees, they don’t get back pay. Small businesses reliant on federal loans are already facing uncertainty, while rural economies and veterans’ services brace for cuts. Economists peg the daily cost of the shutdown at $400 million in lost productivity.

The political blame game is in full swing. Johnson slammed Democrats for refusing to compromise, warning of impacts on WIC nutrition benefits and TSA agents. Trump, posting on Truth Social, cast the shutdown as an opportunity to “get rid of things we didn’t want” and floated permanent cuts to what he labeled “Democrat agencies.”

Schumer called it a “Republican shutdown by a unified government,” accusing the GOP of “hostage-taking.” Jeffries echoed the charge. Former Vice President Kamala Harris chimed in: “Republicans are in charge … This is their shutdown.”

Meanwhile, Trump’s move to freeze $26 billion in funds for transit projects in New York and green programs in California — Democratic strongholds — has drawn accusations of political retaliation. Vice President JD Vance initially denied partisan targeting, only to be undercut when Trump bragged online that it would “save billions” by clawing back “radical left excesses.”

The Senate is set to reconvene Friday for another round of votes on short-term funding. Thune has signaled no weekend sessions are likely, raising the prospect that the shutdown stretches into next week. Behind closed doors, talk has turned to a stripped-down CR to buy time — but Democrats insist on ACA safeguards, and Republicans remain dug in on spending caps.

With RIF notices looming and pressure building from Wall Street, travel groups, and veterans’ organizations, lawmakers face a test of political will. The last shutdown cost $11 billion in unrecoverable economic output. This one, unfolding in Trump’s second term with the economy already under strain, could cut deeper.

(YWN World Headquarters – NYC)