With the federal government shutdown continuing, many business owners are asking how a prolonged shutdown will impact their business and personal lives.
On October 1, 2025, the United States Government shut down due an impasse in Congress over a budget spending plan. This immediately raised questions about how the shutdown would impact the average American.
The federal government last shut down in the 2019 fiscal year, during President Trump’s first term in office. That partial shutdown lasted from December 22, 2018, through January 25, 2019 (35 days) and was the longest shutdown in United States history.
A government shutdown leads to the temporary closure or reduced operations of non-essential government services. While some federal employees are furloughed or temporarily laid off, “essential” federal government employees must continue work. Essential government employees, such as those in the military, federal law enforcement and people like air traffic controllers, continue to work. The federal courts still operate as the United States Constitution protects judicial salaries.
Looking to past government shutdowns, the following agencies and services have been impacted: National Parks, Federal research projects, Federal museums and certain functions of the Internal Revenue service, including delayed tax refunds.
So, what will still operate during the shutdown? The U.S. Postal service will continue processing and delivering mail. Veteran’s, Social Security and Medicare benefits will continue to issue as these processes are considered “essential”. Domestic and international travel will continue, and you can still obtain or renew a passport.
Contrary to popular belief, businesses and individuals must still submit and pay taxes, or risk being assessed penalties.
While a federal government shutdown is not likely to impact the day-to-day operations of most businesses, there is concern that a prolonged government shutdown could impact the global financial market and lead to an economic downturn. If large numbers of federal employees are all of a sudden laid-off, this will increase the unemployment rate, which has an impact on the country’s overall financial health.
Most business owners should not worry too much about the effects of the current government shutdown. Historically, these shutdowns are often short-lived, and while inconvenient, their impact on the overall economy is generally muted.
