There May Be a Deal, But The Government Could Still Shut Down. Here’s What You Need To Know

Key Takeaways

• President Donald Trump endorsed a plan to fund most of the government through September while extending Department of Homeland Security funding for two weeks as Congress debates reforms to the agency.
• But the Senate hasn't approved the deal, and the House isn't set to vote until Monday at the earliest.
• Unlike last fall's 43-day shutdown, a partial stoppage this weekend would affect only a handful of agencies.

A partial government shutdown is likely to begin this weekend, but it shouldn't last long.

President Donald Trump said late Thursday that he supports a deal in Congress that would prevent a partial government shutdown.

"Republicans and Democrats in Congress have come together to get the vast majority of the Government funded until September," Trump wrote on his Truth Social network.

But Congress hasn’t sent him the legislation yet. 

Senate leaders said they have agreed on a spending package that would fund most of the government through September of this year. Under the agreement, funding for the Department of Homeland Security (DHS) would be extended for only two weeks.

That would allow more time to debate the agency's funding after fatal shootings by federal agents in Minneapolis prompted demands for reform.

Why This Matters for the Economy

Government shutdowns can delay paychecks, slow data releases that investors rely on, and dent economic growth. This one is likely to be brief, limiting the damage, but prolonged uncertainty over government funding could unsettle markets.

House Schedule Makes Shutdown More Likely 

Even if the Senate approves the funding package before the midnight Friday deadline, the House of Representatives would still need to approve it. House members aren't scheduled to return until Monday, and House Speaker Mike Johnson said it was unlikely they would come back early.

There are also questions over whether the House would approve a package that places a two-week limit on DHS funding.

Shutdown Impact Would Be Limited

Unlike the 43-day shutdown late last year, this shutdown isn't likely to cause as much disruption.

“Even if there is a partial closure, the economic sting will be much less than in the fall,” wrote BMO Senior Economist Sal Guatieri.

A shutdown would impact only a handful of agencies, since half the appropriations bills have already passed. Several agencies—including Labor, Education, and Transportation—could see funding paused if the bill doesn't pass.

The impact on the public is unclear, especially since the shutdown would begin during a weekend, when many offices are closed. Air traffic controllers and Transportation Security Administration workers would still be required to report to work. But Internal Revenue Service operations could be disrupted during the filing season for Americans' taxes.

Related Education

Government Shutdown: Definition, Example, Impact on Economy

Bureau of Labor Statistics (BLS): What It Is and How It Works

The Bureau of Labor Statistics could also be affected. It produces the monthly jobs report; the next is due Feb. 6. An extended delay in funding next week could postpone its release, Guatieri wrote. 

The Census Bureau, whose funding has already passed, should release its data as scheduled, avoiding a repeat of the data drought during the last shutdown. 

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