Bond&Devick Special Update: Government Shutdown

October 1, 2025

Federal Government Shutdown: What You Need to Know 

Today at 12:01 AM Eastern Time, the federal government shut down. Since 1976, when Congress introduced the modern budget process, there have been 21 government shutdowns, with the most recent one occurring in late 2018 into early 2019.

What Stays Open 

Essential services continue, including:

• TSA and air traffic control 

• Federal law enforcement (FBI, CIA) 

• Federal hospitals and active-duty military 

• Social Security, Medicare, and Congressional salaries 

• USPS and mail services 

• IRS (temporarily, using prior funding) 

Some agencies, like the National Weather Service, will operate with reduced capacity but will continue to provide forecasts and issue safety warnings. 

What’s Affected 

The Office of Management and Budget (OMB) determines most shutdown operations. Common impacts include: 

• National Parks: Many will close unless they have independent funding. 

• Federal Agencies: Staff furloughs and reduced services are expected.  

• Veterans Affairs: Health services continue; career counseling and cemetery maintenance may pause. 

• TSA: Air traffic control prioritized, but security staff may face cuts—expect longer airport lines. 

While layoffs are possible, most federal roles require a 60-day notice, so immediate impacts are limited. 

How Long Will It Last? 

That depends on Congressional negotiations. Disagreements center around healthcare funding: 

• Democrats are focused on a full bill with their aim to extend ACA subsidies and reverse Medicaid cuts. 

• Republicans proposed a short-term funding bill to keep the government open. 

A vote is scheduled for today (10/1), but compromise remains uncertain. For context: 

• The longest shutdown lasted 35 days (2018–2019). 

• Others ranged from a few days to two weeks. 

Economic Impact 

• Jobs: The federal government employs 2.3 million civilians. Cuts to this workforce can significantly impact the economy.  

• Local Economies: Service cuts and furloughs can ripple through the economy, especially in areas near national parks or reliant on federal operations.  

• Federal Contractors: Many are not guaranteed back pay, leading to financial strain and potential layoffs. 

• Small Businesses: Delays in federal loans and permits can stall operations and growth. 

• Data Disruptions: Key economic reports (e.g., jobs, inflation) may be delayed, complicating decisions for investors and policymakers. 

Market Sentiment 

• Investor Confidence: Uncertainty around the shutdown can lead to market volatility. While short-term effects are often limited, prolonged gridlock may weaken consumer and investor sentiment. 

While short shutdowns tend to have minimal long-term effects, we could see additional short-term market volatility in a prolonged shutdown. During previous shutdowns, markets have recovered once the situation is resolved. We believe the best approach is to stay focused on your long-term goals and prepare for minor disruptions in daily services.

As always, we are closely monitoring the situation, and please feel welcome to reach out with any questions or concerns. 

The Bond&Devick Team