A Government Shutdown Isn't Really a Shutdown. Most Federal Employees Are Still Working and Will Get Paid.

The federal government continues paying its biggest bills during a shutdown, and hundreds of thousands of federal employees get a belatedly paid vacation.

Congressional Republicans and Democrats failed to pass a continuing resolution to maintain government funding at current levels on Tuesday. As a result, the federal government "shut down" on Wednesday morning. Some federal services and agencies might be put on hold, but the vast majority of the federal government, including all of its mandatory wealth transfers and obligatory payments, will remain unaffected.

During the shutdown, agencies that don't fund themselves or haven't received additional funding via a standalone bill must furlough non-excepted employees and stop their non-essential operations. Employees who render "essential services related to national security and public safety, like inpatient and emergency medical care, air traffic control, law enforcement, border security, disaster aid, and power grid maintenance" are excepted employees who will continue working (though these services may face disruptions), according to Rep. Ami Bera (D–Calif.). Also excepted are the 2.07 million "active-duty military personnel, as well as reserve component personnel on federal active duty, [who] must continue to report and carry out assigned duties," explains the Center for Strategic and International Studies (CSIS). However, nearly 407,000 of the roughly 741,000 civilians employed by the Defense Department are expected not to be furloughed, as they are either excepted or not funded through annual appropriations.*

In addition to nearly 3 million Americans, uniformed and civilian, working for the Pentagon, there were 2.91 million non-military federal employees in August, per the latest data provided by the Bureau of Labor Statistics (which, like the Bureau of Economic Analysis, is not one of the agencies spared the shutdown's effects). Of these, the Congressional Budget Office estimates that 750,000 could be furloughed each day of the shutdown, at a daily cost of $400 million.

During a government shutdown, the largest expenditures are nondiscretionary and, as such, remain untouched: These include entitlement programs like Social Security, Medicare, and Medicaid, as well as interest payments on the debt. Altogether, mandatory spending and net interest payments made up 74 percent of the federal budget in FY 2024. Meanwhile, thanks to the funding provided by the One Big Beautiful Bill Act, the Defense Department, the Department of Homeland Security, and the Federal Aviation Administration are also unaffected, according to The Washington Post.

If a government shutdown were what it sounds like, libertarians and supporters of small government would have reason to celebrate. But it's not: The biggest contributors to the deficit are largely unaffected. Meanwhile, hundreds of thousands of federal employees are on vacation, not rendering services to the taxpayer. While this vacation is technically unpaid, it's only so for the time being: After the 2018 government shutdown, Congress passed the Government Employee Fair Treatment Act of 2019, which requires all federal employees who are furloughed or required to work without pay during a shutdown to receive back pay once federal funding resumes.

The lion's share of government spending is utterly unaffected by the legislature failing to pass a spending bill, and that's the real problem: The federal government is on autopilot, and its profligacy has the country slouching toward a fiscal crisis that Congress appears entirely unwilling to steer us away from.

* CORRECTION: The original version of this article misstated the conditions under which civilian employees of the Defense Department continue working during a government shutdown.