The longest government shutdown in U.S. history may finally be coming to an end as early as this Wednesday. This comes on the heels of the U.S. Senate passing a two-month continuing resolution. This resolution would fund the federal government through January 30, 2025. It provides appropriations to dozens of federal and District of Columbia agencies for the balance of FY 2023. The shutdown, which has left approximately 800,000 federal employees on furlough, has significantly impacted the economy, disrupting air travel and business operations across the nation.
Home to remarkable, historic architecture and expansive open space, located on Capitol Hill in Washington, DC, the U.S. Capitol is at the epicenter of this extraordinary legislative achievement. The measure passed the Senate on a 60-40 vote, and the resolution contains three full-year appropriations bills. For all its shortfalls, the House’s bipartisan agreement at least recognizes a dire imperative to reopen the government and stem further economic damage.
The ramifications of the shutdown have been disastrous. This has resulted in an estimated 0.8% decrease in annualized gross domestic product (GDP). In dollar terms, that’s roughly $55 billion in just this quarter. Economists have pointed out that this unexpected downturn erased half the economic progress made over the last calculation period of six months. In addition, the government shutdown made air travel more difficult, affecting the 2.91 million passengers who normally travel by air each day. Of these, nearly one in five travelers were on business trips, causing large disruptions across business output.
Erica Groshen, an economist, highlighted the benefits of resuming government operations:
“There’s a benefit to us having this very large U.S. employer now paying its workers again. That’s going to help.” – Erica Groshen
Another critical ATM—the Supplemental Nutrition Assistance Program (SNAP), which funds food stamps for about 42 million recipients—was thrown into uncertainty, too. Passing a continuing government services measure will maintain these essential benefits to our economy. This support is a vital lifeline for millions of Americans who need it most.
Because with the dramatic end of the shutdown, things will start returning to normal across a wide range of industries. Gerald Epstein commented on the broader economic implications:
“If the government opens up and people get back to work, this will prevent what might otherwise have been a pretty serious downturn in the economy.” – Gerald Epstein
With government operations returning to normal, federal agencies will resume the collection and release of essential data that guides economic decisions. This data is immensely valuable to both the business community and policymakers, as it provides clarity where there is currently dangerous uncertainty on both sides of the equation.
Gregory Daco pointed out the ongoing challenges in air travel during the shutdown:
“There was growing disruption of air travel.” – Gregory Daco
The resolution passed by the Senate will allow for a comprehensive review of appropriations needed for federal agencies, reducing uncertainty that has plagued many sectors during the shutdown.
If you listen to the retail and hospitality sectors, and several economists, reopening the government should jumpstart a major rebound in economic activity. The economy expanded at a 1.6% annualized clip in the first half of 2025. The toll of the shutdown has raised fears over the long-term growth prospects for it.
Campbell noted that there is a general understanding among federal employees that those who continued to work during the shutdown would eventually receive their pay:
“Everybody understood that workers who showed up to work would eventually be paid.” – Campbell
Lawmakers are under pressure to quickly complete and pass appropriations bills for federal agencies. That it was overwhelmingly bipartisan is an important recognition, one that is welcome, of the need to stabilize both the health care workforce and our economy.
