TLDR
- US government shutdown begins Wednesday at 12:01 AM after failed negotiations between Trump and congressional leaders
- Senate crypto market structure bill faces additional delays beyond October postponement
- SEC and CFTC will operate with emergency-only staff during shutdown
- Economic data collection stops, including jobs reports and inflation measures
- Trump administration plans permanent workforce cuts during shutdown period
The United States government is set to shut down Wednesday morning after President Donald Trump and congressional leaders failed to reach a funding agreement. The shutdown will halt Senate progress on crypto market structure legislation that has already been delayed multiple times.
Vice President JD Vance confirmed after Monday’s Oval Office meeting that “I think we’re headed to a shutdown.” Senate Democratic Leader Chuck Schumer said the two sides have “very large differences.” Without a deal by midnight Tuesday, government operations will cease.
Crypto Legislation Stuck in Congressional Gridlock
The shutdown freezes all legislative activity in Congress. The Senate Banking Committee cannot vote on the digital asset market structure bill during a government closure. Wyoming Senator Cynthia Lummis had originally targeted a September vote on the legislation.
The committee later pushed consideration to late October. A shutdown adds more uncertainty to that timeline. No congressional votes or bill signings can occur while the government remains closed.
The digital asset bill builds on the CLARITY Act that the House passed in July. The legislation would define regulatory roles for the CFTC and SEC in overseeing crypto markets. The bill aims to create clear rules for digital asset companies and investors.
Senate Majority Leader John Thune proposed a seven-week funding extension through November. House Minority Leader Hakeem Jeffries rejected the plan. Democrats want Republicans to reverse healthcare cuts from a July budget bill. Republicans have refused those terms.
Crypto Regulators Face Operational Restrictions
The SEC will maintain only minimal emergency staff during a shutdown. The agency’s contingency plan states an “extremely limited number of staff members” will be available. The CFTC faces similar restrictions on operations and staffing.
Regulatory actions from both agencies will stop during the closure. New rules and enforcement actions cannot move forward. The agencies will focus only on emergency situations that require immediate attention.
Trump holds the record for the longest government shutdown in US history. His 2018-2019 shutdown over border wall funding lasted 35 days. The last government shutdown occurred in 2019.
The Trump administration plans to use this shutdown for permanent government workforce reductions. The Office of Management and Budget told agencies to consider permanent layoffs. Trump told NBC News the government would “cut a lot of the people” permanently during the closure.
Economic Data and Government Services Impacted
The Bureau of Labor Statistics will stop all operations during a shutdown. The agency goes from 2,055 employees to one full-time employee. Friday’s jobs report will be delayed even though data collection is complete.
Other economic reports including the Consumer Price Index face delays. The Federal Reserve and investors need this data for policy decisions. The longer a shutdown lasts, the more data collection suffers.
TSA agents and air traffic controllers must work without pay during a shutdown. National parks will close to visitors. IRS call centers will shut down. House Speaker Mike Johnson warned that agencies from FEMA to food assistance programs face disruptions.
Medicare and Social Security payments continue during shutdowns. The Federal Reserve sees minimal impact because Congress does not fund it through annual appropriations. Public schools stay open because they receive local funding.
Senate negotiations continue with tentative votes scheduled. Expectations remain low for a breakthrough before the Wednesday morning deadline. Both parties blame each other for the impasse over government funding.
