01.10.2025 08:57
The federal government in the United States shut down before the new fiscal year began due to Congress's failure to approve a temporary budget bill. Following this decision, approximately 750,000 employees are expected to be placed on unpaid leave. This development has raised concerns in the markets, while gold has reached record highs both in ounces and grams.
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The federal government in the United States has shut down due to Congress's failure to approve a temporary budget bill before the new fiscal year begins.
As of midnight Tuesday, the fiscal year 2025 ended in the country, and no agreement was reached on the budget that would fund the federal government.
GOVERNMENT SHUT DOWN FOR THE FIRST TIME SINCE 2019
The inability of a temporary budget bill to pass Congress, which would allow federal agencies to continue their operations, has led to the government shutting down for the first time since 2019.
Just hours before the new fiscal year was set to begin, the Senate did not approve the temporary budget bills proposed by both Democrats and Republicans.
While senators rejected the bill supported by Democrats that included funding for the government and a nearly $1 trillion healthcare reform, the Republican-backed bill also failed to reach the necessary vote count even after being put to a re-vote.
The U.S. House of Representatives had approved a temporary budget bill on September 19 that provided funding for the federal government until November 21, but the Senate did not approve the bill proposed by the Republicans.
TRUMP: GOVERNMENT MAY SHUT DOWN, EMPLOYEES MAY BE LAID OFF
While Democrats demanded an extension of health insurance subsidies and the reversal of Medicaid cuts, they refused to support the Republican bill. Republicans insisted on a temporary budget bill that did not include any changes to current spending levels.
U.S. President Donald Trump stated in a press conference on Tuesday that the federal government would likely shut down, which could lead to the layoff of many employees.
The U.S. Congressional Budget Office (CBO) estimated that approximately 750,000 employees could be furloughed if the federal government shuts down.
WHAT DOES A FEDERAL GOVERNMENT SHUTDOWN MEAN?
According to American law, if Congress cannot approve a budget for the fiscal year that starts on October 1 and ends on September 30, the gap must be filled with temporary budgets.
During periods when a temporary budget cannot be accepted, the federal government loses its spending authority and suspends all activities except for essential services.
During this process, public employees working in "non-essential" services are furloughed, while personnel in the U.S. military, intelligence agencies, public hospitals, airports, and prisons continue to work.
These employees, categorized as "essential personnel," generally do not receive their salaries during shutdown periods until Congress passes a new budget.
THE GOVERNMENT LAST SHUT DOWN DURING TRUMP'S FIRST TERM
According to data from the Responsible Federal Budget Committee, there have been 10 shutdowns lasting three days or less since 1981, while there have been 4 long-term shutdowns that seriously affected federal government operations.
The last "shutdown" in the country occurred during U.S. President Donald Trump's first term.
The budget crisis that arose from Trump's refusal to sign a temporary budget bill that did not include funding for the Mexico wall resulted in a partial shutdown of the federal government after Democrats did not back down.
The 35-day shutdown that began in December 2018 and ended in January 2019 was the longest government shutdown in U.S. history.
SHUTDOWN NEWS AFFECTED GOLD PRICES
Following the budget crisis, investors sought safe havens and turned to gold. This led to record prices both in ounces and grams.
Gold (ounce): Up 0.4% to $3,872.87
Futures gold (ounce): Up 0.7% to $3,901.40
Gold (gram): Reached a new historical peak of 5,161 TL
The dollar index was trading at some of the lowest levels of the week.
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