The White House ended a high-stakes meeting with congressional leaders without an agreement to keep the federal government funded, prompting Vice President JD Vance to warn that the country is “headed to a shutdown.”
He spoke to reporters after the talks, blaming Democrats for insisting that health policy items be part of the budget fix.
The breakdown centers on whether to pair a stopgap funding bill with extensions of Affordable Care Act subsidies and other health provisions that Democrats say are essential.
Republicans favor a short continuing resolution that punts decisions to later this fall.
One GOP proposal circulating on Capitol Hill would run through November 21, but it has not drawn Democratic support.
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Time is almost up, funding for parts of the government expires at 12:01 a.m. Wednesday, Oct. 1, unless Congress passes a measure the president will sign.
After Monday’s meeting at the White House, leaders from both parties left without a path forward.
The Labor Department’s contingency plan says the Bureau of Labor Statistics will suspend all operations during a lapse, meaning economic reports scheduled during the shutdown will not be released.
That would include Friday’s September jobs report if the government is closed, depriving the Federal Reserve and markets of a critical data point.
A data blackout complicates rate expectations and corporate planning. Payrolls, CPI and retail sales drive everything from earnings models to credit pricing.
The inability to publish those series on time would reduce visibility for asset managers and Treasury staff alike, and could push some firms to rely more heavily on private indicators that do not fully substitute for official surveys.
The Commerce Department has not publicly detailed its own shutdown posture for GDP and retail sales schedules, adding to uncertainty about October’s release calendar.
Beyond data, an extended shutdown would hit agency operations unevenly. Some national security, safety and benefit functions continue, but furloughs ripple through grantmaking, contracting and inspections.
The Defense Department’s guidance allows activities funded with unexpired appropriations to continue, while a large share of civilian employees would still face furloughs, which can slow program delivery and vendor payments.
That matters for contractors with high federal exposure and for local economies around major installations.
The political risk is not theoretical as the last record-long partial shutdown, which ended in January 2019, subtracted an estimated $11 billion from output over two quarters, with about $3 billion in permanent losses, according to the nonpartisan Congressional Budget Office.
History is not destiny, but the episode underlines how quickly administrative frictions can leak into the real economy if a closure drags on.
For now, the standoff remains focused on scope and sequencing. Democrats argue the funding bill should lock in health coverage subsidies before they lapse, while Republicans want a cleaner extension first and policy fights later.
Without movement, agencies will begin executing shutdown plans and businesses that depend on federal approvals, data or payments should prepare for delays.
