Chances of a government shutdown spike after Trump cancels meeting with Democrats. Here's what comes next.

By Robert Schroeder

A shutdown could imperil federal workers' paychecks, disrupt air travel and delay food stamps

The federal government last shut down in 2018-19, resulting in the temporary closure of national parks and the furloughing of thousands of federal employees.

The chances of a government shutdown were rising Tuesday after President Donald Trump canceled a meeting with top Democratic lawmakers, potentially imperiling federal workers' paychecks, disrupting air travel and delaying food stamps.

Federal government operations are funded through Sept. 30, and without a stopgap budget, many operations and services would be halted on Oct. 1. Others, like issuance of Social Security and Medicare benefits and U.S. Postal Service deliveries, would continue. U.S. troops would remain on duty.

Read: What happens to Social Security and other services if the government shuts down in October?

Trump had been scheduled to meet Thursday with Senate Minority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries, the top congressional Democrats. On Tuesday morning, the president said on his social-media network that "no meeting with [Democrats'] Congressional leaders could possibly be productive." He called their proposals unserious.

Prediction markets Polymarket and Kalshi on Tuesday are showing a rising chance of a partial shutdown, something that hasn't happened since late 2018 into early 2019. Polymarket was showing a 73% chance of a partial federal closure, while Kalshi was at 70%.

As the clock ticks toward a potential shutdown, Congress has failed to pass spending bills that would keep the government open. Senate Democrats, for example, blocked a Republican bill because it excluded enhanced Affordable Care Act subsidies and did not restore certain Medicaid funds.

Without an agreement to keep government functions going, a partial shutdown would begin the morning of Oct. 1. Services that could be interrupted include national park operations; processing of initial public offerings by the Securities and Exchange Commission; approvals of loans by the Federal Housing Administration; and payroll for thousands of federal employees. Furloughed federal employees do receive back pay once a shutdown is over.

The U.S. stock market has typically have shrugged off shutdowns. There have been six government shutdowns since 1978 that lasted five or more trading days, and the S&P 500 index SPX rose during the four most recent ones.

Now see: Government shutdown looms as Senate rejects spending bill. What could happen to stocks next.

-Robert Schroeder

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09-23-25 1117ET