The US federal government entered a partial shutdown early Thursday after the Senate failed to pass a stopgap spending measure before the 2027 fiscal year began. Agencies began furloughing hundreds of thousands of employees at 12:01 a.m.

Weeks of stalemate between congressional Republicans and Democrats over funding levels and policy riders attached to the continuing resolution led to the impasse. Senate Majority Leader John Thune pressed for a clean short-term bill, while Senate Democrats, led by Chuck Schumer, demanded protections for health care subsidies set to expire.

The White House Office of Management and Budget directed agencies to execute contingency plans overnight. Essential personnel, including active-duty military, air traffic controllers and Border Patrol agents, were ordered to continue working without pay, according to guidance from OMB Director Russ Vought.

President Donald Trump blamed Democrats for the lapse and signaled he would use the shutdown to pursue further reductions in the federal workforce. Democratic leaders accused the administration of manufacturing the crisis to advance permanent staffing cuts, citing earlier threats of mass reduction-in-force notices.

Economists at the Congressional Budget Office warned that a prolonged shutdown could reduce quarterly economic output and delay key data releases. Negotiations were expected to resume Thursday, though neither side signaled an immediate breakthrough.