Experts explain what is a government shutdown as it could happen in the US next week

The US government is headed towards a shutdown next week, as Republicans and Democrats have thus far failed to find a funding agreement beyond September.

As it stands, the gears of American government will grind to a halt on 1 October, otherwise known as next Wednesday, unless a solution can be found.

The clock is ticking down to midnight on 30 September to secure a short term funding deal, without which there'll be a severe reduction in what the US government can do.

Basically, in October it is going to be a new fiscal year, but the US government hasn't got a funding agreement in place for how to pay for the various agencies that rely on congress giving them money each year.

They have to submit requests each year and get the thumbs up from congress, with the president signing off on the budget for the next fiscal year, but the window of opportunity for that to happen is almost shut and nothing's in place...yet.

The most essential functions continue, but everything else is in limbo (Andrew Harnik/Getty Images)

What does a government shutdown mean?

Without approved funding, many parts of the US government won't be able to operate, and will have to stop non-essential functions until a deal can be hashed out.

Typically, it means hundreds of thousands of people working for these agencies get furloughed as they have nothing to do, though some will have to keep working without pay to provide essential services.

What is essential and what isn't might be up for debate, as Republican senator Roger Marshall said: "I’d be much more worried if I were a blue state.

"The president has a lot of discretionary power on what he declares is … essential."

The last time there was a government shutdown in the US, between 2018 and 2019 for over 30 days, there were around 800,000 of the US Federal Government's 2.1 million employees furloughed without pay.

Americans will still get social security, Medicare and Medicaid, as they are listed as essential functions, while air traffic controllers and the Transportation Security Administration (TSA) would have to keep working without being paid.

Even with some staff still on, there are expectations that services will be disrupted. Past shutdowns have resulted in national parks and museums being closed because there aren't enough staff to keep them open.

Wayne Winegarden of the Pacific Research Institute told CBS News: "We've been to this picnic before, unfortunately. In general, things like Social Security, Medicare and Medicaid, those will continue to go out, and we'll continue to pay interest on the debt.

"The general rule is that the longer it goes on, the bigger the disruption."

Museums and parks close, only the essential functions are going and hundreds of thousands of people are furloughed (Bill Clark/CQ Roll Call)

What would the economic impact be?

Economist Gregory Daco added to CBS that for every week the US government shutdown continues, it costs the country about $7 billion.

He added that the wider-reaching economic impact could be even worse, as people lose confidence in the American economy and supply chains grind to a halt.

"A government shutdown at this economic juncture represents a graver risk than when the economy is running at full steam," he said of the current precarious situation in the US, given their recent economic woes.

Economically, it's very bad for large parts of the government to stop working for an unknown period of time, and it could be even worse for some people as the White House has threatened mass firings if a shutdown isn't averted.

According to the BBC, a memo has told federal agencies to start planning for a 'reduction in force', which would include permanent job losses for programmes that can't find funding elsewhere and are 'not consistent with the President's priorities'.

Each party blames the other and has their own suggestion for how to end the shutdown, but they can't do it without each other's votes (Kent Nishimura/Getty Images)

How can a government shutdown be averted?

Securing an agreement on how to fund the US government is the solution, though it's easier said than done, as each side accuses the other of being the reason an agreement can't be reached.

The Republican-controlled US House of Representatives passed a short term solution with only one Democrat supporting them, and while the Republicans also control the Senate, it'll take more votes than Trump's party has to make it happen.

For measures like this, a new budget needs to get 60 votes in the Senate, but Donald Trump's Republicans only have 53 seats out of 100 so they can't pass it by themselves.

However, talks between the parties have broken down as Trump cancelled discussions saying they would not be 'productive' and claiming the demands of the Democrats were 'unserious and ridiculous'.

There are currently two bills which could secure a deal and avert a shutdown, one from each party, though neither agrees funding for the full fiscal year.

The Republicans have suggested a short term agreement which kicks the can down the road until 21 November, and makes no significant funding changes besides another $88 million in security spending.

This is the bill which passed the House of Representatives, but failed to make it through the Senate.

Democrats have their own suggested bill that would keep things going until 31 October, and reverse Republican cuts to healthcare which were introduced in Trump's 'big beautiful bill'.

Trump has denounced it as trying to give 'free healthcare' to migrants, 'transgender surgery' for children, and paying Medicaid to 'dead people'.