‘Battle’ Won but ‘War’ Lost? Trump Faces a Potential Shutdown Backfire

Record-Long Shutdown Ends, Leaving Deep Scars
Q4 U.S. GDP Growth Faces 1.5ppt Decline
Political Risks Mount Despite Trump’s ‘Victory’ Claim

The longest shutdown in U.S. history officially ended after 43 days, but it has left deep wounds across the American economy. Key economic indicators were left blank, and a slowdown in fourth-quarter growth has become unavoidable. Political turmoil also lingers. Since the parties agreed to revisit the Democratic demand for an extension of Affordable Care Act (ACA) subsidies at a later date, a failure to renew them could trigger a surge in health-insurance premiums for millions of Americans—posing a major political risk for President Donald Trump and the Republican Party ahead of next year’s midterm elections.

Shutdown Ends After 43 Days

According to Reuters and other outlets on the 13th (local time), the U.S. House of Representatives held a floor vote the previous afternoon on the Senate-amended short-term spending bill and passed it 222–209. Most Republicans and Democrats voted along party lines, with six Democrats voting in favor and two Republicans opposed. The House-approved continuing resolution was the version the Senate had amended and passed on the 10th. President Trump signed the bill at 10:24 p.m.

The temporary funding bill, formally enacted with President Trump’s signature, keeps federal agencies funded at current levels through January 30. Funding for the Departments of Agriculture and Veterans Affairs, the FDA, military construction projects, and congressional operations—agreed to by both parties—has been secured through the end of fiscal year 2026. The bill also restores pay for federal workers furloughed during the shutdown and mandates their reinstatement. A clause prohibiting federal layoffs through January 30 was included as well. In addition, the legislation specifies that the Senate will hold a vote next month on extending ACA premium subsidies, a core Democratic demand in the negotiations.

With the shutdown officially over, federal agencies have begun the process of resuming normal operations. Some federal employees are expected to return to worksites as early as the 13th. Russell Vought, director of the Office of Management and Budget, instructed Cabinet secretaries to “take all necessary steps to ensure agencies can resume operations swiftly and orderly on the 13th.” Full normalization across the federal government is expected to take several more days. Transportation Secretary Sean Duffy said he anticipates “positive consideration toward lifting restrictions on flight operations within the next week.”

Mounting Losses and Inevitable Aftermath

The shutdown, which began on the 1st of last month and lasted 43 days, inflicted extensive damage across U.S. society. More than 4,200 federal employees were furloughed, 670,000 were placed on unpaid leave, and 730,000 were required to work without pay. As unpaid air-traffic controllers took leave or sought side jobs to cover living costs, more than 9,000 flights were canceled.

Vulnerable populations reliant on the social safety net were also hit hard. When the Department of Agriculture announced on the 1st that it could not disburse November Supplemental Nutrition Assistance Program (SNAP) payments due to funding shortages, the livelihoods of 42 million beneficiaries were put at risk. Democratic-led state governments and advocacy groups in 25 states filed lawsuits, and conflicting rulings from district and Supreme Courts left some regions with restored payments while others saw benefits suspended.

The prolonged shutdown dealt a major blow to the economy as well. A total of 1.25 million federal employees missed USD 16 billion in wages from October 1 through mid-November, suppressing consumption and weighing on broader economic activity. This is expected to dent U.S. GDP. The Congressional Budget Office estimates that fourth-quarter growth will decline by roughly 1.5 percentage points—about half the pace of the previous quarter. Although the resumption of government operations is expected to boost first-quarter growth by 2.2%, an estimated USD 11 billion in economic activity will be lost permanently. Unlike the partial shutdown of 2018–2019, which restricted only 10% of federal spending, the current episode halted 10% of all budget execution, amplifying the impact.

The shutdown also created a hazardous gap in economic data. With the Bureau of Labor Statistics shuttered, all major releases except the September CPI—such as employment reports, consumer-spending data, and core PCE—were halted. As a result, the U.S. economy operated in “blindfolded” conditions, and the Federal Reserve had to make a rate decision without a monthly jobs report for the first time in history. Economists warn that missing data will complicate assessments of economic conditions going forward. Even now that the shutdown has ended, data releases are unlikely to resume immediately.

ACA ‘Time Bomb’ Intact, Potential Blowback in Midterms

Political tensions remain unresolved. Because the continuing resolution is temporary, lawmakers must restart the process for a full-year budget for fiscal 2025 (October 1, 2025–September 30, 2026). Crucially, the extension of ACA subsidies—the core trigger of the shutdown—remains unguaranteed. Even so, President Trump declared himself and the Republican Party the “winners” on the day the shutdown ended, underscoring that the bill passed without the Democrats’ long-sought subsidy extension. Although Republicans agreed to allow a Senate vote on the extension, GOP majorities in both chambers make passage unlikely, raising the prospect of renewed turbulence early next year when Congress attempts to pass a full-year budget.

If subsidies expire at year-end and premiums surge, public anger toward the Trump administration could intensify. More than 20 million ACA enrollees receive subsidies, and their health-insurance premiums are expected to rise by two- to three-fold without them. With enrollment for next year already underway, Americans are beginning to feel the shock of sharply higher premiums—one of the reasons Democrats prolonged the shutdown standoff.

President Trump plans to seek a breakthrough through health-care reform. He has argued that the ACA extends benefits to undocumented immigrants and enriches insurers, and has pledged to redirect subsidies into direct payments to citizens. Critics, however, call the initiative “vague” and “laden with uncertainty,” noting that no concrete framework has been presented and its effect on lowering household premiums remains unknown.

Some analysts warn that President Trump may have won the “battle” of ending the shutdown but may lose the “war” politically. The Washington Post reported that “the ultimate winner of the longest shutdown in U.S. history has yet to be determined.” By ending the shutdown while blocking the ACA subsidy extension without an alternative, the administration may face significant political backlash ahead of next November’s midterms. Election strategists likewise caution that rising premiums could become a liability for Republicans. Tony Fabrizio, former senior adviser to Trump’s presidential campaign, warned as early as July that GOP lawmakers could face fallout if ACA subsidies lapse. Patrick Sebastian, a Republican strategist in battleground North Carolina, also predicted that the end of subsidies would become a major political challenge for the party.