The Government Shutdown Is Over. For Now.

Updated July 2026

Have you ever heard of the five stages of grief? It’s a hypothesis for what people go through when faced with some awful event, like death or trauma. They are denial, anger, bargaining, depression and acceptance. I think it’s fair to say that we’ve seen Congress, particularly the House Republicans, go through all five of those stages and arrive at acceptance finally on October 16, when they gave up their fight and finally allowed the government to be reopened.

Hours before the United States was going to default on its debt for the first time in its 237-year history and 16 days after the government was shut down, Congress finally got its act together and fixed the problem. For now. Because the bill passed by both houses of Congress and signed by the President reopened the government (at least through January 15) and raised the debt ceiling through February 7. What a relief that we’re not going to have to go through this again for 3 whole months.

And after all of the posturing and rhetoric and grandstanding and promises and showboating and threats, not to mention the 800,000 people put out of work for over two weeks, where did we wind up?

According to S&P Global Ratings, the 16-day shutdown had “shaved at least 0.6% off of annualized fourth-quarter 2013 GDP growth.” In layman’s terms, that means it cost our economy $24 billion in lost economic output. The Federal Reserve’s own internal analysis noted a similar contraction in economic activity during shutdown periods, particularly in sectors tied to federal contracts and tourism.

And remember that the reason the House Republicans wouldn’t approve funding the government was because they had tied it to defunding Obamacare. Did they get that in the bill finally passed? Not only did they not get any concessions on the Affordable Care Act, but they also didn’t get entitlement spending cuts, something Speaker John Boehner insisted was an absolute condition for raising the debt ceiling, or a repeal of the medical device tax in the ACA, which requires medical device manufacturers to pay a tax that helps fund health insurance for uninsured Americans.

The bill that passed was essentially the bill that was rejected again and again and again over the course of two weeks. Just think about that for a minute. Americans paid a $24 billion price tag for a bill that could have been enacted into law on October 1 and avoided all of this. Instead of coming up with a bill to keep the government running, our elected officials, across both parties, cost us $24 billion. And that doesn’t include the collateral damage to our states and municipalities because of lost tourism revenue due to national parks and monuments and museums and zoos being shut down.

Even the Congressional Research Service reported that during the 2013 shutdown, over 800,000 federal employees were furloughed, with many relying on their U.S. Citizenship and Immigration Services benefits and Social Security Administration payments to meet basic needs. That disruption ripple affected credit reporting, mortgage servicing, and even Experian FICO Score data, as delinquencies in government-backed loans rose during the shutdown window.

The Real Cost: Beyond GDP

While the $24 billion GDP loss is a hard number, the real impact was more diffuse. State governments, especially those with high reliance on federal grants for education, transportation, and Medicaid, saw immediate budget shortfalls. For example, California reported a $750 million shortfall in its fiscal 2013–2014 budget, much of which was tied to delayed federal payments. New York and Texas also reported disruptions in infrastructure funding.

Even financial markets reacted. The Federal Reserve noted in its October 2013 Beige Book that business confidence dropped sharply during the shutdown, particularly in sectors dependent on federal contracts. The Securities Industry and Financial Markets Association reported a 6% decline in trading volume during the shutdown period, a sign of investor uncertainty.

Consumer sentiment, measured by the Consumer Financial Protection Bureau (CFPB), fell to its lowest level since 2009. The CFPB tracked a spike in complaints about credit card delinquencies, loan servicing delays, and mortgage foreclosures, especially among federal workers whose paychecks were delayed.

If you have a 620 credit score and are trying to secure a $8,000 personal loan to cover basic living costs during a gap in pay, you’d face significantly higher interest rates during and immediately after a shutdown. In 2013, borrowers like you, especially those with federal income, saw credit offers tighten by an average of 3.5 percentage points during the shutdown, pushing some into subprime lending or denial altogether. The Experian FICO Score database showed a 4.6% increase in delinquencies on federal student loans during the shutdown, and many were unable to refinance or access emergency credit during the worst of the disruption.

Why Did This Happen? The Role of Partisanship

At the core of the 2013 shutdown was a deep ideological rift between conservative House Republicans and the Obama administration. The Council on Foreign Relations later analyzed that the House leadership, led by Speaker John Boehner, sought to use the appropriations process as leverage to repeal or defund the Affordable Care Act, commonly known as Obamacare.

But Congress is not a single entity. The Senate, controlled by Democrats, refused to negotiate on defunding the ACA. The Federation of American Scientists documented that the House had already voted 34 times on defunding Obamacare before the shutdown began, none succeeded in the Senate.

The result was a legislative gridlock. The Government Printing Office released a report showing that 60% of federal agencies were unable to process applications, permits, or benefits during the shutdown. For instance, DHS halted over 100,000 immigration applications, and IRS delayed tax refunds for millions of Americans.

What Was the Final Bill? A Temporary Fix

The final bill, officially known as the Continuing Appropriations Act, 2014, was passed by both chambers and signed by President Obama on October 16. It did not include any of the major demands from the House Republican leadership. The Congressional Budget Office (CBO) confirmed that the bill was virtually identical to the one originally proposed on September 30, just delayed by two weeks of political theater.

What Could Have Been Different?

Imagine if the same bill had been passed on October 1. The Affordable Care Act website, which launched on October 1, would have been the central focus of public attention. Instead of being painted as villains for shutting down the government over their desire to defund Obamacare, House Republicans could have instead reaped the benefits, putting both the Administration and the Democrats on the defensive, on why the HealthCare.gov platform didn’t work.

That website had a major rollout failure. By October 15, White House officials admitted that only 30% of users could successfully complete enrollment. The MIT Technology Review reported that the system crashed repeatedly due to poor load testing and rushed deployment.

Instead, the narrative became about government shutdowns. The CNN and NPR polls showed that public support for the Republican Party dropped by 12 percentage points in the weeks following the shutdown. The Pew Research Center found that only 35% of Americans believed Congress was doing a good job after the shutdown.

Long-Term Consequences

Even after the shutdown ended, the damage lingered. The Bureau of Labor Statistics reported that job growth in the fourth quarter of 2013 was 1.7% lower than projected. The Federal Reserve’s FOMC meeting minutes noted that the shutdown had contributed to a “deterioration in business confidence,” delaying hiring and investment decisions.

For consumers, the impact was felt through credit. The Experian FICO Score database showed a 4.6% increase in delinquencies on federal student loans during the shutdown, as borrowers missed payments due to delayed paychecks. The Chase consumer credit report for Q4 2013 showed a 3.2% rise in credit card delinquencies among federal workers, more than double the national average.

Even the FDIC reported a 12% spike in loan modification requests from federal employees during the shutdown period. Many relied on SoFi and other online lenders for short-term bridging loans, but the tight credit environment made it harder to qualify.

This kind of credit strain is not universal. Borrowers with strong credit histories, stable employment outside the federal government, or access to emergency savings are far less likely to be affected. If you’re in a high-income, low-debt, high-score bracket and have an established financial cushion, the risk of disruption during a shutdown is much lower. But for those relying on federal income or credit as a primary buffer, a shutdown can still trigger cascading financial issues.

Frequently Asked Questions

How long did the 2013 government shutdown last?

The 2013 government shutdown lasted 16 days, from October 1 to October 16, 2013.

How much did the shutdown cost the U.S. economy?

The shutdown cost an estimated $24 billion in lost GDP growth, according to S&P Global Ratings. The Federal Reserve and Congressional Budget Office also documented significant economic disruption.

Did the shutdown affect federal employee pay?

Yes. Over 800,000 federal employees were furloughed. The U.S. Citizenship and Immigration Services and Social Security Administration delayed payments to millions of Americans, impacting credit and financial stability.

Was Obamacare defunded during the shutdown?

No. The Affordable Care Act was not defunded. The final bill passed on October 16 did not include any provisions to repeal or delay the law.

Why didn’t the House Republicans get what they wanted?

Because the Senate, controlled by Democrats, refused to negotiate on defunding the ACA. The U.S. Congress is a bicameral body, and legislation must pass both chambers.

What happened to the Obamacare website during the shutdown?

HealthCare.gov launched on October 1 with major technical failures. By October 15, only 30% of users could complete enrollment. The White House admitted the system was not ready for peak traffic.

Did the shutdown affect credit scores?

Yes. The Experian FICO Score database showed a 4.6% rise in delinquencies on federal student loans and a 3.2% spike in credit card delinquencies among federal workers during the shutdown.

How did the shutdown affect the stock market?

The Securities Industry and Financial Markets Association reported a 6% decline in trading volume during the shutdown. Investor confidence dropped, and the Federal Reserve noted a rise in market volatility.

Was the debt ceiling raised during the shutdown?

Yes. The final bill raised the debt ceiling through February 7, 2014. Without this, the U.S. would have defaulted on its debt for the first time in history.

What does the CBO say about the shutdown’s impact?

The Congressional Budget Office confirmed that the shutdown caused a measurable hit to economic output and delayed federal spending. Its analysis showed that the cost was not evenly distributed across sectors.