The U.S. government is facing a potential government shutdown crisis starting October 1, stemming from the inability of both parties in Congress to reach an agreement on subsequent appropriations for the new fiscal year's budget. The focus of the dispute is primarily on cuts to Medicaid, with both sides holding firm to their positions, resulting in a stalemate.

A memo released by the White House on September 25 has further shocked the public. The memo requires federal agencies to immediately initiate "downsizing" plans in the event of a government shutdown. Vice President Pence publicly stated that "the government may shut down," and Trump also warned of the possibility of "permanent layoffs."

The main reason for this situation can be traced back to the new fiscal year budget passed in July this year. The budget includes cuts to Medicaid, which has sparked strong opposition from the Democratic Party. The Democrats believe that these cuts will harm millions of people who rely on subsidies from the Affordable Care Act. Therefore, they are demanding that the next short-term spending bill strengthen Medicaid and extend subsidies to prevent a significant increase in premiums next January.

The Democratic Party has also put forward a series of demands, including the repeal of relevant cuts in Trump's tax reform bill, modifications to the calculation methods of work eligibility requirements and federal grant ratios, as well as the restoration of funding for medical research. These demands aim to prevent the White House from reducing appropriations through executive action. However, Trump and the Republicans insist on the original proposal and refuse to make concessions, which has become the core issue of the confrontation between the two sides.

As the controversy continues to escalate, the White House Office of Management and Budget ordered all federal agencies to submit contingency plans for a government shutdown on August 1. This series of developments has significantly increased the likelihood of a government shutdown and raised public concerns about the potential disruption of government operations and public services.

The government shutdown will have a wide-ranging impact on the U.S. economy and people's livelihoods, including the suspension of certain government services, federal employees working without pay, or being forced to take leave. The direction of this budget crisis not only relates to the trajectory of domestic policies in the U.S. but will also affect the global economic landscape, with various sectors closely monitoring the further developments of the situation.