Economic, Political Stakes Loom Large as Shutdown Threat Rises

The White House’s threat to leverage an Oct. 1 government shutdown to conduct mass firings of federal employees and Democrats’ refusal to cave to President Donald Trump’s demands raise the political and economic stakes of a perennial event that markets had grown to ignore.

The last government shutdown — and the longest in US history — occurred during Trump’s first term, spanning more than a month in late 2018 and early 2019. Since then, last-minute compromises have averted disruptive government closures.

This year, however, a shutdown appears nearly certain as Democrats and Republicans harden their positions ahead of the ...