Federal Government Shutdown
As you have undoubtably heard, Congress has thus far been unable to reach a funding plan for continued operations and as a result the United States Federal Government has officially shut down effective at midnight on October 1, 2025. While that statement clearly sounds dire, it is a bit more nuanced than it seems.
This latest shutdown is the 6th in the last 30 years. While each one has been unique, there are several ways in which this one is significantly different from prior shutdowns.
What does a shutdown mean?
In the simplest terms, federal agencies are prohibited from spending funds not appropriated by Congress. However, these agencies have broad discretion as to what functions and services are deemed “essential” and will therefore continue to be provided. Staff is either required to work without being paid in essential roles or furloughed if they serve in non-essential roles. Fortunately for federal employees, Congress passed a bill during the last shutdown in 2019 and both essential and furloughed employees will now automatically receive pay once the government re-opens.
How is this shutdown different?
The recently enacted tax reconciliation bill (the “One Big Beautiful Bill) included significant appropriations for the Departments of Defense and Homeland Security. This may give greater flexibility to these areas of government to fund their operations during the shutdown.
Another area where this could be much different than shutdowns in the past is the question of layoffs vs. eliminating positions. In the past, administrations have furloughed non-essential staff, bringing them back and reopening agency operations and activities once funding was restored. The current administration has indicated that they might instead proceed with permanent reductions in force (RIFs) for staff operating programs that they do not believe should be funded. In essence, this would take advantage of the lapse in appropriations to try and make more permanent changes. Once the government reopens, it is unclear how the administration would proceed with programs that would have funding, but no staff. This is also likely to raise legal questions.
What parts of government are affected?
Agencies issue updated shutdown plans in conjunction with each shutdown. Federal News Network is maintaining a comprehensive list of those plans available here.
What parts remain open?
Functions dealing with Active-Duty Military, Homeland Security, Federal Law Enforcement (FBI, CIA, DEA, Secret Service), Customs (CBP & ICE), Transportation Security (TSA & Air Traffic Controllers), Health Services (Critical medical staff at VA hospitals and other essential health services), and the US Post Office will be largely unaffected. Social Security and Medicare benefits continue although there may be some delays in processing.
What will be the impact on business?
According to US Chamber of Commerce Executive Vice President & Chief Policy Officer Neil Bradley, “Government shutdowns are harmful to the economy, our national security, and the American people, often in ways that are not immediately obvious. In communities across the country, businesses and Americans rely on the functions of government. From passports and permits to clinical trials and air travel, a well-functioning economy requires a functioning government. The Chamber calls on Congress and the Administration to work together to pass legislation to avert a federal government shutdown.”
When the government partially shut down from December 2018 to January 2019, it reduced economic output by $11 billion in the following two quarters, including $3 billion the U.S. economy never regained, analysts estimate.
With single-party control of the House, Senate, and White House, why can’t the majority party end the shutdown?
The US Senate requires a 3/5th majority (60 of 100 Senators) to end debate and force a vote.
Prior to 1917, the Senate tradition of unlimited debate allowed for use of the filibuster, prolonging debate and delaying or preventing a vote on a bill, resolution, amendment, or other debatable question. That year, the Senate adopted a rule to allow a 2/3rds majority vote to end a filibuster, The procedure is known as a “cloture” vote. The Senate reduced the margin to 3/5th in 1975.
Republicans currently hold 53 seats, so even if they vote unanimously, they would still need an additional 7 votes to invoke cloture and proceed to a vote.
When will it be solved?
While the future is always difficult to predict, past shutdowns have been influenced by a number of factors. Here are some areas to watch:
- Level of public attention and pressure – as in a lot of political situations, the level of dissatisfaction among the public and the perception of which side is to blame will influence the desire to negotiate a solution.
- Impact of administration effort to make permanent changes – If the administration is able to unilaterally make drastic cuts in the size, scope, and cost of government programs, it would likely compel supporters of the programs being cut to want to reach a deal.
- Missed pay day – many federal employees will begin missing paychecks the week of October 12th. This adds pressure to reach and agreement to re-open the government.
Key Players to Watch
As previously mentioned, 60 votes are needed in the Senate for cloture and to proceed to a vote to re-open the government. Assuming 52 or 53 Republicans vote to reopen (Sen Rand Paul being the wildcard), that means they need 7 or 8 additional votes.
Already voting to open the Government – Two Senate Democrats and one Independent Senator have supported the effort to keep the government open.
- Sen Catherine Cortez-Masto (D-Nevada)
- Sen John Fetterman (D-Pennsylvania)
- Sen Angus King (I-Maine)
Senators to watch – Depending on what Sen Rand Paul does, Republicans will need the support of 4 or 5 more Democrats to invoke cloture and re-open the government
- Sen Rand Paul (R-Kentucky)
- Sen Maggie Hassan (D-New Hampshire)
- Sen Gary Peters (D-Michigan)
- Sen Jeanne Shaheen (D-New Hampshire)
Leadership and Key Allies – Others who could be instrumental to resolving the impasse
- Sen Chuck Schumer (D-New York)
- Sen Dick Durbin (D-Illinois)
- Sen Kirsten Gillibrand (D-New York)
- Sen Brian Schatz (D-Hawaii)
NACC DC Fly-in
Despite the current turmoil, NACC is moving forward with the planned DC fly-in. The tentative itinerary is to fly to DC on Wednesday, October 22 and return on Friday, October 24.
- Wednesday, 10/22 – Flight to DC followed by a meeting with Congressman Darin LaHood. His staff has graciously offered to take our group on a private guided tour of the US Capitol Building. Dinner that evening.
- Thursday, 10/23 – Morning issues briefing featuring experts from the US Chamber of Commerce, followed by visits to Capitol Hill for meetings with Congressman Foster (confirmed), Congressman Casten (pending), and Congresswoman Underwood (pending). Dinner that evening
- Friday, 10/24 – Experience a DC historic or cultural attraction (TBD – depending on the government shutdown) before heading to the airport for a return flight.
If you would like to join the Naperville Area Chamber of Commerce in Washington, D.C., Members are welcome — please reach out to our team at advocacy@naperville.net.