With the government shutdown in effect, many federal agencies are operating with limited staff, leading to delays in regulatory approvals, permits, and federal contracts.
As of October 1, 2025, the federal government has entered a shutdown. Understanding the current status of government funding, what to expect during this shutdown, and how agencies plan to operate can help businesses manage the challenges ahead. The federal government is primarily funded through 12 annual appropriations bills, which have not been enacted for the fiscal year 2026. Efforts to pass a continuing resolution to temporarily fund the government were unsuccessful. With no resolution reached, the government has now shut down.
What to Expect During the Shutdown
With the government shutdown in effect, many federal agencies are operating with limited staff, leading to delays in regulatory approvals, permits, and federal contracts. The Office of Management and Budget (OMB) has directed agencies to prepare for reductions in force for unfunded programs that are not aligned with administration priorities. However, essential services such as Social Security, Medicare, veterans benefits, and military operations, continue to operate, as they are funded through mandatory or advanced appropriations.
The Antideficiency Act restricts government operations in the absence of appropriations, but exceptions exist for activities necessary to protect human life or property. As a result, some safety-critical activities, including air traffic control and federal law enforcement, remain operational.
Federal Agency Contingency Plans
Federal agencies have developed and updated contingency plans for operations during this funding lapse. These plans outline which functions will continue and which employees are deemed “essential.” In August 2025, OMB directed agencies to update their contingency plans, noting that plans would be published once approved by OMB.
Links to the latest updated plans can be found below (please check back for updates as more plans become available):
Centers for Medicare and Medicaid Services
Department of Justice
Department of the Treasury
Department of Labor
Department of Defense
Department of Health and Human Services
Federal Trade Commission
Federal Communications Commission
Food and Drug Administration
Internal Revenue Service
Securities and Exchange Commission
We will continue to monitor and report on the latest developments as the situation evolves.
