As of October 1, the federal government has officially entered a shutdown due to a lapse in annual appropriations. This shutdown stems from Congress’s failure to reach an agreement on legislation to extend government funding ahead of the close of the fiscal year on September 30, 2025.
On September 19, the U.S. House passed a “clean” continuing resolution (CR) by a narrow 217–212 vote to extend government funding through November 21. The bill largely maintained current spending levels while including a handful of bipartisan measures. Later that day, the Senate rejected the measure by a 44–48 vote, failing to invoke cloture.
That same evening, the Senate also blocked a Democratic alternative, which would have funded the government through October 31. In addition to the four-week funding extension, it included a handful of partisan measures, including a permanent extension of Affordable Care Act tax credits, as well as the repeal of certain healthcare provisions in the “One Big Beautiful Bill.”
On September 29, just ahead of the shutdown deadline, President Trump met with congressional leaders, including Senate Majority Leader John Thune, Senate Minority Leader Chuck Schumer, House Speaker Mike Johnson, and House Minority Leader Hakeem Jeffries. The meeting ended without a resolution, further increasing the likelihood of the shutdown.
In the final hours before the deadline, the Senate made another attempt to pass the “clean” stopgap funding measure. Again, it fell short of the 60 votes needed to break a filibuster, failing 55–45.
While government shutdowns are relatively rare, they are not unprecedented. Five have occurred over the past 45 years. The most recent was in 2018 and lasted 35 days, which is the longest in U.S. history. It is too soon to know how long this shutdown will continue, though they are typically temporary disruptions.
In preparation for the shutdown, the Office of Management and Budget (OMB) sent a memo to agencies to prepare for the shutdown by preparing and publishing agency contingency plans. Historically, OMB would collect and post the plans on their website, but for now, they have stopped doing so. Further departing from historic norms, in addition to the contingency plans (link below), OMB has instructed federal agencies to prepare for issuing Reduction in Force (RIF) notices in response to the government shutdown.
Agencies are directed to consider RIFs for employees working in programs, projects, or activities (PPAs) that meet three criteria:
While essential services like Social Security, Medicare, and emergency response generally continue, many discretionary or grant-supported programs are affected. For entities that depend on federal programs and funding, including Regional Development Organizations (RDOs), some impacts are immediately going to be felt in areas such as grant processing, communication with agencies, and delays in program activities.
Federal agencies are now operating with reduced staffing, and many routine functions are paused. This includes delays across grant administration and program operations.
Grant-related impacts include:
Communication challenges:
Project and program impacts:
Typically, Federal agencies release contingency plans in advance of a potential government shutdown to outline how operations will be managed during a lapse in appropriations. These plans detail which programs and services will continue, identify “excepted” (formerly referred to as “essential”) personnel who are required to report to work, and indicate which activities will be paused until funding is restored.
In August 2025, OMB directed all federal agencies to update their shutdown contingency plans in anticipation of a possible funding lapse. Once reviewed and approved, these plans are to be made publicly available. As of today, a limited number of updated plans have been released, with additional agency plans expected to be published in the coming days.
While the shutdown is ongoing, you can take several steps to help manage operations and prepare for post-shutdown recovery:
Less than one day into the shutdown, the Senate again voted on, and failed to advance, the previous voted on short-term funding proposals. Although negotiations are ongoing, there seems to be no clear path forward, with both parties digging in on their demands.
NADO will continue to monitor developments closely, keep members informed of any significant updates, and remain committed to advocating on your behalf as new information becomes available.