No fiscal year (FY) 2026 appropriations bills have been enacted, and a House-passed continuing resolution (CR) that would keep the government operating at FY 2025 levels until November 21 has been rejected in the Senate. While a brief shutdown is usually of minimal consequence, things will be different this time.
In the event of a shutdown, most discretionary grant programs—plus mandatory programs funded in appropriations acts—would be affected because no new funding would be available.
FFIS periodically assesses the risks to states from federal government shutdowns. The questions and answers are generally the same from year to year and are summarized below. What is different now is the political and budgetary environment. Among other things, federal agencies have either not updated their shutdown contingency plans or have not made those plans public, creating uncertainty about how they intend to operate under a funding lapse. Further, recent developments make clear that the administration will use a shutdown to dramatically reduce the federal workforce.