Inside (the Beltway) Scoop

By: Ellen Kuo
Thursday, October 9, 2025
Congress Fails to Pass Continuing Resolution and Government Shutdown Begins

On October 1, 2025, the new fiscal year (FY) 2026 began. However, Congress failed to pass a continuing resolution (CR) to keep the government open into the new fiscal year, which was needed since none of the 12 FY 2026 appropriations bills had been signed into law. With a government shutdown in progress, forty-one percent of the roughly 80,000 Health and Human Services Department employees were furloughed. The Senate voted on September 30 for the second time on the House passed seven week CR, HR 5371, which failed. Democratic and independent Senators Cortez Masto, Fetterman, and King all voted for cloture, a procedure to end debate and take a vote on a bill, with Republicans in a 55-45 vote. Another try on October 3 also failed (54-44) with the same three key Senators supporting cloture.

Senate Majority Leader John Thune indicated more votes will take place as pressure mounts to obtain more Democrats to reach the 60 votes needed to pass the CR. “It’s in their court to solve it — it’s their shutdown,” Senate Minority Leader Chuck Schumer said of Republicans. “We are not going to be held hostage.” Democrats want the enhanced premium tax credits for Affordable Care Act (ACA) health insurance to be extended beyond the end of 2025.  Thune said, “There isn’t anything here to negotiate.” He also said negotiations on health care subsidies will not happen until the government reopens. “A lot of good can come down from shutdowns,” President Donald Trump said in the Oval Office on September 30. “We can get rid of a lot of things that we didn’t want. They’d be Democrat things.” However, there is hope since a bipartisan group of Senators is working on a path out of the shutdown with two items—a Republican commitment to pass bipartisan appropriations bills and a promise to take up legislation by November 1 to extend the ACA tax credits.

Office of Management and Budget (OMB) Director Russ Vought held a call with House Republicans on October 1 to brief them on plans to implement mass layoffs of federal workers. In anticipation of the shutdown, OMB sent agencies instructions regarding layoffs, and agencies began implementing their plans. The instructions include the following: “agencies are directed to use this opportunity to consider Reduction in Force (RIF) notices for all employees in programs, projects, or activities (PPAs) that satisfy all three of the following conditions: (1) discretionary funding lapses on October 1, 2025; (2) another source of funding, such as H.R. 1 (Public Law 119-21) is not currently available; and (3) the PPA is not consistent with the President’s priorities.”

He also sat down with President Trump on October 2 to discuss firings at “Democratic” agencies during the shutdown.

The last shutdown began in December 2018 and lasted 35 days, the longest in history. That shutdown resulted in the loss of $3 billion in economic activity, according to the Congressional Budget Office (CBO). How long this shutdown will last depends on reaching a bipartisan agreement on the CR, since it will take more time to sign the FY 2026 spending bills into law. Pundits predict about two weeks or until the pain on lawmakers drives them to come to an agreement to pass a CR. CBO estimates that under a lapse in discretionary funding for fiscal year 2026, about 750,000 employees could be furloughed each day; the total daily cost of their compensation would be roughly $400 million.

Meanwhile, the Department of Health and Human Services (HHS) released its FY 2026 contingency staffing plan, detailing some of the impact on agency staff and services. Specific to the National Institutes of Health (NIH), the plan includes a list of NIH activities that will not continue. Other shutdown plans for the National Science Foundation, Department of Energy, part 1 and part 2, Department of Agriculture, and Department of Veterans Affairs can also be viewed.

FASEB has issued an e-action alert allowing individuals to contact Congress and President Trump to urge a speedy resolution to the shutdown. The federation also released a statement calling on the nation’s leaders to approve a short-term CR to temporarily fund federal agencies while negotiations continue on the unfinished FY 2026 appropriations bills.