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With the government shutdown in effect, many federal agencies are operating with limited staff, leading to delays in regulatory approvals, permits, and federal contracts.
By Erin Brown Jones, Amanda P. Reeves, and Cory Tull
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 & Medicaid Services (CMS)
Commodity Futures Trading Commission (CFTC)
Department of Defense (DOD) (Department of War1)
Department of Health and Human Services (HHS)
Department of Homeland Security (DHS)
Department of the Interior (DOI)
Environmental Protection Agency (EPA)
Federal Communications Commission (FCC)
Federal Trade Commission (FTC)
Food and Drug Administration (FDA)
General Services Administration (GSA)
Government Accountability Office (GAO)
Internal Revenue Service (IRS)
Securities and Exchange Commission (SEC)
How Latham Can Help
Latham understands the complexities and challenges that a government shutdown can present. Our cross-disciplinary team is equipped to provide guidance and support to businesses navigating regulatory delays, contract disruptions, and compliance challenges. We can assist in reviewing agency contingency plans, advising on regulatory obligations, and helping businesses manage the impact on their operations.
We will continue to monitor and report on the latest developments as the situation evolves.
