The federal government has entered the new fiscal year in a full shutdown, meaning all appropriated federal funds have lapsed. Negotiations remain stalled in Congress, and it is unclear how long the shutdown will last.
For cities, this means disruptions to key federal programs and funding streams. With guidance from our partners at the National League of Cities (NLC), GMA is committed to supporting our members through this period of uncertainty.
Congressional Stalemate
Disagreements over the continuing resolution (CR) to fund the government have brought negotiations to a halt.
- Senate Democrats are insisting on extending Affordable Care Act insurance subsidies that expire at the end of the year.
- House Republicans passed a CR that would fund the government at current levels for seven more weeks but without the subsidy extension.
- The Trump administration and congressional Republicans have renewed calls for permanent reductions in the federal workforce as part of their response to the funding lapse.
The Office of Management and Budget (OMB) has issued guidance to agencies on potential permanent reductions in force (RIFs), seeking to limit staffing to what they consider the minimum needed to carry out statutory functions once funding resumes.
Programs Directly Affected
Several major programs have lapsed because their statutory authorization expired on September 30 and was not extended by a continuing resolution:
- National Flood Insurance Program (NFIP): New policies cannot be issued, existing policies cannot be renewed or expanded, and only claims on active policies will be processed. This leaves homeowners, prospective buyers, and local governments facing significant uncertainty until Congress acts.
- Temporary Assistance for Needy Families (TANF)
- Medicare Health Extenders
- Portions of the Farm Bill
For programs such as Community Development Block Grants (CDBG), grantees can continue to access funds that have already been obligated. However, these too could be frozen with little notice if the shutdown continues.
U.S. Department of Transportation Status
The shutdown’s impact on U.S. Department of Transportation (USDOT) bureaus varies based on funding sources:
- Federal Highway Administration (FHWA): All 2,268 employees are supported by the Highway Trust Fund (HTF) and will continue to work. Cities should continue requesting their grant agreements for any outstanding grants and conduct all other business with FHWA as normal.
- National Highway Traffic Safety Administration (NHTSA): All 574 employees are supported by HTF and the Infrastructure Investment and Jobs Act (IIJA) and will continue to work. All activities will proceed as normal.
- Federal Transit Administration (FTA): All 517 are supported by HTF and IIJA and will continue to work. FTA will be able to reimburse transit agencies for previously approved projects, but is unlikely to approve new grants.
- Federal Railroad Administration (FRA): Of 1,023 employees, 239 are furloughed. Safety and life-protecting functions continue, but research, rulemaking, and media activities may be paused.
- Federal Aviation Administration (FAA): Of 44,829 employees, 11,322 are furloughed. Air traffic control and aviation safety continue, but aviation rulemaking, capital planning, and public affairs are disrupted.
- Pipeline and Hazardous Materials Safety Administration (PHMSA): Of 579 employees, 190 are furloughed. Most activities continue, but certain permits, outreach and training will be impacted. Also, hazardous materials grants for emergency first responders and localities that would be funded from new registration fee collections will stop during the shutdown.
What Cities Should Know
- Act where possible: Continue submitting requests for programs unaffected by the shutdown, such as FHWA grants.
- Plan for interruptions: Programs that have lapsed or depend on new appropriations may see delays or temporary suspensions.
- Monitor updates: The situation is fluid and subject to change as negotiations progress.
Resources & Assistance
- Read the latest statement from NLC President Mayor Steve Patterson of Athens, Ohio.
- Review NLC’s Local Official Checklist: Navigating a Federal Government Shutdown for steps local leaders can take.
- If you have questions or need help communicating with federal agencies, contact GMA Federal Relations Manager, Molly Mcloughlin.
GMA will continue to coordinate with NLC and federal partners to keep Georgia’s cities informed and supported as the shutdown continues.