Written by Kellen PA staff, the Capitol Compass is a monthly newsletter offered to clients as a Kellen product. Read the Special Edition Shutdown Showdown Update below.
Disclaimer: Many of the developments discussed below are fluid and may change rapidly. The information is relevant and accurate as of 9AM October 24, 2025
9AM October 24, 2025
Overview
The federal government shutdown has now entered its 24th day, and still no funding deal has materialized. The impasse between Congress and the White House remains deeply entrenched with major sticking points around spending caps, health-insurance subsidy extensions, and Medicaid funding. Many observers now believe the disruption may last well into November, as typical pressure levers have yet to yield a breakthrough.
Developments This Week
- The United States Senate again blocked multiple bills this week aimed at delivering paychecks to federal workers and contractors: a GOP-sponsored bill to pay essential federal employees failed 54-45, and two Democratic bills to pay all federal workers were also blocked.
- According to recent briefings, federal civilian workers are projected to miss their first full paycheck this week, escalating the economic and political urgency of the standoff.
- The looming risk of delayed benefit programs (such as food assistance) and contracting slowdowns in federal-dependent local economies is increasingly seen by Hill staff as the next likely trigger point for a shift in negotiations.
- With the military continuing to get paid via emergency Pentagon appropriations, the unpaid civilian workforce is now at the center of the pressure cooker, highlighting the growing gap between “essential paid” and “essential unpaid.”
Agency and Workforce Impacts
- Agencies are continuing to expand their contingency measures, shifting from short-term furloughs to formal Reduction-in-Force (RIF) preparation, especially for contract and temporary staff whose funding has lapsed.
- The federal judiciary signaled this week that without immediate supplemental funding it will have to pause non-essential operations imminently.
- Numerous civilian employees are now entering the third pay cycle without compensation, and service contractors in key swing districts are reporting increasing financial stress, raising real-world risks of consumer and housing instability linked to the shutdown.
Economic and Operational Toll
- Daily economic losses are deepening. New data suggest the cost to the U.S. economy may now exceed $500 million per day, with real risk of measurable GDP impact if the shutdown continues through November.
- Key private-sector ripple effects include: delays in Medicare/Medicaid reimbursements to providers, pauses in federal grant competitions (especially in research and public health), tourism and hospitality losses in regions reliant on federal land and park service operations, and potential food-aid program disruptions looming.
- The buildup to missed civilian pay-checks this week is widely regarded as the most immediate inflection point for mounting pressure on lawmakers.
Impact Calendar — Key Dates Ahead
| Date | Event / Watchpoint |
| Fri, Oct. 24 | First full missed paycheck for many unpaid federal civilian workers begins |
| Thu, Oct. 30 | Expanded public visibility as second missed pay-cycle looms for most unpaid staff |
| Fri, Oct. 31 | Agencies may begin broader contract terminations and RIFs if funding remains stalled |
| Sat, Nov. 1 | Open Enrollment begins for health insurance; premium hikes and subsidy uncertainty may draw media focus |
| Week of Nov. 3 | Possible renewed push in Senate for a short-term continuing resolution; mounting pressure on House to return to session |
Political Outlook
The legislative outlook remains stalled. Senate Democrats continue to insist on including health-insurance subsidy extensions, while House Republicans remain split between going for a clean short-term funding fix and insisting on major policy changes. Internal leadership signals suggest a return to action is unlikely unless civilian workforce pressure escalates significantly.
Moderate members of Congress are quietly discussing “mini-bill” strategies to reopen select agencies, but the risk is that these could actually weaken pressure for a full funding deal if executed prematurely.-
Takeaway
This shutdown is no longer a momentary disruption—it is now an entrenched operational crisis. Government agencies, federal employees, contractors and private organizations are navigating an extended period of uncertainty. The most likely catalyst for movement appears to be unpaid civilian workers missing major pay-cycles, coupled with visible economic ripple effects.
Organizations that rely on federal funding, contracts, reimbursements or partnerships should now operate under the assumption that the shutdown will extend through the end of October and likely into November, and should adjust plans accordingly.
October 10
Overview
We are now on Day 17 of the federal government shutdown, with no agreement in sight. The stalemate between the White House and congressional Republicans continues over policy riders, spending caps, and Medicaid-related funding provisions. Despite intermittent staff-level discussions, no bipartisan deal has emerged, and the latest signals suggest the impasse could stretch well into November.
While essential operations continue, agencies are entering deeper rounds of furloughs, hiring freezes, and Reduction-in-Force (RIF) preparations, marking a shift from short-term shutdown management to longer-term contingency planning.
Developments This Week
NDAA Vote Overshadows Shutdown Debate
The Senate this week advanced the FY 2026 National Defense Authorization Act (NDAA) on a bipartisan 74–25 vote, underscoring the chamber’s ability to move “must-pass” legislation even amid the shutdown. However, the House has not yet set a date to take up the bill for debate or a vote. Speaker Mike Johnson reiterated that the chamber will not reconvene until a broader funding framework is reached, effectively halting legislative business beyond defense and emergency appropriations.
No New Negotiating Channel Established
Hill staff report that no formal talks are taking place between Senate and House leadership teams. Informal outreach by moderate Republicans and the bipartisan Problem Solvers Caucus has not yet produced a viable off-ramp. Aides note that the next natural pressure point will arrive at the end of October, when:
• Federal employees miss their second paycheck (October 30)
• Open Enrollment season begins on November 1, drawing attention to health-insurance premium increases
Shutdown Expected to Extend Beyond October
With the military continuing to receive pay under the September defense exemption, Hill insiders increasingly believe the shutdown will extend into November. Economic and political pressure from unpaid civilian workers is now viewed as the most likely catalyst for renewed negotiations, particularly as federal employees begin missing mortgage and rent payments and contracting delays ripple through local economies in key districts.
Agency and Workforce Impacts
Layoffs and RIF Notices
Federal agencies have begun issuing formal Reduction-in-Force notices to temporary and contract employees whose project funding has lapsed. These early steps, rare even during extended shutdowns, signal mounting fiscal strain within departments such as:
• HHS – Pausing non-critical grants and clinical research reviews; CDC data monitoring further curtailed
• EPA – 85 percent of staff furloughed; enforcement actions paused
• DOI and USDA – Expanded RIF notifications for seasonal workers and contractors in national parks and food inspection units
• HUD and Education – Backlogged grant disbursements now exceeding two weeks
Judiciary and Transportation
The federal judiciary expects to exhaust operational reserves by early next week (October 21), forcing courts to delay most civil proceedings. FAA and TSA continue to experience scattered staffing shortages, causing minor travel disruptions.
Public Institutions
The Smithsonian museums and National Zoo officially closed to the public this week, with the Zoo citing an inability to sustain animal-care staffing without outside donations by month’s end.
Economic and Operational Toll
The Congressional Budget Office now estimates daily economic losses near $500 million, driven by halted contract payments and consumer spending declines in the D.C. metro area and federal enclaves nationwide. The Federal Reserve has warned that GDP growth could fall by up to 0.2 percentage points per week if the shutdown extends into November.
Private-sector ripple effects are emerging in the form of:
• Suspended SBA loan processing and federal contracting
• Delays in Medicare and Medicaid reimbursements for hospitals and providers
• Pauses in federal grant competitions across HHS and NIH
• Tourism losses in national park gateway communities
| Date | Key Event / Watchpoint |
| Fri, Oct. 18 | Judiciary and EPA furlough thresholds reached; agencies may begin emergency reassignments |
| Mon, Oct. 20–21 | Judiciary operating funds exhausted without supplemental appropriation |
| Thu, Oct. 30 | Second missed paycheck for most civilian employees; increased media and constituent pressure expected |
| Fri, Oct. 31 | Agencies authorized to initiate broader RIFs and contract terminations |
| Sat, Nov. 1 | Open Enrollment begins; ACA premium changes and subsidy lapse warnings gain media attention |
| Week of Nov. 3 | Possible Senate push for a short-term CR; pressure intensifies on House to return for vote |
Political Outlook
Despite growing frustration, there are no indications of imminent movement. Senate Democrats remain united behind a clean continuing resolution, while House Republicans insist on policy concessions and discretionary spending cuts. Some leadership staff now privately acknowledge that a mid-November or even post-Thanksgiving reopening is plausible if no new external event shifts incentives.
Moderates in both chambers are exploring limited “mini-bills” to fund specific agencies such as Defense, Transportation, and Veterans Affairs, but those efforts face resistance from both ends of the ideological spectrum, who fear it would relieve political pressure for a broader deal.
Takeaway
The shutdown is deepening and normalizing, with federal agencies beginning to plan for structural workforce reductions rather than short-term furloughs. Absent a new political incentive, such as widespread missed paychecks or public backlash over open-enrollment disruptions, the path to reopening remains unlikely before mid-November.
Organizations reliant on federal partnerships, grants, or reimbursements should anticipate delays extending into mid- to late November and prepare accordingly.
October 10, 2025
Overview
We are now on Day 10 of the federal government shutdown, which began at 12:01 a.m. EDT on October 1 after Congress failed to pass a continuing resolution or full-year appropriations. The political impasse between the White House and Congress shows few signs of breaking ahead of the holiday weekend.
While essential federal functions continue, most non-essential operations remain suspended, and new furlough rounds are expanding across multiple agencies. The Senate adjourned Thursday evening and will not return until Tuesday, October 14, making further action unlikely this weekend.
Developments This Week
Congressional Stalemate:
The Senate again failed to advance a “clean” stopgap bill (54–45), its seventh failed vote. House Republicans continue to push a package with spending cuts and policy riders Democrats oppose. No new negotiations are scheduled until next week.
Speaker Johnson’s Announcement:
Late Thursday, Speaker Mike Johnson announced that the House will not reconvene until an agreement is reached to end the shutdown, saying he “will not bring Members back to Washington just to stage more political theater.” The move drew sharp criticism from Senate Democrats and several moderate Republicans, who argue it effectively pauses negotiations and prolongs the disruption.
White House and Pay Guidance:
A White House memo circulating early this week questioned whether furloughed and “excepted” employees are guaranteed back pay once the shutdown ends, a break from longstanding precedent. Speaker Johnson has said Congress “of course” intends to authorize retroactive pay, but the issue remains unresolved.
In a more aggressive step, the President authorized agencies to begin formal layoff procedures for select contract and temporary employees whose funding lines are fully exhausted, marking the first such move since the 2013 shutdown.
Agency Impacts:
- IRS: Began furloughing ~34,000 staff this week.
- HHS: Operating at reduced staffing; NIH grant reviews and CDC surveillance work remain paused.
- Smithsonian & National Zoo: Closing to the public Sunday, Oct. 12 as reserve funds are depleted.
- FAA: Minor delays due to stretched scheduling; safety-critical staff remain on duty.
- Judiciary: Reports it can sustain operations only through early next week without supplemental funding.
Economic Toll:
The Congressional Budget Office continues to estimate losses of roughly $400 million per day in foregone wages and output. Credit unions and state programs have begun offering emergency loans to impacted workers.
Missed Pay Periods & Military Impact
The first missed paycheck for most federal workers and military personnel is expected next week (mid-October).
- Furloughed employees have not received pay since September 30.
- “Excepted” workers (including TSA, Border Patrol, and active-duty military) continue working without pay.
- Approximately 1.7 million military members are projected to miss a full pay cycle if no funding is enacted.
The uncertainty surrounding retroactive pay has added new stress for households already relying on savings or short-term credit.
| Date | Key Event / Watchpoint |
| Monday, Oct. 13 (Columbus Day) | Federal holiday—furloughed employees remain unpaid; limited agency operations. |
| Tuesday, Oct. 14 | Senate reconvenes; potential attempt at short-term CR or piecemeal agency bills. |
| Mid-Week (Oct. 15–17) | Missed paychecks hit; public pressure expected to intensify. |
| Late Week | Possible movement on back-pay language or “essential services” mini-funding packages. |
Outlook
Pressure is building on both sides, but no clear resolution path exists. The White House insists on restoring recent Medicaid and health-insurance subsidy funding in any deal; GOP leadership continues to reject those terms.
Absent compromise early next week, agencies may begin issuing secondary furloughs or halting contract payments. Analysts note the longer this continues, the greater the backlog and restart costs once funding resumes.
Takeaway
We are entering a critical phase: by this time next week, hundreds of thousands of federal employees and service members may miss a full pay period, intensifying political and economic pressure. If precedent holds, retroactive pay will eventually be authorized, but until Congress acts, the situation remains fluid.
October 1, 2025
The federal government officially entered a shutdown at 12:01 a.m. EDT on October 1, 2025, after Congress failed to pass a funding measure to sustain operations into the new fiscal year.
- Scope of the shutdown
Most agencies that rely on annual appropriations have suspended non-essential operations. Some independent and statutorily funded entities (for example, the Consumer Financial Protection Bureau) continue limited operations because their funding is not tied to the annual budget process.
- Furloughs and unpaid essential work
Hundreds of thousands of federal employees are being furloughed, while essential personnel will continue working without pay. The Congressional Budget Office estimates the daily cost to the economy could reach approximately $400 million in lost wages and output.
- Health, science, and public health agencies
The Department of Health and Human Services expects to furlough roughly 41% of its workforce. At the Centers for Disease Control and Prevention, significant reductions in staffing will hamper communications, oversight, and surveillance. The National Institutes of Health anticipates suspending much of its research operations, peer-review processes, and grant reviews.
- Judiciary under strain
Although courts will still hear constitutional and critical cases, many court staff—including probation officers, clerks, and support personnel—may be furloughed. The judiciary warns it may not be able to sustain full operations past October 3 without additional funding or legislative action.
- Services that remain, and those disrupted
Core national security, law enforcement, and public safety functions continue, though often at reduced capacity. Programs like Social Security, Medicare, and Medicaid are not expected to be disrupted, though beneficiaries may face delays in ancillary services. Many public services, including national park operations, routine inspections, and grant-making, are largely suspended.
- Length of Last Shutdown
The last major U.S. government shutdown happened in 2018–2019, stretching 35 days from December 22, 2018, to January 25, 2019, making it the longest in U.S. history. That shutdown was triggered by a standoff over President Trump’s demand for $5.7 billion in funding for a border wall, which Democrats refused to approve as part of the spending bills. As pressure mounted, Trump relented and agreed to a stopgap funding bill, ending the shutdown.
- Length of Current Shutdown
Negotiations are ongoing but there’s no clear path yet: Republicans, though holding both chambers, couldn’t marshal the 60 Senate votes needed for a stopgap, while Democrats are pressing to pair funding with health-insurance subsidy extensions and reversal of recent Medicaid cuts, terms GOP leaders reject. Analysts split on timing: some expect a resolution within days to a couple of weeks, but given the policy stakes, including healthcare subsidies and structural agency changes, the shutdown could persist longer absent a compromise. In short, there is no consensus on length; it hinges on whether leadership can break the impasse soon.
Takeaway: The shutdown is now reality. Federal contractors, grantees, and state and local program partners should plan for immediate service interruptions, delay in reimbursements or payments, and ongoing uncertainty until Congress and the White House reach a resolution.
Federal Nominations
Senate Republicans finalized a rule change to accelerate the voting process for President Trump’s federal nominees. The Senate voted 51-44 to adopt a resolution allowing nominees to be considered in groups rather than individually. Currently, 150 nominees await floor consideration.
Senate Democrats argued the change undermines the Senate’s ‘advice and consent’ role, while Republicans contend Democrats intentionally slowed the nomination process.
Typically, the Senate requires unanimous consent to speed floor consideration, with any one Senator able to stall proceedings.
Takeaway: This change is expected to expedite confirmations and free Senate floor time for advancing legislation.
Special Elections
On September 9, a special election in Virginia’s 11th Congressional District was held to fill the vacancy left by Rep. Gerry Connolly (D-VA-11). James Walkinshaw (D) defeated Stewart Whitson (R) with 74.8% of the vote and was sworn in on September 10.
In Arizona’s 7th Congressional District, Pima County Supervisor Adelita Grijalva (D), daughter of former Representative Raul Grijalva, defeated Republican businessowner Daniel Buterez with 70.6% of the vote. She is expected to be sworn in on October 7, when the House returns from recess.
With these results, the House balance shifts to 219 Republicans and 214 Democrats.
Upcoming special elections:
- Texas’ 18th Congressional District – November 4, 2025
- Tennessee’s 7th Congressional District – December 2, 2025
Future Senate elections to note:
- Ohio Senate – November 3, 2026
- Florida Senate – November 3, 2026
Takeaway: These elections slightly tighten the House margin, while upcoming contests could further shape control heading into 2026.
Redistricting
Several states are considering redrawing their voting maps ahead of the 2026 midterm elections, including Texas, Missouri, Florida, Indiana, California, New York, Maryland, Illinois, Ohio, Louisiana, Wisconsin, and Utah.
States that pass new maps will likely face prolonged court challenges over validity and fairness.
Takeaway: Court battles over redistricting could delay candidate filings and impact the balance of power in 2026.
