As Congress enters week four of the government shutdown, neither side is budging. The House, which passed a clean continuing resolution funding the government through November 21, remains out of session subject to being called back to DC on 48 hours’ notice. The Senate has been in session each week but remains unable to move ahead on a funding bill to reopen the government. All but three Senate Democrats have opposed the House-passed CR on the grounds that it does not include an extension of the COVID-era enhanced ACA premium tax credits, which sunset at the end of the year.
Meanwhile, the Trump Administration continues trying to apply pressure to Democrats, with OMB Director Russ Vought announcing Friday a pause on $11 billion of Army Corps of Engineers projects in Baltimore, Boston, New York, and San Francisco. Vought recently stated that at least 10,000 Reduction in Force (RIFs) will take place during the shutdown, and despite a lower District Court temporarily halting ~4,000 RIFs, more RIFs are likely as the shutdown continues.
Continuing Resolution (CR). Senate Republicans remain focused on attempting to pass the House’s clean CR, which has now been voted on 10 separate times. These votes are expected to continue this coming week. In addition to CR votes, the Senate is likely to vote on legislation authored by Sen. Ron Johnson (R-WI) that would guarantee pay for essential federal employees who continue to work during shutdowns. We also expect the Senate GOP to use the week to amplify their views on health care, and specifically, the shortcomings of the ACA, while criticizing Democrats for being unwilling to conduct routine business during the shutdown.
Time will tell if one or both sides begin to feel any real pressure, but for now everyone remains dug in, with the promise of a vote on extending ACA subsidies once a shutdown ends serving as the long-standing Senate GOP offer to Democrats. While there are pockets of frustration among rank-and-file Democrats and Republicans, Trump’s actions to date – using tariff revenue to fully fund WIC, repurposing Pentagon and other funds to pay the troops, FBI, and Coast Guard, etc. – continue to soften the most immediate impacts of the shutdown. As a consequence, absent a significant shift in dynamics, the shutdown is unlikely to conclude before the beginning of November.
Fiscal Year (FY) 2026 Appropriations. Senate Democratic opposition to the CR twice spilled over into the regular appropriations process last week, further imperiling its already fragile near-term outlook. First, all but three Senate Democrats voted against proceeding to the full-year Department of Defense Appropriations funding bill, which was previously reported from the Appropriations Committee by a vote of 26-3. Second, while Senate Republicans have hotlined a proposal to move to formalize a conference committee for three FY26 full year funding bills that have previously passed both the House and Senate – Military Construction-VA, Agriculture, and Legislative Branch – Senate Democrats have not indicated interest in moving forward on their end, despite the fact that informal conferencing was ongoing and had borne fruit prior to the shutdown.
Russia Sanctions. Despite indications this week that the Senate might consider additional sanctions imminently, the Senate continues to weigh moving forward on legislation that would give the President additional authorities to sanction Russia as well as those countries that purchase Russian petroleum and uranium products. The Administration has recently ramped up technical assistance (TA) on Sen. Lindsey Graham’s (R-SC) proposed legislation, which has over 80 co-sponsors, while they ponder at what point moving forward would help advance the President’s goals with respect to bringing an end to the Russia-Ukraine war. The Administration’s calculus on sanctions is complicated by the fact that the President has initiated another round of talks with the Russians and will likely meet with President Xi in Korea at the end of the month. Secondary sanctions remain in place on India, though the Administration has refrained from applying them to China.
Nominations. The Senate has confirmed two major blocs of Executive Branch nominations, significantly reducing the backlog of routine nominations to fewer than 40. Senate Committees continue reporting nominations and we anticipate that later this year the GOP will move a third package, largely clearing whatever backlog accumulates. While the timing is subject to change, we expect Republicans to run a hotline to GOP offices in late November to assess if there are any objections to nominees that have been reported out by committees. From there, a package will be assembled for floor action in early December. In the meantime, the Senate Judiciary Committee continues to advance Article III judicial nominations and the Senate GOP will process them as they are available, along with the odd executive branch nomination as circumstances dictate.
OUTLOOK/ANALYSIS. Despite the GOP’s hopes that Democrats would by now have voted for a clean CR to re-open the government, both sides remain dug in with their respective positions, with actions taken by the Trump Administration largely mitigating the harshest impacts of the shutdown for the time being. It remains to be seen whether that will continue to be the case as we approach November, with a looming missed pay period for Federal employees on October 24, as well as November SNAP benefits potentially in peril. Thus far, there have not been significant personnel issues at TSA or among air traffic controllers, though it is another area to watch carefully, and especially if the shutdown continues into November and the holiday season.
The longest shutdown record of 35 days will be eclipsed if the current shutdown extends beyond this off-year election day of November 4, which features gubernatorial elections in Virginia and New Jersey. In addition to the state races in Virginia and New Jersey, California will hold a vote on a ballot measure allowing Governor Newsom to amend the state constitution to provide for redistricting by Democrats rather than the non-partisan state commission.
The start of November is looking to be incredibly impactful outside of Congress and could create pressure points with the shutdown. In addition to state elections, ACA open enrollment begins and consumers will be notified of looming premium increases. On the trade front, President Trump has set November 1 as the effective date for retaliatory measures against China for its recent rare earth export controls and shipping fees (which also take effect in November). The current trade “truce” expires November 10. Should a breakthrough occur between Trump and Putin, as well as Trump and Xi, these threats are likely to subside. If the opposite occurs, and escalation renews, then large-scale economic impacts could put pressure on Congress to end the shutdown.
###