WHAT ARE THE CHANCES FOR A SHUTDOWN THIS OCTOBER?

Contractors and their government customers are starting to talk about the possibility of a shutdown at the end of this month if Congress can’t pass a Continuing Resolution (CR).  While current indications are that there will not be a shutdown, that could very well change as both the White House and Congress seek to add “must pass” measures to any CR deal.  House Republicans, for example, want to add a provision making it clear that non-citizens are prohibited from voting in federal elections.  Democrats point out that existing law is already clear on this point.  The White House is floating possible language stating support for Israel and potentially socio-economic wish list items.  The debate on these add-ons could very well sidetrack the timely adoption of a CR, leading to a temporary government shutdown.  While that risk must be acknowledged, it still doesn’t seem likely with three weeks left in the current fiscal year.  More likely, however, is a spending showdown early in the calendar year 2025.  Final appropriations work may not be done by that time, increasing not only the potential for partisan haggling at the start of a new administration but potentially again adding a vote to increase the federal debt ceiling into the mix.  Action to increase the debt ceiling is expected to be required sometime in the first 8-10 weeks of the year, adding tension to what may already be a sharply divided process.  Contractors and their government customers should pay close attention to these developments.  While there could be a bump in the road soon, the specter of a larger issue looms in the new year.