Preparing for the Operational Risk of a Government Shutdown

The United States is once again on the brink of a federal government shutdown, with funding set to expire on September 30, 2025. As reported by Doug Benevento, Andrew Wheeler, and Troy Lyons of Holland & Hart, Senate Democrats blocked a House-passed continuing resolution (CR) on September 19 that would have extended funding through November 21, 2025. Instead, Democrats have proposed a shorter package through October 31, reversing Medicaid cuts and extending Affordable Care Act tax credits. With no agreement in sight, the risk of disruption remains high.

For organizations that rely on federal approvals, permits, or guidance, waiting to act is the most damaging strategy. Benevento, Wheeler, and Lyons stress the importance of immediate communication with agency staff before operations slow or stop entirely. Once a shutdown begins, answers to critical questions will likely be delayed. Identifying exposures now, such as pending project approvals or reliance on specific funding streams, provides clarity on where operations are most vulnerable.

The authors also caution that shutdowns may unfold unevenly across agencies. Some departments may continue to function temporarily, depending on their carryover funds, while others will close sooner. Even within the Environmental Protection Agency, past shutdowns have seen different offices shutter on different timelines. Compounding this complexity, state governments, which are dependent on federal funds, may also face disruptions, creating additional layers of risk.

For risk managers, proactive planning is essential. By securing information, clarifying funding sources, and mapping operational dependencies now, organizations can mitigate the uncertainty and costly delays that come with a prolonged government shutdown.