A federal government shutdown is not good for anyone, but we could be in for a long one.
By Michael Kaiser
The Federal Government shutdown continues into its 30th day with no solution truly in sight, but there could be some changing strategy moving forward. October 30th the House is still in recess (remember, they left D.C. on September 19 after passing their continuing resolution), and has no immediate plans to return. The House has remained in recess since they passed the CR, and has only been in session 22 days out of the 119 days since July 1. As we approach November 1, the impacts of the shutdown will start to dramatically increase.
There may be a renewed sense of urgency to get something done. Federal workers have now missed their first paycheck, and the White House Budget Director has announced mass layoffs of government workers. Members of the military were set to miss a paycheck on October 15, but the White House shifted $8 billion on Defense Department funds to make sure that did not happen. Senate Republicans are no longer letting the Democrats bring their version of the CR to the floor, which would only fund the government for less than a week at this point.
Funding lapsed at 12:01 am Wednesday, October 1. The shutdown has temporarily furloughed about 750,000 federal employees, according to the Congressional Budget Office. The Trump administration has threatened to start firing employees as the shutdown progresses, as well as withhold funding for projects in Democratic-lead states. Several agencies are closed, such as the TTB, but programs not funded by appropriations bills will continue, as well as all work necessary to national security.
Missing paychecks and benefit cuts
President Trump is currently overseas, so even if Congress could come to an agreement, he would not be available to sign any bill into law until at least the weekend. This week, many federal civilian employees across government agencies will experience their first fully missed paychecks of the shutdown. Some already went without compensation last week, and it is currently unclear if they will receive back pay missed wages during the shutdown. Members of the military will miss paychecks on Friday if Trump doesn’t intervene like he did earlier this month, when he paid active-duty servicemembers by tapping about $6.5 billion meant for military research and development efforts. It could prove difficult to make the same move again, since that pot of cash had about $10 billion left before the president pulled from it last time. Included in the federal employees not being paid are air traffic controllers, which could spell disaster for the upcoming holiday travel season.
The Supplemental Nutrition Assistance Program (SNAP) program will run out of funding on Saturday and the Trump Administration has stated it will not tap into emergency funds to keep it funded. Forty million Americans depend on the SNAP program for food, and 25 states have said they plan to cut off benefits. Federal funding also will halt Saturday to some early childhood education programs supported by Head Start, the Health and Human Services program that funds education, health and nutrition services for more than 800,000 children under the age of six. Funding will also run out for the Special Supplemental Nutrition Program for Women, Infants and Children, commonly known as WIC. Lastly, many Americans will see sharp premium hikes as they start shopping for Affordable Care Act health plans.
There has been some talk in the Senate to address the pay lapses in separate bills, but House Speaker Johnson has made it clear he will not bring the House back until the Senate passes a CR.
The last lengthy federal government shutdown was during the first Trump Administration from December 2018-January 2019. The President refused to sign any appropriations bill that did not include funding for a border wall, causing the lapse in funding.
Congress has been governing by self imposed deadlines for many years now and that will inevitably lead to shutdowns.
How did we get here?
The government had been operating under a continuing resolution (CR) that was signed back in March. That CR was an extension of the previous year’s appropriations bills. Meaning, we have been operating under the appropriations bills that were originally passed in 2024. The idea of the March bill was to keep the government operating and give Congress time to pass the FY 2026 appropriations bills. The House did pass its FY 2026 bills along party lines, but the Senate did not pass any. Here is a timeline of CRs since last September:
- September 2024: A short-term CR was enacted to fund the government through December 20, 2024.
- December 2024: Another CR was passed to extend government funding through March 14, 2025.
- March 2025: Congress passed the Full-Year Continuing Appropriations and Extensions Act of 2025 to fund the government through the end of FY 2025 on September 30, 2025
We have been down this road before, as there were 13 total CRs passed during the Biden Administration.
The Politics are Toxic
To say that both parties in D.C. have ill will towards each other would be an understatement. House Democrats did not support the CR back in March, but enough Democrats in the Senate did and that CR passed. The Democrat base was furious with Senate Majority Leader Schumer (D-NY) for voting for the CR as they viewed it as their only leverage with the Trump Administration. The Senate is the only place where Democrats have any leverage due to the 60 votes necessary to overcome a filibuster. This was when the “Department of Government Efficiency” was cutting many jobs and programs that Congress has authorized. Senator Schumer felt it was too risky to let the government shut down.
Fast forward to this September. Congressional Democrats are still smarting over the passage of the Big Beautiful Bill Act in July, as well as the recissions package that “clawed back” appropriated funds from the previous year. Democrats were willing to pass a new CR, if Republicans would include funding for the expiring tax credits for the Affordable Care Act that expire on December 31. Democrats viewed the tax credits as leverage to agree to the CR.
The Trump Administration instructed House and Senate leadership to ignore Democrats and to pass a CR with no additions, other than some increased funding for Member security. On September 19, the House passed a bill that would fund the government through November 21. All but one Democrat voted against that. The Senate failed to pass that bill. Senate Democrats put forth their own bill that would fund the government through October 31. That bill included funding for the expiring tax credits. That bill also failed to pass.
There seems to be no solution in sight. Democrats are dug in on the tax credits and Republicans are spreading the false narrative that the federal tax credits will go to undocumented immigrants and are insistent on a clean CR.
What does this mean for alcohol/wine?
The most obvious impact of a shutdown is TTB ceasing operations. Label approvals stop, and a backlog will develop. If there is a further reduction in force, this could lead to major delays. TTB just started approving new AVA applications, and that will also cease.
The wine industry also benefits from many USDA programs, and many of them will also cease operations until funding is restored.
A federal government shutdown is not good for anyone, but we could be in for a long one.
Michael Kaiser
Michael Kaiser is executive vice president and director of government affairs at WineAmerica, which represents wineries and associations from more than 40 states. For more information about WineAmerica and how to get involved, visit www.wineamerica.org.
