With a federal government shutdown narrowly averted, Maryland residents may feel only temporary relief as Congress faces another fiscal deadline in mid-December.
US House Speaker Mike Johnson announced a bipartisan deal to keep agencies funded through December 20, aiming to avert the looming shutdown on October 1.
The proposed continuing resolution — a temporary measure to fund government activities for a limited time — prevents immediate disruptions but leaves Maryland’s significant federal workforce, contractors, and businesses dependent on federal operations in a precarious position.
What’s in the Short-Term Funding Agreement?
The continuing resolution, which still requires votes in both chambers, keeps federal operations running at fiscal 2024 levels without adding controversial provisions that had previously stalled negotiations. By stripping out controversial policy riders, such as requiring proof of citizenship for voter registration, congressional leaders expect bipartisan support in both chambers.
It includes an additional $232 million for the US Secret Service to boost security around the presidential election. Still, it leaves out several provisions debated during earlier negotiations, including $10 billion in additional funding for the Federal Emergency Management Agency (FEMA), which is running out of money after several catastrophic events this year. However, it allows FEMA to accelerate using its existing disaster relief funds over the next few months.
The House plans to vote on the continuing resolution this week before sending it to the Senate for final approval.
The Impact of a Federal Shutdown on Maryland
As previously reported on Conduit Street, federal shutdowns disproportionately impact Maryland due to its proximity to Washington, DC. The state has a significant federal workforce and is home to tens of thousands of contractors and businesses that rely on federal operations.
During the 2018-2019 partial government shutdown, approximately 172,000 Marylanders were directly affected. They missed $778 million in wages, resulting in $57.5 million less in state and local income tax withholding and $2.1 million less in sales tax collections.
In addition, a 2019 US Senate report found that the three government shutdowns in 2013, 2018, and 2019 cost taxpayers nearly $4 billion.
While the current deal delays the shutdown, essential federal workers still face potential unpaid work in the future, and contractors, who typically don’t receive back pay, have little assurance about their financial security.
Looking Ahead: Another Deadline Approaches
Though this temporary agreement delays an immediate shutdown, the fundamental issues in the federal budget process remain. The continuing resolution is only a stopgap, and the more profound disagreements over spending levels and policy mandates are likely to resurface as the new deadline approaches in December.
As Maryland’s economy prepares for another round of high-stakes negotiations, the risks for federal workers, contractors, and businesses persist. Whether lawmakers can reach a long-term solution or face another looming shutdown will significantly affect the state’s economic stability.
Stay tuned to Conduit Street for more information.
Previous Conduit Street Coverage
Shutdown Showdown: The Impact on Maryland’s Federal Workforce and Economy
