The odds of a federal government shutdown are rising as party leaders clash over a stopgap funding bill, and no state has more at stake than Maryland.
Shutdown Looms
Funding expires at midnight on September 30. Without congressional action, most federal agencies will shut down or scale back operations, leading to furloughs, missed paychecks, and widespread fiscal consequences.
Congress has yet to pass any of the 12 required appropriations bills for fiscal 2026. A short-term extension — known as a continuing resolution — is the most likely option, but even that path is uncertain.
Senate Republicans will need Democratic votes to overcome the filibuster threshold, while divisions within both parties further cloud the outlook. The White House has complicated matters by withholding previously appropriated foreign aid and pursuing additional rescission proposals, inflaming tensions and adding uncertainty to an already fractured process.
According to The Hill, House Republicans, led by Speaker Mike Johnson, unveiled a 91-page stopgap measure to fund the government through November 21. Democratic leaders immediately rejected the plan, arguing it was drafted without bipartisan input and failed to extend enhanced health care subsidies under the Affordable Care Act.
The Hill reports that Senate Majority Leader Chuck Schumer stated that Democrats now hold more leverage than they did earlier this year and vowed to resist what he termed a partisan proposal. Senate Republican Leader John Thune conceded the possibility of a shutdown is growing, while several rank-and-file senators now say the odds of a lapse are better than 50/50.
Why Maryland Is Vulnerable
Federal shutdowns hit Maryland harder than most states.
According to the Comptroller’s Office, an estimated 229,000 Maryland residents are employed by the federal government in the defense and non-defense civilian workforce (not including active-duty service members) and have combined annual earnings of $26.9 billion. Federal jobs located in Maryland represent 6% of the state’s overall employment and 10% of overall wages.
A shutdown halts paychecks. Essential employees continue working without pay, while agencies place others on furlough. Although most federal workers eventually receive back pay, contractors and small businesses rarely do — leaving them with permanent income loss and a lasting strain on local communities.
As previously reported on Conduit Street, during the 2018–2019 shutdown, 172,000 Marylanders lost $778 million in wages. That meant $57.5 million less in state and local income tax withholding and $2.1 million less in sales tax collections. A new shutdown could deliver an even sharper fiscal shock.
Broader Dysfunction
Even if lawmakers pass a temporary funding bill, it only delays the crisis. Reliance on short-term measures underscores the dysfunction of the federal budget process, where deadlines often dominate and long-term fiscal planning takes a backseat.
For Maryland counties, this uncertainty complicates efforts to plan budgets, sustain essential services, and ensure stability for residents.
What Comes Next
Lawmakers have less than two weeks to agree on a path forward, and Maryland’s workforce and economy will feel the impact of what comes next. The decisions made — or not made — in the coming days will carry serious consequences for Maryland’s federal workforce, contractors, and economy.
Counties urge Congress to avoid a government shutdown that would harm residents and local economies, and to pursue bipartisan fiscal policies that strengthen the federal-state-local partnership.
MACo will continue to monitor developments in Washington and assess the implications for county governments and communities across Maryland.
Stay tuned to Conduit Street for the latest updates.
