Congress passed a short-term agreement to end the shutdown and restart federal operations, stabilizing paychecks and contract flow for Maryland’s federally driven economy. The package runs only through January 30, keeping the state just weeks away from another potential lapse.
Maryland felt the shutdown more than most due to its high concentration of federal employees, a large federal contracting base, and small businesses that lost income they will likely never recover.
The bill provides full-year funding for USDA, the legislative branch, veterans programs, and military construction. Every other federal agency now operates under a temporary measure that expires on January 30.
Congress must finalize either a stopgap measure or a full-year package by January 30 to avoid another shutdown. State and local governments now face eleven weeks shaped by lingering uncertainty in federal budgeting.
To advance the deal, some Democrats agreed to step back from their demand to extend enhanced Affordable Care Act subsidies that expire at year’s end. The agreement schedules a Senate vote on the subsidies next month, but nothing in the package ensures that the expanded support will move forward.
Here, Conduit Street breaks down the significant provisions in the bill, what they mean for counties, and the process that now unfolds as Congress barrels toward the next funding deadline.
Food Assistance and Nutrition Programs
Congress allocated $107 billion for SNAP through September 2026 and $8.2 billion for WIC, which helps stabilize two programs that experienced significant disruptions during the shutdown. USDA will also restore contingency funds and fully support child nutrition programs, including free and reduced-price school meals.
The agreement includes $460 million for the Commodity Supplemental Food Program, which supports low-income seniors. States and community partners can now plan with more apparent timelines after weeks of conflicting federal guidance.
Federal Workforce and Community Stability
The deal guarantees retroactive pay for the 1.4 million federal employees who went without pay during the shutdown. It also restores staffing levels to pre-lapse numbers and blocks further layoffs through January 30.
Maryland benefits directly because federal payroll drives a significant portion of the state’s income tax base and contributes to its consumer economy. Contractors and small businesses also regain stability after weeks of lost revenue that many will never recover.
Congress also increased security resources for lawmakers and the Supreme Court by funding Capitol Police, physical security upgrades, and protection for justices. These measures address growing safety and cybersecurity concerns on Capitol Hill.
Human Services and Community Programs
Congress protected funding for the Social Services Block Grant, Promoting Safe and Stable Families, and the Maternal, Infant, and Early Childhood Home Visiting Program. These programs support local social services agencies and community providers across Maryland.
The package includes a full extension of Essential Air Service and all programs under the 2018 farm bill through September 2026. The extension encompasses a wide range of programs, including conservation and crop initiatives, as well as rural economic development.
Cybersecurity and Local Safety-Net Support
Congress extended the State and Local Cybersecurity Grant Program and the Cybersecurity Information Sharing Act of 2015. Counties can continue to advance their cybersecurity planning and threat coordination while maintaining connections to federal partners.
The bill reauthorizes mandatory funding through January 30 for community health centers, the National Health Service Corps, and Teaching Health Centers. These programs anchor essential local care networks, particularly in medically underserved communities.
Congress also delayed Medicaid DSH reductions until January 31, which protects supplemental payments to county hospitals that serve uninsured and low-income residents.
Reimbursement for State and Local Governments
The agreement creates a straightforward reimbursement process for states and counties that advanced local funds to keep federal programs operating. States and local governments avoided significant service disruptions only by covering federal responsibilities during the lapse, and this framework ensures repayment.
Maryland Impact: Real Fiscal and Community Risks
As previously reported on Conduit Street, MACo has offered a deeper look at the ripple effects of federal government shutdowns.
In Maryland, the shutdown’s impact reaches far beyond Washington. With nearly 300,000 federal employees and more than 200,000 contractors residing and working in the state, counties face significant fiscal and community risks if the impasse persists.
Lost wages, delayed reimbursements, and stalled projects threaten to strain local economies and county budgets. Federal pay accounts for roughly 12% of all income earned in Maryland, and in Southern Maryland, where federal and defense installations dominate, nearly one in four households relies directly on federal paychecks. Including contractors pushes that share to almost half of the local economy.
During the 2018–2019 shutdown, Marylanders lost an estimated $778 million in wages, translating to roughly $700,000 in lost state and local tax revenue per day.
Another Deadline Looms
Though this temporary agreement delays an immediate shutdown, it does not fix the underlying problems in the federal budget process. The stopgap keeps agencies open, but the core disputes over spending levels and policy mandates will return as Congress approaches the January 30 deadline.
Maryland will feel the effects of the next round of negotiations because federal workers, contractors, and small businesses anchor large parts of the state’s economy. The outcome of this process will shape economic stability for communities across Maryland and determine whether the country avoids another shutdown cycle.
Stay tuned to Conduit Street for more information.
Useful Links
Previous Conduit Street Coverage: Governor Moore Deploys $62M to Prevent Food Assistance Shortfall
Previous Conduit Street Coverage: Governor Moore Declares Emergency, Deploys $10 Million to Confront Shutdown Fallout and SNAP Funding Freeze
Previous Conduit Street Coverage: CBO: Shutdown Slows Growth, Costs Economy Billions
Previous Conduit Street Coverage: Comptroller Announces Tax Relief for Federal Workers Amid Shutdown
Previous Conduit Street Coverage: Counties Urge Swift End to Federal Shutdown
Previous Conduit Street Coverage: Shutdown Countdown: State Leaders Outline Risks and Response
Conduit Street Podcast: Revenues, Roads, and Rising Risks
Previous Conduit Street Coverage: Federal Government Shutdown Odds Rise, Maryland Faces Big Risks
