How election results can shape the chances of a government shutdown

All federal agencies will remain open through Dec. 20 per a continuing resolution (CR) passed Sept. 25. Although doing business under a CR is no one’s first choice, the government and its suppliers are used to it by now.  The specter of a shutdown has also been at least temporarily removed.

When, however, can federal agencies and the companies that do business with them expect to see final appropriations for the 2025 fiscal year?  That’s a bit harder to predict right now.  Here are three scenarios, though, that could help those involved in the business of government plan appropriately.

1.  Kamala Harris is Elected President, but Neither Party Holds Both Chambers of Congress:  This, in fact, is the most likely election outcome if current polls are to be believed.  Under this scenario, there would be little point in pushing final appropriations actions out into the 2025 calendar year.  President-elect Harris has had some level of input into the Biden budget that formed the baseline Congress used to formulate spending bills.  Continued close margins in each chamber, regardless of party control, also provide a new Congress that, at a macro level, may look a lot like the current one.  As such, there would be little incentive to “punt” appropriations actions into the new year.  Congressional leaders have also said that they would like to get appropriations passed by the end of the calendar year, which is the new “normal”.  This election outcome makes that more likely.

Shutdown Chances:  Low

2. Donald Trump is Elected and Republicans Maintain Control of at Least on Chamber:  This outcome is not at all unlikely but does pose questions for when FY25 appropriations bills would be passed.  Although almost all the work on spending bills has been done, a Trump presidency, coupled with at least some sort of Republican congressional power base, increase the chances that final appropriations would be delayed until late winter or early spring of 2025. Republicans would want to give their president a chance to have some impact on spending measures and, if a new Congress was thought to be more sympathetic, that would likely resurrect some version of an earlier House proposal to extend a CR into March.  A short shutdown, just to show people they can do it, is not totally out of the question.  Final appropriations could come at about the same time they did in FY24 – late winter or early spring.

Shutdown Chances:  Moderate

3. Kamala Harris is elected President and the Democrats Control Both Chambers:  While this scenario is considered a “dream” outcome by some pundits, it would be anything but dreamy for FY25 appropriations and the chances for a government shutdown.  House Republicans would like push very hard to assert their current influence, knowing that it would end in the new Congress.  This could create substantial volatility where a relatively small number of members could force a shutdown as a way to protest anticipated increases in government spending.  The razor thin margins in the House make this very possible.  Democrats, though no fans of a shutdown, may also want to delay final appropriations action until a new Congress under their control can weigh in.  This would again likely push action into the late winter or early spring.

Shutdown Chances:  High   

Government agencies and their contractor partners should watch election outcomes closely.  Not only will they provide a roadmap on policy priorities and legislation for several years, but they will also have a potentially significant impact on when and how FY25 appropriations are finally enacted.  Stay very tuned.