Federal Government Shutdown Begins October 1, 2025: Implications for Tribal Nations

The Senate is expected to vote later this evening on a Continuing Resolution (CR) to continue funding the Federal Government, which is expected to fail, leading to a shutdown. The legislation passed the House on a narrow 217-212 party-line vote but will likely not achieve the 60-vote threshold required in the Senate after initially failing on September 19th. As a result, a federal government shutdown would begin at midnight on October 1, 2025, marking the start of the 2026 federal fiscal year.

This will be the first government shutdown since the 34-day shutdown in 2019. The Office of Management & Budget has issued shutdown implementation instructions to federal departments and agencies, and the White House has announced anticipated “reduction in force” layoffs.

Impact on Tribal Nations

Federal government shutdowns create severe disruptions for Tribal Nations that depend on federal funding to deliver essential services to Tribal Members. Congress’s trust and treaty obligations require consistent financial support through annual discretionary budgets, yet funding interruptions force Tribes—particularly smaller communities with limited resources—to choose between self-funding critical programs or halting services entirely.

The timing of this shutdown at the fiscal year’s start coincides with crucial grant application periods (September-October), creating cascading effects across education, healthcare, housing, and public safety programs. Historical precedents from the 2019 shutdown demonstrate how indirect impacts are compounded: even when Bureau of Indian Education staff remained on duty, furloughed BIA road maintenance workers prevented school buses from safely transporting children. These disruptions extend beyond service delivery to employment consequences and impede Tribal economic development by limiting access to capital and financing for business ventures and infrastructure projects.

Financial Cotingency Guidance

NAFOA urges Tribal Leaders and finance professionals to activate financial contingency plans immediately. Earlier this year, NAFOA partnered with Native Advisory, LLC to host an educational webinar series on Tribal Financial Contingency Planning, which provides actionable guidance on conducting internal financial assessments, creating data-driven impact reports, and advocating effectively with Congressional offices and federal agencies during funding uncertainty.

Resources from this series remain available on NAFOA’s website. Tribes should document all expected federal payments, track any funding disruptions during the shutdown, and monitor for issues when funding resumes, as Congress may pass a CR that includes retroactive payments for funds that should have been dispersed during the shutdown period.