Shutdown Redux

It appears increasingly likely that the U.S. Environmental Protection Agency (EPA) and other federal agencies will face yet another shutdown at the end of January 2026. When Congress failed to pass appropriations legislation for the 2026 fiscal year (FY) by September 30, 2025, what ensued was a record-setting 43-day closure of the U.S. government. November 12, 2025's, Hail Mary Senate agreement funds the government at existing spending levels — but only until January 30, 2026. The bill that ended the shutdown contains a few appropriations to fund certain important functions beyond the January 30 deadline, SNAP programs and military payroll among them, but a renewed threat looms over a vast stretch of government activity if further progress is not made before the end of January.

Early reporting suggested that attempts are being made to move appropriations between agencies, but that positive momentum seems increasingly stalled as time marches on. Rumors point to a potential FY 2026 "minibus" bill — a partial "omnibus" appropriations bill — that might separately fund agencies like EPA and the U.S. Food and Drug Administration (FDA), but each effort appears to invite opposition by House or Senate members sufficiently powerful enough to once more pump the breaks. In addition to the rehashing of impacts seen during the 43-day shutdown — shuttered National Parks, lengthy airport delays, and fears of whether government payments will be made on time — there are two less obvious ramifications for the federal workforce and its ability to perform as expected.

For EPA and the pesticide and chemical industry focused on the operational integrity at the Office of Chemical Safety and Pollution Prevention (OCSPP), the impacts of the last shutdown seem limited, as OCSPP programs were funded to-date and mostly operational thanks to leftover funds from prior appropriations, fees considered "not subject to annual appropriations," and Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and Toxic Substances Control Act (TSCA) fees authorized by the statutes. Given the availability of funds used to support program work during the most recent shutdown, it is not clear how much funding from these sources might be left to support another shutdown of any length. If limited funds lead to limited program operations, submitters and other stakeholders may be affected by halts to programs to approve new products or complete review work, two key functions of OCSPP staff.

A subtler but even more harrowing consequence will be seen etched on the face of every EPA and government employee facing yet another shutdown. Two back-to-back work interruptions within six months, coming on the heels of threats of mass dismissal for some employees — threats designed to damage morale and encourage early retirements and buy-outs going hand-in-hand with plans to impose further reductions-in-force (RIF) — does not a happy holidays make, regardless of what eventual appropriations may be coming down the pipeline. This is the human consequence. When you factor in a cost-of-living adjustment (COLA) that will not be able to compete against the rising tide of inflation and the expected significant increase in the employee share of health insurance coverage, a particularly bleak picture begins to emerge. The future prospects of any federal agencies hoping for robust recruitment numbers is grim, at best, as noted in our March 4, 2025, blog item — and that was written before the government shutdown.

It will be important to keep an eye on not just whether another shutdown happens but also on its eventual resolution, whenever and whatever that may be. The budgets for EPA and other federal agencies are likely to remain flat, stagnant — with the same FY 2026 appropriation as that of FY 2025. This would not be the first time that new appropriations include no increase in program funding. But program costs, suffering from the same inflation we all do, continue to rise. Programs must "eat" the COLA — however large or small — and that hurt can get passed along. Contractors and other suppliers will likely find a need to increase the bill for their products and services. Even a small COLA shortfall — one to two percent — can over time have an outsized impact. If the overall budget does not increase, but COLA and inflation go up, government agencies are being forced to do more with less and less each year. Congress has held budgets at or below COLA increases for much of recent history, with cuts being made to other areas of the budget to make up for COLA increases. OCSPP continues to stare down the expanded duties that came with the 2016 TSCA Amendments but with no increased funding in sight. Program officials note that staff available to complete FIFRA work has declined, even with a robust Pesticide Registration Improvement Act of 2022 (PRIA 5) fee program. Even with the prospect of increased funding from fees in both programs, stagnation or cuts in appropriations have an adverse impact on program performance.

If another shutdown occurs, it will likely not last as long as the 2025 shutdown. A second shutdown of that length as the Trump Administration moves into year two would mean that, within one calendar year, the U.S. government will have been shut down for close to a quarter of the work year. Both TSCA and FIFRA's fee programs are set to expire in FY 2026 and FY 2027, respectively, and may thus be reauthorized sooner rather than later. That reupping could ideally include serious discussion of what Congress and agency and industry stakeholders believe is necessary to help the programs, and their people, fulfill their missions and provide some much-needed predictability for public and civil servant alike. With the political climate in Congress now so rancorous that prospect for bipartisan agreement on almost anything is hanging by a thread, we may do well to hang some mistletoe in the Capitol Building and hope for a holiday miracle.

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