The federal government ran out of funding for many of its operations on October 1, leading to a “shutdown” of many activities. Much of the federal government will keep running, but the exact scope of services that will be put on hold until funding resumes is governed by a combination of laws and decision-making by the federal officials.

In summary:

• A shutdown could have significant impacts in New Hampshire. Nearly 19,000 federal workers live here, and about 9,100 federal jobs are based in the state; those state-based jobs had paychecks that added up to almost $1 billion in 2024. When those paychecks stop, federal workers and their families are impacted quickly and directly.
• Federal programs are also critical supports: about 77,000 Granite Staters receive federally-funded food assistance through the Supplemental Nutrition Assistance Program (SNAP), and more than 5,000 people benefit from Temporary Assistance for Needy Families (TANF) support. The State reports it can cover food assistance costs for about 30 days, but a longer shutdown could put those benefits in jeopardy.
• Federal dollars flowing into New Hampshire totaled the equivalent of nearly one-fifth of the state’s economy, and disruptions in the flow of those resources can have ripple effects across communities.

What is a “shutdown,” and why is it happening?

Let’s start with the “why.” The United States Congress did not agree on new spending authority, which can be basically interpreted as the budgeted amounts each federal agency was authorized to use, before the current authority ended on September 30. Appropriations to agencies are laws, which are required to pass through both the U.S. House and the U.S. Senate, and be signed by the President, before they can go into effect.

There are nominally 12 appropriations bills that Congress would pass each year by the deadline of September 30, the end of the fiscal year, that fund different parts of the U.S. government. The “nominally” caveat is important because the last time all 12 were passed by the deadline was Federal Fiscal Year 1997. Every year since then, Congress has needed to pass a “continuing resolution” to fund at least part of the government’s services with appropriations based on the prior year’s spending authority.

During the last shutdown, persisting for about five weeks during December 2018 and January 2019, Congress had already passed five of the 12 appropriations bills. These five bills covered about three quarters of total “discretionary” spending, which is spending that must be appropriated each year. At that time, the operations funded with approved discretionary spending appropriations could continue. With the current shutdown, none of the 12 bills have been approved, so the effects on services are more dramatic.

The 12 budget bills, or the more likely continuing resolution, are distinct from the federal reconciliation law that was approved by Congress in July. While the budget reconciliation process was used to pass that bill, the bill itself did not fund federal agencies or define their budgets. It substantially reduced future federal revenues, made changes to Medicaid that will reduce access to health care, and changes funding levels for specific federal operations such as clean energy programs and national border security; however, it did not include agreements on levels of funding for core government operations themselves.

Which services will keep working, and which will not?

A key component of understanding the impacts of the shutdown is that it impacts only the discretionary spending that needs to be appropriated every year. There are some programs, including some of the largest federal expenditures, that are required to operate in an ongoing manner by federal law. These are called “mandatory” spending, and include Social Security, Medicare, Medicaid, food assistance benefits through SNAP, unemployment compensation, and certain other programs; total mandatory spending was an estimated 61 percent of federal expenditures in 2024. Other self-funded federal services, such as the U.S. Postal Service, will remain operating.

These programs will likely continue, but may not be completely unaffected. For example, in the 1995-1996 shutdown, people applying for Medicare were turned away temporarily. During the 2013 shutdown, states needed to front the money, usually paid for by the federal government, for their TANF program expenditures. Most recently, the 2018-2019 shutdown resulted in SNAP benefits being paid early, as the U.S. Department of Agriculture’s authority to distribute payments to states was expiring before the end of that long-duration shutdown.

The Governor and State officials indicated that the State has the funds to support food assistance through the SNAP and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) through a shutdown of about 30 days. The last federal shutdown lasted 35 days, and it was the longest shutdown to date.

In New Hampshire, enrollment in SNAP totaled 76,849 people at the end of July 2025, while TANF had 5,319 family members enrolled.

Official information on likely agency operational changes from the contingency plans that federal agencies compiled and posted on each of their websites. Previously, these plans were listed in one place on the Office of Management and Budget’s website, but are not being collected there this cycle.

What about the public servants in the federal workforce?

About 19,000 federal workers, or about 2.5 percent of all working residents, lived in New Hampshire in 2023. About 9,000 federal jobs were based within the state’s borders in 2023 and 2024. Many federal workers cross borders, such as to the naval base in Maine or regional offices in Massachusetts, or work remotely. New Hampshire Employment Security reported that, of the 9,152 federal employees based in New Hampshire, about two-thirds will be working without pay. Furloughed employees that apply for unemployment compensation could receive assistance through that program, although they may have to repay the State for unemployment payments made when they receive back pay from the federal government, which is required to happen under federal law.

The federal government has, through a memorandum and public statements, indicated that this shutdown may enable agencies to outright lay off federal employees, rather than just furlough them temporarily. Whether a government shutdown gives federal agencies more authority to execute mass layoffs is contested, as the lack of funding does not necessarily eliminate federal legal responsibilities to carry out services or provide any new authority to conduct layoffs.

During 2024, there was an average of 9,131 federal employees based at 403 federal job sites in New Hampshire, with an average weekly wage of $1,970. Those figures suggest about $935.4 million in wages were paid to federal employees based in New Hampshire. Those dollars were a key component of the total federal funds that flow to New Hampshire.

In 2023, total federal expenditures in New Hampshire were $22.0 billion, or about $15,700 per person; that is the equivalent of 19.2 percent of New Hampshire’s $114.4 billion Gross State Product, a measure of the size of the economy, during that year.

What other impacts on services could come?

Potential federal layoffs could have long-term impacts, or at least have ongoing impacts until judicial decisions offer clarity as to which decisions related to federal employees during a government shutdown are legal.

Even without layoffs, furloughs will have an impact. The public employees who are told to not report for work perform key functions that will go unfulfilled. There could be delays in processing applications for business loans, impacts on approvals for mortgages, and fewer food safety inspections.

The U.S. Department of Health and Human Services reported that about 45 percent of its employees would be furloughed, and the U.S. Department of Defense would also retain just over 45 percent of its civilian employees while furloughing about 334,900. The U.S. State Department will be operating with about 62 percent of its staff.

Some agencies will retain most of their employees, such as the U.S. Department of Justice retaining 89 percent of its staff and the U.S. Department of Homeland Security carrying forward with about 95 percent of its personnel. Other agencies will likely stop most of their operations, with only 11 percent of the Environmental Protection Agency’s 15,166 staff remaining on the job, and just over 13 percent remaining at the U.S. Department of Education. At the U.S. Department of Labor, about 24 percent of employees will be retained; within that Department, only one person at the U.S. Bureau of Labor Statistics, the acting commissioner, will continue working, which may delay data releases providing insights into employment, inflation, and the economy overall.

The impacts of these furloughs on the operations of the federal government could evolve over time, and some of those impacts could be made permanent if there is an attempted shift to incorporate more outright layoffs. We do not know what all those impacts will be definitively, but new and exacerbated impacts will impact more lives of the nation’s residents if the shutdown drags on.

What is the cost of a shutdown?

People working without pay, not receiving services, or having to change investment and purchasing plans due to the lapse in federal funding impacts both household and business budgets directly. However, the costs of a shutdown do not end there.

Shutdowns lasting a few days likely do not have significant impacts on the economy, but they do generally cost the federal government money. Even though operations are not occurring, agencies have to prepare for shutdowns through contingency planning, pay for work not completed, and lose revenue through uncollected fees or late payment interest. The 2013 federal government shutdown cost about $2.5 billion in wages and compensation for work that was not conducted during the shutdown. Following the 2018-2019 shutdown, the Congressional Budget Office estimated about $9 billion in compensation would be paid for work that would have been conducted during the shutdown, and that another $9 billion of federal spending on goods and services during that period would not go unspent but be shifted to subsequent months.

Shutdowns can have a cost to the overall economy as well. The Congressional Budget Office estimated that U.S. Gross Domestic Product was 0.1 percent lower in the fourth quarter of 2018 and 0.2 percent lower in the first quarter of 2019 because of the shutdown; most, but not all, of the economic activity lost during the shutdown would be regained in the following year, based on those projections. Some private sector economists have estimated that the longer the duration of a shutdown, the larger the impact, although subsequent economic activity helps offset the cost.

The federal government plays a big role in the state’s economy. More than $14.8 billion in assistance and contracts were awarded to be spent in New Hampshire during Federal Fiscal Year 2024, and that is before counting federal worker salaries and directly-funded operations. With the economy at a potential inflection point and stalled job growth in New Hampshire so far in 2025, even a temporary economic blow this year could have some cascading effects.

What’s next?

More announcements of decisions from the federal government will provide deeper insights into the impacts. Layoffs and major curtailment in services could lead to bigger impacts. A lengthy shutdown could put some key supports for households with lower incomes, such as food assistance, in jeopardy. Halted operations could have longer-term impacts on public health, such as disease monitoring and prevention, as well as transportation projects, defense and security efforts, and helping ensure environmental quality for future generations. We do not yet know the full measure of the impacts, but the scope and severity will depend, in large part, on how quickly Congress can reach an agreement to fund public services.