It may be hard to believe it, but the longest shutdown in the history of the federal government ended only less than two months ago. And while we’re nearly a quarter of the way through fiscal year 2026 (the fiscal year in Washington, D.C. begins October 1 of each year), lawmakers still have not yet approved funding for many federal agencies and programs past January 30.
With a lot of other matters vying for attention in the headlines, what’s the status of federal government funding as we approach the next fiscal cliff in less than two weeks?
Let’s take a look.
How Close Is The Country To Another Government Shutdown?
As readers may recall, last fall members of the U.S. House and Senate just could not seem to agree on FY 2026 funding. As a result, all nonessential work by the federal government stopped on October 1, 2025 as the government shut down.
It took 43 days, but, finally, in mid-November, lawmakers approved, and President Donald Trump signed into law, legislation that did two things:
- First, it provided funding for the departments of Agriculture and Veterans Affairs, along with the legislative branch, through the end of FY 2026, or September 30, 2026. These agencies and functions, therefore, do not have to worry about another government shutdown until at least October 1 of this year, when the federal government rolls into FY 2027.
- Second, it provided funding for all other government agencies and programs until January 30, 2026. If Congress doesn’t approve legislation that extends that funding beyond January 30, those functions will face a second shutdown at the end of this month.
It was a long December with serious questions about whether Republicans and Democrats on Capitol Hill could agree on the remaining spending bills, but lawmakers did make significant strides during the first two weeks of January.
Here’s what they have done so far to avoid a partial shutdown after January 30:
- One Minibus Is On The President’s Desk. Majorities in both the U.S. House and Senate have approved a minibus — or a collection of a handful of appropriations bills — for rest of the fiscal year for the departments of Justice, Interior, Commerce, and Energy; the Environmental Protection Agency; and federal water programs and science initiatives. President Trump has not yet signed that bill into law, but he is expected to do so before the end of the month.
- Another Minibus Is Awaiting Senate Action. House lawmakers have approved a minibus that would fund the departments of Treasury and State, the Internal Revenue Service, and foreign aid programs through September 30. The Senate has not yet approved this minibus, however, and the chamber is in recess this week. If senators approve the legislation with no changes from the House bill, it will go to the White House for President Trump’s signature.
- Bipartisan Agreement Reached On Funding For All Other Government Functions. Yesterday, a bipartisan, bicameral group of lawmakers released text for the four remaining FY 2026 spending bills. This minibus includes funding for the departments of Homeland Security, Defense, Transportation, Housing and Urban Development, Health and Human Services, Labor, Education, and other related agencies. Since the U.S. House plans to recess on Friday, GOP leaders in that chamber hope to push the legislation through this week. Then it would be up to the Senate to act when it returns to Washington next week. If senators approve the legislation with no changes from the House version, it too will go to the White House for President Trump’s signature.
If you think all of the work on the minibuses seems to have proceeded a bit too easily, you may be right. There could be some drama this week. Indeed, funding for one federal department may have to be excised from that remaining minibus.
According to The Hill, funding for the Department of Homeland Security (DHS) could complicate passage of the final four bills “after an Immigration and Customs Enforcement (ICE) officer fatally shot an unarmed woman in Minneapolis earlier this month.” That shooting has prompted Democrats to threaten “to oppose the bill unless it included tougher oversight and conduct guidelines for ICE officers, along with cuts to the agency’s funding.”
Top Democrats who support the bill have tried to address their colleagues’ anxiety, however. As The Hill reported, House Appropriations Committee Ranking Member Rosa DeLauro (D-Conn.) noted the bill reduces funding for ICE enforcement and removal operations, reduces the number of ICE detention beds, and slashes funding for U.S. Customs and Border Patrol by $1.8 billion.
“I understand that many of my Democratic colleagues may be dissatisfied with any bill that funds ICE,” Rep. DeLauro said. “I share their frustration with the out-of-control agency. I encourage my colleagues to review the bill and determine what is best for their constituents and communities.” But, according to The Hill, Ranking Member DeLauro also “cautioned that a shutdown would leave Transportation Security Administration agents without pay and delay Federal Emergency Management Agency assistance, while a short-term stopgap measure would merely cede authority to the Trump administration.”
Ranking Member DeLauro said GOP leaders had agreed to hold a separate vote on the DHS funding bill.
We will know soon whether House Republicans keep that promise — and whether senators and President Trump approve appropriations for all of the other agencies for which FY 2026 hangs in the balance. In short, the funding drama will either be over on January 30, or some agencies will once again be shut down.
The CFPB, however, is another can of worms entirely.
The Status Of CFPB Funding
Some federal agencies, bureaus, and commissions don’t get their funding through the annual congressional appropriations process. The CFPB is one of them.
As prescribed under the Dodd-Frank Act, the Federal Reserve provides funding for the CFPB through the Fed’s “combined earnings.”
Last fall, Office of Management and Budget Director and Acting CFPB Director Russ Vought announced that, under a Trump administration U.S. Department of Justice (DOJ) interpretation of Dodd-Frank the CFPB would no longer request funding from the Fed. The Trump administration’s justification was that since the Fed was operating at a loss, it had no “combined earnings” and, therefore, could not legally send funds to the CFPB.
As such, post-Vought’s announcement, the bureau faced an imminent shutdown.
But then a federal judge stepped in. As National Public Radio (NPR) reported at the time, U.S. District Court Judge Amy Berman Jackson rejected the DOJ’s argument, ordering that funding must be transferred from the Fed and writing that the Trump administration’s policy “would be tantamount to closing what is left of the Bureau.” Judge Jackson’s most recent order upholds an earlier injunction from her that, as NPR explained, sought to “ensure the agency would continue to exist as congressionally mandated, and [for the Trump administration] to stop efforts to shutter the CFPB, including through layoffs.”
As Government Executive reported, Acting CFPB Director Vought complied with the court order and, last week, the CFPB received $145 million from the Fed to carry out its functions over the next few months.
That funding is expected to last through March, though the Bureau expects to continue to request funding until the matter before Judge Berman Jackson is resolved.
The district court’s order and the transfer of funds does not mean the CFPB is functioning at full capacity, however. As Government Executive also noted, the bureau “is taking unilateral action to limit employees pay and benefits and is still actively fighting for the authority to lay off nearly all of its workers.” Additionally, “While it cannot yet force any others to leave, the [Trump] administration is taking steps to worsen the working conditions for staff.” For example, the administration also has:
- Altered its collective bargaining and compensation agreements with the bureau’s labor union;
- Cut off the bureau workforce’s supplemental benefits, including dental and vision insurance, along with term-life insurance; and
- Curbed performance bonuses and issued pay cuts by altering the use of locality pay.
The bureau has lost about one-quarter of its staff under the Trump administration through attrition, Government Executive estimated.
The union that represents CFPB employees is fighting back against these policies — and so are state policymakers. Last month, a group of 22 Democratic attorneys general (AGs) from states like California, Colorado, New Jersey, New York, and Oregon filed a lawsuit against Director Vought for terminating bureau operations and preventing states from accessing statutorily mandated resources.
The AGs are not just using the courts. Another NPR story reported state and local officials have expanded their own enforcement efforts in the absence of CFPB action. “For example,” NPR explained. “Capital One recently agreed to pay $425 million in restitution following an investigation led by New York Attorney General Letitia James, who accused the bank of misleading customers about interest rates.”
There may be more to come, as well.
Rohit Chopra, the Biden-appointed former director of the CFPB who was fired at the start of the second Trump administration, told NPR he is working with Democratic state AGs to push back against the Trump administration. While these measures are “no substitute for a full-fledged federal agency” Chopra said, AGs “are working hard to make sure they are cracking down on crime and standing up for consumers.”
In other words, even if federal agencies are funded come January 30, the all-out battle between the Trump administration the judiciary regarding the future of the CFPB will continue.