Shutdown Continues With No Viable Compromise in Sight

This article was exclusively distributed to subscribers on October 13, 2025. Click to receive additional information about how to subscribe and to activate a complimentary trial subscription.

It is increasingly difficult to foresee the endpoint of the current government shutdown. The Senate has voted multiple times to reject the existing proposals to fund the government in the short term— (the House-passed Republican proposal) and (the Democrats’ proposed alternative)—and the House remains recessed. Though there have been reports of bipartisan talks to address the looming December 31 expiration of the Affordable Care Act’s enhanced premium tax credits (PTCs), there are no concrete proposals for compromise on the issue—a main sticking point amid negotiations to reopen the government.

As the shutdown drags on, the issue of federal employee pay has come to the fore. Federal employees missed their first paycheck on October 10. Additionally, the White House Office of Management and Budget (OMB) indicated in a memorandum from the OMB General Counsel that it might modify its interpretation of the Government Employee Fair Treatment Act of 2019 (, GEFTA). As enacted and signed by President Trump in January 2019, GEFTA sought to ensure that any federal employees “shall be paid for the period of the lapse in appropriations” whether or not their position was exempted from furlough (e.g., “essential employees”) or subject to furlough during such a lapse. However, in its latest reported interpretation, OMB claims that GEFTA “did nothing to create an obligation on the part of the government to pay furloughed employees.” As a result, the memo concludes, “The legislation that ends the current lapse in appropriations must include express language appropriating funds for back pay for furloughed employees, or such payments cannot be made.”

In addition to the issue of employee compensation, on October 10, more than 1,000 Department of Health and Human Services (HHS) employees reportedly received reduction in force (RIF) notices—a that OMB previewed prior to the shutdown in a September 24 memo. According to media accounts on the RIFs, these staff disproportionately represented HHS subagencies with a larger share of discretionary funding, including significant reductions targeted at the Centers for Disease Control and Prevention (CDC) and the Substance Abuse and Mental Health Services Administration (SAMHSA). CDC layoffs reportedly included several senior leaders, the head of the agency’s measles response, and the entirety of the CDC’s Washington office. However, official information on the RIFs remains unavailable.

For more on the OMB memo, Manatt on Health subscribers can see the Manatt on Health of the government shutdown.

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