Boston, September 29, 2025
News Summary
Massachusetts officials are gearing up for the possible economic impact of a federal government shutdown, with a State House hearing set to analyze federal funding shifts. State agencies are instructed to finalize contingency plans, particularly concerning the state’s fiscal 2026 budget, which relies heavily on federal reimbursements and grants. A shutdown could halt all non-discretionary federal funds and significantly affect payroll for federal employees. State officials emphasize the importance of preparing for potential funding interruptions amid national negotiations on government operations.
Boston — Massachusetts officials are preparing for the potential economic effects of a possible federal government shutdown, with a State House hearing scheduled to gather expert analysis and state agencies directed to finalize contingency plans.
Immediate developments
A hearing is scheduled at the State House on Tuesday to gather insights from economists and experts about federal funding shifts on the state’s economy. A memo from state officials requested fiscal officers and budget directors to prepare contingency plans in anticipation of a shutdown. State agencies were instructed to report on how they would protect Commonwealth residents and resources and not to assume additional funding would be available.
In the event of a shutdown, all non-discretionary federal funds would be discontinued until new funding legislation is enacted. Approximately $15.6 billion from the state’s fiscal 2026 budget depends on federal reimbursements and grants.
Scope and immediate fiscal risk
State officials identified the General Federal Grants Fund as particularly at risk during a shutdown; agencies managing these grants were urged to contact the federal government for updates. Agencies must summarize concerns regarding federal funding, especially its impact on making bi-weekly payroll for employees funded by federal sources.
A shutdown would delay pay for hundreds of thousands of federal employees, including those working at the Bunker Hill monument in Boston. Essential services like Social Security, Medicare, and Medicaid would remain unaffected by the shutdown, and both the USPS and Transportation Security Administration would continue normal operations.
National implications and political context
A government shutdown could cost the U.S. government about $7 billion a week and result in the layoff of tens of thousands of federal workers if no agreement is reached by September 30. The last government shutdown occurred in December 2018 and lasted 35 days, the longest record in U.S. history.
Massachusetts Senator Ed Markey stated that Democrats are ready to negotiate with Republicans to prevent a government shutdown. Markey criticized President Trump and the Republicans for threatening to shut down the government, emphasizing the protection of healthcare programs.
Trump had previously canceled a meeting with Democratic leaders and later reportedly agreed to meet with Senate and House leaders. There appear to be no current plans from the Trump administration to negotiate with congressional Democrats, focusing instead on creating political consequences for the shutdown. Democratic leaders face internal pressure to oppose the Trump administration and may consider a shutdown to gain policy concessions from Republicans.
Local economic concerns and public reaction
Representative Seth Moulton noted the uncertainty in the economy, which affects business investment and consumer spending due to fluctuating tariffs. One tourist expressed support for a government shutdown as a method for course correction in government operations.
State officials instructed agencies not to assume additional federal funding would be available and asked departments to identify critical services that must continue, the staffing required for those services, and timelines for when funding interruptions would cause operational impacts.
What state agencies must do now
- Prepare contingency plans and budget scenarios for a shutdown.
- Contact federal program offices about the status of grants and reimbursements.
- Summarize concerns about federal funding impacts on bi-weekly payroll for employees funded by federal sources.
- Identify essential services and resources needed to protect Commonwealth residents and resources.
Next steps and timelines
The State House hearing on Tuesday will inform lawmakers and agency leaders about the likely timing and scale of federal funding interruptions and help refine contingency steps. State officials will collect reports from agencies and may adjust state-level actions based on the expert testimony and updated federal guidance.
FAQ
What is the State House doing about the risk of a shutdown?
A hearing is scheduled at the State House on Tuesday to gather insights from economists and experts about federal funding shifts on the state’s economy.
How much of the state budget depends on federal funds?
Approximately $15.6 billion from the state’s fiscal 2026 budget depends on federal reimbursements and grants.
What happens to non-discretionary federal funds if there is a shutdown?
In the event of a shutdown, all non-discretionary federal funds would be discontinued until new funding legislation is enacted.
What is the potential national cost of a shutdown?
A government shutdown could cost the U.S. government about $7 billion a week and result in the layoff of tens of thousands of federal workers if no agreement is reached by September 30.
When did the last government shutdown occur and how long did it last?
The last government shutdown occurred in December 2018 and lasted 35 days, the longest record in U.S. history.
What did the state memo request from fiscal officers and budget directors?
A memo from state officials requested fiscal officers and budget directors to prepare contingency plans in anticipation of a shutdown.
What instructions were given to state agencies about reporting?
State agencies were instructed to report on how they would protect Commonwealth residents and resources and not to assume additional funding would be available.
Which state fund is particularly at risk during a shutdown?
The General Federal Grants Fund is particularly at risk during a shutdown; agencies managing these grants are urged to contact the federal government for updates.
What must agencies summarize regarding federal funding?
Agencies must summarize concerns regarding federal funding, especially its impact on making bi-weekly payroll for employees funded by federal sources.
Would local federal workers experience pay delays?
A shutdown would delay pay for hundreds of thousands of federal employees, including those working at the Bunker Hill monument in Boston.
Which essential services would continue during a shutdown?
Essential services like Social Security, Medicare, and Medicaid would remain unaffected by the shutdown, and both the USPS and Transportation Security Administration would continue normal operations.
What did Massachusetts Senator Ed Markey say about negotiating to avoid a shutdown?
Massachusetts Senator Ed Markey stated that Democrats are ready to negotiate with Republicans to prevent a government shutdown.
Quick reference table
| Topic | Detail |
|---|---|
| State House action | A hearing is scheduled at the State House on Tuesday to gather insights from economists and experts about federal funding shifts on the state’s economy. |
| State budget exposure | Approximately $15.6 billion from the state’s fiscal 2026 budget depends on federal reimbursements and grants. |
| Federal funding status if shutdown occurs | In the event of a shutdown, all non-discretionary federal funds would be discontinued until new funding legislation is enacted. |
| National financial impact | A government shutdown could cost the U.S. government about $7 billion a week and result in the layoff of tens of thousands of federal workers if no agreement is reached by September 30. |
| Last shutdown | The last government shutdown occurred in December 2018 and lasted 35 days, the longest record in U.S. history. |
| State instructions | A memo from state officials requested fiscal officers and budget directors to prepare contingency plans in anticipation of a shutdown. |
| Payroll concerns | Agencies must summarize concerns regarding federal funding, especially its impact on making bi-weekly payroll for employees funded by federal sources. |
| Local federal employee impact | A shutdown would delay pay for hundreds of thousands of federal employees, including those working at the Bunker Hill monument in Boston. |
| Services continuing | Essential services like Social Security, Medicare, and Medicaid would remain unaffected by the shutdown, and both the USPS and Transportation Security Administration would continue normal operations. |
Deeper Dive: News & Info About This Topic
HERE Resources
Additional Resources
- NBC Boston: Federal Workers on Edge as Government Shutdown Looms
- Boston 25 News: Government Shutdown Looming
- CBS News: Ed Markey and Seth Moulton on Government Shutdown
- Boston.com: Mass Officials Prepping for Payroll Disruptions
- Politico: Massachusetts Playbook
- Merriam-Webster Dictionary
- Google Search: government shutdown
- Wikipedia: Government Shutdown
- Encyclopedia Britannica: Government Shutdown
- Google News: Government Shutdown
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