State and Federal Update: October 6, 2025
Oct 06, 2025
Federal policy update
Shutdown heads toward second week
As the new federal fiscal year began at midnight on October 1, the government shut down following the failure of Congress to pass a budget. The shutdown is the first in nearly seven years. The previous one began in December 2018 and lasted into January 2019, during the first Trump presidency, and lasted 35 days—the longest government closure in U.S. history.
Whether this shutdown will approach or surpass that record remains to be seen. Democrats are demanding that Republicans restore funding for subsidies to help low-income Americans pay for health insurance, which are set to expire on December 31. Republicans insist that the Democrats support a “clean” Continuing Resolution (CR) to reopen the government before they engage in negotiations around subsidies. In response, Democrats have pointed to promises they believe Congressional Republicans and the administration made earlier this year that they have failed to keep, or reversed using rescissions. If negotiations are happening, they are proceeding out of the public eye.
As of now, what the shutdown means for workforce development remains unclear. In March, Congress passed a CR for the remainder of Fiscal Year 2025 that included funding for the Workforce Innovation and Opportunity Act (WIOA). WIOA funds for any fiscal year are released in two tranches: a smaller tranche in July, and a larger amount in October.
But while these funds have been allocated—meaning that Congress has authorized them to be spent for activities allowed under WIOA—they have not been obligated. This is the process by which the Employment and Training Administration (ETA) within the US Department of Labor actually releases funds to each state according to a formula. Under normal, non-shutdown circumstances, ETA might obligate the second tranche of WIOA funds by no later than mid-November.
Unfortunately, a shutdown is an extraordinary circumstance. Federal employees are furloughed other than “essential workers,” of whom ETA identified about 30 out of a regular staff of around 1,000. Those still on the job will have myriad other responsibilities, even assuming that the administration is interested in obligating the funds. Based on their delays in obligating the first tranche of FY25 WIOA funds, this is far from certain.
Once the government reopens and budget negotiations resume, few in Washington seem to believe that the House Labor-HHS-Education funding measure that proposes devastating cuts to WIOA and other programs—in opposition to which we mobilized last month—will become law. That funding bill was marked up last among the 12 separate measures that constitute the federal budget, meaning that House appropriators had far fewer dollars to draw upon to meet the total agreed-upon spending figure. In the end, sources expect that the result will be closer to the Senate’s Labor-HHS bill, which calls for nearly flat funding for WIOA (it includes a $10 million cut to Title I Adult funds) and other workforce programs.
NYATEP will continue to share updates through the Buzz and as events warrant. Thanks to the more than 200 members and partners who signed on to our recent letter to the New York House delegation, and to those who have reached out directly to their Representatives. Please keep those calls and letters coming, and let us know when you send them. And as always, feel free to reach out to interim executive director David Fischer at [email protected] with any questions or thoughts.
ADDITIONAL FEDERAL SHUTDOWN RESOURCES
ETA Shutdown Plan (October 2025)
