The ongoing federal government shutdown, now the longest in U.S. history, continues to ripple across communities nationwide, disrupting essential services and weakening economic activity. The Congressional Budget Office (CBO) projects a $18 billion reduction in GDP during the fourth quarter of 2025 alone due to the lapse in operations. As federal funding halts, local governments face mounting challenges in sustaining vital programs.\n\nOne of the most immediate impacts is on the Supplemental Nutrition Assistance Program (SNAP), which distributes approximately $4 billion monthly into local economies. Although September disbursements covered October benefits, November payments were initially at risk. After 25 states filed a lawsuit, a federal court ruled on November 6 that the administration must fully fund the program by November 7, requiring the use of non-contingency funds.\n\nOver two million civilian federal employees have missed paychecks since October 1, while military salaries for November remain uncertain despite a $5.3 billion reallocation within the Department of Defense for October. Meanwhile, members of Congress continue receiving around $15,000 per month.\n\nHead Start programs, serving nearly 700,000 children and employing 250,000 staff across 44 states, are also affected. With staggered federal grants, 18 states and Puerto Rico have already seen closures impacting nearly 10,000 families. Many centers are resorting to staff furloughs, emergency loans, or delayed vendor payments to remain operational.\n\nThe Low Income Home Energy Assistance Program (LIHEAP), which supports nearly 6 million households with heating and cooling costs, has not received its usual late October or early November allocations. The Department of Health and Human Services (HHS) has pledged to distribute $4.1 billion in funding once operations resume, but delays could expose vulnerable populations to dangerous winter conditions. Lawmakers like Rep. Fitzpatrick (R-PA-1) are urging HHS to act swiftly.\n\nSmall businesses are losing an estimated $371 million per month, with roughly 300 firms daily unable to access federally backed loans. Since the shutdown began, about 4,800 small enterprises have been denied approximately $2.5 billion in financing, threatening their survival.\n\n— news from National League of Cities\n\n— News Original —\nEconomic Impacts of the Federal Government Shutdown on Local Communities\nAs the federal government shutdown is now the longest in American history, the impact of the loss of federal funding has expanded beyond the Washington, D.C. Metro region and into cities, towns and villages across the country. The shutdown will have immediate and long-term impacts on our nation. The Congressional Budget Office (CBO) estimates that the GDP has been reduced by $18 billion in the fourth quarter of 2025 alone (PDF). n nAs local leaders look to support their residents, businesses and community services, they should be aware of the impacts to key federal programs that will affect their communities. n nSupplemental Nutrition Assistance Program (SNAP) n nTotal federal funding for SNAP, formerly known as food stamps, amounts to about $100 billion a year, or about $4 billion a month going directly into local economies. These funds are disbursed from the federal government to states a month prior to their allotment to recipients. As such, October allotments were disbursed to states in September, before the federal shutdown. n nOver the last few weeks, there has been concern that the U.S. Department of Agriculture (USDA) would not leverage contingency funds to disburse November payments, and NLC and NACo sent a joint letter to USDA asking them to do so. After 25 states sued the Administration (PDF) in federal district court over the November benefit, the court ruled on Nov. 6 that the Administration must fully-fund SNAP benefits by Friday, Nov. 7. In order to do so, the Administration will need to leverage funds other than the contingency fund. n nFederal Employees n nMore than 2 million Americans are federal civilian employees, who reside in every congressional district across the country (PDF), and have not received paychecks since Oct. 1. The salaries of nearly 3 million military personnel remain at risk for November as the shutdown continues despite reallocation of $5.3 billion within the Department of Defense budget for October military salaries. Congressional representatives continue to receive approximately $15,000 a month in salary during this shutdown. n nHead Start n nHead Start programs with nearly 700,000 children, 500,000 parents and 250,000 staff across 44 states continue to be affected. Federal funding for Head Start is disbursed on a staggered grant cycle, meaning programs receive their funding at different times throughout the year. As of Nov. 5, Head Start sites in 18 states and Puerto Rico have had to close their doors, leaving nearly 10,000 children and families without access to their care. In order to continue operating, Head Start programs will be faced with decisions such as furloughing staff, relying on reserve accounts, emergency loans and delayed payments to vendors. These Head Start staff will not receive paychecks and the children will not have a place to go during work hours, creating challenges for their parents who use Head Start care to attend their own jobs. n nLow Income Home Energy Assistance Program (LIHEAP) n nNearly 6 million American households depend on the LIHEAP to pay their winter heating and summer cooling bills. The U.S. Department of Health and Human Services (HHS) distributes $4.1 billion to states for this program, 80 percent of which goes out in the winter. States typically receive their allocations in late October/early November. While HHS has stated that it will swiftly work to get funds out to states when the shutdown is over, recipients can face life-threatening cold weather now. Rep. Fitzpatrick (R-PA-1) has called on HHS to use every available authority to maintain LIHEAP operations. n nSmall Businesses n nThe shutdown prevents over 300 small businesses a day from receiving federally backed funding at a cost of $170 million. Since the lapse in appropriations began, that figure amounts to approximately 4,800 small businesses nationwide unable to secure $2.5 billion in loans. Small businesses are losing an average of $371 million a month during the shutdown. n nMedicare and Medicaid
