The practical takeaway for families, workers, and businesses: a CR can reduce the odds of a full stop, but it does not eliminate the risk of operational disruptions if negotiations run into—and especially if they spill past—the end of the fiscal year.

What’s changing in Congress now

Axios reported on July 10 that Senate Republicans were discussing whether to use a short-term funding bill, known as a continuing resolution, to get through the midterms while trying to avoid another pre-election shutdown fight.

On July 13, the Associated Press tied the shutdown-prevention urgency to disruption inside Senate leadership, noting that Republicans still have to find a way to keep the government open when the current fiscal year ends on Sept. 30.

Why a “lapse” can trigger real cutbacks, even if a CR is being discussed

The Government Accountability Office explains that a “lapse in appropriations” is the gap between when an appropriation expires and when a new one is enacted. GAO notes that such shutdowns may affect only some agencies or the entire federal government.

GAO also points to the Anti-Deficiency Act’s role: when there is no available appropriation, agencies generally must stop most operations. That includes restrictions on incurring obligations or making payments in advance or in excess of appropriations—so salaries and other spending tied to non-excepted work can’t simply continue as usual.

GAO further describes a two-step approach to what can keep running during a lapse: activities with available appropriations may continue, but other activities may continue only if an exception applies—such as work necessary to protect human life or government property.

What readers could notice: HHS’s FY 2026 contingency staffing example

Because the day-to-day effects depend on which activities qualify for exemptions and what funding exists in specific accounts, one of the clearest reader-facing windows is how agencies plan for a lapse.

In its FY 2026 contingency staffing plan, the U.S. Department of Health and Human Services (HHS) estimates that the total number of agency employees expected to be on board before implementation of the plan would be 74,210, while 23,128 would be furloughed under the plan (unduplicated count).

HHS also lays out examples of the kinds of work it expects to keep going under Anti-Deficiency Act exceptions—such as monitoring for disease outbreaks via CDC and staffing tied to funded activities like Medicare and other mandatory health program payments.

At the same time, HHS says it would cease all non-exempt and non-excepted activities during a lapse, including—among other items—oversight of certain extramural research contracts and grants, processing FOIA requests or public inquiries, and some data collection and validation work. HHS also says CDC communications to the public about health-related information would be hampered, and NIH would not have the ability to admit new patients to the Clinical Center.

What Senate Democrats are urging ahead of Sept. 30

The July 13 letter from Senate Democratic Leader Charles E. Schumer urges colleagues to fund the government and avoid a shutdown, repeatedly linking the timing pressure to the Sept. 30 deadline.

Schumer’s letter states, “Eleven weeks remain” before the September 30 funding deadline, and argues that Republicans should join “serious bipartisan negotiations” rather than pursuing an approach that risks colliding with the election cycle.

What to watch next

• Signals that a short-term package is actually moving soon. In a Sept. 30 world, timing matters: watch for whether leaders move toward a near-term funding step versus continued delays.
• Agency contingency updates as the timeline tightens. HHS’s plan shows how staff and operations may shift if a lapse happens; as negotiations progress, look for updated agency guidance tied to specific programs.

Sources

• GAO on what a lapse triggers and what the Anti-Deficiency Act requires
• HHS FY 2026 contingency staffing plan (workforce on board vs furloughed; examples of exempt work)
• Senate Democrats “dear colleague” letter (dated July 13, 2026)
• Axios (July 10, 2026) on GOP discussion of a short-term CR
• Associated Press (July 13, 2026) on Senate leadership disruption and Sept. 30 pressure