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1 1 (December 14, 2020)

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              SConr essional
              Research Servik






Issues Raised by a Federal Government

Shutdown: Grants to State and Local

Governments and the COVID-19 Pandemic



December 14, 2020


At the end of the day on December 18, 2020, the second continuing appropriations measure for FY2021,
Further Continuing Appropriations Act, 2021 (Division A of H.R. 8900, signed into law December 11,
2020) will expire. If additional funding is not provided, funding for federal agencies and activities funded
through all 12 of the regular annual appropriations acts will lapse on December 19. The resulting lapse in
appropriations will require a shutdown of most federal agency operations, including those necessary to
administer federal aid to state and local governments.
On previous occasions, federal agency shutdown procedures have followed guidance provided by the
Office of Management and Budget. This guidance directed federal agencies to implement contingency
plans designed to guide operations during a government shutdown. Federal agency operations include
administration of over 1,700 congressionally authorized federal grant programs.
As shown in Table 12.3 of the OMB Historical Tables, the federal government currently provides over
$720 billion annually in outlays to state and local governments through federal grants. The Coronavirus
Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136) provided additional funding to states
and local governments to address needs arising from the COVID-19 pandemic, including $150 billion for
the Coronavirus Relief Fund, and $5 billion for the Community Development Fund for grants provided
under the Community Development Block Grant program. A federal government shutdown may cause
disruption to, or may result in the cessation of, grant administration activities depending on the following
factors:
      the timing and duration of a federal government shutdown; and
      the choices made by federal, state, and local officials in anticipation of, or during, a
       shutdown regarding grant program administration.




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