Federal Government Shutdown Deadline. How Federal Employees Can Prepare before Mid-March. 

Towards the end of Biden’s presidency, he signed a continuing resolution (CR) to provide the federal government funding until March 14. The House and Senate have until then to agree on a spending bill for the remainder of fiscal year (FY) 2025, and then until September 30 to come up with a federal budget for FY 2026. Traditionally, the White House publishes a proposed budget for the following year by the end of March, typically including a recommendation regarding the annual federal employee pay raise. Based off how the first month of the 2nd Trump administration has gone related to the federal workforce, though, anything other than a pay freeze (meaning no salary raise for 2026) would be surprising. 

Will There Be a Government Shutdown? Deadline is March 14

Lawmakers in Congress at Standstill Over Potential Shutdown

At the moment, it doesn’t seem like there will be an easy agreement between Democrats and Republicans on Capitol Hill regarding the country’s spending bill. 60 votes are required from the Senate  to approve a final FY25 spending bill, and it is currently split 53 – 47 with a slim GOP majority. This means any appropriation or final fiscal year funding legislation will require all Republican votes plus seven from Democratic Senators, many of whom feel the threat of a government shutdown is their only leverage to slow the influence of DOGE and Elon Musk on the country’s civilian workforce. The problem with shutting down the government in this regard, however, is that it would further disrupt operations across agencies, hurting federal employees even more in the process. 

How Many Federal Employees Were Fired Last Week? 

Last week, after a judge paused the deferred resignation offer, approximately 10,000 federal workers were notified they lost their job across several agencies, including the HHS, USDA, EPA, VA, Small Business Administration, Department of Education, and the CFPB. A lot of the federal employees who were let go were in their probationary period, the first 90 days of starting a career in federal service where it is legally easier to terminate employment at a federal agency. The roughly 10,000 employees that were fired last week is on top of the 75,000 that accepted the buyout from the Trump administration. The total of 85,000 slashed federal positions is about 3.9% of the government’s employees, still under the projected 5 – 10% that DOGE estimated would resign. 

Is the Buyout Offer to Federal Employees Still on Hold?

No, a Judge ruled last week that the “fork in the road” offered at the end of January could continue. The decision did not comment directly on the legality of the offer, but only that the federal employee union groups that filed the lawsuit were not directly impacted by the deferred resignation proposal and therefore didn’t have the right to file the complaint in the first place. It is unclear if any federal employees themselves will ending up filing a similar lawsuit with U.S. courts. The main argument of the case was that members of Congress had only approved funding through the end of March and therefore the government couldn’t guarantee pay to those who accepted the offer, which promised continuation of pay and benefits, and the right to retire if eligible, until September 30. Congress needs to pass an FY25 federal budget or at least another continuing budget resolution to keep its promise to the tens of thousands of feds who chose to leave federal service before the February 6th deadline. Many of those who accepted also received a notice of termination later in the week, but the White House confirmed those were sent out in error and their buyout agreement would be honored, assuming there’s not a lack of funding due to a shutdown. 

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We Are Here to Help: How Federal Employees Can Prepare for a Shutdown of the Federal Government

Preparing for Federal Shutdown as March 14 Deadline Approaches

Here is a list of proactive ways to limit the negative financial impact of furloughed federal employees during a shutdown: 

1. Make a Budget. Cut expenses where you can and look for other potential ways to save extra cash and reduce spending. If a shutdown seems likely, prioritize bills and essential expenses. Make arrangements with creditors or utility providers if necessary.
2. Build an Emergency Fund. Strive to have eight months’ worth of living expenses saved in an emergency fund. Prioritize needs over wants until you achieve this goal. Reduce discretionary spending and save as much as possible in the months leading up to a possible government shutdown.
3. Maximize Credit Options (and avoid payday loans). Some credit unions for federal employees offer low interest loans to workers impacted by a shutdown. Before the funding deadline, explore HELOC options if you own your home or apply for a 0% interest credit card (if your credit score allows). Avoid payday loans at all costs – the average APR for these loans is around 400%! 
4. Use Retirement Savings Wisely and Talk to a Financial Planner for Federal Employees. Knowing the rules around TSP and IRA accounts is essential to maintain a healthy financial plan. Avoiding TSP loans and early withdrawal penalties should be a priority when exploring your options when in need of emergency funds due to a furlough or even working without pay during a shutdown. Meet with a Fed-Focused Financial Advisor today. 

Government Shutdown FAQs

What are essential services? 

Some of the essential services, such as passport services and customs and border protection, that keep running during a full or partial government shutdown are funded through mandatory spending programs while others need Congress approval, meaning these employees are required to work without pay during the shutdown. For “non-essential” roles, these employees experience a furlough until a bill is passed to fund the government. While not the case in the past, after the previous shutdown that lasted 35 days, the Government Employee Fair Treatment Act was passed and guarantees backpay for furloughed workers who didn’t work and received either no paycheck or a reduced paycheck throughout a shutdown. 

What services are disrupted or cease during a shutdown?

Whether or not it is a full or partial shutdown impacts which services would be affected. Some examples of disrupted services include food inspection, IRS refund processing delays, and the closure of national parks until Congress approves funding for federal programs. 

Are Social Security, VA benefits, or FERS Retirement impacted? 

Existing payments will not stop as a shutdown continues, and medical care will still be offered at VA government buildings no matter how long a shutdown lasts (assuming there is some emergency funding for the federal government, which includes borrowing from the TSP’s G-Fund). The process of new claims for benefits might be delayed or stopped altogether. Therefore, if you need to apply for Social Security benefits or FERS or CSRS retirement benefits, doing so before the government funding deadline could improve your chances of receiving those benefits in the event of a stoppage. 

Will Congress pass a 2025 spending bill to fund the federal government and avoid a shutdown? Follow us on Linked-In or Facebook to for shutdown updates and federal employee benefits news. 

Learn about FERS, Social Security, the TSP, and – register for our next free federal retirement webinar.