Federal Government Shutdown and Major Executive Actions: Week of October 4, 2025

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The final days of September and opening of October 2025 were defined by a stark contradiction in Washington. As the federal government shut down at midnight on September 30 amid a bitter partisan dispute, the Executive Branch simultaneously executed a series of decisive policy actions.

While Congress was mired in gridlock, the White House and cabinet agencies moved aggressively on multiple fronts. They issued major executive orders on healthcare innovation and national security, rolled back environmental and commercial regulations, and altered the landscape of corporate governance and financial markets.

The Government Shutdown

The week’s dominant headline was the failure of Congress to fund the government, triggering the first shutdown since 2018. This event evolved beyond a simple legislative impasse. It became a tool for the Executive Branch to assert authority and advance a specific political agenda, testing the boundaries of presidential power and the norms of the federal civil service.

How the Shutdown Happened

The federal government officially entered a partial shutdown at 12:01 AM ET on Wednesday, October 1, 2025, the start of the new fiscal year. Lawmakers failed to pass a funding measure by the September 30 deadline.

The central conflict revolved around competing short-term funding bills, known as continuing resolutions (CRs). These are necessary to keep agencies operating when the twelve regular annual appropriations bills haven’t been enacted.

The Republican-controlled Senate and House advanced a CR that would fund the government through November 21, 2025. Democrats insisted that any funding extension must also include a provision to continue Affordable Care Act subsidies set to expire at the end of the year.

With Republicans controlling both chambers of Congress, Democrats utilized the Senate’s filibuster rule as their primary leverage. The filibuster requires 60 votes to advance most legislation.

On Tuesday night, just hours before the deadline, the Republican-led CR failed in a 55-45 vote, falling short of the 60 votes needed. A Democratic alternative was also voted down. The stalemate continued through the week. Another failed vote on Friday, October 3, on a 54-44 tally signaled that a prolonged shutdown was likely.

The White House Response

The Trump administration’s reaction was immediate. President Trump and the White House Office of Management and Budget placed the blame squarely on Democrats. OMB Director Russ Vought cited “Democrats’ insane policy demands” in a letter to federal agency heads.

More significantly, the administration signaled its intent to use the shutdown to actively reshape the federal government. President Trump told reporters that the shutdown empowers the administration to cut social benefit programs and would lead to mass layoffs of federal workers.

“When you shut it down, you have to do layoffs, so we’d be laying off a lot of people,” he stated, adding, “They’re going to be Democrats.”

This rhetoric transformed the shutdown from a passive consequence of legislative failure into an active instrument for the Executive Branch to pursue policy goals unattainable through normal processes.

The administration immediately began to exert this new leverage. OMB Director Vought announced the withholding of billions of dollars in infrastructure project funds for states represented by Democratic senators, including a $2.1 billion project for Chicago’s train system.

This approach suggests a deliberate strategy to weaponize the funding lapse. By linking the shutdown to the power to conduct layoffs—particularly with partisan implications—and to control the flow of congressionally appropriated funds, the administration is testing the limits of its authority over the civil service and the power of the purse. This raises profound questions about the separation of powers and challenges the long-held principle of a non-partisan federal workforce.

Agency Preparations

In the days before the deadline, federal agencies began executing their contingency plans. The Department of State issued guidance on September 29 detailing a halt to most normal operations, with restrictions on hiring, travel, and new financial obligations.

The Environmental Protection Agency’s plan included ceasing new grants, halting updates to its website, and suspending certain activities at Superfund sites where there was no imminent threat to human life.

On October 2, the Office of Personnel Management issued a memo instituting a pay freeze for certain senior political officials during the funding lapse.

Human Cost

The shutdown’s human cost was significant. The nonpartisan Congressional Budget Office estimated that about 750,000 federal employees would be furloughed, meaning they are prohibited from working and are not paid.

Hundreds of thousands more whose jobs are deemed “essential” or “excepted,” such as air traffic controllers or law enforcement officers, were required to work without pay. While the Government Employee Fair Treatment Act of 2019 guarantees that federal employees will receive retroactive back pay once the shutdown ends, it doesn’t prevent the immediate financial hardship they face. Government contractors typically don’t receive back pay, creating a ripple effect through the economy.

In response to the administration’s threats of mass firings, the American Federation of Government Employees, the largest federal worker union, filed a lawsuit against OMB and OPM. The union argued that the agencies lack the statutory authority to implement such cuts during a shutdown.

Executive Orders

In stark contrast to the paralysis on Capitol Hill, the White House was a hub of activity, issuing a series of substantive executive orders and proclamations. This created a deliberate split-screen effect: while one branch of government appeared dysfunctional, the presidency projected an image of decisive action.

Pediatric Cancer and AI

On September 30, amid the escalating shutdown drama, President Trump signed the Executive Order “Unlocking Cures for Pediatric Cancer with Artificial Intelligence.”

The order is a centerpiece of the administration’s “Make America Healthy Again” (MAHA) agenda. It aims to leverage advanced technology to combat childhood cancer, which remains the leading cause of disease-related death for children in the U.S.

The order directs the MAHA Commission, established earlier in the year, to coordinate with the Secretary of Health and Human Services and White House technology advisors to develop innovative ways to use AI for improved diagnoses, treatments, and cures.

The initial focus is on accelerating the Childhood Cancer Data Initiative, a program started during the President’s first term. The order calls for funding research at National Cancer Institute-Designated Cancer Centers that use AI to improve data infrastructure, develop predictive models for treatment response, and enhance the design and accessibility of clinical trials.

The order also encourages the private sector to invest in AI-based technologies. It directs the HHS Secretary to finalize interoperability standards for patient data to enable secure, privacy-compliant data sharing for research.

Foreign Policy and National Security

The President also took several direct actions in defense, diplomacy, and international trade.

On Sunday, September 28, the President announced he would attend a last-minute global summit of the nation’s top generals at Marine Corps Base Quantico. The unusual decision for a commander-in-chief to insert himself into such a gathering overshadowed the planned address by Defense Secretary Pete Hegseth and raised significant security concerns about having the military’s entire senior leadership in one location.

On September 29, the President signed Executive Order 14353, “Assuring the Security of the State of Qatar.” This order formally defines any armed attack on Qatar as a threat to the national security of the United States. It directs the Secretaries of War and State and the Director of National Intelligence to create joint contingency plans with Qatar to respond to such threats. The action solidifies a key strategic partnership in the Middle East at a time of regional tension.

Continuing the administration’s use of trade policy as a national security tool, the White House also issued a proclamation titled “Adjusting Imports of Timber, Lumber, and their Derivative Products into the United States.”

Citing a Commerce Department investigation under Section 232 of the Trade Expansion Act of 1962, the proclamation declares that wood products are being imported in quantities that “threaten to impair the national security.” It imposes a 25% ad valorem tariff on certain imported wood products, including upholstered wooden furniture and kitchen cabinets, effective October 14, 2025.

Federal Advisory Committees

Even as many government functions were grinding to a halt, the President signed a routine but essential order to ensure the continuity of expert advice. On September 29, he issued Executive Order 14354, “Continuance of Certain Federal Advisory Committees.”

This order renewed the charters for 22 different advisory bodies for another two years, until September 30, 2027. These committees, governed by the Federal Advisory Committee Act, provide external expertise to federal agencies on a vast range of topics.

The list of renewed committees includes the President’s Council on Sports, Fitness, and Nutrition; the Presidential Advisory Council on HIV/AIDS; the President’s Committee for People with Intellectual Disabilities; the National Industrial Security Program Policy Advisory Committee; and the Good Neighbor Environmental Board.

Cabinet Department Actions

Beyond the White House, the cabinet departments were actively implementing the administration’s agenda through regulatory changes, enforcement actions, and policy announcements. These moves demonstrate a coordinated, whole-of-government effort to advance a specific ideological agenda focused on deregulation and the reversal of policies from the previous administration.

Energy and Environment

On September 29, EPA Administrator Lee Zeldin announced two major actions framed as part of an effort to “Unleash American Energy” and support “beautiful clean coal.”

The first action is a proposed rule to provide coal-fired power plants with compliance extensions for seven deadlines in the 2024 Effluent Limitations Guidelines rule. These guidelines set limits on the discharge of wastewater pollutants. The extension specifically affects rules for flue gas desulfurization wastewater and bottom ash transport water.

The EPA claims this move will save consumers up to $200 million annually in electricity costs and is necessary to meet growing electricity demand from data centers and manufacturing.

The second action is an advance notice of proposed rulemaking to solicit public comment on a comprehensive overhaul of the Clean Air Act’s Regional Haze Rule. Administrator Zeldin described the current program as “broken” and imposing “unnecessary burdens on states and the regulated community.”

These moves follow the EPA’s ongoing legal effort to ask a federal court to vacate drinking water limits for four types of per- and polyfluoroalkyl substances (PFAS) that were set by the previous administration. Environmental and community groups are vigorously opposing this request.

These actions have been praised by industry groups like the American Petroleum Institute but have drawn fierce opposition from public health and environmental organizations, who argue the rollbacks will cause significant harm.

Finance and Markets

The Treasury Department continued its focus on international financial pressure. On October 1, its Office of Foreign Assets Control announced sanctions against a network of 21 entities and 17 individuals operating in Iran, China, Hong Kong, Germany, Türkiye, and other countries.

The network was targeted for its role in illicitly procuring U.S.-origin dual-use electronics and other components for Iran’s Aerospace Industries Organization and its subsidiaries, which are responsible for the country’s ballistic missile and military aircraft programs.

The most significant financial policy development was the continued reverberation from a September 17 policy statement by the Securities and Exchange Commission. The statement clarified that the SEC will no longer object to requests to accelerate the effectiveness of a company’s registration statement if its governing documents contain provisions for the mandatory arbitration of investor lawsuits.

This reverses a long-standing, albeit unwritten, SEC policy that viewed such provisions as a violation of the anti-waiver clauses of federal securities laws.

Grounded in a series of Supreme Court decisions favoring the Federal Arbitration Act, the SEC’s new position is that federal securities laws don’t override the FAA’s policy of enforcing arbitration agreements.

This is a monumental shift that could effectively eliminate most securities class-action lawsuits, which have been a primary tool for shareholders to seek redress for fraud and other misconduct. Legal analysts note that while the policy change clears a major federal regulatory hurdle, the ultimate enforceability of these clauses will likely be decided in court and will depend heavily on state corporate law, particularly in Delaware.

Justice and Commerce

The Department of Justice was active in both consumer protection and civil rights enforcement. On October 2, the DOJ, in partnership with the Federal Trade Commission and a coalition of 19 states, announced a settlement to shut down a deceptive fundraising scheme.

The complaint alleged that Kars-R-Us.com, Inc. raised over $45.5 million through vehicle donations on behalf of the United Breast Cancer Foundation, but that only $126,815—or 0.28% of the total—was actually used to provide breast cancer screenings. The settlement permanently bans the company’s former president from fundraising and imposes a monetary judgment of over $3.8 million.

The DOJ’s Civil Rights Division also launched two new investigations on September 30: one into Des Moines Public Schools for alleged employment practices that discriminate based on race, color, and national origin, and another into the University of Nevada Las Vegas for potential denial of equal treatment on similar grounds.

Meanwhile, the Department of Commerce pursued a deregulatory path. On September 29, its Bureau of Industry and Security rescinded an interim final rule from the previous administration that had placed more stringent export controls on civilian firearms and ammunition.

The Biden-era rule had created a “presumption of denial” for firearms exports to 36 countries and added other bureaucratic hurdles. BIS stated that rescinding the rule would restore “common sense to export controls” and allow U.S. manufacturers to better compete in overseas markets, creating hundreds of millions of dollars in export opportunities.

Health and Human Services

The Department of Health and Human Services moved quickly to implement the President’s executive order on pediatric cancer. On September 30, the same day the order was signed, HHS announced it was doubling the funding for the National Institutes of Health’s Childhood Cancer Data Initiative, from $50 million to $100 million.

In another major move aligned with the administration’s focus on patient empowerment, HHS Secretary Robert F. Kennedy, Jr. directed the department to increase enforcement against “information blocking.” This practice occurs when healthcare providers or technology companies restrict patients’ access to their own electronic health information.

Under the 21st Century Cures Act, health IT developers and health information networks found to be engaging in information blocking can face civil monetary penalties of up to $1 million per violation.

The department also announced the swearing-in of Dr. Anthony Letai as the new Director of the National Cancer Institute on September 29.

Defense

Despite the looming shutdown, the business of national defense continued. The Department of War (a restored name for the Department of Defense) announced several significant contract awards.

On September 28, General Dynamics Electric Boat was awarded a $642 million contract modification for lead yard support and design efforts for Virginia-class submarines. Other major contracts announced included a $5 billion award to Raytheon for the Coyote Missile System and a nearly $1 billion contract to Mistral Inc. for lethal unmanned systems.

Internally, the Secretary of War issued a memorandum on September 30 to implement reforms to the military’s Equal Opportunity and Equal Employment Opportunity programs. The reforms are aimed at optimizing organizational effectiveness and “restoring good order and discipline.”

Key changes include centralizing EEO counselor operations in a pilot program, replacing anonymous reporting with a confidential complaint option, and amending policy to clarify that filing false complaints may constitute a violation of Article 107 of the Uniform Code of Military Justice. The new policy also directs that favorable personnel actions, like promotions, should not be withheld or delayed based on an EEO complaint without a substantive finding of misconduct.

The Federal Register

The Federal Register, the daily journal of the U.S. government, provides a granular look at the ongoing work of the administrative state. Even as a shutdown loomed and then began, the Register continued its daily publication of proposed rules, final rules, and official notices.

Final Rules

Several agencies published final rules that took effect during the week, representing the culmination of the lengthy rulemaking process.

The U.S. Coast Guard published a final rule effective October 2 that officially renames its operational districts. The rule changes the names from numerical designations (e.g., “First Coast Guard District,” “Ninth Coast Guard District”) to geographic ones (e.g., “Coast Guard District Northeast,” “Coast Guard District Great Lakes”).

The agency stated the change was made to help the public and maritime stakeholders more easily understand which district they operate in. The numerical system, once aligned with the Navy’s, was no longer intuitive.

The Federal Aviation Administration published two final rules on October 2 that amended, suspended, or removed various Standard Instrument Approach Procedures, Takeoff Minimums, and Obstacle Departure Procedures for airports across the country. These routine but critical regulatory actions are necessary to ensure flight safety by reflecting changes in the National Airspace System, such as new navigational aids or newly identified obstacles.

Immigration Policy Change

On Monday, September 29, the public comment period closed for a highly significant proposed rule from the Department of Homeland Security.

The proposed rule, titled “Establishing a Fixed Time Period of Admission and an Extension of Stay Procedure for Nonimmigrant Academic Students, Exchange Visitors, and Foreign Media Representatives,” would fundamentally alter a long-standing immigration practice.

Currently, individuals on F (student), J (exchange visitor), and I (foreign media) visas are typically admitted for “duration of status.” This allows them to remain in the U.S. for as long as they maintain their status (e.g., as a full-time student) without needing to apply for extensions.

The proposed rule would eliminate duration of status and instead admit these individuals for a fixed time period, generally two or four years. To stay longer, they would be required to proactively file an application for an Extension of Stay with U.S. Citizenship and Immigration Services.

This change represents the bureaucratic implementation of the administration’s broader political agenda to increase scrutiny of foreign nationals and restrict legal immigration pathways, creating significant new hurdles for hundreds of thousands of international students, scholars, and journalists each year.

Notable Regulatory Actions

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