The U.S. Capitol on Oct. 9, 2024. (Photo by Jane Norman/States Newsroom)

State officials from both parties urged Congress to avoid a government shutdown Monday, though Republicans were pushing harder for an extension of current funding.

Though they sometimes clash with federal directives, states depend on funding from the federal government for numerous programs. A government shutdown, which would have a wider effect than any in recent years because Congress has not passed any of the dozen annual funding bills, would delay or cancel that support.

The National Governors Association issued a statement Monday from its chair and vice chair, Oklahoma Republican Gov. Kevin Stitt and Maryland Democratic Gov. Wes Moore, calling on Congress to come together to avoid a shutdown. The bipartisan group comprising all the nation’s governors generally avoids commenting on controversial issues that divide its membership.

“The consistent use of political brinksmanship when it comes to our government funding does not serve our states, territories or our people well,” they wrote. “It is long past time to stop kicking the can down the road and return to the regular order of debating and passing a budget, but at this juncture, Congress has a responsibility to ensure the government remains operational. We urge federal leaders from both sides to work to set aside political games and pass a budget that reflects the values and promises states commit to every day.”

While members of both parties expressed a desire to avoid a shutdown, they proposed different solutions. 

Republicans urged lawmakers to approve the “clean” continuing resolution to keep the government funded at current levels, while Democrats backed up their party’s position in Congress to seek an extension of health insurance subsidies in a funding bill.

“Allowing a shutdown would consequently and needlessly disrupt our economies, threaten public safety, and undermine public confidence in our institutions,” 25 Republican governors wrote in a Monday letter to congressional leaders. “Our families and communities would feel the pain with immediate effect and confusion.”

Partisan differences over shutdown extend beyond the Beltway

The U.S. House, where Republicans hold a majority, passed a stopgap spending measure this month, but it failed to clear the 60-vote threshold needed to pass the U.S. Senate, as Democrats have declined to support a proposal that does not address health care costs. 

At the state level, the debate has fallen along similar lines. 

“Put simply, a  government shutdown should not be used as political leverage to pass partisan reforms — these are not chips Congress should be bargaining with,” the Republican governors wrote. “The proposed budget extension is a straightforward, bipartisan solution. There are no gimmicks or partisan poison pills; it’s a clean, short-term funding measure that both parties have historically supported.”

Republican state attorneys general sent a similar letter, which noted a shutdown would affect state and local law enforcement.

Democrats throughout the country, though, echoed congressional messaging that Congress should extend the health care subsidies that were included in the 2010 health care law known as the Affordable Care Act, and take more steps to reduce the cost of health care. Republicans’ failure to include such provisions would put blame for the shutdown on the GOP, Democrats have said.

“Instead of supporting a plan that would lower costs and stop making health care more expensive, Senate Republicans are blindly following Donald Trump and pushing the country towards a devastating government shutdown,” Sen. Kirsten Gillibrand of New York, who chairs Senate Democrats’ campaign organization, said in a Sept. 19 statement.

In a press release last week, the Democratic Governors Association touted efforts by its members to call for extending subsidies.

“DGA Chair Kansas Governor Laura Kelly, Delaware Governor Matt Meyer, and New Mexico Governor Michelle Lujan Grisham called on Congressional Republicans to extend critical Affordable Care Act subsidies that 22 million Americans rely on and avoid a government shutdown,” the release read. 

“Without action from Republicans in Congress, health care costs for hardworking Americans who rely on these subsidies will balloon by an average of over 75 percent.”

President Donald Trump holds up the "One Big Beautiful Bill Act" that was signed into law during an Independence Day military family picnic on the South Lawn of the White House on July 4, 2025 in Washington, D.C.  (Photo by Alex Brandon - Pool/Getty Images)

WASHINGTON — Republicans’ “big, beautiful” law will add $3.394 trillion to deficits during the next decade and lead 10 million people to lose access to health insurance, according to an analysis released Monday by the nonpartisan Congressional Budget Office.

The updated assessment of the sweeping tax and spending cuts law came weeks after nearly every GOP lawmaker voted to approve the legislation ahead of a self-imposed Fourth of July deadline. The law made permanent the 2017 tax cuts from President Donald Trump’s first term and provided billions to carry out his plans of mass deportations, an immigration crackdown and increased defense spending.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, wrote in a statement that it is “still hard to believe that policymakers just added $4 trillion to” deficits after Republican lawmakers “have spent months or years appropriately fuming about our unsustainable fiscal situation.”

“This is a dangerous game we are playing,” MacGuineas wrote. “It has been going on for years, and it was brought to new levels with this bill. And it is time to stop.” 

CBO released numerous reports throughout the months-long process showing how various parts of the bill would affect federal spending and health care access, but the scorekeeper needed additional time to evaluate changes Republicans made during the last few days of debate.

The latest figures are similar to a preliminary report CBO released earlier this month projecting the final version of the package, which underwent considerable changes in the Senate, would likely lead to a $3.4 trillion increase in deficits between 2025 and 2034.

That total was significantly higher than the $2.4 trillion increase in deficits CBO expected the original House version of the bill would have had during the next decade.

Health spending to fall by more than $1 trillion

Republicans’ numerous changes to health programs, predominantly Medicaid, will reduce federal spending during the next decade by $1.058 trillion.

The law made more than a dozen changes to the state-federal health program for lower income individuals and certain people with disabilities, though some of those have larger budget impacts than others.

Language barring Medicaid spending from going to Planned Parenthood for one year would actually increase federal deficits during the 10-year window by $53 million.

The CBO score shows that policy change would decrease federal spending by $44 million this fiscal year and another $31 million during the next fiscal year, before increasing deficits by $91 million during fiscal year 2027 and continuing.

That section of the law is on hold for the moment after a federal judge issued a temporary restraining order earlier this month that required the Trump administration to continue paying Planned Parenthood for routine health care coverage for Medicaid enrollees.

Federal law for decades has barred the federal government from spending taxpayer dollars for abortion services with limited exceptions, so the one-year prohibition on Medicaid funding to Planned Parenthood would have blocked patients enrolled in the program from going to their clinics for routine health appointments, like annual physicals and cancer screenings.

The CBO report didn’t include a state-by-state breakdown of the effects of the health care changes in the law, but the agency is expected to release more detailed analysis of the health impacts in the coming weeks.

Nutrition assistance cuts

Apart from Medicaid, two large projected deficit reductions in the law come in the agriculture title’s sections on the Supplemental Nutrition Assistance Program, or SNAP.

A provision requiring states to pay for some portion of SNAP benefits starting in fiscal 2028 would save the federal government between $5.7 billion and $6 billion per year, totalling just less than $41 billion for the first seven years it will be in effect.

And new work requirements for SNAP would result in $68.6 billion less in federal spending over the 10 years starting in fiscal 2026, the CBO projected.

Federal student loan program

Republicans’ streamlining of the federal student loan program is projected to reduce federal spending in the next decade by $270.5 billion.

As part of a sweeping overhaul of higher education, the law limits repayment options for borrowers with any loans made on or after July 1, 2026, to either a standard repayment plan or an income-based repayment plan.

Extension and expansion of tax cuts

The extension of Trump’s 2017 tax law, plus new tax breaks, will cost $4.472 trillion over the next decade, according to the latest CBO score.

The United States collects the majority of its revenue from individual taxpayers, and the continuation of lowered income tax brackets, plus an increased standard deduction, will comprise the bulk of lost revenue over 10 years, adding up to $3.497 trillion.

Trump also campaigned on several other tax cut promises, including no tax on tips and overtime, as well as no tax on car loan interest. The temporary provisions come with stipulations and will end in 2029. Together they will cost $151.868 billion.

The child tax credit increases under the new law to $2,200, up from $2,000, though lawmakers did not increase the amount lower income families can receive as a tax refund. The CBO estimates the bumped-up tax credit will cost $626.345 billion over the next decade.

Lawmakers offset some costs of the bill by repealing clean energy tax credits, including ending tax credits for personal and commercial electric vehicles, nixing energy efficiency improvement credits for homeowners, and terminating clean electricity production credits. In all, Republicans saved $487.909 billion from axing the measures meant to address the effects of climate change.

Jacob Fischler, Shauneen Miranda and Ashley Murray contributed to this report.