We came out of the longest shutdown in history and we are all worse for it. Who won the shutdown fight? It doesn’t matter – Americans lost. And there is a chance we run it all back again in a few short months.
A Continuing Resolution (CR) stops the bleeding, but healing and recovery is still far off.
The Deal. A continuing resolution, or CR, is an extension of existing funding levels and is a common solution to budget stalemates. That’s where Congress ended up after 8 Senate Democrats broke ranks and agreed to vote for a CR with a pinky promise from Republicans that they would resolve the impending healthcare subsidy cliff.
The CR means most federal agencies remain at Fiscal Year 2025 funding levels until January 30th, 2026 when we do this dance all over again. That makes any future planning at agencies near-impossible with such uncertainty lurking. Plus, inflation means working with last year’s funding levels amounts to an effective cut.
Still Uncertainty. Meanwhile, some agencies, like NASA’s science budget, are still facing significant cuts as the Senate and House negotiate a long-term deal. Leadership at these agencies have to responsibly plan for the lesser funding scenarios which further limits activities on top of backlog clearing that must be prioritized.
Science Highlights from the CR
Most of the Budget Incomplete. Congress’s agreement extended funding levels through January 30, 2026 for most federal agencies and programs, while providing full-year funding to a handful of others, namely for Military Construction and Veterans Affairs, the Legislative Branch, and Agriculture, Rural Development, and Food and Drug Administration divisions (some might call these the “easy” ones to negotiate).
Key highlights for science in the CR include:
- Flat funding for major agencies like NIH, ARPA-H, CDC, BARDA, NSF, and Defense and its Congressionally Directed Medical Research Programs (CDMRP).
- The deal reverses recent federal reductions in force (RIF), prohibits further RIFs through January 30th, 2026, and ensures back-pay for furloughed workers.
- The CR maintains the ban on changes to indirect cost rates but does not fix the risks associated with forward funding NIH grants.
Will Congress reach a full deal?
Congress’s Fave Vehicle. At the time of writing, the Senate is considering advancing a major fiscal 2026 appropriations package that combines the ever-reliable National Defense Authorization Act (NDAA, or defense spending bill) with as many as four additional bills, including Labor-HHS, Commerce-Justice-Science, Interior-Environment, and Transportation-HUD. It’s a common vehicle for these scenarios, as Congress has never failed to pass the NDAA. No one wants to be accused of leaving us defense-less, making a NO vote less likely even if there are funding lines in there that would otherwise be unappetizing to members – not unlike a pill pocket for sick pups needing medicine.
Still Seeking Agreement. While those four bills may hitch a ride, the Senate Appropriations Committee has not held markups for its Energy-Water, Financial Services, Homeland Security, and State-Foreign Operations bills. Without bipartisan agreement on those individual spending bills, Senate Republicans could proceed with partisan versions of the bills as a starting position for later negotiations, likely complicating an already-tense process.
Healthcare Must Get Resolved. Healthcare will likely play a major role in a final deal again. Congress currently remains deadlocked over extending enhanced Affordable Care Act premiums, which are set to expire at the year’s end. Democrats are pushing for a clean extension to avoid premium spikes and Republicans cannot yet agree on their own solution. According to POLITICO, a health package to address the subsidy cliff is unlikely to advance this year, but is expected to be back in play in January when Congress faces the next government funding deadline. We may just be hitting replay on everything we just saw in September. Stay tuned!
Science Agencies Back On, but Backlogged
Creaking Back to Life. The shutdown’s end is just the beginning of a slow recovery for scientific operations. The National Science Foundation (NSF) announced panels and reviews will resume after reopening Nov 13. They will “…prioritize the most pressing issues, including restoring the capacity to make awards and ensuring continued management and oversight of existing awards.” As one example, NSF will have to reschedule over 300 grant-review meetings.
The backlog is fueled by countless furloughed staff delaying grant reviews and reimbursements, scrambles to reallocate funding and activate cash reserves for paychecks and essential work, and cutting costs wherever they could.
Another Setback for American Scientific Leadership
China Keeps Outpacing. The shutdown has consequences for current and future work, and American global scientific competitiveness takes yet another step back. China was already projected to out-pace U.S. R&D funding before the shutdown, and according to the Quincy Institute, that prediction has come true. In recent years, China has surged to the top of global scientific output and is now publishing in respected journals like Nature and Science more than the U.S. China’s fast growth reflects deliberate investments in strategically important fields, while the U.S. remains stagnant or in a decline on certain federal research investments, leaving its historical leadership increasingly vulnerable.
Some Positive Signs for Science
It’s not necessarily all only doom and gloom though, folks. Some research fields are seeing meaningful action, and we have talked about how appropriations committees have largely rejected the president’s budget request for massive cuts to science agencies.
Nat Sec Tech. National security-focused emerging tech is seeing gains too. The Department of Energy (DOE) renewed the five National Quantum Information Science Research Centers with about $625 million in funding over five years. DARPA also moved into Stage B of its Quantum Benchmarking Initiative.
Ag Research. As part of the CR, after USDA faced a 38% cut to its research-granting National Institute of Food and Agriculture (NIFA) and a 5% cut to the Agricultural Research Service (ARS), Congress ultimately maintained their budgets roughly at current levels with ARS at $1.8 billion and NIFA at $1.7 billion.
FDA. The FDA is fast-tracking cures for ultra-rare diseases by introducing a new “Plausible Mechanism Pathway.” The goal being to get treatments to patients faster when traditional trials aren’t feasible. The pathway leans on understanding a therapy’s mechanism of action in lieu of large studies that require a large patient population.
AI State-level Preemption is Back on the Menu
Labs of Democracy. As Congress stalls on meaningful AI regulation, states have been stepping up. All 50 states introduced AI‐related legislation in 2025. 38 states adopted or enacted around 100 measures. NCSL has an incredibly useful tracker of AI state laws.
The EO. It may all be for naught, however, as the Trump administration prepares an executive order to pre-empt state laws on artificial intelligence. At the time of writing, leaks of the EO suggest they’ll have Attorney General Pam Bondi establish an “AI Litigation Task Force whose sole responsibility shall be to challenge state AI laws…”
This Already Failed in Congress. They’ll likely leverage federal funding to override state regulatory authority, similar to an approach earlier this year that the Senate rejected 99-1. FAS opposed it then, and remains similarly opposed to new efforts now.
Higher Ed Shakeup
Unprecedented Changes. The Trump administration is upholding its promise to dismantle the Department of Education, a process kicked off in March by Executive Order. They’ve announced six new interagency agreements (IAAs) with four agencies to break up the federal education system. Everything from K-12 to medical schools to international students will be managed by different parts of the government. Expect lawsuits and sustained uproar, as this is undoubtedly something Congress will need to approve.
Congress Needs to Approve. House Appropriations Labor-HHS-Education Subcommittee Chair Robert Aderholt (R-Ala.) said “If you’re going to completely try to do away with the Department of Education, I’d say yes,” they’d need an act of Congress. Moving them around, I think is a little bit more of a gray area. But I think in order to make it permanent, you’d need to have it by law because obviously the next administration could change it.”
Cornell Deal. Cornell University is the latest to strike a deal with the Trump administration to restore its federal funding. They will directly pay the federal government $30 million and also invest $30 million in “research to strengthen U.S. agriculture” and benefit U.S. farmers. They’ll also hand over massive amounts of admissions data.
International Graduate Student Enrollment Down. New enrollments for international grad students is down 17%, according to fall 2025 snapshot data in the annual Open Doors report, published by the Institute for International Education. Ninety-six percent (96%) of survey participants cited visa concerns. Read a full breakdown at Inside Higher Ed.
Degree Redefinition. The Trump administration is redefining which advanced degrees count as “professional,” excluding fields like nursing, engineering, and social work from the higher loan limits previously available. This shift will almost certainly discourage students from entering these critical fields at a time when they’re needed most.
Keep That Energy
Permitting Reform. Congress is energized about simplifying permitting. Lawmakers across both parties and chambers are treating the upcoming markup by the House Natural Resources Committee of permitting-reform legislation as a pivotal moment in efforts to streamline the federal project-approval process for energy projects. The goal is to maintain momentum toward a broader agreement this Congress to speed energy-project delivery by reforming how federal permits and reviews are handled.
Data Centers and Energy. Meanwhile, attention is increasingly focused on the growing energy footprint of AI-driven data centers. A bipartisan group of 20 House lawmakers has formally asked regulators and industry stakeholders to assess how the expansion of these data centers might translate into rising electricity costs for everyday consumers.
What to Watch in December
Sandwiched between Thanksgiving and Christmas, a limited number of Congressional working days will mean the NDAA, appropriations negotiations, and Congress’s own backlog of priorities will be squeezed into a potent month of activity. There will be lots of moving parts that will all inform January’s next shutdown showdown one way or the other. Let’s hope it doesn’t end with another shuttering of the government, though some Democrats are already signaling a willingness to do it over again if their original healthcare requests are not met. It’s going to be icy cold on many fronts.
We’ll keep tracking and you keep reaching out to us at Gruiz@FAS.org with questions and suggestions. Ta ta for now!
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