Special Report: The Partial U.S. Government Shutdown 2026: What’s Funded, What’s Unfunded, and What Actually Stops

On Jan. 31, 2026, the federal government entered a partial government shutdown after a funding deadline lapsed at 12:01 a.m. Saturday, Jan. 31, leaving several major Cabinet departments without enacted appropriations while other parts of government continue operating under bills already signed into law.

What Is Funded, What Is Unfunded, and What Actually Stops

The lights do not go out all at once in Washington. In a shutdown, the government does not “close” so much as it triages, keeping the machinery of national security and public safety humming while much of the paperwork, oversight, and customer service slows to a crawl.

This shutdown is partial, not total. Six of the 12 annual appropriations bills were already enacted, leaving a sizable slice of federal operations funded and a larger share of day to day discretionary activity suddenly in limbo.

At the center of the standoff is a familiar dynamic in modern budget politics: a must pass funding package colliding with a high voltage policy dispute, this time tied to the Department of Homeland Security and immigration enforcement oversight. The result is a shutdown that is simultaneously high impact and uneven, with consequences that depend less on job titles and more on whether a function is legally “excepted,” funded through other streams, or dependent on annual appropriations.

Key Takeaways for readers, contractors, and anyone expecting a tax refund

• Funded agencies keep operating normally, including Interior, meaning national parks and Smithsonian museums are expected to remain open.

• Unfunded departments face furloughs, paused services, delayed approvals, and critically for business, contracting slowdowns and stop work risk.

• The IRS is expected to shutter early in tax season; prior contingency planning warned that refunds generally would not be paid and in person taxpayer assistance centers would close during a lapse.

• Air traffic controllers and TSA officers keep working, described as working unpaid during the lapse, keeping airports running but not necessarily smoothly.

• ICE and CBP continue operating, drawing on a large pool of previously approved funding even as DHS’s annual budget is caught in the standoff.

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1) Which Federal Agencies Are Funded and Operating Normally

The following departments and parts of government are funded and expected to operate under enacted appropriations:

• Agriculture including FDA, SNAP, Forest Service

• Commerce including Census, NOAA, BEA, USPTO

• Energy

• Environmental Protection Agency

• Interior including National Park Service, BLM

• Justice including FBI, DEA, ATF

• Legislative Branch

• NASA

• National Science Foundation

• Veterans Affairs

What that means in real life: because Interior is funded, national parks and major museums such as the Smithsonian are expected to remain open, a highly visible difference from past shutdowns that shuttered iconic public sites.

2) Programs Not Funded Via Appropriations and Why They Continue

Some major services keep running because they rely on dedicated funding streams rather than annual appropriations:

• Social Security

• Medicare

• U.S. Postal Service

This matters for household stability. Even in a shutdown, the largest benefit programs many Americans depend on typically do not stop the way discretionary agencies do.

3) Which Agencies Are Not Funded and Are Shutdown Affected

These departments are listed as not yet funded, meaning they are operating under shutdown rules and continuing only legally excepted functions:

• Defense

• Education

• Health and Human Services including NIH and CDC

• Homeland Security including CBP, ICE, TSA, Coast Guard, FEMA, Secret Service

• Housing and Urban Development

• Labor

• State

• Transportation including FAA, FHWA, FTA, NHTSA

• Treasury, including the IRS

A key wrinkle is that detailed agency service plans were still emerging, but several concrete operational impacts were already clear, especially at the IRS, in federally backed research, and in housing assistance programs.

4) What Each Unfunded Department Is Not Funded to Do

Below is what the shutdown means in practice, especially the functions that are paused, slowed, or shuttered when appropriations lapse.

Department of the Treasury and the IRS

The IRS is one of the most immediate pain points because the shutdown intersects with tax filing season. The IRS is expected to shutter without enacted funding.

Not funded to do:

• Issue tax refunds in the ordinary course during a lapse

• Operate in person taxpayer assistance centers

• Maintain normal customer service capacity, leading to call and case backlogs

• Process non essential account resolution work at full speed

Health and Human Services, including NIH and CDC

The shutdown has a direct hit on the nation’s scientific engine. Federally backed scientific research is expected to halt immediately when funding lapses.

Not funded to do:

• Continue federally backed scientific research operations at normal levels

• Start new federally funded research activity on schedule

• Maintain routine program operations and administrative support across non excepted health programs

Housing and Urban Development

HUD’s shutdown impact is measured less in headlines and more in household stability. Reporting flagged that money for housing assistance programs could be at risk, particularly during winter conditions.

Not funded to do:

• Sustain normal processing and administration of housing assistance programs

• Maintain routine program oversight, approvals, and disbursement workflows

• Advance new discretionary housing initiatives requiring annual funding

Homeland Security, including TSA, FEMA, Coast Guard, CBP, and ICE

DHS sits at the center of the funding dispute, but operations are complex. ICE and CBP continue operating due to access to previously approved funding pools.

Not funded to do at full capacity:

• Operate non excepted support and administrative functions at normal speed

• Maintain the usual pace of procurement and program administration

• Fully staff non emergency workflows dependent on annual appropriations

What continues under strain: TSA officers and other frontline staff continue working, described as unpaid, keeping security operations running but under staffing stress.

Department of Transportation, including the FAA

Transportation is where shutdown mechanics meet daily life. Air traffic controllers continue to work, described as unpaid, keeping flights operating.

Not funded to do:

• Maintain full staffing for non excepted administrative and program functions

• Advance routine project approvals and discretionary actions on normal timelines

• Fully process non emergency regulatory and program activities

Department of Defense

Defense remains unfunded, though core national security functions continue. Service members continue working, described as unpaid, reflecting the excepted nature of the mission.

Not funded to do:

• Maintain normal civilian staffing for non excepted work

• Process routine contracting and acquisition paperwork at standard speed

• Conduct non mission essential travel, training, and planning

Department of Labor

Labor plays a key role in economic and workforce data collection and is among the unfunded departments.

Not funded to do:

• Collect and publish economic and workforce data at normal cadence

• Maintain routine enforcement and oversight activities at full speed

• Provide full public facing services across non excepted offices

Department of State

State Department operations continue selectively, with reduced staffing.

Not funded to do:

• Maintain normal processing capacity for routine services

• Run non excepted administrative and program functions at full strength

Department of Education

Education is unfunded and operating with reduced staffing.

Not funded to do:

• Maintain the normal pace of discretionary program administration

• Conduct non excepted oversight and administrative functions at full capacity

5) What This Means for Government Contractors and Federal Suppliers

For businesses selling into the federal government, shutdowns are less about politics and more about cash flow mechanics. Many unfunded departments house the very offices that approve work, funding, and invoices.

Common contractor impacts include:

• Stop work orders or pause pending funding direction

• Delays in contract modifications, options, and incremental funding

• Slower invoice approvals

• Award delays for new and recompete work

Even when a contract is funded, the personnel needed to approve deliverables or payments may be furloughed.

6) What Happens Next

Leadership has expressed confidence the shutdown could end quickly, possibly within days. Until enacted funding is restored, agencies will continue operating under emergency rules, unpaid essential labor, and reduced administrative capacity, while backlogs quietly build.

Quick Reference for Indexing and Clarity

Funded: Agriculture, Commerce, Energy, EPA, Interior, Justice, Legislative Branch, NASA, National Science Foundation, Veterans Affairs

Unfunded: Defense, Education, Health and Human Services, Homeland Security, Housing and Urban Development, Labor, State, Transportation, Treasury and IRS

Continues without annual appropriations: Social Security, Medicare, U.S. Postal Service

Frequently Asked Questions About the Partial Government Shutdown

What is a partial government shutdown?

A partial government shutdown occurs when Congress fails to pass funding for some federal agencies, while other agencies continue operating under enacted appropriations. Unlike a full shutdown, large portions of government remain open, but unfunded departments are legally restricted to performing only essential or “excepted” functions.

Which federal agencies are affected by this shutdown?

Agencies affected are those without enacted appropriations, including Defense, Education, Health and Human Services, Homeland Security, Housing and Urban Development, Labor, State, Transportation, and Treasury including the Internal Revenue Service. These agencies operate with reduced staffing and limited authority until funding is restored.

Which agencies are still funded and operating normally?

Agencies that remain funded include Agriculture, Commerce, Energy, the Environmental Protection Agency, Interior, Justice, the Legislative Branch, NASA, the National Science Foundation, and Veterans Affairs. National parks and major museums are expected to remain open because Interior is funded.

Why do Social Security, Medicare, and the Postal Service continue during a shutdown?

These programs are not funded through annual appropriations in the same way as most federal agencies. Social Security and Medicare rely largely on trust funds and payroll taxes, while the Postal Service is funded primarily through postage and service revenue.

Is the IRS closed during the shutdown?

The IRS is affected because Treasury is unfunded. During shutdowns, the IRS typically shutters non essential operations. This can delay tax refunds, close in person assistance centers, and reduce customer service capacity during tax season.

Will tax refunds be delayed?

Yes. Past shutdown contingency planning indicates that tax refunds generally are not issued while the IRS is shut down. Even short shutdowns can create backlogs that take weeks to unwind after funding resumes.

Are airports and flights affected?

Air traffic controllers and Transportation Security Administration officers continue working because their roles are considered essential to public safety. However, they are often required to work without pay during a shutdown, which can increase staffing strain and raise the risk of delays or disruptions.

Does Homeland Security shut down?

Homeland Security is officially unfunded, but many of its frontline operations continue. Agencies such as Customs and Border Protection and Immigration and Customs Enforcement remain operational due to access to previously approved funding. Support functions, training, procurement, and administrative work often slow or pause.

What happens to federally funded research?

Federally backed scientific research is among the most immediate casualties of a shutdown. At agencies under Health and Human Services, research activity can halt when funding lapses, delaying studies, grant administration, and scientific progress.

How does the shutdown affect housing assistance?

At Housing and Urban Development, funding lapses can put housing assistance programs at risk. Administrative delays, slowed oversight, and uncertainty around program funding can have real consequences for communities, particularly during winter or disaster recovery periods.

What does this mean for government contractors?

For contractors, shutdowns often result in stop work orders, delayed contract modifications, slower invoice approvals, and postponed new awards. Even when a contract is funded, the government personnel needed to approve work or payments may be furloughed.

Can contractors keep working during a shutdown?

It depends on the contract and whether funding is already obligated. Contractors should not assume work may continue without written direction from the contracting officer. Silence during a shutdown often reflects furloughs, not approval.

How long is the shutdown expected to last?

Congressional leadership has signaled confidence that the shutdown could be resolved quickly, possibly within days. However, even short shutdowns can cause longer lasting operational and financial disruptions once agencies reopen.

What happens after funding is restored?

Once funding is enacted, furloughed employees return to work and agencies begin processing backlogs. Payments resume, services restart, and normal operations gradually return. The recovery period often extends beyond the official end of the shutdown.

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