
Panoramic: Automotive and Mobility 2025
At 12:01 am ET on October 1, 2025, funding expired for certain agencies within the federal government, including the Food and Drug Administration (FDA) and the U.S. Department of Agriculture's (USDA's) Food Safety Inspection Service (FSIS). These agencies will be operating under significantly reduced functions until Congress passes a new appropriations bill providing funding for these agencies, ending the government shutdown. This memorandum provides a summary of the scope of each of these agencies' operations during the shutdown, as well as implications for the food and beverage industry.
FDA’s Contingency Plan
The U.S. Department of Health and Human Services (HHS) recently issued a contingency staffing plan for operations in the absence of enacted annual appropriations.1 2 The plan states that during any lapse in funding, FDA will continue its core functions to “handle and respond to emergencies” and that all “FDA activities related to imminent threats to the safety of human life or protection of property” will continue. Specific activities that will continue during a shutdown include:
The plan states that the following are examples of activities that would not continue during a lapse in appropriations:
The plan suggests fewer inspections, stating that “FDA will be limited in the number and type of inspections to be conducted, unless the inspections are for cause or otherwise necessary to detect and address imminent threats to the safety of human life.”
The plan also states that 86% of FDA staff will be retained in the event of a lapse of appropriations, including 66% who are exempt (because their activities or positions are already funded or otherwise exempted) and 19% who are excepted (because their activities are deemed necessary by implication, or for the safety of human life or protection of property).3
FSIS’s Contingency Plan
Similarly, USDA revised its lapse in appropriations contingency plan in advance of the government shutdown.4 The plan states that FSIS will continue to perform mission essential food safety operations required to protect life and property, including:
In recent past government shutdowns, FSIS maintained limited label review functions and limited policy staff were available to address questions through the AskFSIS question and answer system, although neither are directly addressed through USDA’s 2025 plan.
The plan states that all functions not required to directly or indirectly support the protection of life and property will cease, including non-essential administrative tasks, training other than mandatory training for frontline inspectors, policy initiatives, and other support activities. Additionally, USDA notes in the plan that the 29 states running cooperative agreements for inspection services with FSIS may run out of funds to perform key inspection services during the shutdown.
Other Considerations
The government shutdown comes after eight months of significant upheaval in the federal workforce, including widespread reductions in force at FDA and USDA. Last week, the White House Office of Management and Budget issued a memo to federal agency heads instructing leadership to begin drafting reduction in force plans for agency activities where funding would lapse on October 1, “to retain the minimal number of employees necessary to carry out statutory functions.”5 Such an action would go beyond standard furloughs that are typical during government shutdowns to permanently eliminate jobs during the lapse in appropriations. At the same time, FDA Commissioner Marty Makary is reported to have issued a statement to FDA employees indicating that he was able to “ensure an exemption” for the agency from such layoffs during the shutdown, due to the agency’s public safety mandate. It remains unclear at this time if and how the shutdown may lead to further reductions in the federal workforce.
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We will continue to monitor and provide updates on the federal government shutdown. Please do not hesitate to contact us about this or any other matter.
Authored by Brian Eyink and Rachel Buff.
References
1 U.S. Department of Health and Human Services, FY 2026 HHS Contingency Staffing Plan for Operations in the Absence of Enacted Annual Appropriations, https://www.hhs.gov/about/budget/fy-2026-hhs-contingency-staffing-plan/index.html.
2 U.S. Food and Drug Administration, Operating Division Details,https://www.hhs.gov/about/budget/fy-2026-fda-contingency-staffing-plan/index.html.
3 Note: The HHS contingency staffing plan proposes the following precise figures, which appear to include a rounding error: “In the event of a lapse of appropriation, 13,872 (86%) of FDA staff will be retained, including 10,740 (66%) who are exempt (their activities or position are already funded or otherwise exempted) and 3,132 (19%) who are excepted (their activities are deemed necessary by implication, or for the safety of human life or protection of property).”
4 U.S. Department of Agriculture, Lapse in Funding Plans, https://www.usda.gov/shutdownplans.
5 White House Office of Management and Budget, Lapse Note, https://www.politico.com/f/?id=00000199-7e8f-ddde-a199-fedf6c5d0000.