At midnight last night, the federal government shut down after Congress failed to reach a deal on funding. While “shutdown” sounds dramatic, its impacts vary—and in Colorado, some families and workers will feel the effects sooner than others.

What Is Shutting Down?

When the government closes, nonessential functions stop. Essential services—those “critical to protect lives and property”—continue. Each federal agency sets its own contingency plan, which are posted on agency websites.

Here are a few key agencies Coloradans may want to track:

• Department of Education
• Social Security Administration
• Environmental Protection Agency

Impact on Colorado’s Budget

Colorado’s state budget relies on federal funding for about one-third of its programs. While state employees paid solely from the state’s General Fund are likely unaffected, programs supported by federal dollars may face furloughs or funding disruptions if the shutdown drags on.

Safety Net Programs At Risk

Here’s what we know so far about how major safety net programs could be affected:

• Social Security, Medicaid, Medicare, Veterans Affairs: Benefits continue, but reduced staff may mean longer wait times and slower application processing.
• SNAP (Supplemental Nutrition Assistance Program): October payments should go out as scheduled. The United States Department of Agriculture (USDA) has reserves to keep payments flowing if the shutdown extends into mid-October.
• WIC (Women, Infants, and Children): Limited contingency funding means payments could be delayed or interrupted—putting families at risk.
• TANF (Temporary Assistance for Needy Families): Colorado can tap unspent block grant funds to weather a short disruption, but prolonged shutdowns could stop payments.

Health Coverage On The Line

Beyond the shutdown, Congress must act immediately to extend the Affordable Care Act’s enhanced premium tax credits (ePTCs). Without action, millions of Americans will soon see their health insurance premiums skyrocket. Tax credits that help Americans afford insurance premiums run out at the end of the year, and families are already getting notices that their costs will soar.

• On average, premiums are expected to rise more than 75%.
• Americans living in rural areas could face increases of 90%.
• An estimated 4 million Americans could become uninsured altogether.

In Colorado, the stakes are high. A 60-year-old couple making $82,000 could see their annual premiums for a benchmark plan jump from $6,970 to over $23,598. Additionally, 35,000 Coloradans risk losing coverage because premiums would become unaffordable. Democrats in Congress are calling for any government funding deal to address this crisis immediately. Republicans have rejected that call.

This isn’t just about budgets—it’s about people’s lives and access to care.

What’s Next

The Colorado Fiscal Institute will continue monitoring how the shutdown affects our state’s economy, budget, and families. We’re also calling on Congress to act now to keep the government running and extend ePTCs so that families don’t face devastating increases in health costs.

Follow along with advocacy campaigns like Community Catalyst’s #CareNotCuts and follow the Center on Budget and Policy Priorities for ways to take action.