Washington is bracing for a government shutdown as federal funding is scheduled to lapse at midnight on Sept. 30, 2025. With no agreement in sight for keeping the lights on beyond the start of fiscal year 2026 on Oct. 1, 2025, Congress left Washington this week at an impasse.
“We are shutting down,” a Senate Republican senior aide told Baker Tilly on Sept. 26, 2025, while noting the most probable way out of the stalemate is for Democratic senators to accept Republicans’ promise to later negotiate Affordable Care Act (ACA) subsidies.
The House cleared a Republican-led, so-called “clean” continuing resolution (CR) by a 217-212 vote on Sept. 19, 2025, to maintain government funding at fiscal 2024 levels through Nov. 20, 2025. The measure failed in the Senate, however, where bipartisan support is required to reach the 60-vote threshold under regular order. A Democratic proposal also failed.
Democratic lawmakers are demanding, among other healthcare-related priorities, that the CR include the extension of the enhanced premium tax credit for ACA premiums, which expires at year’s-end. But Republicans say those demands are too high for a seven-week stopgap measure.
“The Senate will continue to vote on the House-approved CR until it passes,” the senior aide told Baker Tilly. The Senate is scheduled to return on Sept. 29, 2025, while the House is slated to return after the lights go out on Oct. 1, 2025.
Proposed legislation
Although appropriations are at the forefront on Capitol Hill, we continue to track the progress of important tax-related legislative initiatives.
On Sept. 17, 2025, the House Ways and Means Committee advanced the bipartisan Tax Court Improvement Act (H.R. 5349), a tax-procedure measure which would make several changes to the U.S. Tax Court’s procedural rules, including enhancing authority of special trial judges and clarifying the application of equitable tolling in deficiency cases. Following the U.S. Supreme Court’s holding in
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