Tenth Senate CR Vote Fails and Court Challenges Legality of Federal Layoffs as Government Shutdown Enters Fourth Week

By Kim Johnson, NLIHC Senior Director of Policy 

On October 16, U.S. Senators failed to pass on a continuing resolution (CR) to fund and reopen the federal government, extending the government shutdown into a fourth week. The proposal, which offered a “clean” extension of federal funding through November 21, failed by a vote of 51-45, with all but three members of the Democratic caucus voting against. This was the tenth vote the Senate has taken on a CR since the shutdown began on October 1.  

Democrats are withholding their support for an extension of Affordable Care Act (ACA) tax credits that are slated to expire at the end of the year; without an extension, health insurance premiums will increase, and millions will be at risk of losing their healthcare coverage. Despite the urgency, Congressional leaders have yet to facilitate a compromise to end the shutdown. Senate Majority Leader John Thune (R-SD) offered to hold two separate votes in the chamber – one on the CR, and another on the ACA credit extensions – a proposal that drew mixed reactions from Democrats. A bipartisan group of senators, led by Senator Jeanne Shaheen (D-NH), is also reportedly meeting to work out a compromise, including a potential proposal to reopen the government in exchange for a one-year extension of the expiring ACA credits, which would give Congress more time to negotiate a longer-term solution. The House has been in recess since passing a Republican-led CR on September 19 that would extend funding for the federal government until November 21, but that does not include the ACA tax credit extension (see Memo, 9/22). House Speaker Mike Johnson (R-LA) has vowed to keep the House in recess until the end of the shutdown.  

Federal Judge Issues Temporary Restraining Order on Shutdown Layoffs 

In response to the shutdown, the White House issued on October 10 a new round of Reduction in Force (RIF) notices, threatening to cut more than 4,000 federal employees across departments, including 442 HUD staff (see Memo, 10/13). The American Federation of Government Employees (AFGE) and American Federation of State, County, and Municipal Employees (AFSCME), two labor unions representing government workers, filed suit against the administration, asserting the Office of Management and Budget (OMB) “violated the law by threatening to engage in the mass firing of federal workers during a shutdown.” 

“The lawsuit asserts that firing federal employees during a shutdown is an unlawful abuse of power designed to punish workers and pressure Congress,” the unions noted in a press release. “For decades, shutdowns have meant that employees are either furloughed without pay but guaranteed back pay, or they are deemed ‘excepted’ and required to keep working until funding is restored to pay them. The actions of this administration break from this long-standing framework, directing agencies to issue mass RIF notices that could strip employees of back pay rights, violate agencies’ statutory duties, and even target workers whose jobs are essential to protecting life and property during a shutdown. In doing so, the administration is misusing the shutdown process for partisan ends and violating the very laws that govern how shutdowns are supposed to function.”  

A federal judge on October 15 issued a temporary restraining order against the Trump administration, instructing them “to issue no further RIF notices and to take no action to enforce the RIF notices it has already issued” during the shutdown. The Administration submitted court filings on October 17 stating OMB would comply with the order “while this matter is being litigated before the Court, absent an order from a higher court providing relief.” According to the documents, OMB issued a RIF notice to nearly 2,500 federal employees; however, this number only reflects members of AFGE and AFSCME, the labor unions that filed the lawsuit against OMB.  

Shutdown Risks for HUD-Assisted Households  

Households who receive HUD rental assistance — including Housing Choice Vouchers, Project-Based Rental Assistance, and public housing — should have their rent paid at least through November. However, the longer a shutdown continues, the greater the risk to assisted households, and the greater the disruption to essential federal services and programs. The National Housing Law Project (NHLP) published two updated shutdown resources, one for tenants outlining the legal rights of households receiving HUD assistance, and the other providing an overview of the impacts of a government shutdown for legal aid attorneys.  

NLIHC will continue working with our partners to monitor the shutdown, its potential effects on HUD programs, and the people and communities they serve.  

The Need for Additional Funding for Voucher Renewals in a Final FY26 

The shutdown was triggered by the beginning of the new federal fiscal year (FY), which began on October 1. Once a CR is in place, members of Congress will still need to come together to reach a final agreement in FY26 spending bills, including the Transportation, Housing, and Urban Development (THUD) spending bill that funds HUD’s vital affordable housing, homelessness, and community development programs.  

While both the House and Senate FY26 THUD spending bills reject the drastic spending cuts and programmatic overhauls proposed in President Trump’s FY26 budget request, neither spending bill provides sufficient funding to ensure renewal of all existing Housing Choice Vouchers (HCVs) or Emergency Housing Vouchers (EHVs). Without sufficient funding, vouchers will be lost through attrition – when a household no longer needs their voucher, the voucher cannot be reissued to a new family because it is no longer attached to funding. When renewal funding is insufficient enough – or when funding is cut – households that rely on a voucher to keep a roof over their heads actively lose their rental assistance, putting them at risk for housing instability, eviction, and in worst cases, homelessness.  

At current funding levels, over 2.4 million households receive rental assistance, accounting for just one in four households who qualify. Under the House’s FY26 spending bill, an estimated 181,900 fewer households would be served; in the Senate, 107,800 fewer households would receive rental assistance. The loss of these vouchers would disproportionately affect older adults, people with disabilities, and families with children. 

Take Action 

Use NLIHC’s toolkits and resources to take action on FY26 funding, including by:  

• Using NLIHC’s advocacy toolkit, “Opposing Cuts to Federal Investments in Affordable Housing,” to call on Congress to protect and expand affordable housing and homelessness resources, including NLIHC’s priorities:  
  • Full funding to renew all existing tenant-based voucher contracts, to ensure the people and families who rely on an HCV or EHV to keep a roof over their heads do not lose their assistance. Check out the “EHV Funding Cliff Mobilization Toolkit” for more information, including talking points and resources.
  • $4.922 billion for HUD’s Homeless Assistance Grants (HAG) program, and for HUD to stick to its commitment to a two-year Notice of Funding Opportunity (NOFO) for the Continuum of Care Program.
  • $5.7 billion for public housing operations, and at least $5 billion to address public housing capital needs.  
  • $15 million for the Eviction Protection Grant Program (EPGP), as provided in the Senate’s spending bill.
  • At least $1.3 billion for HUD’s Indian Housing Block Grant (IHBG) program and $150 million for IHBG-Competitive funds, targeted to Tribes with the greatest needs.   

The toolkit includes talking points, advocacy materials, engagement ideas, and more resources for advocates to weigh-in with their members of Congress on the importance of these vital resources!    

• Emailing or calling members’ offices to tell them about the importance of affordable housing, homelessness, and community development resources to you, your family, your community, or your work. You can use NLIHC’s Take Action page to look up your member offices or call/send an email directly! 
• Sharing stories of those directly impacted by homelessness and housing instability. Storytelling adds emotional weight to your message and can help lawmakers see how their policy decisions impact actual people. Learn about how to tell compelling stories with this resource.   

National, state, local, Tribal, and territorial organizations can also join over 2,700 organizations on CHCDF’s national letter calling on Congress to support the highest level of funding possible for affordable housing, homelessness, and community development resources in FY26.    

Visit NLIHC’s Advocacy Hub for more information and resources that can help you take action and help protect the affordable housing programs people rely on.