FRANK GREGORY
September 23rd, 2025
Hey Influence Traders,
The OBBB combined several priorities, including funding defense, infrastructure, industrial policy, retirement, rare earths, etc., but it wasn’t a full set of 12 appropriations bills that normally fund every federal agency.
Thus, many day-to-day operating budgets (e.g., salaries, routine agency operations, grants) were left to the regular appropriations process.
By law, each fiscal year Congress must pass appropriations (or stopgap measures) to keep agencies open.
Since the OBBB funded only selected programs, then for the rest of the government, appropriations authority expires on September 30.
As such, without new appropriations or a continuing resolution (CR), those agencies will shutdown.
A CR is used when Congress hasn’t passed a full appropriations bill in time.
It temporarily extends prior-year funding levels, preventing a shutdown and giving lawmakers more time to negotiate.
Even with the OBBB, Congress needs a CR (or final appropriations bills) to bridge the gap and ensure continuity of government operations.
But a CR is not the final answer.
If Congress wants to adjust baseline funding, add emergency money (disaster relief, Ukraine/Taiwan/Israel support, hurricane recovery, etc.), or incorporate new policy riders, it must pass another supplemental or omnibus appropriations bill.
10/1/25
The deadline for funding the government is October 1st, which is the start of the new fiscal year.
Unless something new passes before October 1st, there is a real risk of a government shutdown.
If Congress does not pass either the appropriations bills or a continuing resolution by the deadline, here’s what follows:
- Government Shutdown (partial or full):
- Non‐essential federal agencies must suspend operations.
- Federal employees in non‐essential roles are typically furloughed (i.e., sent home without pay until funding is restored).
- “Essential” functions continue, such as those required for safety of life or protection of property (e.g., air traffic control, national security, etc.).
- Many programs that depend on annual appropriations stop or pause. New grants, non‐urgent services, etc., are delayed.
- Impacts on Citizens / Services:
- Delays in government services, closure of national parks, processing delays (permits, passports, etc.).
- Economic cost: furloughed workers don’t get paid until past the shutdown, local economies around federal installations get hit.
- No Automatic Default on Debt or Interest Payments Because of a CR Failure:
- Failing to pass a CR is not the same as failing to pay debt obligations. A CR relates to appropriations (funding for government operations). Default risks relate to the debt ceiling (the legal limit on borrowing) and whether the government has enough cash/liquidity to honor its promises.
- So, unless the debt ceiling is reached and not raised, or the Treasury runs out of money, interest on debt / principal obligations are expected to continue.
If the current CR fails, Congress and the White House have several possible levers they might pull:
- Pass a different CR: Maybe a shorter-term or modified version that addresses objections.
- Split‐funding: Pass CRs for some departments but not all, such as funding for “critical” or essential parts first.
- Negotiation & compromise: One side might concede more funding for healthcare, foreign aid, law enforcement or remove controversial cuts to get enough votes.
- Delay tactics or stopgap measures: They might try to push things down the road or use procedural tricks (amendments, etc.) to buy time.
- Public pressure/political consequences: Partisan blame shifts can force movement.
It’s very important to distinguish two separate but related issues:
- Government Shutdown = Failure to fund operations. Disrupts services, furloughs, etc., but doesn’t by itself mean the U.S. won’t pay its debt or interest.
- Debt Ceiling Default = Failure to raise the borrowing limit when needed so the U.S. cannot issue more debt and may lack cash to pay interest or principal. That leads to default, which has much more severe implications.
Neither are good … but one is worse.
What is not doing badly is Rare Earth!
We’ve got some trades on in USARareEarth (Ticker: USAR) and American Resources Corp. (Ticker: AREC).
We’ll break down how they’re doing in our next live session.
Come find another winning trade with us in our next live session.
Cutting Through the Noise for You,
Frank Gregory