Issues Raised by a Federal Government Shutdown: Grants to State and Local Governments and the Covid-19 Pandemic [Updated September 29, 2021] [open pdf - 633KB]
From the Document: "Midnight September 30, 2021, will be the end of FY2021. In the absence of new funding legislation for FY2022, funding for federal agencies and activities funded through all 12 of the regular annual appropriations acts will lapse. The resulting lapse in appropriations will require a shutdown of most federal agency operations [hyperlink], including those necessary to administer federal aid to state and local governments. [...] Since March 2020, COVID-19 [coronavirus disease 2019] pandemic response legislation has provided additional funding for federal grant programs to state and local governments. According to the Pandemic Response Accountability Committee, $582.3 billion [hyperlink] has been provided to state, local, and tribal governments for pandemic response, not including additional grant funding provided under the American Rescue Plan Act of 2021 [hyperlink] (American Rescue Plan, P.L. 117-2, enacted March 11, 2021). The American Rescue Plan provided an additional $360 billion [hyperlink], of which $219.8 billion was appropriated for the Coronavirus State Fiscal Recovery Fund [hyperlink], $130.2 billion for the Coronavirus Local Fiscal Recovery Fund [hyperlink], and $10 billion for the Coronavirus Capital Projects Fund [hyperlink]. A federal government shutdown may cause disruption to, or cessation of, grant administration activities for normal grant program appropriations, as well as pandemic-related supplemental funding, depending on the following factors:  the timing and duration of a federal government shutdown; and  the choices made by federal, state, and local officials in anticipation of, or during, a shutdown regarding grant program administration."
CRS Insight, IN11554
Congressional Research Service: https://crsreports.congress.gov/