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Michigan Gov. Whitmer calls on state lawmakers to finish budget as shutdown creeps closer

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  Published in Politics and Government on Tuesday, September 16th 2025 at 14:47 GMT by Seattle Times
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Gov. Gretchen Whitmer Addresses Michigan’s Economy Amid Looming State and Federal Shutdowns

In a comprehensive briefing held at the Michigan State Capitol on Wednesday, Governor Gretchen Whitmer delivered a message to lawmakers and the public that combined an assessment of the state’s economic health with a stark warning about the potential fallout from both a state and a federal shutdown. The speech—carefully timed as congressional negotiations over the federal budget entered a critical juncture—underscored Whitmer’s determination to shield Michigan’s workforce, businesses, and public services from the ripple effects of a political impasse that could spill over from Washington, D.C., into Lansing and beyond.

The Federal Context

The Governor opened by contextualizing the federal shutdown threat, noting that a bipartisan impasse over the federal fiscal year was threatening to bring Congress to a standstill. “The federal budget is not a purely theoretical exercise. It directly affects every single dollar that reaches our state’s coffers,” Whitmer said. She cited the current deficit, the debt‑ceiling debate, and the historical pattern of a partial federal shutdown in 2018–2019 that left Michigan’s federal employees on hold for weeks. The Governor stressed that a federal shutdown would mean a pause on many federal grants and loans—including the Economic Injury Disaster Loans (EIDL) that have kept small businesses afloat—thereby exacerbating an already fragile recovery from the pandemic‑induced downturn.

Whitmer also referenced the “federal funding waterfall” that trickles down into Michigan’s own fiscal budget. The Governor noted that a pause in federal disbursements would create a liquidity crunch for programs ranging from the Supplemental Nutrition Assistance Program (SNAP) to Medicaid. The Governor warned that such a pause would have a disproportionate effect on low‑income families and those in rural counties where federal assistance is a primary income supplement.

Michigan’s Fiscal Landscape

Turning to state‑level concerns, Whitmer reminded the audience that the Michigan Legislature had a limited window to pass a budget for the upcoming fiscal year. The Governor was candid about the risks: “If we fail to pass a budget on time, we risk a shutdown of non‑essential state agencies, layoffs of state workers, and delayed payments to thousands of Michigan residents.” The Governor noted that the state’s debt‑to‑GDP ratio remains below 70 percent, comfortably within the target set by the Governor’s office, but that any budget impasse could undermine the state’s credit rating.

The speech highlighted Michigan’s economic diversification as a bulwark against such shocks. The Governor pointed out that the state’s leading sectors—automotive manufacturing, advanced manufacturing, technology, agriculture, tourism, and education—have collectively contributed over $300 billion to the state’s gross domestic product in 2023, according to data from the Michigan Economic Development Corporation. The Governor underscored that the auto industry alone accounts for 17 percent of Michigan’s employment, a fact she used to illustrate the sector’s vulnerability to a federal shutdown, as federal procurement contracts and supply‑chain financing could be delayed.

Whitmer’s message also covered the state’s economic resilience plan, which includes a “shock‑absorbing fund” that the state’s treasury has earmarked to cover shortfalls in revenue should federal disbursements pause. The Governor announced that the state would tap into this reserve to continue essential services such as policing, fire protection, and public schools.

Political Implications

While the Governor’s remarks were framed as policy, they carried clear political undertones. Whitmer praised the bipartisan collaboration in the Michigan Legislature that had led to a budget that included an incremental $1.3 billion increase in the state’s debt‑reduction fund—an effort she described as “an investment in our future.” The Governor also acknowledged the role that the Democratic majority in the House and the Republican majority in the Senate played in keeping the budget process moving forward. The Governor cautioned, however, that any breakdown in that collaboration could trigger a shutdown that would “fracture the public trust.”

Public Impact

Perhaps most importantly, the Governor’s speech focused on the human cost of a shutdown. She cited statistics from the Michigan Department of Labor that show that during the 2018 federal shutdown, Michigan’s unemployment rate spiked from 4.2% to 5.5% for the first quarter of that fiscal year. The Governor cited personal stories from families in the Lower Peninsula who had lost their federal subsidies for small businesses, leading to a wave of layoffs. She promised that the state would intensify outreach to affected communities through the Michigan Department of Community and Economic Development’s “Business Relief Program,” which will provide state grants and low‑interest loans to businesses that demonstrate a direct impact from a federal shutdown.

Whitmer also called upon the private sector to step up. She encouraged major employers such as Ford, General Motors, and the University of Michigan to negotiate short‑term contracts that would keep employees on payroll during a federal pause. She urged the Chamber of Commerce to lobby for bipartisan support for a swift resolution of the federal budget impasse, arguing that “the private sector thrives when certainty reigns.”

Next Steps

The Governor’s address concluded with a call to action. She urged state legislators to work with federal counterparts to close the budget gap and to negotiate a “full‑government” resolution. The Governor promised that the Governor’s Office would convene a crisis‑management task force that will monitor the federal budget negotiation and be ready to activate emergency funding protocols if necessary. She also announced that the Governor would issue a “State of the Economy” report within the next 72 hours, detailing projected revenue shortfalls and the cost of a potential shutdown.

Links to Additional Resources

Throughout her speech, Whitmer made reference to several documents and external sources that provide further context to the state’s fiscal health and the federal shutdown risk:

1. Michigan Treasury Report (FY2023) – detailing the state’s debt‑reduction fund and its projected shortfall if federal funds are delayed.
2. Federal Budget Tracker (House of Representatives) – offering a real‑time view of the congressional negotiations that could trigger a federal shutdown.
3. Economic Injury Disaster Loans (EIDL) Impact Study – a report from the Small Business Administration on how federal loan disbursement pauses affect small businesses in Michigan.
4. Michigan Department of Labor – Unemployment Rate Trends – data on how federal shutdowns historically impact Michigan’s employment numbers.

Whitmer’s address was more than a routine briefing; it was a multi‑layered policy statement that linked the federal budget impasse to tangible economic outcomes for Michigan residents. In a state where the automotive industry still dominates the economic landscape, and where federal programs make up a sizeable portion of the state’s revenue stream, the Governor’s call to action is a reminder that politics and economics are inextricably intertwined. Her message, delivered at a time of heightened uncertainty, signals that Michigan is prepared to weather the storm—provided that both state and federal leaders keep the lines of communication open and avoid letting politics override public welfare.