Causes and Effects of Government Shutdowns

Why would much of the U.S. federal government shut down and what happens when it does?

by Robert Longley/ThoughtCo

The Cause of Government Shutdowns
The U.S. Constitution requires that all expenditures of federal funds be authorized by Congress with the approval of the President of the United States. The U.S. federal government and the federal budget process operate on a fiscal year cycle running from October 1 to midnight September 30. If Congress fails to pass all of the spending bills comprising the annual federal budget or “continuing resolutions” extending spending beyond the end of the fiscal year; or if the president fails to sign or vetoes any of the individual spending bills, certain non-essential functions of the government may be forced to cease due to a lack of congressionally-authorized funding. The result is a government shutdown.

The Ghost of Shutdowns Past
Since 1981, there have been five government shutdowns. Four of the last five government shutdowns went largely unnoticed by anybody but the federal employees affected. In the last one, however, the American people shared the pain.

1981: President Reagan vetoed a continuing resolution, and 400,000 federal employees were sent home at lunch and told not to come back. A few hours later, President Reagan signed a new version of the continuing resolution and the workers were back at work the next morning.

1984: With no approved budget, 500,000 federal workers were sent home. An emergency spending bill had them all back at work the next day.

1990: With no budget or continuing resolution, the government shuts down during the entire three-day Columbus Day weekend. Most workers were off anyway and an emergency spending bill signed by President Bush over the weekend had them back at work Tuesday morning.

1995-1996: Two government shutdowns beginning on November 14, 1995, idled different functions of the federal government for various lengths of time until April of 1996. The most serious government shutdowns in the nation’s history resulted from a budget impasse between Democratic President Clinton and the Republican-controlled Congress over funding for Medicare, education, the environment, and public health.

2013: For 17 tedious days, from October 1 through October 16, the perennial disagreement between Republicans and Democrats in Congress over spending forced a partial shutdown that saw more than 800,000 federal employees furloughed, U.S veterans locked out of their own war memorials, and millions of visitors forced to leave national parks.

Unable to pass a conventional annual budget, Congress considered a continuing resolution (CR) that would have maintained funding at current levels for six months. In the House, Tea Party Republicans attached amendments to the CR that would have delayed implementation of President Obama’s healthcare reform law–Obamacare–for one year. This amended CR had no chance of passing in the Democrat-controlled Senate. The Senate sent the House a “clean” CR with no amendments, but Speaker of the House John Boehner refused to allow the clean CR to come to a vote of the House. As a result of the impasse over Obamacare, no funding CR was passed by October 1—the end of the government’s 2013 fiscal year—and the shutdown began.

As the shutdown drug on, public opinion of Republicans, Democrats and President Obama began to plummet and, to make matters worse, the U.S. was set to reach its debt limit on October 17. Failing to pass legislation raising the debt limit by the deadline could have forced the government to default on its debt for the first time in history, placing the payment of federal benefits in danger of being delayed.

On October 16, faced with the debt limit crisis and increasing public disgust with Congress, Republicans and Democrats finally agreed on and passed a bill temporarily reopening the government and increasing the debt limit. Ironically, the bill—driven by the government’s need to reduce spending—also spent billions of dollars, including a tax-free gift of $174,000 to the widow of a deceased senator.

The Costs of Government Shutdowns
The first of the two government shutdowns in 1995-1996 lasted only six days, from November 14 to November 20. Following the six-day shutdown, the Clinton administration released an estimate of what the six days of an idled federal government had cost.

Lost Dollars: The six-day shutdown cost taxpayers about $800 million, including $400 million to furloughed federal employees who were paid, but did not report to work and another $400 million in lost revenue in the four days that the IRS enforcement divisions were closed.

Medicare: Some 400,000 newly eligible Medicare recipients were delayed in applying for the program.

Social Security: Claims from 112,000 new Social Security applicants were not processed. 212,000 new or replacement Social Security cards were not issued. 360,000 office visits were denied. 800,000 toll-free calls for information were not answered.

Healthcare: New patients were not accepted into clinical research at the National Institutes of Health (NIH) clinical center. The Centers for Disease Control and Prevention ceased disease surveillance and hotline calls to NIH concerning diseases were not answered.

Environment: Toxic waste clean-up work at 609 sites stopped as 2,400 Superfund workers were sent home.

Law Enforcement and Public Safety: Delays occurred in the processing of alcohol, tobacco, firearms, and explosives applications by the Bureau of Alcohol, Tobacco, and Firearms; work on more than 3,500 bankruptcy cases reportedly was suspended; cancellation of the recruitment and testing of federal law enforcement officials reportedly occurred, including the hiring of 400 border patrol agents; and delinquent child-support cases were delayed.

US Veterans: Multiple veterans’ services were curtailed, ranging from health and welfare to finance and travel.

Travel: 80,000 passport applications were delayed. 80,000 visas were delayed. The resulting postponement or cancellation of travel cost U.S. tourist industries and airlines millions of dollars.

National Parks: 2 million visitors were turned away from the nation’s national parks resulting in the loss of millions in revenue.

Government-Backed Loans: FHA mortgage loans worth more than $800 million to more than 10,000 low-and-moderate-income working families were delayed.

How a Government Shutdown Might Affect You

As directed by the Office of Management and Budget (OMB), the federal agencies now maintain contingency plans for dealing with government shutdowns. The emphasis of those plans is to determine which functions should continue. Most notably, the Department of Homeland Security and its Transportation Security Administration (TSA) did not exist in 1995 when the last long-term government shutdown took place. Due to the critical nature of their function, it is highly likely that the TSA would continue to function normally during a government shutdown.

Based on history, here is how a long-term government shutdown might impact some government-provided public services.

Social Security: Benefit checks would probably keep coming, but no new applications would be accepted or processed.

Income Tax: The IRS will probably stop processing paper tax returns and refunds.

Border Patrol: Customs and Border Patrol functions will probably continue.

Welfare: Again, the checks would probably continue, but new applications for food stamps might not be processed.

Mail: The U.S. Postal Service supports itself, so mail deliveries would continue as usual.

National Defense: All active duty members of all branches of all armed services would continue duty as usual, but might not get paid on time. More than half of the Defense Department’s 860,000+ civilian employees would also work, the others sent home.

Justice System: Federal courts should remain open. Criminals will still be chased, caught, prosecuted and thrown in federal prisons, which would still be operating.

Farms/USDA: Food safety inspections will probably continue, but rural development, and farm credit and loan programs will probably close down.

Transportation: Air traffic control, TSA security personnel, and the Coast Guard will remain on the job.

Applications for passports and visas may not be processed.

National Parks/Tourism: Parks and forests will probably close and visitors told to leave. Visitor and interpretive centers will be closed. Non-volunteer rescue and fire control services might be shut down. National monuments and most historic sites will probably be closed. Parks police will probably continue their patrols.

Carol Duff, MSN, BA, RN

Carol graduated from Riverside White Cross School of Nursing in Columbus, Ohio and received her diploma as a registered nurse. She attended Bowling Green State University where she received a Bachelor of Arts Degree in History and Literature. She attended the University of Toledo, College of Nursing, and received a Master’s of Nursing Science Degree as an Educator.

She has traveled extensively, is a photographer, and writes on medical issues. Carol has three children RJ, Katherine, and Stephen – one daughter-in-law; Katie – two granddaughters; Isabella Marianna and Zoe Olivia – and one grandson, Alexander Paul. She also shares her life with her husband Gordon Duff, many cats, and two rescues.

• Carol’s Archives 2009-2013