Government Shutdown

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Note:  Charles S. Konigsberg, Editor-in-Chief of FedWeb.com, served as Assistant Director at the Office of Management and Budget during the government shutdown of 1995.

Government Shutdown

  • Why does the government have to shut down?  The Anti-Deficiency Act of 1870 (31 U.S.C. 1341-42; 1511-1519) makes it strictly illegal for any government official to make payments or enter into contracts in excess of congressional appropriations.  The purpose is to enforce Congress’ constitutional authority over the public purse and the result is to require government shutdowns when appropriations lapse.  Background on Anti-Deficiency Act
  • When was the last shutdown?  There was a 16-day shutdown in October 2013.  
  • What was the longest shutdown?  The longest shutdown was 21 days in 1995-96.
  • What happens when the government shuts down?  Federal agencies must discontinue all “non-essential” functions and furlough all “non-essential” employees.  Each agency develops its own shutdown plan following guidance released by the White House Office of Management and Budget (OMB);  here is a link to current shutdown plans.  In general, “essential services” are those related to the “safety of human life or the protection of property” and those services continue to be operated by federal employees classified as “essential” —  with back salary and contract payments made only when appropriations are eventually enacted.
  • Entitlement benefits that are permanently appropriated, such as Social Security, Medicare, and Medicaid, continue to be paid although services such as new enrollments or fixing benefit problems might cease (depending on what OMB deems “essential”).
  • Examples of government functions that might stop (the precise impact is uncertain since each Administration’s OMB makes the final determination on what is to be deemed “essential” for the safety of life or the protection of property):
    • NIH may discontinue processing medical research grants.
    • Private-sector lending may be disrupted, because banks and mortgage providers cannot access government income and Social Security Number verification services.
    • Import and export licenses may be put on hold, negatively impacting trade.
    • Tax refunds may be delayed.
    • Government contractors experience delays (2013 shutdown).
    • Federal permitting and environmental reviews may stop, delaying transportation, energy and infrastructure projects.
    • FDA and EPA may cancel health and safety inspections at food processing and water plants, chemical plants, and hazardous waste sites.
    • Federal loans to small businesses, homeowners, and families in rural communities may stop.
    • Travel and tourism is disrupted at national parks and monuments hurting the surrounding local economies.
  • What happens to federal employees?  Non-essential employees are furloughed and “essential” employees are not paid until appropriations are enacted.  Historically, Congress has granted back pay to furloughed employees, but it is not guaranteed.
  • Do shutdowns save money?  No.  OMB estimated that the 2013 shutdown resulted in: $2 billion in lost worker productivity and the federal government had to pay interest on late payments to contractors.

Click here for Federal Agency Shutdown Contingency Plans

FedWeb Appropriations Portal: latest news on continuing resolutions and FY ’18 appropriations

Background and Resources: