Government Shutdown

Facts: Government Shutdown

  • The Federal government is at risk of shutting down at midnight Thursday, February 8, 2018, when the 4th CR expires.
  • The Federal government shut down Friday Jan. 19 at midnight because full-year appropriations for FY 2018 (which began Oct. 1, 2017) have not been enacted due to disagreements on total spending levels, and the latest stopgap measure to continue funding at last year’s levels (known as a “continuing resolution”) expired Friday night.  The shutdown ended on Monday, January 22 when the 4th FY ’18 CR was enacted.
  • 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 be impacted (the precise impact is uncertain since each Administration’s Office of Management and Budget makes the final determination on what is to be deemed “essential” for the safety of life or the protection of property):
    • 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.
    • Taxpayers may be unable to get answers to questions on the new tax law and tax refunds could be delayed.
    • Government contractors are likely to experience payment delays (see 2013 shutdown).
    • Centers for Disease Control analysis of data on disease outbreaks could be slowed.
    • Passport and Visa applications could be delayed.
    • Federal permitting and environmental reviews may stop, delaying transportation, energy and infrastructure projects.
    • Federal loans to small businesses, homeowners, and families in rural communities may stop.
    • Visitor services at national parks may close, hurting surrounding local economies.
    • NIH may discontinue processing medical research grants.
    • National Transportation Safety Board investigation of accidents could be delayed.
  • What happens to federal employees?  Non-essential employees are furloughed and “essential” employees continue working but 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 millions of dollars in 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: