Business - January 20, 2018

What is the US government shutdown?

A shutdown in the government, at least in the US politics, occurs when the Congress fails to pass and/or the President fails to sign appropriations: legislation funding government operations and agencies.

In this case, the current interpretation of the Antideficiency Act requires that the federal government begin a shutdown of the affected activities involving the furlough of non-essential personnel and curtailment of agency activities and services.

Since 1976, when the current budget and appropriations process was enacted, there have been 19 gaps in budget funding, eight of which led to federal employees being furloughed.

Before 1990, funding gaps did not always lead to government shutdowns, but since 1990 the practice has been to shut down the government for all funding gaps. A shutdown have also occurred at the state/territorial and local levels of government.

But how does a shutdown happen?

Under the separation of powers created by the United States Constitution, the United States Congress has the sole power of the purse and responsibility for appropriating government funds.

The appropriations bills must start in the House of Representatives and then be approved by the Senate, and—upon passage of a final version by both houses—then go to the President of the United States. If the President signs the bills, they become law. If instead, the President vetoes them, they go back to Congress, where the veto can be overridden by a two-thirds vote.

A government shutdown tend to occur when the President and one or both of the chambers of Congress are unable to resolve disagreements over budget allocations before the current budget cycle ends.

The process of passing a budget is a challenging and tedious multistage process that must ultimately end with the collective approval of the President, House, and Senate. Typically, the budget process starts in February when the President of the United States issues their budget request.

This year—as in many years where the president is new to the post—the budget was delayed until mid-March, with a “skinny budget” being released in late February. This presidential budget becomes a non-binding starting point for Congress to adapt, change, or discard altogether.

How to pass a budget plan?

Within Congress, there are two chambers: the House and the Senate. Both of these bodies must agree on a budget but, given the enormity of the task, the process is broken into steps. First, each chamber independently makes a high-level budget resolution, in which they allocate money to different agencies, but not projects within those agencies. After each chamber passes a bill they are satisfied with, representatives from the two must meet to reconcile the different budgets. Eventually, this process leads to a consistent budget resolution that passes both houses. The budget resolution is not presented to the president and does not become law.

Once a consistent budget resolution is achieved, various appropriation subcommittees from each chamber create appropriation bills. These subcommittees and bills each deal with different areas of focus; for instance, the Legislative Subcommittee has jurisdiction over the budget of Congress itself. After individual appropriations bills (or, in some cases of political deadlock, an Omnibus Bill of several appropriation bills combined) are approved by each chamber, the same difference-reconciliation process occurs again until both the House and Senate pass the same legislation.

After the House and Senate pass a consistent budget, it is sent to the President to sign into law or veto, ideally before October 1 when the US financial year begins.

Frequently, the process of passing the budget is delayed. As a result, Congress can pass a continuing resolution which provides government funding for some period of time while a full budget is hashed out. As with the total budget, a continuing resolution must pass the House, Senate, and President to become law.

Are government shutdowns common around the world?

Shutdowns of the type experienced by the United States are nearly impossible in other democracies. Under the parliamentary system used in most European nations, the executive and legislative branch are not separate, with the parliament designating all executive officials, typically called “ministers,” and typically an election is triggered if a budget fails to pass. Even without an approved budget, the one from the previous year is usually used automatically. In many other non-parliamentary democracies, a strong executive branch typically has the authority to keep the government functioning even without an approved budget.

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