Economics

Understanding the Government Closure Events of 1995, 2013, 2018, and 2019

Understanding the Government Closure Events of 1995, 2013, 2018, and 2019

A Fresh Look at Government Shutdowns

When a government shutdown happens, non-essential federal programs close down. This occurs because Congress fails to allocate funds or the president doesn't sign the appropriations bills on time. In the regular budget process, Congress passes appropriations bills, and the president signs them by Sep. 30 for the following fiscal year, which begins on Oct. 1. If this doesn't happen by the deadline, a continuing funding resolution can be passed by Congress and the president to keep appropriations at current levels. If that fails, it leads to a shutdown—a clear sign of budget process breakdown.

Exploring the Impacts of a Government Shutdown

During a government shutdown, federal departments that rely on discretionary budget funds must close when Congress doesn't appropriate funds. Many federal employees are furloughed, meaning they are sent home without pay. However, those who provide essential services may have to work without pay. Essential services include activities related to national safety and security. All workers eventually receive back pay once funding is approved. Some agencies providing essential services are designed to operate for weeks without a funding bill. Certain departments, like the Postal Service, have their own source of funding, allowing them to continue their operations until those funds are exhausted.

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