Selects: How Government Shutdowns Work
Ever wonder how the federal government grinds to a halt? In this episode of Stuff You Should Know, Josh Clark and Chuck Bryant break down the inner workings of government shutdowns.
They explain the constitutional budget process, including Congress's role in reviewing the president's proposed spending plan. The duo explores the history behind high-profile shutdowns, from partisan policy clashes over healthcare and border security to disagreements over broader legislative agendas. They also delve into the practical impacts of shutdowns, highlighting the upheaval faced by furloughed federal workers, the disruptions to agency operations, and the economic toll of stalled productivity and consumer spending.
Throughout the discussion, Clark and Bryant provide a balanced, straightforward examination of the forces driving shutdowns and the accompanying fallout. Their explanations shed light on the complex dynamics underlying these events that capture national attention.
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1-Page Summary
The federal budget approval process
The Constitution grants Congress the power over government spending. Josh Clark and Chuck Bryant explain that each year the president submits a non-binding budget proposal, which Congress reviews. Congressional appropriations committees ultimately divide the total spending into 12 bills, which must be reconciled between the House and Senate before going to the president. Congress often misses the October 1 deadline and relies on continuing resolutions to fund the government temporarily.
The history and causes of government shutdowns
When continuing resolutions expire without new funding, shutdowns occur due to policy disagreements. Josh Clark notes these stem from issues seen as non-negotiable by either side. Past shutdowns include the 1995-1996 standoff over the "Contract for America" agenda, the 2013 attempt to defund the Affordable Care Act, and the 2018-2019 impasse over Trump's border wall funding demands. Chuck Bryant adds that the public typically blames Congress more than the president for shutdowns.
The impacts and consequences of government shutdowns
Shutdowns create upheaval for federal workers, who are furloughed or forced to work without pay. Chuck Bryant cites friends at the CDC being furloughed for 35 days in 2018-2019. Essential workers like TSA staff receive delayed back pay. Agency operations are hindered, from airport security to national parks. The 2018-2019 shutdown cost over $11 billion, impacting consumer spending and productivity. Beyond the direct effects, businesses reliant on the government and citizens seeking services experience disruptions.
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Counterarguments
- While Congress is blamed for shutdowns, it could be argued that the president's role in negotiations and veto power also significantly contribute to the likelihood of a shutdown.
- The notion that the president's budget proposal is non-binding might be misleading; while it doesn't have the force of law, it sets the administration's priorities and can heavily influence congressional budget decisions.
- The division of spending into 12 bills could be critiqued as a process that may contribute to inefficiency and complexity, potentially leading to delays and shutdowns.
- The use of continuing resolutions could be seen not just as a necessary response to missed deadlines but as a symptom of a deeper problem with the budgetary process that requires reform.
- The idea that shutdowns stem from non-negotiable issues oversimplifies the complexity of political negotiations, where many factors, including strategic posturing and public opinion, play a role.
- Assigning blame for shutdowns is subjective; some might argue that the president, the opposition party, or even the public's expectations could be responsible, not just Congress.
- The impact of shutdowns on federal workers and essential services is often highlighted, but some might argue that the long-term fiscal responsibility or the principle behind the policy disagreement could justify the short-term disruptions.
- The cost of shutdowns, such as the $11 billion figure for the 2018-2019 shutdown, might be critiqued for not considering potential long-term savings or shifts in spending that could offset short-term losses.
- The assertion that shutdowns cause disruptions for businesses and citizens could be countered by the argument that some shutdowns lead to a reevaluation of the necessity of certain government services or prompt efficiency improvements.
Actionables
- You can enhance your financial resilience by creating an emergency fund that covers at least three to six months of living expenses, considering the potential for delayed pay during government shutdowns. Start by setting aside a small percentage of your income each month into a dedicated savings account, and gradually increase the amount as your budget allows. This fund will serve as a buffer if you're a federal worker or contractor who might face delayed income during a shutdown.
- Develop a contingency plan for your small business that relies on government contracts or services, to mitigate the impact of government shutdowns. Identify alternative suppliers or service providers, and explore diversifying your client base to include more private sector work. This way, you're not solely dependent on government contracts and can maintain operations even during a shutdown.
- Engage in community volunteer work to support essential services that may be disrupted during a shutdown. For example, organize a group of volunteers to help maintain local parks or provide assistance to federal workers who are furloughed. This not only helps maintain community services but also fosters a sense of solidarity and support during challenging times.
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The federal budget approval process
The federal budget approval process is a complex mechanism involving multiple stages of proposal, review, negotiation, and approval that are enshrined in the U.S. Constitution and carried out by Congress and the president.
The Constitution gives Congress control over government spending
Josh Clark and Chuck Bryant highlight that Article 1, Section 9, Clause 7 of the Constitution bestows on Congress the power to appropriate funds and approve government expenditures. This constitutional provision ensures that "No money shall be drawn from the Treasury, but in consequence of the appropriations made by law; and a regular statement and account of receipts and expenditures of all public money shall be published from time to time." Thus, the president cannot unilaterally fund initiatives, and both the president and the Senate require the agreement of Congress for any spending.
The annual budget approval process involves the president submitting a budget proposal and Congress negotiating and passing appropriations bills
The president's budget, prepared with the assistance of the Office of Management and Budget, acts as a list of various funding priorities and is submitted to Congress by the first Monday in February. Although these suggestions reflect the president's priorities, they are not legally binding, and Congress has the authority to accept, modify, or completely disregard the president's proposals.
After receiving the budget proposal from the president, Congress must pass a concurrent budget resolution. Chuck Bryant and Josh Clark explain this resolution establishes the overall spending levels by mid-April. It covers 20 categories and sets the federal budget's spending limits. The subsequent appropriations process involves dividing the total set spending limit into 12 appropriations bills handled by the House and Senate Appropriations Committees. These subcommittees conduct hearing ...
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The federal budget approval process
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Clarifications
- Article 1, Section 9, Clause 7 of the U.S. Constitution grants Congress the exclusive authority to control government spending by requiring that funds can only be drawn from the Treasury through appropriations made by law. This provision ensures that Congress plays a crucial role in determining how public money is spent and that the President cannot unilaterally allocate funds without congressional approval.
- The annual budget approval process begins with the president submitting a budget proposal to Congress, outlining funding priorities. Congress then passes a concurrent budget resolution to establish overall spending levels. This resolution sets the stage for dividing the budget into specific appropriations bills for different government functions.
- The division of the total spending limit into 12 appropriations bills is a process where Congress splits the overall budget into separate bills, each focusing on specific areas of government spending. This approach allows for detailed examination and debate on different aspects of the budget, such as defense, education, healthcare, and more. Each appropriations bill is handled by specific House and Senate committees responsible for overseeing the funding allocation for the corresponding government agencies. This method helps Congress to scrutinize and prioritize spending in a more organized and systematic manner, ensuring thorough consideration of each sector's financial needs.
- The House and Senate Appropriations Committees are responsible for overseeing the federal government's discretionary spending. They review funding requests from various government agencies, hold hearings to assess budget needs, and allocate funds across different programs and departments. These committees p ...
Counterarguments
- The complexity of the federal budget approval process can lead to inefficiencies and delays, which may not be fully captured in the description provided.
- The power given to Congress over government spending can sometimes lead to partisan gridlock, which is not addressed in the main ideas.
- The president's budget proposal, while not legally binding, can significantly influence Congressional budget decisions, which might suggest the president has more impact on the process than implied.
- The concurrent budget resolution by mid-April is an ideal rather than a consistently achieved deadline, reflecting potential procedural challenges within Congress.
- The appropriations process, while designed to be thorough, can be criticized for being opaque and not always reflective of public interest or priorities.
- The fact that Congress rarely passes all 12 appropriations bills by the deadline could be seen as a systemic failure rather than an occasional oversight.
- The use of continuing resolutions, while practical, may be criticized ...
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The history and causes of government shutdowns
Government shutdowns in the United States occur when funding lapses, often due to policy disagreements, threatening the operation of federal agencies and services. Josh Clark and Chuck Bryant explore the causes and consequences of these political standstiles.
Continuing resolutions prevent immediate government shutdowns, but can eventually lead to impasses
When Congress and the Executive Branch can't reach an agreement on spending levels, they often rely on continuing resolutions to keep the government funded at the previous year's levels.
Josh Clark mentions that continuing resolutions are a temporary fix used when an agreement cannot be made. Disagreements over policy provisions can prevent the passing of continuing resolutions, leading to funding gaps. For example, debates over ideological issues, like Medicaid funding for abortions in 1977 and 1978, can create an impasse.
Chuck Bryant further illustrates that such political standoffs can stem from principles that are seen as non-negotiable, often because of pressures from the voting base or a party's policy commitments.
Major government shutdowns have occurred when negotiations break down
Repeatedly throughout history, disagreements between Congress and the President have resulted in government shutdowns.
Shutdowns in 1995-1996 under Clinton and Gingrich were driven by clashes over the "Contract for America" conservative agenda
The 1995-1996 shutdowns highlighted a conflict between President Bill Clinton and House Speaker Newt Gingrich. The Republican-controlled Congress, led by Gingrich, had pressed for the "Contract for America," pushing for reduced government size and strict welfare provisions. The two political figures remained staunch in their positions, leading to a drawn-out shutdown.
The 2013 shutdown under Obama was fueled by Republican efforts to defund the Affordable Care Act
In 2013, the government shuttered its doors amidst a standoff concerning President Obama's healthcare law. A faction of Tea Party Republicans, spearheaded by Ted Cruz, sought to strip funding for the Affordable Care Act, despite House ...
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The history and causes of government shutdowns
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Counterarguments
- Continuing resolutions, while temporary, can also be seen as a pragmatic approach to governance, allowing for additional time to negotiate complex budgetary issues without disrupting government services.
- It could be argued that policy disagreements are a natural and healthy part of a democratic process, reflecting diverse viewpoints and the need for compromise.
- The assertion that political standoffs stem from non-negotiable principles might overlook the strategic and tactical considerations politicians often make, which can include posturing and negotiating tactics rather than purely principled stands.
- While major shutdowns do occur due to breakdowns in negotiation, they can also be seen as failures of the political system to effectively manage and resolve conflicts.
- The 1995-1996 shutdowns could be interpreted not just as clashes over conservative agendas but also as a broader struggle for power and control between the legislative and executive branches.
- The 2013 shutdown might be viewed by some as a legitimate exercise of congressional power to check the executive branch, rat ...
Actionables
- You can enhance your understanding of government budget impasses by simulating a budget negotiation with friends or family. Set up a game where each person represents a different interest group or political faction, and try to reach a budget agreement within a set time. This activity will give you a hands-on feel for the complexities and challenges that arise during real-life budget negotiations.
- Develop a habit of writing to your elected representatives to express your views on pending legislation or budgetary issues. Use a simple template to structure your letters, ensuring you clearly state your position and how you'd like your representative to act. This practice can make you a more active participant in the democratic process and potentially influence policy decisions.
- Create a personal "shutdown plan" for your ho ...
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The impacts and consequences of government shutdowns
Government shutdowns in the United States have far-reaching implications affecting federal workers, agencies, the economy, and the general public.
Hundreds of thousands of federal workers are furloughed or forced to work without pay during shutdowns
Chuck Bryant discusses the personal impact of government shutdowns on federal employees. During shutdowns, agencies must decide who will continue working without immediate pay and who will be furloughed. He mentions friends at the CDC getting furloughed, with some going 35 days without a paycheck. This leads to financial strain for workers, who miss paychecks and face quickly accumulating financial hardship.
Furloughed workers miss paychecks and can face financial hardship, while essential workers receive delayed back pay
While essential workers like TSA employees are required to work during a shutdown, they do not receive paychecks in a timely manner. When the 2018-2019 shutdown took place, about 800,000 federal workers were affected, 380,000 were furloughed and not working, and the remaining 420,000 worked without knowing when their next paycheck would arrive. Although they could apply for retroactive pay, it was not guaranteed.
Agencies and services are scaled back or suspended, affecting everything from airline security to national park operations
Additionally, during shutdowns, essential services are disrupted. TSA employees, for example, were calling in sick at a high rate, about 10% every day after a while, due to not getting paid. This caused inconveniences for travelers with longer lines and heightened security concerns. National Park Service operations can be severely affected, with some parks being closed or kept open but not properly maintained, resulting in damage to natural resources. Food safety inspections by the FDA are also curtailed, leading to serious safety concerns, particularly with fresh foods such as romaine lettuce.
Shutdowns have significant economic costs
The economic implications of government shutdowns are severe.
Estimated losses from the 2018-2019 shutdown reached over $11 billion
Chuck Bryant and Josh Clark address the economic ripple effects, noting that money not spent in the economy affects sectors such as the stock market and people’s retirement funds. It is estimated that America lost at least $11 billion during the most recent shutdown.
Economic activity, consumer spending, and government productivity are all negatively impacted during shutdowns
The negative impact on economic activity, consumer spending, and govern ...
Here’s what you’ll find in our full summary
The impacts and consequences of government shutdowns
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Counterarguments
- While federal workers do face financial strain, some may have savings or other income sources to mitigate the impact.
- Essential workers are often guaranteed back pay, which, while delayed, ensures they are not permanently financially disadvantaged.
- Some services that are scaled back may not be as critical as others, and temporary suspensions can lead to discussions on the necessity or efficiency of certain government operations.
- The estimated economic losses from shutdowns may not account for the subsequent rebound or catch-up in economic activity once the government reopens.
- Consumer spending might be deferred rather than permanently lost during shutdowns, with potential for a surge in spending post-shutdown.
- Private sector businesses may experience disruptions, but some may also find new opportunities or markets as a result of the changes in government operat ...
Actionables
- You can create a personal financial buffer by setting aside a small percentage of your income each month into an emergency fund. This fund acts as a safety net during unexpected financial disruptions, such as a government shutdown. Start with as little as 1% of your income and gradually increase it. This way, if you're ever affected by a shutdown or similar event, you'll have a reserve to help cover essential expenses.
- Diversify your income sources to reduce reliance on any single employer or sector. Consider freelancing, part-time work, or developing a skill that can be monetized, such as crafting or tutoring. By having multiple streams of income, you can mitigate the impact of a shutdown on your personal finances.
- Engage in community bartering systems to exchange g ...
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