Government Shutdown

Categories: Banking, Ethics/Morals, Econ

Every year, like many large dysfunctional families, the United States Congress sits down and tries to figure out its budget for the next year. There are always disagreements during this appropriations process; some people think the country should spend more over here, while others say it should spend less over there. These disagreements are to be expected and, most of the time, they can be reconciled in time to get everything set up for the next year.

But what if they’re not reconciled? What if members of Congress just cannot agree? Or what if they do agree, and the President looks at their proposed budget and refuses to sign it? Then what happens?

Well, in some cases, what happens is a government shutdown. A government shutdown means that nonessential services (don’t worry—the military, United States Post Office, and IRS remain open during government shutdowns) provided by the federal government will be closed until the budget sitch can be rectified.

Shutdowns can be brought about in one of two ways: either Congress can’t agree on a budget, and the previous one expires, and everything has to grind to a halt because it hasn’t been funded, or POTUS refuses to sign Congress’s budget because he believes there's something catastrophically wrong with it.

The term “government shutdown” can sound pretty ominous. And there are definitely some negs to the process: nonessential government workers can be furloughed, which means they’re still employed, but they won’t get paid until they’re working again. Or, if they’re considered essential workers, they might have to continue to work through the shutdown even though they won’t get paid until it’s over. Also, since most government agencies are considered nonessential, lots of federal services can be unavailable or significantly delayed during shutdowns. But on the plus side, important stuff like veterans’ healthcare and emergency response services are not interrupted.

So what’s the point? The point is to either (a) force Congress to quit lollygagging and get a coherent budget put together, or (b) force Congress to amend its budget to include or exclude something the President sees as vitally important. They’re not incredibly common, but six of our last seven POTUSes have overseen at least one, so they’re not incredibly uncommon, either.

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