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Why the shutdown isn’t really a shutdown (and other myths)

September 23, 2013 by NCC Staff


Media pundits are crowing about a likely government shutdown on October 1, as Democrats and Republicans argue about a new budget in Washington. But what does that really mean—and could some folks be exaggerating the problem?

capitolIn reality, the entire federal government isn’t closing its doors next week. Some important agencies and departments will be closed, or offer reduced services.

That is, of course, if there isn’t a last-second deal to fund daily government operations into October.

And yes, some people in politics could be exaggerating the harm of a shutdown, although there’s a definite effect on government employees who may face unpaid furlough days. The bigger problem, say some experts, would be the expected limit on the nation’s debt ceiling—which will be hit in October or November.

In that case, the government would have to decide if it will pay interest on its debt first, or pay its other bills. With any luck, the pressure of having to fix the debt-ceiling problem would lead to the “shutdown” problem being resolved first.

First, let’s get to one myth: Why the much-publicized shutdown really isn’t one, in a true sense of the word.

Technically, the federal government will experience what is called a “funding gap” once the law that funded the government in the past year—the continuing resolution—expires on October 1.

The Congressional Research Service says funding gaps have occurred since President Gerald Ford’s administration. In some cases, the gaps happened so quickly, like on a weekend, that the problem was solved and no one had to take days off from work, and services didn’t stop.

The biggest funding gap, which became popularly known as a government shutdown, happened in 1995 and 1996 as President Bill Clinton and Republicans battled over the budget.

Two funding gaps were long enough to cause a shutdown of some services. About 284,000 federal employees were furloughed then, and another 475,000 employees worked and were paid later.

But in 1996, there were 2.8 million executive branch employees and 4.3 million federal employees total on payrolls. So those people furloughed or working without immediate pay were in the minority.

A federal law that dates back to President Ronald Reagan’s administration ensures that major government programs continue on during a funding gap, even when some employees are furloughed.

The Antideficiency Act was amended in 1982 to ensure that “excepted” areas existed in the government that still received funds during a shutdown. In addition, legal opinions from President Jimmy Carter’s era define more areas that are exempted from a shutdown caused by a funding gap.

There is a long list of programs and jobs that are exempt from a funding gap and shutdown. Here’s a list of departments and services that will be affected: National Park Service sites will most likely be closed; visa and passport applications will go unprocessed; veterans and military benefits will be delayed; bankruptcy cases will be suspended; payments to federal jurors will be deferred; and some health research services won’t be available.

Of course, due to constitutional measures, Congress, the president and the Supreme Court will be paid during the funding gap and shutdown.

Social security checks will still be issued, but this was also a point of contention in the 1995–1996 shutdown, when the government had to recall furloughed employees to handle services.

In the Clinton-Gingrich era, public outrage was great enough to force the sides to the bargaining table.

The debt-ceiling issue could serve that role in 2013. Without the ability to borrow money, the federal government wouldn’t have some money it needs to pay the bills it delays during a shutdown.

The Congressional Research Service explains the problem bluntly: “Treasury Department may not be able to liquidate all obligations that result in federal outlays, due to a shortage of cash, which may result in delays in federal payments and disruptions in government operations.”

Currently, the Senate is expected to reject a House bill that links government funding into December to a proposal to eliminate the funds for the Affordable Car Act, or Obamacare. With Democrats on record as supporting Obamacare, at least for now there is a stalemate in Washington as October 1 approaches.

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