A government shutdown happens when Congress fails to pass full-year appropriations bills or, in the case of a shutdown that began in December and January, it is unable to agree on a fiscal year plan before the stop gap continuing resolution (CR) expires. This prevents departments and agencies from receiving new funding because the Anti-Deficiency Act prohibits the use of money that hasn’t been appropriated.
While some functions continue during a shutdown, such as Medicare benefits payments and military operations at the Department of Defense, other activities are disrupted including delays in processing passport applications, issuing small business loans, or holding clinical trials at the National Institutes of Health. As a result, many federal employees are furloughed, and others must report to work without pay. Employees who are deemed “excepted” and have duties related to the protection of human life or property can continue to work during a shutdown, though they cannot be compensated until appropriations are enacted.
In addition to disrupting critical functions, shutdowns cost the economy. The Congressional Budget Office estimates that the three shutdowns that occurred in 2013, 2018, and 2019 lowered GDP by $11 billion, $3 billion of which will never be recovered. They also hurt taxpayers and workers, who are forced to delay paying bills, dig into savings, or skip meals. Fortunately, there is an easy way to prevent government shutdowns: pass annual funding bills on time. Despite the political fighting, it’s important for lawmakers to do their job and provide funding in a timely manner so that Americans don’t suffer.