Government Shutdown

A government shutdown happens when a legislative body fails to enact funding legislation before the previous appropriations expire, leaving agencies without legal authority to spend money. The term is most associated with the United States federal government, where the Antideficiency Act (originally 1884, strengthened in 1950) prohibits federal agencies from incurring obligations in the absence of appropriations. When Congress and the President cannot agree on either full-year appropriations or a stopgap continuing resolution (CR), a funding gap begins—typically at midnight on the date current funding lapses.

During a shutdown, federal employees are sorted into two categories: "excepted" employees (those performing work involving the safety of human life or protection of property, such as active-duty military, air traffic controllers, and TSA officers) continue working, often without immediate pay, while furloughed employees are sent home. The Government Employee Fair Treatment Act of 2019 guarantees back pay to both groups once funding resumes.

Notable U.S. shutdowns include the 21-day shutdown of 1995–1996 under President Clinton and Speaker Newt Gingrich, the 16-day shutdown of October 2013 driven by disputes over the Affordable Care Act, and the 35-day shutdown of December 2018–January 2019—the longest in U.S. history—triggered by a dispute between President Trump and Congress over border wall funding.

Shutdowns are largely a U.S. phenomenon because of the country's separation-of-powers structure and the requirement that both chambers and the president agree on spending. Most parliamentary systems avoid them: in Westminster systems, failure to pass a budget typically constitutes a loss of confidence and triggers either resignation or elections rather than a halt in services. Some U.S. states, such as Minnesota and New Jersey, have also experienced shutdowns when governors and legislatures deadlock on budgets.

Economic costs include lost output, delayed federal payments, suspended regulatory functions, and reduced consumer confidence. The Congressional Budget Office estimated the 2018–2019 shutdown reduced U.S. GDP by roughly $11 billion, with $3 billion permanently lost.