Government Shutdown: Breaking It Down

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If you’re like me, then prior to this week, you didn’t even know the government could shut down. But it’s here and it’s happening. So what exactly does this mean?

Basically, Congress re-budgets every year. This year, they missed their deadline, and still haven’t caught up with it. Every year, the House and the Senate have to decide to enact certain appropriations–-or bills that determine the amount of money from the Treasury goes to which pre-authorized agencies or programs by the start of the new fiscal year, which starts October 1. Without an effective plan of attack for funding various aspects of the government, agencies are essentially out of business as of this Tuesday, October 1.

The biggest disagreement between House and Senate was the Patient Protection and Affordable Care Act A.K.A. Obamacare. Efforts were made to put a stopgap measure (temporary funding plan) into effect, but Congress couldn’t agree on that either. The Republican heavy House is adamant that Obamacare be defunded or dismantled in some way, but the Democrat heavy Senate is also adamant about that not happening. Both parties refused to yield to the other. Republicans in the House are using the appropriations as means of subjecting an ultimatum on Democrats in the Senate: Either Obamacare is defunded or delayed, or they will not cooperate with passing the appropriations. Similarly, Democrats refuse to concede to the ultimatum and refuse to cooperate unless they back down.

Thus, the shutdown.

However, a shutdown does not really mean a complete collapse of structure. Programs that don’t require annual appropriations–those that are “necessary to protect life or property,” and alternatively funded programs–will continue to operate. This includes Social Security since it doesn’t require annual appropriation, law enforcement, military and embassies, which are considered necessary, and programs that are at least semi-self-sufficient, like courts and the Postal Service.

All federal workers will be deemed either necessary or unnecessary. Those whose employment can be done without temporarily, will be done without. Unnecessary federal employees are put on furlough. According to the Washington Post, it’s estimated that about 800,000 people will be sent home on furlough, while 1.3 million necessary employees, 1.4 million active-duty military members, 500,000 Postal Service workers and other employees of self-sufficient agencies will continue to work.

Federal employees deemed necessary will continue to work, although potentially without pay for the time being. This excludes military members, though, who are guaranteed pay despite a shutdown.

This means that some agencies can be shut down, but not completely. For example, the Social Security Administration will keep on only the staff needed to continue distributing social security checks. Veterans Health Administration hospitals will keep their doors open, but the Board of Veterans’ Appeals will not be conducting hearings.
(A detailed look at different agencies’ plans can be found here)

Shutdowns have happened before, the last one in ’95-’96, which lasted about a month. The current shutdown will cease once Congress agrees on a compromise. If this one lasts as long as the last, the economy would lose about $55 billion, as estimated by economist Brian Kessler.

For now, we’ll just have to wait and see which way the appropriations go, but hopefully it only lasts the average few-day period of a shutdown.