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What Happens During a Government Shutdown? [1]

['Associate Director', 'Media Relations', 'Director', 'Federal Affairs', 'State', 'Local Government Affairs']

Date: 2023-09

Each year, Congress passes 12 appropriations bills to fund the government, sometimes combined into a single bill called an “omnibus” or a few bills called “minibuses.” When these bills are enacted, programs covered by them receive their full-year funding, and the government is said to have passed a budget. However, if these bills are not passed and there is no continuing resolution (CR) in place to temporarily fund the government, then portions of the government that have not been funded by law must shut down. The effects of a shutdown are complicated. A shutdown would not affect the mandatory programs that receive their appropriation outside the annual funding process—such as Medicare, Social Security, and the Children’s Health Insurance Program (CHIP). But it would immediately halt certain programs and put other programs at risk if it lasted long enough. While the consequences of any given shutdown depend on what programs remain unfunded, past shutdowns have, for example, resulted in people with cancer not receiving treatment from the National Institutes of Health as well as some food safety inspections stopping. This column unpacks what a shutdown is and what it would mean for the United States.

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Why does a shutdown occur? A shutdown occurs if there is a lapse in funding. Every October 1, the new federal fiscal year begins. If policymakers have not enacted the appropriations bills for the new fiscal year by then—and have not enacted a temporary stopgap CR to keep programs operating at current levels for a few weeks or months while they try to resolve their differences—the federal government will shut down or be at risk of a shutdown when the temporary CR expires. CRs are very common, but shutdowns are rare; in fact, the federal government has only shut down in three fiscal years in the 21st century. There are about 900 programs—or separate “budget accounts”—funded in the annual appropriations bills, with many more subprograms and subaccounts; the annual appropriations bills need to contain a separate, specified, dollar allocation to each one. This is a big task for the House and Senate appropriations committees. The job is divvied up among the 12 subcommittees of each chamber’s Appropriations Committee, with each subcommittee producing a bill for the programs in its jurisdiction. Congress usually ends up combining the funding decisions of all 12 subcommittees into a single bill, called an “omnibus,” or into several bills, called “minibuses.” Congress enacts funding for the discretionary portion of the budget—roughly 30 percent of the budget—one year at a time. These are the programs that are not entitlements and whose programmatic funding can be determined by the Appropriations Committee without a change to the authorizing law.

What’s in the discretionary portion of the budget? Programs that help ensure the public has clear air, potable water, and safe food, as well as funds for supporting people, families, and communities affected by substance use disorder and the overdose crisis and for the National Weather Service

Critical programs for low-income families, such as Section 8 housing assistance; the Special Supplemental Nutrition Assistance Program for Women, Infants, and Children (WIC); the Child Care and Development Block Grant; and Head Start

Important education programs, such as funding for Title I and the Individuals with Disabilities Education Act (IDEA)

Investments and research for the future in areas such as cancer prevention, clean energy, toxic waste cleanup, and space and earth science

Disaster response and rebuilding, such as the Federal Emergency Management Agency (FEMA), the Small Business Administration’s disaster loan program, the Army Corps of Engineers, and the Community Development Block Grant

The U.S. Department of Defense, including the Army, Navy, Air Force, Marines, Space Force, and hundreds of thousands of civilian employees who administer the department

Veterans’ hospitals and salaries for the doctors and nurses who staff them

Most of the agency budgets, such as the workforce for the U.S. Consumer Product Safety Commission, Centers for Disease Control and Prevention, Environmental Protection Agency (EPA), Department of Labor, Treasury Department, and State Department

Federal funding to administer some federal mandatory programs, such as Medicare and Social Security

In addition, Congress formally appropriates funding for another roughly 25 percent of government funding, called “appropriated entitlements.” For these programs, the legal entitlement for individuals, families, or states to specified payments was created in other bills, but the appropriation to fund that entitlement was not. Congress, therefore, formally inserts the needed funding into the annual appropriations bills each year. These differ from entitlements such as Medicare and Social Security, which have their funding created outside of the annual appropriations process.

What are some appropriated entitlements? Medicaid

Supplemental Nutrition Assistance Program (SNAP)

Supplemental Security Income (SSI)

Veterans’ disability compensation and pensions

Child Nutrition Programs

Most programs funded through the annual appropriations process are appropriated one year at a time, for a single year. However, a few programs receive what are called “advance appropriations,” whereby some or all of their funding is appropriated for the next year. In practice, this means that some 2024 appropriations have already been enacted through the 2023 appropriations bill. That funding is available to keep the program running even if the rest of the government shuts down. For some of these programs, a shutdown would not affect their ability to run because all of the funding needed for the following fiscal year has already been appropriated. For others, a prolonged shutdown, or a shutdown that started later in the fiscal year and lasted long enough, could leave them with advance appropriations nonetheless at risk.

What are some programs that receive advance appropriations? Medicaid (first quarter of the fiscal year)

Veterans Affairs medical care (the vast majority of total funding)

SSI (first quarter of the fiscal year)

Special Education, which carries out the Individuals with Disabilities Education Act (roughly 60 percent of total funding)

Education for the Disadvantaged, which is predominantly funding for Title I grants (roughly 60 percent of total funding)

Veterans’ disability compensation and pensions

Indian Health Services (a large portion of total funding) and Indian Health Facilities (slightly less than half of total funding)

Section 8 (roughly 10 percent of total funding) A comprehensive list of programs that receive advance appropriations can be found here. For more details about the share of program funding that comes through advance appropriations, see the Methodology appendix.

Lastly, the Temporary Assistance for Needy Families (TANF) program, somewhat uniquely, is typically extended each year through the annual appropriations process. TANF’s appropriation exists inside its authorization, but by convention, the program’s authorization is continued, usually one year at a time, in the appropriations bill.

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The longer a shutdown lasts, the more programs are put at risk—as contingency funds run dry, grants expire, and some states and local governments grow increasingly unable to advance the money to run joint federal-state programs.

See also

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[1] Url: https://www.americanprogress.org/article/what-happens-during-a-government-shutdown/#:~:text=Disaster%20response%20and%20rebuilding%2C%20such%20as%20the%20Federal%20Emergency%20Management%20Agency%20(FEMA)%2C%20the

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