The federal government shut down, again, and the political drama, which is half farce, half shrewd calculation, and entirely profitable for both parties, continues.
Imagine a household with $62,000 in income and $456,000 in credit card debt that threatened to “shutdown” and stop paying its bills unless the family agreed to keep spending more than they earn. Then imagine that the parents were blaming one another for the repercussions of refusing to pay their bills on time and the resulting hardships as household utilities like water, gas, and electricity are shut off one by one. Meanwhile, both parents fundraise off the crisis, each publicly telling their friends and families that only they can save the household’s finances from the other.
Unfortunately, this is exactly the situation that Washington politicians are foisting upon the American people right now. The numbers above are simply scaled-down versions of our national fiscal situation: a federal debt of $37.5 trillion, annual revenues of about $4.7 trillion, and annual spending of about $6.7 trillion. We are a nation maxing out credit cards while the parents argue about which one of them gets to go shopping first.
Congress missed a Tuesday night deadline to pass either a continuing resolution or a new budget in order to keep the government “open.” In a 217-212 vote, the House passed a “clean continuing resolution” that would fund the government at current levels through November 21, postponing the fiscal reckoning for another seven weeks. Senate Democrats, however, blocked it. They said that extending more than a trillion dollars of healthcare subsidies was their “nonnegotiable” price for avoiding a shutdown.
The question isn’t whether Congress will eventually cobble together a deal; it always does. The real question is, why does this keep happening?
In what has become an annual ritual, Republicans and Democrats race to cast the other as the villainous source of shutting down the government. Senator John Thune alleges that “the ball is in [the democrats’] court,” pointing to the House’s continuing resolution. However, Senator Schumer has said, “God forbid the Republicans shut the government down.” At this point, the script is so familiar (and absurd) that it might as well be a Broadway play.
This theater is the result of two legal items: first, the 1974 Congressional Budget and Impoundment Control Act, which, among other things, lays out the budget process, including deadlines, step by step. Since this bill’s passage, Congress has met its self-imposed deadlines just four times: 1977, 1989, 1995, and 1997.
Second, the 1980 opinion by Attorney General Benjamin Civiletti, citing the Antideficiency Act, which created the concept of a “government shutdown” as we know it today. Prior to this Act, “departments of government” would routinely spend their entire annual budget in the first few months of the year. This created a “coercive deficit,” whereby Congress was faced with a difficult choice: fund the overspending department with additional appropriations over the course of the year or risk important departments, like the Department of Defense, being unable to fulfill their duties. Civiletti’s opinion inadvertently turned a law meant to prevent executive overreach into a tool for legislative hostage-taking.
Why does this costly political theater keep happening? Because the system rewards it.
Historically, government shutdowns have caused more smoke than fire. The truth of the matter is that, during this so-called government “shutdown,” about 80 percent of the government’s activity still happens automatically. Social Security checks are still sent out, Medicare continues to pay its claims, and the interest payments on the national debt will all still continue to be paid uninterrupted.
What really shuts down are national parks, the Smithsonian, and major components of the non-military aspects of the Department of Defense. The last shutdown, from December 22, 2018, to January 25, 2019, resulted in 380,000 employees being furloughed (i.e., not coming to work) and 420,000 people who worked without pay. These are federal workers who may have struggled to pay their mortgages and other bills, who had to take out loans or borrow money from family members to make ends meet while they went without pay. While they all receive backpay, whether working or furloughed, receiving backpay does not solve the disruption of cash flow that these households feel.
The sixteen-day shutdown that began at the start of the 2014 fiscal year (October 1, 2013) is estimated to have cost the American taxpayer between $2 billion and $6 billion. While these numbers sound large to fiscal mortals such as us, they pale in comparison to the astronomical amount of money that Congress spends each and every day.
But this time, instead of “temporary furloughs,” the Office of Management and Budget has instructed agencies to prepare for permanent layoffs. The president himself has echoed similar ambitions. This could all be a part of the government shutdown political theater, but it could also portend a radical shift in how shutdowns are going to be used going forward.
The real problem that government shutdown talks reveal is Congress’s addiction to passing continuing resolutions, which are nothing but temporary funding measures that maintain spending at current levels for a short amount of time. Since 1977, Congress has passed 207 continuing resolutions to temporarily fund the government. This political brinksmanship has created its own form of dysfunction and has caused serious problems.
Because Congress routinely fails to pass a budget on time, government agencies face unnecessary challenges and uncertainties. A 2022 Government Accountability Office (GAO) report found that the temporary funding from continuing resolutions “creates uncertainty for agencies about when they will receive their final appropriation and what level of funding they will ultimately receive.” In their 2009 report, the GAO lists inefficiencies stemming from “(1) delays to certain activities, such as hiring; (2) repetitive work, including issuing multiple grants and contracts; and (3) challenges executing budgets in compressed time frames after prolonged CRs.”
Since 2013, the Pentagon has started the fiscal year under a continuing resolution in all but one year. This uncertainty led former vice chairman of the Joint Chiefs General John E. Hyten to testify that budget stability would create 5 percent annual efficiencies in defense spending. With a FY2025 defense budget of roughly $850 billion, this means that $42.5 billion in buying power is squandered because Congress refuses to meet its own deadlines.
Why does this costly political theater keep happening? Because the system rewards it. Both parties benefit from the brinksmanship that is government shutdown debates. Fundraising messages flood inboxes and mailboxes. Voting bases are mobilized. Media outlets cover every development. Congresspeople go on television and radio, showing their performative outrage and loudly proclaiming that they will save “us” from “them,” attempting to position the other party as the cause of the shutdown. When the inevitable deal comes to fruition, both sides will congratulate their own party as the ones who finally averted the “crisis” while silently preparing for the next one.
The shutdown circus hides the important truth that whether Congress passes a continuing resolution this week or in a month, the fundamental problem continues unabated. We are a nation that is spending $6.7 trillion while raising only $4.7 trillion, which is already $37.5 trillion in debt. Rather than address this problem, federal leaders would rather perform for the camera.
One cannot help but wonder if the politicians are actually the children, rather than the parents, when it comes to federal spending. Perhaps the American people should not let the children in Washington determine how trillions of dollars are spent.
Unlike a household, Congress cannot declare bankruptcy and effectively start over. Whether we like it or not, we are stuck with our national debt, the dysfunction, and the officials who profit from it. The least it could do is spare us the theatrics and pass a budget on time.