Order Code RL34680
Shutdown of the Federal Government:
Causes, Processes, and Effects
September 23, 2008
Clinton T. Brass
Analyst in Government Organization and Management
Government and Finance DivisionSeptember 9, 2009
Congressional Research Service
7-5700
www.crs.gov
RL34680
CRS Report for Congress
Prepared for Members and Committees of Congress
Shutdown of the Federal Government:
Causes, Processes, and Effects
Summary
When federal agencies and programs lack appropriated funding, they experience
a funding gap.
Under the Antideficiency Act, they must cease operations, except in
emergency situations. Failure
of the President and Congress to reach agreement on
interim or full-year funding measures
occasionally has caused government
shutdowns, the longest of which lasted 21 days, from
December 16, 1995, to January
6, 1996. Government shutdowns have necessitated furloughs of
several hundred
thousand federal employees, required cessation or reduction of government
activities,
and affected all sectors of the economy. This report discusses the causes, processes,
and and
effects of federal government shutdowns, including potential issues for Congress.
CRS Report RS20348, Federal Funding Gaps: A Brief Overview, by Robert
Keith, discusses funding gaps since FY1977.
This report will be updated annually.
Contents
Budget Negotiations and Choices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Causes of Federal Shutdowns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
OMB and Agency Shutdown Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Effects of a Federal Government Shutdown . . . . . . . . . . . . . . . . . . . . . . . . . 5
Effects on Federal Officials and Employees . . . . . . . . . . . . . . . . . . . . . 5
Examples of Excepted Activities and Personnel . . . . . . . . . . . . . . . . . . 6
Effects on the Public . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Effects on Mandatory Spending Programs . . . . . . . . . . . . . . . . . . . . . . 9
Potential Issues for Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Quality and Specificity of Agency Planning . . . . . . . . . . . . . . . . . . . . 10
Availability of Agency Shutdown Plans . . . . . . . . . . . . . . . . . . . . . . . 10
Shutdown of the Federal Government:
Causes, Processes, and Effects
Budget Negotiations and Choices1
It has been said that “conflict is endemic to budgeting.”2 If conflict between
Congress and the President impedes the timely enactment of annual appropriations
acts or continuing resolutions, the possibility of a government shutdown arises.
During high-stakes negotiations over appropriations measures, a number of
options present themselves to Congress and the President, including
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coming to agreement on regular appropriations acts before the
beginning of a new fiscal year;
using one or more interim continuing resolutions (CRs) to extend
temporary funding until final decisions are made; or
not agreeing on full-year or interim appropriations acts, resulting in
a funding gap and a corresponding shutdown of federal activities.
If Congress and the President pursue the second or third options, they may agree on
full-year appropriations after the beginning of the fiscal year by using regular
appropriations acts (e.g., singly or in omnibus legislation) or a full-year CR.
Congress and the President frequently agree on full-year or interim funding without
coming to an impasse.3 On other occasions, however, Congress and the President
may not come to an accommodation in time to prevent a funding gap.
This report discusses the causes of funding gaps and shutdowns of the federal
government, processes that are associated with shutdowns, and how agency
operations may be affected by shutdowns. The report concludes with a discussion
of potential issues for Congress.
1
Justin Murray, Information Research Specialist in the Knowledge Services Group,
provided research support for this report. This report updates and supersedes CRS Report
98-844, Shutdown of the Federal Government: Causes, Processes, and Effects, previously
authored by Sharon Gressle (retired from CRS), and, later, by Kevin R. Kosar.
2
Irene S. Rubin, “Understanding the Role of Conflict in Budgeting,” in Roy T. Meyers, ed.,
Handbook of Government Budgeting (San Francisco: Jossey-Bass, 1999), p. 30.
3
For discussion, see CRS Report RL32614, Duration of Continuing Resolutions in Recent
Years, by Robert Keith. For analysis of the potential functions and impacts of CRs, see CRS
Report RL30343, Continuing Resolutions: FY2008 Action and Brief Overview of Recent
Practices, by Sandy Streeter; and CRS Congressional Distribution Memorandum, Potential
Impacts of Interim Continuing Resolutions (CRs) on Agency Operations and the Functioning
of the Federal Government, coordinated by Clinton T. Brass, July 8, 2008.
CRS-2
Causes of Federal Shutdowns
The federal fiscal year begins October 1. For agencies and programs that are
funded through annual appropriations acts, Congress and the President must enact
interim or full-year appropriations by this date if many governmental activities are
to continue operating. If interim or full-year appropriations are not enacted into law,
the time interval when agency appropriations are not enacted is referred to as a
“funding gap.”4 A funding gap also may occur any time a CR expires and another
CR (or regular appropriations bill) is not enacted immediately thereafter. When a
funding gap occurs, the federal government begins a “shutdown” of the affected
activities, including the furlough of non-emergency personnel and curtailment of
agency activities and services. Programs that are funded by laws other than annual
appropriations acts (e.g., entitlements like Social Security) also may be affected by
a funding gap, if program execution relies on activities that receive annually
appropriated funding.
Funding gaps and government shutdowns have occurred in the past when
Congress and the President did not enact regular appropriations bills by the beginning
of the fiscal year. They also have occurred when Congress and the President did not
come to an agreement on stop-gap funding through a CR. As noted in another CRS
report, six fairly lengthy funding gaps occurred from FY1977 to FY1980, ranging
from 8 to 17 full days.5 Subsequently, the durations of funding gaps shortened
considerably. From FY1981 to FY1995, nine funding gaps occurred with durations
of up to three full days. A significant exception to the trend occurred in FY1996,
when President William Clinton and the 104th Congress engaged in extended
negotiations over budget policy. Two funding gaps and corresponding shutdowns,
amounting to 5 days and 21 days, ensued. There have been no funding gaps since
FY1996.
The Constitution, statutory provisions, court opinions, and Department of
Justice (DOJ) opinions provide the legal framework for how funding gaps and
shutdowns have occurred in recent decades.6 Article I, Section 9 of the Constitution
states that “No Money shall be drawn from the Treasury, but in Consequence of
Appropriations made by Law.” Federal employees and contractors cannot be paid,
for example, if appropriations have not been enacted. It would still be possible under
the Constitution, nevertheless, for the government to make contracts or other
4
CRS Report RS20348, Federal Funding Gaps: A Brief Overview, by Robert Keith. Some
observers use alternative terms “lapse in appropriations” and “appropriations hiatus” instead
of “funding gap.”
5
Ibid. These funding gaps occurred before the Department of Justice issued opinions in
1980 and 1981 about allowable agency activities during a funding gap. The opinions, which
are discussed later, were restrictive in their implications about allowable agency activities
compared to what agencies had done in the past during a funding gap.
6
For legal analysis of funding gaps, see U.S. Government Accountability Office (formerly
the General Accounting Office; hereafter “GAO”), Principles of Federal Appropriations
Law, 3rd ed., vol. II, GAO-06-382SP, Feb. 2006, ch. 6, pp. 6-146 - 6-159.
CRS-3
obligations if it lacked funds to pay for these commitments.7 The so-called
Antideficiency Act prevents this, however. The act prohibits federal officials from
obligating funds before an appropriations measure has been enacted, except as
authorized by law.8 The act also prohibits acceptance of voluntary services and
employment of personal services exceeding what has been authorized by law.9
Exceptions are made under the act to the latter prohibition for “emergencies
involving the safety of human life or the protection of property.” Therefore, the
Antideficiency Act generally prohibits agencies from continued operation in the
absence of appropriations. Failure to comply with the act may result in criminal
sanctions, fines, and removal.
For years, many federal agencies continued to operate during a funding gap,
while “minimizing all nonessential operations and obligations, believing that
Congress did not intend that agencies close down” while waiting for the enactment
of annual appropriations acts or continuing resolutions.10 In 1980 and 1981,
however, Attorney General Benjamin R. Civiletti issued two opinions that more
strictly interpreted the Antideficiency Act in the context of a funding gap, along with
its exceptions.11 The opinions stated that, with some exceptions, the head of an
agency could avoid violating the Antideficiency Act only by suspending the agency’s
operations until the enactment of an appropriation. In the absence of appropriations,
exceptions would be allowed only when there is “some reasonable and articulable
connection between the function to be performed and the safety of human life or the
protection of property.”
In 1990, in response to the 1981 Civiletti opinion, Congress amended 31 U.S.C.
§ 1342 to clarify that “the term ‘emergencies involving the safety of human life or the
protection of property’ does not include ongoing, regular functions of government the
suspension of which would not imminently threaten the safety of human life or the
protection of property.”12 DOJ’s Office of Legal Counsel (OLC) issued a
memorandum in 1995 that interpreted the effect of the amendment (hereafter, “1995
7
For discussion, see prepared statement of Walter Dellinger, Assistant Attorney General,
in U.S. Congress, Senate Committee on the Budget and House Committee on the Budget,
Effects of Potential Government Shutdown, hearing, 104th Cong., 1st sess., Sept. 19, 1995,
S.Hrg. 104-175 (Washington: GPO, 1995), p. 18 (hereafter Effects of Potential Government
Shutdown).
8
31 U.S.C. § 1341. The Antideficiency Act (31 U.S.C. §§ 1341-1342, §§ 1511-1519) is
discussed in CRS Report RL30795, General Management Laws: A Compendium,
coordinated by Clinton T. Brass, pp. 93-97. GAO provides information on the act, available
at [http://www.gao.gov/ada/antideficiency.htm].
9
31 U.S.C. § 1342; see also § 1515.
10
U.S. GAO, Funding Gaps Jeopardize Federal Government Operations, PAD-81-31, Mar.
3, 1981, pp. i, 2.
11
43 Op. Att’y Gen. 224 (Apr. 25, 1980), 43 Op. Att’y Gen. 293 (Jan. 16, 1981). The
Civiletti opinions are included in a GAO report as Appendices IV and VIII. See U.S. GAO,
Funding Gaps Jeopardize Federal Government Operations. For discussion of exceptions,
see U.S. GAO, Principles of Federal Appropriations Law, pp. 6-146 - 6-159.
12
Ibid., p. 6-151, citing P.L. 101-508, 104 Stat. 1388, at 1388-621.
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OLC opinion”).13 The 1995 OLC opinion said one aspect of the 1981 Civiletti
opinion’s description of emergency governmental functions should be modified in
light of the amendment, but that the 1981 opinion otherwise “continues to be a sound
analysis of the legal authorities respecting government operations” during a funding
gap.14
OMB and Agency Shutdown Processes
The Office of Management and Budget (OMB) provides agencies with annual
instructions on how to prepare for and operate during a funding gap in Circular No.
A-11.15 The circular cites the two Civiletti opinions and the 1995 OLC opinion as
“background” and “guidance.” The circular establishes two “policies” regarding the
absence of appropriations: (1) a prohibition on incurring obligations unless the
obligations are otherwise authorized by law and (2) permission to incur obligations
“as necessary for orderly termination of an agency’s functions,” but prohibition of
any disbursement (i.e., payment).
The circular also directs agency heads to develop and maintain shutdown plans,
which are to be submitted to OMB when initially prepared and also when revised.
Agency heads are to use the DOJ opinions and the circular to “decide what activities
are essential to operate their agencies during an appropriations hiatus.” Among other
things, a shutdown plan is required to include
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an estimate of the time to complete the shutdown, to the nearest halfday;
the number of employees expected to be on-board (i.e., filled
positions) before implementation of the plan;
the total number of employees to be “retained” under the plan (i.e.,
not subject to furlough), broken out into two categories: (1)
employees “engaged in military, law enforcement, or direct
provision of health care activities” and (2) employees whose
“compensation is financed by a resource other than annual
appropriations”; and
the total number of additional employees who will be retained, in
order to protect life and property, who are not “exempt” from
furlough because of the two previous criteria, above.
13
U.S. Department of Justice, Office of Legal Counsel, Government Operations in the Event
of a Lapse in Appropriations, memorandum from Walter Dellinger, Assistant Attorney
General, for Alice Rivlin, Director, Office of Management and Budget, Aug. 16, 1995,
reprinted in Effects of Potential Government Shutdown, pp. 77-85.
14
15
Ibid., p. 78.
U.S. Executive Office of the President, Office of Management and Budget (hereafter,
“OMB”), Circular No. A-11: Preparation, Submission, and Execution of the Budget, June
2008, Sec. 124, available at [http://www.whitehouse.gov/omb/circulars/a11/current_year/
a11_toc.html]. See also CRS Report RS21665, Office of Management and Budget (OMB):
A Brief Overview, by Clinton T. Brass.
CRS-5
In general, the circular refers to employees who are to be furloughed as “released,”
and employees who will not be furloughed as “retained” or “exempt.”16 OMB’s
circular also instructs agencies to take personnel actions to release employees
according to applicable law and Office of Personnel Management (OPM)
regulations.17
OMB documents and guidance from previous funding gaps and shutdowns may
provide insights into current and future practices. OPM has recommended on a
website that agencies use OMB guidelines to determine “excepted” positions (i.e.,
those not subject to furlough) and provided retyped copies of previous OMB bulletins
and memoranda for reference.18 These and other OMB documents also have been
reproduced in several legislative branch documents.19
Effects of a Federal Government Shutdown
Effects on Federal Officials and Employees. Effects of a shutdown may
occur in anticipation of a funding gap (e.g., planning), during a gap (furlough and
16
In congressional hearings that focused on the first FY1996 shutdown, some witnesses
expressed regret that the terms “nonessential” and “essential” had been used to describe
employees subject to furlough, and not subject to furlough, respectively. Use of the term
“nonessential” was demeaning, they suggested. See U.S. Congress, House Committee on
Government Reform and Oversight, Subcommittee on Civil Service, Government Shutdown
I: What’s Essential?, hearings, 104th Cong., 1st sess., Dec. 6 and 14, 1995 (Washington:
GPO, 1997) (hereafter, Government Shutdown: What’s Essential?), pp. 48, 228-229.
17
OPM maintains a website with guidance, historical OMB documents, and frequently asked
questions about furloughs, available at [http://www.opm.gov/furlough/furlough.asp].
18
See ibid. The reproduced OMB documents include, in chronological order:
(1) OMB Bulletin No. 80-14, Shutdown of Agency Operations Upon Failure by the
Congress to Enact Appropriations, Aug. 28, 1980 (citing the 1980 Civiletti opinion and
requiring agencies to develop shutdown plans);
(2) OMB Memorandum, Agency Operations in the Absence of Appropriations, Nov.
17, 1981 (referencing OMB Bulletin No. 80-14; saying the 1981 Civiletti opinion remains
in effect; and providing examples of “excepted activities” that may be continued under a
funding gap);
(3) OMB Bulletin No. 80-14, Supplement No. 1, Agency Operations in the Absence
of Appropriations, Aug. 20, 1982 (“updating” OMB Bulletin No. 80-14 and newly requiring
agencies to submit contingency plans for review by OMB);
(4) OMB Memorandum M-91-02, Agency Operations in the Absence of
Appropriations, Oct. 5, 1990 (referencing OMB Bulletin No. 80-14; stating that OMB
Bulletin No. 80-14 was “amended” by the OMB Memorandum of Nov. 17, 1981; saying the
1981 Civiletti opinion remains in effect; and directing agencies on a Friday how to handle
a funding gap that begins during the weekend); and
(5) OMB Memorandum M-95-18, Agency Plans for Operations During Funding
Hiatus, Aug. 22, 1995 (referencing OMB Bulletin No. 80-14, as amended; citing the 1981
Civiletti opinion; transmitting to agencies the 1995 OLC opinion as an “update” to the 1981
Civiletti opinion; and directing agencies to send updated contingency plans to OMB).
19
See Effects of Potential Government Shutdown, pp. 77-85; U.S. GAO, Funding Gaps
Jeopardize Federal Government Operations, Appendices V, VI, and VII; and Government
Shutdown: What’s Essential?, pp. 99-112, 121-131, and 428-430.
CRS-6
curtailed operations), and afterwards (e.g., reducing backlogs of work). An
immediate shutdown effect is the “shutdown furlough” of certain federal employees
(i.e., placement in a temporary, nonduty, nonpay status).20 Several types of officials
and employees are not subject to furlough. These include Members of Congress, the
President, presidential appointees, certain legislative branch employees, and federal
employees deemed “excepted.”21 “Excepted” employees, who are required to work
during a shutdown, are described as “employees who are excepted from a furlough
by law because they are (1) performing emergency work involving the safety of
human life or the protection of property, (2) involved in the orderly suspension of
agency operations, or (3) performing other functions exempted from the furlough.”22
Shutdown furloughs are not considered a break in service and are generally creditable
for retaining benefits and seniority. Also, federal employees who have been affected
by shutdowns historically have received their salaries retroactively.23
As noted earlier, the two most recent shutdowns occurred in FY1996.24 The
first, which lasted five full days between November 13-19, 1995, resulted in the
furlough of an estimated 800,000 federal employees. It was caused by the expiration
of a continuing resolution agreed to on September 30, 1995 (P.L. 104-31), and by
President Clinton’s veto of a second continuing resolution and a debt limit extension
bill. The second FY1996 partial shutdown of the federal government, and the longest
in history, lasted 21 full days between December 15, 1995, and January 6, 1996. The
shutdown was triggered by the expiration of a continuing funding resolution enacted
on November 20, 1995 (P.L. 104-56), which funded the government through
December 15, 1995. On January 2, 1996, the estimate of furloughed federal
employees was 284,000.25 Another 475,000 excepted federal employees continued
to work in nonpay status. There were several short-term continuing resolutions
between January 6, 1996, and April 26, 1996, when the Omnibus Consolidated
Rescissions and Appropriations Act of 1996 (P.L. 104-134) was enacted to fund any
agencies or programs not yet funded through FY1996.
Examples of Excepted Activities and Personnel.
Previous
determinations of excepted activities and personnel would not necessarily hold for
any future shutdown. However, past experience may inform future OMB and agency
20
See [http://www.opm.gov/furlough/furlough.asp].
21
For additional discussion, including the status of legislative branch agencies and
personnel, see ibid. and U.S. GAO, Principles of Federal Appropriations Law, pp. 6-149 6-150.
22
See [http://www.opm.gov/furlough/furlough.asp].
23
For example, for the FY1996 shutdowns, affected employees were guaranteed to be paid
retroactively by provisions in continuing resolutions (P.L. 104-56, Sec. 124, which itself was
continued in P.L. 104-94), but did not receive compensation until funding for their agencies
was enacted.
24
This paragraph draws on CRS Report 95-906, Shutdown of the Federal Government:
Effects on the Federal Workforce And Other Sectors, by James P. McGrath (Sept. 25, 1997,
archived; available upon request).
25
Fewer employees, agencies, and programs were affected because some funding bills were
enacted during the period between the two shutdowns.
CRS-7
decisions. An OMB memorandum of November 17, 1981, from Director David A.
Stockman to the heads of executive agencies, identified “examples of excepted
activities.”26 The memorandum, which still was in effect for the FY1996 shutdowns,
explained
Beginning [on the first day of the appropriations hiatus], agencies may continue
activities otherwise authorized by law, those that protect life and property and
those necessary to begin phasedown of other activities. Primary examples of
activities agencies may continue are those which may be found under applicable
statutes to:
1. Provide for the national security, including the conduct of foreign relations
essential to the national security or the safety of life and property.
2. Provide for benefit payments and the performance of contract obligations
under no-year or multi-year or other funds remaining available for those
purposes.
3. Conduct essential activities to the extent that they protect life and property,
including:
a. Medical care of inpatients and emergency outpatient care;
b. Activities essential to ensure continued public health and safety,
including safe use of food and drugs and safe use of hazardous materials;
c. The continuance of air traffic control and other transportation safety
functions and the protection of transport property;
d. Border and coastal protection and surveillance;
e. Protection of Federal lands, buildings, waterways, equipment and
other property owned by the United States;
f.
Care of prisoners and other persons in the custody of the United
States;
g. Law enforcement and criminal investigations;
h. Emergency and disaster assistance;
i.
Activities essential to the preservation of the essential elements of the
money and banking system of the United States, including borrowing and
tax collection activities of the Treasury;
j.
Activities that ensure production of power and maintenance of the
power distribution system; and
k. Activities necessary to maintain protection of research property.
You should maintain the staff and support services necessary to continue these
essential functions.
Effects on the Public. The effects of the two FY1996 shutdowns on
government activities and the public received extensive attention. Although the
effects on the public of any future shutdown would not necessarily reflect past
experience, past events may be illustrative of effects that are possible.27 Several
26
27
OMB Memorandum, Agency Operations in the Absence of Appropriations, Nov. 17, 1981.
In 1981, GAO developed a “hypothetical case” of the possible effects of a 30-day
government-wide funding gap and shutdown, which the agency characterized as
“unthinkable.” After the release of the first Civiletti opinion concerning compliance with
the Antideficiency Act, GAO characterized the opinion as “fundamentally alter[ing] the
environment in which Federal agencies must prepare for a period of expired appropriations.”
Previously, interpretation of the Antideficiency Act had been much less strict. The results
(continued...)
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examples follow that were reported in congressional hearings, news media, and
agency accounts.28
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Health. New patients were not accepted into clinical research at the
National Institutes of Health (NIH) clinical center; the Centers for
Disease Control and Prevention ceased disease surveillance; hotline
calls to NIH concerning diseases were not answered; and toxic waste
clean-up work at 609 sites reportedly stopped and resulted in 2,400
Superfund workers being sent home.29
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Law Enforcement and Public Safety. Delays occurred in the
processing of alcohol, tobacco, firearms, and explosives applications
by the Bureau of Alcohol, Tobacco, and Firearms; work on more
than 3,500 bankruptcy cases reportedly was suspended; cancellation
of the recruitment and testing of federal law-enforcement officials
reportedly occurred, including the hiring of 400 border patrol agents;
and delinquent child-support cases were delayed.30
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Parks, Museums, and Monuments. Closure of 368 National Park
Service sites (loss of 7 million visitors) reportedly occurred, with
loss of tourism revenues to local communities; and closure of
national museums and monuments (reportedly with an estimated loss
of 2 million visitors) occurred.31
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Visas and Passports. Approximately 20,000-30,000 applications
by foreigners for visas reportedly went unprocessed each day;
200,000 U.S. applications for passports reportedly went
unprocessed; and U.S. tourist industries and airlines reportedly
sustained millions of dollars in losses.32
27
(...continued)
of GAO’s illustrative survey are available in U.S. GAO, Funding Gaps Jeopardize Federal
Government Operations, pp. 48-56.
28
The examples are drawn from more extensive discussion in CRS Report 95-906,
Shutdown of the Federal Government: Effects on the Federal Workforce And Other Sectors,
by James P. McGrath. Many of the examples come from agency accounts in congressional
hearings after the first FY1996 shutdown (see Government Shutdown: What’s Essential?)
and media accounts during and after the second shutdown.
29
Government Shutdown: What’s Essential?, p. 23; and Stephen Barr and Frank Swoboda,
“Jobless Aid, Toxic Waste Cleanup Halt,” Washington Post, Jan. 3, 1996, p. A1.
30
Government Shutdown: What’s Essential?, pp. 62, 228; and Stephen Barr and David
Montgomery, “At Uncle Sam’s No One Answers,” Washington Post, Nov. 16, 1995, p. A1.
31
Dan Morgan and Stephen Barr, “When Shutdown Hits Home Ports,” Washington Post,
Jan. 8, 1996, p. A1.
32
Thomas W. Lippman, “Inconvenience Edges Toward Emergency,” Washington Post, Jan.
3, 1996, p. A11.
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American Veterans. Multiple services were curtailed, ranging from
health and welfare to finance and travel.33
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Federal Contractors. Of $18 billion in Washington, DC, area
contracts, $3.7 billion (over 20%) reportedly were affected adversely
by the funding lapse; the National Institute of Standards and
Technology (NIST) was unable to issue a new standard for lights
and lamps that was scheduled to be effective January 1, 1996,
possibly resulting in delayed product delivery and lost sales; and
employees of federal contractors reportedly were furloughed without
pay.34
Effects on Mandatory Spending Programs. Programs that are funded
by laws other than annual appropriations acts — for example, some entitlement
programs — may, or may not, be affected by a funding gap. Specific circumstances
appear to be significant. For example, although the funds needed to make payments
to beneficiaries may be available automatically, pursuant to permanent
appropriations, the payments may be processed by employees who are paid with
funds provided in annual appropriations acts. In such situations, the question arises
whether a mandatory program can continue to function during a funding gap, if
appropriations were not enacted to pay salaries of administering employees.
According to the 1981 Civiletti opinion, at least some of these employees would not
be subject to furlough, because authority to continue administration of a program
could be inferred from Congress’s direction that benefit payments continue to be
made according to an entitlement formula.35 That is, obligating funds for the salaries
of these personnel would be excepted from the Antideficiency Act’s restrictions
during a funding gap. However, such a determination would depend upon the
absence of contrary legislative history in specific circumstances.
Nevertheless, the experience of the Social Security Administration (SSA) during
the FY1996 shutdowns illustrates what might happen over a period of time in these
situations. The lack of funds for some employees’ salaries, for example, may
impinge eventually on the processing and payment of new entitlement claims. SSA’s
administrative history describes how 4,780 employees were allowed to be retained
during the initial stages of the first shutdown.36 The majority of these employees
were “in direct service positions to ensure the continuance of benefits to currently
enrolled Social Security, SSI and Black Lung beneficiaries.” Avoidance of furloughs
33
Government Shutdown: What’s Essential?, pp. 115-117.
34
Peter Behr, “Contractors Face Mounting Costs from Government Shutdowns,”
Washington Post, Jan. 23, 1996, p. C1; Government Shutdown: What’s Essential?, p. 270;
and Peter Behr, “Latest Federal Shutdown Hits Contractors Hard,” Washington Post, Dec.
22, 1995, p. D1.
35
1981 Civiletti opinion, reprinted in U.S. GAO, Funding Gaps Jeopardize Federal
Government Operations, p. 82 (footnote 7). For discussion, see U.S. GAO, Principles of
Federal Appropriations Law, pp. 6-149 - 6-150.
36
See SSA’s “History of SSA 1993 - 2000,” Ch. 5, available at [http://www.ssa.gov/
history/ssa/ssa2000chapter5.html].
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was possible, because “appropriations were available to fund the program costs of
paying benefits, [which] implied authority to incur obligations for the costs necessary
to administer those benefits.” SSA furloughed its remaining 61,415 employees.
Before long, however, SSA and OMB reconsidered. SSA had not retained staff to,
among other things, respond to “telephone calls from customers needing a Social
Security card to work or who needed to change the address where their check should
be mailed for the following month.” SSA then advised OMB that the agency would
need to retain 49,715 additional employees for direct service work, including the
processing of new claims for Social Security benefits. Further adjustments were
made during the considerably longer second shutdown, in response to increasing
difficulties in administering the agency’s entitlement programs.
Potential Issues for Congress
Quality and Specificity of Agency Planning. In December 1995,
Representative John L. Mica, chairman of the Subcommittee on Civil Service of the
House Committee on Government Reform and Oversight, convened a hearing that
focused on the first FY1996 shutdown and potential implications for the future.37
Among other things, then-Chairman Mica raised concerns about the shutdown’s
planning and execution by agencies and OMB, saying “the execution of the shutdown
was, in many instances, disorganized and illogical, at best, and oftentimes chaotic
experience.”38 As an example, he cited the “recall of more than 50,000 Social
Security personnel [three days into the furlough], raising questions about whether
they should have been furloughed in the first place.”39 In addition, then-Ranking
Member James P. Moran expressed interest in clarifying the distinction between
exempt and nonexempt activities and employees. If similar issues were currently of
concern, Congress might consider lawmaking and oversight options related to the
quality and specificity of agency shutdown planning.
Availability of Agency Shutdown Plans. OMB’s Circular No. A-11
requires executive agencies to submit to OMB “plans for an orderly shutdown in the
event of the absence of appropriations” when the plans are either first prepared or
later revised.40 OMB has required the development and maintenance of these
shutdown plans since 1980. It is not clear, however, the extent to which agency
shutdown plans have been made publicly available or systematically shared with
Congress and agency stakeholders for feedback. Scrutiny over agency shutdown
plans may provide incentives for agencies to improve the quality of the plans, should
it become necessary at some point for agencies to execute the plans, and may inform
budget policy debates about the potential impacts of shutdowns. On the other hand,
such inquiries may distract agency personnel from other duties and raise sensitive
issues regarding what activities and employees should be considered exempt from
Antideficiency Act restrictions.
37
See Government Shutdown: What’s Essential?, pp. 1-3.
38
Ibid., p. 2.
39
Ibid.
40
OMB, Circular No. A-11: Preparation, Submission, and Execution of the Budget, June
2008, Sec. 124, p. 1. Keith.
This report will be updated annually.
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Shutdown of the Federal Government: Causes, Processes, and Effects
Contents
Budget Negotiations and Choices ................................................................................................1
Causes of Federal Shutdowns......................................................................................................1
OMB and Agency Shutdown Processes .......................................................................................3
Effects of a Federal Government Shutdown.................................................................................5
Effects on Federal Officials and Employees...........................................................................5
Examples of Excepted Activities and Personnel.....................................................................6
Effects on the Public .............................................................................................................7
Effects on Mandatory Spending Programs .............................................................................8
Potential Issues for Congress.......................................................................................................9
Quality and Specificity of Agency Planning ..........................................................................9
Availability of Agency Shutdown Plans.................................................................................9
Contacts
Author Contact Information ...................................................................................................... 10
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Shutdown of the Federal Government: Causes, Processes, and Effects
Budget Negotiations and Choices1
It has been said that “conflict is endemic to budgeting.”2 If conflict between Congress and the
President impedes the timely enactment of annual appropriations acts or continuing resolutions,
the possibility of a government shutdown arises.
During high-stakes negotiations over appropriations measures, a number of options present
themselves to Congress and the President, including
•
coming to agreement on regular appropriations acts before the beginning of a
new fiscal year;
•
using one or more interim continuing resolutions (CRs) to extend temporary
funding until final decisions are made; or
•
not agreeing on full-year or interim appropriations acts, resulting in a funding
gap and a corresponding shutdown of federal activities.
If Congress and the President pursue the second or third options, they may agree on full-year
appropriations after the beginning of the fiscal year by using regular appropriations acts (e.g.,
singly or in omnibus legislation) or a full-year CR. Congress and the President frequently agree
on full-year or interim funding without coming to an impasse.3 On other occasions, however,
Congress and the President may not come to an accommodation in time to prevent a funding gap.
This report discusses the causes of funding gaps and shutdowns of the federal government,
processes that are associated with shutdowns, and how agency operations may be affected by
shutdowns. The report concludes with a discussion of potential issues for Congress.
Causes of Federal Shutdowns
The federal fiscal year begins October 1. For agencies and programs that are funded through
annual appropriations acts, Congress and the President must enact interim or full-year
appropriations by this date if many governmental activities are to continue operating. If interim or
full-year appropriations are not enacted into law, the time interval when agency appropriations are
not enacted is referred to as a “funding gap.”4 A funding gap also may occur any time a CR
expires and another CR (or regular appropriations bill) is not enacted immediately thereafter.
When a funding gap occurs, the federal government begins a “shutdown” of the affected
1
Justin Murray, Information Research Specialist in the Knowledge Services Group, provided research support for this
report. This report updates and supersedes CRS Report 98-844, Shutdown of the Federal Government: Causes,
Processes, and Effects, previously authored by Sharon Gressle (retired from CRS), and, later, by Kevin R. Kosar.
2
Irene S. Rubin, “Understanding the Role of Conflict in Budgeting,” in Roy T. Meyers, ed., Handbook of Government
Budgeting (San Francisco: Jossey-Bass, 1999), p. 30.
3
For discussion, see CRS Report RL32614, Duration of Continuing Resolutions in Recent Years, by Robert Keith. For
analysis of the potential functions and impacts of CRs, see CRS Report RL30343, Continuing Resolutions: Latest
Action and Brief Overview of Recent Practices, by Sandy Streeter; and CRS Congressional Distribution Memorandum,
Potential Impacts of Interim Continuing Resolutions (CRs) on Agency Operations and the Functioning of the Federal
Government, coordinated by Clinton T. Brass, July 8, 2008.
4
CRS Report RS20348, Federal Funding Gaps: A Brief Overview, by Robert Keith. Some observers use alternative
terms “lapse in appropriations” and “appropriations hiatus” instead of “funding gap.”
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activities, including the furlough of non-emergency personnel and curtailment of agency activities
and services. Programs that are funded by laws other than annual appropriations acts (e.g.,
entitlements like Social Security) also may be affected by a funding gap, if program execution
relies on activities that receive annually appropriated funding.
Funding gaps and government shutdowns have occurred in the past when Congress and the
President did not enact regular appropriations bills by the beginning of the fiscal year. They also
have occurred when Congress and the President did not come to an agreement on stop-gap
funding through a CR. As noted in another CRS report, six fairly lengthy funding gaps occurred
from FY1977 to FY1980, ranging from 8 to 17 full days.5 Subsequently, the durations of funding
gaps shortened considerably. From FY1981 to FY1995, nine funding gaps occurred with
durations of up to three full days. A significant exception to the trend occurred in FY1996, when
President William Clinton and the 104th Congress engaged in extended negotiations over budget
policy. Two funding gaps and corresponding shutdowns, amounting to 5 days and 21 days,
ensued. There have been no funding gaps since FY1996.
The Constitution, statutory provisions, court opinions, and Department of Justice (DOJ) opinions
provide the legal framework for how funding gaps and shutdowns have occurred in recent
decades.6 Article I, Section 9 of the Constitution states that “No Money shall be drawn from the
Treasury, but in Consequence of Appropriations made by Law.” Federal employees and
contractors cannot be paid, for example, if appropriations have not been enacted. It would still be
possible under the Constitution, nevertheless, for the government to make contracts or other
obligations if it lacked funds to pay for these commitments.7 The so-called Antideficiency Act
prevents this, however. The act prohibits federal officials from obligating funds before an
appropriations measure has been enacted, except as authorized by law. 8 The act also prohibits
acceptance of voluntary services and employment of personal services exceeding what has been
authorized by law. 9 Exceptions are made under the act to the latter prohibition for “emergencies
involving the safety of human life or the protection of property.” Therefore, the Antideficiency
Act generally prohibits agencies from continued operation in the absence of appropriations.
Failure to comply with the act may result in criminal sanctions, fines, and removal.
For years, many federal agencies continued to operate during a funding gap, while “minimizing
all nonessential operations and obligations, believing that Congress did not intend that agencies
close down” while waiting for the enactment of annual appropriations acts or continuing
resolutions. 10 In 1980 and 1981, however, Attorney General Benjamin R. Civiletti issued two
5
Ibid. These funding gaps occurred before the Department of Justice issued opinions in 1980 and 1981 about allowable
agency activities during a funding gap. The opinions, which are discussed later, were restrictive in their implications
about allowable agency activities compared to what agencies had done in the past during a funding gap.
6
For legal analysis of funding gaps, see U.S. Government Accountability Office (formerly the General Accounting
Office; hereafter “GAO”), Principles of Federal Appropriations Law, 3rd ed., vol. II, GAO-06-382SP, Feb. 2006, ch. 6,
pp. 6-146 - 6-159.
7
For discussion, see prepared statement of Walter Dellinger, Assistant Attorney General, in U.S. Congress, Senate
Committee on the Budget and House Committee on the Budget, Effects of Potential Government Shutdown, hearing,
104th Cong., 1st sess., Sept. 19, 1995, S.Hrg. 104-175 (Washington: GPO, 1995), p. 18 (hereafter Effects of Potential
Government Shutdown).
8
31 U.S.C. § 1341. The Antideficiency Act (31 U.S.C. §§ 1341-1342, §§ 1511-1519) is discussed in CRS Report
RL30795, General Management Laws: A Compendium, by Clinton T. Brass et al., pp. 93-97. GAO provides
information on the act, available at http://www.gao.gov/ada/antideficiency.htm.
9
31 U.S.C. § 1342; see also § 1515.
10
U.S. GAO, Funding Gaps Jeopardize Federal Government Operations, PAD-81-31, Mar. 3, 1981, pp. i, 2.
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opinions that more strictly interpreted the Antideficiency Act in the context of a funding gap,
along with its exceptions.11 The opinions stated that, with some exceptions, the head of an agency
could avoid violating the Antideficiency Act only by suspending the agency’s operations until the
enactment of an appropriation. In the absence of appropriations, exceptions would be allowed
only when there is “some reasonable and articulable connection between the function to be
performed and the safety of human life or the protection of property.”
In 1990, in response to the 1981 Civiletti opinion, Congress amended 31 U.S.C. § 1342 to clarify
that “the term ‘emergencies involving the safety of human life or the protection of property’ does
not include ongoing, regular functions of government the suspension of which would not
imminently threaten the safety of human life or the protection of property.”12 DOJ’s Office of
Legal Counsel (OLC) issued a memorandum in 1995 that interpreted the effect of the amendment
(hereafter, “1995 OLC opinion”). 13 The 1995 OLC opinion said one aspect of the 1981 Civiletti
opinion’s description of emergency governmental functions should be modified in light of the
amendment, but that the 1981 opinion otherwise “continues to be a sound analysis of the legal
authorities respecting government operations” during a funding gap.14
OMB and Agency Shutdown Processes
The Office of Management and Budget (OMB) provides agencies with annual instructions on
how to prepare for and operate during a funding gap in Circular No. A-11.15 The circular cites the
two Civiletti opinions and the 1995 OLC opinion as “background” and “guidance.” The circular
establishes two “policies” regarding the absence of appropriations: (1) a prohibition on incurring
obligations unless the obligations are otherwise authorized by law and (2) permission to incur
obligations “as necessary for orderly termination of an agency’s functions,” but prohibition of any
disbursement (i.e., payment).
The circular also directs agency heads to develop and maintain shutdown plans, which are to be
submitted to OMB when initially prepared and also when revised. Agency heads are to use the
DOJ opinions and the circular to “decide what activities are essential to operate their agencies
during an appropriations hiatus.” Among other things, a shutdown plan is required to include
•
an estimate of the time to complete the shutdown, to the nearest half-day;
•
the number of employees expected to be on-board (i.e., filled positions) before
implementation of the plan;
11
43 Op. Att’y Gen. 224 (Apr. 25, 1980), 43 Op. Att’y Gen. 293 (Jan. 16, 1981). The Civiletti opinions are included in
a GAO report as Appendices IV and VIII. See U.S. GAO, Funding Gaps Jeopardize Federal Government Operations.
For discussion of exceptions, see U.S. GAO, Principles of Federal Appropriations Law, pp. 6-146 - 6-159.
12
Ibid., p. 6-151, citing P.L. 101-508, 104 Stat. 1388, at 1388-621.
13
U.S. Department of Justice, Office of Legal Counsel, Government Operations in the Event of a Lapse in
Appropriations, memorandum from Walter Dellinger, Assistant Attorney General, for Alice Rivlin, Director, Office of
Management and Budget, Aug. 16, 1995, reprinted in Effects of Potential Government Shutdown, pp. 77-85.
14
Ibid., p. 78.
15
U.S. Executive Office of the President, Office of Management and Budget (hereafter, “OMB”), Circular No. A-11:
Preparation, Submission, and Execution of the Budget, August 2009, Sec. 124, available at
http://www.whitehouse.gov/omb/circulars/a11/current_year/a11_toc.html. See also CRS Report RS21665, Office of
Management and Budget (OMB): A Brief Overview, by Clinton T. Brass.
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•
the total number of employees to be “retained” under the plan (i.e., not subject to
furlough), broken out into two categories: (1) employees “engaged in military,
law enforcement, or direct provision of health care activities” and (2) employees
whose “compensation is financed by a resource other than annual
appropriations”; and
•
the total number of additional employees who will be retained, in order to protect
life and property, who are not “exempt” from furlough because of the two
previous criteria, above.
In general, the circular refers to employees who are to be furloughed as “released,” and
employees who will not be furloughed as “retained” or “exempt.”16 OMB’s circular also instructs
agencies to take personnel actions to release employees according to applicable law and Office of
Personnel Management (OPM) regulations.17
OMB documents and guidance from previous funding gaps and shutdowns may provide insights
into current and future practices. OPM has recommended on a website that agencies use OMB
guidelines to determine “excepted” positions (i.e., those not subject to furlough) and provided
retyped copies of previous OMB bulletins and memoranda for reference.18 These and other OMB
documents also have been reproduced in several legislative branch documents.19
16
In congressional hearings that focused on the first FY1996 shutdown, some witnesses expressed regret that the terms
“nonessential” and “essential” had been used to describe employees subject to furlough, and not subject to furlough,
respectively. Use of the term “nonessential” was demeaning, they suggested. See U.S. Congress, House Committee on
Government Reform and Oversight, Subcommittee on Civil Service, Government Shutdown I: What’s Essential?,
hearings, 104th Cong., 1st sess., Dec. 6 and 14, 1995 (Washington: GPO, 1997) (hereafter, Government Shutdown:
What’s Essential?), pp. 48, 228-229.
17
OPM maintains a website with guidance, historical OMB documents, and frequently asked questions about
furloughs, available at http://www.opm.gov/furlough/furlough.asp.
18
See ibid. The reproduced OMB documents include, in chronological order:
(1) OMB Bulletin No. 80-14, Shutdown of Agency Operations Upon Failure by the Congress to Enact Appropriations,
Aug. 28, 1980 (citing the 1980 Civiletti opinion and requiring agencies to develop shutdown plans);
(2) OMB Memorandum, Agency Operations in the Absence of Appropriations, Nov. 17, 1981 (referencing OMB
Bulletin No. 80-14; saying the 1981 Civiletti opinion remains in effect; and providing examples of “excepted activities”
that may be continued under a funding gap);
(3) OMB Bulletin No. 80-14, Supplement No. 1, Agency Operations in the Absence of Appropriations, Aug. 20, 1982
(“updating” OMB Bulletin No. 80-14 and newly requiring agencies to submit contingency plans for review by OMB);
(4) OMB Memorandum M-91-02, Agency Operations in the Absence of Appropriations, Oct. 5, 1990 (referencing
OMB Bulletin No. 80-14; stating that OMB Bulletin No. 80-14 was “amended” by the OMB Memorandum of Nov. 17,
1981; saying the 1981 Civiletti opinion remains in effect; and directing agencies on a Friday how to handle a funding
gap that begins during the weekend); and
(5) OMB Memorandum M-95-18, Agency Plans for Operations During Funding Hiatus, Aug. 22, 1995 (referencing
OMB Bulletin No. 80-14, as amended; citing the 1981 Civiletti opinion; transmitting to agencies the 1995 OLC opinion
as an “update” to the 1981 Civiletti opinion; and directing agencies to send updated contingency plans to OMB).
19
See Effects of Potential Government Shutdown, pp. 77-85; U.S. GAO, Funding Gaps Jeopardize Federal
Government Operations, Appendices V, VI, and VII; and Government Shutdown: What’s Essential?, pp. 99-112, 121131, and 428-430.
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Effects of a Federal Government Shutdown
Effects on Federal Officials and Employees
Effects of a shutdown may occur in anticipation of a funding gap (e.g., planning), during a gap
(furlough and curtailed operations), and afterwards (e.g., reducing backlogs of work). An
immediate shutdown effect is the “shutdown furlough” of certain federal employees (i.e.,
placement in a temporary, nonduty, nonpay status).20 Several types of officials and employees are
not subject to furlough. These include Members of Congress, the President, presidential
appointees, certain legislative branch employees, and federal employees deemed “excepted.”21
“Excepted” employees, who are required to work during a shutdown, are described as
“employees who are excepted from a furlough by law because they are (1) performing emergency
work involving the safety of human life or the protection of property, (2) involved in the orderly
suspension of agency operations, or (3) performing other functions exempted from the
furlough.”22 Shutdown furloughs are not considered a break in service and are generally
creditable for retaining benefits and seniority. Also, federal employees who have been affected by
shutdowns historically have received their salaries retroactively.23
As noted earlier, the two most recent shutdowns occurred in FY1996.24 The first, which lasted
five full days between November 13-19, 1995, resulted in the furlough of an estimated 800,000
federal employees. It was caused by the expiration of a continuing resolution agreed to on
September 30, 1995 (P.L. 104-31), and by President Clinton’s veto of a second continuing
resolution and a debt limit extension bill. The second FY1996 partial shutdown of the federal
government, and the longest in history, lasted 21 full days between December 15, 1995, and
January 6, 1996. The shutdown was triggered by the expiration of a continuing funding resolution
enacted on November 20, 1995 (P.L. 104-56), which funded the government through December
15, 1995. On January 2, 1996, the estimate of furloughed federal employees was 284,000.25
Another 475,000 excepted federal employees continued to work in nonpay status. There were
several short-term continuing resolutions between January 6, 1996, and April 26, 1996, when the
Omnibus Consolidated Rescissions and Appropriations Act of 1996 (P.L. 104-134) was enacted to
fund any agencies or programs not yet funded through FY1996.
20
See http://www.opm.gov/furlough/furlough.asp.
For additional discussion, including the status of legislative branch agencies and personnel, see ibid. and U.S. GAO,
Principles of Federal Appropriations Law, pp. 6-149 - 6-150.
22
See http://www.opm.gov/furlough/furlough.asp.
21
23
For example, for the FY1996 shutdowns, affected employees were guaranteed to be paid retroactively by provisions
in continuing resolutions (P.L. 104-56, Sec. 124, which itself was continued in P.L. 104-94), but did not receive
compensation until funding for their agencies was enacted.
24
This paragraph draws on CRS Report 95-906, Shutdown of the Federal Government: Effects on the Federal
Workforce And Other Sectors, by James P. McGrath (Sept. 25, 1997, archived; available upon request).
25
Fewer employees, agencies, and programs were affected because some funding bills were enacted during the period
between the two shutdowns.
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Examples of Excepted Activities and Personnel
Previous determinations of excepted activities and personnel would not necessarily hold for any
future shutdown. However, past experience may inform future OMB and agency decisions. An
OMB memorandum of November 17, 1981, from Director David A. Stockman to the heads of
executive agencies, identified “examples of excepted activities.”26 The memorandum, which still
was in effect for the FY1996 shutdowns, explained
Beginning [on the first day of the appropriations hiatus], agencies may continue activities
otherwise authorized by law, those that protect life and property and those necessary to begin
phasedown of other activities. Primary examples of activities agencies may continue are
those which may be found under applicable statutes to:
1. Provide for the national security, including the conduct of foreign relations essential to the
national security or the safety of life and property.
2. Provide for benefit payments and the performance of contract obligations under no-year or
multi-year or other funds remaining available for those purposes.
3. Conduct essential activities to the extent that they protect life and property, including:
a. Medical care of inpatients and emergency outpatient care;
b. Activities essential to ensure continued public health and safety, including safe use of
food and drugs and safe use of hazardous materials;
c. The continuance of air traffic control and other transportation safety functions and the
protection of transport property;
d. Border and coastal protection and surveillance;
e. Protection of Federal lands, buildings, waterways, equipment and other property
owned by the United States;
f. Care of prisoners and other persons in the custody of the United States;
g. Law enforcement and criminal investigations;
h. Emergency and disaster assistance;
i. Activities essential to the preservation of the essential elements of the money and
banking system of the United States, including borrowing and tax collection activities of
the Treasury;
j. Activities that ensure production of power and maintenance of the power distribution
system; and
k. Activities necessary to maintain protection of research property.
26
OMB Memorandum, Agency Operations in the Absence of Appropriations, Nov. 17, 1981.
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You should maintain the staff and support services necessary to continue these essential
functions.
Effects on the Public
The effects of the two FY1996 shutdowns on government activities and the public received
extensive attention. Although the effects on the public of any future shutdown would not
necessarily reflect past experience, past events may be illustrative of effects that are possible.27
Several examples follow that were reported in congressional hearings, news media, and agency
accounts.28
•
Health. New patients were not accepted into clinical research at the National
Institutes of Health (NIH) clinical center; the Centers for Disease Control and
Prevention ceased disease surveillance; hotline calls to NIH concerning diseases
were not answered; and toxic waste clean-up work at 609 sites reportedly stopped
and resulted in 2,400 Superfund workers being sent home. 29
•
Law Enforcement and Public Safety. Delays occurred in the processing of
alcohol, tobacco, firearms, and explosives applications by the Bureau of Alcohol,
Tobacco, and Firearms; work on more than 3,500 bankruptcy cases reportedly
was suspended; cancellation of the recruitment and testing of federal lawenforcement officials reportedly occurred, including the hiring of 400 border
patrol agents; and delinquent child-support cases were delayed. 30
•
Parks, Museums, and Monuments. Closure of 368 National Park Service sites
(loss of 7 million visitors) reportedly occurred, with loss of tourism revenues to
local communities; and closure of national museums and monuments (reportedly
with an estimated loss of 2 million visitors) occurred. 31
•
Visas and Passports. Approximately 20,000-30,000 applications by foreigners
for visas reportedly went unprocessed each day; 200,000 U.S. applications for
passports reportedly went unprocessed; and U.S. tourist industries and airlines
reportedly sustained millions of dollars in losses.32
27
In 1981, GAO developed a “hypothetical case” of the possible effects of a 30-day government-wide funding gap and
shutdown, which the agency characterized as “unthinkable.” After the release of the first Civiletti opinion concerning
compliance with the Antideficiency Act, GAO characterized the opinion as “fundamentally alter[ing] the environment
in which Federal agencies must prepare for a period of expired appropriations.” Previously, interpretation of the
Antideficiency Act had been much less strict. The results of GAO’s illustrative survey are available in U.S. GAO,
Funding Gaps Jeopardize Federal Government Operations, pp. 48-56.
28
The examples are drawn from more extensive discussion in CRS Report 95-906, Shutdown of the Federal
Government: Effects on the Federal Workforce And Other Sectors, by James P. McGrath. Many of the examples come
from agency accounts in congressional hearings after the first FY1996 shutdown (see Government Shutdown: What’s
Essential?) and media accounts during and after the second shutdown.
29
Government Shutdown: What’s Essential?, p. 23; and Stephen Barr and Frank Swoboda, “Jobless Aid, Toxic Waste
Cleanup Halt,” Washington Post, January 3, 1996, p. A1.
30
Government Shutdown: What’s Essential?, pp. 62, 228; and Stephen Barr and David Montgomery, “At Uncle Sam’s
No One Answers,” Washington Post, November 16, 1995, p. A1.
31
Dan Morgan and Stephen Barr, “When Shutdown Hits Home Ports,” Washington Post, January 8, 1996, p. A1.
32
Thomas W. Lippman, “Inconvenience Edges Toward Emergency,” Washington Post, January 3, 1996, p. A11.
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•
American Veterans. Multiple services were curtailed, ranging from health and
welfare to finance and travel. 33
•
Federal Contractors. Of $18 billion in Washington, DC, area contracts, $3.7
billion (over 20%) reportedly were affected adversely by the funding lapse; the
National Institute of Standards and Technology (NIST) was unable to issue a new
standard for lights and lamps that was scheduled to be effective January 1, 1996,
possibly resulting in delayed product delivery and lost sales; and employees of
federal contractors reportedly were furloughed without pay.34
Effects on Mandatory Spending Programs
Programs that are funded by laws other than annual appropriations acts—for example, some
entitlement programs—may, or may not, be affected by a funding gap. Specific circumstances
appear to be significant. For example, although the funds needed to make payments to
beneficiaries may be available automatically, pursuant to permanent appropriations, the payments
may be processed by employees who are paid with funds provided in annual appropriations acts.
In such situations, the question arises whether a mandatory program can continue to function
during a funding gap, if appropriations were not enacted to pay salaries of administering
employees. According to the 1981 Civiletti opinion, at least some of these employees would not
be subject to furlough, because authority to continue administration of a program could be
inferred from Congress’s direction that benefit payments continue to be made according to an
entitlement formula.35 That is, obligating funds for the salaries of these personnel would be
excepted from the Antideficiency Act’s restrictions during a funding gap. However, such a
determination would depend upon the absence of contrary legislative history in specific
circumstances.
Nevertheless, the experience of the Social Security Administration (SSA) during the FY1996
shutdowns illustrates what might happen over a period of time in these situations. The lack of
funds for some employees’ salaries, for example, may impinge eventually on the processing and
payment of new entitlement claims. SSA’s administrative history describes how 4,780 employees
were allowed to be retained during the initial stages of the first shutdown. 36 The majority of these
employees were “in direct service positions to ensure the continuance of benefits to currently
enrolled Social Security, SSI and Black Lung beneficiaries.” Avoidance of furloughs was
possible, because “appropriations were available to fund the program costs of paying benefits,
[which] implied authority to incur obligations for the costs necessary to administer those
benefits.” SSA furloughed its remaining 61,415 employees. Before long, however, SSA and OMB
reconsidered. SSA had not retained staff to, among other things, respond to “telephone calls from
customers needing a Social Security card to work or who needed to change the address where
their check should be mailed for the following month.” SSA then advised OMB that the agency
would need to retain 49,715 additional employees for direct service work, including the
33
Government Shutdown: What’s Essential?, pp. 115-117.
Peter Behr, “Contractors Face Mounting Costs from Government Shutdowns,” Washington Post, January 23, 1996,
p. C1; Government Shutdown: What’s Essential?, p. 270; and Peter Behr, “Latest Federal Shutdown Hits Contractors
Hard,” Washington Post, December 22, 1995, p. D1.
35
1981 Civiletti opinion, reprinted in U.S. GAO, Funding Gaps Jeopardize Federal Government Operations, p. 82
(footnote 7). For discussion, see U.S. GAO, Principles of Federal Appropriations Law, pp. 6-149 - 6-150.
36
See SSA’s “History of SSA 1993 - 2000,” Ch. 5, available at http://www.ssa.gov/history/ssa/ssa2000chapter5.html.
34
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processing of new claims for Social Security benefits. Further adjustments were made during the
considerably longer second shutdown, in response to increasing difficulties in administering the
agency’s entitlement programs.
Potential Issues for Congress
Quality and Specificity of Agency Planning
In December 1995, Representative John L. Mica, chairman of the Subcommittee on Civil Service
of the House Committee on Government Reform and Oversight, convened a hearing that focused
on the first FY1996 shutdown and potential implications for the future.37 Among other things,
then-Chairman Mica raised concerns about the shutdown’s planning and execution by agencies
and OMB, saying “the execution of the shutdown was, in many instances, disorganized and
illogical, at best, and oftentimes chaotic experience.”38 As an example, he cited the “recall of
more than 50,000 Social Security personnel [three days into the furlough], raising questions about
whether they should have been furloughed in the first place.”39 In addition, then-Ranking Member
James P. Moran expressed interest in clarifying the distinction between exempt and nonexempt
activities and employees. If similar issues were currently of concern, Congress might consider
lawmaking and oversight options related to the quality and specificity of agency shutdown
planning.
Availability of Agency Shutdown Plans
OMB’s Circular No. A-11 requires executive agencies to submit to OMB “plans for an orderly
shutdown in the event of the absence of appropriations” when the plans are either first prepared or
later revised. 40 OMB has required the development and maintenance of these shutdown plans
since 1980. It is not clear, however, the extent to which agency shutdown plans have been made
publicly available or systematically shared with Congress and agency stakeholders for feedback.
Scrutiny over agency shutdown plans may provide incentives for agencies to improve the quality
of the plans, should it become necessary at some point for agencies to execute the plans, and may
inform budget policy debates about the potential impacts of shutdowns. On the other hand, such
inquiries may distract agency personnel from other duties and raise sensitive issues regarding
what activities and employees should be considered exempt from Antideficiency Act restrictions.
37
See Government Shutdown: What’s Essential?, pp. 1-3.
Ibid., p. 2.
39
Ibid.
40
OMB, Circular No. A-11: Preparation, Submission, and Execution of the Budget, August 2009, Sec. 124, p. 1.
38
Congressional Research Service
9
Shutdown of the Federal Government: Causes, Processes, and Effects
Author Contact Information
Clinton T. Brass
Analyst in Government Organization and
Management
cbrass@crs.loc.gov, 7-4536
Congressional Research Service
10