A government shutdown occurs when Congress does not pass full-year spending bills for departments and agencies or when a short-term funding measure, called a continuing resolution (CR), expires. If a CR does not get passed or the budget deadline passes without agreement, most government activities must stop unless they are necessary to protect life and property. Departments and agencies can also develop plans that outline how to continue their programs in the event of a funding gap, but these differ from agency to agency.
In some cases, lawmakers can resolve disagreements on specific appropriations bills and a CR is never needed. However, this happens rarely. If Congress cannot agree on a new budget proposal by the end of the fiscal year in September or agree to a CR, then the government shuts down.
During a shutdown, many federal employees are furloughed and do not receive pay until funding resumes. This puts families in financial limbo for days or weeks until they can resume normal operations. Essential workers like air traffic controllers and active duty military personnel continue to work, but they do not receive their usual paychecks. In the past, shutdowns have reduced economic output and harmed consumer confidence.
Government shutdowns can also have a negative impact on the country’s already struggling infrastructure, including roads, energy and water systems, and public transportation. In addition, a long shutdown would negatively affect private-sector investment and hiring decisions by companies that depend on federal contracts for revenue. Ultimately, the costs of shutdowns are borne by hardworking American families.