What Happens During a Government Shutdown?

This column contains corrections.

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.

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.

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.

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.

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.

What happens during a federal shutdown?

Not all programs halt immediately after federal funding ceases. Some programs, such as WIC and SNAP, have contingency funds that carry over into the new fiscal year. Even if the appropriation has lapsed, a program’s contingency fund is able to continue to make payments until it is exhausted.

Furthermore, many federal programs provide funding to state or local governments for programs that are jointly funded and/or administered; state governments make appropriations based on anticipated federal funding. Even if the federal funding lapses for some time, state and local governments are often bound by their laws governing programmatic responsibilities and by their budgets, which often require programs to continue. They can often cover the programs’ needs until the federal funding belatedly arrives—when the shutdown finally ends—to fill the budgetary hole.

Additionally, even in the event of a shutdown, a decades-old ruling by the U.S. Department of Justice says that obligations necessary to protect “the safety of human life or the protection of property” are able to be incurred. Every president interprets that authority slightly differently, but in the past, this has meant that much of the military continues to operate, along with the U.S. Marshals Service and air traffic control.

Somewhat similarly, if funding for a benefit exists, that can create a “necessary implication” to allow the staff required to administer that benefit to continue to work, even if there is no appropriation for those staff members. For example, this has allowed the staff necessary to administer benefits for Social Security and SSI to continue working during past shutdowns.

Nonetheless, all these federal employees funded through the annual appropriations process would be without pay until the shutdown ended, even if they were to continue working. And while all federal employees are paid in full eventually—whereas some federal contractors and subcontractors are not—longer shutdowns put many households at large financial risk as they miss paychecks.

Finally, if a shutdown occurs after a temporary CR expires, many appropriated entitlements have additional protection. CRs almost always contain language that allows appropriated entitlements to be funded for 30 days after the discretionary portion of a CR ends—even in the event of a shutdown. Any of these programs that deliver monthly benefits would be protected for a month after a CR, regardless of any other considerations.

Nonetheless, many federal programs immediately cease during federal shutdowns:

• Some preschool and school readiness centers would close, leading to some children losing their Head Start benefits. (The effect is only immediate during an October 1 shutdown.*)
• Most inspections of drinking water facilities and hazardous waste sites that are led by the EPA would cease, with 93 percent of its staff furloughed.
• The U.S. Food and Drug Administration would continue with its high-risk food safety inspections, but its routine inspections of low-risk foods, such as packaged cookies and crackers, would cease.
• Workplace safety inspections made by the Occupational Safety and Hazard Administration (OSHA) would be limited, leading to some workers laboring in unsafe conditions.
• The Small Business Administration would stop processing new loan applications.
• The U.S. Department of Agriculture’s loans to farmers would pause.
• The Department of Justice would postpone or curtail some of its civil litigation.
• Much research from NASA and the National Science Foundation would cease, with new grants and unfunded new projects halted and 93 percent and 80 percent of their staff, respectively, furloughed.

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. In some instances, the effects would be localized; in others, the impact could be national: A shutdown that lasted long enough could begin to put programs such as WIC, SNAP, SSI, and TANF at risk, as well as jeopardize funding for school meals, child care, home energy assistance, and housing.**

Conclusion

The federal government funds thousands of activities across 900 budget accounts annually—programs that make the country run. A government shutdown would halt many of these essential services that people rely on and put hundreds more at risk.

The author would like to thank Jean Ross and Madeline Shepherd for their helpful suggestions as well as Crystal Weise and Jessica Vela for their research assistance.

* Correction, November 14, 2023: This column has been updated to clarify that Head Start facilities are only immediately in danger during an October 1 shutdown.

* Correction, November 14, 2023: This column has been updated to reflect that the Labor-Health and Human Services-Education appropriations bill had been enacted prior to the fiscal year 2019 shutdown

Methodology

The author calculated the percentage of each budget account that is advance appropriated by dividing the fiscal year 2023 advance appropriation by the total appropriation for fiscal year 2023, with the exception of the Indian Health Services and Indian Health Facilities accounts. Fiscal year 2024 is the first year these two budget accounts have received an advance appropriation, so it is as of yet unknown what a good estimate for the total appropriation will be. The author assumed the total appropriation would be similar to the 2023 funding total in estimating the proportion that will be advance appropriated.