government shutdown 2023

government shutdown 2023

Analyzing the Impact and Implications of the 2023 Government Shutdown

1. Introduction to Government Shutdowns

The purpose of this paper is to outline the consistent clause in the government shutdown, namely that, with a few exceptions, as take effect the orderly phase-down of, to be made to different federal employees and explored various legal options, as a way of issuing pay to previously performing employees will not be available. All federal employees subject to shutdown furlough will be adversely impacted.

Purpose of this Document: Potential Impact and Implications

At a very fundamental level, a government shutdown occurs when the President and the Congress are unable to agree to fund all or a substantial portion of the government for a significant period of time. A shutdown would result in an unprecedented discontinuation or delay of the execution of the essential functions of the government. This analysis will explore the potential impact of a government shutdown and the significant implications it raises for transactions with the public, so that we can take proactive steps to ameliorate the disruption.

Defining a Government Shutdown

2. Causes and Triggers of the 2023 Shutdown

This book intends to influence future discussions of similar events—and most importantly to provide a guide to the background of what the motivations of the participants really were—by reviewing empirical and anecdotal interactions of the tiny group of key executives and legislators who held the center of power and made the decisions. Detailed expense allocation of the hidden costs of the legislatively mandated but delayed appropriations with identified sources of fiscal and societal impacts supports our theory of what sacrifices/exemptions were demanded as the wage for carrying out the desired budget decision. As it reveals the decision process, this information may serve as a marker of who really holds the balance of political power in our democratic form of government.

The year 2023 was marked by two major budget crises in the United States: the first, at the end of 2022—and associated failure to offer debt service—resulting from an inability to raise required amounts of government revenue; and the second, in the fall of 2023, from the inability to concurrently enact new fiscal year appropriations for and authorize debt service on existing federal government operations. Each such step is said to be pro forma per normal protocol; however, sometimes congressional action stalls centering on the desire of executive nongovernmental interests. This research poses the question, “What was the real motivation for such national fiscal disasters?” It suggests that the personal self-objectives of the participants greatly influence the decisions. Further, the research includes an analysis of who really held the balance of power during the brief legislative sessions of these crises.

3. Economic and Social Consequences

One closely watched economic indicator in that regard is the reduction in the gross domestic product (GDP). Considering a current level for the size of the US government of about 19% of GDP, a complete stop in its becoming will suggest a one-time GDP growth rate close to -5% for that quarter. Such a negative effect of the government shutdown on real output growth adds to a vicious cycle by further reducing tax revenues and increasing the fiscal burden that the country may endure moving forward. Therefore, not only should the right lessons be elicited from the upcoming shutdown and much needed institutional and/or political changes be initiated to avoid such dramatic episodes in the future, but a serious fiscal consolidation thoughtfully addressed before the 2023 economic recession gets underway. Such questions are addressed in what follows with a particular look at government annual contributions to the gross domestic product, financial markets and the risks thereof, private sector risks and look at where the money goes to understand how sharp and rapidly the economy may slow down.

4. Political Ramifications and Public Perception

Many surveys have shown that citizens have almost no trust in Congress’ ability to govern in the years leading up to a government shutdown. The fact that political representatives do not face tangible consequences of a 1% decrease in national GDP linked to continuous multiple government shutdowns would impact feelings that members of Congress are incapable of governing. Dependent on voter response, a fallout of public trust might be that Independent and Democratic members could be negatively impacted more than Republican members. For whom are the political ramifications the most significant?

Political impact and public perception are closely linked, and so it’s difficult to fully identify different political ramifications linked to public viewpoint. This is why further exploration is required into what groups could have changed their minds regarding which party is responsible for their elected representatives failing to negotiate and preventing a government shutdown. One likely impact should it be identified is the possibility of holding elected representatives accountable by the public in the next election. This research would greatly appreciate further inquiries which fully analyze public perception toward political representatives in Congress as a result of consequences to the public.

5. Lessons Learned and Policy Recommendations

As frequently occurred, the “normal” budget and appropriations process had been abandoned six months before the start of the fiscal year. Instead, FY 2023 funding arrived in the form of a continuing resolution that also suspended the application of the federal debt limit. Unhappy Made-December owners, appropriated and non-appropriated fund employees, and federal contractors will have the opportunity over the next two years to focus public and congressional attention on the Budget Reform Act’s apparent inability to achieve its objectives.

How did a relatively mundane budget fight result in a complete government shutdown? The root cause was a fundamentally flawed and outdated budget process that frequently failed to produce a budget and was increasingly being used as a legislative vehicle for matters far beyond its original appropriations purpose. To illustrate the scope of the problematic budget process, OMB submitted its FY 2023 budget request in late January 2022. The House completed initial action on both the FY 2023 budget resolution and the 12 FY 2023 appropriations bills in April 2022. The Senate completed action on the budget resolution in May 2022, and the Senate Appropriations Committee began work on the FY 2023 appropriations bills. However, no additional congressional action on the FY 2023 budget resolution or the FY 2023 appropriations bills occurred until November 1, 2022.