government shutdowns

government shutdowns

The Impact and Implications of Government Shutdowns

1. Introduction to Government Shutdowns

Despite its costs and disruptions, scholars have said little about the government shutdown. In the United States, government shutdowns have occurred numerous times at the local, state, and federal levels of government. A notable lack of research is that government shutdowns are generally absent from the course coverage of graduate courses on public budgeting. Thus, this paper is the first step in providing a thorough systematic study of government shutdowns. Future research will focus on possible solutions to government shutdowns using a variety of survey and experimental methods to value and prioritize solutions to the government shutdown problem.

The goal of this research project is to provide a comprehensive study of government shutdowns, a novel problem identified by our earlier research. Government shutdowns arise when the legislature appropriates no money. In this situation, the government, required by law to satisfy existing debts, provide essential services, and collect taxes to cover the obligations, faces a series of financial and operational problems for which there is no legal answer. The issues and problems posed call for more research on how governments handle a lack of funding and the operational and potential liabilities that arise when organizations contract under conditions of uncertainty.

2. Causes and Triggers of Government Shutdowns

Apparently, when a budget for the new fiscal year has to be approved before the end of the old fiscal year, failing to approve the new budget acts as a trigger for the government shutdown and an incomplete government. Indeed, a shutdown ceases as soon as the necessary budget is provided. But the larger question is whether the shutdown itself is instigated by the fact that preparation or deployment of a new government budget is not forthcoming. Upon deeper scrutiny of the constitution, it becomes clear that a government shutdown occurs mainly at the country’s executive or administrative level. Bare-bones or essential governance continues, relatively unaffected, mainly because certain services are either automatic or run on autopilot. For example, social security checks would continue to be mailed. Thus, a shutdown and incomplete governance remain quite distinct.

We have defined a government shutdown as the event of non-essential activities of the government coming to a halt because people from a certain party or coalition refuse to provide a budget. We have adopted a narrow view of recent literature that defines a government shutdown only in case there is no budget at all, causing policy failures, rather than focusing on broader forms of incomplete government that might also cause various other dysfunctions or suboptimalities. To discuss this issue, we consider two kinds of incomplete government. Firstly, the government does nothing at all. This we typically refer to as a government shutdown. That is to say, administration is not just downsized but ceases in its major or essential functions for coordinating economic activity. Secondly, the government implements only its most essential or critical core functions. At times, our paper blurs this boundary to also consider cases where partial core activities are excluded, but usually, we focus on the stark differences between pure shutdown and partial action.

3. Effects on Government Operations and Services

Government services impacted by shutdown The operations of government are greatly affected by a lack of new budget authority. Some of the funding gaps impact nearly all departments and agencies because many of the cross-cutting issues and powers that are funded under permanent law. Such affected parties include the Departments of Agriculture, Commerce, Housing and Urban Development, Interior, Justice, Labor, State, Transportation, Treasury, and some others whose services and officers are funded annually through the general commerce, Justice, and State and other related appropriations. The representatives of the agencies that carry out these operations have to stand down the majority of the federal workforce; that is, they figure the lowest percentage of employees when a government shutdown occurs. Many of the agencies that carry out these functions have exemptions to statutory restrictions regarding the handling of the order to work for the fear of the organization and the property of the nation’s history.

4. Economic and Social Consequences of Government Shutdowns

The negative effects of a government shutdown on not only federal employees but also their family members are obvious. Approximately 80% of the total federal expenditures finance jobs, rather than involving benefits to be received. As a result, if the federal spending comes to a halt, some federal employees may lose their jobs or face delayed salary payments. This will, in turn, have a further influence on the lives of the family members. A government shutdown not only results in the serious decline of the living conditions of the affected federal employees and their family members but will also prompt them to oppose opposition party activists from not following what they believe to be good governance. Beyond these observed rational actors behaving within the reason game model, the government shutdowns are possible sources of increased crime, depression, bankruptcy, and other irrational reactions in the affected communities. More precisely, the family members or the federal employees may feel deprived of a fair portion of the federal aid and create unwanted additional problems.

The Antideficiency Act is one of the legislative regulations that will allow federal employees to be involuntarily identified and thus will force the government to cease some of its functions, for example, a government shutdown. However, regarding the recent practice of behavior, a government shutdown is often a significant policy failure. One typical example of a government shutdown was the incident which took place during the early 1980s. During these years, there was a disagreement between the President trying to force Congress to accept his policy conditions, in relation to the budget deficit. As a result, both the federal government and not-for-profit organizations mostly dependent upon federal funding suffered from serious financial difficulties. Upon examining the economic and related social impacts of a government shutdown, it becomes apparent that there are several stories about those involved, including the federal employees, both the urban and rural sections of counties, not-for-profit organizations, the public right to seek federal, state, and local government activities, and of course, the legislators and governors of both states.

The U.S. government is funded by a combination of tax, non-tax, and other revenues. Government borrowing, known as the public debt, plays a major role in providing additional amounts of cash to meet the equilibrium level of government spending in the absence of additional revenues. In the U.S., political parties frequently disagree about the optimal size, scope, and the governance of the federal budget. Because of these ongoing disagreements, it is not unusual for the President and Congress to fail to enact regular appropriations before the end of the fiscal year. A continuing agreement to provide additional time for appropriations consideration is an integral part of this annual appropriations legislative process. However, if appropriations for the agencies and programs are not enacted before the beginning of the fiscal year, it can disrupt government activities.

5. Mitigation Strategies and Policy Recommendations

Similar reforms will not necessarily mitigate a major negative consequence of these alternatives – the weakening of the federal government’s oversight function consuming a large proportion of the Government’s resources. This “shade tree government” seems to be – and perhaps needs to be – an important government activity. The functions that the government itself does not conduct are even more important than the functions that the government conducts itself, mostly through subcontractors. If everywhere at least two thought minimum activities are performed to ensure business continuity in the event of a government shutdown, is this a hint of necessary slack in a lean management environment or indeed overhiring of otherwise unnecessary positions?

Understanding why and how shutdowns occur suggests policy changes that can reduce the problem or ease the impact. Such changes include institutional reforms to reduce holdout labor’s leverage, such as compulsory interest arbitration or tied subsidization for the work stoppages of monopoly government workers; compulsory recourse to interest arbitration or supervisory bargaining for private franchisee workers; moving out of public hands infrastructure and enterprise functions better delivered by private entities; the design of more optimal and less cyclical budget procedures; compensation and tax strategies minimizing the impact of a shutdown on potentially battleground subcontractors; and the reconsideration of how critical or necessary are the non-mission-related functions that these private subcontractors conduct for the government.