The United States is once again facing the threat of a federal government shutdown if Congress and the president don’t reach a spending agreement by October 1, 2023. If a shutdown happens, many federal workers across the country will be furloughed indefinitely. Many more, working in roles that are deemed essential, will be required to continue working without pay. And a host of government services on which the public depends would lapse. To avoid a shutdown, Congress must either finish the process of approving government funding for the coming fiscal year or pass a continuing resolution to temporarily extend this year’s funding. Either approach would require either presidential agreement or veto-proof majorities in Congress.
In all United States history, the federal government has experienced only four shutdowns of federal agencies for more than one business day, despite many more shorter funding lapses. The first came in the mid-1990s, when President Bill Clinton and congressional Republicans under House Speaker Newt Gingrich were at loggerheads over federal spending levels. The longest stretched for 35 days between December 2018 and January 2019, when President Donald Trump and Democrats in Congress couldn’t agree on funding for the administration’s proposal to build a wall along the U.S. border with Mexico.
But for all the chaos shutdowns create for the American public, Zachary Price, the Bruce Bromley Visiting Professor of Law at Harvard Law School, wrote in a 2018 paper titled “Funding Restrictions and Separation of Powers” that “Congress’s ‘power of the purse’—its authority to deny access to public funds—is one of its most essential constitutional authorities.” In an interview with Harvard Law Today, Price explains the annual government funding, or appropriations, process and how and why federal government shutdowns happen. And he argues that the apparent dysfunction conceals a vital aspect of the U.S. system of checks and balances.
Harvard Law Today: How is the annual government funding process supposed to work?
Zachary Price: Certain government functions are funded on a permanent basis. But a lot of key government functions are funded just for one year at a time through a practice known as annual appropriations. There’s a series of steps that Congress is supposed to take under governing laws. It starts with the president proposing a budget early in the year. And then Congress is supposed to pass a budget resolution [a plan approved by the House and Senate establishing overall federal spending targets]. The last step is putting together the annual appropriations statutes that ultimately fund all the various federal agencies. In recent years, the process has gotten more difficult. Congress has often failed to pass a budget resolution and worked around it in various ways. And it often has had trouble finishing the annual appropriations process before the fiscal year ends on October 1.
HLT: It seems like these types of funding impasses and occasional government shutdowns are a relatively new phenomena in U.S. history. Is that right and, if so, why?
Price: There have been conflicts over government spending between the branches throughout American history, and in some ways, shutdowns are a function of Congress succeeding in gaining greater control over executive-branch spending. The Constitution says that you can’t spend government money from the Treasury without an appropriation by law. There is also an important statute called the Antideficiency Act, which states that it’s unlawful, and sometimes even a crime, when there’s a lapse in appropriations, not only to spend money, but also to incur a binding obligation to pay money in the future. That’s a way of keeping federal agencies from outrunning their existing appropriations by committing the government to spend more, which had been a recurrent problem in the past.
The kinds of shutdowns we’ve seen in recent decades began after the U.S. Attorney General issued legal opinions in 1980 and 1981 that interpreted the Antideficiency Act as requiring most government operations to cease when there’s a funding lapse. If government employees show up to work during a funding lapse, the government has incurred an obligation to pay them. And that violates the Antideficiency Act. There are certain exceptions in the statute that allow some work to continue. And both branches have also taken the view that certain constitutional functions can continue. But it’s really after those opinions in the 1980s that you get a number of shutdowns where some or all government agencies have to stop working when annual appropriations run out.
HLT: And if we head towards a shutdown in the coming weeks, how are Americans likely to experience it?
Price: Certain government functions continue, and many others stop. Some things that have permanent appropriations, like Social Security, are not dependent on annual appropriations, so people keep getting their Social Security checks. The Antideficiency Act has an exception for emergencies involving the safety of human life or the protection of property, and the executive branch has understood that to allow continuation of various national security functions, the protection for government facilities, and certain law enforcement functions. The people doing that work don’t get paid while there’s no appropriation, but the government can incur an obligation to pay them in the future. So, they have to keep working. Anything that’s not within that life and property exception or otherwise specifically authorized by law is going to stop. National parks will close because the federal employees can’t work there. Lots of government services, things like processing passport applications or certain services for veterans, may also stop. And that will cause a lot of frustration for people.
HLT: Senate Minority Leader Mitch McConnell was recently quoted as saying he’s against government shutdowns, in part because they rarely achieve the policy changes those behind them are seeking. If that is right, what is the incentive to allow this to happen?
Price: Whether it’s ever a successful tactic is an interesting question. I do think the annual appropriations process provides Congress with a lot of leverage over executive branch policy. And you see that in a lot of ways. Appropriations statutes often include provisions that presidents don’t want, but that they nonetheless accept as a condition of getting money for continued operations or other things they want to fund. So I think the annual appropriations process is an important source of policy leverage. And in some sense, the threat of a shutdown is a backstop to that whole process.
At the same time, it does seem that the public dislikes shutdowns, and that shutdowns tend to be political losers for whoever is perceived as being at fault. For instance, the Gingrich-Clinton era shutdowns are generally thought to have been a loss for the Republicans in Congress. There’s an argument that in 2011, Republican threats of a shutdown succeeded in getting a lot of policy concessions from President Obama, but that arguably reflected their relative political strength at the time. On the other hand, in 2013, Republicans shut down the government to get changes to Obamacare, and that didn’t work. More recently, President Trump was perceived as precipitating a shutdown over his demands for greater border wall funding. And he seemed to come out the loser for that. So, it depends a lot on background politics, but shutdowns are generally unpopular, and whoever gets seen as being responsible tends to come out losing politically.
HLT: So, given what you say about Congressional leverage over the executive branch, is there an argument that shutdowns are an example of our system of checks and balances working as it should?
Price: I think the practice of annual appropriations is an important source of both policy leverage and checks and balances for Congress over the executive branch. It’s a practice that was first developed by the British parliament as a way of constraining the king. In that context, the American Revolutionary War ended and the United States gained its independence because parliament was unwilling to continue supporting the war. This approach to government funding was picked up in the United States from the beginning. And it is particularly important in the modern context, where the executive branch has a lot of broad statutory authorities that Congress has delegated to it. Over time, presidents have also claimed broad understandings of their constitutional authority. So, they often have the power of initiative when it comes to policy both domestically and internationally. The annual appropriations process is where Congress can sometimes check or override choices being made by the executive branch. So, I do think that, if you care about checks and balances, it’s an important place where that happens. But it does carry the cost of potentially leading to shutdowns.
HLT: Given recent history, even if we escape a shutdown this year, it seems likely to happen again in the future. Are there ways to change the system to prevent this kind of impasse? And given what you said about checks and balances, even if we could change it, should we?
Price: We certainly could change the system. Congress could amend the Antideficiency Act to change how the shutdown process works. For example, a few years ago Congress amended the statute to say that federal employees, who previously hadn’t been guaranteed back pay after a shutdown, would always be paid retroactively. Congress could also make longer-term appropriations in certain areas. Would that be a good idea? It might be good to have some sorts of reforms, but I’d be wary of moving sharply away from time-limited appropriations in general, because, for all the ugliness and dysfunction they can create, I think the push and pull between Congress and the executive branch is important and that moving away entirely from this process could have pretty big costs.
HLT: Does this struggle to fund the government each year say anything about how well our constitutional order is functioning?
Price: I think it’s a concrete, high profile manifestation of the challenges of governing this vast continental superpower republic with two polarized, highly ideological, nationalized parties with a lot of points of disagreement. In this country, we have a lot of disagreements these days that get funneled into this binary partisan division. And that leads to a lot of brinksmanship and coordination problems in Congress and in governance generally. There are advantages to a presidential system of government and to separation of powers generally, but it does require a degree of coordination between the branches and within Congress. And when you have this kind of acute polarization, it gets harder for people to coordinate. The annual appropriations process imposes a deadline that concentrates the mind and forces people to make a choice. But it’s easy to go over the edge sometimes because you don’t come to agreement on time. I think that’s a key challenge in federal governance right now. It reflects the fact that there are some real points of disagreement, and they’re showing up in the political process. But for all the frustrations shutdowns create, checks and balances are important, and I think most Americans appreciate that.
Want to stay up to date with Harvard Law Today? Sign up for our weekly newsletter.