A look at past U.S. government shutdowns

Corporate Governance 2

January 17, 2018 - Congress was struggling this week to pass another temporary spending bill to avoid a partial U.S. government shutdown, with a Friday night deadline fast approaching. If approved, it would be the fourth since Oct. 1.

While temporary spending bills are common, shutdowns are rare. Previous ones have done little lasting economic damage, although they have hurt federal workers, rattled markets and shaken confidence around the world in the United States.

BDP International is closely monitoring the situation regarding a potential US government shutdown. In the event of a shutdown on Friday, we expect no significant delays or impact to our customers as US Customs and Border Protection will operate normally. We will continue to evaluate the situation and will keep you apprised of any updates. Should you have any questions or concerns, please reach out to your local BDP representative

Since Congress implemented the modern budget process in the mid-1970s, there have been 18 gaps in government funding, according to the Congressional Research Service (CRS).

Not all of these resulted in government shutdowns. In fact, only three of them had a significant impact.

During six funding gaps before 1980, the government continued normal operations. There were nine funding gaps between 1981 and 1994, but they occurred over weekends with minimal government disruption, according to the Committee for a Responsible Federal Budget, a Washington think tank.

Here are the three occasions when funding lapsed and significant shutdowns occurred.

  • Nov. 14 to 18, 1995: This was the first of two shutdowns after Democratic President Bill Clinton vetoed spending legislation passed by the Republican-controlled Congress. About 800,000 workers were furloughed from Nov. 15 to 19 during the first lapse in government funding, according to a CRS report.
  • Dec. 16, 1995 to Jan. 5, 1996: This one resulted from Clinton’s clash with congressional Republicans over funding the Medicare health insurance program for the elderly. About 280,000 workers were furloughed for 27 days beginning on Dec. 16, 1995.
  • Oct. 1 to 16, 2013: About 800,000 federal workers were furloughed, and more than 1 million more reported to work without knowing when they would be paid, according to media reports.

 

The shutdown occurred after conservative House of Representatives Republicans attempted to use the budget process to delay or defund implementation of Democratic President Barack Obama’s Affordable Care Act, known as Obamacare.

The impasse between the House and the Democratic-controlled Senate, along with Obama, ended after both chambers passed a Senate-brokered bill to impose stricter income verification requirements on people getting Obamacare health insurance.

The deal to end the shutdown coincided with a deadline to raise the U.S. debt ceiling, the country’s borrowing limit.

Source: Reuters