If the US Congress fails to pass a bill which funds the Federal Government, it results in a Federal Shutdown. During a shutdown all government services that are not deemed to be essential are closed. This can mean that hundreds of thousands of Federal bureaucrats are sent home, without pay. They will not be allowed to work until a new funding agreement has been reached.
Given the significance of this event, it is perhaps surprising that Federal Shutdowns are far from unusual. Since 1981 thee have been twelve Shutdowns and the last was in only 2013.
Recent Government Shutdowns
President: Barack Obama (Democratic Senate, Republican House)
In September 2013 there was a disagreement between Republicans and Democrats over the funding of Obamacare. The Republican Party was at this point being pulled to the right by the emergence of the Tea Party. This faction within the Republican Party were completely opposed to Obamacare and tried to use the budget process to stop it being funded. On October 17th 2013 a compromise was reached which saw a continuing resolution until January 15th, with only slight changes to the funding of Obamacare.
President: Bill Clinton (Republican Senate, Republican House)
During 1995 President Clinton and Congress were at loggerheads over a number of issues, but particularly that of Government funding. This ended up resulting in two shutdowns:
1995: November 13th to November 19th
The Republicans were riding high after the party had swept to control of both houses in the 1994 Mid-Term Elections, partially as a result of the famous ‘Contract with America’. With this newfound confidence, the Republican Party pushed President Clinton to agree to balance the budget. This would have made his social agenda extremely difficult to achieve. As a result the Government shutdown. A compromise was reached when President Clinton agreed to a seven year timetable for a balanced budget.
1995-1996: December 15th to January 6th
Even after their original agreement, a second shutdown occurred. The issue at the end of the year was was over the budgeting process itself. The Republican House wanted President Clinton to use Congressional Budget Office (CBO) figures in long-term seven year plan, rather than the Office of Budget Management (OBM) figures that Clinton wanted to use. Neither side would back down. Eventually they agreed a compromise.
Why a potential shutdown in 2018?
In October this year Republicans and Democrats agreed a deal to a ‘continuing resolution’. This is an agreement to temporarily continue to fund the Federal Government. However, it expires at midnight on Friday, the 19th January.
The US budget process is incredibly complex. However, at its most basic level it mirrors the legislative passage of other bills.
Tellingly, Congress has not passed a full budget since 1997.
What is holding up the current negotiations on spending? The key stumbling block is over what have become known as ‘the dreamers’. This refers to around 750,000 undocumented immigrants who were came to the US as children. President Obama granted the ‘dreamers’ temporary protections through his DACA program. Under DACA they would not at risk of deportation from the country. This was controversial and the Trump administration has threatened to reverse it. Now it is a showdown. Will the Republicans back down and agree to keep the protections in place? Will the Democrats Risk a shutdown to protect people who many believe are, ultimately, in America illegally.
The fact that a shutdown is at risk due to one key issue shows the problems in the Federal Budget Process. In some ways parallels can be made with the Debt Ceiling Crisis, when the Republicans looked like they were willing to risk America defaulting on its loans to try and alter Obama’s fiscal priorities.
So, why do Shutdowns not happen in the UK. There are a number of reasons. However, two key ones are:
- Britain has an Elective Dictatorship. This means that the party that controls the Executive also controls the legislature. This fusion of powers is very different from the separation of powers in the US. As a result of this, a Government budget is certain to pass. Indeed, although the budget is debated, it is almost certainly passed.
- By Convention in the UK the House of Lords does not vote against the budget. This is because the budget should be dictated by the people’s elected representatives, not the unaccountable House of Lords.
At the time of writing, it was unclear what the outcome of the present showdown will be.