By: Srishti Mittal and Simran Garg
As defined by Investopedia, A government shutdown is the closure of “nonessential offices” of the government due to lack of approval on the federal budget for the upcoming fiscal year. Approval is reached if Congress passes all the spending bills regarding the federal budget. In the cases of disapproval, a government shutdown is bound to transpire, which halts work for most federal employees unless they are considered essential. The cycle of federal shutdowns was onset in 1977 when the Senate wanted to loosen restrictions on the use of Medicaid dollars to cover abortions (restrictions known informally as “the Hyde Amendment”), by allowing funding in cases of rape, incest, and when the health of the mother is in danger. The House, however, was more inclined towards maintaining a stricter ban. The issue was addressed via several amendments to a bill funding the Labor and HEW departments. The two houses couldn’t arrive at a consensus by the September 30th deadline, prompting a funding gap between the two departments. The quarrel amongst the senators over abortion resulted in a failure to pass federal bills, which paved the way for three consecutive federal shutdowns.
Since 1977, United States of America has experienced 18 federal shutdowns which have rocked the US economy in their own unique ways. While some furloughed 241,000 federal workers (the shutdown from November 20- November 23, 1983), others resulted in a complete shutdown of parks, museums and monuments (during the shutdown in 2013, national parks alone lost some $500 million in revenue) affecting the revenue from tourism severely. The economic impact of a shutdown is also severe. The approximately two week shutdown in 2013 left a modest mark on the US economy with the GDP down slightly during that quarter as a result of unpaid workers spending less. Some $4 billion in tax refunds were delayed as a result of furloughed workers in the Internal Revenue Service, with the Office of Management and Budget saying the shutdown cost taxpayers some $2 billion in lost productivity, again due to the shutdown in 2013.
FEDERAL SHUTDOWN, 2018
On the evening of 20th January 2018, the 19th federal shutdown in U.S. history went into force. It merely lasted for 2 days. However, it reflected how divided the senators are regarding various policy issues concerning America.
Primarily, the Senate was unable, and perhaps unwilling, to pass the legislation due to disputes over the extension of the status of people affected by Deferred Action for Childhood Arrivals (DACA) immigration policy. According to the DACA policy, individuals who illegally entered the country as minors were granted a renewable two- year period of deferred action from deportation and eligibility for a work permit. While the former president, Mr. Barack Obama intended to expand the policy to cover additional immigrants, Trump administration decided to rescind the policy on 5th September 2017, resulting in widespread resentment.
Another important point of contention was the long overdue Children’s Health Insurance Program (CHIP). To entice Democrats to vote for a stopgap spending bill without an immigration deal—and to attack them if they didn’t—GOP leaders attached a six-year CHIP reauthorization. Most Democrats, however, didn’t take the bait. Democrats, also frustrated by President Trump’s repeatedly backing out of commitments he makes to them in private, decided to act against his rulings. All these factors, along with others, culminated in a failure to pass the funding bill, causing a shutdown.
WHAT WAS UNIQUE IN 2018?
1. The big difference this time around is that monuments and parts of most national parks remained open during the shutdown. During the last shutdown, in 2013, the Obama administration closed park entrances and put up barriers around national monuments.
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2. Services that require staffing and maintenance, such as campgrounds, full-service restrooms and concessions that require some park staff or assistance did not operate. Careful analysis of the federal shutdowns reveals that senators have often failed to prioritize between pursuing personal political agendas and economic welfare, resulting in failures to pass financial bills, considering the fact leaders give assent to a bill only when their political demands are met.
Hence, it is high time leaders start acting responsibly and look at the larger welfare of the country rather than resorting to practices to push forward their political aims.
Sources:
o https://www.investopedia.com/terms/g/government-shutdown.asp
o https://www.vox.com/policy-and- politics/2018/1/19/16905584/government-shutdown-
history-clinton- obama-explained
o https://www.theatlantic.com/politics/archive/2018/01/the-real- reasons-why- the-government- shut-
down/551027/
o https://www.npr.org/2018/01/19/578985305/open-or- closed-heres- what-happens- in-
a-partial- government-shutdown
DEPARTMENT OF ECONOMICS 
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