Shutdown of the Federal Government: Causes, Processes, and Effects
Released: 2018-12-10T00:00:00

Budget Negotiations and Choices

It has been said that "conflict is endemic to budgeting." If conflict within Congress or between Congress and the President impedes the timely enactment of annual appropriations acts or continuing resolutions, a government shutdown may occur. Along these lines, several options may present themselves to Congress and the President during high-stakes negotiations over appropriations measures. The options include

coming to agreement on regular appropriations acts by October 1, the beginning of a new fiscal year; using one or more interim continuing resolutions (CRs) to extend temporary funding beyond the beginning of a fiscal year, until a point in time when negotiators make final decisions about full-year funding levels; or not agreeing on full-year or interim appropriations acts, resulting in a temporary funding gap and a corresponding shutdown of affected federal government activities.

If Congress and the President pursue the second or third options, they may agree on full-year appropriations after the beginning of the fiscal year. These agreements may provide funding through regular appropriations acts—either in stand-alone or omnibus legislation—or, less commonly, through a full-year CR. Congress and the President frequently agree on full-year or interim funding without coming to an impasse. On other occasions, however, Congress and the President may not come to an accommodation in time to prevent a temporary funding gap. If a funding gap begins and funding does not appear likely to resume during the first calendar day of the gap, the federal government generally begins a "shutdown" of affected activities. The criteria for determining which activities are affected are complex, as discussed later in this report.

This report discusses the causes of funding gaps and shutdowns of the federal government, processes that are associated with shutdowns, and how agency operations may be affected by shutdowns. The report concludes with a discussion of potential issues for Congress.

Causes of Federal Shutdowns

The federal fiscal year begins on October 1. For agencies and programs that rely on discretionary funding through annual appropriations acts, Congress and the President must enact interim or full-year appropriations by this date if many governmental activities are to continue operating. If interim or full-year appropriations are not enacted into law, the interval in which agency appropriations are not enacted is called a "funding gap." In addition, a funding gap may occur if a CR's interim funding expires and another CR or regular appropriations bill is not enacted immediately thereafter. When a funding gap begins and appears likely to continue a full calendar day or longer, the federal government generally begins a "shutdown" of the affected activities. A funding gap and shutdown are distinct events, however (see Box 1 ).

In general, a shutdown implies the furlough of certain personnel and curtailment of agency activities and services. There are multiple exceptions to this general process, however, as this report explains later. Programs that are funded by laws other than annual appropriations acts—such as entitlements like Social Security and other mandatory spending—also may be affected by a funding gap, if program execution relies on activities that receive annually appropriated funding.

Experience from FY1977 to Present

Funding gaps and government shutdowns have occurred in the past when Congress and the President did not enact regular appropriations bills by the beginning of the fiscal year. They also have occurred when Congress and the President did not come to an agreement on stop-gap funding through a CR. As noted in another CRS report, six relatively lengthy funding gaps occurred from FY1977 to FY1980, ranging from 8 to 17 full days. These funding gaps occurred before the Department of Justice issued legal opinions in 1980 and 1981 about agency activities that may continue during a funding gap. The opinions, which are discussed later in this report, were more restrictive in their implications about allowable activities during a funding gap compared to what agencies had done in the past. After FY1980, funding gaps continued to occur at times, but the durations of funding gaps shortened considerably compared to prior years. From FY1981 to FY1995, nine funding gaps occurred with durations of up to three full days.

A significant exception to the trend toward shorter funding gaps occurred in FY1996. Two funding gaps and corresponding shutdowns of affected activities ensued, amounting to five full days during November 1995 and 21 full days during December 1995-January 1996. In the wake of the FY1996 experience, funding gaps did not occur again for over 17 years. Nevertheless, another relatively long funding gap began on October 1, 2013, the first day of FY2014, after funding for FY2013 expired at the end of September. A 16-full-day shutdown of affected activities followed.

Subsequently, in FY2018, two brief shutdowns occurred. The two shutdowns illustrate how the time of day when funding resumes may affect choices that are made about when government operations will resume. They also illustrate some challenges related to counting the number of days that correspond to a particular funding gap or shutdown. Notably, they show, in different ways, how a shutdown can occur on a particular day, even in the absence of a funding gap.

The first FY2018 shutdown began after a CR expired at the end of the day on Friday, January 19, 2018. A funding gap and shutdown ensued over the weekend. OMB directed agencies to execute plans for an orderly shutdown, and the Office of Personnel Management (OPM) indicated that a lapse in appropriations could affect agency operations with implications for whether employees should report to work on Saturday, January 20, 2018. Funding resumed on Monday, January 22, 2018, through another CR, which technically closed the funding gap for the entire day of Monday. Nevertheless, many federal agencies continued to shut down certain operations and furlough related employees on this weekday, because the CR that resumed funding was enacted during Monday evening, after working hours had already passed. OPM then announced late in the evening on January 22, 2018, that due to enactment of a CR, employees would be expected to return to work on Tuesday, January 23, 2018.

The second FY2018 shutdown began after a CR expired at the end of the day on Thursday, February 8, 2018. In the hours after the CR's funding expired, OMB directed agencies to execute their shutdown plans, and OPM indicated that employees might be affected. A few hours later, in the morning of Friday, February 9, 2018, Congress and the President enacted another CR to extend funding. This prompted OMB and OPM to inform employees to come to work on the same day, that morning. From the perspective of prior OMB statements, a funding gap technically did not occur on February 9, 2018. However, given that OMB and OPM issued directions for a shutdown after funding expired, it is possible that some agency operations may have been affected in the few hours between expiration of the previous CR and enactment of the succeeding CR.

Legal Framework for How Shutdowns Have Occurred

The Constitution, statutory provisions, court opinions, and Department of Justice (DOJ) opinions provide the legal framework for how funding gaps and shutdowns have occurred in recent decades. Article I, Section 9, Clause 7 of the Constitution states, "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law." Federal employees and contractors cannot be paid, for example, if appropriations have not been enacted in the first place. Nevertheless, it would appear to be possible under the Constitution for the government to make contracts or other obligations even if it lacks funds to pay for these commitments. Several provisions of law—which commonly are referred to as the Antideficiency Act—generally prevent this from happening, however. The act, which evolved over time and is located in Title 31 of the U.S. Code , prohibits federal officials from obligating funds before an appropriations measure has been enacted, except as authorized by law. The act also prohibits federal officials from accepting voluntary services or employing personal services exceeding what has been authorized by law. Therefore, the Antideficiency Act generally prohibits agencies from continued operation in the absence of appropriations. Failure to comply with the act may result in criminal sanctions, fines, and administrative discipline including suspension without pay or removal from office. The act makes exceptions to the prohibitions on acceptance of voluntary services and employment of personal services, however, for "emergencies involving the safety of human life or the protection of property."

For years leading up to 1980, many federal agencies continued to operate during a funding gap, "minimizing all nonessential operations and obligations, believing that Congress did not intend that agencies close down," while waiting for the enactment of annual appropriations acts or CRs. In 1980 and 1981, however, then-U.S. Attorney General Benjamin R. Civiletti issued two opinions that more strictly interpreted the Antideficiency Act, along with the law's exceptions, in the context of a funding gap.

The Attorney General's opinions addressed "the scope of currently existing legal and constitutional authorities for the continuance of government functions during a temporary lapse in appropriations." In brief, the opinions stated that, with some exceptions, the head of an agency could avoid violating the Antideficiency Act only by suspending the agency's operations until the enactment of an appropriation. In the absence of appropriations, exceptions would be allowed only when there is "some reasonable and articulable connection between the function to be performed and the safety of human life or the protection of property." In addition, "there must be some reasonable likelihood that the safety of human life or the protection of property would be compromised, in some degree, by delay in the performance of the function in question." Apart from this broad category of "human life and property" exceptions to the act, the Civiletti opinions identified another category: those exceptions that are "authorized by law." GAO later summarized the 1981 Civiletti opinion as identifying four sub-types of "authorized by law" exceptions:

Activities funded with appropriations of budget authority that do not expire at the end of one fiscal year, such as multiple-year and no-year appropriations. These activities may continue when the multiple-year and no-year appropriations still have budget authority that is available for obligation at the time of a funding gap. In addition, agencies that receive most or all of their budget authority for their day-to-day operations through means that are not dependent on annual appropriations acts, such as the U.S. Postal Service, would fall under this exception. Activities authorized by statutes that expressly permit obligations in advance of appropriations, such as contract authority. Activities "authorized by necessary implication from the specific terms of duties that have been imposed on, or of authorities that have been invested in, the agency." The Civiletti opinion illustrated this abstract concept by citing the situation when benefit payments under an entitlement program are funded from other-than-one-year appropriations (i.e., where benefit payments are not subject to a funding gap, because they are authorized by permanent entitlement authority), but the salaries of personnel who administer the program are funded by one-year appropriations (i.e., the salaries are subject to a funding gap). In this situation, the Attorney General offered the view that continued availability of money for benefit payments would necessarily imply that continued administration of the program is authorized by law at some level and therefore excepted from the Antideficiency Act. Obligations "necessarily incident to presidential initiatives undertaken within his constitutional powers," such as the power to grant pardons and reprieves. GAO later expressed the view that this same rationale would apply to legislative branch agencies that incur obligations "necessary to assist the Congress in the performance of its constitutional duties."

For its part, the 1980 Civiletti opinion included in the "authorized by law" exception an inference that federal officers may, in the temporary absence of appropriations, exercise authority to incur minimal obligations necessary to closing their agencies in an orderly way. Subsequently, OMB interpreted this exception to fall under the "necessary implication" sub-type of the "authorized by law" exception.

In 1990, in response to the 1981 Civiletti opinion, Congress amended 31 U.S.C. §1342 to clarify that "the term 'emergencies involving the safety of human life or the protection of property' does not include ongoing, regular functions of government the suspension of which would not imminently threaten the safety of human life or the protection of property." DOJ's Office of Legal Counsel (OLC) issued a memorandum in 1995 (hereinafter "1995 OLC opinion") that interpreted the effect of the amendment. The 1995 OLC opinion said one aspect of the 1981 Civiletti opinion's description of emergency governmental functions should be modified in light of the amendment (suggesting that the phrase "in some degree" be replaced with "in some significant degree"), but that the 1981 opinion otherwise "continues to be a sound analysis of the legal authorities respecting government operations" during a funding gap.

More recently, OMB summarized its interpretation of exceptions to the Antideficiency Act in a series of similar, detailed memoranda. The memoranda were issued to agencies in April and December 2011 (regarding FY2011 and FY2012 annual appropriations, respectively), September 2013 (regarding FY2014 annual appropriations), and January 2018 (regarding FY2018 annual appropriations).

Notably, the opinions of OLC and OMB do not permit outlays—such as the issuance of checks, disbursement of cash, or electronic transfer of funds—to liquidate federal obligations for operations that lack appropriated funding during a shutdown. Rather, OLC and OMB have interpreted the Antideficiency Act as including exceptions that provide only the authority to incur obligations that will be paid upon enactment of appropriations in the future.

Observers sometimes wish to contrast the effect of a government shutdown, on one hand, with the effect of the federal government reaching its statutory debt limit and not raising it, on the other. The two situations are distinct in terms of their effects on agency operations and on federal government payments to liquidate obligations (see Box 2 ).

OMB and Agency Processes for Shutdown Planning

Annual Instructions for Agencies

In the annually revised Circular No. A-1 1 , OMB provides instructions to executive branch agencies on how to prepare for and operate during a funding gap. The circular cites the two Civiletti opinions and the 1995 OLC opinion as background and guidance. The circular also establishes two "policies" regarding the absence of appropriations:

a prohibition on incurring obligations unless the obligations are otherwise authorized by law and permission to incur obligations "as necessary for orderly termination of an agency's functions," but prohibition of any disbursement (i.e., payment).

The circular also directs agency heads to develop and maintain shutdown plans. These plans sometimes also have been called "contingency plans."

Prior to the 2011 revision of Circular No. A-11 , the circular broadly indicated that the plans were to be submitted to OMB when initially prepared and also when revised. The plans themselves were required to contain summary information about the number of employees expected to be on-board before a shutdown and also the number of employees who would be "retained" (i.e., excepted from furlough) during a shutdown. With the August 2011 revision of the circular, however, OMB newly required that these plans contain more detailed information, be updated under certain conditions, and be updated periodically, with a minimum frequency of a four-year schedule starting August 1, 2014. OMB's change in instructions occurred four months after Congress and the President almost came to an impasse, in April 2011, on FY2011 appropriations. After the FY2014 shutdown, OMB's 2014 revision to the circular changed the schedule for updates to shutdown plans. Henceforward, agencies were instructed to submit updated plans to OMB for review with a minimum frequency of every two years, beginning August 1, 2015.

Under OMB's instructions from Circular No. A-11 , agency heads are told to use the DOJ opinions and the circular, in consultation with the agencies' general counsels, to "decide what agency activities are excepted or otherwise legally authorized to continue during a lapse in appropriations." Furthermore, these plans are required to address agency actions in two distinct time periods of a shutdown: an initial period of one to five days, which OMB characterized as a "short" lapse, and a second period if a shutdown were to extend further. Among other things, a shutdown plan is required to include

a summary of agency activities that will continue and those that will cease; an estimate of the time to complete the shutdown, to the nearest half-day; the number of employees expected to be on-board (i.e., filled positions) before implementation of the plan; and the total number of employees to be retained (i.e., not furloughed), broken out into five categories of exceptions to the Antideficiency Act, including employees (1) who are paid from a resource other than annual appropriations; (2) who are necessary to perform activities expressly authorized by law; (3) who are necessary to perform activities necessarily implied by law; (4) who are necessary to the discharge of the President's constitutional duties and powers; and (5) who are necessary to protect life and property.

After providing this information for the agency as a whole, an agency's plan is required to further break out some of the information by "component" (e.g., a bureau-size entity within a department). OMB's circular also instructs agencies to take personnel actions to release employees according to applicable law and OPM regulations. OPM maintains a website with guidance, historical OMB documents, and frequently asked questions about furloughs. In 2018, OMB newly directed agencies to, "in coordination with OMB," notify employees two business days before a potential lapse about their work and pay status under a lapse.

In general, the OMB circular refers to employees who are to be furloughed as "released," and employees who will not be furloughed as "excepted" or "retained." More broadly, officials and observers may employ a variety of personnel-related terms in the context of a government shutdown, many of which begin with the letter "e." For discussion of the term "excepted" and other terms that may be used in practice, see Box 3 . Notably, some parts of the federal government may employ a term in a way that is official but different from usage elsewhere. At other times, usage of a term may be colloquial or may suggest meanings that are not intended.

Aside from Circular No. A-11 , other OMB documents and guidance from previous funding gaps and shutdowns may provide insights into current and future practices. OPM provides access to previous OMB bulletins and memoranda for reference on its website. Some of these OMB documents also have been reproduced in legislative branch documents.

Detailed Guidance to Agencies and Posting of Shutdown Plans

In addition to OMB's annual instructions in Circular No. A-11 , OMB may provide more detailed guidance to agencies in specific situations. These formalized communications typically occur through bulletins or memoranda. The documents may be issued to agencies in at least two ways:

through means that are internal to the executive branch and that generally are not readily visible elsewhere (e.g., posting on an OMB-administered website that cannot be readily accessed outside the executive branch), and through publicly visible means (e.g., posting a memorandum on OMB's public website).

Documents in the second, publicly visible category may allude to other, non-public guidance. On occasion, Members of Congress have questioned the rationales for how determinations of "excepted" status were made. (See the section of this report that is titled " Quality and Specificity of Agency Planning .") Consequently, it is conceivable that non-public guidance documents might be of interest to Congress in some circumstances.

Both of the aforementioned kinds of communications have been in evidence in the context of shutdown planning. For example, in the days leading up to near-impasses on appropriations for FY2011 and FY2012, OMB supplemented its annual Circular No. A-11 instructions with more detailed guidance to agencies. Shortly before FY2011 funding was scheduled to expire in April 2011, OMB instructed agencies through a publicly available memorandum to create or revise shutdown plans and post them on the Internet. In these instructions, OMB said it had earlier been "providing guidance and coordinating the efforts of the Executive Branch to facilitate appropriate contingency planning in accordance with the provisions of the Antideficiency Act." OMB apparently provided the earlier guidance and coordination over a period of time through non-public documents and instructions.

For the near-impasses of FY2011 and FY2012, as well as the actual impasses of FY2014 and FY2018, agencies and OMB followed generally the same process of posting new or revised shutdown plans on the Internet. In each instance, OMB posted agencies' plans on the same web page. Many agencies also created their own web pages, which described shutdown procedures and linked to their plans. These resources covered many topics in addition to the information that OMB Circular No. A-11 addressed. Additional topics included shutdown precedents, guidelines, furlough policies, and frequently asked questions. Documents also addressed availability of government services, unemployment compensation for federal employees, union concerns, and information about past shutdowns.

For the shutdowns that occurred in FY2014 and FY2018, agencies implemented their plans after OMB instructed them to do so. On September 30, 2013, for example, OMB said in a memorandum that it did not have a clear indication that Congress would act in time for the President to sign a CR before the end of October 1. OMB therefore directed agencies to execute their plans for an "orderly shutdown." OMB provided similar directions for the two FY2018 shutdowns.

Effects of a Federal Government Shutdown on Government Operations

Effects of a shutdown may occur at various times, including in anticipation of a potential funding gap (e.g., planning), during an actual gap (e.g., furlough and curtailed operations), and afterwards (e.g., addressing backlogs of work). The following sections discuss potential effects of a shutdown from three perspectives:

effects on federal officials and employees; examples of excepted activities and personnel; and effects on government operations and services to the public.

Effects on Federal Officials and Employees

General Practices Regarding Furloughs and Pay

An immediate shutdown effect is the "shutdown furlough" of certain federal employees—that is, placement of the employees in a temporary, nonduty, nonpay status. Shutdown furloughs are not considered a break in service and are generally creditable for retaining benefits and seniority. With regard to pay, there appears to be no guarantee that employees placed on shutdown furlough would receive pay for the time they are placed on furlough. This may be the case, because if furloughed employees are prohibited from coming to work during a shutdown, the government arguably would not be incurring a legal obligation to pay them. Several considerations, including personnel costs, future productivity, and employee retention, might be weighed when assessing the issue of retroactive pay for furloughed staff. Nevertheless, in historical practice, federal employees who were furloughed under a shutdown generally have received their salaries retroactively as a result of legislation to that effect. For example, a CR provision required that employees who were furloughed during the FY2014 government shutdown be paid retroactively:

Employees furloughed as a result of any lapse in appropriations which begins on or about October 1, 2013, shall be compensated at their standard rate of compensation, for the period of such lapse in appropriations, as soon as practicable after such lapse in appropriations ends.

In the case of excepted employees, OMB has stated several times in detailed, shutdown-related guidance to agencies that

[w]ithout further specific direction or enactment by Congress, all excepted employees are entitled to receive payment for obligations incurred by their agencies for their performance of excepted work during the period of the appropriations lapse. After appropriations are enacted, payroll centers will pay all excepted employees for time worked.

In addition, a 1981 memorandum from OMB to the heads of executive departments and agencies included the following statements:

It should be made clear that, during a [sic] appropriations hiatus, funds may not be available to permit agency payment of obligations. All personnel performing excepted services, including activities incident to the orderly suspension of agency operations, should be assured that the United States will not contest its legal obligation to make payment for such services, even in the absence of appropriations.

Historically, Congress has authorized retroactive pay for excepted employees who work during a government shutdown by ratifying and approving the obligations incurred in anticipation of appropriations. For example, the CR that was enacted following the FY2014 shutdown included the following provision:

All obligations incurred in anticipation of the appropriations made and authority granted by this joint resolution for the purposes of maintaining the essential level of activity to protect life and property and bringing about orderly termination of Government functions, and for purposes as otherwise authorized by law, are hereby ratified and approved if otherwise in accord with the provisions of this joint resolution.

Congress pursued similar courses of action regarding the two FY2018 shutdowns.

Extent of Furloughs During the FY1996 and FY2014 Shutdowns

The experiences of FY1996 and FY2014 illustrate what may occur with respect to furloughs during a shutdown of relatively long duration. (By contrast, shutdowns of shorter duration may not result in the production of much authoritative information about their effects; see Box 4 . ) Among other things, the experiences of FY1996 and FY2014 show how the extent of furloughs during a funding gap is driven in large part by the number and composition of regular appropriations bills that remain unenacted during that time period.

Two FY1996 Shutdowns79

As noted earlier, two separate funding gaps and corresponding shutdowns occurred in FY1996. A graphical depiction of the FY1996 appropriations process, including the two funding gaps, is available in another CRS report. The first shutdown, which lasted five full days between November 13-19, 1995, resulted in the furlough of approximately 800,000 federal employees in agencies funded by 10 of the then-13 regular appropriations bills. The shutdown was caused by the expiration of a CR agreed to on September 30, 1995 ( P.L. 104-31 ), and by President William J. Clinton's veto of a second CR. As of December 15, 1995, four additional regular appropriations acts for FY1996 had been enacted. Therefore, six regular appropriations bills remained unenacted at the start of the second shutdown. The second shutdown lasted 21 full days between December 15, 1995, and January 6, 1996. It was triggered by the expiration of a CR that had been enacted on November 20, 1995 ( P.L. 104-56 ), which funded the government through December 15, 1995. On January 2, 1996, the estimate of furloughed federal employees for the second shutdown was 284,000. Fewer employees and agencies were affected, because some funding bills were enacted during and after the first shutdown and before the second shutdown. In addition, many employees were recalled back to work even in the absence of funding, due to ongoing redeterminations of employees' status as excepted or non-excepted. There were eight CRs from January 6, 1996, until April 26, 1996, when the Omnibus Consolidated Rescissions and Appropriations Act of 1996 ( P.L. 104-134 ) was enacted. This consolidated appropriations act provided budget authority for agencies and programs not covered in the FY1996 annual appropriations acts that had become law earlier.

The FY2014 Shutdown

After the second FY1996 shutdown, no shutdowns occurred until over 17 years later, in FY2014. In this case, a funding gap began on October 1, 2013, the first day of FY2014, after funding from the previous fiscal year expired at the end of the day on September 30. At that time, none of the 12 regular appropriations bills for FY2014 had been enacted. On September 30, OMB said in a memorandum that it did not expect a resumption of funding from annual appropriations by the end of the day on October 1. Consequently, OMB instructed the affected agencies to begin the process of ceasing operations and furloughing personnel on October 1.

On September 30, however, an automatic continuing resolution (ACR) was enacted to provide funding for a narrow category of activities at the Departments of Defense (DOD) and Homeland Security (DHS). This narrow CR provided funds for FY2014 pay and allowances for certain members of the Armed Forces and supporting contractors and civilian personnel. Full implementation of the law was delayed several days while agencies determined how to interpret and implement its provisions. The experience may be of interest if similar legislation were considered in anticipation of a potential future shutdown (see Box 5 ).

Ultimately, the FY2014 shutdown lasted 16 full days, through the end of October 16. The funding gap terminated when the President signed an interim CR in the early morning of Thursday, October 17, 2013 ( P.L. 113-46 ).

During the first week of October, information about furloughs occasionally was reported by the news media. Initial reports suggested that 800,000 or more executive branch employees had been furloughed, based on the contents of agency shutdown plans. Three weeks after the shutdown terminated, OMB released a retrospective report. According to OMB, the shutdown resulted in the furlough "roughly 850,000 employees per day" at its peak in the first few days of October, or approximately 40% of the federal civilian workforce. The number decreased during the course of the shutdown due to the implementation of P.L. 113-39 (see Box 5 ). In addition, the total number of furloughs varied over time, due to the net effect of ongoing redeterminations regarding whether an employee's status as excepted or non-excepted should change in response to a change in an agency's circumstances.

For the shutdowns of FY1996 and FY2014, OMB did not issue an overall estimate of the number of furloughs across all three branches of the federal government. A look at furlough and pay practices across the three branches, however, may provide further insights into the potential effects of a shutdown on federal officials and employees.

Selected Furlough and Pay Practices, by Branch of Government

Executive Branch99

Among the three branches of the federal government, the executive branch is the largest in number of personnel and size of budgets. Several types of executive branch officials and employees are not subject to furlough. These include the President, certain presidential appointees, and federal employees deemed "excepted." OPM has described "excepted" employees, who are required to work during a shutdown, as "employees who are funded through annual appropriations who are nonetheless excepted from the furlough because they are performing work that, by law, may continue to be performed during a lapse in appropriations." Nevertheless, excepted employees who are normally paid from annual appropriations would not receive pay for time worked during the shutdown period until funding resumes.

With regard to the President's pay, Article II, Section 1 of the Constitution forbids the salary of the President to be reduced while he or she is in office, thus effectively guaranteeing the President of compensation regardless of any shutdown action.

Judicial Branch103

During a funding gap, the judiciary would likely be able to continue to operate for a limited time using funds derived from court filings and other fees and from no-year appropriations. For example, in preparation for the FY2014 shutdown, the judiciary estimated that these funds, if used cautiously, could have sustained judiciary activities for approximately 10 working days after an appropriations lapse. In FY2018, the judiciary indicated it could operate without a new appropriation for approximately three weeks by using court fee balances and other available funds.

If a lapse in appropriations were to exist after various fee balances like these were exhausted, the judiciary has previously said it would continue in this situation to operate under the terms of the Antideficiency Act, which the judiciary said allows "essential work" to continue during a lapse in appropriations. Such "essential work" includes powers exercised by the judiciary under the Constitution, including activities that support the exercise of Article III judicial powers (i.e., the resolution of cases). Consequently, in the judicial branch, judges would not be subject to furlough, nor would core court staff and probation and pretrial services officers whose service is considered essential to the continued resolution of cases. Each court would be responsible for determining the number of court staff and officers needed to support the exercise of its Article III judicial powers. Such staff performing "essential work" functions would report to work in a non-pay status, while other staff would be furloughed.

Protected by a constitutional prohibition against a diminution in their pay, Supreme Court Justices and other Article III judges would continue to be paid during a lapse in appropriations. Also, in the judiciary's view, other judicial officers, such as U.S. magistrate judges and U.S. bankruptcy judges, may continue to be paid as well. According to the Administrative Office of the U.S. Courts, staff performing "essential functions and working in non-pay status should expect to be paid once" Congress enacts an appropriation, while furloughed judicial staff would not receive compensation unless and until Congress expressly authorized it.

Legislative Branch114

During the first FY1996 shutdown and the FY2014 shutdown, for example, the House and Senate continued to engage in many aspects of the legislative process. For example, new legislation was introduced, committees held hearings and markups, reports were filed, legislative business on a variety of policy topics was conducted, and nominations were considered in the Senate. The House and Senate Rules, which govern procedure in each chamber, did not formally address a lapse in appropriations or provide alternative procedures that would be specifically applicable during such periods.

Due to their constitutional responsibilities and a permanent appropriation for congressional pay, Members of Congress are not subject to furlough. Additionally, Article I, Section 6, of the Constitution states that Members of Congress "shall receive a Compensation for their Services, to be ascertained by Law, and paid out of the Treasury of the United States," and the 27 th Amendment states, "No law, varying the compensation for the services of the Senators and Representatives, shall take effect, until an election of Representatives shall have intervened."

During a funding gap, pay for congressional employees would not be disbursed if there is no appropriation to fund legislative branch activities. Any decision regarding requirements that a congressional employee continue to work during a government shutdown would appear to fall to his or her employing authority. Activities of legislative branch agencies would likely also be restricted, in consultation with Congress, to activities required to support Congress with its constitutional responsibilities or those necessary to protect life and property.

Timing of Furloughed Employees' Return to Work After Funding Resumes

When a funding gap concludes due to the resumption of interim or full-year funding, agencies and employees undertake efforts to resume their normal activities consistent with the funding that the legislation provides. The timing of when funding resumes can have implications for how soon agencies and employees are able to resume full operations, however. The shutdowns of FY2014 and FY1996 provide illustrations of this process.

In FY2014, for example, President Barack Obama signed an interim CR to bring the FY2014 shutdown to an end, reportedly shortly after midnight in the morning of Thursday, October 17, 2013. The Administration judged that this timing was early enough to enable a re-opening of the federal government on October 17. Along these lines, OMB issued a memorandum to agencies and reportedly released it to the news media just before 1 a.m. eastern standard time on October 17. In the memorandum, OMB indicated that "[a]ll employees who were on furlough due to the absence of appropriations may now return to work." Separately, OPM posted guidance for executive branch employees on its website at 12:30 a.m. The guidance said employees were "expected to return to work on their next regularly scheduled work day (Thursday, October 17 th for most employees), absent other instructions from their employing agencies."

The experience of FY1996 was different. If funding resumes later during a calendar day, there may not be adequate time for an agency or its personnel to resume their activities during the same day. At the conclusion of the first FY1996 shutdown, for example, interim funding was enacted late in the evening on Sunday, November 19, 1995. As a consequence, funding technically was available for operations earlier on that day. In many if not most instances, however, affected agency operations did not restart until the following day, November 20, 1995. In this situation, a five-full-day funding gap may have resulted in a six-day shutdown for affected agencies.

Apart from the specific events of FY1996 and FY2014, OPM has addressed this matter generally in prospective guidance to agencies, relating to when furloughed employees may be expected to return to work.

If a shutdown were to occur, guidance concerning when furloughed employees should come back to work at the conclusion of the shutdown would have to be tailored to the specific situation. In the absence of such guidance, agencies should apply a rule of reason in requiring employees to return to work as soon as possible, taking into account the disruption in the lives and routines of furloughed employees that a shutdown causes.

Examples of Excepted Activities and Personnel

Previous determinations of excepted activities and personnel would not necessarily hold for any future shutdown. However, past experience may inform future agency and OMB decisions. Perspectives on this topic might be gleaned from documents associated with shutdowns and near-shutdowns from the past.

Agency Shutdown Plans

Compared to more recent events, the experience of the FY1996 shutdowns is more difficult to document, because the FY1996 events did not result in wide publication on the Internet of agency shutdown plans. The near-impasses in April and December 2011, by contrast, regarding enactment of FY2011 and FY2012 annual appropriations, resulted in executive branch agencies posting a substantial amount of information on the Internet about their plans for a potential shutdown, including information about excepted and non-excepted personnel and activities. In September 2013, in the context of FY2014 annual appropriations, OMB directed agencies to update these plans and prepare for their potential release. These mostly-updated plans ultimately were posted on websites of agencies and OMB. OMB and agencies have continued to occasionally post updated plans. Looking ahead, any of these plans might provide insight into questions of whether government activities at a specific agency or program, and in a specific situation, would continue or cease, at least according to interpretations of law at the time.

OMB Guidance

More generally, OMB memoranda may provide insights into which activities and personnel might be considered to be excepted. In April and December 2011, then-OMB Director Jacob J. Lew outlined several categories of exceptions to the Antideficiency Act and provided further explanation on how agencies should interpret the categories. Later, then-OMB Director Sylvia M. Burwell provided similar guidance in September 2013, as did OMB Director Mick Mulvaney in January 2018. These documents were primarily conceptual in nature and focused on explaining key principles that apply during a funding gap.

Three decades earlier, however, an OMB memorandum of November 17, 1981, from Director David A. Stockman to the heads of executive agencies, identified concrete "examples of excepted activities." The memorandum, which still was in effect for the FY1996 shutdowns and posted online by OPM as a reference for agencies for the FY2014 shutdown, explained:

Beginning [on the first day of the appropriations hiatus], agencies may continue activities otherwise authorized by law, those that protect life and property and those necessary to begin phasedown of other activities. Primary examples of activities agencies may continue are those which may be found under applicable statutes to:

1. Provide for the national security, including the conduct of foreign relations essential to the national security or the safety of life and property.

2. Provide for benefit payments and the performance of contract obligations under no-year or multi-year or other funds remaining available for those purposes.

3. Conduct essential activities to the extent that they protect life and property, including:

a. Medical care of inpatients and emergency outpatient care;

b. Activities essential to ensure continued public health and safety, including safe use of food and drugs and safe use of hazardous materials;

c. The continuance of air traffic control and other transportation safety functions and the protection of transport property;

d. Border and coastal protection and surveillance;

e. Protection of Federal lands, buildings, waterways, equipment and other property owned by the United States;

f. Care of prisoners and other persons in the custody of the United States;

g. Law enforcement and criminal investigations;

h. Emergency and disaster assistance;

i. Activities essential to the preservation of the essential elements of the money and banking system of the United States, including borrowing and tax collection activities of the Treasury;

j. Activities that ensure production of power and maintenance of the power distribution system; and

k. Activities necessary to maintain protection of research property.

You should maintain the staff and support services necessary to continue these essential functions.

Effects on Government Operations and Services to the Public

The effects of a shutdown on government operations may be examined through multiple and sometimes overlapping perspectives. In the sections below, this report highlights three:

illustrations of program- or policy-related effects from past shutdowns; potential costs associated with a shutdown; and general effects of a shutdown on mandatory spending programs.

More detailed discussion of some topics may be found in other CRS products. They discuss the potential effects of a shutdown on government procurement, selected agencies, recipients of federal grants, the economy, and other subjects of potential interest to Congress.

Illustrations of Program- or Policy-Related Effects from Past Shutdowns

Although the effects on the public of any future shutdown would not necessarily reflect past experience, past events may be illustrative of effects that are possible. Several examples follow, below, that were reported by the news media, OMB, and agencies, and in congressional hearings, about the operations and services of federal programs and agencies. The examples focus on the FY1996 and FY2014 shutdowns, in particular.

The Two FY1996 Shutdowns

The effects of the two FY1996 funding gaps and shutdowns received extensive attention. Nevertheless, funding gaps occurred for only some of the then-13 regular appropriations bills. Consequently, the shutdowns' effects were limited primarily to agencies and programs that were included in these bills. Several illustrations of the shutdowns' effects on executive branch agencies and programs are highlighted in the bullets below.

Health. New patients were not accepted into clinical research at the National Institutes of Health (NIH) clinical center; the Centers for Disease Control and Prevention ceased disease surveillance; and hotline calls to NIH concerning diseases were not answered. Law Enforcement and Public Safety. Delays occurred in the processing of alcohol, tobacco, firearms, and explosives applications by the Bureau of Alcohol, Tobacco, and Firearms; work on more than 3,500 bankruptcy cases reportedly was suspended; cancellation of the recruitment and testing of federal law-enforcement officials reportedly occurred, including the hiring of 400 border patrol agents; and delinquent child-support cases were delayed. Parks, Museums, and Monuments. Closure of 368 National Park Service sites (loss of 7 million visitors) reportedly occurred, with loss of tourism revenues to local communities; and closure of national museums and monuments (reportedly with an estimated loss of 2 million visitors) occurred. Visas and Passports. Approximately 20,000-30,000 applications by foreigners for visas reportedly went unprocessed each day; 200,000 U.S. applications for passports reportedly went unprocessed; and U.S. tourist industries and airlines reportedly sustained millions of dollars in losses. American Veterans. Multiple services were curtailed, ranging from health and welfare to finance and travel. Federal Contractors. Of $18 billion in Washington, DC, area contracts, $3.7 billion (over 20%) reportedly were affected adversely by the funding lapse; the National Institute of Standards and Technology (NIST) was unable to issue a new standard for lights and lamps that was scheduled to be effective January 1, 1996, possibly resulting in delayed product delivery and lost sales; and employees of federal contractors reportedly were furloughed without pay.

OMB briefly summarized the effects of the two FY1996 shutdowns in a two-page February 1996 letter and two short attachments. These documents later were included in a congressional hearing print. OMB identified in one three-page attachment what OMB said were "illustrations" of the effects of the shutdowns. The documents also listed agencies and corresponding numbers of employees who were said to be excepted or not excepted from furlough, and provided an overall cost estimate. The FY1996 cost estimate is discussed in the section of this CRS report titled " Potential Costs Associated with a Shutdown ."

During the FY1996 government shutdowns, the federal courts generally operated with limited disruption to their personnel. In the absence of appropriated funds, the judiciary used fee revenues and "carryover" funds from prior years to support what it considered its essential function of hearing and deciding cases. Internal judiciary guidelines, according to the official publication of the U.S. courts, recognized the "unique function of the Judiciary" and anticipated that all activities "essential to maintain and support the exercise of the judicial power of the United States during a funding lapse" would continue. The funding lapse, however, did affect some court functions, with some judges entertaining motions for continuances in civil cases and at least one district court announcing it would not start any new civil jury trials. An appellate court, it also was reported, had to reschedule several arguments because government lawyers were unable to attend. During the November 1995 government shutdown, lack of funding resulted in furloughs of most of the staff of the federal judiciary's two support agencies, the Federal Judicial Center and the Administrative Office of the U.S. Courts. During the second shutdown, prior to the judiciary's decision to use fee revenues and carryover funds to continue essential functions, some courts did furlough personnel "on a limited basis."

The FY2014 Shutdown

The FY2014 funding gap and corresponding shutdown occurred for all 12 regular appropriations bills. Consequently, the shutdown's effects were extensive for federal government operations.

News media reported extensively on how the 16-full-day shutdown affected operations of programs and agencies in the executive branch. At first, many media accounts drew primarily from the shutdown plans that agencies and OMB posted online. As the shutdown continued, national and local outlets typically focused on specific agencies, programs, or experiences of citizens or stakeholders who said they were affected. Agencies themselves often did not report information about the ongoing impact of the shutdown during the 16-day period, however, due to the furlough of relevant staff and non-updating of their websites.

After the FY2014 shutdown, some Members of Congress requested assessments of its effects. Three weeks after the shutdown concluded, OMB posted on its website a 27-page report compiling the "impacts and costs" of the FY2014 shutdown. The publication's level of detail stood in marked contrast with the document that OMB produced after the two shutdowns of FY1996, when, as described earlier, OMB generated a three-page paper compiling "illustrations" of the impacts of the two shutdowns. OMB's FY2014 report discussed the impact of the shutdown through five sometimes-overlapping perspectives, in separate sections. The bullets below provide an illustrative sampling of the contents in each section.

C osts to the E conomy. 169 According to OMB, these costs included overall macroeconomic effects (the subject of another CRS report) and several kinds of "economic disruption" due to cessation of "government activities the private sector relies on." In the latter category, OMB cited among other things a halt to several kinds of permitting, reviews, and licensing (e.g., 200 applications for a permit to drill for energy resources); suspension of Internal Revenue Service (IRS) income verification used by financial institutions to help determine credit-worthiness of prospective borrowers; a halt to hundreds of federal loans to small businesses; and disrupted tourism and travel by closing national parks. Federal Employee Furloughs. 171 OMB cited payroll costs for "work not performed" by furloughed federal employees as the "largest direct cost" of the FY2014 shutdown. As one way to quantify the furloughs, OMB said that executive branch employees were furloughed for a total of "roughly 6.6 million" employee work days, with "furloughs affecting workers at the vast majority of agencies." An accompanying table broke out this total by executive branch agency, listing 1,600,000 employee furlough days at DOD, 985,000 days at the Department of the Treasury, and a further 4,055,000 days at 33 additional agencies. If these day-based figures were translated into an annual, work-year equivalent, it could be said that the furloughs amounted to over 25,000 employee work years. OMB characterized the impact of the furloughs qualitatively, saying

"[e]mployees not on the job could not conduct food, product, and workplace safety inspections; prepare for flu season or monitor other public health issues; process tax refunds or respond to taxpayer questions; or provide numerous other services important to the general public and the economy."

Impacts on Programs and Services. 177 In another section of the report, OMB identified shutdown impacts on multiple government programs and services. OMB described the impacts of the shutdown, often in quantitative terms, with 29 bullets that focused on separate policy and programmatic areas. The bullets were grouped in six categories: (1) direct services for veterans, seniors, and other "vulnerable" groups; (2) public health and research; (3) product safety and environmental protection; (4) worker rights and safety; (5) international trade and relations; and (6) other government services. In the sixth category, for example, one bullet said the shutdown suspended the issuance of Social Security cards and, in addition, closed down the E-Verify system for employers to check prospective employees' immigration status. Other Direct Budgetary Costs. 179 Apart from the costs of employee furloughs (discussed in the next section of this CRS report), OMB identified "other direct budgetary costs" that executive branch agencies incurred. These costs included a variety of topics, such as lower revenues (e.g., $7 million in user fees and other revenue not being collected for the National Park Service); a halt to "program integrity" activities (e.g., activities intended to identify noncompliance with tax laws, collect unpaid taxes, and thereby help incentivize voluntary compliance, which OMB characterized as collecting $1 billion per week); interest due on late federal payments; increased costs on federal contracts due to over 10,000 stop work orders; and shutdown-related costs, such as the cost of employee and contractor time that was used to undertake pervasive shutdown-related activities—such as planning, implementation, and re-start activities—that diverted from mission-related work that otherwise would have been performed in the absence of a shutdown. Impacts on the Federal Workforce. 180 In a final section of the report, OMB discussed impacts of the shutdown on the federal workforce apart from those discussed elsewhere. These included federal employees not receiving their full pay during the shutdown (including many employees who legally were required to work) and potential adverse impacts on recruitment and retention of federal employees and contractor personnel.

The FY2014 shutdown also affected many federal grant programs that provide funding for state and local governments. State and local governments rely upon federal aid to fund projects and provide services that benefit communities and individuals. During the shutdown, agency contingency plans stated that several grant-related activities would be disrupted. These activities included executing grant agreements, processing payments to grantees, and investigating waste, fraud, and abuse.

In the judicial branch, as during the FY1996 government shutdowns, courts generally operated with limited disruption to their personnel. According to internal guidance, the judiciary was prepared to keep the federal courts operating for about two weeks by using non-annually appropriated funds (as it did during the 1995-1996 government shutdowns). In practice, the judicial branch was able to operate on non-annually appropriated funds for the entirety of the FY2014 shutdown. Had that funding been exhausted, the judiciary would have continued operating under the terms of the Antideficiency Act.

The funding lapse, however, did affect some court functions. Some civil cases were postponed, in part due to continuance requests from the Department of Justice. Many courts also operated on condensed criminal calendars and reduced building maintenance. The judiciary also advised judges and court unit executives, in the event of a funding lapse, to post information on their individual court websites about what operations would continue during and after the initial two-week period.

Across the legislative branch, the impact of the FY2014 shutdown varied. At the outset, the House of Representatives and some legislative branch agencies publicly released official guidance or operational plans. Guidance or plans may vary for any future shutdown, however.

Potential Costs Associated with a Shutdown

There are many potential approaches to assessing the costs of an event, because the concept of "cost" may be defined in multiple ways. (See Box 6 for discussion of potential perspectives on the term.) As a result, it typically is not possible to arrive at a single cost figure or definition that will be of primary interest to all stakeholders. The case of government shutdowns arguably is no exception. An additional complication frequently arises when assessing costs, due to a lack of relevant or readily available data. Nevertheless, in the aftermath of past shutdowns, some efforts have been undertaken to ascertain what the costs of the shutdowns were.

After a one-day shutdown in late November 1981, Senator Alan Cranston asked GAO on a quick-turnaround basis to ascertain the costs of paying employees who had been furloughed, as well as "other costs directly or indirectly related to the shutdown." In response to the inquiry, GAO interviewed agency officials and developed a uniform set of questions for agencies. GAO responded to the Senator's inquiry two weeks later, saying "[d]ata on the number of employees furloughed and the costs of implementing a shutdown are neither readily available nor easily obtainable." The agencies' abilities to respond varied considerably, leading GAO to portray limited information in a tabular format. Because agencies took multiple approaches to define what constituted costs, GAO also cautioned against comparing the extent of costs across agencies, concluding "[w]e would not suggest that the figures are any more than indicative of the types of costs incurred" (emphasis added).

A similar inquiry about costs and shutdown-related impacts came in the aftermath of the much-longer FY1996 shutdowns. In response, OMB provided an overall cost estimate of "over $1.4 billion" for the two shutdowns. According to earlier testimony from OMB after the first shutdown, a portion of shutdown-related costs corresponded to retroactive pay for furloughed employees. OMB also said that significant additional costs, which then could not be determined, arose from interest payments to third parties required under the Prompt Payment Act and, in addition, additional personnel costs to deal with backlogs of work. Years later, OMB broke down the $1.4 billion figure. OMB said $430 million of the total corresponded to payroll costs from the first FY1996 shutdown (retroactive pay for furloughed employees), $630 million related to similar payroll costs for the second FY1996 shutdown, and $300 million were associated with "other" costs. In this accounting, OMB did not appear to quantify costs in monetary terms corresponding to the three pages of itemized impacts on government services that it earlier had identified in its letter from 1996, such as costs accruing to small businesses that experienced delays in receiving financing from the Small Business Administration.

After the FY2014 shutdown, some Members of Congress requested assessments of its costs and impact. As noted earlier, OMB released a 27-page report on the subject three weeks after the shutdown ended. The report characterized all of its contents as focusing on "costs," broken down into five categories: (1) effects on the economy, (2) federal employee furloughs, (3) impacts on programs and services, (4) other budgetary costs, and (5) impacts on the federal workforce. OMB did not attempt to quantify in monetary terms the items that it included in the third and fifth categories, as well as some program-specific items that it included in the first category. For the first category, however, OMB attributed $2 billion to $6 billion in lost domestic economic output to the shutdown. With regard to the second category, OMB estimated that the total cost of retroactive pay due to employees furloughed during the shutdown was "roughly" $2.0 billion, with another $500 million in costs added if "total compensation costs" were calculated (i.e., including benefits). OMB said the $2.0 billion total for the FY2014 shutdown exceeded the total payroll costs corresponding to the two FY1996 shutdowns, which OMB said were $1.65 billion in inflation-adjusted terms. Finally, in the fourth category, OMB estimated budgetary effects of some program- and policy-specific impacts, but OMB did not aggregate them.

Effects on Mandatory Spending Programs, Generally

Programs that are funded by laws other than annual appropriations acts—for example, some entitlement programs—may, or may not, be affected by a funding gap. Specific circumstances appear to be significant. For example, although the funds needed to make payments to beneficiaries may be available automatically pursuant to permanent appropriations, the payments may be processed by employees who are paid with funds provided in annual appropriations acts. In such situations, the question arises whether a mandatory program can continue to function during a funding gap, if appropriations were not enacted to pay salaries of administering employees. As noted earlier in this report, according to the 1981 Civiletti opinion, at least some of these employees would not be subject to furlough, because authority to continue administration of a program could be inferred from Congress's direction that benefit payments continue to be made according to an entitlement formula. That is, obligating funds for the salaries of these personnel would be excepted from the Antideficiency Act's restrictions during a funding gap. However, such a determination would depend upon the absence of contrary legislative history in specific circumstances.

Nevertheless, the experience of the Social Security Administration (SSA) during the FY1996 shutdowns illustrates what might happen over a period of time in these situations. The lack of funds for some employees' salaries, for example, may impinge eventually on the processing and payment of new entitlement claims. SSA's administrative history describes how 4,780 employees were allowed to be retained during the initial stages of the first shutdown. The majority of these employees were "in direct service positions to ensure the continuance of benefits to currently enrolled Social Security, SSI and Black Lung beneficiaries." Avoidance of furloughs was possible, because "appropriations were available to fund the program costs of paying benefits, [which] implied authority to incur obligations for the costs necessary to administer those benefits." SSA furloughed its remaining 61,415 employees. Before long, however, SSA and OMB reconsidered. SSA had not retained staff to, among other things, respond to "telephone calls from customers needing a Social Security card to work or who needed to change the address where their check should be mailed for the following month." SSA then advised OMB that the agency would need to retain 49,715 additional employees for direct service work, including the processing of new claims for Social Security benefits. Further adjustments were made during the considerably longer second shutdown in terms of retaining employees, in response to increasing difficulties in administering the agency's entitlement programs.

Potential Issues for Congress

Quality and Specificity of Agency Planning

In December 1995, Representative John L. Mica, chairman of the Subcommittee on Civil Service of the House Committee on Government Reform and Oversight, convened a hearing that focused on the first FY1996 shutdown and potential implications for the future. Among other things, then-Chairman Mica raised concerns about the shutdown's planning and execution by agencies and OMB, saying "the execution of the shutdown was, in many instances, disorganized and illogical, at best, and oftentimes chaotic experience." As an example, he cited the "recall of more than 50,000 Social Security personnel [three days into the furlough], raising questions about whether they should have been furloughed in the first place." In addition, then-Ranking Member James P. Moran expressed interest in clarifying the distinction between excepted and non-excepted activities and employees.

If similar issues were of current concern, Congress might consider lawmaking and oversight options related to the quality and specificity of agency shutdown planning, including the rationales for excepting employees from furlough. The shutdown plans that agencies publicly released in the wake of negotiations on FY2011 and FY2012 appropriations, in connection with the FY2014 and FY2018 shutdowns, and subsequently might provide a starting point for such attention. If insight were desired into agency decision making processes, Congress might weigh whether to seek access to any OMB guidance documents that were provided to agencies but not posted on the publicly available Internet.

Availability of Updated Agency Shutdown Plans

OMB's Circular No. A-11 requires executive agencies to submit to OMB "plans for an orderly shutdown in the event of a lapse in appropriations." OMB has required the development and maintenance of these shutdown plans since 1980. Prior to the circular's 2011 revision, the circular broadly indicated that the plans were to be submitted to OMB when initially prepared and also when revised. With the August 2011 revision of the circular, however, OMB newly required that these plans be updated whenever there is a change in the source of funding for an agency program, or "any significant modification, expansion, or reduction in agency program activities." In any case, plans are required to be updated and submitted to OMB with a minimum frequency of once every two years, starting August 1, 2015.

The April and December 2011 releases of agency shutdown plans on the Internet—on OMB's website and on agency websites—brought a new level of transparency to agency shutdown planning. However, each release occurred on the final day of funding availability before an interim CR was scheduled to expire, and in the context of negotiations where an impasse seemed to many observers to be a possibility. Before the April 2011 release, it was not clear the extent to which agency shutdown plans ever had been made publicly available or systematically shared with Congress and agency stakeholders for review and feedback. In the context of FY2014 funding, OMB began to post agencies' shutdown plans on its website on September 27, 2013, three days prior to the end of FY2013. For FY2018 funding, OMB began to post links to several updated shutdown plans in December 2017, January 2018, and intermittently thereafter.

It remains to be seen over time whether these shutdown plans will remain a permanent fixture of federal agency and OMB websites. Similarly, it is not clear if any updated plans will be made available to Congress and the public, except at a time determined by OMB or a sitting President. If these possibilities were of interest to Congress, Congress could consider the advantages and disadvantages of the status quo versus establishing a statutory structure for how updated plans are posted and updated. On one hand, scrutiny over agency shutdown plans may provide incentives for agencies to improve the quality of the plans, should it become necessary at some point for agencies to execute the plans. Oversight may also inform budget policy debates about the potential impacts of shutdowns. On the other hand, such inquiries may distract agency personnel from other duties and raise sensitive issues regarding what activities and employees should be considered to be excepted from Antideficiency Act restrictions.

Federal Grant Administration216

Several issues and options arise in the context of a federal government shutdown in the administration of federal grants to state and local governments. The scale of these activities is considerable. Federal outlays for grants to state and local governments were $510 billion in FY2013, leading into the early-FY2014 shutdown. A federal government shutdown may cause disruption to, or may result in the cessation of, grant administration activities depending on the following factors:

the timing and length of the federal government shutdown; choices made by federal, state, and local officials in anticipation of, or during, a shutdown regarding grant program administration; and statutory changes since the last federal government shutdown that change how a grant program is administered.

In anticipation of, or during, a shutdown, Congress and federal, state, and local stakeholders make choices in administering programs. For some programs, these choices may include whether to

cover gaps in federal grant funding with state or local funds with uncertainty of reimbursement; furlough grants administration personnel at all levels of government; and involve grants administration personnel in contingency planning.

For example, when there is a gap in federal funding for state-administered programs during a federal government shutdown, states must decide whether to fill the gap with state funding to continue program operations or to cease program activities until the federal funding is restored. This decision may be influenced by the level of uncertainty the states face regarding the reimbursement of state funds by the federal government once funding is restored. Congress might consider options for enacting legislation in advance of a shutdown to address whether states would be reimbursed for expenses that would have normally been covered by federal grant outlays but that were delayed due to a government shutdown.

In addition, grant administration personnel may play a critical role in evaluating the choices that contribute to the impact of a federal government shutdown. If grant administration personnel are furloughed due to a federal government shutdown, grant program administration activities such as grant agreement execution, payment processing, and investigation of waste, fraud, and abuse, may be interrupted. For example, GAO reported that during the FY2014 shutdown, "[a]ll [National Institutes of Health] and [Federal Transit Administration] grants management officials were furloughed and were generally unavailable to assist grantees." If grant administration personnel are furloughed or not involved in the contingency planning, these activities may not be sufficiently addressed. Congress might consider the role of grant administration personnel when contemplating statutory changes that would affect grant program administration during a shutdown.

Narrow Continuing Resolutions222

One previous congressional response to shutdowns has been the enactment of "narrow" continuing resolutions that provide temporary budget authority for only specified programs or activities, as opposed to all of the programs and activities in one or more regular appropriations bills. For example, during the second FY1996 shutdown, a narrow CR was enacted that funded benefits for veterans and certain children and families programs, and that allowed the District of Columbia government to operate. More recently, the Pay Our Military Act was enacted the day before the FY2014 shutdown commenced, to provide funds for certain DOD and DHS activities.

Narrow CRs have a number of potential implications in the context of a government shutdown. Proponents of such CRs have argued that they are an important tool to mitigate the effects of a government shutdown by eliminating funding gaps for certain vital government activities. However, others have posited that such CRs unfairly prioritize some programs over others, and that they may reduce the pressure on broader negotiations to end the shutdown.

Possible National Security Implications229

A federal government shutdown could have possible negative security implications, as some entities wishing to take actions harmful to U.S. interests may see the nation as physically, technologically, and politically vulnerable. The Antideficiency Act is silent regarding which specific organizations would be excepted in whole or part from a government shutdown. The act's provisions and historical guidance from OMB, however, suggest that entities that perform a national security function may be allowed to continue many of their operations. Historically, individuals responsible for supporting the nation's global security activities, public safety efforts, and foreign relations pursuits have been excepted from furloughs that accompany a government shutdown. In FY2018, the Trump Administration issued specific guidance that states, "cybersecurity functions are excepted functions as these functions are necessary to avoid imminent threat to Federal property."

The actions that are taken in anticipation of a government shutdown may lessen the negative effects of an incident of national security significance occurring during this period. How agencies and OMB prepare for a government shutdown may have short- and long-term consequences if an incident occurs during a period of reduction in government services or soon after a resumption of all government activities. Should federal government organizations traditionally not viewed as an excepted part of the security apparatus be shut down, and subsequently become needed during a crisis or emerging situation, the nation's ability to respond to an incident could be delayed. Such a situation could result in increased risk to the nation and a longer recovery time as services and support activities normally provided to nonfederal entities may not be available when needed. Some security observers may offer concerns that the longer the duration of a government shutdown, the more at-risk the nation becomes as enemies of the United States may seek to exploit perceived vulnerabilities.