Deep Dive: The Appropriations Process and Government Shutdowns

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Deep Dive: The Appropriations Process and Government Shutdowns

With the longest government shutdown recently behind us, some may think that it’s too early to start talking about another one. But the budget process for the next fiscal year has begun this week. How this turns out will determine if we’ll see a government shutdown again in November or December.

 

During the recent shutdown, there was a lot of news reporting about why the government shuts down and the process for re-opening it. There was even some confusion about what it means for the government to “shut down.”

 

A previous Deep Dive examined the budget process that talks about the overall spending blueprint for the federal government. This Deep Dive will discuss the specific part affecting spending – the appropriations process. This is key to understanding when and why the federal government shuts down.

 

What Happened Recently

 

With the signing of House Joint Resolution 31, President Trump has averted another government shutdown. This avoids a repeat of the recent partial government shutdown that occurred from December 21, 2018, to January 25, 2019. While called a “shutdown,” in reality much of the government kept operating. Government employees working in capacities deemed “essential” had to work. Those in “non-essential” positions could not do any work.

 

Like every shutdown in the past, this one occurred because Congress and the president could not agree on appropriations, or spending, bills. These shutdowns occur when either Congress fails to pass spending bills to keep parts of the government open or the president vetoes these spending bills.

 

The Appropriations Process

 

Article I, Section 9, of the U.S. Constitution states: “No money shall be drawn from the Treasury, but in consequence of appropriations made by law.”

 

Federal government spending is divided into two categories:

  • Mandatory: Programs authorized by Congress that operate outside the regular spending process are entitlement programs, and their spending is deemed “mandatory.” For Social Security, Medicare, and Medicaid, anyone who meets certain qualification is entitled to benefits. Funding for these programs does not have to be authorized yearly by Congress, although the eligibility and payment rules can be changed.
  • Discretionary: To pay for other government activities, ranging from military operations undertaken by the Defense Department to operating national parks to paying congressional staff, Congress must pass 12 appropriations, or spending, bills. These bills operate on a fiscal year basis. If they do not become law, funds cannot be drawn from the U.S. Treasury to pay for the government operations they cover.

 

Appropriations Bills

 

The 12 appropriations bills that should be passed by Congress every fiscal year (October 1 through September 30) are:

  • Agriculture
  • Commerce/Justice/Science
  • Defense
  • Energy and Water
  • Financial Services
  • Homeland Security
  • Interior and Environment
  • Labor/Health and Human Services/Education
  • Legislative Branch
  • Military/Veterans
  • State/Foreign Operations
  • Transportation/Urban Development

 

You can see the progress of the Fiscal Year 2019 appropriations bills through Congress here.

 

The number and title of these bills can be changed by Congress. After the 2001 terrorist attacks, Congress re-organized the appropriations process, which at that time had operated with 13 appropriations bills.

 

Consolidated Appropriations/Continuing Appropriations/Omnibus Appropriations

 

While the spending process is supposed to proceed with the 12 bills being passed separately and signed into law by October 1 of each year, this almost never happens. In fact, since 1977 (when the current spending system was put in place), Congress has passed all of the appropriations bills on time in only four years. The last time it did this was 1997. The usual pattern is that Congress passes some, but not all, of the bills to be signed into law by October 1.

 

When this happens, Congress can take a variety of steps to avoid a government shutdown. It can pass a resolution for continuing appropriations, which fund the government for a specified period of time at the level of the previous fiscal year. During this time, it can then pass a consolidated appropriations act, which combines two or more appropriations bills. An omnibus appropriations bill generally wraps all the outstanding appropriations bills into a single act for the rest of the fiscal year.

 

If special spending needs arise during the fiscal year, Congress can also pass a supplemental appropriations bill, which provides funding more money than what was contained in the original spending bill.

 

The 2018-2019 Government Shutdown

 

Prior to the beginning of Fiscal Year 2019 (which began on October 1, 2018), Congress had only passed these appropriations bills:

  • Defense
  • Energy and Water
  • Labor/Health and Human Services/Education
  • Legislative Branch
  • Military/Veterans

 

Continuing resolutions funded the government agencies covered by the other appropriations bills through December 21. President Trump signaled his opposition to signing any spending bills that did not contain funding for a wall on the U.S.-Mexican border. As a consequence, the agencies not covered by the already-passed appropriations bills were shut down on that date.

 

The parts of the government that were covered by these spending bills could continue to operate as normal, however. Since the Legislative Branch appropriations bill was signed into law, congressional staffers could continue to be paid their salary. So could employees of the Energy Department, Defense Department, the Labor Department, the Department of Health and Human Services, and the Education Department.

 

When President Trump signed House Joint Resolution 28 on January 25, this reopened the portions of the federal government that were shut down until February 15. The signing of House Joint Resolution 31 by President Trump funds the federal government through the end of Fiscal Year 2019, averting any further government shutdowns until then.

 

What This Means for You

 

Because of the agreement that funds the government through the end of this fiscal year, there will be no more government shutdowns until at least October 1. However, if Congress and President Trump cannot agree on spending bills for the next fiscal year by then, they will be forced to resort to a short-term funding measure (a continuing resolution) or the government will shut down. With the House of Representatives being controlled by Democrats and the Senate and White House controlled by Republicans, the prospect of a spending disagreement is relatively high. For those who want to predict whether a government shutdown will occur, keep watching the annual spending bills that are supposed to be moving through Congress during the summer. If some of these bills have not been approved by both house of Congress and signed by the president in September, then there is a greater chance of a government shutdown in October through December.

 

 

 

 

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