Budget Showdown 2011: Q & A - How Many Times in US History has the Government Shutdown Over the Budget?

HISTORY Q & A:

How Many Times in US History Has the Government Shutdown Over the Budget?

By Bonnie K. Goodman

Ms. Goodman is the Editor of History Musings. She has a BA in History & Art History & a Masters in Library and Information Studies from McGill University, and has done graduate work in history at Concordia University.

With just under a day left for negotiations before the government will shutdown and despite working non-stop this week Congressional Republicans and Democrats have still not come to an agreement for the 2011 Budget. Wednesday and Thursday President Obama kept meeting with House Speaker John Boehner (R-Ohio) and Senate Majority Leader Harry Reid (D-Nev.) at the White House, declaring some progress, still no agreement has been made. Although Obama opposes and threatened to veto the measure Speaker Boehner and Republicans are working on a week extension to prevent the shutdown on midnight Saturday. At issue is the 7 million difference between the Democrats proposed 33 million and the Republicans 40 million in spending cuts. The shutdown would affect 800,000 federal workers out of 2 million workers, and will also  affect all aspects of the government at a time when the fragile economy is just starting to recover.

The government’s budget has been at the center of all previous shutdowns, and the 2011 budget battle is not different. A budget (annual appropriation bills) needs to be passed by Congress and signed by the President prior to the commence of the new fiscal year on October 1, or continuing resolutions also known as stopgap spending bills need to be passed to keep the government operating at the prior year’s fiscal spending limits. However, if Congress fails to pass the appropriation bills, a continuing resolution, or the President vetoes or does not sign the resolution; these results in a government shutdown as there are no funds allocations to operate government.

The last and longest government shutdown in American history was when Democrat Bill Clinton was President and Newt Gingrich was the Speaker of the Republican Congress in November 1995 and in December 1995 through to January 1996. The clash over the 1996 budget caused a government shutdown for six days in the first shutdown and for 21 days during the second shutdown. High partisanship affected the budget negotiation process resulting in the shutdown. According to Charles Tien writing on continuing resolutions in Robert E. Dewhirst, John David Rausch Encyclopedia of the United States Congress, “The government has shut down (partially) a total of 11 times since 1980; the fiscal year 1996 budget battle included two lengthy shutdowns. To avoid or end a government shutdown, the president or Congress must pass either the regular appropriation bill or a continuing resolution.” (149)

Throughout the 1970s, various agencies have had to shutdown because of budget issues. As economic problems increased throughout the 1970s, Democratic President Jimmy Carter became the first president to face the issue of budget fights in Congress leading to the threat of government shutdowns. Lowell Barrington, Michael J. Bosia, Kathleen Bruhn Comparative Politics: Structures and Choices explain Despite being a Democratic President with a Democratic Congress “As Jimmy Carter found out during his four years as president of the United States, even having a legislature controlled by your own party is no guarantee that your policies will pass quickly, or resemble the original initiatives once they do.” (240)

The whole concept of shutting down the government if a budget, appropriation bills, or continuing resolution, started with President Jimmy Carter. Charles Tien writing on continuing resolutions in Robert E. Dewhirst, John David Rausch Encyclopedia of the United States Congress explains, “Since 1980, failure to pass a CR or an appropriations bill has led to a government shutdown. In 1980 President Jimmy Carter’s administration, in reevaluating a law passed in 1870, the Anti-deficiency Act ruled that agencies without appropriations had to close operations. The 1870 law said that “[I]t shall not lawful for any department of the government to expend in any one fiscal year any sum in excess of appropriations made by Congress for that fiscal year, or to involve the government in any contract for the future payment of money in a excess of appropriations.” The Carter administrations ruling of the 1870 Anti-deficiency Act required Agencies without appropriations to shut down immediately.”(149)

Congress used the law to shutdown operations at the FTC in 1980. “The first agency to ever shut down for a lapse in appropriations was the Federal Trade Commission (FTC). The FTC shutdown for one day in 1980 because Congress refused to pass a full-year appropriation for the agency until it had authorizing legislation.” (149)

RONALD REAGAN

The trend of government showdowns and shutdowns over the budget did not slow with the election of Republican President Ronald Reagan. The introduction of Keynesian supply-side economics to the Federal government, differing economic philosophies regarding spending, and an increase of partisanship between Democrats and Republicans accounted for the succession of government shutdowns throughout the 1980s.

During the Reagan administration, the government spent the most time on the brink of government closures. Steven Hayward writes in The Age of Reagan: The Conservative Counterrevolution 1980-1989; “Unable to agree on a budget, Congress passed a “continuing resolution” in November to keep the government running at current levels. Reagan cast his first veto and brieftly shut down the government, in a pattern that would repeat itself much of the next six years (and which was repeated most dramatically during Bill Clinton’s presidency in 1995).” (188)

It was a battle that began from the onset of the administration and spanning the administration’s two terms. As historian Gil Troy writes “During the first two months after his January 20 inauguration, Reagan, with his chief lieutenant David Stockman, launched the Budget Battles as the Regan Revolution’s opening salvo.” (12) The most remembered government shutdown in the Reagan Administration was in 1981. Tien explains that “President Ronald Reagan’s administration used the shutdown guidelines the following year when Reagan vetoed a continuing resolution that resulted in a three-day broader government shutdown.” (149) After short closures in 1981, 1984, 1985, and 1986, the government again faced similar situation in 1987 a closures were averted.

The Reagan administration in presenting and pursuing the passing of their first federal budget in 1981 looked to cut taxes, and cut spending in order to reduce the deficit and balance the budget. Reagan’s economic solution was a program entitled “America’s New Beginning”; a expansive program that would cut taxes, and spending across the board including social programs in order to reduce the swelling deficit, and infuse the lagging economic situation with life. The 1982 deficit was estimated to reach $109 billion.

Reagan in presenting his 1982 budget pleaded with the American people in a televised address; “Our immediate challenge is to hold down the deficit in the fiscal year that begins next week. A number of threats are now appearing that will drive the deficit upward if we fail to act… And without further cuts, we can’t achieve our goal of a balance budget by 1984…. I’m asking all of you who joined in this crusade to save our economy to help again, to let your representatives know that you will support them in making the hard decisions to further reduce the cost and size of government.” (187) Senator Ted Kennedy gave the Democratic response, “This is the government of the rich, by the rich for the rich.” Summing up that the Democratic Congress was not interested in cutting the deficit or spending especially when it came to social programs.

The Reagan administration looked to cut spending in the upcoming 1982 budget. However, as the economy became increasingly worse by September and the Democratic Congress inability to find areas to cut that would have limited impact to relied upon social programs, there was an impass. Reagan reduced the numbers to 13 billion and then again by late October to half that amount, 7-8 billion, without any tax raises, and finally to meet Congress halfway at 4 billion and no less.

• Nov 23, 1981: The spending feud between the Republican President Reagan and the Democratic Congress led to a shutdown. The November 20 deadline for a stop gap spending bill was on a Friday, however the House-Senate Conference delayed it to the following Monday to finalize a bill. The compromise bill consisted of 4 billion in spending savings/cuts, by reducing 2 percent of government spending. The White House in reviewing the numbers claimed there would only be 2 billion in savings from the proposed cuts. When presented with the bill in the morning, Reagan refused to sign Congress’s continuing resolution.  Reporting in the New York Times stated “President Reagan vetoed the measure as “budget-busting.” Faced with the “difficult choice” of either signing the bill or disrupting Government services, the President said, “I have chosen the latter.”  Reagan’s veto led to a shutdown in the government for the afternoon, forcing 400,000 of the 2.1 million federal employees home. Congress approved a stop gap spending bill which later the same day Reagan signed, ending the shutdown with work resuming the next morning. Only on December 12, 1981, did the Congress and and President Reagan approve an Omnibus spending bill, “setting the spending ceilings for the entire year, except in foreign aid. Thus, although the continuing resolution will be superseded by enactment of individual appropriation bills.” (NYT, 12-13-1981, pg. 80)

The one day shutdown cost the government $65 million with a total of 670,000 workers furloughed. A worker who came to work as part of the essential government workers described it as a “snow day without snow…. People come to work sit around confused worry about their car pools, then maybe get interviewed on television.” (NYT, 12-15-1985, pg. D23)

• Oct. 4 1984: Congress failed to pass a stopgap money bill, when a new budget was not passed for the new fiscal year. On October 4^th 500,000 civil servants out of the 2.9 million civil servants where sent home from their jobs; leading to a partial shutdown. An emergency spending bill passed, which Reagan signed, and normal government operations continued the next morning. Both times the shutdowns were limited in their implications and impacts.

• Nov 11, 1985: In Reagan’s second term the government again faced a shutdown. Congress could not agree over a budget agreement, and the need to extend the federal borrowing limit, beyond the limit which was 1,823 trillion, which contradicted plans to balance the budget by 1991.

• Oct. 17, 1986: The Democratic Congress and the Presidency’s inability to agree on a new fiscal budget led to another half day furlough. Congress had also failed to come to an agreement and pass a spending bill. At Midday 500,000 non-essential federal employees were forced home. An emergency spending bill passed, returning employees the next day to work.

GEORGE H.W. BUSH

All previous government shutdowns lasted only short periods of time, in 1990 that changed under Reagan’s successor and former Vice President, and then President George H.W. Bush when the government experienced its longest shutdown. In October 1990 the government was shut down a total of three days, because of Democratic Congress and the Republican President could not agree on a budget for 1991. As signs of economic problems were visible on the horizon, the battle was centered on the Gramm-Rudman-Hollings Act to balance the budget. Democrats wanted to increase taxes on the nation’s richest to reduce the ballooning deficit, but in the 1988 campaign Bush had promise he would not increase any taxes across the board. Bush threatened to veto any budget that Congress presented to him that included a tax increase.

• Oct. 6, 1990: President Bush made good on his veto threat; with the budget vetoed and without a continuing resolution agreed upon, the government was shut down throughout the three day Columbus Day weekend. Both the President and Congress wanted to limit the negative impact of a shutdown, and they agreed the new budget would not include any surtax or tax increases. Over the weekend President Bush then signed a continuance, and government opened on Tuesday morning. The closure during the holiday weekend, limited the impact a three day closure would had on running the government, had it been closed for three days during the week. Bush was however, was forced to agree to tax increases, going against his main campaign pledge. The President signed the Omnibus Budget Reconciliation Act of 1990 on November 5, 1990 securing a budget for the fiscal year.

BILL CLINTON

The 1995-1996 shutdowns were the longest amid the most heated battle over the budget between Congress and the President. President Clinton chose to veto several appropriation bills in the 1996 budget, at issue was funding amounts for social programs such as Medicare, Medicaid, public health, education, and the environment, all programs Clinton pledged to maintain to the public, however, the Republicans wanted Clinton to submit a seven year plan for a balanced budget. The Republican Congress could have voted on a continuance to keep the government operating on the previous fiscal years spending limits. However, the Republican controlled Congress looked to shut down the government hoping the public would blame the Democratic President, leading to a Republican victory in the next year’s Presidential election.

Many believed Gingrich was motivated by revenge as opposed to policy when allowed the shutdown to occur, Senator Tom Delay in his memoir No Retreat, No Surrender wrote, “He told a room full of reporters that he forced the shutdown because Clinton had rudely made him and Bob Dole sit at the back of Air Force One… (After Yizhak Rabin’s funeral, where Clinton refused to discuss the budget as well on the flight) Newt had been careless to say such a thing, and now the whole moral tone of the shutdown had been lost. What had been a noble battle for fiscal sanity began to look like the tirade of a spoiled child. The revolution, I can tell you, was never the same.” Throughout the shutdown Clinton suffered in the polls, but in the end the backlash was against the Republicans instead, whose popularity waned after the shutdowns, and in the 1996 election they actually lost 5 seats in the Congress to Democrats.

• Nov 13, 1995: The first shutdown commenced at midnight on November 13, 2005, after a last minute attempt to avert the shut down; Clinton, Gingrich, House Majority Leader Dick Armey, and Senator Bob Dole met, but failed to reach a compromise. Clinton described the negotiations in his memoirs, My Life; “Armey replied gruffly that if I didn’t give in to them, they would shut the government down and my presidency would be over. I shot back, saying I would never allow their budget to become law, “even if I drop to 5 percent in the polls. If you want your budget, you’ll have to get someone else to sit in this chair!” Not surprisingly, we didn’t make a deal.” At the midnight, a partial shutdown led to 800,000 “nonessential employees” being sent home or told not to come into to work, with only emergency government services remained open. This represented 42 percent of the civil servants employed. The shutdown only ceased with an agreement on a temporary spending bill.
• Dec 16, 1995-Jan 5, 1996: When the temporary funding measures expired, and no continuance was yet again signed, the government shut down this time for 14 days from December 16, 1995 and finally ending on January 5, 1996; the longest shutdown period in US history. Although Congress enacted resolutions to end the shutdown and another temporary spending bill was signed ending the 21 day partial government shut down, the government did not go back to fully functioning until April. Clinton agreed to submit a seven year balanced budget plan approved by the Congressional Budget Office to ensure the government would keep running after the January 26, 1996 spending extension end date. With the agreement, Clinton declared ‘The era of big government is over.’

In 1990 and in 1995, 1996, the budget battles and their subsequent shutdowns forced compromises, especially on the side of the President more than Congress. In 1990 Bush had to agree to tax increases, while in 1996, Clinton had to agree to a seven year balanced budget plan. Bush going against his campaign pledge lost his 1992 bid for re-election, Clinton however, escaped with a higher approval rating for his handling of the 1996 budget showdown, and was re-elected later that same year, while Republicans heavily shouldered the blame for the shutdowns.

Now within hours of the government being shutdown after one of the longest budget battles in history, one side will blamed more than other for allowing a shutdown. Neither side has been able to compromise, Republicans are aggressively pursuing a week extension, and while President Obama has looked to keep out of the battle as much as possible, a veto to even the emergency week extension measure could shift the blame towards both the Democrats and the President. As time wanes one aspect seems almost certain, 2011 will be added to the list of recent government shutdowns over a budget battle, while only time will tell the long term political ramifications a such a shutdown at a time of economic fragility.

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Posted by bonniekgoodman on April 8, 2011

http://historymusings.wordpress.com/2011/04/08/how-many-times-us-history-government-shutdown-budget/