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A U.S. government shutdown happens when federal agencies must stop nonessential operations because Congress hasn’t provided funding. The event has occurred multiple times since 1980, but it’s not a constitutional crisis. It’s a consequence of how American government is structured.
When Congress fails to pass legislation funding government operations, a “funding gap” or “lapse in appropriations” occurs.
Two pillars of American governance control what happens next: Congress’s exclusive “power of the purse” granted by the Constitution, and a 19th-century law called the Antideficiency Act, which prohibits the government from spending money it doesn’t have.
The Shutdown Begins
The Antideficiency Act
While the Constitution prohibits spending without an appropriation, the Antideficiency Act (31 U.S.C. §§ 1341-1342) legally compels the executive branch to shut down nonessential functions during a funding gap. The Act was originally created to prevent federal agencies from intentionally overspending their budgets and then returning to Congress for a bailout.
The modern interpretation is stricter and has two key prohibitions:
- It forbids federal officials from making payments or incurring financial obligations without an appropriation.
- It bars the government from accepting “voluntary services” from employees, meaning furloughed workers can’t simply decide to work for free.
However, the Act contains a critical exception. The government can continue functions related to “emergencies involving the safety of human life or the protection of property.” This clause provides legal justification for designating certain functions and employees as “excepted,” allowing them to continue working during a shutdown.
Before the 1980s, funding gaps would occur, but federal agencies tended to curtail some operations while largely continuing to function, assuming Congress would eventually provide funding. This changed dramatically in 1980 and 1981, when Attorney General Benjamin Civiletti issued legal opinions that reinterpreted the law.
Civiletti’s opinions concluded that unless an activity fell under the narrow “life and property” exception, the Act legally required an agency to suspend operations upon a lapse in appropriations. This transformed the government shutdown from a minor administrative disruption into a mandatory, large-scale event with immediate and visible consequences.
The Role of the OMB
In the days leading up to a potential funding lapse, the White House Office of Management and Budget (OMB) becomes the central command for the executive branch. OMB guides agencies through the shutdown preparation process.
Approximately one week before appropriations are set to expire, OMB typically directs all federal agencies to review and update their shutdown contingency plans.
If the funding deadline passes without a new law, OMB issues a formal memorandum to the heads of all affected agencies. This memo serves as the official directive, informing them that a lapse in appropriations has occurred and they must begin executing “an orderly shutdown of agency activities” in accordance with their plans. This is the official trigger that initiates the physical process of shutting down the government.
Agency Contingency Plans
Under OMB Circular A-11, every federal agency must create and maintain a detailed contingency plan outlining procedures for a lapse in appropriations. These plans, updated at least every two years and posted publicly on agency websites, provide a precise blueprint for the shutdown.
These contingency plans contain:
- The estimated time required to complete shutdown activities, often just a few hours on the first day.
- The total number of employees at the agency.
- The exact number of employees who will be furloughed and the number who will be retained as “excepted” or “exempt,” along with legal justification for their retention.
- A comprehensive list of agency functions that will cease and those that will continue.
On the first day of a shutdown, employees designated as “nonexcepted” typically report to work for a short period – often four hours or less – to perform orderly shutdown tasks. This includes securing files and equipment, changing voicemail messages, setting up out-of-office email replies, and receiving their official furlough notices before being sent home indefinitely.
The Human Impact
Who Works and Who Goes Home?
During a government shutdown, the federal workforce is divided into distinct categories that determine their work status.
“Excepted” (Essential) Employees: These individuals must continue to report to work, but without pay. Their jobs are deemed essential for national security, public safety, or the protection of life and property. This group includes active-duty military personnel, air traffic controllers, TSA officers, federal law enforcement agents, border patrol agents, and critical medical staff at VA hospitals.
“Nonexcepted” (Nonessential) Employees: This is the largest group of affected workers. They are placed on furlough, a mandatory, temporary, unpaid leave of absence. Furloughed employees are legally prohibited from performing any official duties, including answering emails or taking calls from government-issued devices.
During the 2018–2019 partial shutdown, approximately 380,000 employees were furloughed, while 420,000 were required to work without pay. The Congressional Budget Office has estimated that a full shutdown could furlough as many as 850,000 of the 2.1 million nonpostal federal employees.
“Exempt” Employees: A smaller category of employees are “exempt” from a shutdown because their salaries aren’t funded through annual appropriations. Their funding may come from multi-year budgets, trust funds, or fees collected by their agency. These employees continue to work and be paid as normal.
Recent directives from the executive branch have introduced a more severe possibility than temporary furloughs. OMB guidance has instructed agencies to prepare for Reductions in Force (RIFs), or permanent layoffs, for employees in programs not aligned with the administration’s priorities. Unlike a furlough, a RIF eliminates the position entirely.
This shift in strategy transforms the shutdown from a temporary pause in operations into a potential tool for permanently reshaping the federal workforce and eliminating programs.
Paychecks on Pause and the Guarantee of Back Pay
During a shutdown, no federal employee whose salary is funded by annual appropriations receives a paycheck – this applies both to those on furlough and those required to work. This immediate cessation of income creates significant financial hardship for hundreds of thousands of families, many of whom have been forced to delay mortgage payments, miss credit card bills, or seek financial assistance.
In the past, Congress would typically pass separate legislation after a shutdown to provide retroactive pay to affected employees. However, this wasn’t guaranteed.
Following the prolonged 2018–2019 shutdown, Congress enacted the Government Employee Fair Treatment Act of 2019. This law now provides a permanent, legal guarantee that all furloughed and excepted federal employees will receive their full back pay as soon as possible after a shutdown ends.
Federal Contractors
While federal employees have a guarantee of back pay, the same isn’t true for the millions of private-sector workers employed by federal contractors. During the 2018–2019 shutdown, an estimated 4.1 million people worked for companies with government contracts.
When an agency shuts down, it often issues “stop-work orders” to its contractors, halting projects and freezing payments for completed work.
The employees of these contracting companies – who perform services ranging from janitorial work and security to advanced research and IT support – are often furloughed by their employers. Unlike their federal counterparts, federal contractors and their employees are not guaranteed back pay for lost hours or revenue. This creates a severe and often unrecoverable economic shock, particularly for small businesses that depend heavily on government contracts.
Restarting Operations
Once the President signs a funding bill into law, the process of reopening the government begins. The OMB sends out a notification to all agency heads, informing them that appropriations have been restored and directing them to resume normal operations.
Agencies then activate the “recall” phase of their contingency plans. This involves using pre-established communication channels – such as websites, hotlines, and media announcements – to notify furloughed employees that the shutdown has ended and they are to report back to work. A top priority for agencies is to process and distribute retroactive pay to all employees as quickly as possible, in accordance with the Government Employee Fair Treatment Act.
However, reopening the government isn’t as simple as flipping a switch. The shutdown creates a “hangover” effect that causes disruptions to persist long after funding is restored. The shutdown creates a massive backlog of unprocessed applications, delayed inspections, postponed court cases, and other administrative tasks. When agencies reopen, they’re immediately dealing with this accumulated workload in addition to their normal, incoming tasks.
This creates new bottlenecks and ensures that delays in public services continue for weeks or even months. For example, a backlog of company registration filings at the SEC can delay initial public offerings, and a mountain of canceled immigration hearings further strains an already overburdened system.
The very process of shutting down and restarting is a significant administrative burden, diverting thousands of hours of personnel time away from agencies’ core missions. The true cost and disruption of a government shutdown extend far beyond the official dates it is in effect.
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