The Antideficiency Act: The 1884 Law Behind Every Government Shutdown

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The partial federal government shutdown that began on January 31, 2026, is the latest example of how a legal rule that few Americans understand has a profound impact on their government. At the root of this recurring crisis lies the Antideficiency Act, an obscure statute originally enacted in 1870.

Originally enacted to stop government agencies from spending too much money, the law now forces the federal government to halt most of its operations whenever Congress fails to appropriate funds on schedule. This 19th-century rule to control spending has become a 21st-century political weapon.

The Problem Congress Tried to Solve in 1870

The Antideficiency Act did not emerge from abstract fiscal theory. It came from concrete abuses that plagued the federal government in the decades following the Civil War.

The earliest version of the legislation was enacted in 1870 to address a specific problem: agencies would commit the government to spend more money than Congress approved, forcing Congress to provide extra funding to avoid breaking contracts they’d already made.

Some agencies had become so brazen in this practice that they would spend their entire annual budget within the first few months of the fiscal year, leaving the remainder of the year to be funded retrospectively through emergency appropriations requests. The military, in particular, had perfected this technique, using it to circumvent congressional budget constraints and secure funding beyond what the legislative branch had originally approved.

Congress responded in 1870 with legislation that established a fundamental principle: the federal government could not spend money in any fiscal year in excess of the appropriations Congress had made for that fiscal year, nor could agencies enter into contracts obligating future payment of money beyond the amounts appropriated. This principle enforced a constitutional rule that only Congress can authorize spending.

However, early enforcement of the 1870 law proved inconsistent, and agencies found ways to keep forcing Congress to give them extra money.

The 1884 amendment retained the core prohibition against unauthorized expenditures and made the punishment worse for officials who broke the rule. The 1905 amendment added penalties of $100 and one month in jail for violations. Congress enacted the modern comprehensive version of the Antideficiency Act in 1950, building off the 1870 framework. The two-year imprisonment penalties represent the current statutory framework.

The people who wrote the 1884 law assumed that the law would deter unauthorized spending by threatening criminal prosecution, not that it would require the entire government to shut down whenever Congress missed a funding deadline. The distinction between these two purposes—preventing unauthorized spending versus halting government operations—proved critically important more than a century later.

A Century of Flexible Interpretation: 1884-1977

For nearly a century after its enactment, the Antideficiency Act remained in the background of federal budget practice. Funding gaps—when Congress didn’t pass a new budget before the old one ran out—occasionally occurred due to simple administrative delays or accounting mistakes. Yet when these lapses occurred, no one automatically triggered the kind of widespread government shutdown that became routine after 1980.

Instead, both Congress and the executive branch operated under a flexible understanding of the Antideficiency Act’s requirements. Elmer Staats, who ran the office that checks how Congress spends money for 15 years from 1966 to 1981, made clear that the law was meant to stop agencies from spending money Congress didn’t approve and protect the federal budget. But that didn’t mean Congress wanted agencies to shut down during funding gaps that were typically resolved within hours or days.

Agencies would minimize nonessential operations and obligations during these brief lapses—avoiding new hiring, grant-making, or nonemergency travel—but the government continued operating at normal capacity.

Both sides agreed the law should stop agencies from spending unapproved money or making promises to spend more later. But a brief funding gap was seen as a minor delay, not a reason to shut down.

When Appropriations Became Weapons: The 1970s Shift

In the 1960s, Congress usually passed budget bills on time. In the 1970s, Congress started adding controversial policy demands to budget bills and using appropriations deadlines as leverage to force votes on unrelated policy issues.

Funding gaps occurred not because of accounting mistakes, but because Congress started adding controversial policy demands to budget bills on deeply divisive topics such as abortion, school integration, and other ideologically charged matters on which Congress was bitterly divided.

Between 1977 and 1980, Congress failed to pass budgets six times, ranging from 8 to 17 days in duration. Each was intentional—Congress deliberately delayed to gain leverage in which Congress used the threat of a funding lapse to extract concessions on substantive policy matters.

The Attorney General Who Invented Government Shutdowns

In the context of this increasing use of appropriations deadlines as political tools, Representative Gladys Noon Spellman, a Democrat from Maryland, became curious about whether periodic funding lapses violated the Antideficiency Act. Asking it formally of government legal authorities set in motion a chain of events that transformed the Antideficiency Act from a dormant fiscal control statute into the legal rule that now triggers shutdowns.

Elmer Staats responded clearly: while the law technically stopped agencies from spending unapproved money, that didn’t mean Congress wanted agencies to shut down during periods when funding decisions were being sorted out.

Attorney General Benjamin Civiletti, the nation’s top lawyer, disagreed. In his opinion, Civiletti articulated a more technically specific legal framework: he argued that the Antideficiency Act’s prohibition on obligations or expenditures in advance of appropriations meant that, once appropriations lapsed, agencies could only obligate funds for activities necessary to bring about the orderly termination of an agency’s functions—in other words, agencies could only spend money to shut down in an organized way.

Civiletti went further, asserting that the Justice Department intended to enforce the criminal provisions of the Act against federal officials who continued running their agencies without funding.

This was a completely different reading of the same law. Civiletti wasn’t saying Congress changed the law. Instead, he was interpreting the same law differently than Comptroller General Staats had interpreted it.

Many legal experts at the time thought Civiletti was wrong, and some noted the stark reversal from the Comptroller General’s guidance. But once the Attorney General issued this opinion, it became how government worked.

The First Shutdown: May 1, 1980

On May 1, 1980, Congress didn’t pass a budget for the Federal Trade Commission while they argued over its rules, and the Carter administration shut down the FTC based on Civiletti’s ruling for the first time in American history. The shutdown lasted only one day.

The shutdown was estimated to cost $700,000, of which $600,000 went to pay for salaries of the furloughed workers during their brief time away.

Congress responded quickly that evening, and the House approved an extension of funding by a 284-96 vote, with the Senate following 71-10, ending the shutdown the same day it began.

But a problem became obvious: what about law enforcement agencies like the FBI? Would police have to stop working and leave buildings unprotected just because Congress didn’t pass a budget?

In January 1981, Civiletti changed his mind. Even without a budget, some government work could continue, Civiletti now concluded, only if the work directly related to keeping people safe or protecting property. This created an exception for “essential functions”—work that had to keep going for national security, law enforcement, and emergency services.

Over time, what counted as “essential” kept changing. In 1990, Congress tried to narrow what counted as an emergency, limiting it to immediate dangers to people or property. But Civiletti’s basic rule—agencies shut down except for essential work—has been the law for 45 years.

From Accident to Arsenal: The Political Evolution of Shutdowns

What started as a disagreement about what an old law meant became something bigger: the law became a weapon in budget fights.

Over the next 14 years, agencies shut down briefly a few times as the new rule took hold. None lasted more than a few days during this period.

But in 1996, House Speaker Newt Gingrich deliberately caused two shutdowns, one lasting 21 days, in a confrontation with President Bill Clinton over spending priorities and conservative policy demands. The 1995-1996 shutdowns marked the beginning of the modern era of intentional shutdown leverage. More than 800,000 federal workers were sent home without pay during the first shutdown, which lasted from November 14-20, 1995. Gingrich and House Republicans, newly in control, had promised to cut spending and sought to use the shutdown threat to force Clinton to accept their budget framework. The public blamed Republicans, and they had to give in. Clinton won politically and was reelected, while Republicans lost House seats.

In 2013, Republicans shut down the government to try to kill the Affordable Care Act. After 16 days, the public turned against Republicans, and they had to reopen government. About 800,000 workers were sent home, and 1.3 million had to work without knowing when they’d be paid, costing millions in wages owed to workers.

The 2018-2019 shutdown over border wall funding lasted 35 days—the longest ever at that time. Trump wanted border wall funding, Democrats refused, and the shutdown lasted over a month. 380,000 workers were sent home, and 420,000 had to keep working without knowing when they’d be paid, forcing many to find other jobs or protest. Air traffic controllers called in sick, causing widespread flight delays which finally forced Trump to reopen government without wall funding.

What Other Countries Do Instead

The U.S. is almost alone among democracies in shutting down government over budget fights. No other stable democracy shuts down government this way.

Britain has never had a government shutdown. Only the ruling party proposes the budget; Parliament approves it but can’t change the timeline. The ruling party must keep Parliament’s support or step down. If Parliament votes no confidence, the government must resign or call new elections. So lawmakers avoid blocking budgets because it could force new elections.

Britain has a backup system that lets government keep spending at last year’s level while they negotiate. If Parliament doesn’t pass a new budget, government keeps spending at last year’s level. This prevents shutdowns unless Parliament deliberately blocks it, which would force new elections.

Australia, Canada, and other democracies use similar backup systems. In Australia, if the budget doesn’t pass, the government must resign or call new elections. South Korea, which has a president like the U.S., uses an automatic backup budget instead: if the legislature is late, last year’s budget automatically continues until a new one passes. Germany has the same backup system.

In December 2025, when France couldn’t agree on a 2026 budget, the government extended 2025 spending while they negotiated. The Prime Minister said it wasn’t ideal but at least prevented a shutdown like America’s.

The Real Cost: What Shutdowns Do to the Economy

The 2013 government shutdown, which lasted 16 days, cost the economy $20 billion in lost growth according to Moody’s Analytics. Federal workers lost 6.6 million days of work. About 700 small businesses couldn’t get $140 million in loans approved. The Federal Housing Administration delayed approving loans for apartment buildings. International trade stopped because agencies couldn’t approve export licenses. The government couldn’t approve $3 billion in export loans and insurance.

The 2018-2019 shutdown cost $11 billion, including $3 billion in permanent damage the economy never made up. Moody’s Analytics estimated that the shutdown delayed over $2 billion in loans to small businesses. Federal workers lost at least $2 billion in wages.

The most recent shutdown, lasting 42 days from October 1 to November 12, 2025, surpassed the 2018-2019 shutdown to become the longest in American history. By October 17, 2025, federal workers had missed their first full paycheck of the shutdown. By day 20, about 750,000 workers were sent home without pay, while 1.4 million essential workers had to keep working without getting paid. By October 31, the Congressional Budget Office estimated that the shutdown had cost the economy $7 billion, and over 4,000 workers were permanently laid off.

Shutdowns cause other damage: people spend less, credit agencies see the government as unstable, contractors lose money they can’t recover, and businesses stop investing because they don’t trust government. Consumer confidence hit its lowest point since the pandemic in January 2026.

The Current Crisis: January 2026

The January 2026 shutdown shows the law still works as a political weapon. Congress had already agreed on most spending; the shutdown was over a specific policy dispute: rules for how immigration agents can operate after two people died in Minneapolis.

Democratic senators demanded that DHS funding come with new rules for immigration enforcement, like body cameras and stricter rules for how agents can operate. Republicans opposed tying DHS funding to these rules.

When the House didn’t pass a budget by Saturday midnight, six departments ran out of money. The White House ordered an orderly shutdown—workers would go home and most work would stop. Trump wanted to avoid another long shutdown, but the House couldn’t vote until Monday when Congress returned.

This pattern—a deadline passes, funding runs out, shutdown happens even though a deal is coming—is how budgeting works now. Agencies spend money shutting down operations they’ll restart in days. Federal employees spend weekends wondering whether they will work and whether they will be paid. Contractors lose money they can’t get back. Government reopens with temporary funding, delaying the next shutdown.

How to Fix This

The main proposed fix is an automatic backup budget: if Congress doesn’t pass a new budget, government keeps spending at last year’s level, implemented in other democracies and proposed in the Prevent Government Shutdowns Act. This would remove the shutdown threat as a weapon while letting budget talks continue.

The Prevent Government Shutdowns Act would automatically keep spending at current levels and give Congress incentives to pass a budget on time. The bill would force Congress to focus on the budget by blocking other votes while the automatic budget is active, unless two-thirds of Congress votes to allow other business for up to a week. This would force Congress to pass budgets on time, since members currently face no penalty for delays.

A previous version passed a Senate committee 10-2, showing both parties agreed it was a problem. But the bill never became law, blocked by the same budget fights that cause shutdowns. Congress members often oppose shutdown fixes because they like using shutdown threats as leverage in budget negotiations.

Senator Jeanne Shaheen suggested the Trump administration could reverse the 1981 ruling and let agencies keep running during budget gaps. The Attorney General would have to say the old ruling was wrong and go back to what Staats said in 1980. But courts might say the president can’t change the law without Congress.

Congress could change the law to let agencies keep running during budget gaps. This would prevent future presidents from reinterpreting the law like Civiletti did. But the bill hasn’t passed, and some Congress members like the current system because it gives them power in budget fights.

An Unintended Transformation

The January 2026 shutdown shows how a law from 1870, amended in 1884, has been transformed over 45 years. The Antideficiency Act was designed to stop agencies from overspending and from forcing Congress to pay for things it didn’t approve. It now forces the government to shut down when Congress misses a budget deadline.

Congress didn’t change the law to make this happen, but one lawyer in 1980 read the law differently. The costs have been enormous. Shutdowns have hurt the economy, shaken confidence, delayed services, and caused permanent damage that the economy never makes up. Contractors lose money they don’t get back; federal workers are sent home without pay, though they eventually get paid; and repeated shutdowns probably make businesses and people less likely to invest and spend.

Other democracies have the same budget fights but have fixed the problem with different laws and rules. These democracies decided government can’t shut down because of budget disagreements, and they have automatic backup systems to keep government running while they negotiate. The U.S. could change the law to work the same way.

Yet 45 years after Civiletti changed how the law works, nothing has changed. The shutdown threat is the tool that lets some lawmakers force votes on other issues, so they don’t want to get rid of it. Until Congress stops using shutdown threats, the law will keep costing the country billions.

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