Congress in Plain English: The Basics of a Government Shutdown

Budget Process By Jay Cost October 14, 2025

On October 1, 2025 the United States federal government “shut down.” This is not the first time it has happened. In the last 30 years there have been four shutdowns that have lasted at least a week. A shutdown that spanned the winter of 1995-96 lasted 21 days; one in 2013 lasted 16 days; and one in 2018 lasted 35 days (the current record for longest shut down).

Yet for how they have become a regular part of American political life, they are still not particularly well understood. Why do they happen, and what precisely is shut down?

At its most basic level, shut downs are a product of  ideological polarization. The Republican party in the last 40 years has become more conservative, while the Democratic party has moved to the left.

This leaves little room for compromise, which is a major reason why gridlock is a common feature in Washington, D.C. Both sides would rather do nothing than accept reforms proposed by the opposition. But funding the government remains one area of controversy where, every year, the two parties are forced to work together. This inevitably leads to partisan and ideological frustration as pragmatists in Washington seek to keep the government running while firebrands and diehards on both sides insist on no compromise whatsoever. 

Article I, Section 9 of the Constitution includes the Appropriations Clause, which reads, “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” Mandatory programs — like Social Security, Medicare, and Medicaid — have laws on the books that establish formulas to determine annual spending. However, discretionary programs — including national defense — are paid for by annual laws in the appropriations process.

The congressional budget process is structured by the 1974 Budget Act, which established rules and protocols to help Congress spend money in a timely and accountable way. The law requires the House and Senate to pass a budget resolution that establishes broad spending targets per categories like defense and agriculture by April 15 each year. The budget forms the framework for the House and Senate Appropriations Committees (and their subcommittees) to write appropriations bills to fund the government for the next fiscal year (which begins every October 1). There are twelve such bills, each related to a House and Senate Appropriations Subcommittee. Some of these include “Agriculture, Rural Development, Food and Drug Administration, and Related Agencies;” “Homeland Security;” “Defense;” and “Transportation and Housing and Urban Development, and Related Agencies.”

Congress usually misses its budgeting deadlines, even when partisan gridlock is not undermining legislative business. While it continues to deliberate, Congress often passes “continuing resolutions” to fund the government for a specific length of time. Typically, a “CR” establishes identical funding levels as the last fiscal year, although frequently they carry exceptions to existing spending directives (“anomalies”).  

Importantly, all appropriations bills and CR’s must be passed by both chambers and signed into law by the president. If they cannot do that before October 1 (or the expiration of a CR), the government shuts down. Moreover, appropriations and CR’s may be filibustered in the United States Senate. It takes 60 senators to end a filibuster, and seldom does either party have 60 seats in the chamber.

If Congress fails to pass appropriations bills or enact a CR after last year’s appropriations have expired, then whatever portion of the government that did not receive new funding is shut down because they do not have the authority to spend money. The precise scope of the shutdown depends on the agency, as Congress over the years has enacted laws — like the Antideficiency Act — that regulate executive behavior in the case of a funding shortfall. Agencies have likewise developed contingency plans to guide activity during a shut down. Employees in shuttered agencies are furloughed without pay, although they inevitably receive back once the government reopens. (The 2019 Government Employee Fair Treatment Act made this practice official.) 

 The federal government never entirely shuts down. Border control agents and military soldiers don’t pack up their gear and go come. Air traffic control operations and weather forecasting satellites are not turned off. Agency contingency plans identify essential workers — usually those who are involved in safety, property protection, and health — who must work during the shutdown, even though they do not receive pay. Additionally, various executive branch officials are required under law to continue working even without pay. This includes, for instance, political appointees like cabinet secretaries. 

Another reason shutdowns are partial is that most federal money is spent outside the annual appropriations process, through entitlements and interest on the national debt. Seniors continue to receive Social Security checks and doctors continue to receive Medicare and Medicaid payments because those appropriations do not happen annually. Self-funding government agencies like the US Postal Service keep doing what they always do.

The current government shutdown is a direct result of continuing ideological polarization, an extension of the heated debates about health care that embroiled politics in the last 20 years. The previous Congress created temporary subsidies for insurance companies offering policies on the individual marketplaces created by the Affordable Care Act of 2010 — a law supported only by Democrats and still opposed by Republicans at least in principle (in practice Republicans have ceased their active efforts to repeal it). Those subsidies expire at the end of this year, and Senate Democrats are filibustering CR’s that would fund the government while the two sides negotiate a deal over these funds. Democrats want to renew these funds to keep the cost of insurance premiums from skyrocketing, while Republicans generally speaking are not inclined to prop up what they see as a broken insurance system created by the ACA. 

Like most past shutdowns, the two parties have common ground on many issues. Both of them, for example, want members of the US military to be paid and cancer research conducted. The filibuster ensures Democrats have a seat at the negotiating table and that a bargain must be struck to reopen the government. Yet, that is hard to do with a very liberal Democratic caucus and a very conservative Republican conference.

Ultimately, shutdowns end because the lack of government services and the plight of unpaid federal workers moves public opinion, which in turn brings the parties to the negotiating table. When that happens is anybody’s guess, as it is driven purely by politics. What is certain is that just as shutdowns have been a feature of our highly polarized era, they will continue to be, as both sides often prefer shutting down the government rather than making concessions to the opposition. 

Jay Cost is the Gerald R. Ford Senior Nonresident Fellow at the American Enterprise Institute. He is the author of five books, most recently Democracy or Republic? The People and the Constitution (AEI Press, 2023).

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