US Government Shutdown Explained: Reason, Impact And Why It Can't Happen In India
Essential services such as public safety, health services, national security will function as usual.
The United States government may partially shut down temporarily on Friday around midnight—when federal agencies run out of money—if Congress fails to approve a spending bill owing to pressure from Donald Trump.
The shutdown will impact a range of government operations, with many federal employees being furloughed, i.e. sent on leave without pay. Though critical services will continue to function, non-essential operations such as visa and passport processing, national park, etc. will halt temporarily. Essential services such as public safety, health services, and national security will function as usual.
But what is government shutdown and can a similar thing happen in India? Here is a breakdown.
What is US government shutdown?
A US government shutdown takes place when Congress fails to approve or enact a budget or funding measures temporarily. As a result of lack of appropriations to fund government operations, federal agencies run out of funds to function, leading to suspension of non-essential services.
Several government workers from the agencies are furloughed. Usually the shutdown is a result of political disagreements between the president and Congress. It can also be due to Congress not arriving at the decision owing to different factions on policy proposals, priorities in spending and others.
The shutdown can also adversely impact the economy because of productivity loss and a delay in government contracts.
When was the last time US government shut down?
The last time the US government saw a partial shutdown was in the year 2023 from mid-November to mid-December due to disagreement on spending levels and policy issues between Congress and the president. It ended after about 12 days, after temporary funding measures were reached at.
How did US government shutdowns start?
The first modern shutdown in the US occurred in 1976 for about 10 days which was triggered by a disagreement between the then President Gerald Gord and Congress over spending priorities. The shutdown had ended after 10 days as both the parties finally arrived at a decision.
The 1980s saw multiple short shutdowns under President Ronald Reagan, usually due to failure to arrive at a resolution over spending and budget deficit.
The longest shutdowns in the US history were seen between 1995 and 1996. Between Dec 1995 and Jan 1996, the US government was partially shut for about 28 days due to a disagreement between Bill Clinton and Congress primarily on Medicare, spending cuts.
In November 1995 as well, the government saw a shutdown for 21 days. Since then, the country has seen four shutdowns, including the recent one in 2023.
What triggered the shutdown this time?
US debt ceiling—typically a major factor leading to government shutdowns—has triggered the possible shutdown this time around. At the centre of the dispute over funding, the debt ceiling is the limit set by the Congress on the amount the government can borrow. The government often spends more than it collects, hence the need for the lawmakers to systematically resolve the issue.
One of the measures is temporary funding and many lawmakers are usually against voting for more debt. President-elect Donald Trump has this time demanded a provision to either raise the cap or suspend the debt limit. However, his own party is resisting the same routinely.
Why a shutdown can't happen in India?
The Indian government functions with the provision of a supplementary grant, which is an additional amount passed to cover the expenditure over and above the allocations made in the annual Union Budget.
The different departments of the Indian government usually submit the proposals for supplementary grants to the Finance Ministry with the details of why they need additional funds. This is followed by them being tabled in parliament for approval.
Once the proposals are approved by both the Houses—the Lok Sabha and Rajya Sabha, the funds are allocated. They are usually sought twice a year, once after the mid-year review and the second is towards the end of the financial year.
