How Much Do Government Shutdowns Cost?

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By on September 18, 2019 in Current Events with 0 Comments
Wooden letters in a row that spell 'govt shutdown' on top of a map of the United States next to some cash and an American flag

What’s the financial cost of a government shutdown? According to a new report from two Senators, partial government shutdowns from the last five years have cost taxpayers somewhere around $4 billion.

Senators Rob Portman (R-OH) and Tom Carper (D-DE), the Chairman and Ranking Member of the Permanent Subcommittee on Investigations, published the report this week to make a case to get rid of government shutdowns.

The report found that the largest direct cost was lost productivity (a combined estimated total of 56,938 years based on furlough days) due to work not performed by federal employees. That alone cost $3.7 billion in back pay for federal workers who were furloughed.

$338 million in other costs went to things like extra administrative work, lost revenue, and late fees on interest payments.

Regarding the impact on federal workers, the Subcommittee specifically wanted to know:

  • The number of federal employees furloughed
  • The total number of combined employee furlough days
  • The total amount of “back pay” compensation paid to federal workers for the time they were furloughed
  • Any additional costs or financial consequences associated with lost productivity

The figures in the report are estimates based on data provided to the Senate Subcommittee by 26 federal agencies. Some agencies, including the Departments of Defense, Agriculture, Justice, Commerce, and the EPA were unable to provide basic information about employee furloughs, including back pay, for certain shutdowns. Furthermore, some agencies were unable to provide information about additional costs and impacts associated with the shutdowns, so the total cost is likely higher. The Senators said that this problem raises serious questions about those agencies’ ability to perform effective oversight of their own employees.

As the report stated about the cost figures:

The responses varied in terms of data and information provided. Some agencies provided quantitative data or estimates representing certain costs, while others stated that they were unable to do so, or unwilling to calculate estimates due to concerns about accuracy. This report provides information, where relevant, regarding agency explanations about any missing data and other gaps in responses provided to the Subcommittee.

Recommendations

The report made these recommendations to end government shutdowns:

Resume the Annual Budget Process

Congress should resume its annual budget responsibilities to better help House of Representatives and Senate appropriators provide funding for federal agencies on an annual basis. This would allow federal agencies to plan for the fiscal year ahead and helps avoids any possibility of a lapse in funding resulting in a government shutdown.

Enact an Automatic Continuing Resolution (CR)

Congress should pass legislation to permanently prevent the federal government from shutting down through an automatic CR for any regular appropriations bill or existing CR, thereby ensuring that essential government services are not disrupted and protecting American taxpayers who must bear the resulting cost. This would also ensure federal workers are able to continue working.

OMB Should Review Financial Controls at Federal Agencies

The Office of Management and Budget (OMB) should examine the financial management policies and practices at agencies that were unable to provide the Subcommittee with complete information on the cost of the last three shutdowns. The OMB Director should then report to Congress on any legislation necessary to ensure senior agency officials have access to the timely and accurate financial data they need.

Why Does the Government “Shut Down?”

The notion of a government “shutdown” is a relatively new concept that did not even happen prior to 1980. However, since its inception, it has evolved into a useful political weapon for politicians. Both parties spar over some issue and threaten to withhold funding for agencies, hoping the other side will cave.

Prior to 1980, there were occasions when money had not been appropriated, but federal employees still went to work, still got paid (usually a little late until funds were approved) and the situation was resolved without all the political drama we currently enjoy under the modern concept of a shutdown.

As FedSmith author Ralph Smith noted in a previous article, Benjamin Civiletti, the attorney general under President Jimmy Carter, is credited for inventing the concept of the modern shutdown. It is based on an interpretation of an 1870 law. For details, see Who Invented Government Shutdowns?.

Lawmakers to the Rescue: Bills and More Bills to End Government Shutdowns

Portman is one of several lawmakers who have introduced or co-sponsored bills with their own solutions on how to bring about the end to government shutdowns.

The latest partial government shutdown, the longest in history, seemed to have one thing in common – it made a lot of people angry. Politicians, despite causing it in the first place, expressed outrage at the situation and have been quick to come to the rescue in the aftermath by proposing bills to put an end to shutdowns for good.

Regardless of the politics, putting an end to them would no doubt be a welcome relief to federal employees who end up getting caught in the middle of the political fight.

These are some bills that have been introduced in Congress since the last shutdown to bring about a permanent end to shutdowns:

  • The End Government Shutdowns Act (S. 104)
    Portman’s bill would create an automatic continuing resolution (CR) for any regular appropriations bill or existing CR not completed by the October 1 deadline. After the first 120 days, CR funding will be reduced by one percent and would be reduced by one percent again every 90 days thereafter until Congress does its job and completes the annual appropriations process.
  • The Stop STUPIDITY Act (S. 198)
    Introduced by Senator Mark Warner (D-VA), this one would keep the government open in the case of a lapse in funding by automatically renewing government funding at the same levels as the previous fiscal year, with adjustments for inflation.
  • The Government Shutdown Prevention Act (S. 147)
    Senator Rand Paul’s (R-KY) bill would keep the government open but institute a 1% cut to then-current funding levels for any agency, program, and activity that Congress failed to fund by the start of the fiscal year (October 1). Funding would be reduced by another 1% every 90 days thereafter that an agreement is still not enacted.
  • The Ensure Washington Funds Government Responsibly Act (H.R. 1172)
    Introduced by Congressman Dan Kildee (D-MI), this bill would enact a short term continuing resolution when a budget is not passed. Pay for Members of Congress and the President would be withheld until the government is funded.

Whether or not any of them will come to fruition remains to be seen.

The True Cost of Government Shutdowns

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About the Author

Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce.

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