If the two sides can't come to an agreement by Friday evening (April 8) at midnight, a government shutdown will take effect.
A complete government shutdown doesn't mean that all government employees will stop working. "Essential operations" such as national security, law enforcement, criminal investigations, care of prisoners, air traffic control and other transportation safety functions will all keep working during a shutdown.
There have been 17 government shutdowns since 1977. The two most recent ones occurred during the 1996 fiscal year – the first, a five-day shutdown in November 1995, and the second, a three-week hiatus from December 1995 to January. 1996. Those two shutdowns were caused by funding gaps due to an inability of then-President Bill Clinton and GOP leaders in Congress to agree on funding measures.
According to a report from the Congressional Research Service, the shutdowns caused widespread impacts, which serve as warning signs for what might result from a shutdown this fiscal year:
During the November 1995 shutdown, an estimated 800,000 federal employees were furloughed. During the 21-day 1995 to 1996 shutdown, the estimate of furloughed federal employees was 284,000, with another 475,000 excepted federal employees continuing to work without pay.
The Office of Management and Budget estimated that the first of those two shutdowns cost taxpayers an estimated $100 million per day. The final cost of the three-week shutdown, including back pay to workers who did not go to work during that time, was more than $1.25 billion. According to the Government Accountability Office, a funding gap of just three days in 1991 ran up a $607 million bill, including $363 million in lost revenue and fees.
New patients were not accepted into clinical research at the National Institutes of Health (NIH) clinical center; the Centers for Disease Control and Prevention ceased disease surveillance; hotline calls to NIH concerning diseases were not answered; and toxic waste cleanup work at 609 sites reportedly stopped and resulted in 2,400 Superfund workers being sent home.
Law Enforcement and Public Safety
Delays occurred in the processing of alcohol, tobacco, firearms and explosives applications by the Bureau of Alcohol, Tobacco, Firearms and Explosives; work on more than 3,500 bankruptcy cases reportedly was suspended; cancellation of the recruitment and testing of federal law enforcement officials reportedly occurred, including the hiring of 400 border patrol agents; and delinquent child-support cases were delayed.
Parks, Museums and Monuments
Closure of 368 National Park Service sites (loss of 7 million visitors) reportedly occurred, with loss of tourism revenues to local communities; and closure of national museums and monuments (reportedly with an estimated loss of 2 million visitors) occurred.
Visas and Passports
Approximately 20,000 to 30,000 applications by foreigners for visas reportedly went unprocessed each day; 200,000 U.S. applications for passports reportedly went unprocessed; and U.S. tourist industries and airlines reportedly sustained millions of dollars in losses.
Multiple services were curtailed, ranging from health and welfare to finance and travel.
The National Science Foundation, which funds 2,000 research institutions such as astronomy observatories and science and technology centers — and gives millions of dollars of research grants to scientists each year — was gravely affected during the last shutdown. Approximately $120 million in research grants went unmade during that time, delaying the support of approximately 2,000 people to carry out research and education activities.
Additionally, 240 grant proposals for science and engineering research and education went unprocessed each day of the shutdown, resulting in a backlog of 3,000 grant proposals, 1,000 of which would normally have been accepted. Dozens of panels, meetings, and workshops were canceled.
Furthermore, only a "handful" of EPA employees and only 7 percent of NASA workers stayed on the job during the shutdown, according to data from the Clinton Administration.
Of $18 billion in Washington, D.C., area contracts, $3.7 billion (more than 20 percent) reportedly were affected adversely by the funding lapse; the National Institute of Standards and Technology (NIST) was unable to issue a new standard for lights and lamps that was scheduled to be effective Jan. 1, 1996, possibly resulting in delayed product delivery and lost sales; and employees of federal contractors reportedly were furloughed without pay.
The furlough of Department of Interior Bureau of Indian Affairs employees delayed general assistance payments to some Native American recipients.
Individual states can also undergo government shutdowns due to budgeting issues. In these instances, state departments, such as the motor vehicles bureau and the lottery, would stop operating. Unemployment offices would close and road repairs would be put on pause. The state's licensing bureau would also be temporarily shuttered, forcing businesses to wait for the shutdown to end in order to receive necessary permits and certificates.
Each state manages a shutdown differently, but like a federal shutdown, emergency and essential services are rarely cut off:
In 2006, New Jersey implemented a shutdown by closing nonessential operations for eight days before coming to a budget agreement. This put approximately 45,000 state employees on unpaid leave, shutting down casinos in Atlantic City for the first time ever because inspectors were not available.
A similar shutdown situation occurred in Tennessee in 2002, when a three-day long shutdown closed state parks and put road construction on hold. While brief, the shutdown was serious enough to suspend classes at state universities. However, essential operations such as public health and child support services were not affected.
Michigan's government shutdown lasted for only four hours in 2007, but the seemingly minor blip in state employment called for fewer state troopers to patrol the highways, which temporarily laid off 35,000 of the state's 53,000 workers. The short shutdown also temporarily turned off traffic cameras, shuttered state parks and barricaded highway rest stops.
State shutdowns can affect lower-tier governments as well, since shutdowns often cause small, local governments to stop receiving state aid until the budgeting issues are resolved. Depending on the amount of state funding that a local government is receiving, a shutdown could negatively affect its schools and social services.