In 2018, the U.S. faced its longest government shutdown in four decades, from Dec. 22, 2018, to Jan. 25, 2019. Now in 2023, the U.S. steered close to yet another critical shutdown, until a last-minute bill to keep the government open for another 45 days was passed, as the countdown for a budget agreement read three hours until time ran out.

The shutdown neared after Speaker of the House, Kevin McCarthy, rejected Senate legislation to keep the Federal government functional on Sept. 28. The next day, the House turned down a bill supported by McCarthy, advocating to keep the government in full function for 30 days at lower spending levels. In a final vote of 232-198, 21 Republicans led by Matt Gaetz, representative for Florida’s first congressional district, as well as Democrats, exhibited opposition. The 21 Republicans believed the bill was “insufficient,” while Democrats felt it was “too extreme.” 

The bill would have cut spending by about 30% to numerous agencies while increasing U.S.-Mexico border security — a factor McCarthy hoped would appeal to Republicans. On Sept. 30, within hours of the deadline, Congress passed a stopgap bill, with a final vote of 88-9, opening the government for another 45 days. The bill includes natural disaster aid, however, it eliminates additional funding for Ukraine and border security, something that was included in the previous bill. The inability to agree on a solution prolonged the period in which the Senate and House needed to pass legislation.

“You would think the role of the government is to ensure the country runs smoothly. We’ve been seeing this time and time again, that the government sort of fails to govern; they’re not doing just the basic role of government, which is [to] keep the country moving. It’s not great. I mean, it was averted, so we’re lucky there. But, it’s people not getting paid, it has effects on the economy, it has effects on families, things like that,” AP Macroeconomics teacher Joel Soldinger said.

Shutdowns occur as a result of Congress’ failure to pass funding legislation for the federal government by the time the fiscal year begins on Oct. 1. Under the Antideficiency Act, Congress is required to pass 12 appropriation bills annually, consisting of the discretionary spending budget as well as funding levels for federal agencies. If some of the bills pass, the government closes only agencies without appropriations, but if none of the 12 bills pass, the government is forced to enter a termination of all non-essential functions until Congress acts.

Government shutdowns have a drastic effect on many. Though border protection, in-hospital medical care, law enforcement, Social Security and Medicaid continue, other agencies need to devise a contingency plan to determine which functions will or will not be ceased, in addition to the number of employees that will work for the duration of the shutdown. Federal employees and members of the military will not be paid until the end of the shutdown, and non-essential workers are temporarily let go. In the last government shutdown, about 420,000 federal employees worked without payment and 380,000 were suspended due to closures.

“Families are going to be hurt. They’re already struggling with inflation…so when the people that are affected don’t have money coming in, that’s gonna hurt. And then generally, that leads to knock-on effects with GDP and other factors,” Soldinger said.

Despite earning their money back later, families who have members working for the government do not receive pay in the short-run, in addition to other inflationary pressures that may already impact them. 

Additionally, a shutdown leads to an increased number of flight delays due to shortages in air traffic control, food safety may diminish due to disrupted Food and Drug Administration food safety inspections, access to Head Start Programs for low-income children may lessen and infrastructure work such as the construction of transportation could come to a halt. It would also cause delays in passport applications, business loans and other government functions. 

Short shutdowns typically do not overly impact the economy, but in a long shutdown, the general economy can face long-term effects. For example, the unemployment rate rises, gross domestic product decreases in growth and borrowing costs go up. According to Ernst & Young estimates, the government shutdown has cost the U.S. economy a weekly $6 billion and a GDP growth decrease of 0.1 percentage points in the fourth quarter of the year.

Though the government shutdown has been prevented for the short-term, it does not mean that the issue has been put aside; the government needs to come up with a budget plan by Nov. 17.

​“I heard this analogy, it is not mine: we just hit the snooze button. You guys know what hitting snooze buttons is like, you know, every time you hit it, it gets harder and harder to wake up. So they need to do what they should have done this time and figure out a way to fund the government. And Democrats sort of bailed them out, more Democrats voted for this than Republicans, even though Republicans control the House. How are they going to be able to find a way to come together?” Soldinger said. “So it’ll be interesting to see. They’re talking about Kevin McCarthy leaving the house [and] vacating his speakership, if that happens, is someone more extreme put in there or someone more moderate? So, you know, it’s great that [preventing the shutdown] happened, but I think it’s going to lead to [the] next 45 days to pay attention to because it could be interesting.”

Educating the next generation on topics related to economics and government prepares for large decisions to make in difficult times such as the possibility of government shutdowns.

“It’s kind of a mature subject matter, but, you know, this is the world that you guys are going to be entering and you want to make sure the people you put in office as you start to vote are responsible and they’re doing the right thing for the country,” Soldinger said. “So I think the more that [students] know, and when you start to educate yourself about what’s going on out there, you say, ‘wow, this does affect me’ and, you know, you’re going to be the generation that makes the difference, perhaps if you get out there and vote.”