What history tells us about the potential government shutdown

The Senate is working to pass a bipartisan funding bill before a summer recess that would fund the federal government through Dec. 11, prevent a potential government shutdown during November’s midterm elections and avoid a repeat of last year, when agencies began the fiscal year with a record 43-day shutdown.

Senators easily cleared the first in a series of procedural motions Monday by a vote of 89-4, fast-tracking the bill for final vote before the Senate recesses for five weeks. Senate Majority Leader John Thune, R-S.D., all but promised Wednesday that senators would delay the recess—scheduled for Friday—until they navigate a “train wreck” of legislation that includes the spending bill.

The bill has several key differences from the one the House passed on July 21—which Senate Democrats declared dead on arrival—including no new funding for immigration agencies and language temporarily blocking the Trump administration from putting political appointees in charge of federal grant approvals. Unlike the House bill, the Senate bill does not include $1 billion for the Trump-class battleship program, and it would provide government funding one week longer than the House bill, which would fund agencies through Dec. 4.

To be signed into law and avoid a shutdown, one chamber would have to adopt the other’s bill, or appropriators will need to develop a compromise bill that both chambers pass and President Trump signs.

On its face, Congress’ unusual early efforts to avoid a shutdown dramatically decreased the odds of a shutdown—at least in October. On prediction market Kalshi, odds of an Oct. 1 shutdown now sit at 25%, down from 64% last month.  

“It’s good they’re getting ahead of it. I cannot recall a time when a CR was introduced in July,” said David Berteau, a longtime budget expert and former high-ranking Pentagon appointee in both the Reagan and Obama administrations. “I don’t really know what the parties want, but the members want to not have a shutdown.”

That should alleviate some angst for federal employees and government contractors who’ve dealt with three partial or full government shutdowns in the past year. Hundreds of thousands of federal employees missed several consecutive pay periods, forcing many to take odd jobs or seek loans to pay bills. Many contractors, meanwhile, weren’t paid at all during the shutdown, since they are not legally entitled to backpay. Millions of Americans suffered too, with fewer domestic flights and hours-long security lines at airports, disruptions to public services and tens of billions of dollars in lost economic output.

In decades past, chances of a shutdown with a government and presidency under the same party—during a critical midterm election—would have been exceedingly low. Lately, though, there are no sure bets.  

What history says

Given recent history, Berteau said it’s anything but a done deal.

Until 2018, every government shutdown for the previous four decades occurred under a divided government, when either the majority in the House or Senate was held by a different political party than the presidency.

“Until 2018, the last time we had a shutdown with unified government was under Jimmy Carter in 1980,” Berteau said. “That trend broke briefly in 2018, which started under unified gov’t and ended under a divided government. Then we had no shutdowns until last year, and all three of those were under a unified government.”

“Normally, I would say don’t worry about it, but it’s not normal anymore,” Berteau added.Neither House Speaker Mike Johnson, R-La., nor the White House has weighed in yet on the Senate’s spending bill. Once Congress returns from summer recess, they’ll be under a time crunch, with only 16 working days in the legislative calendar to advance a stopgap before the fiscal year ends Sept. 30. Other competing priorities, including a reconciliation bill and the SAVE Act, may take some oxygen during those proceedings.

“The possibility of an October shutdown, even in an election year, even in a unified government, that possibility is not zero,” Berteau said.

Even with apparent momentum in the Senate, government executives would be wise to dust off their shutdown plans, while government contractors who serve the government should prepare their pipelines and communication strategy for a possible shutdown. That’s because even if an October shutdown is avoided through a stopgap measure, the federal government faces the prospect of running out of money during a lame-duck Congress—midnight on Dec. 12 in the Senate’s current bill—wherein at least one of the House or Senate is favored to flip into Democratic control.

The scenario is eerily similar to the 2018 shutdown, which until last year held the record for the longest shutdown at 35 days. The 2018 shutdown began Dec. 22 when government funding ran out in President Trump’s first term, with Republicans in charge of the House and Senate. The crux of that shutdown was Senate Democrats’ opposition to more than $5 billion in funding for Trump’s border wall. That shutdown finally ended Jan. 25, 2019, three weeks after Democrats took control of the House under new Speaker Nancy Pelosi, following their successful flip of the chamber in November.

With three months to go until elections, most polls give Democrats better than an 80% chance to take the House in November, with Democrats only slight underdogs to take the Senate. There is a very real possibility that Republicans lose control of either the House or Senate in November, leaving a lame-duck Congress the responsibility of passing another budget bill to avoid a holiday shutdown.

“History says that when one House or both change hands in the midterms, they wait until a new Congress is seated before any final spending deals,” Berteau said.

That doesn’t mean a deal couldn’t happen. Both parties may have incentives to negotiate.

John Weiler, cofounder and executive director the IT Acquisition Advisory Council, said, “If Republicans lose the House as is expected, they will be moving to pass appropriations bills and a budget reconciliation package before the new Congress is sworn in, so they’ll be looking to make a deal with the Democrats on appropriations.”

Similarly, Weiler said, “Democrats should also be looking to strike a deal on appropriations because the Trump administration is happy to operate under a continuing resolution since it gives them more leverage and might be the last chance they have to set new spending levels versus ongoing CRs and budget showdowns.”

Until the president’s signature is dry on a spending bill, all bets are off.