Joseph V. Micallef is a best-selling military history and world affairs author, and keynote speaker.
From January 20 to January 23, 2018 the US government was officially shut down. The January shutdown was not the first time that the US government had suspended all non-essential government activities.
Since 1990, there have been 19 instances where the federal government's authorization to operate was suspended because of so called "funding gaps". In eight instances, these gaps resulted in non-essential federal employees being furloughed.
The US is unique among western democracies in that a disagreement over the federal government's budget can produce an impasse and a suspension of non-essential government operations. In parliamentary democracies the defeat of the government's budget would trigger an election, although a new election might not necessarily result in a resolution.
Typically, when a parliamentary government falls because of a budget dispute, it reverts automatically to the previous year's budget until a new budget can be approved.
US government shutdowns can occur for one of two reasons. First, the Congress fails to pass a budget or if the president declines to sign the budget bill into law and Congress cannot override the veto. The failure to pass a budget creates what is euphemistically called a "funding gap".
Secondly, Congress can opt to not raise the debt ceiling on the US government's debt. Once the government's borrowing reaches the current debt ceiling it is prohibited under federal law to issue additional debt or to make payments on pre-existing obligations. The failure to raise the debt ceiling, however, does not necessarily force a shutdown of any government services.
It's typically assumed that US government shutdowns are constitutionally mandated. That is not correct. Although the constitution clearly lays out the budget process and vests the Congress with the authority to approve the President's budget, it is vague on what happens if the Congress fails to agree on a budget. Presumably, the founding fathers could not conceive of a situation where the Congress would act so irresponsibly as to fail to pass a government budget.
The two different causes of a government shutdown, funding gaps and debt ceiling limits affect the government in different ways.
Debt Ceiling Limits
If Congress fails to raise the debt ceiling, the government is prohibited from selling new debt or to pay existing obligations. That means, in theory, the Treasury is not allowed to make payments on the existing federal debt.
Given that US government bonds are widely held throughout the international financial system, a US government default, in theory, could have far reaching and unforeseen consequences on the world's economy.
In practice, the US Treasury has the one advantage that other debt holders don't have; they can print money. From a practical standpoint the US government can't default on its debt, it can simply be prevented by Congressional inaction from making interest or redeeming its debt, in the short term, as it comes due.
While technically that's a default and would have serious consequences for the international monetary system, it just means that once the dispute was resolved the expectation would be that things would return to normal.
Of course, faced with a long-term impasse, a president could simply order the Treasury to make whatever payments it needed to make and to issue whatever debt was necessary. Such an action would be a violation of federal law and presumably would be grounds for the impeachment of a president.
Since the issue would likely be framed in terms of the constitutional division of power between the executive and the legislature, it would likely lead to a constitutional crisis as well, although that is not a given.
The constitution says nothing about a federal debt limit. Until 1917, there was no federal debt limit. Congress simply approved, by way of a bill, whatever debt the Treasury was issuing.
The entry of the US into World War I spurred a vast increase in the size of the Federal government and in its spending. Rather than approve each debt issue, Congress opted to simply set a ceiling on the total amount of federal debt the government could issue and left it to the Treasury to manage the size and terms of each specific debt offering.
According to the GAO, "the debt limit does not control or limit the ability of the federal government to run deficits or incur obligations, rather it is a limit on the ability to pay obligations already incurred." In other words, it does not limit the ability of the government to keep functioning, only to the amount of additional debt issued and its ability to pay its current obligations.
Moreover, the unfunded liabilities of, for example, government pensions or the obligation represented by all the leases on buildings occupied by the government are not affected by the debt limit or counted as part of it. The government is free to incur additional indebtedness, i.e., hire more employees or order more warships.
The Treasury could, in theory, simply extend the maturity of federal debt coming due without running afoul of the debt limit or replace it with a new issue of equal size. It could also, possibly, exchange federal debt for some other consideration.
Maybe, next time the Japanese Central Bank has a big stack of US bonds coming due we could offer to swap them Yellowstone instead of giving them cash. I wonder what we could get for California?
The last time the US government settled its debts by swapping land was when it traded land on the western frontier in lieu of back wages owed to soldiers that had fought in the Continental Army during the Revolutionary War.
The last debt ceiling was reached on September 30, 2017. Rather than raising the debt ceiling, Congress simply suspended it by passing Public Law 115-56. The White House has asked Congress to attach a debt limit suspension to the Continuing Resolution currently under consideration.
If Congress fails to do so or fails to raise the debt limit, it's expected that the government will run into a serious financial bind by sometime in March.
Origin and Consequence of Funding Gaps
Funding gaps are governed by the Anti-Deficiency Act of 1982. Precursors of the act go back to 1870. It was originally designed to prevent the executive branch from coercing Congress to allocate more funds by intentionally spending more money than had been allocated and risking a default or a government shutdown without additional funds.
The act specifies that in the event the Congress fails to pass, or the president fails to sign an appropriation to fund government operations, the federal government must begin a shutdown by furloughing non-essential government personnel; and curtailing the activities and services of government agencies.
The Act is based on Article One of the US Constitution (Section 9 Clause 7) that specifies that "No money shall be drawn from the treasury, but in consequence of appropriations made by law." The determination of what services are deemed to be essential is left to the Office of Management and Budget (OMB).
Obviously, what constitutes essential services is open to interpretation. Manning NORAD as an essential service is unlikely to be disputed. On the other hand, during the most recent shutdown, OMB decided that broadcasting the AFC and NFC championship games on the Armed Forces Radio and Television Service was an essential activity.
Moreover, services that might be deemed non-essential over a short shutdown might be deemed as essential over a longer shutdown.
In theory a president could instruct the OMB to decide that all the government's services were essential and to continue operations as usual. It's not clear what Congress could do about that determination. It could specify what departments of the federal government should remain open or close, but doing so would raise constitutional issues over Congressional encroachment on the executive branch's authority.
Government Shutdowns and National Security
Does all this political drama over funding the government have an impact on American national security? That's hard to say. In the short term, probably not. In the long term, it probably does, but indirectly.
First, American military personnel will continue to stay of the job regardless of the uncertainties on when they will get paid. The same is true of essential Homeland Security staff, of the nurses and doctors in the VA system or the myriads of critical jobs staffed by government personnel.
That says a lot about the dedication of military personnel and federal employees and a lot less about the country's political leaders.
The potential physical threat to the country is not increased due to a government shutdown, regardless of the cause. The borders are still defended, military posts are still manned. US Navy ships at sea will stay on station. The Air Force will still fly its patrols. The military will respond to a perceived threat as needed.
America's opponents know that and realize that an attack on the United States would be punished swiftly and decisively regardless of what budget impasse was consuming Washington politics.
On the other hand, responding to less obvious acts of aggression from such things as cyber warfare, or the deliberate release of biological agents might well require personnel that were initially considered to be non-essential. Likewise, responding to a financial crisis, even if it was not the result of an act of aggression, might require the use of federal employees that had been furloughed.
The presumption of course is that any government shutdown will only last for a short period of time; days perhaps a week or two but certainly not months. Invariably one political party gets blamed for the shutdown by the public.
When it becomes clear who the "winners" and "losers" of the current political drama are going to be, the "losers" have a vested interest in compromising and limiting the damage to themselves and their political party.
Are their long-term consequences from these kinds of budget impasses to America's standing in the world? That's harder to assess. It certainly underscores the dysfunctionality of American politics and the inability of the two major political parties to agree on any kind of bipartisan policy.
When it comes to foreign policy that can be an issue. America's international commitments are supposed to be binding on the United States regardless of whom is in power, not binding only on the political party which made that commitment.
Hyper-partisanship, a phenomenon that budget crises are a symptom off, makes the job of governing that much more difficult. It makes government less effective and it creates opportunities for America's enemies to intervene in American politics and to aggravate political dissension and social unrest.
That lesson hasn't been lost on the Kremlin. They have already demonstrated they have the tools to weaponize political dysfunction in the government against the US and its interests.
To the extent that this kind of political dysfunction and the political chaos its creates leads the rest of the world to see the US as a less reliable ally and partner, to less certainty about America's long-term goals and commitments, to more ambivalence about what Washington wants and where it is going, then yes, these budget crises have a direct impact of US national security.
Fundamentally, these kinds of budget impasses are manufactured political drama. True, budgets have always been political. Where the government spends its money says reams about its priorities. Notwithstanding the different policy agendas of the two political parties, however, there is no need to weaponize the budget process to this extreme for partisan political ends.
In doing so we undermine our own security and afford the opportunity to America's enemies to do the same.
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