The federal government operates on annual funding appropriations, which Congress passes and the President signs into law. When these bills don’t pass or are stalled in Congress, the federal government is considered “shutdown.” During shutdowns, many discretionary services stop operating—from processing passports to issuing small business loans and conducting clinical trials for medical research. National parks and museums close, and food-safety inspections grind to a halt. The longer a shutdown lasts, the greater the disruption and the worse the economy suffers.
During a shutdown, the vast majority of federal employees are furloughed until appropriations are passed. But a few federal agencies are deemed “excepted” from the furlough because of their activities that are expressly authorized by law or necessary to protect life or property, such as border protection and in-hospital medical care. Mandatory spending also continues, such as Social Security and Medicare.
During a shutdown, the Securities and Exchange Commission, for example, instructs staff to turn off all lights and electronic devices not needed during the duration of a lapse in appropriations. The National Gallery of Art, on the other hand, says it will keep its doors open as long as it can tap reserves, and some agencies list “excepted” activities that could continue if they can’t find other ways to cover costs. This system is fraught with uncertainty and waste, and it displays a divided domestic image to international partners and rivals in a time of growing global competition.