Yet, as familiar as shutdowns now seem in our fractured politics, the idea of a “government shutdown” is a relatively new one in American history. The first true government shutdown—when defined as federal employees being furloughed because the government is unable to pay them—didn’t happen until 1980. The cause was a new interpretation of an 1870 law—one that upended how the government had functioned for close to two centuries. This history reveals that government shutdowns are not forced on us by the Constitution or even federal law—and suggests that there are multiple ways out of this recurring modern constitutional crisis.
The Constitution declares that “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law,” but this was not really an obstacle for presidents before the 1870s, much to the ire of many in Congress.
Until the Civil War, the federal government routinely relied on what one historian later dubbed “coercive deficiency,” where executive branch agencies like the military allowed themselves to spend more money than their appropriations, trusting Congress to make up the difference.
Budget “hawks” were deeply skeptical of this practice, with Virginia Senator John Randolph declaring in 1806 that “[the executive branch is] like a saucy boy who knows his grandfather will gratify him, and over-turns the sum allowed him at pleasure.” But skeptics like Randolph could do little to dislodge the practice. In 1807, during a war crisis with Britain, even Thomas Jefferson, a skeptic of government debt, authorized the Army and Navy to spend money to prepare for war, expecting (rightly) that the anti-British feeling in the country would force Congress to pay for it.
In 1809, Congress tried to end the practice by passing a law stipulating that “Appropriations shall be applied only to the objects for which the appropriations were made except as otherwise provided by law.” Executive branch agencies, however, continued to routinely overspend and implicitly dared legislators not to pay the bills.