Government Shutdown

DEFINITION of 'Government Shutdown'

The closure of non-essential offices of the government due to lack of approval on the government programs budget for the upcoming fiscal year. Approval is reached if Congress passes all of the spending bills regarding the federal budget. If an agreement is not achieved, a government shutdown will close many federally run operations, and halt work for federal employees unless they are considered essential. Some organizations still stay open by running on cash reserves, but once these run out, if a solution is not found, they will also close. The shutdown stays in effect until a compromise is reached and a budget bill is passed.

BREAKING DOWN 'Government Shutdown'

Government shutdowns have happened in the past and could affect any government processing functions such as passport applications, law enforcement recruitment and testing, or Social Security card applications. Any office which does not receive funding from Congress would continue. For example the Federal Reserve would continue operating, and the Post Office, being owned but not operated by the federal government, would also continue to run. Essential employees which typically continue working might include security, such as police and firefighters, intelligence agencies and soldiers.

RELATED TERMS
  1. Shutdown Point

    A point of operations where a firm is indifferent between continuing ...
  2. Federal Debt

    The total amount of money that the United States federal government ...
  3. Budget

    An estimation of the revenue and expenses over a specified future ...
  4. Balanced Budget

    A situation in financial planning or the budgeting process where ...
  5. Budget Deficit

    A status of financial health in which expenditures exceed revenue. ...
  6. Business To Government - B To G

    Professional affairs conducted between companies and regional, ...
Related Articles
  1. Markets

    A Look At National Debt And Government Bonds

    Learn the functions of the U.S. Treasury, and find out how and why it issues debt.
  2. Markets

    Breaking Down The U.S. Budget Deficit

    Find out why this particular piece of national financing gets so much attention from the media and investors.
  3. Markets

    Explaining Limited Government

    Limited government is a political viewpoint that favors few, if any, government controls on individuals and the economy.
  4. Personal Finance

    5 Reasons Why You Can't Stick To Your Budget

    You want to stay on track with your finances, but these fatal budgeting flaws may be holding you back.
  5. Personal Finance

    How Budgeting Works For Companies

    Learn how to break down and understand a corporate budget.
  6. Personal Finance

    The Complete Guide To Planning A Yearly Budget

    A personal budget is a useful tool for tracking your income and expenses.
  7. Markets

    The Current State of the U.S. Debt

    Discover the current state of U.S. national debt, whether it's increasing or decreasing, and what is projected for the next 10 years.
  8. Markets

    It's Not Illegal If The Government Does It

    The government allows itself the leeway to do many things that would be illegal for a private citizen or corporation.
  9. Markets

    The Treasury And The Federal Reserve

    Find out how these two agencies create policies to stimulate the economy in tough economic times.
  10. Personal Finance

    Budgeting Your Small Business

    Budgeting helps small businesses determine if they have enough money to fund operations, expand and generate income.
RELATED FAQS
  1. What are the pros and cons of a business temporarily closing once a shutdown point ...

    Learn about the differences between a shutdown point and going out of business, why it might make sense to shut down, and ... Read Answer >>
  2. What factors go into determining a business's shutdown point?

    Find out what a shutdown point is and what determines whether a business has reached their shutdown point, including multiproduct ... Read Answer >>
  3. Can state and local governments in the US run fiscal deficits?

    Discover why most state and local governments do not – or cannot – run fiscal deficits in the same manner as the U.S. federal ... Read Answer >>
  4. How does a nation's national debt affect the budget process?

    See how the national debt has traditionally impacted, or purported to impact, the budgeting process for the U.S. federal ... Read Answer >>
  5. How do open market operations affect the money supply of an economy?

    Understand how open market operation affect the supply of money in the economy and learn the specific ways the Federal Reserve ... Read Answer >>
  6. How do open market operations affect the overall economy?

    Understand how open market operations affect the overall economy. Learn how the Federal Reserve uses open market operation ... Read Answer >>
Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center