Answer to Question #116828 in Macroeconomics for Rubi Lopez

Question

How can disagreements over discretionary spending lead to a government shutdown?

Answer 1

Government shutdowns refer to a funding gap period that causes a full or partial shutdown of government operations and agencies.Caused when there is a failure to pass a funding legislation to finance the government for its next fiscal year or a temporary a temporary funding measure.

If the government does not pass a budget resolution that sets overall spending and tax targets,and cannot agree on a spending bill for the next year ,the president and congress sometimes enact a short-term(continuing resolution) "CR" to fund discretionary programs,typically at the previous year's levels,until they can agree on new spending.If they don't pass a spending bill or a CR,the government shuts down though vital services like security/defense continue.