1995–1996 United States federal government shutdowns

The United States federal government shutdown of 1995 and 1996 was the result of a conflict between Democratic President Clinton and the Republican-controlled Congress over funding for Medicare, education, the environment and public health. It took place after Clinton vetoed the spending bill which Congress sent him. Thereupon, the Federal government of the United States put non-essential government workers on furlough and suspended non-essential services from November 14 through November 19, 1995 and from December 16, 1995 to January 6, 1996 (see budget crisis). The major players were President Bill Clinton and the Speaker of the U.S. House of Representatives Newt Gingrich.

Background

When the previous fiscal year ended September 30, the president and the Republican-controlled Congress had not passed a budget. A majority of Congress members wanted additional cuts in education, environmental controls, and the EITC, as well as limiting the growth of Medicare. Their differences resulted from differing estimates of economic growth, medical inflation, and anticipated revenues.

Dear Mr. Wuthrich's class. Eat my bunghole. That is all. To keep the government running in times of deficit, it is necessary to periodically increase the limit of debt that the Treasury Department is authorized to accrue. In response to Clinton's unwillingness to make the budget cuts that the Republicans wanted, Newt Gingrich threatened to refuse to raise the debt limit, which would have caused the US Treasury to suspend funding other portions of the Government to avoid putting the country in default. Since Gingrich expected Clinton to fold, the result was a game of chicken between the two. Economically, the result would be a shaking of investor confidence and higher interest rates, which would increase the cost of borrowing money.

Since a new budget had not been approved, October 1 started with the entire federal government running on continuing resolution to authorize funding for departments until new budgets are approved. The existing continuing resolution was set to expire on November 13 at midnight, at which point non-essential government services would be forced to be shut down in order to prevent the country from defaulting on its debt. Congress made many attempts to pass cuts, which Clinton denounced as "backdoor efforts".

On November 13, major players on both sides, including Vice President Al Gore, Dick Armey, and Bob Dole, met once more to try to resolve the budget. In response to a discussion on Medicare, Clinton writes:

Armey replied gruffly that if I didn't give in to them, they would shut the government down and my presidency would be over. I shot back, saying I would never allow their budget to become law, "even if I drop to 5 percent in the polls. If you want your budget, you'll have to get someone else to sit in this chair!" Not surprisingly, we didn't make a deal.

The shutdown

On November 14, major portions of the federal government became inoperative. The Clinton administration later released figures detailing the costs of the shutdown, which included losses/savings of approximately $400 million in the form of payments to furloughed federal employees who did not report to work. The first budget shutdown was resolved with the passage of a temporary spending bill, but the underlying disagreement between Gingrich and Clinton was not resolved, resulting in the second shutdown.

A 2010 Congressional Research Service report summarized other details of the 1995-1996 government shutdowns, which it said impacted all sectors of the economy. Those included: health and welfare services for military veterans were curtailed; the Centers for Disease Control and Prevention stopped disease surveillance; new clinical research patients were not accepted at the National Institutes of Health; and toxic waste clean-up work at 609 sites was halted. Other impacts included: the closure of 368 National Park sites resulted in the loss of some seven million visitors; 200,000 applications for passports and 20,000 to 30,000 applications for visas by foreigners went unprocessed each day; U.S. tourism and airline industries incurred millions of dollars in losses; more than 20% of federal contracts, representing $3.7 billion in spending, were affected adversely.

Result

Daily News cover illustrated by Ed Murawinski.

The Republicans blamed Clinton for the shutdown, and Clinton blamed the Republicans. Public opinion favored the president; Clinton's approval rating fell precipitously during the shutdown, but once it had ended they rose to their highest since his election. The Republicans' support was further diminished two days later when Gingrich made a widely-reported complaint about being snubbed by Clinton; Tom DeLay called it "the mistake of [Gingrich's] life".

DeLay writes in his book No Retreat, No Surrender:

"He told a room full of reporters that he forced the shutdown because Clinton had rudely made him and Bob Dole sit at the back of Air Force One... Newt had been careless to say such a thing, and now the whole moral tone of the shutdown had been lost. What had been a noble battle for fiscal sanity began to look like the tirade of a spoiled child. The revolution, I can tell you, was never the same."

Gingrich's complaint gave rise to the perception of his behaving in a petty egotistical manner, and Clinton defended the seating arrangement as a courtesy to Gingrich, the back of the plane being closer to his pickup car. Later, the polls suggested that the event badly damaged Gingrich politically.

The shutdown also influenced the 1996 presidential election. Bob Dole, the Senate Majority Leader, was running for president in 1996. Because of his need to campaign, Dole wanted to solve the budget crisis in January 1996 despite the willingness of other Republicans to continue the shutdown unless their demands were met. In particular, as Gingrich and Dole had been seen as potential rivals for the 1996 presidential nomination, they had a tense working relationship. The shutdown has also been cited as having a role in Clinton's successful re-election in 1996.

Further reading

• CRS Report for Congress: Shutdown of the Federal Government: Causes, Effects, and Process