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I promised a couple of people that I’d explain a few things re: the partial government shutdown and who it does and doesn’t affect. If you aren’t interested in politics, feel free to skip.

The most important thing to know is that there is not a single budget bill. Instead, there a dozen different appropriations bills. Five of those were signed by the end of September – which is interesting, because the fiscal year starts on October 1st though it’s rare for Congress to pass the bills by then (much less for the President to sign them). So, for example, the Department of Defense, the Department of Labor, and the Department of Education aren’t shut down. By the way, you may have heard of an omnibus spending bill. That’s what it’s called when the various appropriations bills are combined into one. More common is what is called a minibus, which combines some, but not all, of the appropriations bills. While it seems like those would be good things, the problem is that it can hold some agencies hostage to an issue with one. Right now, the issue has to do with the Department of Homeland Security, but the shutdown also impacts Agriculture, Science, Justice, Commerce, Interior, Transportation, etc.

For some things (defense and intelligence), there are two types of budget-related bills in Congress – appropriations and authorization. Appropriations tells you how much you can spend and authorization tells you what you can use that money for. The tricky thing here is that if even a single dollar is authorized, the agency can spend up to the amount of the appropriation. The way I like to explain this is to imagine that you were asking your parents for tuition money for college. They want you to study international real estate finance, but you want to study underwater basket weaving. They authorize you to take Real Estate 101, but you can’t sign up for it until they also give you an appropriation for the tuition money. Good luck finding the lab fees for wicker and scuba gear.

Now, the impact on contractors is more complicated. See, some appropriations cover multiple years. What matters then is whether the money for a contract has already been obligated. The other thing to be aware of is that the period of a contract does not necessarily match the federal fiscal year. If a company is already on contract for services from January through December, the failure to renew an appropriation in August won’t matter – until the end of December.


The even bigger issue with shutdowns that people don’t talk about is collateral damage. That is, government employees who aren’t working and aren’t getting paid are also not going out to lunch near their offices and getting haircuts and shopping for non-essentials on their way home. That’s a huge impact on a lot of people in places with government workers.

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