Government Shutdown - The Broken Budget Process

We are approaching 3 weeks of Federal Government Shutdown.

How did we get in this mess ? 

We will start with a basic review in plain language of the Federal Budget process.  We have added Footnote Citations at the end of this report for more detail on authority for this review.

The U.S. Constitution provides minimal guidance on the Federal Budget process.  Here are the basics that are provided: 

Congress has the single authority to raise revenue and decide how it is spent for the general welfare. (1)

• The Executive Branch (President) cannot spend federal money not appropriated by Congress. (2)  The President must administer spending in accordance with laws enacted by Congress.

• All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills. (3)

• This gives the House the first say in tax and spending bills, reinforcing that the People’s Chamber controls the government’s purse.

That is all the Constitution has to say.

How The Budget Process Has Evolved

The President must submit an annual budget to Congress by the first Monday in February for the following Fiscal Year which begins October 1 each year. (4)

This allows almost 8 Months for the Congress to pass a Final Appropriations Bill.  

The President’s Budget Proposal is presented to the House of Representatives which debates and passes a Bill sent to the Senate.

The Senate debates and makes modifications. 

The proposed Senate Bill is sent to a Reconciliation Committee between the House and Senate to resolve differences.

Upon Committee agreement, the reconciled Budget Bill is presented to Congress for passage of a Final Appropriations Bill.

This is a lengthy and arcane political process.  Congress has frequently failed to meet the deadline.

RECENT HISTORY

Unfortunately, recent history is full of examples with the Congress unable to manage Final Appropriation Bills.  This is due to partisan political divides that prevent agreement.  A leading example of the current dysfunction in the process of Congress.

When a Final Appropriations Bill is not passed in time, the Congress must pass a “Continuing Resolution” (CR) to fund the Government and prevent a Shutdown.

Over the last 20 Years, Congress has done 77 CR’s because a Final Bill was not passed.

Sometimes, Congress cannot even agree on a CR, resulting in 11 Government Shutdowns over the same period.

Current Situation

The Congress has not funded the new 2026 Fiscal Year with a Final Appropriations Bill.  Not a Surprise.

The House passed a CR to continue funding the Government at the same level as approved in the previous Fiscal Year (passed under the Biden Administration). Many observers refer to it as a Clean Bill, meaning no additions or subtractions from the previous year – just continue with funding as is.

Democrats seek to insert major spending additions to the CR.

The Senate has been blocked by Democrats from voting on the CR by invoking “cloture” rules.  Cloture requires 60 votes in the Senate to send a Bill to the floor for a vote.  When the Bill gets to the floor it can be passed by a simple majority.  Keeping a Bill off the floor is often referred to as a Filibuster.

Without a CR, the Executive Branch has no authority to spend money that is not appropriated. 

There are workarounds that keep basic government functions running.

Current law provides that “essential” government employees are required to work even though paychecks will be delayed until a budget bill is passed. 

The Next Report will cover alternative actions and suggested reforms for the Budget Process.

David Hollaender                                            October 20, 2025

Cogport.com

FOOTNOTES:

(1)  Constitution Article 1 (Section 8, Taxing and Spending Power):

“The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States.”

(2)  Constitution Article 1 (Section 9 - Appropriations Clause): 

“No federal spending can occur without a law passed by Congress, and the government must publish regular financial reports.”

(3)  Constitution Article I  (Section 7)

All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.

(4)  Budget and Accounting Act of 1921 and (31 U.S.C. § 1105(a))