United States federal government shutdown of 1995 and 1996

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 that 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. The major players were President Bill Clinton and Speaker of the U.S. House of Representatives Newt Gingrich.

Background

When the previous fiscal year ended on September 30, 1995, the president and the Republican-controlled Congress had not passed a budget. A majority of Congress members and the House Speaker, Newt Gingrich, had promised to slow the rate of government spending; however, this conflicted with the president's objectives for education, the environment, Medicare, and public health.^[1] According to Clinton's autobiography, their differences resulted from differing estimates of economic growth, medical inflation, and anticipated revenues.^[2]

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.^[2]

Since a budget for the new fiscal year had not been approved, on October 1 the entire federal government operated on a continuing resolution authorizing interim funding for departments until new budgets were approved. The existing continuing resolution was set to expire on November 13 at midnight, at which time non-essential government services would be required to cease operations in order to prevent the country from defaulting on its debt. Congress had passed a continuing resolution for funding and a bill for debt limit extension, each of which was vetoed by Clinton,^[1][3] who denounced them as "backdoor efforts" to make cuts.^[2]

On November 13, Republican and Democratic leaders, including Vice President Al Gore, Dick Armey, and Bob Dole, met once more to try to resolve the budget. They were unable to reach an agreement.^[2][4]

Event

On November 14, major portions of the federal government suspended operations.^[3] The Clinton administration later released figures detailing the costs of the shutdown, which included payments of approximately $400 million to furloughed federal employees who did not report to work.^[5]

The first budget shutdown concluded with Congress enacting a temporary spending bill, but the underlying disagreement between Gingrich and Clinton was not resolved, leading to the second shutdown.

A 2010 Congressional Research Service report summarized other details of the 1995-1996 government shutdowns, indicating the shutdown impacted all sectors of the economy. 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.^[6]

Result

Daily News cover illustrated by Ed Murawinski

Clinton's approval rating fell significantly during the shutdown. According to media commentators, this indicated that the general public blamed the president for the government shutdown.^[7] However, once it had ended his approval ratings rose to their highest since his election.

During the crisis, Gingrich made a complaint at a press breakfast that, during a flight to and from Yitzhak Rabin's funeral in Israel, Clinton had not taken the opportunity to talk about the budget and Gingrich had been directed to leave the plane via the rear door. The perception arose that the Republican stance on the budget was partly due to this "snub" by Clinton^[8] and media coverage reflected this perception, including an editorial cartoon which showed Gingrich having a temper tantrum.^[9] Opposing politicians used this opportunity to attack Gingrich's motives for the budget standoff.^[10][11] Later, the polls suggested that the event damaged Gingrich politically^[12] and he referred to his comments as the "single most avoidable mistake" as Speaker.^[13]

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.^[14][15] The shutdown has also been cited as having a role in Clinton's successful re-election in 1996.^[15]

According to Gingrich, positive impacts of the government shutdown included the balanced-budget deal in 1997 and the first four consecutive balanced budgets since the 1920s. In addition, he has stated that the first re-election of a Republican majority since 1928 was due in part to the Republican party's hardline on the budget.^[16][17] The Republican Party lost net eight seats in the House 1996 elections, but retained a 228-207 seat majority. In the Senate, Republicans gained two seats.

On Nov 14, 1995, at the start of the crisis, the DJIA closed at 4923. By the time the crisis ended on Jan 6, 1996 the DJIA closed at 5181.

References

1. ^ ^{a b} Alan Fram (November 13, 1995). "Clinton Vetoes Borrowing Bill -- Government Shutdown Nears As Rhetoric Continues To Roil". The Seattle Times. Associated Press. http://community.seattletimes.nwsource.com/archive/?date=19951113&slug=2152355. Retrieved March 3, 2011. 
2. ^ ^{a b c d} Clinton, Bill (2004). My Life. Alfred A. Knopf. pp. 673, 680–684. ISBN 0-375-41457-6. 
3. ^ ^{a b} Sharon S. Gressle (November 8, 1999). "Shutdown of the Federal Government: Causes, Effects, and Process". CRS Report for Congress. National Library for he Environment. http://www.rules.house.gov/archives/98-844.pdf. 
4. ^ "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." Clinton describing the mood of the discussion. Page 681, My Life.
5. ^ "Government Shutdown? US Government Info/Resources". About.com. 1999-10-24. http://usgovinfo.about.com/library/weekly/aa102499p2.htm. Retrieved 2007-06-03. 
6. ^ ""Shutdown of the Federal Government: Causes, Processes, and Effects" at Journalist's Resource.org". http://journalistsresource.org/studies/government/politics/shutdown-federal-government/. 
7. ^ Yglesias, Matt (November 1, 2010). "Did the 1995 Government Shutdown Boost Public Approval of Bill Clinton?". ThinkProgress. http://yglesias.thinkprogress.org/2010/11/did-the-1995-government-shutdown-boost-public-approval-of-bill-clinton/. Retrieved April 3, 2011. 
8. ^ DeLay, Tom; Stephen Mansfield. No Retreat, No Surrender: One American's Fight. pp. 112. 
9. ^ http://z.about.com/d/politicalhumor/1/0/_/7/newt_baby.jpg
10. ^ Hollman, Kwame (1996-11-20). "The State of Newt". PBS. http://www.pbs.org/newshour/bb/congress/november96/newtb_11-20.html. Retrieved 2006-08-14. 
11. ^ Murdock, Deroy (2000-08-28). "Newt Gingrich's Implosion". National Review. http://www.nationalreview.com/comment/commentprint082800d.html. Retrieved 2006-08-15. 
12. ^ Langer, Gary (2007-09-28). "Gingrich as Speaker: Remembering When". ABC News. http://blogs.abcnews.com/thenumbers/2007/09/gingrich-as-spe.html. Retrieved 2007-09-28. 
13. ^ Gingrich, Newt (May 1998). Lessons Learned the Hard Way. New York: HarperCollins. pp. 42–46. ISBN 978-0060191061. 
14. ^ Steinhauer, Jennifer (November 3, 2010). "John Boehner, New House Speaker, Will Face Tough Challenges". The New York Times. http://www.nytimes.com/2010/11/03/us/politics/03boehner.html. 
15. ^ ^{a b} George Stephanopoulus, All Too Human, Back Bay Books, 2000. p. 406-407
16. ^ Gingrich, Newt (February 25, 2011). "If it comes to a shutdown, the GOP should stick to its principles". The Washington Post. http://www.washingtonpost.com/wp-dyn/content/article/2011/02/25/AR2011022502924_2.html?sid=ST2011022503108. Retrieved February 28, 2011. 
17. ^ Philip Klein (July/August 2010). "Starving ObamaCare". The American Spectator. http://spectator.org/archives/2010/08/06/starving-obamacare/print. 

Further reading

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