Budget crisis

Budget crisis

A budget crisis is an informal name for a situation in which the legislative and the executive in a presidential system deadlock and are unable to pass a budget. In presidential systems, the legislature has the power to pass a budget, but the executive often has a veto in which there are insufficient votes in the legislature to override. If no emergency provisions are made for the government's budget, a budget crisis may develop into a government shutdown in which the government temporarily suspends non-essential services until a budget is passed.

Unlike parliamentary systems, where a Loss of Supply would trigger resignations and new elections, a budget crisis can often lead to an extended standoff. At the federal level in the United States, a crisis can often be averted by a continuing resolution which appropriates funding at the same level as the previous budget.

A budget crisis can also occur if the legislative branch has a constitutionally mandated dissolution or suspension date and the budget hasn't been passed up to that point.

Examples

A particularly severe budget crisis occurred in the United States in November 1995, when the House of Representatives under Speaker Newt Gingrich and the administration of President Bill Clinton quarreled over apportionments. The failure of the House and Clinton to pass a continuing budget resolution to apportion temporary funds forced a closure of most nonessential United States government offices for several weeks.


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