{"id":750,"date":"2026-08-08T09:37:34","date_gmt":"2026-08-08T09:37:34","guid":{"rendered":"https:\/\/marketrelocationreport.com\/?p=750"},"modified":"2026-08-08T09:37:34","modified_gmt":"2026-08-08T09:37:34","slug":"what-history-tells-us-about-the-potential-government-shutdown","status":"publish","type":"post","link":"https:\/\/marketrelocationreport.com\/?p=750","title":{"rendered":"What history tells us about the potential government shutdown"},"content":{"rendered":"
\n

The Senate is working to pass a bipartisan funding bill before a summer recess that would fund the federal government through Dec. 11, prevent a potential government shutdown during November\u2019s midterm elections and avoid a repeat of last year, when agencies began the fiscal year with a\u00a0record 43-day shutdown.<\/p>\n

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Senators easily cleared the first in a series of procedural motions Monday by a vote of 89-4, fast-tracking the bill for final vote before the Senate recesses for five weeks. Senate Majority Leader John Thune, R-S.D.,\u00a0all but promised Wednesday that senators would delay the recess\u2014scheduled for Friday\u2014until they navigate a \u201ctrain wreck\u201d of legislation that includes the spending bill.<\/p>\n

The bill has several key differences from the one\u00a0the House passed on July 21\u2014which Senate Democrats declared dead on arrival\u2014including no new funding for immigration agencies and language temporarily blocking the Trump administration from putting political appointees in charge of federal grant approvals. Unlike the House bill, the Senate bill does not include $1 billion for the Trump-class battleship program, and it would provide government funding one week longer than the House bill, which would fund agencies through Dec. 4.<\/p>\n

To be signed into law and avoid a shutdown, one chamber would have to adopt the other\u2019s bill, or appropriators will need to develop a compromise bill that both chambers pass and President Trump signs.<\/p>\n

On its face, Congress\u2019 unusual early efforts to avoid a shutdown dramatically decreased the odds of a shutdown\u2014at least in October. On prediction market\u00a0Kalshi, odds of an Oct. 1 shutdown now sit at 25%, down from 64% last month.\u00a0\u00a0<\/p>\n

\u201cIt\u2019s good they\u2019re getting ahead of it. I cannot recall a time when a CR was introduced in July,\u201d said David Berteau, a longtime budget expert and former high-ranking Pentagon appointee in both the Reagan and Obama administrations. \u201cI don\u2019t really know what the parties want, but the members want to not have a shutdown.\u201d<\/p>\n

That should alleviate some angst for federal employees and government contractors who\u2019ve dealt with three partial or full government shutdowns in the past year. Hundreds of thousands of federal employees missed several consecutive pay periods, forcing many to take odd jobs or seek loans to pay bills. Many contractors, meanwhile,\u00a0weren\u2019t paid at all during the shutdown, since they are not legally entitled to backpay. Millions of Americans suffered too, with\u00a0fewer domestic flights and hours-long security lines at airports, disruptions to public services and tens of billions of dollars in\u00a0lost economic output.<\/p>\n

In decades past, chances of a shutdown with a government and presidency under the same party\u2014during a critical midterm election\u2014would have been exceedingly low. Lately, though, there are no sure bets.\u00a0\u00a0<\/p>\n

What history says<\/strong><\/p>\n

Given recent history, Berteau said it\u2019s anything but a done deal.<\/p>\n

Until 2018, every government shutdown for the previous four decades occurred under a divided government, when either the majority in the House or Senate was held by a different political party than the presidency.<\/p>\n

\u201cUntil 2018, the last time we had a shutdown with unified government was under Jimmy Carter in 1980,\u201d Berteau said. \u201cThat trend broke briefly in 2018, which started under unified gov\u2019t and ended under a divided government. Then we had no shutdowns until last year, and all three of those were under a unified government.\u201d<\/p>\n

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\u201cNormally, I would say don\u2019t worry about it, but it\u2019s not normal anymore,\u201d Berteau added.Neither House Speaker Mike Johnson, R-La., nor the White House has weighed in yet on the Senate\u2019s spending bill. Once Congress returns from summer recess, they\u2019ll be under a time crunch, with only 16 working days in the legislative calendar to advance a stopgap before the fiscal year ends Sept. 30. Other competing priorities, including a reconciliation bill and the SAVE Act, may take some oxygen during those proceedings.<\/p>\n

\u201cThe possibility of an October shutdown, even in an election year, even in a unified government, that possibility is not zero,\u201d Berteau said.<\/p>\n

Even with apparent momentum in the Senate, government executives would be wise to dust off their shutdown plans, while government contractors who serve the government should prepare their pipelines and communication strategy for a possible shutdown. That\u2019s because even if an October shutdown is avoided through a stopgap measure, the federal government faces the prospect of running out of money during a lame-duck Congress\u2014midnight on Dec. 12 in the Senate\u2019s current bill\u2014wherein at least one of the House or Senate is favored to flip into Democratic control.<\/p>\n

The scenario is eerily similar to the 2018 shutdown, which until last year held the record for the longest shutdown at 35 days. The 2018 shutdown began Dec. 22 when government funding ran out in President Trump\u2019s first term, with Republicans in charge of the House and Senate. The crux of that shutdown was Senate Democrats\u2019 opposition to more than $5 billion in funding for Trump\u2019s border wall. That shutdown finally ended Jan. 25, 2019, three weeks after Democrats took control of the House under new Speaker Nancy Pelosi, following their successful flip of the chamber in November.<\/p>\n

With three months to go until elections, most\u00a0polls give Democrats better than an 80% chance to take the House in November, with Democrats only slight underdogs to take the Senate. There is a very real possibility that Republicans lose control of either the House or Senate in November, leaving a lame-duck Congress the responsibility of passing another budget bill to avoid a holiday shutdown.<\/p>\n

\u201cHistory says that when one House or both change hands in the midterms, they wait until a new Congress is seated before any final spending deals,\u201d Berteau said.<\/p>\n

That doesn\u2019t mean a deal couldn\u2019t happen. Both parties may have incentives to negotiate.<\/p>\n

John Weiler, cofounder and executive director the IT Acquisition Advisory Council, said, \u201cIf Republicans lose the House as is expected, they will be moving to pass appropriations bills and a budget reconciliation package before the new Congress is sworn in, so they\u2019ll be looking to make a deal with the Democrats on appropriations.\u201d<\/p>\n

Similarly, Weiler said, \u201cDemocrats should also be looking to strike a deal on appropriations because the Trump administration is happy to operate under a continuing resolution since it gives them more leverage and might be the last chance they have to set new spending levels versus ongoing CRs and budget showdowns.\u201d<\/p>\n

Until the president\u2019s signature is dry on a spending bill, all bets are off.<\/p>\n

Read more Key oversight and federal workforce nominees confirmed by Senate<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Kicking the funding can down the road would prevent a government shutdown during the November midterms, but a flip of either the House or Senate would increase the odds of a prolonged December shutdown.<\/p>\n","protected":false},"author":1,"featured_media":749,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-750","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-management"],"yoast_head":"\nWhat history tells us about the potential government shutdown - Market Relocation Report<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/marketrelocationreport.com\/?p=750\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What history tells us about the potential government shutdown - 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