© Getty Images

How is it supposed to work? - According to the Constitution, the government only spends money it collects through “appropriations made by law.” Laws must be passed by both the House and Senate as well as signed by the president.

© Getty Images

Government funding explained - Lawmakers in the House and Senate split government funding into 12 appropriations bills each fiscal year. Committees in both chambers then draft these bills, which determine how federal funds are allocated to various government departments, agencies, and programs.

© Getty Images

Funding process -

Then, the House and Senate are supposed to consider these bills, reconcile any differences, and send the final request to the president. This work is supposed to be done by September 30 since the government’s fiscal year begins on the first of October.

© Shutterstock

How many bills were passed into law last year? - Zero bills were passed last year. The House did pass an initial version of five of the 12 appropriations bills. However, the Senate didn’t pass any, so none of the appropriations bills came close to being signed into law.

© Shutterstock

When was the last time an appropriations bill happened? - Lawmakers haven’t passed any appropriations bills on time and sent them to the president’s desk since 2019 when five made it to that stage.

© Shutterstock

Implications - These bills keep the government running until all appropriations are consolidated into a large omnibus bill, typically passed several months after the fiscal year has begun.

© Shutterstock

History of appropriation bills - In the decades leading up to 2019, only a few appropriations bills were consistently passed on time each year. However, in the nearly half-century since this process was established, Congress has fully completed the appropriations process only four times—in 1977, 1989, 1995, and 1997.

© Getty Images

Appropriations bills that pass - Even if the appropriations bills didn’t pass, the work of these committees can ultimately be reflected in spending bills that do pass.

© Shutterstock

What happens when Congress can't pass normal spending bills? - Lawmakers often pass a temporary funding bill, known as a "continuing resolution" (CR), which is sometimes called a "stopgap" measure.

© Getty Images

What's wrong with the system? - These continuing resolutions often simply buy time. Instead of implementing funding for the new year, they just extend the previous year’s funding.

© Shutterstock

What's wrong with the system? -

There’s another aspect that we should consider. Continuing resolutions will often come at the last minute, alongside fears of a government shutdown or a lapse in funding.

© Shutterstock

What do last-minute resolutions mean? - When lawmakers review the large omnibus spending bill that combines all the appropriations, they are often asked to vote days after these massive bills are introduced. The rushed timeline creates pressure to pass the legislation quickly.

© Shutterstock

How often does Congress need extra time to fund the government? - Almost every year, Congress needs extra time. The current budget process has been in place since the late 1970s and in almost 50 fiscal years, there has been at least one continuing resolution in all but three.

© Shutterstock

How long can temporary funding bills last? -

Temporary funding bills can last for a day or longer depending on the year and the political climate.

© Shutterstock

How long have temporary funding bills lasted historically? - Since the 1977 fiscal year, 200 continuing resolutions have been put in place that funded all or part of the government for an average of 137 days.

© Getty Images

The most recent fiscal year -

For the most recent fiscal year, which was set to begin in October 2023, President Joe Biden didn’t sign a funding bill until March 2024.

© Getty Images

Why does it take so long? - A great deal of politicking occurs around these spending bills each year, with political maneuvering and strategies often used to gain power or influence decisions, sometimes involving behind-the-scenes actions or manipulation.

© Getty Images

What is a shutdown? - The word "shutdown" is a bit of a misnomer here, as the entire government doesn't stop or shut down. However, lapses can delay paychecks for federal workers and temporarily shutter some government services.

© Shutterstock

What happens if there’s a shutdown? - According to the Congressional Budget Office, the 2018-2019 partial government shutdown, which was the longest in history at five weeks, did not impact all federal departments but resulted in a reduction of US$11 billion in economic output.

© Shutterstock

What are the sources of revenue for the federal government? - Over 50% of federal revenue comes from individual income taxes, 9% from corporate income taxes, and another 30%  from payroll taxes that fund social insurance programs. The rest comes from different sources.

© Shutterstock

Individual income tax - Since 1944, the individual income tax has been the largest source of federal revenue, making up 54% of total revenue and 10.5% of GDP in 2022—the highest level ever recorded.

© Shutterstock

Future predictions of individual income tax - According to Congressional Budget Office projections, individual income tax revenue is expected to decline to 8.8% of GDP by 2025 and an average of 9.6% in the following years.

© Shutterstock

Corporate income tax - In 2022, the tax on corporate profits made up 9% of the federal government’s revenue.

© Shutterstock

More on corporate income taxes -

Tax revenue has generally declined from an average of 3.7% of GDP in the late 1960s to an average of just 1.5% over the past decade, with its share rising slightly to 1.7% of GDP in 2022.

© Shutterstock

Social insurance (payroll) taxes - Payroll taxes funding Social Security and Medicare made up the largest portion of social insurance, totaling 30% of federal revenue in 2022. Other sources include taxes for the railroad retirement system, unemployment insurance, and federal workers’ pension contributions.

© Shutterstock

More about social insurance (payroll) taxes - Social insurance receipts increased from 1.6% of GDP in 1950 to over 6% since the 1980s, largely due to the creation of Medicare and rising Social Security taxes. They temporarily fell to 5.3% of GDP in 2011-2012 following a Social Security tax cut.

© Shutterstock

Federal excise taxes -

Excise taxes on goods and services, like gasoline and cigarettes, contributed 1.8% of federal revenue in 2022 but have steadily declined from 1.7% of GDP in the late 1960s to 0.4% in 2022.

© Shutterstock

Other revenues -

The US government also collects revenues from estate and gift taxes, customs duties, and earnings from the Federal Reserve System.

Sources: (CNN Politics) (Tax Policy Center) (Britannica)

See also: Generational differences in US politics today

© Shutterstock