A budget crisis is a situation in which the

legislative A legislature (, ) is a deliberative assembly with the legal authority to make laws for a political entity such as a country, nation or city on behalf of the people therein. They are often contrasted with the executive and judicial powers ...

and the

executive Executive ( exe., exec., execu.) may refer to: Role or title * Executive, a senior management role in an organization ** Chief executive officer (CEO), one of the highest-ranking corporate officers (executives) or administrators ** Executive dir ...

in a

presidential system A presidential, strong-president, or single-executive system (sometimes also congressional system) is a form of government in which a head of government (usually titled " president") heads an executive branch that derives its authority and l ...

deadlock and are unable to pass a budget. In presidential systems, the

legislature A legislature (, ) is a deliberative assembly with the legal authority to make laws for a political entity such as a country, nation or city on behalf of the people therein. They are often contrasted with the executive and judicial power ...

has the power to pass a

budget A budget is a calculation plan, usually but not always financial plan, financial, for a defined accounting period, period, often one year or a month. A budget may include anticipated sales volumes and revenues, resource quantities including tim ...

, but the executive often has a

veto A veto is a legal power to unilaterally stop an official action. In the most typical case, a president (government title), president or monarch vetoes a bill (law), bill to stop it from becoming statutory law, law. In many countries, veto powe ...

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 A government shutdown occurs when the legislative branch does not pass key bills which fund or authorize the operations of the executive branch, resulting in the cessation of some or all operations of a government. Government shutdowns in the U ...

in which the government temporarily suspends non-essential services until a budget is passed. Unlike parliamentary systems, where a

loss of supply Loss of supply occurs where a government in a parliamentary democracy using the Westminster System or a system derived from it is denied a supply of treasury or exchequer funds, by whichever house or houses of parliament or head of state is cons ...

would trigger the immediate fall of the government, a budget crisis can often lead to an extended stand-off. At the federal level in the

United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...

, 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. The term "budget crisis" could be used for situation where the executive branch freezes certain funds ( impoundment) despite the directions of the law on annual budget already passed by

parliament In modern politics and history, a parliament is a legislative body of government. Generally, a modern parliament has three functions: Representation (politics), representing the Election#Suffrage, electorate, making laws, and overseeing ...

. Politically, a budget crisis may develop in a situation of disagreement between

state State most commonly refers to: * State (polity), a centralized political organization that regulates law and society within a territory **Sovereign state, a sovereign polity in international law, commonly referred to as a country **Nation state, a ...

and

civil society Civil society can be understood as the "third sector" of society, distinct from government and business, and including the family and the private sphere.Constitutional economics Constitutional economics is a research program in economics and constitutionalism that has been described as explaining the choice "of alternative sets of legal-institutional-constitutional rules that constrain the choices and activities of econom ...

is a field of

economics Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interac ...

and

constitutionalism Constitutionalism is "a compound of ideas, attitudes, and patterns of behavior elaborating the principle that the authority of government derives from and is limited by a body of fundamental law". Political organizations are constitutional to ...

which describes and analyzes the specific interrelationships between constitutional issues and functioning of the economy including budget process. The standards of constitutional economics when used during annual budget planning, as well as the latter's transparency to the society, are of the primary guiding importance to the implementation of the

rule of law The essence of the rule of law is that all people and institutions within a Body politic, political body are subject to the same laws. This concept is sometimes stated simply as "no one is above the law" or "all are equal before the law". Acco ...

. Also, the availability of an effective court system, to be used by the

civil society Civil society can be understood as the "third sector" of society, distinct from government and business, and including the family and the private sphere.House of Representatives House of Representatives is the name of legislative bodies in many countries and sub-national entities. In many countries, the House of Representatives is the lower house of a bicameral legislature, with the corresponding upper house often ...

under Speaker

Newt Gingrich Newton Leroy Gingrich (; né McPherson; born June 17, 1943) is an American politician and author who served as the List of speakers of the United States House of Representatives, 50th speaker of the United States House of Representatives from 1 ...

and the administration of

President President most commonly refers to: *President (corporate title) * President (education), a leader of a college or university *President (government title) President may also refer to: Arts and entertainment Film and television *'' Præsident ...

Bill Clinton William Jefferson Clinton (né Blythe III; born August 19, 1946) is an American politician and lawyer who was the 42nd president of the United States from 1993 to 2001. A member of the Democratic Party (United States), Democratic Party, ...

quarrelled over apportionments. The failure of the House and Clinton to pass a continuing budget resolution to apportion temporary funds forced a closure of most non-essential United States government offices for several weeks.

United States federal government shutdown of 2013

History repeated for the United States in 2013. It again occurred with a Democratic President, Barack Obama. The Republican-controlled House of Representatives boycotted the budget to protest the Affordable Care Act. The failure of the House to pass a continuing budget resolution forced a closure of most non-essential United States government offices for several weeks in October 2013.

Uses in popular culture

In the episode "Shutdown" of ''

The West Wing ''The West Wing'' is an American political drama television series created by Aaron Sorkin that was originally broadcast on NBC from September 22, 1999, to May 14, 2006. The series is set primarily in the West Wing of the White House, where t ...

'', a budget crisis situation like the 1995-1996 federal government shutdown was depicted when Josiah Bartlet and Republican Speaker of the House Haffley disagree over budget cuts and shuts down the government for a number of days.

References

{{DEFAULTSORT:Budget Crisis Financial crises

Crisis A crisis (: crises; : critical) is any event or period that will lead to an unstable and dangerous situation affecting an individual, group, or all of society. Crises are negative changes in the human or environmental affairs, especially when ...

Political crisis

United States federal government shutdown of 2013

Uses in popular culture

See also

References