United States Federal Government Shutdown Of 1990
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shutdown Shutdown or shut down may refer to: * Government shutdowns in the United States * Shutdown (computing) * Shutdown (economics) * Shutdown (nuclear reactor) Arts and entertainment Music * "Shut Down" (The Beach Boys song), 1963 * ''Shut Down Volu ...
from Saturday, October 6, until Monday, October 8, 1990. It stemmed from the fact that a deficit reduction package negotiated by President
George H. W. Bush George Herbert Walker BushSince around 2000, he has been usually called George H. W. Bush, Bush Senior, Bush 41 or Bush the Elder to distinguish him from his eldest son, George W. Bush, who served as the 43rd president from 2001 to 2009; pr ...
contained tax increases, despite his campaign promise of "
read my lips: no new taxes "Read my lips: no new taxes" is a phrase spoken by American presidential candidate George H. W. Bush at the 1988 Republican National Convention as he accepted the nomination on August 18. Written by speechwriter Peggy Noonan, the line was the mo ...
", leading to a revolt led by
House Minority Whip Party leaders of the United States House of Representatives, also known as floor leaders, are congresspeople who coordinate legislative initiatives and serve as the chief spokespersons for their parties on the House floor. These leaders are ele ...
Newt Gingrich Newton Leroy Gingrich (; né McPherson; born June 17, 1943) is an American politician and author who served as the 50th speaker of the United States House of Representatives from 1995 to 1999. A member of the Republican Party, he was the U ...
that defeated the initial appropriations package. Because the shutdown occurred over a weekend, the effects of the shutdown were lessened, with the
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and the Smithsonian museums being the most visible closures. Around 2,800 workers were furloughed, with the government losing $2.57 million in lost revenue and back wages.


Background

The shutdown stemmed from disagreements over the 1991 United States federal budget, whose fiscal year was to begin on October 1, 1990. Over the course of the prior year, President
George H. W. Bush George Herbert Walker BushSince around 2000, he has been usually called George H. W. Bush, Bush Senior, Bush 41 or Bush the Elder to distinguish him from his eldest son, George W. Bush, who served as the 43rd president from 2001 to 2009; pr ...
negotiated with Congressional leaders on a deficit reduction plan. At the time, Congress was controlled by Democrats. In June, Bush announced support for tax increases to break a stall in the negotiations, abandoning his campaign promise of "
read my lips: no new taxes "Read my lips: no new taxes" is a phrase spoken by American presidential candidate George H. W. Bush at the 1988 Republican National Convention as he accepted the nomination on August 18. Written by speechwriter Peggy Noonan, the line was the mo ...
". On September 30, the day before the beginning of
fiscal year A fiscal year (or financial year, or sometimes budget year) is used in government accounting, which varies between countries, and for budget purposes. It is also used for financial reporting by businesses and other organizations. Laws in many ...
1991, a deal was announced that would reduce the federal deficit by $500 billion over five years, including $134 billion in new taxes and making deep cuts to Medicare, with a temporary
continuing resolution In the United States, a continuing resolution (often abbreviated to CR) is a type of appropriations legislation. An appropriations bill is a bill that appropriates (gives to, sets aside for) money to specific federal government departments, ag ...
to fund the government through October 5. However, the new taxes in the bill were opposed by conservative Republicans led by
House Minority Whip Party leaders of the United States House of Representatives, also known as floor leaders, are congresspeople who coordinate legislative initiatives and serve as the chief spokespersons for their parties on the House floor. These leaders are ele ...
Newt Gingrich Newton Leroy Gingrich (; né McPherson; born June 17, 1943) is an American politician and author who served as the 50th speaker of the United States House of Representatives from 1995 to 1999. A member of the Republican Party, he was the U ...
. The fact that deal was supported by the President and Congressional leaders from both parties after long negotiations, with Gingrich walking out during a televised event in the
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, caused
House Minority Leader Party leaders of the United States House of Representatives, also known as floor leaders, are congresspeople who coordinate legislative initiatives and serve as the chief spokespersons for their parties on the House floor. These leaders are ele ...
Robert H. Michel Robert Henry Michel (; March 2, 1923 – February 17, 2017) was an American Republican Party politician who was a member of the United States House of Representatives for 38 years. He represented central Illinois' 18th congressional distric ...
to characterized the revolt as " a thousand points of spite". In addition, liberal Democrats opposed the bill's cuts to benefit programs. In response to the opposition, Bush made a nationally televised address warning of the negative effects of failing to reduce the deficit. The deal was defeated in the
House of Representatives House of Representatives is the name of legislative bodies in many countries and sub-national entitles. In many countries, the House of Representatives is the lower house of a bicameral legislature, with the corresponding upper house often c ...
in the early morning of October 5. Congress passed a second continuing resolution, but it was
veto A veto is a legal power to unilaterally stop an official action. In the most typical case, a president or monarch vetoes a bill to stop it from becoming law. In many countries, veto powers are established in the country's constitution. Veto ...
ed by Bush, causing a lapse in funding authority beginning on Saturday, October 6.


Shutdown

Because the shutdown occurred during a weekend, the most visible effect was the closure of
National Parks A national park is a natural park in use for conservation purposes, created and protected by national governments. Often it is a reserve of natural, semi-natural, or developed land that a sovereign state declares or owns. Although individual ...
and the Smithsonian museums. Although none of the appropriations bills had been passed, not all government agencies actually shut down. Full shutdowns occurred in the
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,
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,
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, and
Department of Housing and Urban Development The United States Department of Housing and Urban Development (HUD) is one of the executive departments of the U.S. federal government. It administers federal housing and urban development laws. It is headed by the Secretary of Housing and Urb ...
, and partial shutdowns occurred in the
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,
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, and the Departments of
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, Interior, and
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. According to a study by the
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, Interior (which includes the National Park Service) furloughed about 2,800 workers, the Library of Congress around 100, and the other agencies fewer than 10 each.


Resolution and aftermath

In the morning of Tuesday, October 9, a revised deal was announced that would reduce the cuts to Medicare and would cut
capital gains taxes A capital gains tax (CGT) is the tax on profits realized on the sale of a non-inventory asset. The most common capital gains are realized from the sale of stocks, bonds, precious metals, real estate, and property. Not all countries impose a c ...
in return for higher
income taxes An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Tax ...
on the wealthy. A new continuing resolution lasting until October 19 was passed to allow for the bill to be finalized, allowing workers to return to work. The continuing resolution was passed by the Senate on a
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, and was passed by the House 362–3 at around 1:30 AM. The deal was driven by a perception that the public was blaming Congress for the shutdown rather than the President. Had the shutdown lasted into Tuesday, 2.4 million federal workers would have been furloughed. The final deficit reduction deal, the
Omnibus Budget Reconciliation Act of 1990 The Omnibus Budget Reconciliation Act of 1990 (OBRA-90; ) is a United States statute enacted pursuant to the budget reconciliation process to reduce the United States federal budget deficit. The Act included the Budget Enforcement Act of 1990 whic ...
, derived 28% of its savings from tax increases including an increase in the top income tax rate, but the gasoline tax was not raised. Trims in Medicare and discretionary spending were also included in the deal. Only 47 of the 176 House Republicans voted for the final package. The defeat of the initial bill was seen as giving Democrats more leverage in negotiating the final deal. Bush initially announced that federal workers would not be paid for the furlough days, but Congress passed legislation granting them back pay due to the threat of lawsuits. The cost of the shutdown was $1.68 million, mainly as a result of lost revenue, not including back pay amounting to an additional $837,000. The shutdown was later seen as the first high-visibility example of Gingrich's political power, showing his willingness to weaken the President and his own party leaders to try to stop them from making compromises with Democrats. The revolt was partially responsible for negative perceptions of the Bush presidency, as they could not use Reagan's strategy of claiming that Congressional Democrats were responsible for the tax increases. During his 1992 reelection campaign, Bush called the deal a mistake.


See also

*
Government shutdowns in the United States In the United States, government shutdowns occur when there is a failure to enact Appropriations bill (United States), funding legislation to finance the government for its next fiscal year or a temporary funding measure. Ever since a 1980 inte ...


References

{{U.S. government shutdowns 1990 in American politics Government shutdowns in the United States Presidency of George H. W. Bush