Why in news?

US President Donald Trump signed a stopgap bill recently, ending the longest government shutdown in US history. A shutdown occurs when the government runs out of funds, forcing federal agencies to halt operations and hurting the economy.

Since the budget system began in 1976, the US has faced 11 shutdowns, with the latest lasting 43 days — surpassing the previous record of 34 days during Trump’s earlier term.

What’s in Today’s Article?

• Why Government Shutdowns Happen in the US but Not in India?
• How the US Budget Cycle Works?
• Rising US Budget Deficit
• Presidential vs Parliamentary System: A Warning for India

Why Government Shutdowns Happen in the US but Not in India?

• A US government shutdown occurs not because the country runs out of money, but because the government loses legislative permission to tax and spend.
• Unlike India — where the Executive is part of Parliament and a budget failure forces the government to resign — the US President is separate from Congress.
• This separation means the President cannot ensure passage of the budget and need not resign if it fails.
• When Congress, divided along party lines, cannot agree on the budget, the federal government shuts down.
• In the recent shutdown, Republicans lacked the 60 Senate votes needed, and the deadlock ended only when eight Democrats supported the resolution.

How the US Budget Cycle Works?

• The US fiscal year runs from October 1 to September 30. The shutdown began on October 1 because the Trump administration could not get its budget approved by Congress in time.
• Budget Preparation Begins in February
  • The budget process starts much earlier. By the first Monday of February, the President must submit the budget proposal to Congress.
  • Both chambers — the House and the Senate — then engage in months of deliberations, debates, and amendments on taxation and spending priorities.
  • These discussions often become contentious.
• Source of Conflict in the Recent Budget Debate
  • A key point of disagreement during this shutdown was the scope and funding of the Supplemental Nutrition Assistance Program (SNAP), formerly known as the food stamps programme.
  • Such policy disagreements create delays in approving appropriations.
• October 1: The Hard Deadline
  • According to the Congressional Research Service, October 1 is a strict deadline for Congress to pass appropriations.
  • When the fiscal year ends, previous funding expires, and by law, the government cannot spend money without new appropriations.
• Why a Shutdown Happens?
  • If Congress does not approve funding by October 1 — creating a “funding gap” — federal agencies must begin shutting down affected programmes and activities.
  • This legal requirement triggers a government shutdown until a new budget or stopgap bill is passed.

Rising US Budget Deficit

• According to the Congressional Budget Office, the US recorded a $1.8 trillion budget deficit in FY2025.
• Government receipts were $5.2 trillion, while spending reached $7 trillion, creating a large fiscal gap.
  • For comparison, the entire Indian GDP is under $4 trillion, and the central government’s total budget expenditure is about $0.6 trillion.
  • This highlights the massive scale of US finances and deficits.
• The FY2025 deficit equalled 5.9% of US GDP, much higher than the long-term average of 3.8% (1975–2025).
  • A deficit means the government must borrow more to sustain its expenditure.
• Larger deficits add to the rising mountain of public debt. One consequence is rising interest payments, which have now become the second-largest expenditure item for the US government, as shown in official data.

Presidential vs Parliamentary System: A Warning for India

• The US shutdown illustrates how a presidential system can suffer severe governance breakdowns when the executive and legislature disagree.
• In contrast, India’s parliamentary system ensures continuity of government, even with its own limitations.
• While system choice depends on many factors, this episode highlights why a developing country like India may struggle to withstand long, disruptive shutdowns that a presidential model can trigger.