The GAO Shutdown Report Is an Audit of Nonessential Government

When the Government Accountability Office released its accounting of the 2018-2019 partial government shutdown, official Washington treated the document as a management story. The report found that agencies gave inconsistent guidance, that back pay arrived late, and that contingency plans buckled once appropriations lapsed. Most of the commentary asked how to make the next shutdown less disruptive. That is the wrong lesson. The most consequential word in the report is not cost or delay. It is nonessential.

For thirty-five days, the longest shutdown in American history, the federal government had to do something it rarely does voluntarily. It divided its own operations into two categories: work that had to continue because lives, property, or national security depended on it, and work that could stop because it simply was not urgent enough to justify crossing that line. The pause disrupted hundreds of thousands of families, and no serious person should call that pain trivial. But the Republic held. That uncomfortable fact is an audit no congressional committee ordered.

An audit nobody asked for

Under the Antideficiency Act and Office of Management and Budget guidance, an appropriations lapse forces agencies to separate excepted work from everything else. Excepted work covers the core of the state: national defense, border enforcement, air traffic control, federal prisons, and the law enforcement functions that protect life and property. Those operations continued. At the peak, roughly eight hundred thousand federal employees were either furloughed or working without pay. Border Patrol agents stayed on the line. TSA screeners staffed the airports. The active-duty military kept its posts, and the federal courts kept the judiciary moving.

What stopped was the vast administrative layer built on top of those essentials. Visitor centers at national parks closed. Routine food and drug inspections paused. IRS taxpayer assistance slowed to a crawl. Grant processing, regulatory rulemaking, outreach, paperwork, and administrative review all sat idle for more than a month.

Nobody is attacking the people who held those positions. Nonessential is not an insult to the employee. It is an indictment of the program. A capable federal worker can be assigned to a function the federal government has no constitutional business running. The waste is structural, not personal. If an agency can stop doing most of its work for five weeks and the constitutional Republic does not falter, the question is not how to protect that agency from future shutdowns. The question is why Washington is doing that work at all.

The Founders gave us a government of enumerated powers. The early federal government handled defense, foreign affairs, the federal courts, and a handful of duties expressly authorized in Article I, Section 8. Today the administrative state reaches into education, health care, land use, business regulation, and hundreds of other areas that would have been unthinkable to the men who wrote and ratified the Constitution. The shutdown report quietly shows how far the drift has gone.

The real price of back pay

Congress then made the mistake worse. Once the shutdown ended, lawmakers passed legislation guaranteeing back pay for affected federal employees, including many who had been furloughed and did not work during the lapse. Taxpayers paid for work that was never performed. That sounds generous. It is moral hazard.

Moral hazard occurs when a party is insulated from the consequences of its own decisions. In the private economy, a stoppage carries a real cost. Workers lose wages. Owners lose revenue. Customers go elsewhere. That cost creates pressure to solve the problem quickly and avoid repeating it. Washington has abolished that pressure for itself. Federal employees now understand that a shutdown may effectively become paid leave. Agencies understand that Congress will eventually reimburse them. Federal employee unions also know the cost of delay lands on the taxpayer, not on the immediate parties, which lowers the pressure to reach an agreement quickly. The result is that shutdowns become political theater with a delayed invoice.

This is not a swipe at federal employees. They respond rationally to the rules Congress writes. The blame rests with the rule-makers, who have built a system in which almost nobody inside the government has a strong personal incentive to avoid a shutdown.

Henry Hazlitt taught in Economics in One Lesson that we should look beyond what is visible and ask what is not seen. The visible cost is the billions in back pay that made furloughed workers whole. The unseen cost is the permanent expectation that nonessential government will always be refunded, no matter how long the work stops. Milton Friedman put the same idea in five words: there is no such thing as a free lunch. Every dollar spent on work that was not done is a dollar taken from someone who earned it or a dollar added to a debt future taxpayers must carry.

Thomas Sowell has spent decades warning against judging policies by their stated intentions rather than their actual incentives. The intention behind back pay is compassion for workers caught in a fight they did not start. The incentive it creates is a government that does not have to suffer the consequences of its own shutdowns. That is not compassion. It is a subsidy to dysfunction.

What the Constitution actually requires

The standard Washington response to a shutdown is a promise that it will never happen again. The usual mechanism is an automatic continuing resolution, a rule that says if Congress fails to act, spending stays exactly where it was. That would be the worst possible cure. An automatic continuing resolution would lock in current spending levels forever and remove the last remaining pressure to examine the budget honestly. It would guarantee that the size and shape of government never shrinks, even when no elected official can defend it line by line. A shutdown is unpleasant, but it is one of the few moments when the public gets a look at what the federal government actually does. Automatic continuing resolutions would close that window permanently.

The real fix is to shrink the number of things that can be shut down. Congress should use the GAO report as a permanent checklist. For every agency, program, and office, ask one question: if this stopped tomorrow, would the constitutional Republic still function? If the answer is yes, it is not a federal essential. It belongs with the states, the private sector, or the history books.

That is not a rhetorical exercise. In Federalist No. 45, James Madison wrote that the powers delegated to the federal government are few and defined, while those remaining with the states are numerous and indefinite. The Tenth Amendment makes the point plainer: whatever is not delegated to the United States by the Constitution is reserved to the states or to the people. The modern administrative state has inverted that order, and the shutdown report is evidence of it.

Some will object that nonessential does not mean worthless. Fair enough. The designation is a legal category for a lapse in funding, not a final moral judgment on every task. But that is exactly the point. The federal government should not be in the business of doing things that are merely nice, popular, or administratively convenient. Those tasks crowd out the few things Washington alone can do, and they do them badly by draining money, attention, and constitutional authority.

Friedrich Hayek warned that central planners can never gather enough local knowledge to run people's lives well. That wisdom applies directly here. A program administered from Washington often knows less about a community's needs than the state, the town, the family, or the entrepreneur who lives there. The shutdown showed how much of the federal apparatus is layered on top of functions that would still be handled, often better, by people closer to the problem.

The real lesson

A government shutdown is a symptom, not the disease. The disease is a federal government that has grown far beyond its constitutional functions and now treats its own bloat as permanent. The GAO report, read honestly, is not an argument that shutdowns are too costly. It is an invitation to make shutdowns smaller by making government smaller. A government that can pause most of itself for more than a month without losing the Republic has already told us it is too large. The only question is whether Congress has the courage to listen.

The ordinary citizen does not need a Washington that never shuts down. He needs a Washington that does its essential duties well, from defense and borders to the courts and the rule of law. Everything else should be left to the states, the market, and the people. That would make the next lapse in appropriations a minor administrative footnote instead of a national crisis. More important, it would restore the constitutional order the Founders risked everything to create. That is the lesson buried in the GAO report, and we should not waste it.