14 November 1995: US government shuts down

On this day in 1995, the US government shut down museums and national parks after Bill Clinton and Congress were unable to agree on a budget.

Newt Gingrich and Bill Clinton
Newt Gingrich (L) and Bill Clinton (R) eventually reached an agreement
(Image credit: © DAVID AKE/AFP via Getty Images)

In the 1994 American mid-term elections, the Republicans gained control over both Houses of Congress, putting them on course for a collision with US President Bill Clinton, a Democrat. Clinton was willing to let them have their way on a variety of issues, such as tougher sentencing laws.

But he felt their demand for large spending cuts would hit the economic recovery and was also concerned about the impact on health and pension entitlements.

Despite several attempts to broker a deal, the president and Congress were unable to pass a budget in October 1995. They could only achieve a resolution that allowed the government to operate until 14 November.

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When this expired, the government was forced to shut down services such as museums and national parks. The first shutdown lasted for only five days, but the failure of further negotiations led to a second 21-day shutdown that began on 16 December.

The Republicans hoped that the shutdown would hurt Clinton, but polls showed that most voters blamed them. Matters were made worse when Newt Gingrich, the speaker of the House of Representatives, complained about Clinton snubbing him on a flight to Israel.

This gave the impression that Gingrich was shutting down the government out of spite. When a budget finally passed in early January, Clinton got most of the credit. Overall, the crisis is credited with helping him win the 1996 election comfortably.

However, while the shutdown hurt the Republicans in the short term, the final deal led to a decline in government spending. This partial victory may have inspired them to shut down the government for 16 days in October 2013.

Dr Matthew Partridge

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

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