Despite last-minute negotiations, federal leaders have once again entered another federal government shutdown, as funding has lapsed for the Department of Homeland Security.
To eventually re-open DHS, Congress will have to resort to an increasingly common financial legerdemain: funding the federal government through a last-minute “continuing resolution” rather than an on-time vote before the start of the fiscal year, which began in October.
Rather than make the hard financial choices to fund the budget on time, which could involve cutting spending on popular programs or increasing revenue through taxes, Congress is fond of punting the decision another year. In doing so, Congress often raises the federal debt ceiling in tandem with passing a continuing resolution (which it did again last July), relying on increased government borrowing to make up the difference.
This concerning phenomenon isn’t new.
If Congress doesn’t get its act together, 2026 will mark 30 straight years since it last passed a fully funded budget on time. It took former President Bill Clinton declaring “the era of big government is over” after a painful midterm election for his party to deliver a full federal budget in September 1996.
Unfortunately, Clinton was wildly wrong on that score. Since his pronouncement three decades ago, the federal debt has skyrocketed from approximately $10.7 trillion in 1996 to more than $37 trillion today, alongside a similar increase in the size and scope of the federal government. In 1996, debt accounted for 66% of U.S. gross domestic product; today, it is 124% of GDP.
In light of these concerning statistics, perhaps our trend of recent federal government shutdowns could be seen as a positive—a way to highlight the increasingly unsustainable nature of federal spending, and an opportunity to cut wasteful spending and balance the budget?
Unfortunately, it hasn’t worked out that way.
The current shutdown centers on the politics of increased funding for DHS and its subagency, U.S. Immigration and Customs Enforcement. In a funding bill totaling nearly $1.2 trillion, Congress shut down the government over approximately $10 billion for ICE funding—less than 1% of the total bill amount. At our government’s current rate of overspending, the federal debt increases by roughly $10 billion every 36 hours.
The October 2025 federal government shutdown was similar. Congressional negotiators debated the potential extension of premium subsidies for the Affordable Care Act, leading to a 43-day shutdown, the longest ever. Eventually, the government was funded—but not before the federal debt would have grown by about $266 billion.
There’s no free lunch carrying this debt.
It costs $355 billion annually just to maintain interest payments—19% of total federal spending in fiscal year 2026.
Instead of playing politics over trivial amounts of federal spending, our leaders should tackle the debt’s real causes, including ballooning interest payments, growing entitlement programs, and other mandatory spending. The fact that they don’t reflects on our nation’s concerning lack of economic literacy.
Economic literacy is the understanding of the core economic principles that govern our lives, and how to apply them to everyday economic decision-making.
Every American, whether a busy parent or a member of Congress, should possess basic economic literacy.
Unfortunately, our political debates often reflect a lack of understanding of opportunity costs, tradeoffs, incentives, and other key economic concepts relevant to the federal budget.
My organization, the Foundation for Teaching Economics, works year-round to address gaps in our nation’s economic literacy.
FTE hosts in-person and online programs for high school and middle school teachers, equipping them with the tools to teach economics to their students.
Each year, more than 1,500 high school teachers participate in these programs, educating an estimated 175,000 students annually.
By fortuitous timing, FTE just kicked off our winter schedule with a relevant program—Making Sense of the Federal Budget, Debt & Deficit.
The seminar helps educators teach the economic way of thinking to help students understand the spending choices facing American policymakers. To get a handle on the ever-growing federal debt and stop the current shutdown/overspending cycle, we must continue to support programs that increase economic understanding across society and promote the economic way of thinking among America’s next generation of leaders.
Only by understanding these critical concepts can we maintain sound government policies that enable economic growth—a must-have if we’re ever to meet our growing obligations on the deficit and debt.
Though FTE’s programs typically serve high school teachers and students, we’re happy to make an exception for any member of Congress eager to attend and learn how to avoid the next budget crisis.
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