Looming federal government shutdowns should be treated as opportunities to cut both spending and regulation. So as we barrel toward a potential shutdown that will likely end with a resumption of COVID-era spending levels and $2 trillion deficits despite all the drama, let’s take a beat.
WASHINGTON, DC – SEPTEMBER 16: Senate Majority Leader John Thune (R-SD) gestures as he has an exchange with Fox News Reporter Chad Pergram during a news conference following a Senate policy luncheon at the U.S. Capitol on September 16, 2025 in Washington, DC. Congress is edging toward a shutdown as Republicans push a short-term “clean” funding patch opposed by Democrats demanding health care provisions, while Thune and Schumer spar over who is to blame. (Photo by Kent Nishimura/Getty Images)
Getty Images
Each side blames the other for holding the federal government hostage over contentious continuing resolutions when fiscal-year deadlines approach, but the federal government does not truly shut down. Taxes are still withheld from paychecks and spent, federal borrowing continues, and many “essential” federal functions—functions that the GOP now in charge once weakly opposed—resume with renewed legitimacy upon reopening.
Yet a “clean” continuing resolution without challenging those supposedly abhorred programs from a GOP majority bestows even greater legitimacy.
The real crisis is not a temporary shutdown but a Congress acting far beyond its fiscal means and constitutional limits. Both parties reliably keep open even parts of government that should be shut down despite all the theater.
Government is now so large that, along with the debt limit, shutdowns may be the last remaining institutional pressure point to impose fiscal and regulatory restraint. By and large, these episodes are quickly forgotten when next elections roll around – and that should make them ripe for “exploitation” to taxpayers advantage by wise and forward-thinking policymakers.
Rather than seeing the GOP extract major concessions to begin dismantling the spending/regulation trap, we’re in a perplexing situation in which current spending is maintained in exchange for simply keeping the government open. The White House—via an undated and untitled memo to department heads and general counsels—ordered agencies to prepare Reduction in Force (RIF) plans that would extend well beyond conventional furloughs in the event of a shutdown (“With respect to those Federal programs whose funding would lapse and which are otherwise unfunded, such programs are no longer statutorily required to be carried out”). That infuriated House and Senate minority leaders and set off consternation in the media. But note this is not a condition of avoiding a shutdown; it is only to occur if one happens. This episode is a reminder that the very steps needed to pare back government surface only under duress—yet shutting down programs and agencies remains both the most necessary and the most difficult part of deconstruction.
Let the Deconstruction Commence
Author and Competitive Enterprise Institute
Shutdowns Reveal What Government Shouldn’t Be Doing
Most of the alarmist coverage around shutdowns focuses on disruptions like delayed park openings, paused grants, or furloughed federal staff not getting paychecks. But these underscore how deeply Washington has penetrated everyday life. From farm aid and student loans to disaster insurance and the design of dishwashers, federal spending programs and downstream regulations micromanage sectors that should be left to private enterprise or, at most, to state and local governments.
The question that should be asked in last-ditch talks isn’t “How do we avoid a shutdown?” but “Why is the federal government involved in these nonessential and arguably unconstitutional activities in the first place?”
Escaping The Spending/Regulation Trap Requires Terminating Departments And Agencies
The root of the recurrent shutdown and debt ceiling fights (the latter now delayed another year or so by the “One Big Beautiful Bill Act”) is Congress’s disregard for its enumerated powers—and secondarily, its rampant over-delegation of powers to the expensive, bloated, unionized bureaucracies. Each spending surge becomes a platform for new mandates, and each such regulatory expansion “justifies” additional future spending by strengthened agencies.
Breaking the cycle requires more than fiscal trims or procedural reform. It requires dismantling programs, agencies, and statutes at their roots. While the White House memorandum may result in the elimination of some programs if the deadline passes, shutdowns and debt ceilings represent greater opportunities than that for downsizing both spending and regulation.
As it stands, if Democrats agree to the “clean” continuing resolution that provides a stopgap of a mere few weeks, all those employees and programs and their mounting regulatory tangles remain intact and poised to expand at the first opportunity.
To shrink government, future RIFs must occur and programs must go away as a condition of any budget agreement, not persist because one has been reached. Those complaining that government isn’t big enough need to be given an actual “just cause” to object.
If we are to endure shutdown brinkmanship, it should be real—rooted in reaffirming the simple truth that much of Washington isn’t core constitutional governance—not over whether to maintain recently elevated spending levels. Shutdown drama should be over actual philosophical differences rather than the deep-rooted agreement that today prevails. Entire departments and agencies should be terminated, with their functions devolved to the states and to private civil society.
End Subsidies, Public-Private Partnerships and State Grants-in-Aid
These fiscal skirmishes are also the time to recognize that hundreds of billions of today’s federal spending consists of subsidies and grants to private entities and pass-through grants-in-aid to states—nearly all of which should not involve Washington at all. This profusion of dollars, and the dependency it inflicts, in turn enables laundering of regulation through public-private partnerships and terms embedded in programs of which states and localities are beholden. Relatedly, as the largest purchaser of goods in the world, agencies have increasingly embedded climate mandates, DEI initiatives, and union preferences into contracts and grants—requirements often not dictated by Congress.
This results in what we are seeing now, as the shutdown clash proves. The torrent of federal funding weakens and neutralizes the natural opposition to the federal leviathan from both businesses and lower-level governments, eroding the constituency for the limited government we by rights should enjoy. Ending agencies and programs is necessary not only to shrink spending but also to restore federalism and decouple private enterprise from excessive federal control.
Post-Chevron Reality Check To Inform Congress’s Downsizing Duty
The recent Supreme Court Loper Bright Enterprises v. Raimondo decision ending Chevron deference was a vital restoration of separation of powers, limiting agency autonomy. However, as the funding debate shows, in recent years Congress has bestowed effectively all the power agencies need through laws such as Obamacare, Biden’s Inflation Reduction Act, the Infrastructure Investment and Jobs Act and the CHIPS and Science Act. Much of that spending is regulatory in character. And as with public-private collaborations including federal equity stakes in private companies on the ascendance, resultant regulation will emerge not via conventional notice-and-comment rules now limited by Loper, but by informal guidance, memoranda and assorted “rule equivalents.” In this setting, shutdowns will increasingly become an important tool of reckoning since other means appear scant.
Trade-Offs Toward Downsizing: If We Keep Government Open, What Do We Get?
Unfortunately, breaking the shutdown impasse in one way or another is going to leave us with sustained spending and a too-large government. What does posterity deserve in return? At the very least, new mechanisms for tracking the downstream regulatory effect of hyper-spending are necessary to help us assess reality and make the aforementioned changes down the road. Rather than retaining unneeded programs and personnel as the condition for keeping government open, program closures should be the starting condition. Beyond that, we need reforms that address the regulatory nature of much spending and enhance its transparency.
If a $7 trillion federal government is to remain open, here are some minimum demands.
- Enable the Tracking of Spending-Induced Regulation: As noted, the federal government holds such sway over the private sector and lower-level governments that it generally needs no new laws nor regulations to maintain control—allowing largely unresisted continuance despite the shutdown theater. In return for keeping the government open, Congress should at least demand new controls over guidance documents, memoranda, letters, interpretations and the like. The bipartisan Guidance Out of Darkness (GOOD) Act would foster that by requiring federal agencies to post all such documents on a centralized online portal. Implementation of the GOOD Act will prove increasingly necessary so the public can monitor the rule-equivalents that all the spending generated by failing to shut anything down will produce.
- Enforce Existing Regulatory Reform Laws: Several laws already on the books—from the Paperwork Reduction Act to the Congressional Review Act—require transparency and cost estimates for regulation but are neglected. Congress should reinforce these and restore compliance so that the prominence of what is now an inappropriate spending/regulatory fusion can play a greater role in shutdown deliberations.
- Codify Executive Orders a Build a Regulatory Cost Budget: Trump’s revived “one-in, ten-out” approach, guidance portals, and disclosure rules will endure only if codified in law. In addition, the time is long past to consider a regulatory cost budget to cap total regulatory burden just as a fiscal budget caps (or should cap) spending.
- Sunsetting, a Regulatory Reduction Commission and a Report Card: Just as spending should lapse without reauthorization, regulations should expire unless renewed and consciously extended. Bipartisan commissions have long been proposed to recommend eliminations. In addition, an annual regulatory report card could also help expose the true scope of agency activity, bringing more relevant information to the table when federal budgets are deliberated.
- Congress Should Approve Regulations: Like spending programs, Congress should approve major regulations before they take effect. The Regulations from the Executive In Need of Scrutiny (REINS) Act would make lawmakers directly accountable. A stripped-down version of REINS incorporated into the Big Beautiful Budget bill earlier this year was yanked at the last moment. This approach should be restored now, and a strengthened version should also apply to guidance documents.
Shutdowns Should Be Teachable and Leverageable Moments
Shutdowns may be inconvenient, but they’re clarifying. They expose a federal government that has far outgrown its constitutional boundaries and both over-spends and over-regulates without limit. Shutdowns, as well as debt-limit negotiations, may be all we have left to force confrontation of the spending/regulation trap and finally grapple with which federal functions are truly essential and which shouldn’t exist at all but be reallocated.
The White House memo reads, “If Congress successfully passes a clean CR prior to September 30, the additional [RIF] steps outlined in this email will not be necessary.” Downsizing, instead, should be the condition for keeping government open in the future—not paused as a reward for doing so.
This fiscal year’s and future shutdown cliffs—or the looming debt limit—might be the last remaining leverageable tools to shrink government: the solution not the problem. If Congress cannot bring itself to reduce government during a funding impasse, it’s hard to see how it will do so when things are calm. The real impasse is over a constitutional government or an unshackled one. Restoring normalcy in governance requires taking advantage of every opportunity to downsize and reallocate essential functions. Shutdown? Take the win.
Disclaimer: This news has been automatically collected from the source link above. Our website does not create, edit, or publish the content. All information, statements, and opinions expressed belong solely to the original publisher. We are not responsible or liable for the accuracy, reliability, or completeness of any news, nor for any statements, views, or claims made in the content. All rights remain with the respective source.