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Ep. 83 The First Government Shutdown: Behind the Scenes

What goes on behind the scenes in a government shutdown? In 1995, John Koskinen was deputy director of the federal Office of Management and Budget.  President President Bill Clinton, a Democrat, was tussling with a new Republican Congress over a variety of issues. Soon the government was in the midst of its first major shutdown.

Koskinen says the shutdown meant he was constantly re-evaluating, trying to troubleshoot as well as anticipate issues brought on by the closures.

“One of the things you have to do as a shutdown moves on is continually evaluate –  are emergencies now being created? Is life or property being threatened in a way after a couple of weeks [in a way] that it wasn’t being threatened after a day or two?”

Koskinen joins Sanford School of Public Policy Dean Judith Kelley to discuss lessons from that shutdown. They also talk about accomplishments and challenges Koskinen faced during his career spanning 11 different public leadership positions in the public and private sectors.

Koskinen led the Internal Revenue Service from 2013-2017, and was charged with restoring public confidence in the agency after a scandal. Previously, he headed the Federal Home Loan Mortgage Corp. (Freddie Mac), President Clinton’s Council on Year 2000 Conversion (Y2K) and the U.S. Soccer Foundation.

He also served as deputy director of the federal Office of Management and Budget and as the District of Columbia’s city administrator during the 9/11 attacks and afterwards.

Conversation highlights have been edited for readability and clarity.

Conversation Highlights

What did you learn from your shutdown experience and is that applicable today?

It was viewed so negatively at the end of that shutdown in early January of 1996 that my prediction, incorrectly, was that they’d never do it again. That it’d been such a nonproductive waste of time, that congress did decide that they would pay people who didn’t work, as well as the emergency workers who did, and so everybody thought so well then that really is a … it’s fair to the workers but for three weeks they didn’t do anything, now they have to go back and try to catch up on all that. That doesn’t make any sense at all […]

I think the risk is that people are going to use shutdowns as a point of leverage to accomplish something that they can’t get an agreement on and that will be a dangerous precedent for the country. First it discourages people from taking federal employment if every once in a while they’re going to go two, three, four weeks without getting paid. But beyond that it’s just an inefficient, ineffective way to run an organization.

What do you think is the biggest misconception that everyday Americans have about government service?

I think there is an image that somehow if you’re in the government you don’t have a bottom line, you don’t have a profit measure for performance and success and therefore you don’t work hard. And having now spent a lot of time at the federal level and at the local level, although the district is a state as well, I spent a lot of time trying to disabuse people of that notion. That people go into public service because they believe in the mission of the department or the area where they’re going to go work and they stay there. Some of the most talent people I’ve ever known are career government employees in various parts of the government whether it’s at OMB, whether it’s at NASA, whether it’s the agriculture department, the education department. And they have any number of other options and they stay because they believe in the mission.

You’ve been through a lot of different types of jobs, so what has given you the most satisfaction?

I have this checkered employment career going from kind of disaster management to disaster management […] The thing that was probably the most challenging and the most fun really was the year 2000 because you were dealing with a threat to the entire critically infrastructure of the country[…]

 We ultimately ended up with a meeting of 170 countries in the UN, it was the largest meeting in the history of the UN that wasn’t a general assembly meeting and it was reflection of the concern around the world about whether their systems were going to work or not and their desire to work together to share information about telecommunications about financial systems […]

I told somebody who was working with me, I said, “You know, this is the biggest stage on which I’ll ever get to play,” and there were not just the usually doomsayers, placate carriers, the world is coming to an end, there were very thoughtful computer experts who said there’s no way you can get it done in time. It simply, there were going to be major shortfalls. So it was kind of an interesting challenge.


Koskinen was on Duke University’s campus as a part of the The Terry Sanford Distinguished Lecture series. The series is made possible by the William R. Kenan Charitable Trust.

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