No Pay for Congress During Shutdowns or Debt Default: New Bill Ties Lawmaker Salary to Fiscal Success

This bill, aptly named the “No Pay for Congress During Default or Shutdown Act,” is pretty straightforward: it aims to dock the annual pay of every Member of Congress whenever the federal government hits the debt limit or shuts down due to a failure to pass funding. It’s an attempt to put a direct financial stake on the line for lawmakers when they can’t agree on basic fiscal management.

The Automatic Penalty: Default and Shutdown

Under this proposal, if the government hits the debt limit—that point where the U.S. can’t borrow money to pay its existing bills (Sec. 2)—or if there’s a government shutdown because Congress failed to pass a budget (Sec. 3), the pay cuts kick in automatically. The penalty is calculated based on how long the crisis lasts: Congress members lose one day’s worth of pay for every 24-hour period the debt limit is reached or the shutdown is in effect. This calculation is designed to scale with the severity of the crisis, meaning a three-week shutdown costs a lot more than a three-day one.

For most people, the concept of ‘no work, no pay’ makes sense, but applying it to Congress is complicated by the 27th Amendment, which prevents Congress from changing its pay during a current term. To navigate this, the bill sets the full, direct pay cuts to begin applying only after the general election in November 2026. This means the next Congress will know the rules before they take office.

The 119th Congress Escrow Loophole

Here’s where the policy gets a little tricky, especially for the upcoming 119th Congress (the one starting in January 2025). If a shutdown or debt limit crisis happens during this specific term, Congress members will see money withheld from their checks immediately. However, instead of losing the money, it gets placed into a special escrow account (Sec. 2, Sec. 3). The key detail is that any money held in that escrow account must be released and paid back to the Members on the very last day of the 119th Congress.

What does this mean in the real world? For the 119th Congress, the pay cut is effectively a temporary, interest-free loan to the government. Lawmakers still feel the immediate pinch of a smaller paycheck during the crisis, but they get the money back later. This satisfies the constitutional requirement but softens the financial incentive significantly for that specific two-year period. After the 2026 election, the pay cuts become permanent losses, creating a much stronger incentive for the next set of lawmakers to avoid a fiscal cliff.

Who Manages the Money?

To make sure this complicated payroll scheme works, the bill requires the Secretary of the Treasury to assist the payroll administrators in the House and Senate (Sec. 4). This means Treasury will be lending its expertise to help Congress track the exact number of hours the government is shut down or in default to ensure the pay cuts—or the escrow deposits—are calculated correctly. It’s a necessary bureaucratic step, as tracking these events down to the 24-hour period is a precise accounting challenge.

Overall, this bill is a clear attempt to increase accountability by making Congressional failure hit lawmakers directly in the wallet. While the full financial hammer doesn't drop until late 2026, the immediate escrow provision for the 119th Congress ensures that lawmakers face a temporary financial consequence right away when a crisis occurs.