Bush agrees to remove tax increases shutdown ends with spending deal and income tax increase

On October 9, 1990, President Bush agrees to remove his proposed tax increases and reduce the amount of spending cuts in exchange for Congressional concessions allowing income tax to increase on the wealthy. The compromise ends the 3-day shutdown. Bush's reversal represents a significant retreat from his stated negotiating position, though the deal does achieve his goal of spending reductions. The cost to government for lost revenue and back wages is estimated at $2.57 million. The weekend timing of the shutdown (spanning Columbus Day) limits the economic and administrative disruption. The shutdown demonstrates the difficulty of enacting significant spending and tax changes during divided government, with both Republicans and Democrats using shutdown threats to leverage their priorities.