A continuing resolution, or “CR”, is a temporary funding measure that Congress can use to fund the federal government for a limited amount of time. Continuing resolutions are often employed to avoid a government shutdown and give lawmakers more time to enact the twelve appropriation bills that are necessary to fund the federal government for the full fiscal year.
Currently, five of the twelve regular appropriation bills have been enacted for the full year; the rest of the federal government is operating under a CR. On September 21, 2018, three of twelve appropriation bills for FY2019 were enacted — Energy/Water, Military Construction/Veterans Affairs, and Legislative Branch. Two additional bills, for Defense and Labor/Health and Human Services/Education, were enacted on September 28. The remaining seven bills were initially under a CR through December 7 — a deadline that was extended through December 21. On that date, Congress failed to pass further legislation, which led to a partial government shutdown. On January 25, lawmakers enacted a CR that ended the partial shutdown and funded the government through February 15. By that date, lawmakers will have to enact legislation covering the rest of the year or pass another CR to avoid another partial government shutdown.
While temporary funding measures often avoid shutdowns, they also reflect the failure of lawmakers to reach agreement on some or all appropriation bills for a full fiscal year. Funding the government for a full year is preferable to using a CR because it allows government agencies to plan appropriately and match their resources with their responsibilities. Predictability benefits the economy by providing certainty about government actions.
For example, appropriations support government activities that touch nearly every aspect of our daily lives as well as various facets of the economy — including national defense, operating national parks, law and immigration enforcement, health care research, and a host of other activities. All of those activities are funded through the 12 regular appropriation bills that are supposed to be enacted into law each year by the Congress and President. Under regular budget order, lawmakers would enact all of those full-year appropriation bills before October 1.
Missing the October 1 deadline to enact all 12 appropriation bills is not unusual; in fact, that deadline has not been fully met since 1997. Instead, lawmakers have come to rely heavily on CRs — temporary, imperfect solutions that avoid the difficult but necessary work of allocating funding. Lawmakers often enact multiple CRs in a single fiscal year before deciding on full-year funding levels. From appropriations for FY 1998 through today, 116 CRs have been enacted.
Lawmakers’ dependence on CRs to fund the government on a short-term basis undermines the budget process and introduces uncertainty to government agencies. By enacting full-year funding bills on time, lawmakers can focus their attention on other important legislative duties and government agencies can operate more efficiently.
If lawmakers can’t work together to fund the remaining government agencies for the rest of fiscal year 2019 by the time the current CR expires — or if they don’t enact another set of temporary appropriations — a partial government shutdown would occur and could have a significant effect. It would disrupt government services and programs, create uncertainty about future fiscal policy, and impose unnecessary costs on the economy. A 2013 paper written by Macroeconomic Advisers found that costs of a shutdown could include an increase in the rate of unemployment, lower growth of the economy, and higher borrowing costs for businesses. An S&P Analysis found that a shutdown could reduce economic activity by as much as $6.5 billion per week.
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