A continuing resolution, or “CR,” is a temporary 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 appropriation bills that are necessary to fund the federal government for the full fiscal year.
Fiscal year 2020 began on October 1, 2019 and none of the 12 appropriation bills for the year had yet been enacted. As a result, the government is now operating under a seven-week continuing resolution, which will keep it running through November 21. If appropriations are not enacted by that date — or another continuing resolution is not put in place to temporarily fund the government — we would face a shutdown.
As of October 4, the House has passed 10 appropriation bills, but the Senate has yet to pass any, so there is still significant work to be done.
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 fiscal year 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 fiscal year 1998 through today, 118 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 government agencies for fiscal year 2020 by the time the fiscal year begins — or if they don’t enact temporary appropriations — a 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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