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The day-to-day operations of most federal agencies are funded on an annual basis by appropriations. When those appropriations bills are not enacted by the start of the fiscal year on October 1, Congress uses a continuing resolution, or “CR,” as a temporary measure to fund government activities for a limited amount of time. Continuing resolutions are temporary “stopgaps,” often employed to avoid a partial government shutdown and give lawmakers more time to enact appropriations for the full year. However, programs deemed as essential services, such as those related to public safety, often continue to operate even in the absence of a CR.
Fiscal year 2021 began on October 1, 2020 and none of the 12 appropriation bills for the year were yet enacted. As a result, a continuing resolution was enacted on October 1 to avoid a partial shutdown and provide temporary funding for government operations through December 11. At that point, legislators still had not reached an agreement; through December 22, four subsequent CRs have been enacted. The current CR funds operations through December 28 to allow time to send the President the bills containing final appropriations and funding for relief related to the COVID-19 pandemic, which were passed by the Congress late on December 21.
While temporary funding measures often avoid shutdowns, they also reflect the failure of lawmakers to reach agreement on some or all appropriations 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 activities.
The majority of federal spending is governed by permanent law and generally not constrained by the appropriations process. However, over the last ten years, appropriations have accounted for a third of total spending and support programs 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 appropriations 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 appropriations bills before October 1.
Missing the October 1 deadline to enact all 12 appropriations 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. For fiscal years 1998 through 2021, 124 CRs have been enacted.
Without annual funding provided through the appropriation process, a government shutdown would occur and such a shutdown could have significant fiscal and economic effects. Such effects include the disruption of government services and programs, creation of uncertainty about future fiscal policy, and the imposition of unnecessary costs on the economy.
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.
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