Continuing resolution

A stopgap by design

The federal fiscal year starts on October 1. By then Congress is supposed to have passed twelve regular appropriations bills that fund every agency. When it has not — which is almost every year — it passes a continuing resolution instead: a temporary law that keeps agencies running, usually at the previous year’s funding levels, until a set date.

Without either regular appropriations or a continuing resolution, funding lapses and the government shuts down.

The norm, not the exception

Since the modern budget process began in the 1970s, Congress has passed all its appropriations bills on time only four times, most recently for fiscal year 1997. Continuing resolutions have filled the gap in almost every other year, sometimes several in a row, and in some years they have lasted for the entire fiscal year.

What they cost

A continuing resolution avoids a shutdown but has side effects. Agencies generally cannot start new programs, sign long-term contracts or adapt to changed needs, because they are funded as if nothing has changed since the previous year. The Defense Department in particular has long argued that repeated stopgaps waste money and delay projects.

Uncertainty adds its own cost. Agencies that do not know their final budget for months tend to delay hiring and purchases, then rush to spend late in the year.

How it relates to the debt ceiling

Continuing resolutions and the debt ceiling are easily confused, because both produce deadlines and brinkmanship. They are separate. A continuing resolution decides whether agencies may spend; the debt ceiling decides whether the Treasury may borrow to pay for spending already approved. Congress can settle one while the other is still looming.