What Is a Continuing Resolution?
A continuing resolution (CR) is a temporary legislative measure passed by the U.S. Congress to provide interim government funding for federal agencies when the annual appropriations bills have not been enacted by the start of the new fiscal year on October 1. As a concept within public finance, a continuing resolution ensures the federal government can continue its operations, preventing a lapse in funding that would otherwise lead to a partial or full government shutdown. This stopgap measure typically maintains spending levels at those of the previous fiscal year, or with minor modifications, for a specified period, allowing lawmakers additional time to negotiate and pass full-year spending legislation.30,29 The use of a continuing resolution has become a common practice in the modern budget process due to the complexities of reaching agreement on discretionary spending.28
History and Origin
The concept of interim funding measures, which eventually evolved into the modern continuing resolution, has roots in the long and often contentious U.S. federal budget process. Historically, Congress has frequently struggled to complete all 12 annual appropriations bills by the October 1 deadline. The increasing reliance on continuing resolutions became more pronounced after the 1970s, coinciding with heightened partisanship and political strategy.27 For instance, since the fiscal year was changed to October 1 in 1977, Congress has enacted at least one continuing resolution in all but three fiscal years.26 The frequent use of these measures has led to a situation where they are no longer seen solely as emergency stopgaps but as a regular, albeit often criticized, component of the legislative process.25
Key Takeaways
- A continuing resolution is a temporary funding mechanism used to keep the U.S. federal government operating.
- It is enacted when Congress fails to pass regular appropriations bills by the start of the fiscal year on October 1.
- A continuing resolution generally funds agencies at the previous year's spending levels, or with minor adjustments.
- While preventing government shutdowns, CRs can lead to operational challenges and uncertainty for federal agencies.
- Their frequent use has become a point of contention, undermining comprehensive financial planning within government.
Formula and Calculation
A continuing resolution typically funds federal government operations at a rate or formula based on the previous year's funding.24 While there isn't a specific mathematical "formula" in the sense of a financial ratio or investment calculation, the core principle is maintaining the annualized rate of operations (ARO) from the prior fiscal year.
The funding level for an agency or program under a continuing resolution is generally:
Where:
- (\text{Funding}_{\text{CR}}) represents the authorized spending level during the period of the continuing resolution.
- (\text{Funding}_{\text{Prior Fiscal Year}}) is the base funding level appropriated for the specific agency, program, or activity in the preceding fiscal year.
- (\text{Adjustments}) account for any specific legislative provisions or "anomalies" included in the continuing resolution that allow for deviations from the prior year's levels. These can include minor increases, decreases, or permission for "new activities" not previously funded.23
For example, if an agency received $100 million in the prior fiscal year, a continuing resolution might authorize it to spend at an annualized rate of $100 million for the duration of the CR.
Interpreting the Continuing Resolution
Interpreting a continuing resolution primarily involves understanding its scope and implications for government operations and government spending. A CR's "coverage" defines which agencies and programs are subject to its terms. Its "duration" specifies the timeframe it will fund operations, which can range from days to an entire fiscal year.22 The rate of operations, typically based on the previous year's funding, means agencies are largely restricted to existing programs and activities. New initiatives or increases in funding for evolving public needs are often not permitted unless specifically authorized through "anomalies" within the continuing resolution itself.21 This limitation can significantly impact a department's ability to adapt to changing circumstances or begin new projects.20
Hypothetical Example
Imagine the U.S. federal government's fiscal year is set to begin on October 1. Congress, however, has been unable to agree on all 12 individual appropriations bills. As the deadline approaches, to avoid a government shutdown, Congress passes a continuing resolution on September 30.
This hypothetical continuing resolution might fund federal operations for 60 days, through November 30, at the fiscal year's 2024 spending levels. This means that agencies, like the Department of Commerce, can continue to pay their employees, operate their existing programs, and maintain essential services. However, if the Department of Commerce had planned to launch a new, major census-related technology initiative starting October 1, the continuing resolution would likely prohibit this "new start" activity unless a specific exception was written into the CR. For the 60-day period, their financial planning and operational decisions would be constrained by the prior year's budget and directives.
Practical Applications
Continuing resolutions primarily appear in the realm of U.S. federal public policy and budgeting. They are a tool used by the House of Representatives and the Senate to ensure the continuity of government functions when the regular appropriations process is not completed on time. In practice, CRs keep federal services like military operations, essential social programs, and research facilities running.19
However, their practical application often comes with significant drawbacks. Agencies operating under a continuing resolution face uncertainty, which can disrupt multi-year contracts, delay hiring, and hinder the start of new programs crucial for modernization or response to emerging needs.18 For example, a full-year continuing resolution could prevent the Department of Defense from initiating new priorities, ramping up production of critical capabilities, or modernizing its systems, potentially impacting national security.17 Similarly, programs like the Supplemental Nutrition Program for Women, Infants, and Children (WIC) could struggle to meet current demand and rising costs under static funding levels imposed by a continuing resolution.16
Limitations and Criticisms
While a continuing resolution prevents the immediate disruption of a government shutdown, it is not without significant limitations and criticisms. A primary concern is that CRs often lock spending levels and priorities to those of the previous fiscal year, regardless of evolving needs or new programs.15 This can lead to administrative inefficiencies, as agencies may be forced to operate with outdated allocations or postpone critical initiatives. The Government Accountability Office (GAO) has highlighted that CRs can cause challenges such as delayed contracts and grants, delayed hiring, and increased administrative burdens due to repeated budget adjustments.,14
Furthermore, the uncertainty created by short-term continuing resolutions makes effective long-term financial planning difficult for federal agencies. This can result in wasted resources as agencies spend time planning for potential shutdowns or adjusting to temporary funding parameters.13,12 Critics argue that the increasing reliance on CRs undermines the entire budget process, reducing Congress's ability to thoughtfully match resources with actual needs and hindering effective governance.11 A full-year continuing resolution, while avoiding a shutdown, can be particularly disruptive by preventing necessary adjustments for an entire year, affecting everything from infrastructure projects to research and development.10,9
Continuing Resolution vs. Government Shutdown
A continuing resolution and a government shutdown are two distinct outcomes when the U.S. Congress fails to pass regular appropriations bills. The key difference lies in whether federal government funding continues, even temporarily.
A continuing resolution is a legislative measure passed to prevent a government shutdown. It provides temporary funding for federal agencies, allowing them to continue operations, typically at the previous fiscal year's spending levels, for a defined period. This stopgap measure gives lawmakers more time to negotiate and pass the full-year appropriations bills.8
Conversely, a government shutdown occurs when there is neither a full-year spending bill nor a continuing resolution in effect for a federal department or agency. In this scenario, non-essential government functions must cease, and many federal employees are furloughed. Essential services, such as public safety and national security, generally continue, but often without full pay until funding is restored.7,6
In essence, a continuing resolution is a temporary patch to keep the government open, whereas a government shutdown is the consequence of failing to implement such a patch or a final budget agreement. The former maintains some level of operational continuity, while the latter halts significant portions of federal activity, often with broader economic impact.5
FAQs
What is the primary purpose of a continuing resolution?
The primary purpose of a continuing resolution is to provide temporary government funding to federal agencies, allowing them to continue operations when Congress has not passed the annual appropriations bills by the start of the new fiscal year. It acts as a stopgap measure to avoid a government shutdown.4
How long does a continuing resolution typically last?
The duration of a continuing resolution can vary widely, ranging from a few days to several months, or even for an entire fiscal year (a "full-year CR"). Congress may pass multiple continuing resolutions in a single fiscal year as negotiations for full appropriations bills continue.3
Does a continuing resolution allow for new government programs or increased spending?
Generally, a continuing resolution maintains spending at prior fiscal year levels and does not allow for new programs or significant increases in funding. Any deviations, known as "anomalies," must be specifically legislated within the continuing resolution itself. This limitation can pose challenges for federal agencies looking to adapt to new needs or implement new initiatives.2,1