QUESTION: I’ve seen a lot of media coverage this week about “a continuing resolution.” What is it and why is it important?

ANSWER: Lawmakers in Washington have one must-do task each year: pass the twelve annual discretionary spending bills that fund the government for the upcoming fiscal year before October 1 when the new year begins. When they can’t complete their work on time, lawmakers often rely on a temporary spending measure called a “continuing resolution” (CR) to keep the government, and the programs it administers, open and operating until lawmakers are able to enact full-year appropriations.

This year, with the coronavirus pandemic, presidential politics, and now a Supreme Court nomination consuming most of the oxygen in Washington, Congress and the president have been unable to enact a single funding bill for FY 2021. To prevent a government shutdown, this week Congress passed, and the president signed into law, a short-term continuing resolution that will fund the government through December 11, 2020. 

Continuing Resolutions Follow a Common Format

A typical continuing resolution will have six main features: 

  • A coverage statement that includes, by reference, a list of all the prior appropriation bills for which funding is extended in the CR. The CR signed by the president this week extends 2021 budget authority provided in the 12-bill omnibus for FY 2020.  

  • An expiration date. CRs provide budget authority for a specified length of time that may be as short as a single day or as long as several weeks or months. The current CR provides funding for the government through December 11, 2020.

  • A rate of operations. Unlike a full-year appropriation bill, a CR does not provide a specific dollar amount for agencies to spend during the interim period. Rather, it authorizes the Office of Management and Budget to apportion funds to an agency or program based on a “rate of operations” – a uniform pro-rata monthly allocation tied to the length of the CR. 

  • A prohibition on “new starts.” A CR typically includes language prohibiting the use of funds for any project or activity that was not funded in the prior year appropriation bill.

  • A list of anomalies. Sometimes it is necessary to adjust the rate of spending or purpose of the funds provided in the underlying prior-year funding bill, which is  incorporated by reference in the coverage statement. These “anomalies” are included to prevent major programmatic, operational, or management problems that would arise under the CR’s uniform pro-rata formula. Anomalies are in the eye of the beholder, however, and are negotiated by Congress, the president, and the agency heads for each CR.  

  • Legislative or policy “riders.” Some CRs include major policy changes that fall under the jurisdiction of committees other than the House and Senate Appropriations Committees. These riders can create, amend, or extend other laws that have nothing to do with funding the government agencies. For example, prior CRs have included the extension of expiring tax provisions which fall under the jurisdiction of the House Ways and Means Committee and the Senate Finance Committee. 

Because CRs are considered must-pass legislation (because otherwise the government would shut down), they are an attractive vehicle for members pushing these policy riders. These riders can be controversial, however, leading members to demand “clean” CRs - ones that allow only fully-vetted, traditional, non-controversial riders. Rarely is a CR every truly devoid of all policy riders.

Drawbacks of a Continuing Resolution

A continuing resolution performs the most basic function – it provides federal agencies with the budget authority needed to administer programs under their jurisdiction in the interim period – but it imposes restrictions and challenges that make it a less-than-ideal way to fund the government:

  • No “new starts.” For agencies that typically engage in new projects, or change their funding priorities from year to year, the prohibition against new starts can significantly affect operations. The Department of Defense frequently criticizes this constraint because it can, for example, delay the development of new weapons programs, stall new contracts, and prevent new hires.

  • Restrictive rate of spending. Under the pro-rata formula, agencies receive a uniform amount of budget authority to spend for each month under the CR. For agencies that manage programs with “chunky” spending patterns (e.g., the Department of Education’s college Pell grant program), a CR can have an deleterious impact on agency actions. This issue usually can be resolved with an anomaly, if all negotiating parties agree.

  • Budget uncertainty. Without a full-year funding bill in place at the start of a fiscal year, an agency will have to manage its operations without clear direction of resources available to it. This may cause an agency to alter its plans, its rate of spending, or its spending pattern, with potential ripple effects on internal management. An agency like the Census Bureau, for example, would find a CR very challenging while trying to plan and conduct a decennial census.

  • Administrative burden. A CR imposes tight restrictions on the obligation of funds and there are federal penalties for spending more than authorized under law, so documentation is very important. For this reason, the administrative burden that accompanies a CR can have a significant impact on agency operations and employee productivity.

Additional CRs May Be Needed This Year

The purpose of the current CR is to keep the government open and operating past the November elections. If Democrats retain control of the House, flip the Senate, and secure the White House, there will be considerable pressure within the party to delay action on any full-year funding bill until 2021, when a new administration will be sworn in. Consequently, it is possible that the current CR will not be the last for FY 2021.