Lawmakers often enact multiple CRs in a single fiscal year before deciding on full-year funding levels. For government contractors, understanding the nuances of a CR is crucial. It means maintaining flexibility and being ready to adapt to funding changes once a full-year budget is passed.
A measure of prices paid for goods and services excluding food and energy; the Federal Reserve’s preferred measure of inflation. Measures the change in prices of all goods and services purchased for consumption by urban households.
The current usage of the CR represents a corruption of the federal budget process, a damaging effect on the economy, and a failure of politicians to compromise. Yet this is how the country has been running because the government has failed to pass a yearly budget for the last 14 years.i This means that the country limps along from one CR to the next, waiting on the certainty and sanity of a budget. In fact, all 12 regular appropriations bills haven’t been enacted on time since fiscal year 1997. This persistent pattern has led to a heavy reliance on CRs as the default method of keeping the government running, rather than as exceptional measures. The resulting lack of appropriations led to the shutdown of non-essential functions of the federal government for 28 days due to lack of funds.
- For example, the congressional majority attempted to enact a debt limit suspension in the most recent CR.
- Instead businesses hold onto their money due to the uncertainty, thus hampering economic growth.
- Over time, this consistent deviation from regular order could lead to diminished emphasis on in-depth appropriations work among members of Congress and their staff.
- Without annual funding provided through the appropriation process, a government shutdown could occur, which could have significant fiscal and economic effects.
One nuance of the Continuing Resolution issue is that a full government shutdown may or may not happen if a CR or budget agreement cannot be reached. In 2018 and 2019 when a partial shutdown was initiated, just under 400,000 employees got furloughed, and another 400,000-plus workers showed up for work but did not get paid until the end of the shutdown. On more than one occasion employees were sent government mandated 30-day layoff notices because no budget was in place and the funds from the CR had run out. Following a repetition of layoff notices, several valuable and productive employees left the company for more stable jobs. This had a negative effect on production and caused additional costs as new employees had to be hired and trained. The purpose of the budget process is to have a timely and consistent monetary plan for the country to work from.
CBO Estimates the Fiscal Impact of the One Big Beautiful Bill
These acronyms and abbreviations are routinely used in government solicitations. You will also encounter these acronyms throughout the various sections of government contracts. This master list of acronyms will help you better understand the specialized language of government contracting. This is essential for successfully doing business with the Department of Defense (DoD) and working with contracting offices at military bases and DoD agencies. In late 2020, there was a deadline to either pass a new budget or pass a Continuing Resolution that would allow funding and government operations to continue past the deadline.
The New Norm? Why CRs Are So Common
Most times, the CR allows government offices to keep writing checks at the current rate, based on the total appropriation for the fiscal year that’s just ended. But sometimes, the agencies are instructed to start spending at a pace — whether it’s more or less than the status quo — that would be dictated by a House or Senate appropriations bill that’s in the pipeline but not yet finished. And other times, Congress dictates an across-the-board spending reduction (a “haircut,” in congressional shorthand) for all the programs governed by the CR. Since the fall of 1997, there have been measures that kept the government running in place for as short as one day at a time and for as long as 32 weeks. The Congressional Research Service calculates that the average duration of all 106 CRs in those years was 25 days. The process has been completed no less than three weeks behind schedule, and the average finish has been about 100 days beyond the legal deadline.
Appropriations bills
Avoid making hasty hiring or layoff decisions until what does cr stand for in government there is more clarity about long-term funding. Communicate transparently with your employees about the situation and your strategy to manage it. The three central decisions Congress must make when writing every CR are how long to keep the spigot open, at what rate to keep the cash flowing, and which (if any) agencies should be treated more (or less) generously than the rest. There’s been very little consistency in the outcomes since the last on-time completion of the annual budget process. With the President’s signature, temporary funding to keep the government open was approved until a full budget could be agreed upon at a later time. The House And Senate passed a Continuing Resolution only hours before the deadline was meant to pass.
That said, the Coast Guard once experienced major delays in paying their troops during 2019 because the Department of Homeland Security (which the Coast Guard falls under) was not funded for a time. Basically, during a full shutdown, all federal agencies will follow its own shutdown program. Federal budgets must be passed before the deadline of Sept. 30 in order for the government to continue operating as it is expected to.
Former Vice President for Economic Policy
The connection between the federal budget process and real-world outcomes is undeniable and impacts us all. While most Continuing Resolutions are short-term measures, Congress sometimes enacts a “full-year CR.” This type of CR has distinct characteristics and carries its own set of significant implications for government operations and congressional authority. The cumulative effect of repeatedly operating under CRs and facing recurrent shutdown threats can significantly erode public trust in the government’s ability to manage its basic responsibilities effectively. When the public consistently sees news reports of last-minute deals to narrowly avoid shutdowns, or witnesses actual shutdowns occurring with their attendant disruptions, it can foster a perception of widespread dysfunction and instability within the federal government. This erosion of public trust is a less tangible but nonetheless profoundly significant consequence of a persistently broken and crisis-driven budget process. The detailed structure of appropriations acts, including specific account allocations and general provisions, underscores Congress’s intent to maintain significant control over executive branch spending.
The remainder consists of mandatory programs (like Social Security and Medicare) and interest on the national debt. Understanding these two funding pathways reveals an inherent tension in the budget process—a constant struggle between orderly, planned governance and the political realities that often obstruct timely agreements. The uncertainty of government funding can impact staffing decisions.
- The resulting job insecurity causes concern, confusion and frustrations from government and contractor employees.
- The modern Congress serially fails to abide by the federal budget process set forth in the Congressional Budget Act, and instead often relies on stopgap legislation to avoid (more) federal government shutdowns.
- The purpose of the budget process is to have a timely and consistent monetary plan for the country to work from.
- This master list of acronyms will help you better understand the specialized language of government contracting.
Afterwards, it became a title for all the other emperors.If you mean Julius Caesar, he was not an emperor and there never had been an emperor before him. With the CR in place, your current contracts will continue to receive funding, allowing ongoing projects to proceed. Stay in close contact with your contracting officers to receive updates on any changes that may affect your work. One type is called Discretionary Spending–these are “appropriated funds” and they have to be agreed upon year-to-year. Non-discretionary spending is either authorized permanently or in multiple years depending on the nature of the funding or other variables. The discretionary funds need to be approved year to year with a budget or extended with a CR.
A Roll Call analysis found that Congress passed an average of 5.8 CRs each year. Regardless of your political leanings, we can all agree that the gridlock in the federal government is not helpful to the nation. The inability to pass a budget is just one of the effects caused from this gridlock and from the uncompromising stances of our politicians. While not the easiest task, the budget process has been successful for over 75 years. It is time our elected officials in Congress put Americans first by releasing our Constrained Republic and passing a budget. For citizens, the impact of a chronically disrupted budget process appears in many forms—park closures during shutdowns, delays in medical research, compromised military readiness, or economic uncertainty affecting jobs and savings.
The focus shifts from strategic fiscal governance to the more immediate goal of avoiding government shutdowns. Without annual funding provided through the appropriation process, a government shutdown could occur, which could have significant fiscal and economic effects. Such effects include the disruption of government services and programs, the creation of uncertainty about future fiscal policy, and the imposition of unnecessary costs on the economy.
Once passed by both chambers and signed by the President, they carry the full force of law, just like regular appropriations. Between 1980 and 2013, there were eight government shutdowns in the United States.9 Most of these shutdowns revolved around budget issues including fights over the debt ceiling and led to the furlough of certain ‘non-essential’ personnel. The majority of these fights lasted 1–2 days with a few exceptions lasting more than a week. The CR offers a temporary reprieve from the threat of a government shutdown, but it also highlights the need for vigilance and preparedness among government contractors. By understanding the implications of a CR, staying informed about legislative developments and proactively managing your contracts, you can navigate this period of uncertainty more effectively. The current CR extends government funding until December 20, 2024.