Shutdown avoided, but new fiscal year brings uncertainty for federal agencies’ funding

Oct. 1 marks the start of a new fiscal year for the federal government. At this point, Congress is supposed to have approved funding for the approximately one-third of federal spending that relies on the annual appropriations process.  

However, Congress has yet again missed the deadline to pass any of the spending bills that set the overall annual budget for most federal agencies and determine which new or existing programs get funded. This nearly resulted in a government shutdown, which would have harmed the public, our economy and federal employees. 

To prevent the shutdown, Congress passed a 45-day continuing resolution, or CR, on Sept. 30. While a continuing resolution may seem like a decent reprieve that gives Congress time to determine spending levels for agencies, it creates an uncertain fiscal environment that prevents our government from making long-term decisions, and in some cases more immediate ones, on the programs and services that Americans rely upon.  

A continuing resolution is not the answer 

A continuing resolution is a temporary measure that freezes spending funded by annual appropriations at current levels for the duration of the CR. At some point within the current 45-day window, Congress must either pass appropriations or another CR, or risk a government shutdown.  

Under a continuing resolution, our government must wait to take new actions to address urgent national priorities and is often limited in managing critical hiring and travel needs.  

Long-term planning and the strategic use of taxpayer dollars, which fund federal agencies, fall to the wayside. Innovation and modernization are nearly impossible when agencies don’t know what their budget will ultimately be, when they will get that budget or if they will be able to adjust programs to meet changes in spending priorities.  

While agencies have plans in place to continue their work during CRs, continual shutdown threats mean employees must spend more and more time building contingency plans for when services cease and less time actually delivering those services. Applicants also may hesitate to look for federal work with another shutdown on the horizon, a potentially chilling effect on our government’s ability to recruit young people into an increasingly aging workforce.  

Private sector companies would be unlikely to succeed under these fiscal and strategic planning realities. Unfortunately, they have become the norm for federal agencies.  

What’s next? 

With stark differences in spending priorities between the House and Senate, and between Democrats and Republicans, it seems unlikely that all the appropriations bills will make it through the legislative process in the next 45 days. Additionally, Congress has other big issues to address, such as the National Defense Authorization legislation and solidifying around a new House speaker, that put pressure on the legislative calendar.  

There’s a chance that Congress may fund some but not all agencies, leaving the possibility of another short-term CR on the table. If the past decade is any indication, agencies may face one or more CRs through the end of the calendar year while Congress works on an omnibus spending package to fund agencies for the remainder of the fiscal year.  
 
Congress could make several changes to efficiently fund federal agencies and prevent future shutdowns. But that is a longer-term conversation. The best outcome in the meantime would be for Congress to pass all appropriations bills so that agencies can get on with the business of providing critical services to the public. 

Jenny Mattingley oversees the strategic direction for the Partnership’s government affairs and advocacy efforts focused on improving and modernizing government management and services for the public.