The national news this week will likely host one of two headlines:
“The U.S. House and Senate have reconciled the funding measures each passed and a federal budget bill has been sent to the president for signature”
or
“Congress has passed another Continuing Resolution, averting a government shutdown”
What is a “government shutdown”? And how does this Congressional process impact you? Here is a basic primer on the process and some of the terminology you may see in the news:
Fiscal Year. Just as a business sets an annual budget, so too does Congress for the running of the federal government. The federal fiscal year starts October 1 and ends September 30. Why start October 1? That gives newly elected officials, who have taken office in mid-January, time to get involved in the budget process. After all, appropriation measures to fund the 12 executive branches of government are the only legislative actions that the U.S. Constitution requires Congress to take each year.
Appropriation measures – the dollars federal agencies can spend – come about only after the various Congressional authorization committees have passed, and the president has signed, authorization bills. Authorization bills provide the legal authority for federal agencies to fund and operate their programs, just as appropriations bills provide the actual money. The authorization committees are the “subject-matter” experts within Congress. For transportation and trucking issues, the authorization committees are the House Committee on Transportation and Infrastructure, the Senate Committee on Transportation and Infrastructure, and the Senate Committee on Environment and Public Works.
So, what happens if Congress fails to pass an appropriations measure by the end of the fiscal year? Congress can pass a Continuing Resolution (CR) which carries forward (extends) the existing level of federal agency funding and the existing scope of legal authorization to a date set in the resolution. In other words, under a Continuing Resolution, it’s status quo – no new programs and no changes in funding — until Congress can agree on a new set of authorization and appropriation measures. But at least government agencies can continue to function. The federal government is currently operating under a CR which ends March 14 – this week.
Congress may adopt so-called “stopgap measures.” While not formally defined, these are typically short-term authorization and appropriation bills usually focused on an emergency need. Congress may agree on a true emergency need, but adopting a “stopgap measure” removes one area of overall agreement, reducing the incentive for Congress to adopt the larger appropriations package… probably leading to another CR.
Government shutdown. If Congress fails to pass an appropriations bill or a continuing resolution, there is the potential of a “government shutdown.” A “shutdown” is a bit of an overstatement. The federal budget has three components:
- Federal agency funding, called “discretionary spending,” which is the focus of the appropriations measures. Discretionary funding is where Congressional debate occurs, because it often involves changes in policy and in the scope of government. Discretionary funding is about one-third of the federal budget.
- Interest on the debt, which amounts to about 10% of the budget; and
- Funding for Social Security, Medicare, veterans benefits and other so-called “mandatory spending,” typically over half of all federal budget.
Absent continued government funding, what is “shut down” are the federal agency activities utilizing discretionary funding. For agencies like the Federal Motor Carrier Safety Administration, that is most of their federal functions. (However, motor carrier safety enforcement is largely conducted by personnel employed by the states and continues unabated.) The end of the federal fiscal year and the final days of a Continuing Resolution are critical times for Congress and the federal government.