The House and Senate easily passed a continuing resolution (CR), or temporary spending measure, last week to keep the federal government operating through December 11. With fiscal year (FY) 2015 approaching on October 1, Congress was not able to complete its work on the FY 2015 appropriations bills before adjourning again to campaign for November’s midterm elections. The CR (H.J. Res. 124) totals $1.012 trillion and extends current year (FY 2014) funding and policy directives into the first 10 weeks of FY 2015. In addition, the bill includes an across-the-board cut of 0.0554 percent to keep spending within the discretionary budget caps set in late 2013.
Election-year politics coupled with the need for immediate action to address the Ebola crisis in West Africa and authorization for U.S. action in Syria contributed to the speedy, bipartisan action on the CR. However, much less certain is what will happen after the November elections when Congress returns for a short lame duck session and attention will turn once again to avoiding a government shutdown and enacting final FY 2015 funding legislation. As previously reported, the final outcome largely hinges on whether the Republicans are able to win majority of the Senate next year. House and Senate appropriations chiefs are calling for consideration of a 12-bill omnibus appropriations package in the lame duck session so that the 114th Congress can start fresh in January with a clean slate. However, should the Senate flip, there may be attempts to enact another short-term CR to give a new Senate Republican majority control over the final product.
Regardless, federal agencies will once again begin the new fiscal year with little clarity about their long-term budget outlook. Under a CR, agencies generally will be conservative with their spending and refrain from entering into new contracts and beginning new initiatives until funding questions are settled.