By Mark Strand and Timothy Lang

Ideally, the government should provide funds for its various operations by a series of 12 appropriation bills that all should be passed by September 30, the end of the fiscal year. (For a fuller overview of the budget process, check out this post.) But sometimes, things go awry.

In recent years, the President and Congress or the House and Senate (or any combination thereof), have often been unable to reach deals on how much money to provide the federal government or on which programs to bankroll. When they can’t pass the normal appropriations bills, they turn to what are known as continuing resolutions (CRs), which, as the name suggests, extend funding for government operations.

Continuing resolutions differ from normal appropriation bills in a few significant ways. One important distinction is duration each is in force. Normal appropriation bills usually last for the entire fiscal year. CRs, however, can vary in length. One type, an interim CR, is in effect only for a specified amount of time, such as three weeks or a month and a half. The second type, a full-year CR, provides funds from the time it goes into effect until the end of the fiscal year. Actually, some CRs are a combination of the two, providing full-year funding for some budget items, and partial funding for others.

The other crucial difference between a CR and an appropriation bill is the level of funding. When an appropriation bill is an enacted, it means that the President and both chambers of Congress have agreed to (or at least compromised on) a certain level of funding for the items listed in the legislation. But, as has already been indicated, CRs are passed when the normal process breaks down, when compromises can’t be reached. So what do they do?

The answer is…it depends.

Continuing resolutions establish what are called “rates,” levels of funding for government programs. Sometimes, CRs provide funds at the exact same levels as the previous year. Sometimes they provide more money to account for inflation and other price increases that would inhibit effectiveness of programs if they were denied additional funds. Interim CRs often will set spending limits this way. Full-year CRs can also provide funding via spending rates like interim CRs, but they also might incorporate the language of an appropriation bill floating around the House or Senate.

If the government cannot pass either normal appropriation bills or a continuing resolution by the start of the new fiscal year, then the government experiences what is known as a shutdown, which affects those agencies whose appropriations bills have not been signed into law. The term is practically self-explanatory: the government does not open for business. Certain types employees must report to work regardless of whether there is a shutdown or not. Such employees are involved with protecting or preserving Americans’ lives and security. They include military personnel, healthcare workers, or various types of police and other security officials.

The government remained open for business on October 1. The House and Senate recently passed a short-term continuing resolution to keep it open until the middle of November. This CR saga has been actually been a real nail-biter. In September, the House of Representatives rejected a CR brought to the Floor by leadership—a stunning upset for them. Once they were able to pass a measure, it looked like it would get stopped in the Senate, until a last-minute deal salvaged the measure.

Continuing Resolutions: Latest Action and Brief Overview of Recent Practices by Sandy Streeter for the Congressional Research Service. 17 February 2011.