Continuing Resolution or Shutdown - What is the difference anyway?
By Dana Fowler with fact-checking by Claude (Anthropic)
Every year federal staff wait for the Hill to decide the fate of the coming year’s budget.
It has been a long haul getting to this point in the process, but that is the topic of another insight article. After more than 18 months of development, refinement, and negotiation, a final budget proposal called the Congressional Budget Justification or CJ lands in Congress the first week in February.
Congress then has less than eight months to review, hold hearings, and develop final appropriations bills. It has been nearly 30 years since all twelve of the required spending bills have been passed prior to the start of the Federal Fiscal Year (FFY) on October 1.
The popular media covers these weeks in gory detail, so let’s break it down for all of us into plain english. Highlighted terms can be found in our Federal Insider’s Glossary where they are discussed in more detail.
So, what happens if they don’t pass the spending bills? Or if they only pass some of them?
The FFY starts on October 1. Most government departments function on budgets (also known as appropriations) that are for a single year. So, come October 1, they run out of money. While they may have some dollars left from the prior year, there are legal limits on how those dollars can be spent after September 30.
So, on October 1, the government is in one of the following situations.
Fully funded - all twelve appropriations bills have been passed and signed into law. Everything continues to function as normal and in line with the final budgets passed.
Partially funded - some of the twelve appropriations bills have been passed and the government organizations funded will continue to function as normal. The remainder will face an alternate scenario described below.
Not funded - none of the twelve bills have passed. Only parts of the government with multi-year appropriations or mandatory programs continue to operate. Everything else is affected.
But, what happens to those parts of government who don’t have funding? It depends.
Sometimes Congress gives themselves more time by passing a Continuing Resolution or CR. ACRmay cover the entire government or only the agencies and programs still lacking funding authority. A CRmay also be of varying length and may be as short as a day or two or as long as a full year. It is also possible that multiple CRsare passed in succession.
If a CRis not passed, the government (all or part) faces a Lapse in Appropriations which is the formal term for not having an appropriation. A lapse is a direct result of appropriations bills not passing and leads to what is commonly called a ‘shutdown.’ A shutdown can be as short as a few hours or as long as 40+ days during October 2025. A single agency shutdown can also occur as we saw with DHS this past spring which lasted 75 days.
For all of the media coverage and discussion during the last 8 weeks or so before the end of the FFY, these twelve appropriations bills only cover about one third to one fourth of the federal budget often referred to as discretionary spending. Let’s break that down.
The full federal budget is made up of:
Mandatory spending
Discretionary spending
Interest on the federal debt
A shutdown only affects discretionary spending, specifically the programs without a passed appropriation. Additionally, under the guidance of the Office of Management and Budget, agencies are able to designate ‘essential’ functions and staff which keep working through a shutdown without pay.
Recent shutdowns have impacted functions in many public-facing service areas including delays and disruptions in passport processing, airport security wait times, national park hours and services, and tax processing to name a few.
Founder’s Note: I lived through two prolonged shutdowns in my 24 years, along with several shorter ones that lasted a day or a weekend. The first was October 2013, when I was at the Centers for Disease Control and Prevention (CDC) in Atlanta. I was designated non-essential and was furloughed. I spent the 16-day lapse at home, waiting for word on reopening. We were not allowed to check email or even turn on our Blackberries (!). The only source of news was the actual news so we left it on day and night until we had a budget. It was a stressful 16 days for me, my staff, and my family. My second experience, from the winter of 2018-2019, is in the Lapse in Appropriations entry in our Federal Insider’s Glossary.
Current Status: As we quickly approach the September 30, 2026 end of the FFY 2026, it remains unclear what will happen with federal discretionary appropriations. As of this writing, both the House and the Senate have passed bills establishing a CR through early December. They are, however, different bills and will require additional House and Senate action before a final bill can go to the President. If this does not take place, we may be looking at a shutdown.
More to come - stay tuned.
Fact checking by Claude (Anthropic) using the following resources:
Pew Research Center, "Congress has long struggled to pass spending bills on time" pewresearch.org
Congressional Research Service via Congress.gov, "Congress" congress.gov/crs_external_products
Bipartisan Policy Center, "Can Congress Deliver Appropriations Bills On Time?" bipartisanpolicy.org
Peterson Foundation (PGPF), "Understanding the Federal Budget" pgpf.org/federal-budget-guide
Committee for a Responsible Federal Budget (CRFB), "Government Shutdowns Q&A: Everything You Should Know" crfb.org/papers
Lawfare, "The Homeland Security Shutdown and the Power of the Purse" lawfaremedia.org
Congressional Research Service via Congress.gov, "Government Shutdowns and Executive Branch Operations: Frequently Asked Questions" (R47693)
OPM, "Contingency Plan for the Suspension of Operations in the Absence of Appropriations" opm.gov
Congressional Research Service via Congress.gov, "Past Government Shutdowns: Key Resources" (R41759)
Travelers Today, "Flights, Parks, and Passports at Risk as Congress Eyes October Shutdown" travelerstoday.com
USAFacts, "Everything you need to know about a government shutdown" usafacts.org
Congress.gov, "Appropriations Status Table: FY2027" congress.gov/crs-appropriations-status-table