May 7, 2018  |  Finance

Government Appropriations and Shutdowns

Most of us have had the unfortunate experience of dealing with a Government shutdown and the anxiety that comes with it. But do you know what leads to such a serious financial situation?

AdobeStock_47195820_Government SpendingIn this post, I’ll briefly explain the three types of appropriations and how each affects the way the Government is funded. These include:

  1. Appropriation or omnibus spending bill
  2. Supplemental appropriation bill
  3. Continuing resolution (CR)

1. Appropriation or omnibus spending bill

Generally speaking, an appropriation is a bill that sets aside money for government agencies and departments. A regular appropriations bill is supposed to fund the government for the entire fiscal year (1 Oct – 30 Sep), and is actually a collection of 12 separate bills. You’ll sometimes hear this referred to as an omnibus spending bill since it is a collection of two or more bills.

2. Supplemental appropriation bill

The second type of bill is a supplemental appropriation which is used to add funding to already funded programs or add funding for unforeseen issues such as war or natural disasters.

3. Continuing resolution

The third kind of bill that we have heard a lot about in the past several years is the continuing resolution (CR). A CR continues existing appropriations at the same levels as the previous fiscal year for a specified period of time and is used when a regular appropriations bill does not cover the entire fiscal year.

This type of bill has been used extensively due to the fact that the last time Congress passed all of its required regular appropriations on time was in 1997. Operating under a CR can have several negative impacts to long-term programs and can greatly affect day-to-day operations of the government, especially in the final days leading up to the expiration of the CR.

_____

Fortunately, an omnibus spending bill was signed by the President on March 23, 2018 which funds the government for the remainder of the current fiscal year. Let’s hope that we don’t start fiscal year 2019 under another CR, but if history is an indicator, the chances are very high!

About the Author

David Morrison

David Morrison

Dave leads Markon’s financial management practice and is also the market lead for our Intelligence Community finance and consulting business. He has provided project management, financial consulting, and IT services to clients across the Intelligence Community. Dave began his career as a Contracting Specialist managing an IDIQ contract consisting of 50+ separate delivery orders valued at more than $100 million. In 2013, he was named Markon's Employee of the Year. Dave earned his MBA from Georgetown University and a BS in Finance with minors in Economics and Management Information Systems from the University of Delaware.