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Defense Speak Interpreted: Update on the Continuing Resolution and Budget Process for Defense

In December 2019, I discussed the Continuing Resolution (CR), a “kick-the-can-down-the-road” action by Congress signed by the President that delays the final decision on many departmental budgets in the U.S. government. Now, I’d like to provide an update on where we stand today with a new president and a slightly different makeup in Congress.

Most of us think there is just one big budget, but actually, there are 12 that need passage through Congress each year. The Federal fiscal year operates from Oct. 1 to Sept. 30. Normally, the President submits his proposed budget from his Cabinet Secretaries and Executive Departments early in the Calendar year for the following fiscal year, to start Oct. 1. By law, budgets should start in the U.S. House and then move to the Senate for confirmation before the President signs them into law. Usually, the House and Senate Appropriations Committees adjust the President’s proposals to get a final proposal for each of the 12 budgets, hopefully around the time of the congressional summer recess in August. It usually means that after Labor Day, the hard-ball negotiating occurs between House and Senate, and then between Congress and the President.  

But what happens if the House/Senate cannot agree, or they agree, but the President vetoes the Legislative budget? The Federal operations shut down without an appropriation, except for “essential personnel” who are required to work without immediate pay. A full government shutdown usually just makes everyone in the U.S. angry, with lots of finger-pointing about who caused the shutdown. So, Congress instituted the Continuing Resolution so programs can spend the same as they did in the prior fiscal year, but no more. No new programs can be undertaken, and if a program becomes complete, the funding is cut off.   

Here is run-down of the continuing resolutions, for all 12 of the needed federal budgets since 1998:

Table 1: Number and Duration of Interim Continuing Resolutions (CRs): FY1998-FY2025

Source: Prepared by CRS using data from the Legislative Information System (LIS)/Congres.gov.

I have highlighted in yellow, the change when the party affiliation of the incoming president is different from the prior president. In blue, the president has been re-elected. Those years are especially hard to pass budgets as the incoming president has to be inaugurated on Jan. 20, have a Cabinet confirmed by the Senate, and then have those new Secretaries propose a fiscal year budget to start on Oct. 1. Almost always, those Cabinet/White House budgets are late, and the House/Senate cannot start any work before late summer. There is no chance to get a combined budget that will pass both chambers and get Presidential approval by Oct. 1.   

In our current fiscal year, Congress approved a Continuing Resolution extending FY 2024 funding from Oct. 1 to Nov. 17, presumably to be able to see the results of the Presidential, Senate, and House elections. Of course, Trump won the White House, the Senate majority went Republican, and the slim Republican majority in the House dropped by a couple of seats, but held.   

Then, Congress passed another CR to extend the deadline to Dec. 23, just in time for Christmas. The third CR extended the deadline to March 13, with the hope that the House and Senate committees would be sorted out and a firm budget passed.  

In the wake of the push by the Department of Government Efficiency (DOGE), Congress could not meet the March deadline and passed H.R.1968 - 119th Congress (2025-2026): Full-Year Continuing Appropriations and Extensions Act, 2025, through Sept. 30. The U.S. has never spent a whole year under continuing resolution. However, this year, the CR contains the following exceptions for Defense: 

1. While it increases national defense funding approximately $6 billion above FY 2024 spending levels, the bill’s $892.5 billion falls below the Biden administration’s initial $895 billion request for FY 2025. While many Senate Democrats opposed the House version, 60 bipartisan votes in the Senate passed the House version 
2. There is some chance there may be a bit more discretionary spending in this CR than the past, but those factors are complicated.  
3. Already some DoD civilian personnel have taken the retirement package offered by the DOGE effort, and some people in “probationary positions” have been cut from Defense.  

What is the downside for DoD under a CR? By far the biggest downside is that new programs cannot be started. Always, there are needed modernizations and new weapons systems that cannot be undertaken. Also, the production rate for existing weapons programs is frozen, so no increased production can be authorized. 

We are currently in a great state of flux for both program levels, expenditures, and personnel levels within Defense. Stay tuned.

Denny Fritz was a 20-year direct employee of MacDermid Inc., and retired after 12 years as a senior engineer supporting the Naval Surface Warfare Center in Crane, Indiana.