What happens if Congress can't decide on a budget?

The federal government starts each fiscal year on October 1st. This means that the FY 2018 budget being debated now should cover October 1, 2017 to September 30th, 2018. This also means that Congress, who controls the budget, has to have something in place by September 30th, 2017.

Ideally, they would have legislation that has gone through the traditional budget process, where Congress passes appropriation bills for discretionary spending, and the appropriate authorization bills for mandatory spending.

But the federal budget process is a large, slow going process that faces a lot of challenges.  Many people and organizations within our community rely on government funding to execute their missions and those challenges to Congress translate into challenges for us. Any disruptions to the typical* budget process can be a planning and managerial nightmare for many organizations. This post answers some questions about what happens when the budget process goes awry, and identifies ways to act to preserve investment in our communities.

So, will there be an FY 2018 budget be in place in time?

We talked earlier this week about this very issue. The quick version: There are a lot of challenges facing a FY2018 budget. It might not get passed in time. This can make it feel like things are up in the air, but there are some things that we can anticipate even if a budget isn’t ready to be signed into law.

What happens if the budget isn’t ready to go by Oct 1?

The most extreme case is that the federal government shuts down, like what happened in the fall of 2013. While each shut down can behave differently, generally speaking non-essential discretionary programs cease, and federal employees can be furloughed, typically without pay.

A shut down would likely only affect discretionary spending, because discretionary spending is subject to the annual appropriations process, which runs out at the end of the fiscal year. Mandatory spending programs, like SNAP or Medicare/Medicaid have authorization bills that are often multi-year, and have funding that reaches beyond the annual process. Though mandatory programs still continue through a shutdown, their funding can be a negotiating chip in getting a full budget passed.

Continuing Resolutions help avoid shut downs

Thankfully, there are ways to avoid shut downs. Congress has temporary measures it can take to assure that programs continue to receiving funding while they work to hash out the details of the full budget. This is called a continuing resolution, and it keeps funding at current levels. These measures are often used because no one really wants a shut down - they are expensive, and there is a lot of incentive to avoid a shut down.

Continuing resolutions often work in conjunction with omnibus spending bills. Omnibus bills combine all 12 funding areas.

For example, FY 2017 (October 1, 2016 – September 20, 2017) worked this way. A full budget wasn’t ready by deadline, so Congress passed a continuing resolution in September, then again in December, and finally in April, before an Omnibus bill was passed in May that provided funding through the end of the fiscal year.

*What’s typical anyway?

In recent years, it has become increasingly rare for a budget to be passed, and even rarer for it to be passed on time.

Between 2002 and 2016, only 7 federal budgets were adopted, with appropriations bills being passed on average about 3 months late.

What does all this mean for nonprofits?

This process demonstrates why meaningful, authentic relationships with members of Congress are always worth building! When our representatives are working right up to a deadline, there may not be time to schedule a meeting before a crucial vote. It’s important that your federal representatives are always aware of the value organizations provide, and  so will invest in programs that help nonprofits build strong, thriving communities. 

This is a perfect time to engage your board members on the role federal expenditures play in the lives of the people your organizations partners with every day, and the ability of your organization to provide its services. Board members can be excellent messengers on federal funding issues because they bring a broad, informed community perspective.

It is easy for you, your and your staff to be engaged. Here are some tips for how to make an impact by thoughtfully tell the story of your nonprofit organizations, its mission and values, and its investment in strong, thriving communities.