What is a Continuing Resolution?
The national government's budget calendar runs from October 1st through September 30th of each year. Each federal department, agency and program is authorized to spend congressionally specified amounts of money. That money cannot be spent, however, unless it is explicitly appropriated for a given purpose. For example, an agency might be authorized to spend $2 billion on a program, but it does not actually have that money to spend until it is appropriated for that program.
Each year, the Congress must pass and the President must sign 13 separate appropriations bills by October 1st to fund all of the national government's departments, agencies and programs for the following year. If the Congress and President fail to pass all of the appropriations bills, there will be some agencies and programs that do not have the money appropriated to them that they are authorized to spend. In other words, there will be no money to spend on some legally established programs and national government functions.
In most instances, the Congress and the President will agree to a Continuing Resolution which temporarily funds the programs and agencies for which appropriations bills have not been passed. A Continuing Resolution (CR) must be passed by both houses of Congress and signed by the President. Generally, a CR funds agencies or programs for a month or two at the same funding level as the previous year. The main purpose of a CR is to keep the government running long enough for the Congress and President to work out an agreement on all 13 appropriations bills. Currently (on November 8, 1999), the national government is functioning under a Continuing Resolution while the President and Congress work out their differences on the remaining appropriations bills.
While the President and the Congress almost always agree to Continuing Resolutions to keep the government "open," a breakdown in budget negotiations between President Clinton and the Republican Congress in 1995 led to a temporary government "shutdown." Having failed to agree on a new Continuing Resolution after the previous one had expired and having failed to agree on a number of key appropriations bills, several departments and agencies were left with no money to spend. For a short period of time, some parts of the national government did not function.