March 14th is approaching fast, and it increasingly looks like politicians are driving us toward another government shutdown.

Budgeting Basics.

The federal government is currently operating under a continuing resolution (CR) passed on December 20, 2024, which temporarily extends funding at FY2024 levels for most agencies, including HHS, CMS and FDA until March 14, 2025.

Any government appropriations solution, either in the form of an appropriations bill or a continuing resolution, must successfully pass both a House and the Senate vote before it is signed into law by the President.

Come March 14, 2025, there are three potential outcomes:

  1. The federal government is funded under a normal appropriations process,
  2. The federal government is funded under a temporary continuing resolution, typically extending funding at previous levels,
  3. The federal government is forced to shut down until funds are successfully allocated by Congress.

So far, both the Senate and the House have passed competing budget resolutions.  As budget resolutions, the bills do not allocate funding to specific programs. Instead, they provide guidelines and instruct the relevant committees to draft legislation that aligns with their budgetary targets.

  • In the Senate, Majority Leader John Thune passed a budget resolution on February 21st (52 yays – 48 nays).
  • In the House, Speaker Mike Johnson, alongside the White House, flexed significant political muscle to encourage GOP Members to vote along party lines and pass a GOP budget resolution on February 25th (217 yays -215 nays).

While we remain hopeful, a government shutdown remains a real possibility this year. Both the Senate and House passed their respective budget resolutions along party lines with slim margins. Under the normal appropriations process, the two chambers must negotiate a compromise. However, securing House approval for any compromise will be challenging – Republican Speaker Mike Johnson has struggled to manage GOP infighting, and Democrats are unlikely to offer support; both House and Senate Democrats have threatened to oppose any GOP budget unless the federal government complies with the 1974 Impoundment Control Act. This threat becomes even more significant if any measure requires a supermajority in either chamber, where bipartisan support remains unlikely. Even the passage of a CR has become more contentious within both chambers; many Democrats believe voting for a CR will allow DOGE to continue its cutting of the federal workforce unfettered.

Below we address each potential outcome of the upcoming budgeting process and its corresponding legislative process.

Normal appropriations process:

Under the normal appropriations process, a budget resolution passed by one chamber must either be approved by the other chamber as is or be modified and sent back to the original chamber for approval.

In the case of the passage of two competing resolutions, a conference committee made up of members from both chambers will negotiate a compromise, which must then be approved by both chambers. Any budget resolution in the Senate requires only a simple-majority to pass (51 yays – 49 nays, or in the case of a tie, 51 yays – 50 nays with the Vice President casting a tiebreaking vote).

If both chambers agree with the resolution, committees draft a reconciliation bill outlining the proposed federal funding legislation, which is sent to both chambers. If the bill contains only budget-related provisions, it can pass both chambers with a simple majority.

Continuing Resolution (CR) process.

If it becomes clear that Congress is unable to pass funding through the reconciliation process, lawmakers may pivot to approving a stop-gap CR. In the past, a CR typically extended existing funding, with some slight modifications, until a later date, allowing Congress another opportunity to pass a full budget. Traditionally, a CR is developed by the House and Senate Appropriations Committees and introduced to the House, where it must pass with a simple majority. The CR must then pass through the Senate, again with simple majority, and be signed into law by the President.

If a CR’s passage in the House approached the March 14th deadline too closely, it may need to be approved under a suspension of rules, which requires a two-thirds majority – a process that was employed during the passage of the December 20th bill.

Shutdown:

                  If Congress does not agree to a renewed appropriations package or a CR by March 14, 2025, a government shutdown will begin at 12 a.m. on Saturday March 15, 2025.

Typically, Administrations are sensitive to government shutdowns. Since the current funding rules were enacted in 1981:

  • Only 15 shutdowns have occurred. Shutdowns have ranged from several hours to thirty-fix days, with an average length of six days.
  • Only three shutdowns have lasted several weeks.
  • The longest ever shutdown, lasting thirty-five days, occurred in 2018-2019. Notably, it occurred during the first Trump Administration as the FDA was under Scott Gottlieb’s leadership.

We expect that the second Trump administration may view a potential federal shutdown differently than prior Administrations. Although the Administration currently is stating it would like a clean, temporary funding bill (CR),  a shutdown could play into the Administration’s stated priority to streamline federal agencies by reducing unnecessary staff. A recent OPM memorandum directs agencies to identify employees furloughed during a lapse in appropriations within their Agency Reduction in Force and Reorganization Plans (ARRPs); it remains unclear whether this signals an intent to include these employees in any Administration RIF efforts regardless of a shutdown or if the administration is proactively preparing for a lapse in appropriations.

From the Administration’s perspective, the silver lining to a federal shutdown is that if allowed to proceed it may serve as a legal means of retaining only “essential staff,” though this approach would last only as long as supplemental funding remains available to the Agency. Additionally, during an Agency shutdown, policymaking staff are often furloughed, potentially granting the Administration the ability to advance its agenda with reduced oversight.

A shutdown will impact not only the government workforce who will be furloughed, but other severe implications for the US government as a whole.