Fact check: How does the continuing resolution affect the 2025 federal budget?

1. Why the CR turned into a budget chokehold, and who’s counting the cost

The CR’s failure to secure timely congressional approval turned ordinary budget timing into a shutdown that halts appropriations, immediately freezing non-exempt discretionary accounts and stopping new contracts and grant obligations. Congress’s inability to agree on either a full set of appropriations bills or a bipartisan short-term CR left agencies reliant on pre-existing balances or statutory exceptions for essential activities, a dynamic described as the proximate cause of federal furloughs and hiring freezes ^{[5] [2]}. The Office of Management and Budget’s preparatory guidance for layoffs reflected the real fiscal constraint: absent enacted appropriations, agencies cannot legally obligate funds, producing immediate operational impacts and deferred budgetary decisions ^[3].

2. Who keeps getting paid and who doesn’t under the CR

The CR and ensuing shutdown produced a split in payments: military and certain essential personnel continue to work and typically will be paid, while many civilian federal employees face furlough or delayed pay unless specific emergency measures are passed ^{[1] [2]}. Recent Senate votes highlighted partisan disagreement over piecemeal solutions — Republicans advancing measures to pay some workers and Democrats pushing for broader coverage — leaving millions of civilian workers in limbo and contractors particularly vulnerable because they lack statutory backpay protections ^{[4] [1]}. These choices effectively shift the budget question from appropriations to adjudications of urgency and authority.

3. Program-by-program risks the CR introduces into the 2025 budget

The CR places programs reliant on annual appropriations at immediate risk: Head Start, some grant-funded social services, and other discretionary programs face disruptions or suspension absent funds, and nutrition programs may strain into November depending on stopgap outcomes ^{[4] [6]}. Mandatory programs such as Social Security and Medicare remain legally funded in most cases, but administrative slowdowns and contractor interruptions can still delay processing and services tied to those programs. The CR’s short-term nature also prevents Congress from making trade-offs or adjustments for 2025 priorities, meaning deferred funding choices create downstream uncertainty for states, localities, and beneficiaries ^[5].

4. The economic and fiscal ripple effects beyond federal payrolls

Beyond direct staffing impacts, a prolonged CR and shutdown can dampen economic activity, raise borrowing and administrative costs, and complicate fiscal planning for FY2025 and FY2026, as agencies postpone commitments and private contractors face cash-flow strains ^{[2] [7]}. Market and municipal actors factor federal uncertainty into their forecasts; prolonged funding lapses can reduce consumer confidence and slow spending in sectors tied to federal contracts. While the immediate budgetary arithmetic shifts discretionary obligations, the medium-term fiscal picture is also affected by potential emergency rescissions, supplemental spending, or catch-up appropriations that alter baseline assumptions for 2026 budgeting ^[3].

5. How Congress’s vote choices changed the political arithmetic of the budget

Recent Senate rejections and party-line maneuvers show that passage choices are shaping who bears the immediate pain: targeted bills to pay active-duty military or certain employees pass differently than omnibus funding packages, and partisan objections often cite concerns about executive discretion or fairness in who receives pay ^[1]. These parliamentary outcomes matter because each short-term legislative maneuver either narrows or expands the fiscal options available for an end-of-year deal, effectively influencing negotiating leverage and the content of any eventual omnibus appropriations that will set FY2025 spending.

6. What the CR means for 2026 planning and the longer budget calendar

Even if a CR were passed tomorrow, the deferred decisions create carryover effects into the FY2026 calendar by altering baselines and obligational authorities, complicating appropriators’ baseline math and heightening pressure to reconcile funding shortfalls in subsequent bills ^{[3] [5]}. Agencies forced to suspend or delay programs may need supplemental funding or reprogramming authority later, creating additional budget amendments and legislative friction. The CR’s pattern of stopgap action incentivizes short-term fixes over comprehensive budgeting, making multi-year planning and longer-term fiscal priorities harder to implement.

7. Where reporting converges and where it diverges

Reporting converges on the immediate operational impacts—pay disruptions, furloughs, and frozen discretionary obligations—and on the political stalemate driving the shutdown ^{[4] [2]}. Divergence appears in emphasis: some outlets foreground the human and programmatic harms, including childcare and subsidy disruptions ^[4], while others emphasize procedural and legal dimensions, like the president’s discretionary authority or OMB contingency plans ^{[1] [3]}. Those differences reflect editorial and political lenses but agree on the factual framework: without enacted appropriations, the CR’s failure constrains the 2025 budget in tangible operational and fiscal ways ^{[7] [6]}.

8. Bottom line for policymakers and the public

The continuing resolution’s collapse has not rewritten statutory entitlements but has frozen discretionary spending and forced stopgap triage that delays budgetary choices for 2025, amplifies costs for agencies and contractors, and increases the likelihood of ripple effects into 2026. Resolving those impacts requires either a negotiated omnibus, successive CRs, or targeted congressional action to restore pay and obligations; until then, the FY2025 budget remains in partial suspension with measurable human and economic consequences ^{[1] [3]}.