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Thursday, October 10, 2013

Government Shutdown: Operations of the Department of Defense During a Lapse in Appropriations

Pat Towell and Amy Belasco
Specialist in U.S. Defense Policy and Budget

Through most of the second half of FY2013, funding for the Department of Defense (DOD), as for most other federal agencies, has been provided by the Consolidated and Further Continuing Appropriations Act, 2013, (P.L. 113-6), which will expire at 11:59 p.m. on Monday, September 30. If additional funding is not provided by then, DOD, like other agencies, will be subject to a lapse in appropriations during which agencies are generally required to shut down. In the past, however, the Office of Management and Budget (OMB) has identified a number of exceptions to the requirement that agencies cease operations, including a blanket exception for activities that “provide for the national security.” On September 25, 2013, DOD issued guidance and its contingency plan identifying the types of activities that would continue in the event of a shutdown.

As a result, during a lapse in appropriations, some DOD personnel would be “excepted” from furloughs, including all uniformed military personnel, while others would be furloughed and, thus, not be permitted to work. Even “excepted” military and civilian personnel who would continue to work and whose pay is normally provided through annual appropriations would not be paid, however, until after appropriations are subsequently provided for that purpose unless separate legislation is enacted. Personnel who are not “excepted” would not be entitled to receive pay for the period during which they were furloughed although, in the past, Congress has provided for them to receive the pay they would have received if they had not been furloughed.

A frequent question is how federal employees’ compensation was affected during the last government shutdown in 1995-1996. There were two shutdowns at that time, one of five days, from November 13 through November 19, 1995, and one of 21 days, from December 15, 1995, through January 5, 1996. The first shutdown was not long enough to affect pay checks, and DOD was not affected by the second because defense appropriations were enacted on December 1, so funding was available. Moreover, by law, Congress provided back pay for employees who had been furloughed during the two shutdowns, although the government was not legally obligated to provide that pay.

The authority to continue some activities during a lapse in appropriations is governed by the Antideficiency Act, now codified at 31 U.S.C. 1341 and 1342, as interpreted by Department of Justice (DOJ) legal opinions and reflected in Office of Management and Budget (OMB) guidance to executive agencies. Subject to review by OMB, each agency is responsible for making specific determinations on which activities may continue during a shutdown and which may not.

Legally, according to DOJ and OMB guidance, activities that may continue during a lapse in appropriations include (1) activities “necessary to bring about the orderly termination of an agency’s functions;” (2) administration of benefit payments provided through funds that remain available in the absence of new appropriations, including, in the case of DOD, military retirement benefits; (3) activities and purchases financed with prior year funds and ongoing activities for which funding has already been obligated; (4) activities undertaken on the basis of constitutional authorities of the President; and (5) activities related to “emergencies involving the safety of human life or the protection of property.” The Defense Department attributes its authority to carry on national security-related operations mainly to Section 1342 of the Antideficiency Act, which permits the continuation of activities to protect human life and property.

DOD’s September 25, 2013 guidance identities activities that would continue in the event of a shutdown including a list of military operations and related activities deemed necessary for national security This guidance is almost identical to December 2011 guidance that was issued almost two years ago when a funding lapse was also widely viewed as a real possibility. The 2013 guidance provides that not only would ongoing military operations, such as those in Afghanistan could continue but that a broad range of other activities that, in DOD’s view, were needed to support national security-related operations, from training, communications and intelligence to emergency response, equipment repair and acquisition support would also continue. Other activities included are operation of DOD Dependent Schools, child care centers, and DOD medical activities, including TRICARE services for dependents, but not non-essential services such as elective surgery in military medical facilities.

The 2013 DOD memo also pointed out that—as noted, above—the pay of military and civilian personnel could be interrupted, however, potentially imposing hardships on many families. Contracting activities that supported military activities and payments to vendors derived from prior multiyear appropriations could also continue. While some new contract obligations to support excepted activities could be permitted, there could be some confusion and, potentially, disruptions to supplies of some material and services.

Date of Report: September 30, 2013
Number of Pages: 23
Order Number: R41745
Price: $29.95

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