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Regulatory: Government Furlough

John CooneyA potential impasse is looming between President Obama and Congress over the federal budget. It is possible that parts of the federal government will run out of money on March 4 and have to close. The White House is reactivating a program for managing a shutdown that was developed by President Reagan and used successfully by President Clinton in 1995-96 to win a protracted budget battle with Speaker Gingrich and the Republican House. The shutdown program will again be center stage in the next weeks, as Congress and the White House seek to attract public support for their budgetary policies.

The governing principles were defined in a Jan. 1981 opinion that Attorney General Benjamin Civiletti wrote for President Carter. Under the Antideficiency Act, 31 U.S.C. ?1341, when annual appropriations for a federal program expire, it must cease operations and furlough its employees, unless: (1) the program has funding that covers multiple years; (2) it has authority to operate without appropriations, which includes taking steps necessary to protect human life and property; or (3) it has implied authority to pay employees to implement a function that has permanent spending authority (i.e., paying employees who generate Social Security checks, which are permanently authorized). If the program does not have such authorities, the agency may only undertake "reasonable" actions to shut down operations and put the function into cold storage.

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John Cooney

John F. Cooney is a partner in the Washington, D.C., office of Venable.

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