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A continuing resolution (CR) is a stopgap measure which is designed to keep vital government services running while a legislature works out appropriations bills, which formally designate funding to various agencies. The practice of making continuing resolutions is quite common, as budgets can get extremely complex, and some political parties have been known to deliberately hold up budget negotiations to force an issue, thereby potentially threatening important government services. Depending on where you live, you may find the term "continuing resolution" in the news a lot around the end of your government's fiscal year.
In the United States, the budget year runs between 1 October of one year and 30 November of the next year. Other nations have different fiscal years, depending on how their budgets and governments are organized. Every year, the legislature must agree on appropriations, acts which designate various amounts of funds to different government agencies. Appropriations bills allow government agencies to spend their funds; without an appropriations bill, a government agency has no money, and it will quickly cease to operate.
Appropriations bills, however, are rarely simple. Lawmakers wrangle over details, and many try to slip pet projects into appropriations bills, thereby dragging the process out even more. As a result, it is common for the end of the budget year to be reached without the passage of appropriations. This is where a continuing resolution comes in; it provides several months of funding for vital government agencies. The funding in a continuing resolution is typically similar to that which the agency received in the previous year, allowing agencies to keep running.
In order for a continuing resolution to pass, it must pass both houses, if the legislature is bicameral. The head of state must typically sign off on it as well. Failure to pass and sign such a resolution could be catastrophic, as government agencies provide things like health care, education, food stamps, road maintenance, law enforcement, and so forth. Most people agree that these services are vital, and an interruption in service could turn very ugly.
As a result of the consequences of funding interruptions, most governments are generally willing to cooperate on continuing resolutions. In 1995, the Republican party in the United States, led by Newt Gingrich, decided not to cooperate, causing a temporary shutdown of many government agencies. In Washington, chaos erupted as moderates tried to negotiate while extremists blamed each other for the situation. Some people have suggested that the Republican-led budgetary chaos may have contributed to the results of the 1996 general election in the United States, as many voters were very angry about the temporary shutdown in government.