In a precautionary move, the Office of Management and Budget (OMB) directed agencies to review their plans for operating in the absence of appropriations if an agreement if not reached on a Continuing Resolution (CR) to fund the government.

FY2014 begins on October 1 (less than two weeks away) and congressional Republicans and the Administration appear to be at an impasse on providing appropriations for the new fiscal year.

House Speaker John Boehner (R-OH) had hoped to pass a CR that would last until December 15. Boehner’s proposed CR included a provision that would defund implementation of the Affordable Health Care Act (so-called Obamacare). However, his proposal allowed the Senate to reject the provision and still keep the CR funding intact.

The House Republican Conference strongly objected to this plan and forced Boehner to change the proposed CR to require defunding the new health care law in the CR. The House may vote on this proposal tomorrow. However, the Democrat-controlled Senate will surely object to such a CR so it has no chance of getting to the president for signature.

Because of the increasing uncertainty regarding an agreed-to CR before October 1, OMB Director Sylvia Burwell sent a memo to agency heads on Tuesday directing them to begin updating their plans for operating in the absence of appropriations. Burwell reiterated that the administration “does not want a lapse in appropriations to occur,” but given the current situation “prudent management requires that agencies be prepared for the possibility of a lapse.”

The memo reminded agencies that if new appropriations are not made available by October 1 they can not “incur obligations when the funding source for the obligation is an appropriation that has lapsed,” except in limited situations.

Agencies could only continue performing “activities that are ‘excepted’ pursuant to applicable legal requirements (unless the agency has a separate funding source for an activity that will remain available during a lapse and that the agency would use for the agency’s continued performance).”

In an attachment of “Frequently Asked Questions” OMB cited Justice Department decisions that allowed obligations for “excepted activities” if: 1) a legal requirement “expressly authorizes an agency to obligate funds in advance of appropriations” (such as DoD’s feed and forage authorization); 2) the function addresses emergency circumstances that threaten human safety and property; and 3) “the function Is necessary to the discharge of the President’s constitutional duties and powers” (such as in foreign affairs).

Agencies could also continue activities that are “necessarily implied” from the authorized continuation of other activities. Examples of these activities are: minimal obligations to conduct an orderly shutdown of agency operations and activities funded by appropriations that remain available during a lapse (such as administrative activities “that are necessary to disburse benefit payments, for which an indefinite appropriation provides the funding for the benefits).