When funding fails

Since 30 September, visitors to the website of the US Nuclear Regulatory Commission (US NRC) have been faced with a flash message that the organisation “has ceased normal operations”, which it says is “Due to a lapse in appropriations”. The US government’s nuclear safety watchdog, along with the Department of Energy and other Federal bodies, have been effectively shut down because on 30 September lawmakers departed the legislature without agreeing a bill that would allocate for funding to pay the organisations’ costs, including paying federal employees. Federal departments or agencies are prohibited from conducting non-essential operations without appropriations legislation in place and NRC has strict limitations on allocating money from assumed future allocations or between funding streams. The result is that nearly 2000 employees will be on ‘furlough’ – forbidden from working, with salary payments held over until the appropriation is passed.

This is not the first time that the US Federal government has been shut down. It  was shut for 21 days in 1995/96, for 16 days in 2013 and for the longest closure in history at 35 days in 2018-19, when some 800,000 employees were furloughed. But the effects are felt more widely than the agency employees: contractors may see contracts terminated or subject to ‘stop work’ orders.

The procedure for shutdown was set out in the 1980 Office of Management and Budget (OMB) Bulletin 80-14, “Shutdown of Agency Operations Upon Failure by the Congress to Enact Appropriations,” amended in 1982 by Supplement No. 1, “Agency Operations in the Absence of Appropriations”.

In 1980 the Attorney General issued an opinion, “Applicability of the Antideficiency Act upon a Lapse in an Agency’s Appropriation,” reaffirming that the Act “unambiguously prohibits agency officials from incurring obligations in the absence of appropriations”. It allows for “minimal obligations necessary for the orderly termination of their agency’s functions”. It allows for emergencies, but a 1995 judicial opinion said this applies “only to cases of threat to human life or property where the threat can be reasonably said to be near at hand and demanding of immediate response”, confirming earlier language this “does not include the ongoing, regular functions of government the suspension of which would not imminently threaten the safety of human life or the protection of property.” However, the “highly specialised” nature of much NRC work may allow it to call back relevant staff on an “as-needed” basis.

Some carryover funding is available because, for example, previous appropriations may have included funds for multiyear projects that are part completed. In addition there are activities that may continue because they are funded by reimbursable agreements, such as the processing of fingerprints for criminal background checks. Once carryover funds are exhausted the NRC may revisit its plan.

It is the Chief Financial Officer who reallocates, to the extent permitted, all available funds to forestall orderly shutdown, and determines how long the agency can operate before all available funds are exhausted. It is office directors and regional administrators who prepare a list of employees to be furloughed by name, grade, job title, office, division, and branch.

Currently the NRC website says the situation is:

• Total number of agency employees expected to be on board before implementation of the plan: 2665
• Total number of agency employees expected to be furloughed under the plan: 1837
• Compensation financed by a resource other than annual appropriations: None
• Necessary to perform activities expressly authorized by law: None
• Necessary to perform activities necessarily implied by law: 85
• Necessary to the discharge of the President’s constitutional duties and powers: 571
• Necessary to protect life and property: 172

The activities that will be delayed or discontinued, “except as necessary to support excepted functions”, is comprehensive, including:

• Licensing, certification, and permit activities.
• Inspections.
• Inspections, tests, analyses, and acceptance criteria (ITAAC) closure verification reviews.
• Routine enforcement actions.
• Notifications, confirmatory order letters, guidance memos, acknowledgement letters to licensees, alternative dispute resolution case work.
• Emergency preparedness exercises.
• Reactor operator licensing, training, and requalification.
• Financial analysis for operating and decommissioning plants.
• Rulemaking and regulatory guidance development.
• Public outreach.
• Integrated Source Management Portfolio routine support.
• Decommissioning-related activities.
• Routine oversight of Waste Incidental to Reprocessing.
• Developing infrastructure for advanced nuclear reactor technologies.
• Developing infrastructure for advanced medical technologies and new fuels.
• Foreign assistance and cooperation including safeguards.
• Support for international travel.
• Maintaining and tracking technical cooperation arrangements.

As well as routine activities such as training, human resources management, press notices, etc, work continues on ‘critical activities’ to fulfil President Trump’s Executive Order 14300’. Dated 23 May 2025, this orders that the NRC be reformed. The NRC has to work with the Department of Government Efficiency Team, and the Office of Management and Budget, on ‘wholesale revision of its regulations and guidance documents’, and produce a rulemaking by 23 February 2026, with final rules and guidance nine months later:

• Establish fixed deadlines for activity or potential licensee, such as licence evaluation or renewal, rather than non-binding ‘generic milestone schedules’
• Reconsider the linear no-threshold (LNT) model and the “as low as reasonably achievable” standard for radiation exposure.
• Expedite approval of reactor designs that the DOD or the DOE have tested, to focus solely on risks from new applications.
• Establish a process for high-volume licensing of microreactors and modular reactors.
• Set a higher bar for changes to the design of reactors under construction.
• And generally streamline the reactor licensing process.

When funding runs out

The NRC set out timeframes for its actions in the event funds are exhausted, which are predicated on the assumption that carryover funding will forestall furloughs for at least 10 working days.

Five days before funding ends contractors will be informed, some contracts cancelled or stopped and inter-agency working ends. Two days later employees to be furloughed will be identified. Employees will be told furlough is expected on the day before funding ends and the following day will see both furloughed and retained employees informed of their status. Telephones will be answered only to inform callers of the agency status, without responding to new business matters unless of an emergency nature, and meetings will be cancelled. After 21 business  days (29 calendar days) furloughed staff we be sent renewed furlough notices and contracts that previously were on ‘stop’ notices may be cancelled. 

Once NRC carryover funds are exhausted, no funds can be disbursed until additional funds are appropriated. In that case, neither furloughed employees and nor those who are retained will receive their pay for the period until after funds are appropriated to end the shutdown.