Government narrowly avoided closing down after Olbiil Era Kelulau finally passed the Continuing Budget Resolution for FY 2021 on September 30th.

The budget passed did not cut or increase any budget items, merely made the budget effective for six (6) months.  In other words, starting October 1st, 2020 to March 31, 2021, government will operate at the budget level of FY 2020.

The new government upon taking office in January, has three (3) months to come up with its own unified budget for the remainder of FY 2021.

None of the proposed budget cuts which delayed the budget passage were in the passed budget, SB 10-188,SD1, HD1, CD1.

In his transmittal letter to both Houses after accepting the budget, President Remengesau lamented the time wasted, “an exercise in futility”, debating over “reducing” the budget but at the end merely passed the same budget. 

Despite harsh words, President Remengesau in his signing of the bill into law said he gives credit to the leadership of both houses for their patience in leading both houses to reach an agreement and avoiding government shutdown.

Remengesau added that in the last four years, OEK and Executive Branch worked together and accomplished much and said that let this be a lesson learned, to avoid in the future, not to alarm the people needlessly.

The budget has been a subject of debate of both houses since August. Senate had proposed 5% to 15% cut across the board of government branches and agencies.  House proposed to maintain the budget at FY 2020 level as submitted under the Continuing Budget Authority bill. 

After a number of meetings, Conference Committee of both houses was unable to reach a compromise.  Finally, on September 30, the day the FY 2020 fiscal budget was to expire, they passed the Continuing Budget bill as is with language limiting the effectiveness of the law to 6 months only or up until March 31, 2021. 

President Remengesau signed the bill into law on the same day thereby preventing government shutdown.

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