Because Congress did not provide funding for FY2014, the new fiscal year beginning October 1, 2013, the Department of Defense (DOD), like other agencies, is now subject to a lapse in appropriations. In that event, agencies are generally required to shut down, although the Office of Management and Budget (OMB) has identified a number of exceptions to that rule, including a blanket exception for activities that "provide for the national security." Other than continuing to perform such "excepted" activities, agencies are generally required to terminate operations, and personnel who are not performing "excepted" activities are now furloughed after working only long enough to ensure an orderly shutdown. On September 25, 2013, Deputy Secretary of Defense Ashton B. Carter issued guidance and a contingency plan to continue essential activities in the event that appropriations lapsed. These activities included not only the war in Afghanistan (including preparing troops to deploy) but also other (unspecified in this guidance) military operations, and "many other operations necessary for safety of human life and protection of property, including operations essential for the security of our Nation." Such activities would be considered "excepted" from furloughs. All other activities would shut down. In testimony before the Senate Finance Committee on October 10, 2103, Secretary of the Treasury Jacob J. Lew suggested that Treasury believes that the federal government will "run out of borrowing authority" on October 17, 2013, and will have insufficient cash on hand to meet all government obligations "including Social Security and Medicare benefits, payments to our military and veterans, and contracts with private suppliers—for the first time in our history." Under this scenario, DOD benefit programs for military retirement and concurrent receipt could be delayed if the debt ceiling is not raised, which is not the case during the current government shutdown, where payments to military retirees are protected, as are salaries of troops, and DOD civilians after enactment of H.R. 3210 , Pay Our Troops Act. If the debt ceiling is reached, there is some controversy, however, about whether Treasury could make distinctions between one type of payment and another rather than simply paying bills as they come due and are processed. Some have argued that in such a situation the Treasury could prioritize payments in order to avoid a technical default by paying interest due on debt first as part of a policy to choose to make certain types of payments before others. The Treasury argues that it does not have the authority to make such distinctions. In addition, some suggest that making such distinctions would violate the Impoundment Control Act of 1974 as amended, which prohibits deferring particular payments. In addition to prioritizing payments, Treasury, in 2012, considered but rejected other options, including asset sales—as against taxpayer interests; across-the-board reductions—as difficult to implement; or, the "least harmful" one of delaying payments, which would be "worsened each day ... potentially causing great hardships to millions of Americans and harm to the economy." It is difficult, if not impossible, to predict potential effects on Department of Defense programs or benefits because of the uncertainties. If payments to defense contractors were delayed, the government could incur interest penalties, and contractors could eventually face liquidity problems. If payments to trust funds (Tricare for Life, military retirement) were delayed and not repaid, the solvency of those funds could be affected. If payments to troops or DOD civilians were delayed, this could be seen as breaking a contractual relationship, as well as harming morale. On September 30, 2013, President Obama signed H.R. 3210 , the Pay Our Military Act (POMA), which was passed unanimously earlier in the House and Senate. This act provides appropriations to cover the pay and allowances of all members of the armed forces performing "active service" ("active service" includes both active duty and full-time National Guard duty), and those DOD civilians and contractor personnel whom the Secretary of Defense determines are providing support to these members of the armed forces. This act ensures that those personnel will be paid on time rather than being dependent on passage of a full continuing resolution (CR) or regular appropriations act. On October 10, 2013, the President signed H.J.Res. 91 , which provides for the payment of death gratuities and other funeral expenses for military personnel. Known as the "Honoring the Families of Fallen Soldiers Act," this act was passed in response to considerable controversy in Congress and the press about the Secretary of Defense's determination that these expenses were not covered under the Pay Our Military Act (POMA), passed on September 30, 2012. According to the Administration's interpretation, the language in POMA providing appropriations to cover "pay and allowances" of active-service personnel did not cover death gratuities, an interpretation questioned by some Members of Congress and some analysts. An October 9, 2013, CRS memo, "Payment of Death Gratuities under the Pay Our Military Act," argues that previous statutory language provides that death gratuity payments are to be made from "payment to members" and that POMA language could be construed to include this type of payment. During a House Armed Services hearing on October 10, 2013, on implementation of POMA, several Members raised concerns about the Department's interpretation. CBO estimates that H.J.Res. 91 will cost $150 million on an annualized basis. Like POMA, the act is in effect until passage of a regular or continuing appropriations act. On October 5, 2013, Secretary of Defense Chuck Hagel announced that after consultation with the Department of Justice, it was decided that the new law, H.R. 3210 , would permit DOD to recall most, but not all, DOD civilians from furlough rather than the fewer number "excepted" from furlough under DOD's original September 25, 2013, Contingency Plan. Under the original plan, only those DOD civilians whose "support activities are felt directly by covered members of the armed forces" (i.e., those performing military operations or required for health and safety) were "excepted" (see Appendix A ). The Administration interpreted H.R. 3210 as also permitting the recall of those DOD civilians " whose responsibilities contribute to the morale, well-being, capabilities and readiness of service members [italics added]" . This revision of DOD's Contingency Plan would increase the number of DOD civilians returning to work from roughly 50% to about 95%, according to DOD Comptroller Robert Hale. Under DOD's revised Contingency Plan reflecting this interpretation of H.R. 3210 , DOD civilians are being recalled from furlough if they: "contribute support to service members and their families on an ongoing basis [italics added]" (such as health care and family support programs, repair and maintenance of weapon systems on bases, training associated with readiness, installation support, commissary, payroll activities, and administrative support); and "contribute to capabilities and sustaining force readiness and that, if interrupted, would affect service members' ability to conduct assigned missions in the future [italics added]" (such as acquisition program management, depot maintenance, intelligence, information technology and other administrative support) (see Appendix B for complete text). The services and defense agencies are currently determining how to carry out the revised guidance. As the services and DOD components implement this decision, civilians will return to work starting this week and will become eligible to be paid on time under H.R. 3210 . Because H.R. 3210 only covers the pay and allowances of personnel, but not "critical parts and supplies" necessary to provide that support, Secretary of Defense Chuck Hagel warned that at some point once current inventories run out, DOD civilians would not be able to do their jobs. At that point, he would be "forced once again to send them home." It is also possible that scheduled two-week annual training for reservists could be delayed if the necessary travel and support are not available. DOD is continuing to review whether the number of contractor personnel, also covered under H.R. 3210 , will be increased. Expanding the number of contractor personnel covered could be problematic because it could be difficult to determine the amount of monies providing pay, the funding covered in POMA. Contracts are typically written in terms of the goods or services to be provided rather than the amount for pay, one element of cost. Those defense civilian or contractor personnel who were or remain furloughed would only receive pay for that period if Congress passes legislation to pay furloughed personnel. Civilians recalled under POMA will also not be paid for furloughed time in early October unless Congress chooses to do so. On October 5, 2013, the House unanimously passed H.R. 3223 , which would provide retroactive pay for all federal employees, as occurred during the 1995 to 1996 shutdown. The President has announced his support. The Senate has not taken up the bill at this time. On October 3, 2013, the House passed H.R. 3230 , Pay Our Guard and Reserve Act, which would provide appropriations to cover the pay of inactive-duty weekend training reservists in FY2014 until a regular or continuing resolution appropriations act is passed. (Reservists performing two-week annual training are already covered under H.R. 3210 .) Although reservists would be paid, it is not clear how much training would take place because H.R. 3230 does not provide appropriations to cover related training costs (e.g., fuel, spare parts, food services, and ammunition). Reservists might be confined to training that did not involve additional expenses beyond their pay, although DOD might be able to draw on existing stocks or existing contracts to address these issues at least in the short-term.