• Allon Advocacy

Shutdown Averted...Barely

Congress used to fund the government through the appropriations process. Its recent use of "CRs" is causing issues within the bureaucracy.

“Shutdown averted.” That’s the headline each time the U.S. House and Senate reach a last-minute deal to pass a continuing resolution (CR) that will keep funding running to federal agencies (albeit at the previous fiscal year’s levels).

With Congress fast approaching the expiration of its most recent CR next week, the House has already approved another CR – the third since the last fiscal year ended on October 1 last year – that would fund the government through mid-March.

These stopgap measures allow federal lawmakers to avoid a government shutdown that would disrupt everything from IRS operations to the processing of Social Security checks to military construction. But while lawmakers emit a collective sigh of relief each time a CR is finished, federal agency staff, military leaders, government contractors, and other stakeholders grit their teeth.

Continuing resolutions are better than shutdowns, but they aren’t as useful as long-term appropriations bills, which is how Congress used to fund the government.

Continuing Resolutions Impact Our National Defense

As President Biden has mobilized troops for possible engagement in Ukraine, the country’s military leaders have warned Congress that another CR would harm servicemembers and their families. They also have outlined the dire results if Congress were to simply pass a full-year CR that kept federal agencies funded at fiscal year (FY) 2021 levels.

A U.S. Department of Defense (DoD) blog post last month summarized what’s wrong with a CR. By freezing spending at last year’s levels, “A CR does not allow new starts for contracts or programs; it causes havoc on recruiting, retention and personnel moves; and severely impacts military readiness.” DoD Comptroller Michael McCord told a panel of lawmakers that a CR also would mean each military branch would have to put off facilities’ maintenance. It also would make it more difficult to pay medical bills for soldiers and “would undermine support of our men and women in uniform and their families,” McCord said.

McCord estimated a full-year CR — meaning the CR would last until the next fiscal year begins on October 1, 2022 and there would be no increased spending for this year — would reduce the DoD budget by $8 billion in FY 2022. That figure would include a $5 billion cut from the military personnel accounts that are used to compensate service members.

While that is the raw monetary cost, McCord argued the practical impact would be far greater.

“[W]e would have significant funding that’s misaligned, trapped or frozen in the wrong places, and unusable because we don’t have the tools or flexibility to realign funds on anything like the scale we would need to fix all the problems,” McCord said. That’s because Congress does not normally allow federal agencies to reprogram money during short-term CRs.

“If you add the impacts of this unusable funding to the straight loss of purchasing power under a CR, the real impacts on our operations will double or triple the impact of the cuts,” McCord concluded.

Rep. Mark Green (R-Tenn.), a member of the House Armed Services and Foreign Affairs committees, has argued CRs harm military readiness. “Every year that Congress fails to produce a full defense budget, the Department of Defense reports multiple losses that slow weapon development and manufacturing,” he said in a column in The Tennessean. “[I]n fiscal year 2018 alone, the department saw a delay in over 75 weapons programs. … Just last year, the lack of a proper budget brought on significant cuts to the military’s W93 warhead program.”

Whether Republicans remember Rep. Green’s argument if they win back the House is another story. And CRs impact much more than the military.

CRs Harm Government Contractors, Other Stakeholders

Rep. Rob Wittman (R-Va.) has argued CRs adversely impact the economy by making investors and the general public less confident in the federal government and its operations. “The CR rules prevent agencies from recruiting or hiring new staff and implementing new programs (even necessary ones, like transportation projects),” he said. “Stopgap measures kick the can down the road, create uncertainty for agencies and employers, and negatively impact communities and families.”

Republicans are not the only ones on the anti-CR bandwagon. According to Rep. David Trone (D-Md.), a full-year CR “would mean vital programs would either not be expanded — or worse — not be funded at all.” He estimated :

  • The National Institutes of Health would not receive $3 billion to establish the Advanced Research Projects Agency for Health, which will conduct research to improve the health of all Americans;

  • The National Cancer Institute would not receive an additional $432 million, including $194 million for the Cancer Moonshot; and

  • The Substance Abuse and Mental Health Services Administration would lose out on $3.14 billion for critical investments, including responding to the opioid epidemic that claimed 100,000 lives in 2021.

The American Association for Cancer Research has said, “A full-year continuing resolution or funding lapse would threaten our nation’s research enterprise and stall medical breakthroughs that could benefit the lives of millions of patients with cancer and survivors.”

The ill-effects of CRs “extend well beyond the federal government,” according to the left-leaning Center on Budget and Policy Priorities, to state and local governments, nonprofit agencies, scientific researchers, and any other entity that receives federal money. These organizations and individuals cannot “fully plan or proceed with that work until full-year funding decisions are made,” CBPP concluded.

The Concord Coalition outlined the main drawbacks of a CR:

  • No New Projects. CRs prohibit agencies from starting new projects, which “can significantly affect operations,” stall new contracts and reduce hiring.

  • Less Money to Go Around. Under what is called a pro-rata formula, federal agencies receive a uniform amount of budget authority to spend for each month. Some agencies, like the U.S. Department of Education, spend more in certain months so these caps can have serious consequences for programs like Pell Grants.

  • Budget Uncertainty. Federal agencies have to manage their operations without a clear direction of resources available to them. Why does this matter? Well, it could “cause an agency to alter its plans, its rate of spending, or its spending pattern, with potential ripple effects on internal management.”

  • Administrative Burden. A CR “imposes tight restrictions on the obligation of funds and there are federal penalties for spending more than authorized under law, so documentation is very important.” It takes a lot of agency staff hours to ensure compliance with these rules.

As The Washington Post explained, a 2009 Government Accountability Office (GAO) study looked at the impact CRs had on six agencies. It found stopgap spending measures:

  • Cost the Veterans Health Administration (VHA) $1 million in lost productivity and more than $140,000 in extra work for the agency’s contracting office;

  • Caused the VHA to delay signing contractors for new maintenance projects on electrical and sewage systems at some hospitals and to solicit bids on contracts a second time in order to redo environmental, architectural, and engineering analyses;

  • Meant the FBI had to spend more than 600 extra hours on planning meetings and monitoring agency resources;

  • Caused the Administration of Children and Families (ACF) to issue block grant awards multiple times over the course of temporary spending measures, leading to 10 extra days of work preparing and verifying the grants;

  • Resulted in the U.S. Food and Drug Administration holding off on hiring personnel for vacant positions; and

  • Caused the Bureau of Prisons to delay opening two facilities.

Continuing Resolutions: A History of Failure

The Peter G. Peterson Foundation has argued that, while CRs are better than shutdowns, they still “reflect the failure of lawmakers” to finalized spending for federal agencies.

As the foundation has explained, these failures are all too common. In fact, Congress has not met its obligation to pass all 12 annual spending bills since FY 1997. From FY 1998 to FY 2022, federal lawmakers have relied on 126 CRs to get through appropriations season.

As a result of this dismal record, some lawmakers have recommended that Congress pass legislation to allow the automatic passage of CRs. Funding would be on autopilot at the prior fiscal year’s levels and would continue whenever the House, Senate, and president failed to enact a full-year or temporary funding bill.

According to the CBPP, automatic CRs, and CRs in general, mean agencies are less adaptable. The CBPP said they “significantly increase the instances in which the previous year’s appropriation levels and priorities remain in place for a year or more while pressing, new needs go unattended and areas that no longer need as much funding are overfunded.”

That’s definitely not something to celebrate. But there is cause for hope. Earlier today, Republican and Democratic leaders announced an agreement on a framework for passing appropriations bills to fund the government after the next CR expires in March.

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