The challenges of working under a CR

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Nearing four months into operating on one continuing resolution after another, some government agencies are getting a little nervous about moving forward. Will they be able to ramp up planned programs. Can or should they make similar plans for next year?

The conventional wisdom is that Congress will pass a fourth temporary budget measure in FY 2018 by the time the third expires Friday night. But one observer said it’s a 50-50 chance nothing will happen and the government will shut down.

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“We’re starting to hear folks talk more and more about how they’re fed up and they’re not willing to pass another CR unless they have some sort of a deal, at least in principle,” Todd Harrison, senior fellow at the Center for Strategic and International Studies told the Federal Drive with Tom Temin.

In addition to the overall budget issues being debated, immigration issues have become one place where things have become heated. Getting past that won’t be easy.

“Right now I think it’s basically a coin-toss whether or not the Congress gets another short-term CR passed by Friday,” Harrison said.

A big problem facing federal agencies is that there’s no assurance there will even be a regular budget this year. If Congress were to follow on with more continuing resolutions, current spending could exhaust money that’s available and lead to sequestration.

“I don’t think that will actually become an issue,” said Harrison. “The bigger issue is when will they eventually get around to passing a regular budget.”

The Defense Department, for example, has a budget cap for FY 2018 of $549 billion. The three continuing resolutions passed thus far have provided for small increases in the cap, but Harrison questions whether there will be enough time left in FY2018 to actually spend the money.

“This past fiscal year, FY 2017, we had the longest continuing resolution — seven months for DoD. That’s the longest we’ve had in over 40 years. That’s not a good trend to continue. It was very disruptive last year,” Harrison said.

Without an official budget, agencies are hamstrung. Besides not being able to follow through on plans made the previous year, they can’t launch new programs until there is an official budget.

“It’s not that you just can’t start a new program, you can’t ramp up production of something you were already planning to ramp up. So there are all kinds of disruptions that get more and more severe the later you go into the fiscal year under a CR,” Harrison said.

Even things like maintenance and training can be set back.

“If you go too far into the fiscal year, you won’t be able to do all the things that had already delayed that year. You’ll have to push some of them into the next fiscal year,” Harrison said.

Obviously,  acquisition programs are at the most risk. Because of many big budget items, the Pentagon is a good example of the quandary caused by the lack of a budget.

The DoD planned to ramp up production on its F-35 program this year. Congress wanted to add even more planes than the military had requested. But that’s all on hold right now.

Then there’s the aerial refueling tanker, the KC-46. The Air Force was able to lock Boeing into a firm fixed price contract. But if the Air Force can’t provide the money to follow through on the terms of the contract, it could be forced to renegotiate less favorable terms.

The Air Force bomber, the B-21, was just getting under development and anticipating ramping up funding this year. That can’t happen under a continuing resolution.

While budgets for war fighting and emergencies are exempt from cuts, ancillary activities that support those missions at the Pentagon are not.

“Training and maintenance budgets can really have a negative impact. If you’ve got this uncertainty in the budget and you have to delay things, then eventually you get so late in the fiscal year you can’t do all the training you planned to do. That can negatively affect readiness,” Harrison said.

Harrison said the maintenance issue really comes clear in the Navy’s ship programs. With a limited number of slots in its depots for doing ship overhauls, repairs or just everyday maintenance, budget shortfalls cause delays and changes in deployment schedules. Those, said Harrison, result in cascading problems that impact readiness.

“I think the biggest point is this — it just drives inefficiency in the system to have this kind of uncertainty,” Harrison said.