Friday, January 21, 2011

The Continuing Resolution

The Continuing Resolution (CR) that our government is currently under is really, really hurting the country, and it's not getting enough coverage in the news.

While an under-reported piece of news like the CR is not new or noteworthy, I think it's worth some rational discussion when Congress is actively wasting time making symbolic statements and political posturing about Obamacare.  The act was provocatively named "Repealing The Job-Killing Health Care Act" and reviewed by the Congressional Budget Office.  It has a very, very small chance of being passed by the Senate and zero chance of being signed by the President (he said as much in a press release).

I freely admit that there may be room for improvement in Obamacare.  For example, I never quite grasped how forcing health care companies to accept nearly all applicants won't cause rates to rise dramatically.  I do, however, applaud the idea of making almost all preventive medicine covered.  And I'm actually supportive of requiring people to get health care -- an ounce of prevention is worth a pound of cure.

But, whatever.  The point of this post is not to debate the merits of Obamacare.  It's to lament the dog-and-pony show that the House is putting on with this Act (they spent three days debating the bill) when there are far, far more pressing and important issues to be dealt with.  Namely, THE BUDGET.

Do your job, Congress.

Passing a budget is perhaps the single most important thing that Congress can do each year.  And they missed it badly for FY2011.  See, in the normal budget cycle, there are 12 bills that are individually passed (one bill from each of the twelve subcommittees of the House Committee on Appropriations) and then signed by the President.  Often, things don't go swimmingly, and they have to roll some or all of them together in an "omnibus spending bill".  In fact, that usually happens.  From 1997 through 2007, there were only 3 years  (Table 1) where at least one bill wasn't combined with another to form some kind of omnibus bill.  And in 1987 and 1988, ALL subcommittee bills were combined into one, whopping document.

And then, there are other years where Congress really doesn't get its act together and doesn't pass a spending bill by October 1st.  In fact, the Congressional Research Service states the following (page 13):

In 26 of the past 31 years (FY1977-FY2007), Congress and the President did not complete action on a majority of the regular bills by the start of the fiscal year.  In eight years, they did not finish any of the bills by the deadline.  They completed action on all the bills on schedule only four times: FY1977, FY1989, FY1995, and FY1997.

So what happens when they don't pass a budget?  Then you're in the dreaded realm of the Continuing Resolution:
  • Each month, you're only allowed to spend 1/12th of last year's budget;
  • No new contracts can be awarded or new projects started;
  • When the Continuing Resolution ends, you must spend whatever new money you receive in a shorter period of time to not have excessive carry-over in the next year.

This wreaks havoc on anyone trying to plan their program.  We are now ~ 4 months into FY2011, and no one has a budget.  As a government program manager, chances are, you can't build.  You can't expand.  You can't grow.  And for a country that's trying to reduce its 9.8% unemployment rate, that's a big deal.

And yet Congress (well, at least the House) prances about, passing an irrelevant bill that will never be signed.  "Re-arranging the deck chairs on the Titanic" doesn't cut it -- at least people USE deck chairs occasionally.  This is like handing out maps of Cincinnati on the Titanic.

There is a perfect storm brewing:
  1. Congress was unable to come to an agreed-upon spending bill (twice) in December, and they have now pushed the Continuing Resolution until March 4th.  And, by the way, the House is in session for 9 days in February and only 3 days in March before that deadline hits. That leaves very little time to negotiate and debate a fix to this problem.
  2. The Treasury Department estimates that we'll hit the current debt limit ceiling of $14.3 trillion sometime between March 31 and May 16. 
  3. The GOP has told the White House that they're not likely to raise the debt ceiling.
I'm sad that the above situation isn't being reported in the headlines.  Sure, it's buried in bits and pieces, but I don't think it's getting the attention that the whole package deserves.  Congress needs to figure out a budget, and figure out a way to raise the debt ceiling acceptably.

But what I'm afraid will happen is that Congress will keep kicking the can down the road: do a stop-gap increase in the debt ceiling, and make ALL of FY2011 a Continuing Resolution ... resulting in a null year that could have accomplished so much, and at a time when so much was needed.  Alas.

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