It is always risky to raise the subject of legislation, particularly appropriations bills, in conversation or a blog. There are few people even in Washington who understand the basics of the budget process and how an appropriations bill gets constructed and passed. What is the difference between a regular appropriations bill and the current continuing resolution? Such a discussion becomes even more problematic when the subject has the infelicitous title of an omnibus defense appropriation bill. Sounds like a replay of the health care debate with a 2,400 page bill nobody understands, earmarks snuck in between the paragraphs to benefit some Congressman’s or Senator’s best donor and more waste, fraud and abuse.
Despite the risks, the subject is too important not to discuss. So let me start with the basics and make it as painless as possible. Currently the entire U.S. government is operating under a continuing resolution (CR). A CR is a means by which Congress can fund the government if a formal appropriations bill has not been signed into law by the end of the fiscal year. A CR provides funding for existing federal programs at the prior year’s levels or less. It does not allow for the initiation of new programs, major changes in funding that may have been planned for the new fiscal year or the reallocation of funds between programs. As a result, a CR can be extremely disruptive to government operations, acquisition programs and research efforts.
While government departments and agencies can manage a relatively brief CR, once it stretches out into months the problems mount. The government has been without regular appropriations since the beginning of the fiscal year on October 1, 2010. The primary reason for this was election year politics; an attempt to pass a government-wide omnibus spending bill died in the Senate last December. The current CR expires on March 4. Many observers believe that the political situation on Capitol Hill could paralyze the appropriations process forcing the government to operate with CRs for the entire fiscal year, that is until the end of September 2011.
Funding the government through CRs causes problems for all parts of the federal government. However, its impact is felt most severely by those portions responsible for the nation’s security and, in particular, the Department of Defense. Secretary of Defense Robert Gates characterized the continuing resolution as, “the crisis on my doorstep. Frankly that’s how you hollow out a military, even in wartime.” The secretary described the consequences of operating long-term under a CR. “It means fewer flying hours, fewer steaming days, cuts in training for home-stationed ground forces, cuts in maintenance, and so on.” In essence the ability to conduct current conflicts, prepare for future threats and protect the lives of service personnel is placed at risk by a long-running CR.
A CR is the gift that keeps on giving. Most defense procurement programs extend over a number of years with funding planned over an extended time frame to achieve a particular rate of production and thereby achieve predictable costs. With a CR the continuity of funding is disrupted and costs can skyrocket. Often when a program is interrupted by the effects of a CR on planned spending there is no way to make up the losses even if additional funds are made available in the ensuing year. For example, if the plan was to buy 10, 20 and then 30 aircraft over three years for a total of 60 but a CR restricts the purchase in the second year to the previous 10 aircraft, the loss cannot be recouped simply by appropriating enough funds to buy 40 in the third year. The production line cannot leap from 10 to 40 aircraft in one year. Moreover, additional costs can be incurred when plans are disrupted and jobs lost. So the consequences of a CR can ripple through defense programs for years.
The current CR is particularly onerous for national security because it limits production rates and prohibits new starts. If warfighters in combat need additional equipment, technically under a CR the Pentagon might be prevented from acquiring what is needed. The U.S. Navy just negotiated a contract to buy ten Littoral Combat Ships from each of two contractors for an amazingly low price. Because of this low price, the Navy was able to add one additional ship at no additional cost. While the CR remains in effect the Navy cannot initiate the new contract. The contractors will have to keep people around without work to do in anticipation of a start sometime between now and the first of October. As a result, costs will rise and the Navy could lose the additional ship.
The CEOs of more than a dozen major defense companies took the unusual step last week of sending a letter to the House and Senate Majority and Minority leaders warning of adverse consequences for national security, job creation and the overall economy if the situation is not resolved. They called on Congress to pass an omnibus national security appropriations bill. Such a bill would free the Department of Defense and other national security agencies from the strictures of a CR. Other departments and agencies would have to be funded either through new CRs or additional appropriations bills.
Congress can continue its current wrangling over government spending levels, public debt and the deficit. But it should not play politics with funding for the military and other national security agencies. As Secretary Gates opined, “this has to do with the security of the country.” Pass an omnibus national security appropriations bill.
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