The Pending Government Shutdown
The Democrats in charge of Congress have yet to pass a single funding bill even though the government is now a month into a new fiscal year. All that is keeping the government running at this point is a series of continuing resolutions, reports David Ignatius. It is not a new phenomenon, of course. This has been going on for years, sometimes it is slightly better, sometimes worse. But it is a real problem.
The problem has actually become worse since the 1974 Congressional Budget Act, which delayed the start of the fiscal year to Oct. 1 from July 1 to give Congress more time to do its job. According to a 1997 article by University of Maryland political scientist Roy T. Meyers, the percentage of late appropriations bills increased after Congress extended its deadline.
Meyers summarized the inefficiencies that result from having to run an agency without knowing your budget. "When regular appropriations are delayed, uncertainty about final appropriations leads many managers to hoard funds; in some cases, hiring and purchasing stops. These effects are so unnecessarily counterproductive, it is surprising (the comic strip) 'Dilbert' has not devoted a month to this topic."
Joyce argues that government contractors jack up their prices to compensate for the risk and uncertainty. And he notes the added cost for federal agencies who have to plan for the possibility that a new CR won't be approved and that they may have to shut down. "That's what economists would call a dead-weight loss," says Joyce.
"It's a lousy way to do business," says Leon Panetta, who grappled with these issues as director of the Office of Management and Budget in the Clinton administration. "You're almost guaranteeing that there will be incompetence, because the agencies don't have the resources to do the job."
The budget breakdown is as serious for those who receive federal money as for the bureaucrats who dole it out. Panetta notes the problem facing school districts around the country that count on federal spending. They have to make plans at the beginning of the school year in September, but with Congress in "CR" mode, they don't know if they can count on the federal money. So they often delay big items such as construction or new programs.
Again, it is not unique to either party. But the party in power is going to take a disproportionately large hit for allowing a shutdown to occur. The Republicans found that out back in the late 1990s. With approval rates for Congress already at historic lows, this is not a good sign for the Congressional leadership.
By K T Cat, Thursday, 1 November , 2007 @ 10:11 am
In a lot of cases, federal money cannot be carried over to the next year. It has to be expended by Oct. 1. This means you have less time to spend the same amount of money, but you can’t staff up because doing so adds to your labor burden for the next year when your budget won’t really have gone up to cover the added people.
This happens fairly frequently, typically the most during non-election years. In election years, Congress is rushing off to campaign and they want to get the job done as fast as they can. Still, this year seems worse than most.
By K T Cat, Thursday, 1 November , 2007 @ 1:39 pm
I just noticed that I’m not linked here. I can has blogroll?
By Gaius, Thursday, 1 November , 2007 @ 2:19 pm
Sorry, KT. I really thought you were on the blogroll - but I’m not sure if some things got lost when I tranferred everything around, either. You’re blogrolled now.
By K T Cat, Thursday, 1 November , 2007 @ 8:48 pm
Thanks!