Will the Pentagon start October 1 with an annual appropriation or a Continuing Resolution (CR)?
The safe bet, as it has been for months, is on a CR. The Pentagon, after all, has been forced to operate under a CR at the start of the fiscal year for nine of the last 10 years. Sometimes it’s a close call, and it’s not till the last few weeks that we actually know how things will turn out. For the 2019 fiscal year, to the astonishment of many, Congress actually passed the defense appropriations bill before the start of the budget year.
But for fiscal year 2021, it’s already clear an appropriations bill will not be passed in time. The only question now is whether Congress will rally to pass the appropriate CR in time to keep the government running.
How can we be so sure? Well, although the House already passed its version of the Defense Appropriations Bill as part of a six bill “mini-bus” package on July 31, no bills or mark-ups have emerged from the Senate Appropriations Committee. And there doesn’t seem to be much expectation that something will appear soon and the 2020 election is fast approaching.
Even though it’s normal for the Senate to follow the House in consideration of the president’s budget request, the looming national election is cited as the reason why the Senate hasn’t even begun its process. Roll Call reports the Republican committee leadership believe the Democrats want “to use amendments to score political points to try to reclaim control of the Senate, and Republicans see no point in taking those shots if there is no expectation the bills will be passed before the elections.”
This, combined with the impasse on a third COVID relief bill, means nothing will be done by October 1. In all likelihood, work won’t begin in earnest until after the November 3 election.
The House did manage to pass a defense appropriations bill, but the larger legislation it was a component of passed without a single Republican vote. So when the Senate does get around to passing a defense budget bill, the two houses will find themselves far apart on a wide range of issues—which will in turn, require extra time to reconcile.
Indeed the House bill contains a number of provisions to which Republicans will likely object. The list includes, among other things: cutting defense spending by $3.7 billion below the Bipartisan Budget Act of 2019 levels; repealing the 2001 Authorization for the Use of Military Force without providing deployed forces a replacement; and overturning the administration’s policy on military service by transgender individuals suffering from gender dysphoria.
For a Congress who regularly delights in accusing the Pentagon of rampant waste and inefficiency, forcing the Defense Department to operate under a CR for an indefinite period while in the midst of implementing a new National Defense Strategy smells a bit like hypocrisy.
In 2017 former Defense Secretary James Mattis famously testified: “During nine of the past 10 years, Congress has enacted 30 separate continuing resolutions upon the Department of Defense, thus inhibiting our readiness and adaptation to new challenges.”
What are the challenges of operating under a CR? First, there’s the Pentagon’s inability to initiate new programs. Unless a special exception is made (called an anomaly, and they are rare) DOD can only spend money on those programs for which money was appropriated the previous year. That means that new programs DOD hoped to pursue in 2021 in areas like hypersonics, artificial intelligence, 5G, or unmanned systems, must await passage of a final appropriations bill.
And sometimes the appropriations bill can take a while to arrive. In 2017 in took 217 days, consuming 59% of the fiscal year. From 2010 to 2019 the DOD has operated under a CR for an average of 119 days per year, nearly a third of the year. This delay serves as a ball and chain on the leg of the Pentagon, consuming time which is the only resource which can’t be regained when the country is engaged in great power competition.
But perhaps the most pernicious effects of the CR are less obvious. Because the Pentagon must operate without any knowledge of when and how much money they will ultimately receive, each echelon of the military pivots to operating on an incremental funding basis. This means doling out only the minimum amount of money to operate, normally 30 days’ worth—like a kid’s allowance.
Key funding decisions are postponed. Rather than make the most cost-efficient deals, officials must pursue short term contracts until the annual funding picture becomes clear. As is typical with an enormous organization, the DoD takes a great deal of time to switch into an incremental funding mode, and just as long to convert it back. All this adds up to missed opportunity and wasted time.
It isn’t just the Pentagon that experiences the pain. The defense industry often pays just as dear a price. Last year the shipbuilding industry warned Congress that “the devastating impacts of both a short-term and long-term CR come at a time when the shipyard industrial base is making signiﬁcant investments in infrastructure, materials, and people in order to rise to the challenge to build, maintain, modernize and repair the Navy the Nation Needs of 355 ships.”
When you are in a race, the last thing you want is a late start.
While our system of government is clearly superior to any other, our potential adversaries don’t contend with CRs or shutdown threats. It’s slowly dawning on most Americans that the United States is in a competition, and there’s not a moment to lose.
Moving forward, Congress must pass key defense spending bills to preserve our national security. Lawmakers should pursue legislative process reforms to ensure the defense budget is consistently passed close to the start of the fiscal year.
Congress has tried for decades to avoid late appropriations, considering various budget process reforms, including passing a balanced budget amendment (introduced in 1994), switching to biennial budgeting (used in 19 states), elevating the annual budget resolution to the force of law or implementing an automatic 120-day CR (whereby CRs take effect automatically on October 1, absent an appropriation). Under that last proposal, additional automatic CRs would reduce spending across the board by 1%.
All these proposals have been offered with the best of intentions. But, as my colleague Justin Bogie observes: “Not passing appropriation bills on time is the symptom of a dysfunctional Congress, not an ill-designed budget process.” For every new rule imposed to fix the process, Congress has demonstrated a complete willingness to grant themselves an exception.
There are some more modest proposals that might help Congress stay on track. For example, the No Budget, No Pay Act of 2013 withheld lawmaker’s pay when they failed to meet the deadlines for budget resolutions. It worked in 2014, but wasn’t renewed. Similarly, Congress could prohibit other legislative items from consideration and forgo scheduled recesses until appropriation bills conform to established deadlines.
Without reform, it is important for our national security that key leaders in government and the private sector continue to stress the imperative of passing defense budgets on time.
This piece originally appeared in Breaking Defense