Shortly before President Donald Trump revived his threat to shut down the government, I attended a holiday dinner party where the discussion turned to tariffs. My dinner companion was a North Carolina manufacturing executive whose company produces some of its merchandise in China. He said his staff is “wasting a lot of time trying to plan for every contingency” because the administration has yet to announce the amount of the new duties on Chinese goods. His staff is so busy, “they can’t get the real work done.” I told him I understood because that’s the way our $4 trillion federal government operates most of the time.
Government managers have had to hire staff, enter into contracts, and run multi-billion dollar organizations without knowing their full annual budgets. That’s because they’ve had to operate under short-term funding resolutions for much of the past two decades. Congress and the president can agree to these short-term funding resolutions, or CRs as they are known in Washington, when they can’t agree on a new budget. The CRs allow departments to operate at the previous year’s levels until a new deal is reached. And, if it looks like a new deal won’t be reached, hundreds of managers also waste a lot of time preparing for shutdowns.
They’re probably planning for a shutdown right now. Congress has passed five of the 12 spending bills necessary to fund the government, but the president promises to close the rest of the government if Congress doesn’t provide a $5 billion down payment for a border wall. He’s unlikely to back down without a fight since immigration is a top Republican issue. Democrats will probably dig in, too. Five billion dollars is a lot of money, even in Washington, and they want to spend that money on their priorities.
Unfortunately, shutdowns are an expensive way to debate priorities. When federal workers are sent home, private businesses all over the country are hurt. During the last major shutdown in 2013, the North Carolina press reported on missed paychecks everywhere from the Pisgah Inn in Waynesville to a Durham day care center. One estimate found 900,000 jobs across the US could be affected.
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Everyone breathes a sigh of relief when a shutdown is averted, and the press moves on. But if history is any guide, the “deal” will probably be another short-term funding resolution. And that can lead to yet another CR. Last year there were eight. In 2001, there were 21. That means managers develop spending plans over and over again, delay large deals, and let short-term contracts. Sometimes they can’t make long-term deals at all.
That’s bad for private businesses that deal with the government, and agencies can’t negotiate a good deal. The Bureau of Prisons, for example, estimated short-term planning added more than $5 million to the cost of a new prison. The FDA said it jeopardized food and medical device inspections. When you multiply these problems over a dozen departments with multi-billion-dollar budgets, the waste is significant.
This year, Congress has passed the bill that funds the Defense Department. That’s fortunate because, as almost every defense secretary has warned, short-term funding has hurt national security with significant delays in troop training, equipment maintenance and the ability to respond to emerging threats.
This year, annual funding bills still need to be passed for the Treasury, Homeland Security, Transportation, State, Agriculture, Commerce, Housing and Urban Development and Justice departments. How long they’ll have to operate with short-term funding this year is anyone’s guess. But you won’t see any articles about the problems this poses for North Carolina or the country. It’s just business as usual because of broken politics.