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Defense Speak Interpreted: The Continuing Resolution

The topic of the continuing resolution (CR) has been sneaking past other hot Washington topics, such as impeachment, candidate debates, and why the Redskins are so bad. I think most of us have a vague idea that CR is some kind of alternative to “government shutdown.” The memory of the recent shutdown from December 22, 2018, to January 25, 2019, is all too clear. Parks closed, services were suspended, and in some cases, workers were not paid. However, there have been 10 Federal Government shutdowns since a 1980 interpretation of the 1884 Antideficiency Act that basically prohibits the Federal Government from spending money without a budget process. Before the 35-day shutdown last year, the next longest was 21 days in 1995, and a 16-day shutdown in 2013. In general, all of these shutdowns involve disputes between Congress and the President. Figure 1 shows the shutdowns for the Department of Defense (DoD).

Figure 1: Days under a CR (DoD, FY2002–FY 2019). (Source: CRS analysis)

To prevent full government department shutdowns, Congress has instituted continuing resolutions (CRs). From Wikipedia ^[1], “A CR continues the pre-existing appropriations at the same levels as the previous fiscal year (or with minor modifications) for a set amount of time.”

Normally, Congress passes, and the President signs, 12 separate budgets each year. The one of interest to the DoD is the National Defense Authorization Act (NDAA). While a top-line budget figure of the total money for all 12 departmental budgets has been agreed to between the House of Representatives and the White House, department-by-department and line-by-line spending detail is still to be worked out. The 2020 NDAA—which runs from October 1, 2019, to September 30, 2020—has not been set. The DoD budget was included in the first CR passed on September 27 and signed by the President at the start of the 2020 fiscal year. That extended 2019 program funding until November 21, 2019, hence the recent scurrying in Washington to again pass a second FY2020 CR. The current CR is to run until December 20, 2019, so Merry Christmas!

Beginning the federal fiscal year under a CR is nothing new for the DoD. For 13 of the last 18 years, the DoD has not had a passed and signed budget as of October 1. Figure 1 shows the number of days the DoD has spent under CRs in the past 18 years.

What are the prospects for a regular appropriate bill passage by December 20? As I write this, they are not terribly good. A new concept for appropriation this cycle is a clean NDAA; that is, there would be nothing controversial in the bill, such as border wall funding, contentious nuclear weapons plans, authority to monitor domestic phone calls, etc. One good thing about the recently passed CR is that the military received the planned 3.1% yearly pay raise for troops. The clean NDAA is backed by Senate Majority Leader Mitch McConnell (R-Ky.). Somehow, lawmakers did put money in the CR to run the U.S. Census in 2020; that will not be delayed.

What is the downside for the DoD under a CR? By far the biggest is that new programs cannot be started. Always, there are needed modernizations and new weapons systems that cannot be undertaken. Some of the programs now being put off include the Space Corps as a new branch of defense, hypersonic weapons development, and plans for the Defense Counterintelligence and Security Agency. Also, the production rate for existing weapons programs is frozen, so no increased production can be authorized.

The U.S. Army has been vocal about CR’s impact on their programs. From Defense News ^[2], “If the Army has to stick to FY19 spending levels for an entire year, it won’t be able to begin 79 new-start programs, which amount to $1.9 billion in planned investment, according to a detailed list of impacts to the service the Army sent to Defense News upon request. Additionally, the service wouldn’t be able to increase planned production for 37 programs totaling $1.6 billion. The Army would also be unable to spend $1.9 billion on 46 new military construction projects, $2.8 billion on operations and maintenance efforts, and an additional $500 million on military personnel obligations.”

It also appears the Navy will mostly be postponing maintenance work that was scheduled in FY2020. They would probably ask for, and receive, an exception to the CR to start a new Columbia class submarine. And based a document released during an Air Force Association breakfast in Washington, D.C., and quoted by National Defense, “A CR will prevent the procurement of the F-15EX, F-22 sensor upgrades and F-35 modifications and correction of deficiencies.” National Defense continues, “A year-long CR would also impact the GPS III Follow-On satellite, and slow hurricane recovery efforts at Tyndall AFB in Florida, and flood damage at Offutt AFB in Nebraska, respectively.”

Further, hiring, training, and travel are greatly curtailed. For instance, DoD personnel are very unsure of the ability to attend IPC APEX EXPO 2020 in early February. If travel authorization does come through, flights and hotel rooms may already be booked up.

Is anything worse than a CR? The specter of sequestration still looms over the DoD. According to the Center for Strategic and International Studies (CSIS), “The Budget Control Act (BCA) of 2011 spending limits return to their original level for both defense and non-defense at $576 billion and $543 billion, respectively. In its FY2020 budget released in March, the Trump administration requested a total of $750 billion for national defense (050), designating the $174 billion above the cap as Overseas Contingency Operations (OCO) or emergency funding and thus exempt from the spending limits. While the administration’s budget request does not breach the BCA caps, Congress is not likely to consider it a viable option and will seek to negotiate a budget agreement, which increases both the defense and non-defense spending caps. If both political parties and the White House fail to reach a deal by 15 days after the current Congressional session adjourns and appropriations for FY2020 exceed the caps, sequestration—the automatic process of imposing across-the-board budget cuts—would be triggered for the first time since 2013.”

This CSIS analysis also estimates that if sequestration was the result of a budget impasse, the DoD would have to live with an 8.9% reduction from the current requested budget, not just spend the same as last year.

References

1. Wikipedia, “Continuing Resolution.”
2. J. Judson, “Two Steps Back: A Yearlong Continuing Resolution Could Derail U.S. Army Modernization Efforts,” Defense News, November 6, 2019.
3. M. Mayfield, “JUST IN: Extended Continuing Resolution Could Reduce Air Force Buying Power by $11.8 Billion,” National Defense, November 6, 2019.
4. CSIS, “How Would Sequestration Impact DoD in FY2020?” May 16, 2019.

Dennis Fritz was a 20-year direct employee of MacDermid Inc. and has just retired after 12 years as a senior engineer at (SAIC) supporting the Naval Surface Warfare Center in Crane, Indiana. He was elected to the IPC Hall of Fame in 2012.