A delicate balancing act: The US government must juggle a pandemic and the FY21 budget

By: Robert DuPree

For the past few months, the U.S. federal government has been, quite understandably, totally focused on addressing the enormous health care and economic impacts of the COVID-19 pandemic. These efforts will necessarily continue to be front and center in the weeks and even months ahead, no matter how rapidly the curve flattens or declines, as different sectors and regions reopen.

But to move the country forward, Congress must prepare to do its regular business for the year, which largely means tackling appropriations bills. Congressional staff have reportedly been doing the prep work to get spending bills ready for whenever the House and Senate can safely convene to work on them (or to do much of this work remotely).

The American people — including federal contractors large and small, and our employees — are relying on Congress to check its partisan impulses and figure out how to do two things at once in the coming months: Continue to combat the COVID-19 crisis, and develop fiscal 2021 funding bills for all federal departments and agencies to meet our nation's needs.

Unfortunately, there are some who are already taking a simplistic view, saying Congress will be so busy dealing with the pandemic that it will have to just give up and pass a continuing resolution to fund the government beyond the election into next year or even for a full year.

On the contrary, the pandemic is exactly why Congress should be doing its work and completing updated appropriations bills on time.

First of all, in these extraordinary times, the country doesn't need appropriations bills which merely extend the decisions made on spending last December, when Congress finally completed action (over two months late) on FY20 appropriations bills. The COVID-19 pandemic was just a blip on the horizon at that time. For FY21, the country needs updated spending legislation that more accurately reflects the greatly changed world we now face. Moreover, departments and agencies also need the flexibility to enter into new contracts to meet new needs, which is generally prohibited unless expressly provided under a continuing resolution.

Further, Congress and the administration must come to grips with the elephant in the room — the strict annual spending caps imposed by the Budget Control Act of 2011, as amended. To mix metaphors, this law is no longer just an elephant, it's an emperor who has no clothes.

Congress has modified the BCA's statutory spending caps a number of times over the past decade (thus, the above caveat “as amended”). Now we're about to face the final year of the law's spending caps, and what do we find? The caps are a joke. The caps were meant to limit discretionary spending each year, but Congress has repeatedly found ways around them. This has usually been done in one of two ways.

The first is by including some amount of normal baseline defense spending under the category of overseas contingency operations, or OCO, which is “wartime” funding; this occurs even when unrelated to America's overseas/wartime military efforts. OCO spending is exempt from the BCA caps, so funding part of the base Defense Department budget this way enables the law's defense-spending cap to be technically met while also understating the Pentagon's non-wartime expenditures.

The second way is by designating certain spending as “emergency” expenditures. Yes, these are almost always for valid, unforeseen emergencies, but it is still spending that would otherwise exceed the discretionary caps. Only Congress can wave a wand and say: “No, it doesn't exceed the cap — it's for an emergency.”

To be honest, the caps painted an unrealistic picture of efforts to control federal spending anyway. By only being applied to discretionary spending, exempting massive entitlement expenditures and interest on the debt, the caps presented a partial picture of true federal-spending restraint to begin with.

And now the COVID-19 crisis has resulted in multiple legislative packages being enacted, which the nonpartisan Congressional Budget Office estimates could add over $2.7 trillion to the current year's deficit. But because they are loans or designated as “emergency” spending, they don't violate the caps. They just add to the deficit.

In reality, true federal spending has soared far past the stable level of spending that the caps were purported to achieve when the BCA was first enacted. Yet, the caps are still in place for next year, which will impact the congressional appropriations process by either preventing the spending needed to address current needs, or leading to further contortionist efforts by legislators to circumvent the caps.

So let's quit pretending. Congress and the administration should agree to repeal the final year of the caps as part of the next COVID-19 legislative package so appropriators can be upfront about the spending needed without having to hide so much of that spending behind the “emergency spending” loophole.

Be transparent, and admit the country is, like during World War II, spending a whole lot more than anticipated to meet the crisis.

And most of all, get the job done by acting in a bipartisan fashion to pass appropriations bills by Oct. 1, 2020, that accurately reflect our real needs and expenditures. Admittedly, that may not be easy to do in an election year, but the nation and the federal contracting community are depending on Congress to be able to manage the COVID-19 crisis response, while simultaneously conducting its regular business.

Robert DuPree is manager of government affairs at Telos Corporation. He focuses on political developments in Congress and the executive branch, including the federal budget, appropriations process, national defense and cybersecurity. He previously served as legislative director for a senior member of the U.S. House of Representatives.

https://www.defensenews.com/opinion/commentary/2020/05/13/a-delicate-balancing-act-the-us-government-must-juggle-a-pandemic-and-the-fy21-budget/