Budget analysis: Gridlock, shutdown, stalemate

The President’s 2012 budget request would end or trim spending for more than two hundred federal programs. President Obama sent the request to Congress on Monday, as Congress still tries to hash out a final spending plan for fiscal 2011.

When it comes to the budget, Stan Collender has three words for feds: Gridlock, shutdown and stalemate.

Collender is the managing director at Qorvis Communications and has worked on budget policy from jobs in the private sector and on Capitol Hill.

He said the $1.1 trillion deficit reduction in President Obama’s proposed 2012 budget may not be enough of a cut for Republican lawmakers.

“If what [Obama] is proposing is painful, what [Republicans] are proposing is political dynamite,” Collender said.

The cuts to federal programs should not come as a surprise to federal employees, Collender added.

“Unfortunately, federal workers – who are some of the hardest working people I’ve seen in my life with the least amount of thanks – they always had a bullseye target on them as soon as spending started to be an issue,” he said.

What the spending reductions mean is feds will be asked to “do more with less.” With less money for administrative expresses for almost every agency, including the Defense Department, Collender said agencies can probably expect a reduction in force in the years ahead. In the past, “do more with less” meant the additional use of contractors, but the White House deficit reduction commission called for less reliance on contractors, Collender said.

“If you’re going to do that – reduce the number of workers and prevent contracting out…there should also be some decisions about what government should no longer be doing,” Collender said. So far, agencies don’t have a clear explanation of what is lower priority, he added.

The political stalemate is borne of a culture in Washington, D.C., that has shifted away from compromise.

“Compromise is now a dirty word,” he said.

But the budget gridlock in Congress is the “worst way” to run government, resulting in what has happened now – government is funded by a continuing resolution at 2010 spending levels, Collender said.

The Tea Party has defined compromise “as collaborating with the enemy,” Collender said. Republican leaders “may very well have to let the government shutdown at least once to show the Tea Party they’re willing to do it.”

Today’s budget release is an “exercise in futility,” since the Congress is divided, said Mike Causey, senior correspondent of Federal News Radio. Monday’s budget merely shows the intention of the administration, but Causey added, “rarely does anybody get what they want in the budget.”

Although neither political party benefits from a government shutdown, the possibility is real as Congress plays a game of “political chicken,” Causey said.

Defense winners and losers

The Defense Department budget makes up more than half of the government’s discretionary budget and 20 percent of the overall federal budget.

“People are saying we need to get serious about trimming the deficit and bringing the budget back into budget…it’s hard to do that without putting Defense on the table,” said Todd Harrison, senior fellow for Budget Studies at the Center for Strategic and Budgetary Assessments.

The proposed DoD budget released by the president is $23 billion less than what was requested in 2011. The House Appropriations Committee also has a proposal for DoD’s budget that is $15 billion less than the 2011 request.

On Monday, Defense Secretary Robert Gates said his budget floor is $540 billion – that’s $5 billion above what the House Appropriations Committee is proposing.

The question becomes, Harrison said, “Is Congress willing to play chicken on this and go below what the Secretary of Defense himself is saying that he needs?”

Biggest losers: The president’s budget released Monday set DoD’s procurement budget was “significant less” than what was projected last year for the next five years.

Last year’s projection for DoD procurement in 2012 was $120 billion. Monday’s 2012 budget set DoD procurement at $113 billion.

“That’s got people scratching their heads saying, What does that mean? What programs are going to be affected? A lot of those details are still just trickling out,” Harrison said.

A lot of defense contractors will have to revise their estimates, he added.

Biggest winners

Congress passed a two-year pay freeze for all federal civilian employees – including civilian DoD employees. Uniformed military personnel will get a 1.6 percent pay freeze, as well as increases in their basic housing and subsistence allowances, Harrison said.

In light of what’s happening with the rest of the government, military personnel as the “big winner overall,” he said.

Opportunities despite the cuts?

Despite the spending reductions, a new Federal IT Services Industry Outlook report shows that some areas will actually see growth. Angie Petty, principal analyst at Input, told the DorobekINSIDER that the need for greater IT services in the federal space creates a buffer to budget cuts.

Take the poll: Does the budget release affect the way you do your job?

Check out Collender’s blog.

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