With White House 2017 budget amendment, time is on civilian agencies’ side

Time just isn’t on the President’s side if he wants to pass major increases to defense and homeland security spending and offset it with $18 billion in cuts to civilian agencies for the last five months of fiscal 2017.

Budget experts predict that plan, which the White House released as part of a 2017 budget amendment, won’t go far in the Senate and would be incredibly difficult for civilian agencies to manage and implement with five months left in the fiscal year.

Civilian agencies would also have a difficult time moving from their current environment under a continuing resolution to one in which they’d have to make substantial cuts in a short period of time.

“They’ve  been holding back a little bit but not a lot,” said David Berteau, CEO of the Professional Services Council. “They don’t have a big cushion, a big unobligated balance cushion to absorb additional cuts and continue all the work that’s being done. But they couldn’t even begin to plan for that without knowing which appropriation line items are going to take what share of that $18 billion in cuts, and nobody has specified that or even speculated that.”

Congress has four legislative weeks until the current CR expires on April 28. Lawmakers have indicated they plan to use repeal and replace legislation for the Affordable Care Act as the vehicle for the budget resolution and reconciliation process for 2017.

But there are too many time limitations and too many unknowns.

“I don’t think there’s enough time,”  said Paul Posner, director of George Mason University’s public administration program. “I don’t think there’s enough politics to just send [agencies] on their merry way. This is the kind of thing that could be held up until the next fiscal year.”

Given the President’s fiscal 2018 budget blueprint, it would have been inconsistent if the White House hadn’t suggested a major boost to defense and homeland security spending for the rest of 2017, Berteau said.

“It’s consistent that if you’re proposing cuts in [20]18, you would propose similar, parallel cuts in [20]17,” he said. “However, they didn’t propose those 2017 cuts with enough specificity to know whether it lines up with those proposed [20]18 cuts in the budget blueprint or not.”

Regardless, this presidential transition year is unlike any other, and budget experts have warned agencies and contractors to expect the unexpected in 2017.

For example, this will be the first transition year when the Defense Department has operated on a continuing resolution, Berteau said.

“We have never put DoD in this position before — and for more than seven months or more,” he said.

And though the nomination process for roughly 4,000 political appointees during a transition is often sluggish, this year has been particularly slow.

Most agencies don’t have deputy secretaries or other leaders — the political appointees who would often appear on the Hill to testify to their designated appropriations committee about their budget priorities — confirmed or even nominated yet.

“You’re going to have essentially acting civil servants defending these programs,” Posner said. “That has a mixed picture, but it means you’re not going to have a big political leadership force behind these cuts. Rather, these programs are going to be defended by their defenders.”

That could be a benefit to some agencies facing major cuts if their main negotiators for the 2017 budget come from within the organizations themselves.

“My sense is that they’ll get part of the way, but many of these deeply rooted programs are not going to be torn up by their roots and tossed away,” Posner said.

What’s next?

Civilian agencies are most likely preparing for another continuing resolution, or at least they should be, Berteau said.

“There is no way, based upon 24 hours in a day and the congressional calendar, that a detailed FY18 budget can be submitted in May or June and be fully appropriated by Sept. 30, 2017 so that on Oct. 1 … you actually have appropriations in place,” he said. “We will almost certainly be starting fiscal 2018 under a continuing resolution, unless we have a government shutdown.”

Agencies would likely start thinking about the anomalies to the current continuing resolution they’ll request. For the most part, agencies would be stymied from starting new IT modernization projects or research initiatives, for example, because a CR requires that departments continue spending at the same levels on the same line items as the previous fiscal year.

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