Long-term budget outlook: ‘We’re doomed. Any questions?’

“I just need to say this, and get this out of the way: We’re doomed. Any questions?”

This is how Stan Collender, executive vice president of Qorvis MSLGroup, transitions from talking about his credentials, which include being an adjunct professor at Georgetown University and a fiscal policy blogger at Forbes, Roll Call and National Journal, to the current budget environment in front of a ballroom full of government contractors.

Hyperbole aside, Collender told attendees at the May 11 Coalition for Government Procurement’s 2017 Spring Training Conference not to expect anything but continuing resolutions until after the 2020 elections.

“Every time someone asks me … ‘When are we going to get back to normal?’ This is normal,” Collender said. “And anybody who says differently is ignoring what’s happened in history. These are decisions they just don’t want to make and don’t have time to do.”

Based on what’s happened so far in 2017, Collender said the administration is already behind schedule on budgets and appropriations as far ahead as 2019, and the tactics Republican lawmakers are using make catching up unlikely.

Falling behind in 2017

“The Republican strategy after the election was actually brilliantly conceived: We’re going to do two budget resolutions and have two reconciliation bills, so that they can do health care reform on the first one and tax reform on the second,” Collender said. “What they didn’t think, because no one has ever done this before and they never had a chance to think through the implications when they came up with the original strategy, is that the first reconciliation is only good until you do the next budget resolution.”

What this means is that the reconciliation bill being used to reform health care is already holding up the 2018 budget process. And while the House finally passed a bill, it’s problematic to say the least, and the Senate is indicating it’s going to take its time crafting a more palatable bill. But if it takes too long, it will run up against the 2018 budget time frame.

2018 Budget

That leaves two options regarding 2018, Collender said. First, lawmakers could delay a 2018 budget resolution until they manage to pass the 2017 reconciliation. This would mean another continuing resolution to keep the government open, and would also delay 2018 appropriations.

Or Congress could move forward on the 2018 budget resolution, and address health care reform in a 2018 reconciliation bill. But the 2018 reconciliation was already slated as a vehicle for tax reform. Tying a controversial bill like the American Health Care Act to it as well could easily sink both efforts.

Ordinarily the Senate might fall back on what’s referred to as a “deemer” resolution, where it “deems” the House budget levels in place until both chambers reach an agreement.

“Except that you need 60 votes to do that, and there isn’t 60 votes to declare today Thursday,” Collender said.

So at this point, Collender said, a continuing resolution for the 2018 budget is almost a certainty. With everything else on their plates, it’s unlikely they’ll get to individual appropriations by Oct. 1.

And then there’s the fact that President Donald Trump was tweeting about a potential shutdown.

“I think it was more bluster than anything else, but we could easily go into 2018 with the government not operating, which would screw up the appropriations process even further,” Collender said.

But it’s also a signal that the President isn’t willing to be bound by the norms that usually surround this process.

“All the norms, all the budget rules, all the budget laws are very much in play,” Collender said. “And I’m not sure you should anticipate that things will happen the way they rolled out in the past.”

For example, the President’s budget proposal called for a $54 billion increase to defense spending, balanced by a $54 billion decrease in domestic. To do that, Congress would have to raise the spending cap on defense, and lower the spending cap on domestic, but that’s not likely to happen. Democratic lawmakers would vehemently resist any lowering of the domestic cap.

“What would happen if Congress appropriated the additional money for Defense — which should trigger a sequester because it’s more than the cap — and the President simply orders Mick Mulvaney, the [Office of Management and Budget] director, not to implement the sequester law?” Collender asked. “That was largely unthinkable until a few months ago, but is now something, from what I can tell, is at least being discussed inside the administration.”

Looking Ahead to 2019

“What you need to keep in mind is that we’re already behind on the schedule for the ’19 budget process,” Collender said. “Partly it’s the transition, which would have normally been the case. Partly it’s the slowness of getting people in the jobs who would actually be overseeing the development of budgets within the agencies.”

Normally, OMB would have shared initial guidance on the 2019 budget in April, but the agency is still working on 2018.

And the various agencies and departments can’t begin working developing or implementing their 2019 budgets, because they don’t have 2018 yet. In addition, many don’t yet have the people in place to do so even if they could.

Collender said he assumes the final numbers for 2018 will take another three months.

“Based on that, you’ve got to assume the President’s budget for ’19 is going to be late,” he said. “Second, you’ve got to assume that the 2019 budget process will be delayed. This puts the 2019 process in jeopardy.”

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