March 18 2011 Copyright 2011 Business Research Services Inc. 301-229-5561 All rights reserved.

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Congress Readies Another Short-Term Spending Bill

Federal agencies and contractors continue living hand-to-mouth while Congress fights over spending.

With the 2011 fiscal year nearly half over, Congress was working toward passage of a sixth short-term spending bill. At press time Republicans and Democrats were near agreement on a three-week extension of spending authority, to keep the government operating until April 8. Republicans are insisting that the bill include spending cuts of $2 million per week.

Negotiations continue on a long-term spending blueprint. House Speaker John Boehner, in a March 14 interview on CNBC, said, “I want the continuing resolution through September 30th finished as soon as possible. But that’s gonna mean real cuts. It’s gonna mean real limitations on what this administration can do for the balance of this fiscal year.”

“We can’t keep on running the government based on two-week extensions,” President Obama said at a March 11 news conference. “That’s irresponsible.”

Anecdotal reports from around the government paint a picture of confusion. Uncertainty over funding has forced agencies to delay new projects. Ongoing work is being affected as well.

While some procurements are on hold, many agencies have awarded contracts but cannot start work. Others are awarding short-term contracts, which drives up costs.

The New York Times reported the Defense Department is delaying equipment repairs and the purchase of helicopters. The Navy has cut back its shipbuilding and repair work. The Army has temporarily halted some work on its Stryker Mobile Gun System, an armored fighting vehicle.

“The continuing resolution represents a crisis at our doorstep,” Defense Secretary Robert Gates said, according to the Times. He complained that “inefficient, start-and-stop management” has forced the military services to rely on one- and two-month contracts.

A new federal prison in New Hampshire is sitting empty because the Bureau of Prisons cannot hire staff. The Social Security Administration has frozen most overtime, slowing delivery of services.

Washington’s gridlock is cascading down to state and local governments, which are already short of money. Federal grants for such programs as Head Start classes and road and transit improvements are being doled out piecemeal.


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