DEC 2019 |
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Frank Bernheisel: The View From Here |
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Posted 12.09.14 Just Outside Washington FRANK BERNHEISEL
Priority Number One: Pass A Budget
The U.S. Constitution in Section 9 states:
No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.
This clearly gives the Congress the responsibility for passing the laws that authorize spending on whatever projects and activities that it created through other legislation. We will call those authorizations the Budget.
In 1974 Congress passed The Congressional Budget and Impoundment Control Act, which established the federal government's fiscal year as the 12-month period beginning on October 1 and ending on 30 September of the next year. We are now over two months into fiscal year 2015 and there is no Budget. Congress has not passed the Budget before October first since before 2000.
So, why doesn't the federal government just stop? Because Congress passes a "Continuing Resolution" (CR), which says, in effect, just go on spending money like last year.
The impact, based on a Government Accounting Office study in 2013 is:
The DOD has contracted to buy a new HUMVEE and the production schedule calls for 100 in the first year, 500 in the second, and 1000 in the third. The manufacturer's price depends on a three-year run with those numbers and so do prices of their suppliers. At the end of the first year – say September 30 – there is no Budget but a CR.
Under the CR, DOD can continue at the 100 per year level for the HUMVEEs. And to do that the manufacturer's contract will need to be modified. More management and bureaucratic work! Also, the manufacturer has no guarantee there will be money for 500 units in Year Two. He slows down, but the production line was set up for 500 resulting in layoffs and supply chain backup.
When the CR is finally replaced by a Budget, the 500 units are authorized. The manufacturer ramps back up but now he is behind schedule. He asks for a contract modification and an increase in price to cover the cost of the change in production schedule. Congress is appalled and calls for hearings. All the DOD and manufacturer's program managers must go to the Hill and testify. Senator Foghorn holds a press conference on Waste, Fraud, and Abuse.
All this is very entertaining and sells newspapers (and other media). However, it costs money and destroys the public trust in government. |
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