Why the Latest CR Isn’t All You Want It To Be

While Congress has passed a Continuing Resolution (CR) that will keep some government agencies open until January 19th and others until February 2nd, contractors should not view this CR as “business as usual”.

Continuing-Resolution

The timing, “laddered” approach, and disagreements on longer-term spending levels should be a concern to anyone who supports the sound operation of government.  First, the two-tiered nature of the CR means that the VA, HUD, Transportation, and military construction operations will need to have permanent appropriations or another CR by January 19th.  The good news here is that these areas are less controversial than others and significant House and Senate action has already taken place on their appropriations.  The rest of government, including DOD and DHS, runs through February 2nd, but substantial hurdles remain to arrive at spending measures that could actually pass each chamber of Congress.  In fact, the House adjourned early last week because it could not agree to take up one or more of the controversial spending measures.  Unless cooler heads prevail, there is still a very real prospect of a partial shutdown.  Even absent that, national security will take a hit in the absence of regular appropriations.  Further, there will be an automatic 1% cut of all agencies’ discretionary funding as of January 1st because Congress will not have passed final appropriations bills for all branches of government.  This provision was part of the debt ceiling agreement measure passed earlier this year.  While it could be rescinded by Congressional action, it likely will not be as many in the House support cuts much deeper than 1%.  All of this means that agencies cannot start any new project requiring appropriated dollars for the foreseeable future.  We are also on a path of substantial confusion, with the prospect of having some agencies open and not others.  Contractors may see reduced action on any non-critical projects during this time.  When deciding who to blame, please remember not to shoot the messenger.

This post was originally a part of Larry Allen’s Week Ahead Newsletter.  Allen Federal Business Partners provides clients with the information, training, and representation services critical to accelerating their federal market success.

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