Any hope of driving real efficiency in federal agencies hinges in large part on the ability of our elected leaders to come to some consensus on the nation’s fiscal course. If there was any question that the budget President Obama submitted to Congress in early February was dead on arrival, the congressional leadership answered it by announcing they would not even bother to hold hearings on it.
Yes, there is a budget “deal” in place. It established new spending caps for the 2016 and 2017 fiscal years, and put off debate over the debt limit, but it’s what the deal did not do that bears talking about. It did not allocate funding by agency, which means we are almost certainly headed toward one or more continuing resolutions to kick off the next fiscal year. Nor did the deal address any of the core philosophical and fiscal differences that exist between the parties. In other words, while skirting an immediate political problem it did nothing to provide the kind of insight that agencies need for their own short and long term planning.
Of course, the questions—on both sides—are many. For example, the proposed Republican budget for 2016 would have reduced non-defense spending to its lowest proportional level (as a percentage of GDP) in some 50 years. Is that a good idea? Does it go too far? Are the targeted cuts the right ones? Meanwhile, the administration’s proposed budget for 2017 acknowledges that the deficit is back on an upward trajectory, toward the $1 trillion level; that the national debt will rise to nearly $22 trillion; and that by 2024, annual interest payments on the debt will rise to levels equal to nearly 80 percent of the entire discretionary budget. What are the implications of that reality? And what happens if interest rates rise even slightly more than anticipated?
Then there is the Affordable Care Act. I personally supported, and still support, it. But when originally passed, one of the tools that kept it “deficit neutral,” was the planned imposition of a tax on so-called “Cadillac” health care plans. But that tax has been delayed at least a year and will almost certainly continue to be pushed down the road. Neither party actually supports it. In fact, it is one of the few issues surrounding the ACA on which they agree. But what does the loss of that key funding mechanism do to the fiscal integrity of the health care program specifically and the overall budget more generally?
These issues aren’t news to anyone who follows such things. But that doesn't make them any less important. Moreover, by failing to actively and substantively engage in a debate over the 2017 budget now, Congress is perpetuating a problem that too few people seem to think matters. That is, the lack of clarity and predictability in funding has a direct impact on the ability of agency leaders to manage effectively and of agencies themselves to operate at anything close to optimal efficiency. No one hesitates to chastise them when things go wrong; so why wouldn't we want to give them every opportunity to do things right?
The continued fiscal stalemate and the ways in which it is whipsawing agencies and, in turn their employees and contractors, let alone the citizens they serve, isn’t healthy for anyone. This has been a complaint of many years. But it deserves far more attention than it is getting.
Stan Soloway is president and chief executive officer of Celero Strategies, LLC.