Crisis Budgeting Creates an 'Uncertainty Tax,' Senator Says

The absence of timely budgets creates “an uncertainty tax,” Sen. Thomas Carper, D-Del., said. The absence of timely budgets creates “an uncertainty tax,” Sen. Thomas Carper, D-Del., said. Charles Dharapak/AP

The uncounted hours federal employees have spent planning for budget contingencies amid political and fiscal uncertainty reduce agency productivity and lower morale, witnesses told a Senate panel on Wednesday.

The Senate Homeland Security and Governmental Affairs Committee hearing came just as President Obama and the House and Senate Budget committees met on Capitol Hill but made little progress toward a solution to the fiscal stalemate.

“By failing to provide timely, predictable budgets we are generating waste throughout our government and exporting some of that waste to our state and local partners and everyone who relies on us,” said Sen. Tom Carper, D-Del., chairman of the committee.

The absence of timely budgets, he said, creates “an uncertainty tax.”

Sen. Tom Coburn, R-Okla., agreed with Carper that the budget crisis is “a bipartisan failure of leadership.” The reason the Senate has not enacted a budget in four years, Coburn said, is that “it has sought not to meet the needs of government but to meet needs of politicians, focusing on the short-term and not the long-term.” The fact that Congress failed to pass all 12 spending bills in 18 of the last 24 years and relied on continuing resolutions, he said, “kills the agencies. It doesn’t allow for judgment or let them do what they’re supposed to do. The inefficiency and the increased cost I would lay at the feet of Congress and the president.”

Routine CRs are “at least as worthy of attention, and may indeed be more damaging, than sequestration or brief government shutdowns,” Philip Joyce, a professor of management, finance, and leadership at the University of Maryland School of Public Policy and author of a recent study on the harm from late budgets, testified. “Some of these costs are financial, and some represent inefficiencies and compromised effectiveness for federal programs. All of these negative impacts are self-inflicted, however, and are entirely preventable.”

Budget uncertainty also affects the federal workforce, Joyce added. “People leave government because of lowered morale,” he said, “and they’re not necessarily the ones you want to leave.”

He also noted that despite the Office of Management and Budget’s early prohibition on planning for sequestration for fear of harming productivity, “any rational agency would begin planning given what they could see coming. And once OMB pulled the switch, they went into high gear. But nothing about developing these plans contributes to mission success of these agencies.”

Colleen Kelley, president of the National Treasury Employees Union, recalled that during the prolonged budget battle in fiscal 2011, “federal employees faced the possibility of government shutdowns and unpaid furloughs due to appropriations lapses no less than eight times, including three in December of 2010 and one in April 2011…. In many of these cases, employees had only hours of notice as to whether appropriations had been approved that would permit them to come to work the next day.”

She noted that the Internal Revenue Service has had to delay the tax filing season and shuffle employees because its staff has shrunk by 10,000 over the past two years, accompanied by a pay freeze. “They see the waste that comes from lack of timely congressional action, and they can be forgiven for thinking the wrong people are getting the pay cut,” she said.

The agencies, Kelley added, “have not done a good job of communicating to employees what is going on. By letting rumors get around, they’ve made uncertainty a lot more frightening.”

Budget uncertainty also complicates matters for contractors, said Stan Soloway, president and chief executive officer of the Professional Services Council and a Pentagon veteran.

PSC’s 360 member companies, he said, would prefer that Congress “rip off the Band-Aid,” to restore predictability to the budget process and “return to regular order.” Agency officials’ “risk aversion” to hire or spend money on new contracts spills over into contracting firms, he said.

Witnesses’ recommendations for fixing the problem ranged from biennial budgeting, to improved communication with agencies, to banning continuing resolutions or limiting their duration, to giving agency budget planners more freedom to move funds around when they arrive late.

Most agreed that wasteful spending can be found to ease the budget stalemate. “Congress doesn’t do a good job of oversight and tends to oversee a crisis but not the operations,” said Sen. Mark Begich, D-Alaska. “Congress doesn’t do enough review of whether this or that program should exist.”

That’s because “there’s no incentive to do real oversight because it’s not sexy and doesn’t produce headlines,” Joyce said. “Real oversight is hard work and means getting into the weeds.”

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

    Download
  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download
  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

    Download
  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.

    Download

When you download a report, your information may be shared with the underwriters of that document.