Call it CR hell

Welcome to CR Hell

It looks like a crisis averted. But inside government, a continuing resolution creates a wasteful netherworld all its own. And we’re 21 days into the latest one. A POLITICO investigation.

By Darren Samuelsohn

The deal closed in Washington on Sept. 30 seemed, in the moment, like the end of a drama. Just as the fiscal calendar ran out, Congress voted for a last-minute agreement to keep the government from shutting down. Lawmakers agreed on a temporary funding patch, the president signed it, and America’s attention quickly moved on to the next political showdown.

In official terms, they passed a continuing resolution, and it felt like a crisis averted.

It wasn’t. In the more than 100 federal offices, agencies and departments that actually use the money, the crisis was only beginning. With a real spending deal for fiscal year 2016 still uncertain, they started to run a drill that has become depressingly familiar. Under the continuing resolution, multi-year projects like constructing new Coast Guard ships and launching weather satellites faced new delays. Hiring departments closed. Budget officials began to tally losses as their typically powerful purchasing power dwindled. For pretty much the rest of this year, and perhaps 2016, too, the U.S. government will effectively be in a state of suspended animation.

Call it CR hell. We’ve been living in it for 21 days and counting.

Budget patches might not command the headline-level attention of potential defaults, or fiscal cliffs, or the seemingly constant parade of near-catastrophes that now surround the American budget process. But a POLITICO investigation of the full effects of a continuing resolution suggests that they should.

With Congress constantly paralyzed by political brinksmanship, governing by CR has been the norm, rather than the exception. In fact, 58 percent of President Barack Obama’s days in the White House have required a continuing resolution to fund at least one agency. And every fiscal year Obama has been in office has begun under a CR covering his entire government.

POLITICO’s exhaustive review of what really happens under a CR found scores of negative repercussions, drawn from interviews with more than three dozen senior budget leaders and department directors, members of Congress and their aides, as well as the advocacy groups who lobby on behalf of the different agencies and their programs. Planning and hiring stop; reforms and new projects are put on ice. Some effects are specific and local: In New Mexico, the Los Alamos National Laboratory had to suspend a project that would expand its ability to handle crucial weapons-grade plutonium. Some of them are broad: The Food and Drug Administration won’t get the money it needs to implement a 2011 food safety law laden with important deadlines. More than 450,000 immigrants who have flooded through the U.S. southern border are stuck in legal limbo because the Justice Department can’t hire more federal judges to process the paperwork; new Secret Service training recommended in the wake of several recent security lapses at the White House can’t take place.

Even reasonably diplomatic public officials have some choice words for the situation. “It’s unacceptable,” Robert Work, the deputy secretary of Defense, told me. “It’s debilitating,” added Dan Ashe, the head of the U.S. Fish and Wildlife Service. “Sand in the gears,” said a former Department of Homeland Security official. “A steaming pile of the same old same old,” Republican White House hopeful Rand Paul recently lamented on the Senate floor.

Under the rules of a CR, federal agencies can’t recruit or hire new staff; grants to states and local agencies are delayed. New programs can’t begin. And if this all sounds heartening to the “less government is better” crowd, there are special penalties for them as well. Millions of taxpayer dollars get wasted from the accumulated inefficiencies; thousands of paid work hours are squandered planning for budget scenarios that don’t end up happening. And dead-weight programs that departments want to cut—yes, this really happens in government—can’t be cut. Under a CR, you could literally go to jail for saving taxpayer money.

And as with any piece of legislation, a CR is also stuffed with little exceptions and giveaways. Called “anomalies,” these secretively negotiated loopholes give agencies exemptions from the normally strict rules associated with a continuing resolution, sometimes saving critical programs, and on occasion just sending some extra money to someone’s favorite agency. Wedged into this year’s CR are a replacement freezer at the CDC and a death benefit to one congressman’s widow.

It was never supposed to work this way. To look at life under a CR shows the true consequences of a government in which anything short of outright default has become acceptable—and the old “unacceptable” has become the new normal.

ON SEPT. 25, the day after Pope Francis left Washington, House Speaker John Boehner shocked the American public by announcing he would be leaving Congress in a month. His impromptu rendition of "Zip-a-Dee-Doo-Dah” made it one of the strangest retirement speeches in recent memory. It also, politically, prevented the looming government shutdown and gave birth to a new continuing resolution.

Though it was far too late to get a real budget done, Boehner no longer needed to keep the restive right flank of his party happy and was free to push through a CR he knew the president would accept.

That 11-page document, quickly finalized by Congress and signed by Obama a few hours before the midnight deadline, now effectively dictates funding for the entire federal government.

The moment the latest short-term CR kicked in, Obama’s administration was hit with all manner of automatic restrictions. Not only is spending flatlined, but money can only be spent on activities approved in the previous fiscal year. Agencies are legally forbidden from starting any new programs. Most hiring and recruiting of new staff needed to be frozen. Agencies also can’t award new grants. Large long-term contracts for expensive equipment like weapons and satellites also must be moved to the back burner.

For each agency, a CR can mean different things. Ashe, the director of the U.S. Fish and Wildlife Service, complained in an interview that repeated CRs have had a “long-term chronic effect” undermining his ability to manage his existing refuges, including the Pacific Remote Islands Marine National Monument, which Obama expanded last fall.

Chris Cummiskey, a former Obama administration appointee at the Department of Homeland Security—a department that has started nearly every year of its existence under a CR—told me that constant CRs meant disruption that cut into the core of his mission. “The first thing to go is schedule,” he said. Under earlier CRs, the agency couldn’t buy equipment for a $200 million cybersecurity project to create a dashboard for real-time understanding of attacks on any government website. “Those are months that you don’t make up,” he said.

Traditionally, not every agency has suffered equally. Congress long made the Department of Defense spending bill a top priority even if it faced political gridlock in other avenues, but in recent years even the Pentagon has been dragged into CR hell. Democrats recognized that holding up the defense budget could give them greater leverage in the overall appropriations debate, and the last seven fiscal years, including this year, have opened with CRs that covered the Pentagon.

As a result, military officials have become some of the most outspoken voices pushing Congress to reach a budget deal and end the CR cycle. While the more than 2 million active duty and reserve troops, as well as civilians, still get paid under a continuing resolution, the effects reverberate throughout the department. The Navy, for instance, said the short-term CR it is under prevents it from buying a number of expensive new items, including aircraft carriers, cargo helicopters, unmanned surveillance aircrafts and missiles.

Defense Secretary Ash Carter has complained that repeated stop-gap spending measures put commanders in a “straitjacket” that limits their ability to adapt, keeping pace with Russia and China and also responding to fast-evolving threats like Islamic extremists.

Carter is actually campaigning less against the current CR than the possible next one: If Congress doesn’t pass a budget at all, the resulting year-long CR would give the Defense Department $38 billion less than what Obama had requested for it. Restrictions on new starts mean disruptions in plans for purchases of ships, aircraft and weapons, including more fortified protections for soldiers targeted by improvised explosive devices. The Army’s budget chief, Maj. Gen. Thomas Horlander, told me he’ll have to delay more than two dozen planned construction projects totaling about $1 billion, including a cybersecurity headquarters in Georgia; a new joint force headquarters in Richmond, Virginia; and housing for troops and their families in South Korea.

“It’s dangerous for our strategy, and, frankly, it’s embarrassing in front of the world,” Carter told reporters at the Pentagon last month just hours before the fiscal new year began.

IF THIS SEEMS like a dubious way for a $1 trillion operation to do business, few would disagree. Under both parties, the 40-year-old budget process—never very functional to start with—has ground to a halt. Congress is designed to pass 12 different appropriations bills, written first in specialized subcommittees, by Sept. 30; these days, they typically get wrapped up into immense “omnibus” packages controlled by House and Senate leadership and a handful of powerful panel chairmen, who usually have to blow straight through their deadlines trying to negotiate them.

While members of Congress continue their bruising political battles over the details of federal spending —or, in most cases, just go home to let someone else fight it out—a CR gives them a handy stopgap. The “continuing” in the name means that each federal agency keeps getting its existing budget allocation, and it keeps the same mandate. That’s how CRs have been used for generations, often as short as a day or two—as a quick bridge while Congress works out its differences.

But more recently, as budgeting has broken down, the CRs have started to stack up. According to the Congressional Research Service, continuing resolutions have been used on average about six times per year since fiscal 1997. On a few occasions when no solution has been in sight, the U.S. has run its government under full-year CRs, which wipe away much of the planning that goes into both a president’s budget and the appropriations process.

A CR slaps a set of handcuffs on government that don’t come off until the spending bills pass, though some of the damage never gets undone. For the White House, a CR can mark the official end of the line for the new budget priorities the president laid out early in the year. Both the House and the Senate had appropriated money to fund Obama’s Precision Medicine Initiative, which was announced with great fanfare in the president’s January State of the Union speech; absent an omnibus package that resurrects the money, the funding in those bills is now dead.

So are Obama’s efforts to expand the country’s national park portfolio, at least for now. A CR forbids new work on recently designated sites like the Harriet Tubman Underground Railroad National Monument on Maryland’s Eastern Shore; the Charles Young Buffalo Soldiers National Monument in Ohio; and the Tule Springs Fossil Beds National Monument in Nevada. The Interior Department is also trying to spruce up its properties for the park service’s 2016 centennial; that’s on hold. “We’re trying to celebrate one of America’s greatest ideas and a CR is going to impact our ability to do that,” a staffer said.

The Department of Housing and Urban Development has had to shelve plans for refurbishments on thousands of rental housing units; the National Highway Traffic and Safety Administration also can’t proceed with plans to boost staffing in an office that handles upwards of 80,000 complaints a year about defective automobiles.

Beyond specific programs, a CR has financial repercussions that might sound abstract but take a real toll on governing, and end up wasting significant taxpayer money.

Normally the government can save by buying in bulk; under an appropriations bill lasting a full fiscal year, agencies can enter into new contracts or extend their options on existing agreements. This helps them lock in discounts and exploit the government’s purchasing power.

Not under a CR, especially a short one that lasts only a couple of weeks or months. Instead of paying up front for multiple big-ticket items such as fighter jets, electronic baggage screeners or medical services for a federal prison, the government is limited to shorter-term orders that come with higher price tags. Government workers waste time having to fill out repetitive contracts reflecting each short burst of funding they get under a CR.

CRs also wreak havoc on the government’s grant-making functions, undercutting one of Washington’s most effective ways to seed innovation and get things done in the real world. Losers in the process include competitors for EPA awards that help communities with air and water pollution monitoring, National Institutes of Health-funded vaccine research and Transportation Department-sponsored campaigns targeting drunk driving, texting and wearing seat belts.

Benjamin Corb, a spokesman for the American Society for Biochemistry and Molecular Biology, said he’s seen CRs negate grants and cause enough financial doubt that it “leads to experiments failing and a loss of intelligence as researchers move to new projects and fields.”

DESPITE ALL THE restrictions, a few new things do happen under a CR—and those tend to be oddly specific, quietly negotiated and barely mentioned in public. Last month’s patch, though only 11 pages long, included about three dozen special provisions: It allows NASA to keep using its funds to shut down the Space Shuttle program, clears the CDC to build a replacement freezer for storage of critical biological specimens and lets the Interior Department keep collecting recreation fees for access to public lands.

These are the “anomalies,” the provisions in every CR that offer special relief from the law's typically stern restrictions.

Several people I spoke with explained this secretive process, which begins in July and spills into early August. As lawmakers and department budget officials grow increasingly pessimistic that Congress will finish its spending bills on time, they begin exchanging lists of cherished programs that should get passes from the CR.

Historically, the final CR gets written behind closed doors with input from the White House, but mostly in collaboration between the Democratic and GOP congressional leaders and House and Senate appropriations committees. Several sources explained that no one wants to talk openly about the activity as it’s unfolding because of the signal that would send —however obvious it may be—that the formal appropriations process is once again on track for failure.

The CR that Obama signed late last month was considered a “clean” resolution, with relatively few special carve-outs or controversial political demands. An earlier attempt to include language that would have stripped federal funding for Planned Parenthood was dropped because it couldn’t pass the Senate. Even so, the bill included numerous exemptions. Most were noncontroversial. One of them replenished firefighting accounts for the U.S. Forest Service, which was hit extremely hard this year; another allowed more money for an Agriculture Department nutrition program for low-income elderly people.

As it has in previous CRs, Congress included an anomaly giving a green light to NOAA to keep hitting some of its early launch milestones with the polar satellite program, though it didn’t include language that had been requested to fund two additional satellites that are also part of the same program. Lawmakers also inserted what several staffers described as customary language in a CR for taking care of one of their own, ensuring a one-time $174,000 death-benefit payment to the widow of the late Rep. Alan Nunnelee, a Mississippi Republican who died in February.

But there are also losers in the CR anomaly campaign. According to interviews with several senior budget aides in the administration and on Capitol Hill, the Pentagon made more than three dozen anomaly requests but was largely shut out (Even so, it got extensions on two existing programs: for a security cooperation office with Iraq, and for cash rewards of up to $5 million to people helping U.S. forces with counterterrorism operations). Lawmakers also rejected a plea to preserve the Land and Water Conservation Fund, a 50-year-old program that uses fees from oil and gas production to pay for local, state and federal conservation efforts. The program was supposed to be reauthorized by Sept. 30; instead it expired and will now need to be revived by Congress in some other fashion.

Budget veterans explained that tough political calculations like that are common in the anomaly process, and lawmakers often shy away from adding too many concessions into a CR that would relieve potential pressure points in future negotiations.

“I think the [appropriations] committee deep down wants there to be a little bit of suffering because it promotes a longer term solution,” said Jim Dyer, a former Republican staff director to the House Appropriations Committee. “If you got someone by the pinky toe they squeal louder and they want relief faster.”
 
In other words, a CR is supposed to be tough. Much like sequestration, it’s not supposed to become a way of life—but thanks to Congress, that’s increasingly what it is.

AS I INVESTIGATED what CRs mean for government, a bigger picture began emerging: Today’s American government runs on the assumption that the budget just won’t work and it will need to start every year under a CR.

“We’ve got way too much experience at this over the last couple of years,” Mike McCord, the Pentagon’s chief financial officer, said in an interview.

Several agency staffers I talked with explained that because of the constant threat of CRs they no longer try to solicit, review or award grant money at the start of a fiscal year. On the other end of the grant cycle are the state and local government officials, businesses and scientists who need consistency in their funding.

Department budget officials also said that because of the threat of a CR they’ll often make the most conservative spending decisions for the start of each fiscal year. Better to be safe than end up in a predicament where Congress reaches a deal that provides less money than expected, forcing painful retroactive cuts and even less money for the rest of the year.

“You don’t want to do anything, because you don’t know what’s over the horizon, despite the fact everyone tells you a good manager is one that looks over the horizon,” Dyer said.

Several budget veterans told me that they welcome federal departments being more mindful of their spending habits. That’s a mantra that permeates both Democratic and Republican administrations. But a competing refrain boiled down to this: Operating during a CR, or under the perpetual threat of one, leads to hesitant, backward-looking thinking that would never be duplicated in the business world.

“Unquestionably, it causes [government] deep headaches trying to plan,” House Appropriations Committee Chairman Hal Rogers, a Kentucky Republican, told me. “That’s the case we try to make to our membership here. The CR is the worst possible way to do business. Obviously, that’s not carried the day.”  

In my interviews about governing amid budget gridlock, I often asked whether there were any obvious solutions to avoid the perpetual return into CR hell. Nothing offered up sounded easy.

There’s a bigger problem here, of course. The CR itself is just a symptom: It has become far easier to let a bad status quo persist for the nation—even a terrible status quo—than to do the detailed and politically costly work of striking a new bargain. To those involved in the big political battles over spending, it’s not necessarily a priority to fix.

 “As far as I know, common sense would tell me as long as there’s no shutdown they don’t have any problems,” Sen. Chuck Grassley (R-Iowa), the chairman of the Judiciary Committee, told me. “I think past history would tell you that they eventually get the money as long as government isn’t shut down and they continue to operate.”

That attitude is a big part of why Washington lets the CR pattern drag on, said Paul Posner, a former head of the Government Accountability Office’s federal budget program. It doesn’t have big political costs, and “the value of governance and management are always second fiddle in our system,” he said.

It’s become commonplace for Americans to complain about Washington; the public has a general sense Congress is not doing its job, and that’s reflected in poll after poll showing historically low approval ratings for lawmakers. A CR, however, is one of those disheartening examples where people who actually understand the process know it’s even worse than the public thinks.

“We’re abdicating our constitutional role,” Sen. Brian Schatz (D-Hawaii), a member of the Appropriations Committee, told me. “Everyone has done a good job of working around this problem. But it’s an absurd proposition on its face. Every legislative body on the planet is able to do regular budgets and appropriations. For the world’s greatest deliberative body, this is a low bar to pass and we haven’t met it yet.”