You might think that CR stands for ‘Continuing Resolution’ – a method to fund the government – and you would technically be correct. However, CR should stand for Constrained Republic as it stifles growth within America. A CR is used when the Congress fails to pass a budget. It funds the government for a set amount of time and money, typically for a few months, at which point another CR is passed. The current usage of the CR represents a corruption of the federal budget process, a damaging effect on the economy, and a failure of politicians to compromise. Yet this is how the country has been running because the government has failed to pass a yearly budget for the last 14 years.[i] This means that the country limps along from one CR to the next, waiting on the certainty and sanity of a budget.
Consider how the budget process should work, as outlined in the Budget and Accounting Act of 1921 and the Congressional Budget and Impounding Control Act of 1974.[ii] The following explanation summarizes George Edwards and Stephen Wayne’s explanation of the budget process found in their book “Presidential Leadership: Politics and Policy Making.”
To begin, the Executive Branch, through the Office of Management and Budget (OMB), compiles the monetary needs of each agency. The OMB and the White House review these numbers, adjust them as needed, and then send them to Congress by the first Monday of February each year.
Congress then goes through the appropriations process by holding hearings, creating and modifying the bills, and then passing those bills. This process is supposed to be completed by June, leaving the two chambers of Congress four months until the September deadline to debate, adjust, reconcile, and pass a budget.[iii] The two chambers rarely pass the same bill, requiring the entire four months to rectify their differences.
The purpose of the budget process is to have a timely and consistent monetary plan for the country to work from. The budget is used in planning by both the private and public sectors. Without such direction, it can be difficult to plan for the future and to deal with the unexpected bumps caused by the starting and stopping of the government.
I have seen the effect of CR budgeting first hand during my time as a government contractor and small business owner. Because a CR only funds the government for a short amount of time, the government can only fund contractors for a short amount of time. This shortened funding period travels down the chain to the front line employees. The resulting job insecurity causes concern, confusion and frustrations from government and contractor employees.
On more than one occasion employees were sent government mandated 30-day layoff notices because no budget was in place and the funds from the CR had run out. The panic within the ranks was palpable. Following a repetition of layoff notices, several valuable and productive employees left the company for more stable jobs. This had a negative effect on production and caused additional costs as new employees had to be hired and trained. These unexpected costs hurt the company’s bottom line.
This cycle is repeated in the private business community. Budget uncertainty rattles the business and the financial sectors. It increases the cost to do business, which is usually reflected by an increase in the price of products. The uncertainty causes interest rates to be higher and removes the impetus for business to reinvest profits. Instead businesses hold onto their money due to the uncertainty, thus hampering economic growth.
Regardless of your political leanings, we can all agree that the gridlock in the federal government is not helpful to the nation. The inability to pass a budget is just one of the effects caused from this gridlock and from the uncompromising stances of our politicians. This process hits Americans where it hurts most – the wallet. While not the easiest task, the budget process has been successful for over 75 years. It is time our elected officials in Congress put Americans first by releasing our Constrained Republic and passing a budget.