Crisis Averted – At Least for Now

By: Ann Sullivan 

October 1 marks a new fiscal year, FY2020, and the government will continue to be funded until November 21.  Congress sent the continuing resolution (CR) to the President last Friday, who signed the bill into law before the September 30 deadline.

It is significant that during September, the Congress and the President agreed to two additional steps to bring stability to the budget process. Legislation to suspend the federal debt ceiling and set government spending levels for two years addressed issues that have proven to be problematic in the past. Budget bills, such as these, have provided opportunities for legislators and Presidents to hold government spending hostage to their demands.  That’s not to say the demands don’t hold merit but shutting down the government is not without consequences.

Thirty-five days in length, the last government shutdown in January-February 2019 wreaked havoc on small federal contractors.  According to a report by the Senate Permanent Subcommittee on Investigations, The True Cost of Government Shutdowns, the last three shutdowns in cost taxpayers $4 billion—at least $3.7 billion of it in back pay to furloughed federal workers and $338 million in other costs such as lost revenue.

A statistic that government contractors certainly felt was the Congressional Budget Office estimate that the most recent shutdown delayed approximately $18 billion in federal spending for compensation and purchases of goods and services.  Legislation was introduced this year to require compensation to low-wage workers employed by government contractors, including the Fair Compensation for Low-Wage Contractor Employees Act in the House and the Fair Compensation for Low-Wage Contractor Employees Act in the Senate.  Although these efforts have yet to gain traction, it is a move applauded by many government contractors.

The angst that builds in Washington around the end of the fiscal year is justified.  Even though our members have strategies in place to weather a shutdown storm, a government shutdown affects everyone in the supply chain.  In addition to requiring contract modifications to keep providing services during a CR, it also delays grant awards and new projects. 

There’s a whole new wrinkle in completion of federal funding for FY2020 that expires on November 21 – impeachment proceedings.  Decisions on where the money is spent in the federal government is a key responsibility of the Congress, but it requires the President’s signature. Putting aside partisan wrangling is a requirement for getting this funding passed.  Appropriations bills are determined by the Appropriations Committees in the House and the Senate.  Since Democrats are in control of the House but Republicans are in control of the Senate, getting these bills to the finish line requires bipartisan cooperation.  And, the President has to be willing to sign the legislation.

Senate appropriators say they can “walk and chew gum” at the same time, and have expressed their intentions to keep working to complete their work despite the impeachment proceedings. There is precedent for taking care of normal legislative matters while at the same time pursuing a major matter such as impeachment. In 1998 in the in the midst of then-President Bill Clinton’s pending impeachment investigation by the House, Clinton signed all of that year’s appropriations bills. 

Where does this leave government contractors?  Feeling pleased about averting a government shutdown until November 21, but cautiously optimistic about federal funding for FY2020 after November 21.  Here’s where your advocacy comes in.  Contact your Congressional delegation urging them to complete the appropriations process. Congress will need lots of encouragement by its constituents to stay the course and complete their work.  The small business contracting community can ill afford another shutdown.