Yearlong funding measure won’t rely on current formula

Details about how a yearlong continuing resolution -- or joint resolution, as lawmakers have termed it -- would function began to emerge this week as congressional staff discussed the fallout from the decision to drop the nine unfinished fiscal 2007 spending measures.

The current continuing resolution to keep all departments but Defense and Homeland Security, which have separate appropriations, running was signed into law last Friday just before lawmakers left Washington for the year. It will run through Feb. 15 and generally funds agencies and programs at the lowest of the following three levels: House-passed fiscal 2007, Senate-passed fiscal 2007, or fiscal 2006 enacted.

From mid-February on, House and Senate Democratic leaders have announced, a long-term joint resolution will kick in to cover the rest of the fiscal year.

"While the results will be far from ideal, this path provides the best way to dispose of the unfinished business quickly, and allow governors, state and local officials and families to finally plan for the coming year with some knowledge of what the federal government is funding," wrote Sen. Robert Byrd, D-W.Va., and David Obey, D-Wis., the incoming appropriations committee chairmen.

Byrd spokeswoman Jennifer Reed said the details of how this will play out are still being determined. The basic framework for the joint resolution will start from the committee-passed fiscal 2007 appropriations bills, she said, and a group of House and Senate lawmakers will go through those line by line to decide funding levels.

Reed said the joint resolution would not rely on a formula like that used in the current continuing resolution, but will "evaluate broad priorities and look at areas in desperate need." In that way, it would more closely resemble an omnibus spending bill, but she said the joint resolution would be different in that it would be "a lot more bare bones," with no policy direction.

She said the process for working with agencies to assess their needs has not been fleshed out, but likely will involve agencies working with lawmakers through their congressional affairs offices. There may be an option for agencies to make the case for funding for new programs or other priorities that typically suffer under the terms of a continuing resolution, she said.

The joint resolution will have to adhere to a $463 billion spending cap, but Reed said about $8 billion would be freed up by eliminating earmarks from the draft bills.

The lawmakers' decision not to rely on a formula for the joint resolution like that in the current resolution will create some wiggle room that agencies are likely to welcome.

At the Social Security Administration, where Commissioner Jo Anne Barnhart has publicly warned that proposed budget cuts would require furloughs of about 10 days agencywide, that flexibility could mean the agency gets sufficient funding to stay open as usual. A spokesman said Wednesday that SSA could continue to operate through mid-February without needing to make a decision on furloughs.

The White House has expressed disappointment at the decision not to pass individual spending bills.

"While it is not our preference to have a year-long continuing resolution, we will certainly work with the agencies and the Congress to ensure there are no major disruptions to essential government services," said Office of Management and Budget Director Rob Portman in a statement. "Should there be a long-term continuing resolution, the administration would want to assure we maintain fiscal discipline and avoid gimmicks and unwarranted emergency spending."

A longtime congressional observer, who asked not to be named because he does not work primarily on budget issues, said a concern would be how agencies cover costs associated with new hires and how that could spill over into other financial problems. Agencies often make new hires when they anticipate a future budget increase, he said, assuming that once a budget is passed they will be able to cover the additional salaries. But if the joint resolution does not provide that funding, agencies could be forced to find savings where they can or face involuntary layoffs, he said.

Contracting is one area where agencies have considerable discretion and could cut back, the observer said. "How much contracting can you do if you are held to '06 levels? Might there have been something more that you wanted to do that was essential?.… Are there contracts that will have to not be let so that that kind of [essential] unit can be created and funded?" He questioned whether there are companies that rely so heavily on government contracts that they might go out of business if contracting took a hit.

"This has a lot more implications than people realize right at the moment. It's a huge amoeba coming at us," he said. He was not aware of a precedent for Congress funding agencies through a yearlong continuing resolution.

Travel and training are two additional areas likely to be restricted as agencies operate on tight budgets. Typically agencies cannot start new programs under a continuing resolution unless it is explicitly allowed, but Reed said that level of detail has yet to be worked out for the joint resolution.

Asked whether a yearlong continuing resolution has an upside, the observer said probably not. "This is like shutting down a huge thing like a battleship, and trying to run it on one engine," he said. "There can be crises that occur, and then it takes a lot of time" to deal with them.