For those who believe government does too much, the saying “Don’t just do something — stand there!” makes a lot of sense. But the latest Bloomberg Businessweek explains how those who live off the taxpayer have figured out how to make a buck when the government takes no action.
Since 1952, according to the Congressional Research Service, Congress has completed its spending bills by its own deadlines only four times—in 1977, 1989, 1995, and 1997. Year after year, lawmakers enact continuing resolutions to tide agencies over until appropriations bills pass. Fiscal year 2011—all 365 days of it—was paid for this way. Though a hyperpartisan year on Capitol Hill, it was by no means exceptional. According to the CRS, 178 days every year, on average, have been funded through continuing resolutions since 1977. Basically, half the time there is no budget.
The uncertainty creates all kinds of inefficiencies, according to a new report by the IBM Center for the Business of Government, a Washington think tank. Agency officials told the report’s author, University of Maryland School of Public Policy professor Philip Joyce, that federal contractors build a risk premium into their fees, charging back to taxpayers the extra uncertainty of potential funding disruptions. Agency leaders also have trouble staffing for new projects when there’s no budget. They have to resort to signing contracts on a monthly rather than an annual basis. Because every contract costs money to close, more contracts mean greater administrative and legal costs.