Fed spending may go on hold

Federal agency spending for the rest of 2004 will shift into "operational status quo" if Congress fails to pass fiscal 2005 spending bills before the Sept. 30 deadline, said Toby Reut, vice president of business development for Computer Management Associates Inc.

Reut spoke at Eagle Eye Publishing Inc.'s monthly agency business intelligence seminar.

Of the 13 annual appropriations bills that keep the federal government working, only one — the Defense Department's — has been finished by Congress and signed into law by President Bush in time for fiscal 2005.

Without the appropriations process completed before Sept. 30, the expiration of the current fiscal year, Congress will likely pass a motion to continue federal spending at current levels. But, Reut said, project managers won't start anything new while Congress continues to vote on individual spending bills and work on reconciling House and Senate versions in conference or roll them into an omnibus spending package.

Congress didn't pass the majority of fiscal 2004 spending bills until January. Senate Appropriations Chairman Ted Stevens (R-Alaska) reportedly has urged his colleagues to finish the appropriations process before Congress' planned Oct. 8 adjournment. But program managers aren't counting on success, Reut said. "People in the government don't expect it to be any different than last year," he said.

Project managers anticipate cuts of at least 3 percent to 5 percent when next fiscal year's money is finally handed to them, Reut added. "Programs that were budgeted and that look good right now may be gone," he said.

A record-breaking federal deficit, combined with civil service salary increases that can only be paid for by using discretionary account money are to blame, Reut said.

"It's not supposed to happen that way," he added.

About the Author

David Perera is a special contributor to Defense Systems.

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