Agencies begin a year of fiscal dieting

Most federal agencies will operate in 2007 under an unusual continuing resolution

With the passage of a fiscal 2007 continuing resolution, Congress and federal agencies have started a fiscal diet of trimming spending and cutting pork.

Under the $463.5 billion full-year continuing  resolution, which President Bush signed Feb. 15, Congress and federal agencies must adhere to self-imposed spending restrictions, including a moratorium on earmarks. 

Agencies should not fund projects based on pressure from lobbyists or other interested parties, said Rob Portman, director of the Office of Management and Budget, in a recent memo to agency leaders.

Spend only in cases in which the resolution grants authority in law or other statutory authorities provide the funding, he wrote. Earmarks from 2006 have no legal effect under the legislation, Portman added.

Before passing the resolution, Congress had approved spending bills for only the Defense and Homeland Security departments. All other agencies will operate under the continuing resolution, supplemented by some additional monies.

Projects funded under earmarks have generated controversy because they are often of dubious value and waste federal funds, said Tom Gavin, a spokesman for the Senate Appropriations Committee. Earmark abuses led to Sen. Ted Stevens’ (R-Alaska) “Bridge to Nowhere” project in 2005 and the bribery scandal involving former Rep. Randy Cunningham (R-Calif.) in 2006.

Lawmakers removed 9,300 earmarks that had been added to 2007 spending bills, including many pork barrel spending appropriations listed in accompanying reports.

By a vote of 92 to 2, the Senate passed the Legislative Transparency and Accountability Act, which would put a greater burden on members of Congress to justify their spending requests, Gavin said. The House is expected to pass the measure, he added.

The legislation offers guidance on the use of earmarks. The abuse of earmarks “is not just an appropriations problem,” Gavin said. “This is a congressional problem.”

Alan Chvotkin, a senior vice president and counsel at the Professional Services Council, an industry association, said mandating an end to earmarks might not be that simple. He said the close relationship between members and agency leaders likely will mean pet projects still will be funded. “It will be interesting to see if agencies follow report language if it doesn’t conflict with the agency’s priorities,” he said.

Agencies are also feeling pressure from other sources to suppress spending. In a memo to agency leaders in early February, Paul Denett, administrator of the Office of Federal Procurement Policy, said agencies should operate on the basis of their 2006 enacted funds, or in the case of a reduced budget, the  congressionally approved smaller amount.

Denett said the extended duration of continuing resolutions in recent years “serves as an important reminder of the additional attention required by acquisition officials to ensure compliance with the [Antideficiency Act] and the avoidance of major disruptions to essential government services.”

Cranmer is an intern at the 1105 Government Information Group
4 rules for operating under a continuing resolutionThe Office of Management and Budget’s Office of Federal Procurement Policy has guidelines for how federal agencies should operate under a continuing budget resolution, such as the one enacted for fiscal 2007.
  1. Speak with budget and finance employees to determine the availability of funding for existing and new contracts.
  2. Notify vendors of government funding limitations.
  3. Conduct contracting activities prudently by planning ahead, maximizing competition and managing contracts to reduce spending.
  4. Receive legal counsel to ensure compliance with the Antideficiency Act, which holds government officials accountable for spending within their appropriated funds.
Source: Office of Federal Procurement Policy

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