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House Budget Success Is More Congressional Failure

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March 8 (Bloomberg) -- Washington is celebrating a modest victory this week because the House of Representatives passed legislation to finance the government for the remainder of the fiscal year. This “continuing resolution” sets funding for all but military programs beneath their 2012 levels (once sequestration is factored in).

If the Senate can reach agreement with the House, and if President Barack Obama deems the result fit to sign, the federal government will avert the kind of manufactured crisis at which it has excelled in recent years. But it will also encourage Congress’s penchant for slapdash budgeting that preceded the current era of sequestration and fiscal Russian roulette.

This week’s continuing resolution is not so much an aberration as the latest reminder of Congress’s chronic failure to fulfill the core requirement of its job: taxing and spending. According to the Congressional Research Service, lawmakers last met their own deadline for appropriations in 1997.

If this sounds like a good way to keep budgets from rising, it’s not. Unstable funding drives up the cost of government while making it less efficient. A 2009 Government Accountability Office report found that it caused contract delays, requiring bids and environmental or engineering analyses to be redone, “resulting in additional costs in time and resources to the agency.”

In 2011, the Navy canceled $62 million worth of ship repair contracts while it waited for its appropriations to be set, according to a study by the IBM Center for the Business of Government. Forgoing needed maintenance is among the more expensive ways that government agencies accommodate congressional failure.

Perverse incentives only lead to, well, more perverse incentives. Inevitably, experienced government contractors include the costs of budget uncertainty in their bids, forcing up costs. Likewise, hiring freezes make it harder for agency administrators to staff high-priority programs. Good candidates, it seems, don’t like waiting around.

The current House and Senate leadership didn’t invent this dysfunction; a continuing resolution first appeared in the 19th century. But their heavy reliance on crude shortcuts only grows more troubling.

Here’s a giddy thought: Before October, the start of fiscal 2014, bears down upon them, House and Senate leaders should commit to an orderly legislative process, producing bills through the respective appropriations committees. Representative Paul Ryan is scheduled to release his budget next week, which will ideally prod the already tardy White House and Senate to hurry their own. Democrats and Republicans should use the occasion as a basis for work, not posturing. Congress won’t regain respect until it proves competent at its primary duty -- the lost art of appropriations.

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