A continuing resolution (CR) is a temporary funding measure that allows the government to continue operating when Congress fails to pass a budget before the fiscal year ends. While it may seem like a practical solution to avoid a government shutdown, a CR can have detrimental effects on various sectors of the economy. In a recent report by the National Defense Industrial Association (NDIA), insights from its CEO, Hawk Carlisle, shed light on the negative consequences of a continuing resolution, as explained by NDIA’s President and CEO, Eric Fanning.
One of the most significant detrimental effects of a continuing resolution is the uncertainty it creates for businesses and industries that rely on government contracts. When a CR is in place, funding for new projects and initiatives is put on hold, leading to delays in procurement decisions. This uncertainty can disrupt supply chains, hinder research and development efforts, and impede the ability of companies to plan for the future.
According to Fanning, the defense industry is particularly vulnerable to the negative impacts of a continuing resolution. The defense sector relies heavily on long-term planning and investment in research and development to maintain technological superiority and ensure national security. However, under a CR, defense contractors are unable to initiate new programs or make significant investments, which can have long-term consequences for military readiness.
Furthermore, a continuing resolution can lead to inefficiencies and increased costs. When funding is uncertain, agencies often resort to short-term contracts or extensions of existing contracts, which can be more expensive than long-term agreements. This not only wastes taxpayer dollars but also hampers the ability of agencies to negotiate better deals and achieve cost savings.
The negative effects of a continuing resolution are not limited to the defense industry. Other sectors, such as healthcare, transportation, and infrastructure, also suffer from funding uncertainties caused by CRs. For example, healthcare providers may face delays in reimbursements from government programs, leading to financial strain and potential disruptions in patient care. Similarly, transportation and infrastructure projects may be put on hold, resulting in deteriorating infrastructure and missed opportunities for economic growth.
To mitigate the detrimental effects of a continuing resolution, NDIA’s Norquist suggests that Congress should prioritize passing a budget on time. This would provide stability and certainty to businesses and industries, allowing them to plan and invest accordingly. Additionally, Norquist emphasizes the importance of bipartisan cooperation in budget negotiations to avoid the recurring cycle of CRs.
In conclusion, a continuing resolution may seem like a temporary solution to keep the government running, but it can have far-reaching detrimental effects on various sectors of the economy. The uncertainty it creates disrupts business operations, hampers long-term planning, and leads to inefficiencies and increased costs. To avoid these negative consequences, it is crucial for Congress to prioritize passing a budget on time and work together in a bipartisan manner. Only then can businesses, industries, and the economy as a whole thrive without the burden of a continuing resolution.
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- Source Link: https://zephyrnet.com/ndias-norquist-explains-the-harm-of-a-continuing-resolution/