How Congressional Continuing Resolutions Hurt Defense Industrial Base

  • Post category:News / US News

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Inflation, Chinese encroachment, and Russian aggression loom large and dark on the horizon, and U.S. defense capabilities have scarcely looked less prepared.

The latest congressional continuing resolution, though better than a total government shutdown or a bad appropriations bill, will make matters worse.

With the president’s signature on Congress’ latest continuing resolution, the federal government will continue to operate until at least Dec. 16.  While continuing resolutions hold government shutdowns at bay, the unfortunate truth is that they keep the government operating by continuing last year’s funding levels into the new fiscal year.  

That means that until Congress can pass appropriations for fiscal year 2023, American tax dollars will be bound up in initiatives and spending goals gone by, leaving those dollars  wasted, inefficiently spent, or allotted to last year’s projects that might not even exist anymore.

That’s particularly harmful to the Pentagon and the complex web of military contractors and tech innovators that make up the defense industrial base. Delays in contract settlements and funding can mean many months and millions of dollars in extra expenditures.

With incredibly high entry costs, complex regulations, and a single customer—the Department of Defense—to serve, the defense industrial base is called to the challenging task of providing timely, innovative, and cost-effective products to the military. To do that, it must have adequate, sustained, and predictable funding—provisions that continuing resolutions do not provide. 

That not only harms current programs and military readiness, but also has lasting effects on future initiatives, disrupting innovations and strategic advantages for years to come.

To produce the best results, the Defense Department must have the funds to pursue current goals. Continuing resolutions typically last a few months while Congress gets its political ducks in a row to pass real appropriations. Sometimes, if that proves too challenging, there will be three or four continuing resolutions in a fiscal year before appropriations pass. 

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That shortens the operational fiscal year and delays new contracts for, construction of, and repairs to military equipment, compacting everything that should have a year to be done into the span of a few months. 

With more than a hundred continuing resolutions enacted in the past 20 years, it has become common practice for nothing of importance to be scheduled in the first quarter of the fiscal year to account for resulting delays. With only so much time each year, that means a lot of thumb-twiddling, backlogged orders, missed opportunities, and increased overhead costs.

For example, if a new Ford-class aircraft carrier under construction doesn’t get its needed funding, the contractor building it can’t order parts from its subcontractors, nor the subcontractor from theirs, and so on.

Construction is halted, but the ship—sitting incomplete in a shipyard—continues to rack up expenses for taking up space. That’s space that was meant to be occupied by the next carrier on the docket that cannot begin construction on time.  

This isn’t a new problem: Delays to Ford-class carrier construction were a leading concern on Capitol Hill in the fall of 2016 and the fall of 2019, and they are again today.

Contractors must take these uncertainties into account, which forces them to raise prices to protect their operations from funding inconsistencies. That means higher costs to the Pentagon—and less value for taxpayers’ defense dollars.

Continuing resolutions don’t just hurt current initiatives. Modernization and innovation for the future face challenges of their own. Since continuing resolutions are just a continuation of the prior year’s appropriations, there’s no funding allocated to new developments.

Appropriations needed for strategic initiatives, such as laser missile defense, hypersonics, and space capabilities, are misaligned to old projects or doled out in too-small allocations.  Innovation must wait on the new appropriations to pass, putting the U.S. behind its rapidly advancing competitors.

The continuing resolution will impact the future of the defense industrial base in less obvious ways, too. Without new initiatives to staff, hiring slows down, leading to a significant talent drain from the defense industry, where skilled workers are already scarce. The new hires of today are the mentors of tomorrow, and the lag in hiring will be felt by the defense industry for generations.

Continuing resolutions may keep the lights on in the federal government, but they keep it running about as well as spraining your ankle at the starting line sets you up to win a marathon. You might make it to the finish line, but the consequences will last for years to come.

As threats to the American way of life loom large from our many adversaries, a U.S. military that is advanced, innovating, and ready for anything is paramount. That military simply cannot exist under the provisions of a continuing resolution.

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The post How Congressional Continuing Resolutions Hurt Defense Industrial Base appeared first on The Daily Signal.

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