House Plans Continuing Resolution for Rest of FY11

by: Matthew Potter
February 10, 2011

Category: Business Line, Companies, Congress, Contract Additions, Contract Awards, Department of Defense, development program, Events, Federal Budget Process, logistics, Military Aviation, production program, Restructuring, Services | RSS 2.0

Based on this press release from the House Appropriations Committee released yesterday it is clear that rather then try to pass a 2011 Defense Appropriations Act or any other part of the Fiscal Year 11 budget the Congress will use Continuing Resolution (CR) language for the remaining seven months of this FY.

Under CR funding will be capped at FY10 levels and it severely limits new contract awards and new program initiation. For example even if the U.S. Air Force announces in the next few weeks a winner for the KC-X aerial tanker program they may not be able to award the contract as the funding and language was not in the FY10 budget. This would potentially push that off to FY12.

One of the benefits to those wanting to reduce spending by the Federal Government by this approach is it holds spending at the FY10 level meaning that there is no growth in total spending. In fact the HAC release details over seventy programs that are being cut a total of over $70 billion.

Of course the problem for DoD with the CR is that they may need growth in funding for some parts of their budget including money for operations in Iraq and Afghanistan. The use of CR for the entire fiscal year may affect activities such as training as money is moved from stateside accounts into overseas operational ones.

Secretary of Defense Gates is still hoping to get Congress to pass a defense budget so that these types of choices do not have to be made and the U.S. military can meet its commitments.

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