WASHINGTON - Congress passed its third continuing resolution of the year on Friday, delaying a government shutdown by one week to allow time to finalize an FY17 appropriations bill. The new short-term agreement, which expires May 5, cleared the House by a vote of 382-30, and was subsequently approved by unanimous consent on the Senate floor. The president was expected to sign the bill.

Lawmakers are hopeful they will be able to agree on an FY17 spending package. The alternative would be a year-long CR, which would fund the government at FY16 levels through the rest of the year. CRs are a burden for budget planners, preventing new programs from starting and leaving many other programs overfunded or underfunded. While CRs have become the norm in Washington, they typically do not last this far into the year. The constant battle over spending caps, plus the change in administrations, created a perfect storm of budgetary gridlock.

The White House threw a wrench in the gears with the release of a $30 billion supplemental budget request in March. More than half of the supplemental request would bolster acquisition programs, including $14.5 billion for procurement and $2.4 billion for research, development, test & evaluation. Passing the supplemental request in its entirety is unlikely, as it would exceed Budget Control Act spending caps. Nevertheless, lawmakers hope to incorporate at least a portion of the supplemental into a final spending bill.

The Pentagon's acquisition coffers are already on track for an increase in FY17. A version of the FY17 defense spending bill passed by the House in early March already added $6.6 billion for procurement programs and $943.3 million for research and development. It remains to be seen if any additional funding from the supplemental will be added to that bill.

Source: Forecast International - International Military Markets
Associated URL: http://www.forecastinternational.com
Author: S. McDougall, Defense Analyst