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New UMD Report: The Cost of Government Dysfunction Could Increase Costs, Reduce Efficiency

November 16, 2012

Jennifer Lynn Talhelm -  - 301-405-4390

Analysis: Late or Failed Appropriations Increase Costs, Reduce Efficiency

COLLEGE PARK, Md. - When it comes to the federal budget process, dysfunction has become the norm. Congress has managed to pass all of its appropriations bills into law before the end of the federal government's fiscal year in just four of the last 37 years. A new report by University of Maryland School of Public Policy Professor Philip Joyce details the many challenges this dysfunction creates - from increased costs to reduced effectiveness and efficiency.

Professor Philip JoyceJoyce, a government management and finance expert who has worked at the Congressional Budget Office, says that late or failed appropriations bills cause problems ranging from delayed hiring and poor morale, to higher costs for services, continuation of ineffective programs, and expensive deferred maintenance. Delays can also do harm to the private sector and the economy as a whole.

"Contractors may face uncertainty about whether their operations in support of a given agency will be interrupted or halted altogether, Joyce writes. "Budget planning at the state and local government level is affected by the uncertainty surrounding the timing and continued receipt of federal funds. The delays can even be felt in the broader economy, not only as the budget affects contractors, but also as it affects funds flowing to individual recipients."

The report is particularly timely as Congress is deciding how to address the "fiscal cliff," the package of spending cuts and tax increases set to go into effect at the end of the year because of Congress's inability to agree on a deal to reduce the debt. Joyce's report calls attention to the increasingly unpredictable federal budget pro­cess and the many challenges it creates for efficient and effec­tive management of federal operations. It also offers several recommendations to Congress, the president and agencies on ways to ameliorate the adverse effects of continuing resolutions on agency operations.

"The Costs of Budget Uncertainty: Analyzing the Impact of Late Appropriations" was published as part of the IBM Center for the Business of Government's Improving Performance Series.

"Dr Joyce looks at the ongoing condition of continuing resolutions, and applies empirical research to develop clear-eye analysis and recommendations for government leaders," said Dan Chenok, Executive Director of the IBM Center for the Business of Government. "This report will help the government address improvements in this key part of the budget process for the future."

Philip Joyce