A new three-week continuing resolution expected to pass the House and Senate this week might make things easier for Congress to negotiate a new budget deal, but would likely wreak havoc at federal agencies, if history is any guide.

Short-term spending resolutions block agencies from filling vacant positions and hiring new staff, providing full levels of service and make it impossible for agency officials to do any long-term planning, according to government watchdogs. The temporary budget deals mean many agencies must sign multiple short-term deals with contractors, requiring reams of extra paper work and cost estimates.

Lawmakers eager to cut federal spending may want to hurry their budget negotiations along, according to a 2009 Government Accountability Office study that probed the impact of CRs on operations at six agencies.

The budget impasses cost the Veterans Health Administration (VHA) $1 million in lost productivity and more than $140,000 in extra work for the agency’s contracting office, GAO said. The FBI estimated it spent more than 600 extra hours holding planning meetings and monitoring agency resources during CRs.

The Administration of Children and Families (ACF) devoted at least 80 more hours to short-term budget planning and performing related tasks. ACF officials also had to issue block grant awards multiple times over the course of temporary spending measures, leading to 10 extra days of work preparing and verifying the grants.

Temporary spending measures contributed to the already-cumbersome process of hiring new federal employees. At the FBI, officials said they didn’t fill vacancies because temporary funding ratess didn’t include funding for annual pay raises, hiring increases or more money to pay for new retirements.

Officials at the Food and Drug Administration and ACF also avoided bringing on new workers for fear that they’d end up with insufficient funding to support new staff.

“Overall, case study agency officials said that, absent a CR, they would have hired additional staff sooner for activities such as grant processing and oversight, food and drug inspections, intelligence analysis, prison security, claims processing for veterans’ benefits, or general administrative tasks, such as financial management and budget execution,” GAO said.

CRs also made it difficult to sign long-term contracts. The VHA delayed new maintenance projects on electrical and sewage systems at some hospitals because funding would run out before the project’s completion.It also had to solicit bids on contracts a second time in order to redo environmental, architectural and engineering analyses.

The Bureau of Prisons (BOP) also delayed opening two prisons in 2007 — despite overcrowding at other facilities — in order to divert funding to other areas that needed the money, GAO said. In 2007, the BOP signed three separate short-term contract extensions with optometrists to provide care for inmates. Prisons also couldn’t make long-term food purchases, and couldn’t procure other medical, fuel and utility purchases — all leading to more work and greater administrative costs.

Bottom line: The sooner the budget negotiations are completed, the sooner agencies can get back to normal.

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