A Brief History of Defense Budget Instability

Despite the highly predictable end of the fiscal year annually on 30 September, Congress has not passed a final defense appropriations bill on time since 2009; the Department of Defense has begun each fiscal year since then without knowing how much money it could spend that year. In the past decade, Congress has come close to shutting down the government seven times, and actually shut down the government once. The duration and number of continuing resolutions varies by year, creating additional uncertainty for the department. Congress has enacted about 30 continuing resolutions since 2009, and the department has operated under a continuing resolution for approximately a third of that time, the longest lasting for over seven months. Continuing resolutions harm the department by freezing the budget at the previous year’s level and distribution. During a continuing resolution, DoD cannot move money from one account to another through reprogramming, nor can it start new programs not authorized and appropriated the previous fiscal year. Any increase in budget authority planned for the new fiscal year is deferred until Congress ends the continuing resolution and appropriates funds for the new fiscal year. This lack of flexibility is debilitating over time.

Compounding the harm done by these continuing resolutions and late appropriations is the 2011 Budget Control Act’s (BCA) legacy of dysfunction. The BCA was an ill-fated bipartisan attempt to reduce the deficit in exchange for an increase in the debt limit. To this end, the act established caps on defense and non-defense discretionary spending. To ensure that Congress would not be tempted to exceed these caps, it established a mechanism called sequester, which, if triggered, would result in an automatic, across-the-board cancellation of approximately 9 percent of the discretionary budget. The mechanism was designed to be so dreadful as to force Congress to come to a long-term budget agreement through the “supercommittee” led by Representatives Paul Ryan and Patty Murray. However, the worst came to pass in 2013 when the “supercommittee” failed, resulting in a $30 billion cut to DoD in the middle of the year. This mid-year cut forced DoD to cancel training activities, defer maintenance, and furlough most of its civilian workforce, harming military readiness for years to come.

The 2013 sequester was followed by the government shutdown that kicked-off fiscal year 2014. A shutdown, or even the threat of a shutdown, which occurs every time Congress lets the clock run down on the end of the fiscal year or a continuing resolution, is enormously disruptive and wasteful. The department must plan for a shutdown, even if Congress passes a last-minute budget resolution, drawing senior leaders’ time and attention away from more pressing matters and harming the morale of the military and civilian work forces. If a shutdown does occur, service members wonder whether they will be paid on time; furloughed civilians wonder whether they will be compensated at all. Costs accrue for cancellation of contracts and overhead to administer the shutdown. A shutdown completely disrupts the department’s work: it defers maintenance and procurements, delays critical decisions, and cancels or postpones engagements. Perhaps most damaging is the reputational harm the United States incurs in the eyes of other nations when the government cannot perform its most basic functions.

This interactive graphic provides a pictorial history of the past decade of budget instability. Hover over each marker in the chart for more information on budgetary actions (or on a mobile device, tap and hold the marker). Click through to access budget requests and legislation.