PSC Statement on President’s FY21 Budget Request

PSC Statement on President’s FY21 Budget Request

Arlington, Va. (Feb. 10, 2020) The Professional Services Council (PSC) issued the following statement on the release of President Trump’s Fiscal Year 2021 (FY21) Budget Request. From PSC President and CEO David J. Berteau:

“Today the president released his FY21 proposed budget. As in previous years, Congress will change what the president has proposed. PSC calls on Congress to make those changes and enact FY21 full-year appropriations on time.”

“The solution is simple,” Berteau continued. “Congress and the president agreed to the budget caps. The President’s Budget fails to meet those caps, but because the overall numbers are the same as last year, Congress can reject the proposed cuts and more easily allocate funds to each of the 12 appropriations bills for the agencies included in them. Congress should also ensure that the administration is faithfully executing prior-year appropriations, consistent with the Constitution and the Budget Reform and Impoundment Control Act of 1974.”

Berteau concluded by saying, “Finally, in two of the last six presidential election years, Congress has enacted full-year appropriations on time. PSC believes we should make it three out of seven.”

Additional budget information will be released in the coming days and weeks, but the following are PSC’s initial key takeaways and implications of the FY21 President’s Budget.

Budget Caps
Last August, Congress passed, and the president signed, an increase in FY20 and FY21 spending caps. The new caps provided for $1.37 trillion in FY20 for defense and non-defense (or civilian) agencies. On December 20, the president signed FY20 appropriations that aligned with those caps. The FY21 caps are nearly identical, adding $2 billion for defense and $3 billion for civilian agencies. The president’s FY21 budget supports those caps only for defense, not civilian agencies.

Defense

At $740 billion, the administration’s FY21 proposed defense budget is consistent with the overall caps, though underneath that topline are many changes when compared to FY20 appropriations.

Civilian Agencies

For civilian agencies, the budget proposes steep cuts below the caps. Depending on the baseline, the budget overall falls between 5% and 7% below the overall FY20 civilian agency total. Cuts for some agencies are 20% or more. These drastic cuts do not support the critical missions and functions these agencies perform every day, at home and abroad.

This is the fifth year in a row that the president’s budget has proposed such cuts, with Congress rejecting them in each of the previous four years. Such a rejection is likely again this year, but it usually takes Congress most of a year to act. In the meantime, and even afterwards, government suffers.

Impact on Government and Contractors

These annual delays of many months have substantial and negative consequences for the government and for the contractors that support them. Here are just a few of them.

1. Steep cuts are built into agency budget plans that make up the president’s budget. Even while Congress is moving toward a higher level, agencies are not permitted to plan for the effective use of those funds.

2. The Office of Management and Budget (OMB) limits the flow of funds to be consistent with the cuts and can take a month or more to act even after Congress passes new bills.

3. When appropriations are late (six months for FY18, nearly five months for FY19 for many agencies, and three months for FY 20), agencies are pressed for time to use funds in that fiscal year.

4. Even though the work is there to be done, shortfalls in agency program and contracting personnel make it even harder to obligate funds. Last year’s partial government shutdown only made that worse.

Taken together, these four factors make it hard for agencies to deliver on their missions. In order to reduce these impacts and to avoid delays and a potential shutdown, Congress should move expeditiously to enact full-year appropriations in advance of the start of FY21 on October 1.

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Media Contact:
Pheniece Jones
Director, Media Relations
703.875.8974
media@pscouncil.org

About PSC: PSC is the voice of the government technology and professional services industry. PSC’s more than 400 member companies represent small, medium and large businesses that provide federal agencies with services of all kinds, including information technology, engineering, logistics, facilities management, operations and maintenance, consulting, international development, scientific, social, environmental services, and more. Together, the trade association’s members employ hundreds of thousands of Americans in all 50 states. Follow PSC on Twitter @PSCSpeaks. To learn more, visit www.pscouncil.org.