BUDGET MATTERS: Continuing Resolutions Could Extend Well into 2022.

• Author: Harper, Jon

* Once again, the federal government has started the new fiscal year under a continuing resolution because Congress failed to pass a full-year appropriations bill by Oct. 1. However, this time around, the CRs may last much longer than usual, Hill observers are warning.

Continuing resolutions are problematic for federal agencies like the Defense Department as well as contractors because they generally freeze spending levels and prevent new-start programs. Last year, the final appropriations bill for 2021 was passed about three months late. For 2022, the delay could be much longer, said Mackenzie Eaglen, a defense budget expert at the American Enterprise Institute and a former Hill staffer.

"I'm even more pessimistic about the length of a CR now for a variety of reasons," she told National Defense in late August when it was apparent there would be a continuing resolution. "Odds grow by the week that the CR will be longer than half a year. No real talks have started between the two parties on any sort of overall federal spending deal for defense and nondefense discretionary" programs.

"Debt bombs" like the trillions of dollars in new non-defense spending proposed by Democrats will exacerbate the political divide between the two parties, she said.

"But the biggest reason the CR could last a long time is that a spending freeze through a continuing resolution is more palatable to many conservatives than a budget deal since it avoids additional non-defense double digit increases and prevents many divestments and retirements of equipment, which is politically popular," she added.

John Lucio, a staffer for the Senate Appropriations defense subcommittee, said "the signals are there" indicating the government could be in for a long CR.

Unlike in recent years, there is no previously agreed upon topline for defense. Additionally, the principle of "parity"--whereby Democrats' insistence on increases in non-defense spending are accompanied by similar boosts in defense spending to meet Republican demands--will be difficult to achieve after...