March madness -- the fiscal cliff and continuing resolution

Yesterday, the Washington Post carried a front-page article on the costs of preparing to "shut down" the government (something that actually can't be done; instead it just becomes even less efficient and responsive than usual).  The obvious costs are those associated with diverting slender staff resources from mission responsibilities toward shutdown preparations.  In the derivatives arena, those disappointed with the pace of regulation and the lack of "regulatory certainty" should be prepared for more of the same, as Congress buckles under its basic responsibility to "keep the lights on."

Operating under a continuing resolution -- which permits spending only at levels of the prior year -- for six months has been an effective across the board budget cut for federal agencies.  Even if Congress were to provide funding at levels near those requested by the agencies during the regular budget cycle -- something unlikely to occur at the end of March when the current CR expires -- the agencies could not possibly spend that funding in a rational and efficient way in the last six months of the fiscal year.  And, if funding above the CR level is not enacted in March, are we facing a full year of flat-lined appropriations?

A more subtle cost of CRs is that they are often "resolved" through passage of massive "omnibus" appropriations bills -- behemoth bills so large that nobody can read them critically before they are passed.  They therefore become laden with pork and bad initiatives that individually are not significant enough to justify delaying the omnibus bill but that are still bad law and collectively inflict a thousand wounds on the public. 

The second look over the fiscal cliff arrives earlier than the March 27 expiration of the CR -- on March 1, thus bracketing the month with a set of legislative spasms.  (The debt ceiling fiasco has been rescheduled for May.)  The ill effects of the cliff controversy are largely the same as those of the CR, only translated into areas of tax policy and other segments of the government not directly associated with the appropriations process.

Having seen Congress injure each foot with a fiscal bullet makes one shudder to think where the debt ceiling bullet may lodge.