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Reeling from two highly controversial Supreme Court decisions and some revelatory hearings concerning the Capitol break-in, Congress is in recess this week. But not everything has stopped on the Hill. The Federal Drive with Tom Temin got more from Bloomberg Government deputy news director Loren Duggan.

Interview transcript:

Tom Temin: Loren, what a week it’s been it’s there used to be that old TV comedy show That Was the Week That Was but two landmark and controversial, world shaking Supreme Court decisions, plus those hearings on the Trump administration and Jan. 6, 2021. Quite a week, what’s your take? And what do they be doing while on recess?

Loren Duggan: Well, I’m sure they’ll go home and react to these decisions for Democrats, in particular Friday’s ruling on Roe v. Wade and scrapping that and also the Casey decision from the 90s. That’s going to resonate hugely for them, they’re gonna go home and probably try to reassure voters in their states what they’re going to do to fight against it. On the other hand, you have Republicans and conservatives who have wanted this outcome for a long time, who were happy with it, thrilled with it, and going to, you know, go home and take that to their voters as well. So I think that this decision is going to be down not just this week, but in the weeks and months to come, including in the November elections.

In terms of how they respond legislatively on the Hill. Obviously, we won’t see much this coming week. But I think this will come up in the appropriations process. And then discussions about other votes that they might be able to take. The House passed a bill many months ago to try to codify provisions of Roe v. Wade and Casey into law, the Senate didn’t take that up because of the 60 vote requirement for most things, which will probably stop them from doing very much about it for the rest of the year. But we may see some more votes and some more discussion, at least. And on the gun issue. You did have this juxtaposition of a Supreme Court ruling that makes it easier potentially to carry guns in New York State and elsewhere, with this bipartisan deal to put some gun regulations in place trying to protect Second Amendment rights for Republicans as they would describe it, but at the same time, make a dent in changing some background check rules, providing funding. So again, those two issues, those court rulings are, are big.

Tom Temin: Well, I guess I’m hoping that members of both parties, regardless of what side you’re on, and the gun question, or the abortion question will maybe tone down the rhetoric, we’re not seeing that too much, so far. Neither gloating, nor threatening the Supreme Court or wanting to burn the whole place down over that decision. Neither side should be really fanning the flames. But I’m not sure we can count on that.

Loren Duggan: I think we’ll see some rhetoric that’s perhaps heated at times. But you know, this is a deeply felt position on both sides, people who were worried about this ruling after the leak, or the draft ruling was leaked to Politico and was out there and people who have wanted this outcome for a long time. And you know, what happens next? And what direction two things go, both federally, and at the state level? I think a lot of this discussion, obviously, is going to shift to states that have either trigger laws or maybe considering new legislation on either side of this question.

Tom Temin: All right. And getting back to Congress itself. You mentioned some committee work, maybe on the appropriations bills, they’ll try to grind out something during the recess. Is that possible?

Loren Duggan: That is possible. This is, it’s a two week floor recess, at least. And in the House they call it a committee work week. And the main action will come in the Appropriations Committee, which has been very busy the last three weeks. As of last Friday, they approved 12 bills through subcommittee and then another six of those made it through full committee, they’re going to try to do the other six this week, if they can get all that done. It was a pretty ambitious schedule to do get all of them done in three weeks and out and available for floor votes. Potentially, when they come back in July, they’d like to get that through. It’s important to remember these are written using a top line number that only House Democrats have agreed to, it doesn’t reflect a bicameral, bipartisan top line number which will be necessary for any sort of final version of these. But this is very much the House Democrats sticking out their position, both in terms of funding levels and policy and riders at this point. Earmarks are back in the mix again this year as they were last year. That’s a little bit more bipartisan, where you do have Republican members seeking earmarks and many of these bills. So we’ll see how that plays out this week. Again, it’s been a pretty ambitious timetable to get all these through. But it’s, it’s just the first chapter in the story because the Senate has to weigh in and then we’ll see if they can get a final deal or if we’re going to be talking about a continuing resolution around Oct. 1, because we may not be able to get a bicameral deal in place by then.

Tom Temin: We’re speaking with Loren Dugan, deputy news director at Bloomberg Government and getting back for a second to the earmark question. I’m wondering if earmarks will maybe in some way blunt the desire of the Republicans to slow things down and want a continuing resolution because they feel that they might be in the majority when it comes to the next session?

Loren Duggan: We’d have to see how that plays out. I mean, obviously if you lock in a continuing resolution into next year, it’s the amounts that were agreed to last year but that could lock in both sides of the equation defense and non-defense There is a general upward pressure right now on defense spending going much higher than President Biden wanted. We saw that with the defense authorization markups in both chambers where they came in with increases in both the House and the Senate on that. So there may be real interest in getting something locked in before the end of the calendar year, if not the fiscal year to try and lock higher amounts in place, and also clear the decks for the next group of leaders, Patrick Leahy (D-Vt.), who is the Appropriations chairman, Richard Shelby (R-Ala.), who’s the vice chairman in the Senate, I think they’d both like to in their last time doing this, as the top leaders in the appropriations process, get it done, clear the decks and leave it to the next chamber’s leadership to figure out what to do for fiscal 2024 when they get to that, but I think we’re gonna see some interesting discussions around that. Earmarks are accepted by some Republicans, but by not all means not all. But some of the ones who are invested in are the appropriators themselves, we saw Richard Shelby get a number of earmarks in last year’s bills, and I assume he’ll be aiming for the same this year.

Tom Temin: And also, before the break, there was action on the NDAA, the National Defense Authorization Act in the committee’s. Can that continue in this committee work so called period?

Loren Duggan: Well, they because the House in the Senate have both approved those committees, at least they’re going to be ready for floor action at some point. So I don’t think we’ll see much more on those until maybe July or maybe even September, if they need to wait to do that. Again, one of the big questions there is just what are you going to set the defense top line at? And what does that mean for the systems that funds and the personnel expenses that are out there. That bill is an important one, it’s been enacted for what, six decades now. No chairman wants to be the one that doesn’t finish that on their watch. So I assume they’ll be working to finish that bill by the end of the year, again, maybe not fiscal year, but probably by the end of the calendar year, trying to wrap that one up as well.

Tom Temin: And once upon a time before Ukraine before the gun ruling before the abortion debate. Before all of these things, there was worry about competition with China. And a big bill on that one, what’s going on with that one that was kind of active for a few weeks?

Loren Duggan: It was that has been sent to a House Senate Conference Committee, which includes I think, all told about a fifth of the membership of Congress or something like that. Because of all the committee’s involved in the sweeping packages that came out of the house in the Senate. There was work before this two week break to try to narrow the list of issues and maybe even jettison some topics that they couldn’t come to an agreement on to try and get a deal on that. July 4 had been a target for finishing that, obviously they haven’t done that. But they are going to try to use this next work period to come to an agreement. At the core of it is money for semiconductor manufacturing in this country. But then there’s all sorts of other provisions dealing with trade and tax and natural resources and things that would improve even science funding in the country authorizing money for National Science Foundation, NIST, groups like that. So we’ll have to see if they can narrow and come to an agreement on a bill that can get through both chambers. But that will be one of their priorities when they come back.

Tom Temin: And it seems strange to discuss nominees. Here we are almost to the midterm elections. But the administration not quite as new as it was a year ago. But there’s still lots of nominees out there pending out there?

Loren Duggan: There are both administration positions, and then still the courts because the vacancies come up. And Democrats are definitely trying to use this window where they know they have control of the Senate to push through as many nominees as they can for President Biden, there’s some key administration jobs, they’re still trying to fill and we’ll see some votes. And one of the big ones is the vice chair for supervision at the Fed the nominee there, Barr will get a vote at some point it seems like when they come back, but you know, they’ve they’ve really tried to be efficient here and schedule a lot of nominations every week, even as they work on legislation, get some nominees in there as well. So there’s no slowdown in that activity.

Tom Temin: Loren Duggan is Deputy news director at Bloomberg Government. As always, thanks so much.

Loren Duggan: Thank you.

The public’s liaison to the Department of Homeland Security’s lead immigration agency has one primary focus in this year’s annual report to Congress: reducing the backlog of cases and its impacts. U.S. Citizenship and Immigration Services’ backlog has nearly 5.2 million cases and approximately 8.5 million cases are pending, according the CIS Ombudsman Phyllis Coven.

By comparison, the backlog was around 2.7 million in July 2019. On a call with USCIS leadership Wednesday, Coven said the affirmative asylum backlog is worst of all.

“We’re hyper focused on all backlogs, but there are some impacts beyond just the time loss. That’s of great concern to us. We’re examining things like how customers can request, expedite and advance parole, which snowball because of the backlogs,” Coven said. “We looked at needed solutions, including digital ones to encourage the agency to take bolder steps. And we’re also trying to give due credit where it’s due such as the approach of dealing with the U visa [for nonimmigrant victims of certain crimes] backlog that the agency has undertaken by developing the [Bona Fide Determination] process.”

USCIS struggles to hire enough staff to address the case backlog, even after hiring freezes in fiscal 2019 and 2020 lifted. In fiscal 2020, the average time to onboard a new adjudicator was 97 to 118 days after the date of a hiring decision, according to the CIS Obudsman’s office.

Dan Renaud, senior counselor to the USCIS director, said that when social distancing measures were in place, staff used video interviews and biometrics to continue processing cases. He also said the agency leveraged appropriations to cover overtime for adjudicators.

“Our first round of hiring has favored more towards supervisory roles, which has meant additional internal promotions and an HR infrastructure that’s ready to support an increase in new staff. We’re glad that we’ve been able to promote those career civil servants committed to our mission,” he said.

USCIS plans to hire more than 4,000 employees by the end of this calendar year, and set new, more aggressive “cycle time” goals for fiscal 2023. Renaud said these are an internal management metric comparable to median processing time.

Timesaving accommodations were made for certain applicants. Doug Rand, senior advisor to the USCIS director, said individuals in the health care and child care industries who are renewing their work authorizations can request an expedited review and completion of their employment authorization document renewals. The work permit validity period also increased from one to two years for certain “adjustment of status” and humanitarian applicants.

Meanwhile, back in March, USCIS published a final rule to effectively expand premium processing services for cases, which is an additional fee applicants can pay to expedite their forms. But this expedited service is still handled by human beings, and Rand said there is a limit to how many cases employees can process at once.

“One needs extra human beings to be able to do a faster turnaround time. So we understand and appreciate the fact that a lot of folks out there would be paying for premium processing for a lot of these ones right now, if they could,” Rand said. “We really want to satisfy that demand. We wish we could, we could just flip a switch and turn it on for everybody, but that’s not really operationally possible.”

Fee-for-service model leaves USCIS underfunded, understaffed

Although the CIS Ombudsman’s annual report to Congress is due by June 30, Coven’s office already issued two formal recommendations on March 31 and June 15. One was to amending USCIS’ funding model which relies almost entirely on fees-for-service, a long-running obstacle for the agency to tackle its backlog.

USCIS’ workforce of more than 20,000 people and 200-plus offices and facilities have an annual budget averaging above $4 billion since 2018, 97% of which comes from fees-for-service. The federal review and public comment process for adjusting fees takes several years, and the agency has never adjusted those fees for inflation – which reached an annual rate of 8.6% in May, the highest in 41 years.

But that’s not all.

The drop in services performed by USCIS during the pandemic, various humanitarian disasters that occur at unforeseen times, and cuts to nonpayroll expenses in order to avoid a massive COVID-related furlough compounded to reveal the inadequacy of USCIS’ funding model, the ombudsman wrote. The recommendations included dedicated appropriations to tackle case backlogs, and to cover humanitarian and asylum services which are not fee-based yet paid for at the expense of applicants for other immigration needs.

“We recommend that USCIS seek legislative or regulatory action to: Reengineer the agency’s biennial fee review process, particularly its associated staffing allocation models, to ensure it fully and proactively projects the staffing levels needed to meet targeted processing time goals for future processing as well as backlog adjudications … [and] Authorize and establish a financing mechanism, through the auspices of the Department of the Treasury, that USCIS may draw upon to address unexpected revenue shortfalls and unfunded policy shifts and to maintain adequate staffing to meet its performance obligations to its customers and Congress,” the report said.

Although, researchers pointed out in 2020, when USCIS requested emergency funding, “As a fee-funded agency, USCIS has been largely exempt from customary congressional oversight,” and the reason it was made a self-standing agency was to “strengthen the benefit-granting functions of the immigration system and sever them from [congressional] enforcement missions.”

‘Efficiency at the expense of equity’

The second recommendation was to improve the notification process for Form I-129 beneficiaries. Form I-129 is a petition filed by an employer to extend, amend or change the status of their nonimmigrant worker. Currently, USCIS only notifies employers of actions and status changes for the application, but does not notify the workers who would in fact benefit from the I-129 petition. According to the CIS Ombudsman, this means those workers reply on their employers for all information, which could leave them without status documentation and make them susceptible to abuse. The report called this “administrative efficiency at the expense of equity,” echoing several of the Biden administration’s directives for improving customer experience and the federal workforce as a whole.

As of now, eligible nonimmigrant workers are supposed to receive a tear-off Form I-94 from their employer, which they carry around at all times. Employers keep a copy, but USCIS will not send the form to workers themselves.

Proposed solutions included notifying beneficiaries by mail or online; allowing beneficiaries to track their status online; and for USCIS to collaborate with Customs and Border Protection so that applicants can check their Form I-94 status online using passport information.

Agencies are expected to incorporate PMA initiatives into their multi-year strategic planning. Some, including the Commerce Department, had an easier time doing this thanks to early insights from the Office of Management and Budget.

Harry Knight, director of performance and co-lead for strategic planning at Commerce and its acting executive director for China, said political leadership in the Office of the Secretary shared OMB drafts of the PMA along the way. But for agencies who did not, Knight said it was not too late to follow suit, one reason being that, “the process to get new executive orders signed and released also was very much in alignment with the new President’s Management Agendas. So within these pillars, there’s strategies. There’s also executive orders that backup and have required actions.”

During last week’s Government Performance Summit 22, Knight said Commerce leadership got an early jump on the pillar of promoting diversity, equity, inclusion and accessibility in the federal workforce, while the pillar on improving federal customer experience “is where we get a lot of bang for the buck.”

But, as focused as the PMA is, the competition for executive time and priorities persists. Knight advised entities to have synergy in accomplishing these priorities.

Similar to Commerce, NASA’s four-year strategic plan process benefited from working closely with the President’s Management Council, according to David Walters, chief of the strategic planning and performance management branch at the agency’s headquarters. NASA’s 2022 strategic plan has new objectives built around the Biden administration’s DEIA and climate goals. Walters said that, in building NASA’s 2022 strategic plan, the team determined prior strategic plans did not go far enough to demonstrate the agency’s existing efforts to combat climate change.

“So when we went about writing the new 2022 strategic plan, we made sure to include a strategic objective built around climate change research, and then another strategic objective around sharing that data with the rest of the world,” using language directly from the PMA, he said.

It has emerged as an important resource for the performance management community, and although Walters said NASA already considered itself a data-driven organization, the Foundations for Evidence-Based Policymaking Act of 2018 (Evidence Act) forced them to focus their energies.

“If you had come to me before the Evidence Act had been enacted, and you had said, ‘Talk to me about NASA’s major self-reflective activities. What kind of data do you use as you’re developing a strategic plan?’ and I probably would have given you 50 or 60 different answers. What the Evidence Act did is it kind of forced us to focus that down into a narrow list of priority questions, so that we now think of it in terms of ‘Yes, we’re looking at 50 or 60, but within that, here’s the five or six key priorities that we’re going to focus on for the next four years,’” he said.

As a messaging tool, the Evidence Act is helpful, and Walters said it forces all the CFO Act agencies to “talk in one voice” when having conversations around evaluation and evidence. The law also created a lift in workload from NASA’s 2018 strategic plan, which was 64 pages, compared to the over 100-page-long 2022 plan. Walters said it has changed how NASA does resourcing and disparate processes, as well as when they start strategic planning because of the additional requirements.

At the Commerce Department, Knight said the two statistical agencies — the Census Bureau and the Bureau of Economic Analysis — are ahead of the curve when it comes to implementing the Evidence Act requirements, but other less experienced Commerce sub-units may not be as far in integrating those requirements with their strategic plans. Knight acknowledged this is an ongoing challenge, especially since many of the new initiatives in evidence-based decision making do not come with additional funding, and it could take as much as two years to receive the budgetary support.

Therefore, it behooves agencies to consider budget needs and constraints in strategic plans even if the money is not currently available. In the meantime, getting processes and “learning loops” in place should not require additional funds, he said.

“And that’s what we’re looking at right now is we’re looking at FY 2024 budget formulation, is actually making the ask to all of our bureaus and programs,” Knight said. “Saying, ‘Hey, if you’ve got a learning agenda question, and oh by the way, similar to NASA we have three strategic objectives … Did you get any [funds] in your FY 2023 to support that analysis and learning? And then if not, are you getting it into your FY 2024 ask?’”

OMB updated the Circular A-11, which guides agencies on submitting FY 2023 budget requests as well as instructions on budget execution, to reflect Evidence Act requirements. This includes an “evidence submission” along with budget requests, and guidance on “implementing evaluation and evidence-building activities.”

Performance Institute CEO Jeffrey Yefsky said this would help agencies at the federal, city and county levels communicate both internally and to constituents.

“Government is a big business in the United States, and if you don’t have true guidelines or at least some type of a rule book to follow, you’re going to end up with a lot of mayhem and a lot of missed steps, and a lot of utilization of funds that don’t need to be utilized,” he said.

For his part, Walters said having the A-11 update helps every year and gives him the reinforcement to direct others in creating budget submissions. He also appreciated that OMB regularly asks him and his counterparts how A-11 updates could be more useful, which gives performance managers a voice in that update process. Yet he did not deny the lack of additional resources is hard to overcome.

“Just in terms of execution, resources present a huge challenge for someone like me, that has a team that’s used to working [in a] GPRAMA [GPRA Modernization Act of 2010] silo, and now being asked to build all these new Evidence Act products and processes into our work,” Walters said. “What I try to do is just stay positive. I try to remind everybody that the Evidence Act is still in its infancy … There will be resources that become available in future years, especially if we do the work well. And there’s a reason why this legislation was passed. We’re going to build on our prior efforts, and that ultimately it’s a good thing.”

Two House Appropriations Subcommittees are proposing a $777 billion budget for the Pentagon next year; the budget is the culmination of the Defense appropriations bill and a separate bill that handles military construction. Those bills are the only ones that have true financial repercussions and are largely in line with what the Biden administration requested for Defense back in April.

The House Armed Services Committee is sticking closely to the Biden budget and to appropriators. The 2023 House Defense authorization bill suggests $772 billion for the Pentagon next year.

The Senate Armed Services Committee, however, is feeling bolder in what it is approving in its legislation. That panel is authorizing $817 billion for DoD, an increase of $45 billion from the Biden administration’s request.

Committee staffers said about half of the increase will go to hedging inflation and the other half will go to priorities that were unfunded by the president’s request. The bill halts the proposed decommissioning of 12 Navy ships

The authorization bills, do not appropriate actual funds, but they do dictate policy and are taken into consideration by other lawmakers.

The missing piece of the puzzle is the Senate Appropriations Defense bill, which has not scheduled a release of its legislation yet.

The shifting numbers come from concerns that the Biden administration’s budget only planned for a 2% inflation rate before prices began to rise. Lawmakers fear that the president’s budget will not give the Pentagon the buying power it needs next year to meet its strategy.

House Armed Services Committee Chairman Adam Smith said last week that he expects to see the topline of the House Defense authorization bill higher than what is currently proposed. Smith said the committee is going to try to pass the bill and then offer an amendment that will authorize a bigger budget.

“We’ll see by how much but it’s not going to be an insignificant amount,” Smith said.

The full committee will markup the bill on Wednesday.

Where the funding goes

Despite differing toplines, the three bills share plenty of similarities. All three bills fund the largest Defense research and development budget ever, with at least $130 billion. Those funds will go toward basic research, artificial intelligence, microelectronics and other technologies.

The bills also fund a 4.6% pay increase for service members and for DoD civilians.

The legislation adds extra funds to aid Ukraine in 2023 and adds money to stockpile rare earth minerals that the military needs for critical technologies.

Area of conflict

After years of debate, the Senate’s Defense authorization bill requires women to sign up for the Selective Service System and allows them to be drafted.

Multiple Republicans like Sen. Marco Rubio (R-Fla.) have already come out against the provision.

“Women have served in and alongside the Armed Forces since our nation’s founding. Time and again, they have answered the call of duty and served honorably – often heroically – when our nation needed them,” a handful of senators wrote to Senate Armed Services Committee Chairman Jack Reed (D-R.I.) last week. “But they have done so of their own will. While American men are required to register for the military draft and fight if needed, these requirements have never been applied to American women. Where they have fought, they have done so freely.”

A commission looking at public service found in 2020 that women should be eligible for the draft.

“Ultimately, the commission determined the time is right to require women to register with Selective Service,” the authors wrote. “This policy change represents a necessary — and overdue — step that is in the best interests of the United States. Requiring all Americans to register with the Selective Service System is needed to ensure that during a national emergency, the Government would be able to call on the talents of all Americans and demonstrate the resolve of a united country.”

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SAN DIEGO – The government hasn’t had it easy when it comes to predicting what world events will be thrown its way over the past few years, and in turn, that has an impact on budgeting, businesses and their supply chain.

The Air Force and other military organizations are dealing with a handful of “black swans” as Maj. Gen. Camron Holt, Air Force deputy assistant secretary for contracting, called them. The war in Ukraine, supply chain shortages, COVID and inflation are all throwing a wrench in pricing and contracting.

Holt said the Air Force is exploring multiple options to ensure the service gets the products it wants and helps industry where it is struggling along the way.

One option that could benefit both sides is to change the way the Air Force approaches supply chains.

“Running inventories on the ragged edge of how low you can get it is always best for a balance sheet and a business,” Holt told Federal News Network. “But, when you have the possibility of the several black swans coming or the dynamics of inflation or war in Ukraine or other disruptive influences, I think that there’s ways to start examining our supply chains in ways that we haven’t done before.”

Holt said the service can take the burden off suppliers by using tools that analyze the fragility of supply chain and then directly funding additional inventories beyond what would be normally acceptable.

The process wouldn’t go as far stockpiling goods, but it would add some cushion for the Air Force and suppliers to ensure airmen get what they need and businesses aren’t hit too hard on their bottom line.

“It may not be very expensive, but the resilience that it adds in the supply chain without harming the balance statement of that company could be enormous,” Holt said. “If we analyze and understand our supply chains better, then I think we’ll see a lot of those kinds of opportunities to improve the resilience and drop the cost while companies maintain a healthy profit.”

While keeping larger inventories might help supply chains become more resilient, Holt said government needs to rethink its budgeting process in general if the military wants to keep up with a world that is changing faster than ever.

Holt said the military’s demands to buy faster are in high demand, but the ability to do that runs up against constitutional and congressional resistance.

Congress has already charged the Defense Department with looking at its planning, programing, budgeting and execution (PPBE) process. The 2022 Defense authorization act sets up a commission to review how the Pentagon plans out its financial situation.

“Let’s say you find a great prototype someplace and you want to buy it. Well, did you have the foresight two years ago to plan it into your POM? If you didn’t, guess what? You have no authority to buy it,” Heidi Shyu, the undersecretary of Defense for Research and Engineering said in an interview with Federal News Network last fall. “And let’s say you’re going to plan it into your POM. Well, in two years time, maybe you’ll get the money, but the technology is already several years old. The PPBE process is too sequential, too linear, too old-fashioned. It works really well if you’re moving at a very slow, very methodical, very risk-averse pace. But in today’s world, when competition against your adversaries is key, it’s got to change.”

Holt said changing the PPBE process, while staying true to the statues of oversight may be critical to ensuring U.S. military dominance.

“I think the budgeting process definitely needs to change. I’m really proud of the House Armed Services Committee and the Senate Armed Services Committee for recognizing that,” he said. “I think the appropriators need to be involved in that discussion as well. The effort is to make sure that we don’t defy our own constitution. I think there are private sector models that can change incentives and keep insight and oversight solid, but modernize that oversight in a way that at first may be a little bit concerning, but I think would be effective.”

Holt noted that rivals like China can move funds quickly, while the United States has a time consuming process.

“I’m actually more urgently interested in the oversight inside of execution year,” Holt said. “I do understand these arguments. I know that the executive branch hasn’t always been the greatest actors in terms of meeting the will of Congress in terms of what buckets of money we spend and how we spend it. I don’t think that friction is going to change. I do think that we as a nation have got to start thinking about how do we allow for some judgment and some decision making at the point of attack at the point of execution. Where we can avoid holes in maybe dozens of acquisition programs that we did not anticipate? Can we rapidly move money to an emerging technology we had no idea existed a year ago?”

The committee’s draft financial services and general government spending bill, released Wednesday, demonstrates a willingness from some lawmakers to gradually restore the IRS’ budget through annual appropriations.

The IRS in this proposal would get a $13.6 billion topline budget, and would see the biggest spending increase in its enforcement and taxpayer service operations.

The draft spending plan comes after Congress, in its fiscal 2022 omnibus spending deal, gave the IRS its largest spending increase in decades. The 2022 omnibus deal gave $12.6 billion to the IRS, the largest budget increase the agency has received since 2001.

Committee Chairwoman Rosa DeLauro (D-Conn.) said the IRS budget outlined in the draft bill would help the agency “provide better customer service and crack down on big corporations and the wealthy who are not paying their fair share in taxes.”

The 2022 spending bill also gave the IRS long-sought-after direct hiring authority, which allowed the agency to bring employees onboard more quickly to deal with its current backlog of tax returns and correspondence.

IRS Commissioner has repeatedly told lawmakers for the direct hiring authority has been essential to the agency’s plans to bring 10,000 IRS employees onboard, half this year and half next year.

“Congress rescued us. There’s no other way for me to say that with direct hiring authority,” Commissioner Chuck Rettig told the Senate Appropriations financial services and general government subcommittee on May 4.

Much of the funding increase would go toward the IRS’s enforcement budget. The bill sets $6.1 billion for IRS enforcement, which is a $682 million increase from enacted levels.

The bill would also give the IRS a $3.4 billion budget for taxpayer services, or an increase of $630 million above enacted levels. That includes funding for the National Taxpayer Advocate and increased personnel to improve IRS customer service.

The IRS would receive a $310 million budget for Business Systems Modernization, a fund that’s focused on modernizing IRS legacy systems and improving IRS Web applications and tax filing processing, or a $35 million increase from current levels. The funding would be available until Sept. 30, 2025.

The IRS would also receive $3.8 billion for operations support.

The draft bill directs the IRS to maintain an employee training program, focused on “taxpayers’ rights, dealing courteously with taxpayers, cross-cultural relations, ethics, and the impartial application of tax law.”

The bill states that the IRS shall institute and enforce policies and procedures that will safeguard the confidentiality of taxpayer information and protect taxpayers against identity theft.

A recent Government Accountability Office report found that the IRS completed nearly 1,700 investigations of alleged willful unauthorized access of tax data by employees between fiscal 2012 and 2021. Of those investigations, the IRS determined that in 462 cases (27%) the employee in question violated the agency’s policy on unauthorized access to taxpayer records.

The draft bill also directs the IRS to increase staffing and improve facilities to handle a greater volume of calls from taxpayers. The bill directs the IRS commissioner shall continue its level of phone service and “enhance the response time to taxpayer communications.”

The Treasury Inspector General for Tax Administration would receive a more than $179 million budget for fiscal 2023.

The draft bill signals a wiliness to give the IRS incremental funding increases, rather than the administration’s original plan to give the IRS as much as $80 billion over the next decade.

The Biden administration’s plan to invest $80 billion into the IRS over a decade, largely toward enforcement efforts and to shrink a growing tax gap between what taxpayers owe and what the IRS receives.

But that plan, which is part of the administration’s Build Back Better Act, failed to earn enough support in the Senate.

The draft bill would also support IT modernization more broadly. The Technology Modernization Fund would receive $100 million. OMB released a recent strategy outlining where the administration would spend the remaining funds in the TMF, as well as two other governmentwide IT modernization funds.

That plan, however, falls short of a proposal led by Sen. Mark Warner (D-Va.) to give the TMF $300 million.

The draft bill also puts money behind two major agency headquarters projects. The General Services Administration would receive $380 million for ongoing construction at the consolidated Department of Homeland Security campus at St. Elizabeths in Southeast Washington, D.C.

GSA would also receive $500 million for a new FBI headquarters. The Biden administration, as part of its fiscal 2023 request, announced its plans to move the FBI’s headquarters out of the District of Columbia and build a new campus in suburban Virginia or Maryland.

Congress, as part of the fiscal 2022 omnibus spending bill, already requested a briefing from the FBI and GSA on the viability of relocating the headquarters to one of three potential sites: Greenbelt, Maryland; Landover, Maryland; or Springfield, Virginia.

GSA would receive $100 million in its Electric Vehicle Fund to allow the purchase of more electric and zero-emission vehicles for the federal fleet.

The draft bill also gives the National Archives and Records Administration a $452 million budget, or a $2 million increase above the administration’s request. The bill supports NARA’s goal to increase access to records linked to the history of underserved and underrepresented communities.

The IRS Whistleblower Office, according to the agency’s fiscal 2021 report, made 179 awards to whistleblowers worth more than $36 million. Whistleblower tips helped the agency collect more than $245 million that same year.

The amount the IRS awarded to whistleblowers last year is nearly half the approximately $70 million a year whistleblowers have received over the program’s 15-year history, on average.

Fiscal 2021 is the office’s lowest year for whistleblower awards since fiscal 2017, when it awarded $33.9 million to whistleblowers.

The IRS Whistleblower Office made its biggest payout to whistleblowers in fiscal 2018, when it awarded more than $312 million. Those whistleblower tips helped the IRS collect more than $1.4 billion in proceeds from non-compliant taxpayers.

The report’s findings underwhelmed whistleblower advocates, who are calling on Congress to strengthen the program through bipartisan legislation.

Since 2007, the IRS Whistleblower Office has paid out more than 2,500 awards to whistleblowers totaling over $1.05 billion. Whistleblower tips to this office have helped IRS to recover $6.39 billion from non-compliant taxpayers.

The Whistleblower Office staff last year had 41 full-time employees, with decades
of experience in a broad array of IRS compliance programs. The IRS also notes that the office went through a major reorganization “to better serve whistleblowers and accommodate program growth.”

The most common types of tips the IRS Whistleblower Office receives on any given year include unreported income, general allegations of fraud and false dependent exemptions.

The IRS held its first whistleblower round table discussion in June 2021. The agency said that discussion allowed industry representatives to hear directly from IRS leadership, ask questions, share thoughts and suggestions, and learn more about the agency’s programs.

Whistleblower attorney Stephen Kohn said in a statement that the report should serve as a “massive wakeup call to Congress,” and should lead to Congress passing the IRS Whistleblower Program Improvement Act.

“Whistleblowers need to have confidence — and IRS managers need to know — that whistleblowers will get a full independent review of any denial of a whistleblower award,” Kohn said.

The legislation, which Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.) introduced in June 2021, would give whistleblowers more latitude to appeal an IRS award determination to U.S. tax courts.

Under the current legal standard, tax courts may only hear an appeal on an award determination if the appeal is based on an “abuse of discretion.”

The bill would also exempt whistleblower awards from budget sequestration and would allow interest to accrue on whistleblower awards within one year of the IRS collecting proceeds from taxpayers.

A bill summary states whistleblower claims can take years to go through the IRS review and award determinations process, and that IRS whistleblowers have expressed concerns that the IRS has “sometimes dragged its feet on issuing awards,” even after the IRS has collected all proceeds.

Siri Nelson, executive director of the National Whistleblower Center, said that the report’s findings are “extremely disappointing,” considering last year marked a “banner year” for other whistleblower award programs, including whistleblowers submitting tips under the False Claims Act.

“The only people celebrating these low numbers for the IRS whistleblower program are the millionaire and billionaire tax cheats,” Nelson said, adding said the IRS whistleblower program has been key to major tax evasion cases.

Dean Zerbe, a partner at the law firm Zerbe, Miller, Fingeret, Frank & Jadav, said the IRS could improve the program by allowing for awards to whistleblowers who don’t meet the criteria of the mandatory award program.

Zerbe said the IRS also could enter into contracts with whistleblowers and their advisors, and expedite the backlog of cases that have been waiting for action by IRS legal counsel.

“The IRS and Treasury management need to take a hard look and recognize that the best program the IRS has for going after big-time tax cheats is in a ditch,” Zerbe said.

The IRS last month named John Hinman to serve as the Whistleblower Office’s director.

Zerbe said Hinman brings years of experience as an IRS employee in examination and audits.

“The hope is that as an IRS insider, Mr. Hinman can advance the ball on a key challenge for the IRS whistleblower program – having the program embraced by examiners and auditors in the field. Mr. Hinman will benefit from the experienced and dedicated professional staff of the IRS whistleblower office,” Zerbe said.

The 2014 Tax Relief and Health Care Act led to the creation of the IRS Whistleblower Office, as well as a new framework for whistleblower submissions.

Whistleblowers eligible to receive an award must have their disclosure signed and submitted under penalty of perjury. The disclosure must also be related to an action in which the proceeds in dispute exceed $2 million, and related to taxpayers whose annual gross income exceeds $200,000.

Under these conditions, the IRS will pay whistleblowers an award of at least 15% of the funds recovered, but no more than 30% of the proceeds in cases where a whistleblower “substantially contributes” to an administrative or judicial action that results in the collection of proceeds.

The IRS cannot make the award to a whistleblower until the taxpayer in question has exhausted all their appeal rights, meaning the agency generally cannot make award payments for several years after the whistleblower has filed a claim.

The report states that the COVID-19 pandemic led to a slowdown of the IRS whistleblower officer operations including intake processing, classification, payment processing, litigation and closures.

However, the whistleblower program’s operational processes have been fully restored, the report added, and is continuing to process claims “to the greatest extent possible.”

The IRS report states the Whistleblower Office completed three internal reviews performed by the IRS Office of the Chief Financial Officer, which found the office is showing effective internal controls.

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The Army is expecting fiscal 2023 to be a big year for its digital transformation efforts.

The question, as with most agency programs, is whether Congress will deliver on the Army’s budget request.

“Fiscal 2023, for us, is that year of inflection when it comes to our digital transformation journey,” said Raj Iyer, the Army’s chief information officer, during a press briefing on June 9. “We need to make sure that the investments that we have are appropriately aligned to the Army’s priorities and to the Defense Department priorities, quite honestly through the release of the National Defense Strategy.”

The Army will have to support those priorities, as Iyer and Lt. Gen. John Morrison, the Army’s G6, laid them out in the October digital transformation strategy, through mostly a flat budget request and buttressed by savings from IT modernization efforts.

Iyer said the Army’s IT and cybersecurity budget request is $16.6 billion in 2023, which is the largest of all DoD services. The request makes up slightly less than 10% of the Army’s total budget request of $180 billion.

This was the first time the Army detailed its 2023 IT and cyber budget request since President Joe Biden sent his spending wish list to Congress in March.

Inside that $16.6 billion request is $2 billion for cybersecurity, including offensive and defensive operations, network operations and research and development.

Iyer said the bulk of their IT and cyber investment will go to network support and modernization.

“This is about $9.8 billion. This is clearly supporting all the way from the tactical edge, including the support of current operations, all the way to investments we’re making the cloud,” Iyer said. “Gen. Morrison has spoken about the unified network at a number of events…but 2023 really is also our opportunity to scale our cloud efforts that we have made some tremendous progress in 2021 and 2022. We’re seeing about a $290 million investment in cloud in 2023 to continue to further our cloud migration journey. There’s some tremendous activity across the Army right now in terms of operationalizing the cloud that we’ve established in what we call c-Army.”

Spending less on legacy technology

The Army also is asking for about $220 million for artificial intelligence and data related initiatives.

Iyer said he expects his operations and maintenance (O&M) budget to support current and legacy IT to be slightly lower in 2023 compared to this year as well.

Over the last few years, the Army has been on a path to reduce reliance on old technology and consolidate tools.

Iyer said by moving to Office 365 and through other consolidation efforts, his office has found money to reinvest in modernization.

“One is the convergence of our networks as part of our unified network strategy. We’re looking at converging 42 networks across the Army into that single, unified network. What that will do really is start to consolidate all of the tools into a common service catalog, get us to a common set of processes and to standardization across the network. That will inherently result in in cost savings into 2023,” Iyer said. “Beyond that, there’s some other things that we have done in terms of reducing our bills for 2023 based on our current spending. One of them really is the recent decision to complete or finish out our enterprise IT-as-a-service pilots. We had three contracts in place at three pilot locations that we had selected. Most recently, based on the results and the lessons learned, we have come to a conclusion that we have good data in order to be able to deploy some common services that are cloud enabled across all Army locations worldwide.”

He said O365 is one example of those services. He said his office deploy a standard virtual desktop infrastructure as well in the coming years.

Morrison added that some of the decisions to find savings means getting rid of technology altogether like video teleconferencing hardware and software since the Army can use the capabilities through O365.

“As enterprise capabilities come online, we just need to be ruthless in our governance of it to make sure that we did keep the best of legacy capabilities and we don’t hang on to something just to hang on to it,” Morrison said. “I think we are putting the mechanisms in place to really start getting after that. We’re continuing to shut data centers. We are continuing to leverage the great capabilities that come with c-Army. We’re not doing it at the speed and tempo that we probably can. And quite frankly, Dr. Iyer and I had a discussion just earlier [on June 9] about reinvigorating those efforts because even though we’re past what the goals that had been set for the Army from an efficiency perspective, but I would submit to you more importantly from an operational effectiveness perspective, we need to move a little bit faster and harmonize with this hybrid cloud operational environments. That will only drive us faster toward data centricity. It will only drive us toward a unified network that can support multi-domain operations.”

5 ERPs, 150 support systems

One of Iyer’s biggest and boldest priorities for 2023 that, over the long term, should result in significant cost savings is modernizing the Army’s business systems.

The Army plans to spend $1.4 billion on maintaining five enterprise resource planning (ERP) systems for financial management, human resources and the like as well as 150 support systems.

Iyer said many of these ERP and related systems are more than 20 years old and ready to be updated and moved the cloud.

The Army has been focused on reducing and modernizing its business systems for the last decade. In 2017, the service reported it cut the number of business systems to 400 from 800. In 2020, it upgraded the General Fund Enterprise Business System to be more of a shared service for other Defense agencies and had plans to take the system to the cloud.

“Our marquee effort in 2023 is going to be our implementation or initial prototyping for our new enterprise business systems convergence,” he said. “We’re trying to converge them into a single architecture or into a single system if we can. If we have one integrated capability, then, more importantly, the data that we can pass across that spectrum of operations for analytics. It is a massive, multi-year modernization effort. We fully expect that it will be as high as 10 years for us to get to that modernization effort. But the approach that we’re taking isn’t a big bang approach that we’ve typically used in the past. This is going to meet be more of an evolutionary modernization approach.”

Along with the budget request, Iyer said the Army will take another key step this summer when the Program Executive Office-Enterprise Information Systems (PEO-EIS) will release a call for white papers under an other transaction agreement (OTA) approach to better understand what industry has to offer.

“Since we are going to use an OTA process for this acquisition, there is going to be a lot of interaction with the industry to figure out what’s out there that the Army can adopt rapidly, as well as, ensure we have a future proof architecture,” Iyer said. “We expect to award multiple prototypes in early 2023. These would run anywhere from 12-to-18 months. Then at the end of that effort, just like any OTA, we will get to a production contract by down selecting one of those prototypes to be our production solution.”

Iyer said while the OTA will not be prescriptive, the Army wants to see how industry responds with ideas that include using a modular architecture, supports data exchange through application programming interfaces (APIs) and micro services and is cloud native.

“We’ll be looking at how flexible the solution will be in terms of its ability to implement Army unique processes wherever we have them, without the need to customize commercial off the shelf products,” he said. “This is going to be evolutionary modernization as we are doing this in an agile approach. We will let the functional priorities define what those increments will be, and then we will look at the risk profile to look at how quickly we can get those turned on. That will determine the level of funding and the timeline for implementation. From an implementation perspective, one of the things that we’re going to we’re going to be pushing an industry for is to truly do this using dev/sec/ops and in an agile manner, which means that we are looking for functionality to be available or released to users on rapid sprints, not taking years to do this. This is all about getting functionality in the hands of the user rapidly through agile development.”

Former OMB Director Russ Vought and current president of the Center for Renewing America, sent a letter to current OMB Director Shalanda Young today detailing why he believes the current approach to implementing the March 2021 executive order, Promoting Access to Voting, would put federal employees in jeopardy of breaking the law.

“In recent months, agencies have slowly begun responding to outside requests to make their plans for complying with this order public and transparent,” Vought wrote to Young in the letter obtained by Federal News Network. “What we have seen thus far is of deep concern. Some of these plans provide that agencies will expend federal taxpayer funds or other resources and partner with preapproved outside organizations in order to satisfy the Biden administration’s directive to engage in voter registration efforts.”

The Anti-Deficiency Act prohibits agencies from spending money without appropriations. There are some recognized exemptions too.

Vought, who served as OMB director or acting director from 2019 to 2021 and as deputy director from 2018 to 2020, wrote that it seems the Biden administration is asking agencies to either use appropriations for other things than intended or to take “gifts” from outside organizations to promote voter registration.

“[I]nviting White House-preapproved outside organizations to volunteer their time and efforts on federal property in furtherance of the administration’s stated policy of increasing voter registration and participation could be seen as a violation of the ADA,” he wrote.

A Center for Renewing America spokesperson added the concern is that federal civil servants could put themselves in jeopardy if they participate in voter registration activities.

An OMB spokesperson declined to comment on the letter.

Concerns overstated?

Two experts on the Anti-Deficiency Act say the letter over states the concern about possible violations.

Tim Westmoreland, a law professor at Georgetown University, a former counsel to the Subcommittee on Health and the Environment in the House of Representatives and a former director of the Medicaid program at the Department of Health and Human Services during the Clinton administration, said typically Congress is not specific in appropriations statute making violations of the ADA difficult.

“The ADA would be triggered if statutory language for specific purpose was violated, but language in the bill report or floor language is not enough to make it illegal,” he said. “If agencies are given general appropriations to carry out a specific authority, it’s unclear if activities within that general authority are in violation of the ADA. They may get criticized by the appropriations committees, but it has to be very specific  reason that Congress allocated these funds for to be a violation.”

Howell Jackson, professor at Harvard Law School and a federal budget expert, added that he would’ve expected agency leaders to go through an ordinary review of legal and regulatory requirements before signing off on any use of funding.

“In the ordinary course — and the Biden administration folks are pretty good on this dimension — the general counsel or financial officer of each agency would sign off on compliance efforts, including ADA issues,” he said in an email to Federal News Network. “Enforcement of the ADA is, of course, up to the Justice Department and OMB, which is not likely in this instance, I would think. A new administration might reach different conclusions, but if individual officials have followed ordinary procedures in getting sign-off on their compliance efforts, it may be difficult to demonstrate an intentional violation.”

Examples of concerns

The Center for Renewing America highlighted several potential actions agencies plan or have taken as most concerning.

The Labor Department issued guidance to designate 2,300 job centers as voter registration sites and invited organizations to conduct outreach efforts.

CRA says “designating locally-run job centers as voter registration agencies, much like most state registries of motor vehicles, would add a significant burden on them and incur additional personnel obligations in these federally-funded centers. For that reason, this initiative could be found to be violative of the ADA. Additionally, enlisting the voluntary services of state and nonprofit workers to further the aims of Biden’s E.O. could be found to be a violation of § 1342 of the Act.”

CRA also pointed to the Department of Housing and Urban Development’s plan to work with more than 3,000 public housing authorities (PHAs) about their efforts to promote voter registration as another concerning example

The Biden administration said it will work with PHAs on “permissible ways to inform residents of non-partisan voter registration information and services. The department will also assist relevant HUD-funded service providers by highlighting and sharing promising practices that improve non-partisan voting registration and voting access for people experiencing homelessness.”

The Center for Renewing America spokesperson said these examples and other may take up federal resources, money and people, for voter registration efforts that were not intended by Congress.

“This is an example of writing an EO and then trying to make policy and understand what authorities can be used to execute the EO by agencies,” the spokesperson said. “They have to figure it out. This is an imbalance between the objectives of the EO and the underlying authority that every agency needs.”

Feds to seek counsel

Georgetown’s Westmoreland said unless there are clear examples of Congress telling agencies to spend money on a specific thing or not to spend money on something, like with the Hyde amendment that prohibited agencies from spending money on abortions except for some specific instances, it’s hard to make the case that these efforts would be risky for employees.

“This is less of a budget argument and more of a political argument. The ADA is a good law and people do training on it all the time,” he said. “I think this argument in this letter is simply trying to chill or scare people from doing things that may otherwise be legal. They should turn to their general counsel and seek more information. I’d be surprised if there is any statue to prohibit federal employees from doing voter registration.”

Westmoreland said there also is some irony that Vought is worried about the Anti-Deficiency Act given the Trump administration’s actions when it came to spending appropriated funding.

The Government Accountability Office found multiple violations of the ADA during the four years of the Trump administration. OMB even changed Circular A-11 in 2019 about reporting possible ADA violations.

The CRA spokesperson said the Trump administration took the ADA seriously but just disagreed with GAO’s oversight of the executive branch. The spokesperson said the administration always thought they had good legal grounds and were conscious of the ADA’s requirements when making spending decisions.

Westmoreland said the Trump administration often skated right up to the edge or even went over the edge in using appropriated funds for other activities than they were designated for, including the border wall.

“Members of their own party said this is not how appropriations law works,” he said. “They also used EOs to tell agencies to do controversial things and didn’t create new authority for them, like in advancing religious freedom.”

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A section in the 2023 Defense Department budget request would change how DoD manages its civilian workforce. The American Federation of Government Employees thinks it could lead to wholesale reductions in the civilian ranks. For what’s going on, the Federal Drive with Tom Temin turned to AFGE’s Defense Department legislative representative John Anderson.

Interview transcript: 

John Anderson: There is a massive contradiction in the president’s budget between, and I found it very positive when I saw the sections about strengthening the federal government workforce, and improving the hiring process. Then buried in the technical appendices is a reversion back to some very failed practices that occurred over the past decade where the workforces funding levels were disrupted through the operation of personnel caps. Now, the way a personnel cap operates is that funding that has been set aside and budgeted for the civilian workforce, once a civilian gets promoted, retires, leaves for another job, that manager who is responsible for the function has to worry about keeping that position, because it becomes ripe for the takings by the controller. And the controller doesn’t really care that much about total force management or the civilian workforce hiring. That’s the responsibility of the undersecretary of personnel readiness to be the champion for that. And as you have an incumbent as a political appointee, performing the duties of undersecretary of Defense for Personnel and Readiness, and they either have been delays in their appointments, or have not really gotten up to speed and being a vigorous advocate of this function. The Comptroller, given their normal practices will just say, this is an easy way for me to harvest some dollars. And so they will take the money, if it’s a vacant position, if it’s a vacant position, they don’t have to do a rest. So it completely eludes any kind of congressional oversight. And then they wonder why this is the front ends of problems with the hiring process that most people don’t really get to. They just look at the back end, once a physician is established, and they don’t look at the front end of when a person leaves a position and a vacancies in place. And then it’s a free-for-all to protect that position.

Tom Temin: All right, so you have written to the chair of the House Appropriations Committee, defense subcommittee, and to Sen. [Jon] Tester, who is chairman of the Senate Appropriations Committee Defense Subcommittee, the two big defense subcommittee folks, and said, you’re citing section 129 of title 10, which is the overall kind of statute for civilian employees in the Defense Department. And you said that the provision in the request for next year eviscerates that. So tell us what 129 does, and how this request from the Biden administration eviscerates it?

John Anderson: Okay, 129 specifically mandates that the civilian workforce has to be solely managed, based upon those full force management principles in a separate section 129-A, which is separate from 129. And it is to be managed solely based on the full force management principles, the workload that’s to be performed and the funding provided by Congress. Now, the total force management policies that are supposed to be followed, they are the responsibility of the undersecretary of Defense for Personnel and Readiness to be the champion of those and advocate for them. And those policies requires the department to look at the civilian workforce, and the functions they perform holistically. Together with the capabilities provided by the active, the reserves component, military, and the contractor workforce. And to look at things from the standpoint of costs and risks, and the elements of risks deal with readiness, lethality, stress on the military force, and operational effectiveness. Now, the thing that really was alarming was not just this technical change, but the performance of the department. Very various budget hearings and posture hearings, before the House Armed Services Committee, Senate Armed Services Committee, and in particular, the Senate Appropriations Committee and the House Appropriations Committee, subcommittees of defence. And in particular, in a the hearing before the House Appropriations Committee Subcommittee on Defense, when Ranking Member [Ken] Calvert, did his perennial, he has done for the past 15 years saying, “Let’s reduce the civilian workforce by some arbitrary number, in this case, since military end strength is going down, you should have proportionately reduced the civilian workforce.” And he had that interview in the record without objection. And there was no vigorous rebuttal, consistent with the department’s previous budget, posture briefings and everything else. Instead, they met it with, “Oh, we are always ready to become more efficient.” Now, when you look at past Government Accountability Office audits of the department when they have tried to become more efficient, by cutting the civilian workforce, they found that essentially, the department just shifted the requirement done by civilians to higher-cost contractors, or to military to the detriment of readiness and [the force].

Tom Temin: We’re speaking with John Anderson, he’s DoD’s legislative representative at the American Federation of Government Employees. So the key sentence here is during the current fiscal year, which would be 2023. And this is from the request, the civilian personnel of the Department of Defense may not be managed solely on the basis of any constraint or limitation in terms of man years, end strength, et cetera, et cetera. So you’re interpreting this to be a gambit to just make wholesale cuts to the civilian workforce?

John Anderson: Yes, because of the injured position of the word “solely” suggests that well, they primarily may be managed based on that. And in fact, that provision, before it was changed by the appropriators to conform to the title 10 section 129 and 129-A, in fact, was interpreted that way. It was interpreted to say, we can manage the caps and in fact, that’s the way we do it. And as a result, you had massive levels of basically the department coming in and saying we’re going to spend X amount on the civilian workforce, and then they would not spend that they were shifted through contractors, essentially.

Tom Temin: So the question now is, have you gotten any response from the appropriators here? I mean, this was section 8008, in the appropriations request, out of probably 12,000. And I can guarantee no member of Congress can name all 12,000. So were they aware of it? Do they agree with you? What’s the reaction been so far since this letter?

John Anderson: Well, I’d say on the Democratic side, the reaction of the appropriators has been to thank me for pointing out that disconnect. There has been some follow up, I understand, with the department to try and find out just exactly where this came from. I have a sense that they haven’t been answered yet. And my instincts are the department is probably trying to figure out how it got in there.

Tom Temin: Right, because it did come from a Democratic administration, too.

John Anderson: Yeah. Now my hypothesis is, is that in the bureaucratic coordination process, this is a highly technical provision, it’s possible, this is my speculation, it’s possible, it came from the comptroller. And as the P&R – the personnel and readiness people, because that function was weakened in the prior administration, and the current incumbent has not really from my perspective, really vigorously taken on that function – that they missteps. That’s the benign interpretation of this. Now, a more nefarious interpretation is this is deliberate. I doubt that, I think it was probably a bureaucratic glitch. I’d like to give him the benefit of that doubt. But it also reflects the fact that the performance of the department during budget and posture hearings in this area has not been very good. And they did not prepare their senior leaders when Calvert gave him something that would be very easy to answer if they just read their own documentation in the past that they’ve done on the civilian workforce to answer him and say, “Actually, workload is going up, operational demand is going up. The national defense strategy does not say that military end strength should go down. The only reason it’s going down is we’re not able in this current job market, to get people to agree to enlist at the level of quality that we would like to have. Now the people that were closest to getting that direction were the Army, so I applaud the way they performed in the hearings, but in general, the department overall has not really adequately rebutted Ranking Member Calvert. If they just read their own documentation, it was easy for them to do so.

Tom Temin: So you’re confident this will come out?

John Anderson: I certainly hope so. And I’d say based on, and I’ve also had responses from some Republicans too and I commend Sen. [Thom] Tillis on the Senate Armed Services Committee side, because he seems to get when the undersecretary of Personnel and Readiness testified before the Personnel Subcommittee of the Senate Armed Services Committee and didn’t seem to be aware of his total force management responsibilities very well and had to be kind of reminded that he has those responsibilities, I think that both the Democratic side of the Senate Armed Services Committee and Sen. Tillis in particular, were very good on this issue of military end strength reductions. He understood that it had nothing to do with – in fact, he was concerned. Is this driven by some budgetary restraints from the comptroller or is this based on the national defense strategy? He gets it and I’m very, very pleased with the way he follows up.

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Memorial Day sent Congress home for a week’s recess. So the gun debates and other matters will have to wait a few more days. For what to expect next, Bloomberg Government congressional reporter Zach Cohen spoke to the Federal Drive with Tom Temin.

Interview transcript:

Tom Temin: All right, and just review the schedule for us. They’re gone this week, and then they’re back next week or what’s going on?

Zach Cohen: That’s right, both chambers are out of session this week, they’ll be back next week for another couple of weeks before then they’ll be out again, for the July 4 recess. And so that’ll be another pretty busy work session, as you mentioned, sort of guns are sort of top of the agenda. I think when they get back, the House is going to vote on a bill related to a red flag law, right, sort of imposing what they’re called extreme risk protection orders, in certain cases where courts have decided at either the behest of a family member or significant other. Even police, in some cases, have said a person shouldn’t have access to firearms. And so that bill should come to the floor in the House, over in the Senate, it’s a little more complicated.

Tom Temin: Sure. And we don’t really know the administrative details of how those laws would actually play out, or what agencies they would affect because it’s all kind of being done in haste.

Zach Cohen: Yeah, over in the Senate there’s a couple of different, couple different bills that are sort of starting off, it sounds like as they’re sort of base text. Senators, Lindsey Graham (R-S.C.) and Richard Blumenthal (D-Conn.) have had a bill in the past, that would be a federal red flag law that would basically allow federal district courts to impose these extreme risk protection orders, and then leave it to the U.S. Marshal Service or a law enforcement agency of their choice, basically, to take these guns back. And then to return them to people if the orders are lifted. Then the there’s another bill from Sen. Marco Rubio (R-Fla.). And I think this is the direction that they will probably go instead, based on our conversations with senators last week, that instead that they would basically grant money to the states to incentivize them to design their own red flag laws. And now we’ll leave it to state courts and their law enforcement offices to sort of both determine whether these orders would be in place, and then to actually retrieve the guns at that question.

Tom Temin: So it sounds like because this has been an abiding issue for both sides and a point of debate periodically, they do have bills that are mostly written already. They’re not starting from scratch here in other words.

Zach Cohen: Yeah, recall that, you know, unfortunately, after every mass shooting, there’s sort of this debate in Washington and across the country, what can Congress do with anything to try to stem the amount of gun violence in this country? After Sandy Hook, there was the failed effort to pass the Manchin-Toomey background checks expansion bill. There’s a lot of interest. I think actually, Senate Majority Leader Schumer (D-N.Y.) put two bills that passed the House already on the floor that he could force a vote on if you wanted to, that would expand background checks. I believe one would close the gun show loopholes, so to speak, right to try to institute background checks for private sales in certain cases, but in general, they both do background checks expansion. And so there are definitely bills out there. The question is, can people like Sen. Chris Murphy (D) from Connecticut Sen. John Cornyn (R) from Texas, come to some sort of an agreement on a bill that can get 60 votes in the Senate, because in today’s day and age, you really do need 60 votes to overcome a filibuster, because basically every bill, and basically every nomination is filibustered at this point.

Tom Temin: Sure. And it seems like just looking at Congress from a process standpoint, giving them the benefit of the doubt, they’ve had a series of things which seem to just dump on them a whole lot of new concern, outside of the routine stuff they’re supposed to be doing, like the annual budget. First, there was another COVID wave, then Ukraine happened. And now the shootings that took place in Texas, and there have been some manufactured obstacles for Congress, like debates over Build Back Better. This all has a cumulative effect on their ability to do the routine business.

Zach Cohen: It could and I think actually, more visibly, we see sort of the inability to even confirm nominees to a lot of these posts. There’s over 100 nominees waiting for Senate confirmation, most of whom, you know, in a normal administration, in a normal political environment, which would be confirmed by voice vote and we’ve done very quickly. So a lot of the Senate’s time on the Senate floor is spent processing nominees as opposed to debating these bills.

We’re going to see something a little bit different next week, when they come back, they’re actually going to vote on pretty historic legislation expanding the benefits to veterans who were exposed to toxic open air burn pits during the wars in Iraq and Afghanistan. That’s something that actually should have broad bipartisan support despite the price tag, it’ll lose a couple of Republicans on that front, but should get passed by the Senate and sent back to the House. And so they are voting on legislation. There’s a large, I guess, what’s called a China competition bill. That’s in the middle of conference negotiations between the House and the Senate that could pass sometime this summer, is sort of the timeline that lawmakers are talking about. We’ll see if they’re able to keep to it. And then as you mentioned, government appropriations, the National Defense Authorization Act, the annual military policy bill, all of those are sort of waiting in the wings without a lot of progress.

Tom Temin: We’re speaking with Zach Cohen, he’s congressional reporter with Bloomberg Government and I wanted to ask you about the appropriations because as we talked about with your colleague, Loren Duggan, the Four Corners, if you will, of the people in Congress that come together the ranking and chairs of the House and Senate Appropriations Committees. They had a little gambit a few weeks ago. Did that go anywhere? And is there any chance it looked like there was a glimmer of hope that they could get something done before the CR (continuing resolution) would set in Oct. 1. No chance or less chance or anything going on there?

Zach Cohen: They’re in the middle of hearings, all of the appropriations committees, subcommittees have been having hearings with senior Biden administration officials on what an annual government funding bill might look like. It seems pretty unlikely to be that they’d be able to pass all 12 appropriations bills by the Sept. 30 deadline, when the fiscal year ends for the U.S. government. Stranger things have happened. There are the two of the four corners, Sens. Patrick Leahy (D-Vt.) and Richard Shelby (R-Ala.) are both retiring at the end of this year. And so they might be looking for a feather in their cap and might be looking to actually pass some appropriations bills on time, which would certainly be a victory in today’s partisan environment. But if they’re not able to do that, then yes, there would be another continuing resolution, most likely probably until after the election at that point and leave annual government funding either to the lame duck session of Congress or even the year after once new majorities come in.

Tom Temin: What a great legacy to talk about after you retire. Yes, I got a budget done on time. My legacy as Senator maybe they’ll have more than that to talk about. Any of those nominations, in particular that might come up sooner rather than later for votes?

Zach Cohen: They’re scheduled to vote first thing when they come back on a cloture motion a motion to sort of limit debate on an Air Force nominee, Alex Wagner. The Secretary has been confirmed a while back. This is an assistant secretary that’s been waiting in the wings for a bit. And so I assume that’ll get you know, he’ll get confirmed probably by that Tuesday, a week from today. And then they would turn to this Veterans Affairs, this toxic burn pits legislation. After that remains to be seen. There’s I think there’s about a dozen nominees that are waiting to be confirmed including a chair of the Merit System Protection Board, which I think you all have talked to Loren about in the past.

Tom Temin: Right. Well, she was confirmed.

Zach Cohen: As a member but not as a chair, which is kind of interesting.

Tom Temin: The chairmanship has to be confirmed also?

Zach Cohen: Exactly. So they confirmed or as a member, but not as chair last week. And so they’re they’re about halfway done through the process. So maybe they’ll get to that.

Tom Temin: So they’re a headless horse now, but at least it has all of its legs, you might say.

Zach Cohen: Exactly.

Tom Temin: Zach Cohen is a congressional reporter with Bloomberg Government. Thanks so much for joining me.

Zach Cohen: Sure, anytime.

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The Department of Health and Human Services has some new authorities to hopefully help resolve the nationwide shortage of baby formula. That’s after President Joe Biden invoked the somewhat rarely used Defense Production Act last week. But it’s not exactly clear how HHS will use those newly delegated authorities and how much help they could provide. Meanwhile, lots of questions about the crisis on Capitol Hill, and it’s where the Federal Drive with Tom Temin found WTOP’s Mitchell Miller. And he offered a preview of what to expect on the Hill this week.

Interview transcript:

Jared Serbu: Hi, Mitchell.

Mitchell Miller: Hi, there.

Jared Serbu: Let’s start with the formula issue. Best we can tell, where do things stand right now, both in terms of the administration’s response and any ways in which lawmakers might be looking to intervene or at least conduct oversight?

Mitchell Miller: FDA Commissioner Robert Califf says improvements are getting underway this week. And he told members of an angry House panel last week that it could take several weeks before parents actually start to see baby formula on shelves like they’re accustomed to see. And this of course, goes back to the issues at Abbott’s production facility in Michigan. Lawmakers from both parties still very upset with the FDA saying it was slow to react to these problems that they say they’ve known about for months. Now for its part, the Biden administration has started a program to use military aircraft to actually bring in formula from foreign manufacturers. Generally during a regular part of the year, basically, you have 98% of the baby formula being made and distributed here at facilities in the United States. So this is a big change. And the House also passed a bill to provide the FDA with $28 million last week, but it’s unlikely to pass in the Senate. Now the Senate did join the House and approving changes in the WIC program for low income women. Essentially, this allows them to go to other baby formulas, if you will. Normally they have to get one specific one that’s USDA approved. This loosens the regulations related to that. So that was one area where both the House and the Senate were both on the same page. But also, as you know, within the FDA, there is a lot of angst, frankly, within the agency about how things are being managed. Now the Commissioner Califf has appointed Janet Woodcock, who’s deputy commissioner and had been acting commissioner of FDA, to have a bigger role on not only this issue, but other major food issues. But consumer advocates have been critical of that. They say her expertise has really been more related to drug approvals. A lot of people from the outside looking in say the FDA needs to do a lot more within the organization to get ahead of some of these big issues.

Jared Serbu: Well, you could be a little clearer on, to the extent there was finger pointing and the FDA is direction, what exactly is the criticism? What do members of Congress who are pointing that finger think they could have done better to head off this crisis?

Mitchell Miller: Well, what they’re saying is that there were starting to be rumblings of issues going back as far as last fall. And then when it really hit the fan was in February, when you had specific problems at the Abbott facility, which unfortunately, it looks like at least two baby deaths are related to some kind of problems with the plant and safety issues there. And what they’re saying is that, as far back at least as February and maybe even beyond that, that the FDA should have been taking a much more aggressive look at what was happening at that plant. Eventually, of course, the FDA did shut down the operations at the plant. But they’re arguing that there was really no longer term plan to get the plant back up, or to figure out with all the supply chain issues that have ramped up what they were going to do to actually get the baby formula to people. And then of course, obviously, it just blew up when you had people getting to the stores and not seeing it. And I’ve talked to some lawmakers about this. I talked to Sen. Tim Kaine of Virginia, and he acknowledged that Congress was frankly slow on its own part to recognize, he said he didn’t himself really realize that there was a problem until about a month ago. So I think in a lot of these instances, there’s plenty of blame to go around.

Jared Serbu: Let’s zoom out a bit and talk about the legislative schedule some, here. I know it’s been a few busy weeks of congressional hearings on both the House and Senate side. I think the House is actually out now for at least a bit. Is this kind of the sign of things winding down toward election season and prospects of legislation getting dimmer?

Mitchell Miller: It really looks like that, Jared. I mean, right now you have this week the House is out. They will be back the Senate is in. But right now, there’s really this feeling that what is actually going to get done? And there’s really not a good optimistic feeling about a lot of things getting done. Of course last week, the Senate followed the House and did pass the nearly $40 billion in Ukraine aid. That has obviously dominated a lot of things but in terms of federal agencies and things actually getting done on the more traditional level, it’s really been slow, especially even for a midterm election year. Obviously congressional Democrats have been trying to get some kind of reconciliation measure through for months, but they keep hitting the stop sign. Some of them say that the stop sign is Sen. Joe Manchin. But nonetheless, it does not look like there’s going to be even piecemeal legislation which they have talked about, whether it’s adding to daycare or providing more child care funding, or lowering prescription drug prices. A lot of these get a lot of discussion among congressional Democrats but realistically, there’s just no path forward for it. You have a 50/50 Senate. And of course, you need the 60 votes to overcome the filibuster. So I don’t see a lot of optimism right there about any kind of legislation getting done. And then if we move to the the more basics, the nuts and bolts of congressional budgeting, you have the four corners, you have the appropriators who have been saying, really now for many weeks that yes, we’re slowly making some progress here. But there hasn’t really been any kind of breakthrough moment where we thought that okay, now they’re finally getting to the next fiscal year budget. It’s still very early in that process. And as you know, from past years, they just don’t generally get a lot of these major bills passed in a midterm election year.

Jared Serbu: Yeah, and I think folks are pretty used to living under [continuing resolutions] for at least the first few months now of every federal fiscal year. Is it basically just a certainty, especially with the election year that that’s going to be the case again, for this year?

Mitchell Miller: I think there’s no doubt about it. I mean, the CR is going to be back, we’re going to see a little bit of optimism here and there, and then it’ll all fall to the side as it usually does. So we’ll be looking at a continuing resolution sometime late in the year and there’s just not enough agreement on either side. I mean, you do have some people that think that they could push through and maybe get a couple of spending bills through, but that would be even optimistic. So I think we’re just headed for those two familiar letters: CR.

Jared Serbu: And I know one agency budget in particular you’re watching is the IRS, which the president has proposed, I believe $80 billion in new funding for, and meanwhile, also some scrutiny from [the Government Accountability Office] over that agency. What are you watching there?

Mitchell Miller: Right. Congress has really been all over the IRS, as you know. And as Federal News Network reported last week, this new GAO report came out. This was requested by Idaho Sen. Mike Crapo, who is the ranking Republican on the Senate Finance Committee, a lot of concern in connection particularly with Republicans about whether or not the IRS was poking around too much into some personal things related to people who filed and whether people had gone too far in that. Now, this GAO report found that several hundred IRS employees over a decade or so violated various policies going [into] unauthorized access to taxpayer information. In some cases, they just don’t know exactly what was found, or particularly why it happened. The IRS has been somewhat opaque on some of the other, on some of the issues where people, it wasn’t really clear, frankly, what they were looking for, but they may have violated a policy nonetheless. So that’s been happening, and then related to the $80 billion that the president wants, there’s just no way obviously that they’re going to get it. A lot of Republican opposition to this. Democrats on the other side, say you’re going to continue to have these problems with the IRS. And in terms of paper backups, and not getting enough audits done and all of this getting, this waiting game at the IRS that we’re familiar with if you don’t provide some additional funding. But right now, I just don’t see anything close to that kind of funding happening. Although the IRS has certainly made a big push to try to get more resources and try to get that paper backlog down although it has made some some progress in that area.

Jared Serbu: All right, WTOP’s Mitchell Miller joining us from the Capital. Thanks a lot, Mitchell.

Mitchell Miller: You bet.

The President’s Budget Request included approximately $62.5 billion for NIH, compared to $42.9 billion the agency received in the 2022 continuing resolution, and $42.8 billion in the final 2021 budget. The request represents a 7.2% increase for research project grants, a 50% increase in the buildings and facilities appropriation, and a 5% increase for training.

The 2023 proposal includes $12.1 billion more for pandemic preparedness, and an additional $5 billion to stand up the new Advanced Research Project Agency for Health (ARPA-H). ARPA-H was first proposed in the president’s 2022 budget and is modeled after the Defense Advanced Research Projects Agency. It aims to use public-private partnerships for quicker support of results-driven, time-limited projects and innovations as a way to enable more experimentation.

“ARPA-H should expect that a significant fraction of its efforts will fail; if not, the organization is being too risk-averse. The best approach is to fail early in the process, by addressing key risks upfront,” NIH wrote in its 2023 budget justification to Congress.

Testifying before the House Appropriations Subcommittee for Labor, HHS, Education and related agencies yesterday, NIH Acting Director Lawrence Tabak said the request emphasizes large-scale investment because “the scientific opportunity presented itself,” due to either emerging technologies or areas of concern.

But ARPA-H still does not have a presidentially appointed director and Tabak could not give a firm deadline for hiring one. Therefore, Ranking Member Tom Cole (R-Okla.) asked why Congress should approve funding for an organization whose direction and leadership is still uncertain, at the expense of funding other NIH institutes.

“Our first step of course is going to be to build out the infrastructure, the administrative infrastructure of the organization. And from the practical standpoint, with the new organization within NIH we can draw upon some equities that are standard, that are used across HHS [and] indeed from other departments …” Tabak said. “We will certainly bring in a small group of senior operational people focused on the administrative side, but no program managers who will be driving the science will be recruited until the director is in place.”

Last July, then-NIH Director Francis Collins told the Federal Drive with Tom Temin that an ARPA-H director should have private sector and entrepreneurial experience, the ability to recruit several program managers in the first year, who understands design pitches and milestones to have dozens of projects going at once even with little results. Collins said ARPA-H was meant to operate in a more venture capital-type way, rather than as a traditional grant mechanism.

Subcommittee Chairwoman Rosa DeLauro (D-Conn.) expressed concern that ARPA-H leaves out smaller but still impactful projects. The estimated success rate for competing research project grants — which is the number of applications funded, divided by the number of applications received — was 19.8% in the 2023 request. Overall, success rates decreased from 18% in fiscal 2014 to 16.9% under the 2022 CR, which Tabak said was due to in part to an overwhelming increase in applications received.

These success rates, however, obscure long-running disparities between white and minority scientists. For example, although the funding rates for African-American/Black scientists increased from 12.2% in 2013 to 23.6% in 2020, but that’s still behind the 31.3% funding rate for white scientists in 2020. The gap is exponentially wider when examining the number of Black applicants compared to white applicants.

A 2019 study of applicants for R01 research grants — the most common type of award — showed that African-American/Black applicants tend to propose research on topics with lower award rates. The president’s budget request proposes increased funding for its institutes on Minority Health and Health Disparities; Nursing Research; the National Heart Lung and Blood Institute; and the Fogarty International Center, which all have disproportionate numbers applications from scientists in underrepresented groups as well as lower than average R01 success rates.

And because grant funding is often a factor in both hiring and tenure decisions for researchers and academic faculty, addressing these gaps is part of NIH’s UNITE idea generator, within the agency’s Equity Action Plan.

Every subagency at NIH has its own equity action plan that Tabak said would be updated periodically. Rep. Bonnie Watson Coleman (D-N.J.) asked about NIH’s investment in, and success rate of diversity, equity and inclusion initiatives to date, including resources, and reviewers of grant applications. Tabak listed the Faculty Institutional Recruitment for Sustainable Transformation (FIRST) grant program to support cluster hiring and institutional cultural change, and NIH increased funding for the loan repayment program for researchers in areas of health for disadvantaged communities.

The president’s budget request also includes an additional $16 million for the chief officer for Scientific Workforce Diversity “to enhance NIH’s effort to diversify the national scientific workforce and expand recruitment and retention.”

Rep. Andy Harris (R-Md.) also asked Tabak why NIH has failed to reduce the median age of principal investigators for R01 awards despite years of attempts.

“Unfortunately institutions around the country increasingly want their new faculty hires to have bridge funding before they give them a permanent appointment on their faculty. And that was never an intended purpose of some of these transitional awards, but they become a surrogate of deciding who gets a tenure track position or not,” Tabak said.

As such, NIH launched the Stephen I. Katz Early Stage Investigator Research Project Grant, and established mentoring networks to encourage early stage and younger investigators to strive for that R01 award “sooner rather than later, despite what the old sages at their institution may be telling them: ‘Oh, you’ll never get that award, it’s too big, apply for a smaller, little award,’” Tabak said.

He added that students are entering graduate school later than before.

Meanwhile, it is important to make recruiting connections early, according to Roland Owens, director of research workforce development at the NIH’s Office of Intramural Research and a recruiter of principal investigators. In a 2020 interview with the American Society for Biochemistry and Molecular Biology, Owens said he struggles with turnover in his job.

“I learned in the last 12 years [by] making connections with staff [that] the people who are going to be at the university advising the postdocs and graduate students [are crucial],” Owens said. “Unfortunately, those people tend to have a lower profile on the web … and it can be a challenge trying to find those individuals to make connections with them.”

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From infant formula to the devastating war in Ukraine, nothing is to big or small for Congressional attention this week. You can throw veterans and Veterans Affairs into the mix. The Federal Drive with Tom Temin gets the outlook from Bloomberg Government deputy news director Loren Duggan.

Interview transcript:

Tom Temin: And it sounds like whatever the blame, or cause, or supply chain, this infant formula issue is really getting to Congress, which in turn is looking at what agencies might have a role in either causing it or fixing it.

Loren Duggan: That’s right. This is a problem that’s happening nationwide. And that inevitably filters up to Congress and the lawmakers who hear from each other and hear from their constituents. So what we’ll see this week is a hearing at the House Appropriations Committee where the FDA commissioner is going to testify, obviously, they play a key role in regulating things like baby formula and food in the country. So I’m sure there will be a number of questions for that agency. And it’s the first of many hearings that I think we’re likely to see over the coming weeks. And just, you know, things we’re going to hear from lawmakers who are concerned about this, because it is having a real world impact, as you see pictures of empty shelves, or at least somewhat empty shelves and people looking far and wide to get the particular formula that their baby may need. So this is going to be I think, a lingering issue. Probably one that’s top of mind because it is you know, it has a salience it has I think, an emotional resonance as well, that is something that Congress will continue to pay attention to.

Tom Temin: And veterans once again, occupying some parts of Congress this week.

Loren Duggan: That’s right, the House is out next week for just a committee work weekend, they traditionally take up a slate of bills, to help with things like veterans benefits, you know, whether it’s education or health care, or different things that the VA (Department of Veterans Affairs) provides to people who have served this country and more. There’s a slate of those headed to the House floor this week, mostly will be bipartisan, probably passed with some wide margins bills that have moved through the House Veterans Affairs Committee, and in some cases, even already have Senate companions or have been endorsed by the Senate. So this is a pretty traditional thing to do right around Memorial Day, and they’re continuing that tradition this year.

Tom Temin: All right, and there is some contention over I guess the vote, whatever vote they’re going to have with respect to Roe v. Wade is over. Is Congress further involved at this point, because the Supreme Court is under almost lock and key, certainly they’re surrounded by fencing, and so forth is, aside from the political rhetoric any connection at this point?

Loren Duggan: I think rhetoric will definitely continue; Democrats are going to continue pushing and hoping that maybe there’s a way to persuade their neighbors across the street to not go forward with the draft opinion or maybe try to change things there. It you know, depending on how final that opinion is that was drafted the stage and will probably be released in the final form sometime in the coming months, there could be more action in Congress on this, whether they force people to vote on the same issue over and over again, which is not unprecedented, or look for other ways to go after this, whether it’s other programs to help people around the country that they think would be negatively affected by this ruling. But a lot of this is going to shift to states. And I think that’s where you’re going to see even more legislative action with even some states considering special sessions to come in and perhaps now that Roe v. Wade would be struck down if that draft opinion were to become the law of the land, they would maybe pass some additional legislation in their states. So there will be a lot of talk, I think you’ll have more hearings. And I think you’ll have more votes on this issue in the coming months. It’s not over even once the decision is signed, this is going to remain an issue because I think it’s factoring into people’s thinking about the midterms, and therefore you use what you have in Congress to kind of add to that discussion.

Tom Temin: And all of this takes duty cycle time away from, say, the 2023 budget, which had a little momentum a couple of weeks ago.

Loren Duggan: That’s right, where the Big Four or the Four Corners, if you will, the leaders of the House and Senate Appropriations Committees have started their discussions about trying to come to top line spending on the defense and the non-defense side. With that agreement in place, it would make it a lot easier to make progress on appropriations bills and defense authorization as well, always easier when you have a shared number for that. We haven’t heard much about the progress there. A lot of the appropriations time last week was taken up by the Ukraine supplemental. But there’s still work to be done there to try and move forward. There are aspirations to start marking up those appropriations bills in June and start moving them toward the floor, at least on the House side, trying to get some progress going there. So I think those talks aren’t by any means over. I think they might need a little bit of a reboot. But that is still a priority is to make some progress on that. The cabinet officials keep making the rounds on Capitol Hill to defend what they asked for. So that part of the process is going but we’ll see what happens next.

Tom Temin: We’re speaking with Loren Dugan, deputy news director at Bloomberg Government and the Ukraine bill that was stalled by certain language that Sen. Rand Paul (R-Ky.) wanted $40 billion, which from the sound of it could help Ukraine actually nail Russia. And what’s the status of that now?

Loren Duggan: We’ll see a procedural vote tonight in the Senate, trying to push that forward. The hope that Senate Democrats and Republicans as well and for the most part had was that they could come to an agreement to clear this thing last week to push it through quickly get it to President Biden so he could sign it. And this aid could start flowing. Because of the way the Senate works in one senator can hold up unanimous consent, which Senator Rand Paul did. They’re having to go through some hoops to move that forward. They had hoped that he would accept just a vote on the language that he wants to insert some oversight functions into the bill. But he was actually demanded that it be added to the bill. And Republicans and Democrats weren’t willing to agree to that. So we’re sort of in the standstill, we’ll see how quickly the bill can move if tonight’s procedural vote opens the gates to this happening quickly, or if they have to burn up a lot of floor time trying to get that over the line in the coming days.

Tom Temin: And there’s also the possibility of a few appointments coming through in the Senate?

Loren Duggan: Absolutely. As we’ve seen, these can take a while or they can happen pretty quickly, once there’s agreement. Last week was a pretty banner week for some top nominations, including to the Federal Reserve, to the Federal Trade Commission and some other positions like that. We know that this week, there’s already some steps taken to set up some more judicial votes. There’s also the Cathy Ann Harris nomination has sort of been waiting in the wings to be both a member and the chair of the Merit Systems Protection Board. So I would anticipate more action this week on those nominations that kind of fill gaps in the schedule when there’s not a bill moving at any particular time. I think we’ll see more of that both on the floor and then committees that are always looking at these nominations and trying to push them forward as well.

Tom Temin: And this all while they’re not spending time issuing subpoenas to one another, which that’s got to detract from the spirit of civility that used to pervade up there?

Loren Duggan: I think it does, to some extent, but that’s sort of the the whole Jan. 6 committee is looking at a very unusual and perhaps unprecedented event on Capitol Hill and some of the what’s come out of that has been unprecedented as well with contempt citation subpoenas to co-lawmakers and things like that. So it’s a very unusual time a very unusual committee and I think that’s borne out with that.

Tom Temin: All right. Loren Duggan is deputy news director at Bloomberg Government. As always, thanks so much.

Loren Duggan: Thank you.

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For anyone in Washington wanting to understand something in the Defense Department budget, Todd Harrison has been a go-to analyst. Now, after seven years at the Center for Strategic and International Studies, he’s leaving to join a defense company. The Federal Drive with Tom Temin spoke with him about the move.

Interview transcript:

Tom Temin: Todd, good to have you on.

Todd Harrison: Hi, thanks for having me.

Tom Temin: Let’s begin with what prompts you to leave that third party, honest broker, analyst kind of perch to go to one of the companies.

Todd Harrison: It really is the opportunity at Meta Aerospace, it presented itself and the great team that they’ve assembled there, that I’ll be able to be part of, you know, the real attractive part is I’m going to be able to stand up a new research and analysis entity within the company to keep doing the same kind of research I had been doing, but doing it from a different perch, and quite frankly, at a location where we’re going to have skin in the game, that you know, if my analysis says, hey, this is a really exciting market that you know, we need to be getting into, I better be right.

Tom Temin: So you won’t be running around at Sea-Air-Space, trying to set up appointments for demonstrations and that kind of thing.

Todd Harrison: Oh, no, I’m not going to do the sales dive.

Tom Temin: OK, good. Well, I wanted to get your perspective. First of all, you have been watching the development of the budget, which in some rough way should tie to what the military feels it has to do and what Congress feels it has to do. And what’s your general sense of how I don’t know, efficient? Or how accurate or how efficacious budgeting in DoD is relative to what the nation faces? I mean, what’s your overall impression after these years?

Todd Harrison: I’ve been in the think tank world for 13 years now. So it CSBA before CSIS, and throughout that whole time, you know, the defense budget has really been at the core of my research portfolio and in space and air power as well. But really, a lot of my work has been focused on aspects of the Defense budget. And I’ll tell you, my opinion is that the budgeting process is broken. It is broken within the department, the planning, programming, budgeting and execution system is an industrial age system. And it is not what we need to compete now and in the future, and the digital age and the congressional budget process itself. I mean, that kind of goes without saying, it is pretty broken when it is becoming common that we go six months into the fiscal year without a budget enacted, just operating on continuing resolutions. So I don’t think the current way of doing business is going to work for that much longer. And if we’re serious about competing with China, if we’re serious about being able to out innovate our adversaries and potential adversaries, we can’t do that effectively by continuing business as usua.

Tom Temin: And competing and out innovating are all great, but ultimately, the military has to win wars. And isn’t that really the objective that should be part of this? And is that in doubt with the way things are going budget wise and planning wise?

Todd Harrison: Well, you know, I would go a step further. It’s not just that you want to be able to win a war, you want to be able to do more than that. You want to be able to deter a war. And so you’ve got to have a credible, capable force so that an adversary does not even want to get into a fight with you. And yeah, I think that we are at risk of losing that. I think we have seen our competitive advantage gradually erode over the years. And I think deterrence in several areas around the world and in several domains, has started to become more and more questionable.

Tom Temin: We’re speaking with Todd Harrison, until last week, was an analyst at the Center for Strategic and International Studies, having now just joined Meta Aerospace. And getting back to that PPBE. I mean, at one time, it was PPB. And somewhere along maybe around the Nixon administration, they added the E part, the budget execution part. But in general, it’s been impervious to reform. And there’s been lots of gyrations on how to make it work better, but it’s basically the same old instrument. And there’s a commission now that’s about to be formed to look at it, who knows how long that’ll take, why so impervious to reform for something so crucial, do you think?

Todd Harrison: You know, ultimately, I think that the process that DoD uses is driven by the process Congress uses, right, and so they try to create a process that will fit with what Congress is doing. So I’m of the opinion that change actually has to start on the congressional side. And what I would start looking at, you know, if I was advising the PPBE commission, and I know several of the members of maybe they’re listening, I would tell them start on the congressional side, and in particular, looking at how money is appropriated, and the antiquated titles of the budget that we use where we divide money up and we restrict how you can spend it and the rate at which you can spend it based on whether it’s, you know, research and development, or procurement or operation and maintenance, etc. That just increasingly does not work anymore.

If you are developing a software intensive program that may have some hardware, but the bulk of the work is actually in software, where is the difference between development, production and maintenance of that code? You’re really doing all of it at the same time. So the idea of bucketing the money this way, and these categories, and then putting restrictions on it, and restrictions on how you can move money around in the budget, and how quickly you have to spend the money. It just leads to bad behavior, suboptimal performance, and it also locks us into this industrial base, where DoD is constantly in the mindset of, well, you know, if we want a new capability, we need to go hire a contractor, pay them on a cost plus contract to develop it, and then we’ll come back and we’ll pay them again to produce it, and then we’ll come back and we’ll pay them again to help us maintain it, right. And if you want to innovate, you can’t operate that way anymore. Especially when requesting all that funding, you need about a two year lead time between when you try to work it into your palm your draft budget, and then submit it to Congress and wait for Congress to enact on it appropriate the money, and then come back and actually be able to obligate the money, right? You can’t do it with that type of a system anymore, we’ve got to look more and more about where can you just go to industry and say, I want to buy a capability, I want to buy it off the shelf, sometimes I’m gonna buy it as a product, sometimes I’m gonna buy it as a service. And we need a budgeting in a congressional appropriations system that is more flexible and able to adapt to these types of new acquisition environments.

Tom Temin: Of course, if you eliminate the colors of money or reduce them, then it’s incumbent on DoD to make sure they really get results and don’t spend whatever colorless money they have, but nothing to show for it. And that hasn’t always been the case, either.

Todd Harrison: Right. I mean, it is always a balancing act of you know, you want Congress to give enough flexibility to the department so they can use the money effectively and not make bad decisions or rushed decisions or inefficient decisions. You also want to give Congress enough insight to conduct effective oversight to make sure the money is being used wisely. So it is a balancing act. And you know, I’m hopeful the commission will really look at this hard and try to figure out how do we strike a new balance that actually works in today’s technological environment.

Tom Temin: And what we have you, you mentioned you’ll be doing research and analysis and budgetary types of work for Meta, what does Meta do?

Todd Harrison: Well, Meta is a pretty diversified—

Tom Temin: We should say Meta Aerospace. Because there’s another company called Meta, we don’t want to be confused with them.

Todd Harrison: Yeah, yeah. It’s not Facebook, no relationship. No, Meta Aerospace does a lot of different things. And, you know, the core business is basically providing effects as a service for defense. And, you know, that’s in a lot of different areas. I mean, one example is airborne ISR, you know, delivering that as a service. So you buy it by the hour, or aerial refueling as a service, they’re already doing that today, you know, with their own fleet of tankers that they operate, maintain themselves, and then can just deliver that by the hour, by the pound of fuel to the customer, as required. Also got business units, you know, in a lot of different areas, looking at simulation, AI, lots of things. So it’s a pretty diversified company. And that’s, that’s what makes it exciting to me to be coming in where, you know, there are a lot of potential avenues that my research can end up going.

Tom Temin: Just make sure I understood you. The company owns aircraft that can refuel military airplanes?

Todd Harrison: Yes.

Tom Temin: Why doesn’t the Air Force buy those? Whatever they are?

Todd Harrison: That is a good question. The Navy already buys the service. It’s a very good question. Why hasn’t the Air Force started doing what the Navy has been doing for quite a while in using aerial refueling as a service to supplement their own organic capabilities?

Tom Temin: And if you refuel a really big plane, do you get a set of cocktail glasses?

Todd Harrison: You know, that I don’t know. But I still want to try to finagle a ride on one of the planes and sit back there with the boom operator.

Tom Temin: All right, well send us pictures if you do. Defense analyst Todd Harrison is now senior vice president of Meta Aerospace. Thanks so much for joining me.

Todd Harrison: Thank you and hope to be in touch.