Interview transcript:

Terry Gerton: You’ve seen many shutdowns in your long career. Here we are a couple of days into restart. Let’s start with some of the impacts on people as agencies get up and running. Some people got maybe their first back paychecks over the weekend. Others will be seeing them promised early this week, but they’re not going to be complete. What should agencies and people be thinking about as we go through the logistics of making folks whole in back pay?

Bill Hoagland: Well, I think it’s important for the HR departments of the various agencies, they’re going to have a lot of work on their hands to make sure that they get the pay back, get everybody back up to where they were. And as you say, Terry, I think hopefully most of them had received the pay that they were due over the weekend because the law that was adopted said as quickly and as soon as this has become law, you’re to get the back pay. So all I can say is that the HR departments will be working very hard to make sure that happens. And then, of course, they’re going to be faced with the next payday. So there’s going to be a lot of work for the HR departments here. And when they come back, get fully staffed too.

Terry Gerton: And it’s really kind of complicated to compute that back pay, so folks who were affected need to make sure that they’re checking their own paychecks, right?

Bill Hoagland: Absolutely. I think that’s a very important point, Terry. I think that absolutely they need to check to make sure that because there could be some glitches in this, given the way this has to go fast. HR departments are supposed to move fast to get the payback. So you’re right, there could be some mistakes and so the federal worker needs to make sure and check what their previous paychecks were against what they’re getting to make sure they are getting what they have been promised.

Terry Gerton: When you talk about workload for the HR teams, many of them are much smaller than they were because a lot of HR folks have been downsized or took the DRP, but there’s a piece in this law that’s really important. It says reverse the RIFs that happened during shutdown. How is that going to play out?

Bill Hoagland: Well, since we’ve never had this happen before in a shutdown, this is going to be new. And therefore, again, we’re going to have some new complications here for the HR departments to figure this out. My hope is that it’s a simple flipping of the switch, so to speak. I hope that the HR department, they know who they RIFed. They simply have to turn that off and, of course, notify the people that they are still fully employed.

Terry Gerton: And one more thing in the HR space is the processing of a retirement backlog. Sept. 30, the day before the shutdown, was the deadline for the deferred resignation program. HR teams could come back to find stacks of retirement processing on their desks.

Bill Hoagland: Absolutely, as you’ve outlined it here and we discussed, there is going to be a lot of activity for the HR departments and how they prioritize what to address first. I think they will have to address quickly the pay issue. They will have quickly address the RIFs issue. And then I would assume that in terms of the retirement programs and people that have put in for retirement or were going to retire. That may take a backseat a little bit to those other priorities the HR department will be facing during that period of time.

Terry Gerton: Well, I started with people because they are the foundation of everything that’s going to happen in the federal government. But now put yourself in the position of one of the department or agency leaders. You’ve just got your organization started back up. What are your operational priorities? What do you think about getting back up to speed first?

Bill Hoagland: Well, I think if I was running an agency, first of all, it would depend upon the agency. Let’s be clear. Some of the agencies, such as Department of Agriculture, the Military Construction Accounts, those are full-year funded now. They will be basically going back to their full-year plans in terms of implementation. It’s for those other agencies, those other nine appropriation bills that are just operational now until the end of January, they’re going to have to look very carefully. They have received, as I understand on the day before the shutdown, there was a memorandum that was put out by Russ Vought at OMB that laid out the appropriation apportionment process. And so those agencies are going to look very carefully at that directive, that OMB memo, in terms of the implementation of their accounts and moving forward. But in terms of agency priorities, I think the first most important thing again is to make sure that those individuals that had been RIFed are put back onto the payroll quickly and working with individual programs. The problem here is for the agencies that are only receiving a continuing resolution to the end of January is planning. If they had planned new programs, new activities, technically, they’re on hold again. And so they’ll have to go back to, just as the term implies, just a continuation of their activities that were in place at the end of the last fiscal year.

Terry Gerton: I’m speaking with Bill Hoagland. He’s a senior vice president at the Bipartisan Policy Center. Well, Bill, speaking of continuing, what about the impact on contracts and contractors? I mean, there was so much disruption leading up to the end of the fiscal year, and then they went into a shutdown. If you’re still under a CR, how do you get your contracts and contractors back up and running?

Bill Hoagland: Terry, that’s a question I probably had better avoid trying to answer exactly because I think there’s some legal questions here. Technically, first of all, the contractors, many of them did not get paid, and the question whether they will get paid. They’re not federal workers, they’re on contract. And so I think as you’ve outlined it here, there’s going to be some issues associated without those contractors. Reestablish their relationship with the agency, the agency heads, do they have to enter into new contracts? That would be terrible. I would assume that a continuing resolution would allow those contractors. I hope the contracts were written in such a way that they automatically come back into play. But again, that will depend upon the way the contracts were entered into prior to the shutdown.

Terry Gerton: Does a continuing resolution provide that agencies can make penalty payments if they’re overdue in settling some of these invoices?

Bill Hoagland: I think the answer there again, Terry, is dependent upon the way the contracts were written at the time that the agency entered into it. I think it will depend. That’s the best answer I could give to that question.

Terry Gerton: Thank you. Well, we’ve been talking here about federal agencies, but Congress has got to get back to work, too. The House, at least, has been away for a while. What’s the backlog looking like as Congress tries to get itself restarted?

Bill Hoagland: Well, this is going to be a difficult period between now and through the end of January with the holiday season coming up, a Thanksgiving recess, the traditional recesses around the first of the year with the holiday season there. There’s not a lot of time. Congress does have, at least the Appropriation Committee chairwomen in the Senate, plan very strongly to try to get as many of the regular appropriation bills done as possible. And so we can expect another packaging of some of the many appropriation packages in terms of putting maybe Defense and Health and Human Services into one package and try to get that through. I do know that the hope is next week that the Senate does want to put a package together that includes Defense, Homeland Security, I think, as well as Health and Human Services. So those are big bills and so the pressure will be mounting here. But to your point, it’s not a lot of time here. And the bigger the bill, the more controversy the bill.

Terry Gerton: The more ornaments on that Christmas tree.

Bill Hoagland: That’s true. And so as a consequence, I’m gloom and doom are a little bit on this. I’m sorry to it. I don’t want to just coming off this the longest shutdown in our history. There’s a real chance a real probability that we’ll have another have to have another continuing resolution come the end of January, simply because of the backlog. And of course, there are other things defense reauthorization bill is up, trying to get that done. So Congress has got, because of the first of all, because the House has been out, we also have the Jeffrey Epstein issue coming up, which is going to cause some problems in terms of delays further. It’s going to be a full agenda between now and the end of January, which, as I say, has, unfortunately, likely a probability of another continuing resolution.

Terry Gerton: Bill, you’ve given us a hard reality pill there, but if you could make some recommendations about reforms that might help us avoid shutdowns in the future or maybe get appropriations out on time, what would you say is at the top of that list?

Bill Hoagland: Well, as a former Senate Budget Committee staff director for many years, the first thing is just to pass a budget and pass it on time. As you know, we really didn’t get a budget from the president for the fiscal year that we’re in. We had a mini kind of budget around for the Appropriation Committee, but we never got a budget. And so Congress has not adopted a budget. In fact, over the 50-year history of the Budget Act, I think about 13 or 14 times, we’ve not got budget resolutions put in place in time. So the first thing is, just basics, is get a budget put together and meet that time frame early. If you’re following the schedule, you would have your budget put in place by April the 15th, tax filing day, before the beginning of the upcoming fiscal year. That would give time for the appropriators to move and get their individual appropriation bills done. So that’s just basic. No. 2, while you’re not always going to make it. Even with a budget resolution on time, as we know. And therefore, I would also argue that maybe an automatic continuing resolution, something that I’ve argued for many years. Nobody wins in shutdowns, I’m sorry. It’s not Republican, it’s not Democrat, not the president, the American public lose. And so my argument would be, have an automatic CR. Don’t go through the shutdown aspect, but just automatically continuation of appropriations and if you want to put pressure on maybe you, after so many days on that continuing resolution, automatic continuing resolution, knock down the appropriations by a percentage point or two to keep the pressure on them to get it done. And then finally longer term, I’m a strong believer in biannual budgeting as opposed to annual budgeting, which would be another approach, would you end up after two years also end up with, maybe, but at least you’d have more time to work out your budget and your appropriations over a two-year period.

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