Does the 2013 budget stand a snowball's chance?

To hear some of the leading experts on the government market describe 2012 and the prospects of a 2013 budget there is plenty of doom and gloom ahead.

On March 7, Stan Soloway, president of the Professional Services Council and a Washington Technology columnist, told the crowd at Grant Thornton’s 17th annual Contractor Survey event that President Obama’s 2013 budget was “dead on arrival.”

On March 8, Stan Collender gave the keynote address at a Washington Technology-TechAmerica breakfast on the 2013 budget where he also scoffed at the idea of anything getting done before the fiscal year ends on Sept. 30 or even before the elections in November.

“It’ll be the mother of all lame duck sessions,” Collender said, referring to the session of Congress that falls between the November elections and January when the next Congress will be seated.

Collender, who at one time was on a short list to become director of the Office of Management and Budget in the Obama administration, said that the budget isn’t the overriding issue in 2012 that it was in 2011.

President Obama released the 2013 budget request on Feb. 13 and on Feb. 14 China’s vice premier visited Washington and talk of the budget disappeared. “Three weeks later no one is talking about the budget,” Collender said.

During Obama’s press conference on March 6 no budget questions were asked, he said. The budget has become less of an issue as the economy has improved and as other issues, particularly foreign affairs, have captured attention.

But there are huge budget issues looming for the lame duck session, including passing a 2013 budget or more likely a continuing resolution, the debt ceiling likely will need to be raised, the Bush tax cuts expire, the alternative minimum tax will need to be addressed, and finally there is threat of sequestration.

Another complicating factor, according to Collender, is that the polling numbers show that more incumbents could lose – from both parties – than in any other election.

“There could be a 40 percent turnover in the House,” he said.

Collender’s prediction for the lame duck session is that while it might be messy, it’ll likely be a “kick the can down the road” session. Congress could pass a continuing resolution that extends to June 30 and give the same extension to the tax cuts and the debt ceiling. Sequestration could be put off until July.

“The stated reason could be that it is more appropriate for the new Congress to deal with it and (possibly) a new president,” he said.

But the impact on contractors will be unchanged – a shrinking pie of possible opportunities. A continuing resolution will mean no new starts, and competition will be tougher.

If a budget finally gets passed in June that leaves just one quarter left in the fiscal year. “Some agencies will get more money and they’ll need to spend it fast,” he said. “Some will get less and will need to cut quickly,” Collender added.

Collender’s best advice to contractors was to think about how they talk about what they sell to the government.

“You have to stop talking about what it costs and start talking about what it saves,” he said. “And what it saves has to be in dollars.”

Agencies want to see a quick savings, usually in the first year. “That might take some creative financing on your part, but they want to see a quick return,” he said.