Pentagon Fails Audit for Sixth Straight Year

Plus: Senate slams the door on shutdown threat ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey Good evening! The government will not be shutting down on Saturday now that the Senate has passed a stopgap spending bill — and did so a full two days before the deadline at midnight on Friday! The vote pushes much of Congress’ to-do list into next year but leaves plenty of urgent matters for lawmakers to take up when they return from their Thanksgiving break. Here’s your Thursday update. The Senate passed a stopgap spending bill. (Reuters) Congress Defuses Shutdown Threat — for Now The Senate on Wednesday night approved a short-term spending bill for the federal government, averting a potential shutdown at the end of the week while pushing the next funding deadline into early 2024. Initially passed by the House on Tuesday, the bill now goes to the White House, where President Joe Biden is expected to sign it before a midnight Friday deadline. The bill passed easily by an 87-11 vote, with 10 Republicans and one Democrat voting against it. The lone Democrat holdout, Sen. Michael Bennet of Colorado, said he opposed the bill because it failed to include aid for Ukraine. As we told you [earlier this week]( the stopgap bill creates two new deadlines early next year, with some departments receiving funding until January 19 and others until February 2 — effectively creating two new shutdown threats. The bill is also “clean,” meaning it includes no amendments addressing divisive issues such as foreign aid and makes no cuts in spending, and instead extends current spending levels into early 2024. Although conservatives in the House pushed to include funding cuts and policy provisions, the fact that the bill avoided those issues was a crucial factor in winning bipartisan support in both chambers of Congress. Senate Majority Leader Chuck Schumer applauded lawmakers’ willingness to work together and leave aside controversial issues that threatened to derail the effort. “Because of bipartisan cooperation, we are keeping the government open without any poison pills or harmful cuts to vital programs — a great outcome for the American people,” he said. “If the speaker is willing to work with Democrats and resist the siren song of the hard right in the House,” he added, “then we can avoid shutdowns in the future and finish the work of funding the government.” The clock is ticking: The stopgap bill removes the immediate threat of a shutdown and provides the promise of an unusually quiet holiday break for Congress, but it also kicks the funding can down a road that is both short and bumpy. While early January may seem reasonably far away, the holiday pileup at the end of the year means there are precious few legislative days left before the new deadlines arrive, leaving little time to deal with a whole host of serious issues. Perhaps the most pressing issue will be avoiding a partial shutdown in mid-January, and another in early February. Lawmakers will have to either reach their goal of passing full-year funding bills through both the House and Senate or come up with another stopgap bill — with the latter option already being discounted by House Speaker Mike Johnson. Either path offers a whole host of potential obstacles, and even if the House can manage to pass all 12 of its annual spending bills in the coming weeks, they will likely run into opposition in the Senate, requiring long and difficult negotiations to hammer into acceptable form. Meanwhile, lawmakers must deal with legislation addressing aid for Ukraine, Israel and Taiwan, as well as funding requests for disaster relief, child-care providers and border enhancements — all of which will be difficult to resolve on their own, and even more so if they become entangled in legislative horse- trading. Divisions may be growing: While conservatives in the House gave Johnson leeway to successfully negotiate a bipartisan deal that avoided a government shutdown, they again revolted after seeing the result. In the last two weeks, Republicans have been unable to pass multiple spending bills due to internal disputes over spending levels and policy provisions, with the hardliners saying they are no longer willing to play along with demands for compromise — hardly a promising development ahead of the new deadlines. “We’ve had enough,” Rep. Scott Perry of Pennsylvania, the chairman of the far-right Freedom Caucus, said after helping to derail a funding bill on Wednesday. “We want to see good, righteous policy, but we’re not going to be part of the failure theater anymore.” On the House floor Wednesday, Rep. Chip Roy of Texas, a member of the House Freedom Caucus, excoriated his fellow Republicans for their failure to win conservative victories and called on them to pass bills that slash spending and reduce the size of government, among other objectives. “When are we going to do what we said we would do?" he said. At the same time, more moderate Republicans in the House are pushing back against conservatives’ calls for potentially divisive spending cuts. Rep. Nick LaLota of New York, a member of the centrist Problem Solvers Caucus, voted against a bill this week in protest of what he saw as excessive reductions in spending. “My ‘no’ vote on the underlying rule was a message to my party’s leadership to stop wasting members’ time with doomed bills and start concocting more reasonable ones which can pass the House,” he told [The Hill](. The bottom line: Lawmakers successfully postponed a shutdown threat with this week’s bipartisan funding bill, but growing rifts within the GOP-controlled House — and serious disagreements throughout Congress about difficult issues like aid to Ukraine and border policy — may make it difficult to repeat that performance in early 2024. Pentagon Fails Audit for Sixth Straight Year The Pentagon failed its annual financial audit for the sixth straight year, the Defense Department’s chief financial officer announced Wednesday. CFO Michael J. McCord told reporters that the Pentagon, with $3.8 trillion in assets and $4 trillion in liabilities, is making progress toward a clean audit, but that the failure “is not a surprise” and that the department still has years’ worth of work to do to reach its goal. “Things are showing progress, but it's not enough,” he [said](. The annual audit is conducted by independent public accounting firms and the DOD Office of the Inspector General. Some 1,600 auditors and 700 site visits were involved and the Pentagon spent a reported $187 million on the process, which includes 29 standalone audits of military services, all of which must pass for the overall audit to be scored as clean. There is also an overall department-wide audit. Just seven of the standalones passed this year, the same as last year, while one received a qualified opinion, which falls short of passing. Three component audits are still pending. “While we acknowledged enhancements in the DoD's financial management procedures, significant challenges persist in generating thorough and precise financial statements,” Inspector General Robert P. Storch said in a statement. The audit identified 28 material weaknesses, three significant deficiencies and seven instances of noncompliance with laws, regulations, contracts and grant agreements, the inspector general’s office said. No new Pentagon-wide material weaknesses were reported this time. The auditors also found that about half of the Defense Department’s assets can’t be accounted for. "This does not mean that the other 50% is unaccounted for," McCord explained. "The department has tight control of its assets — but too many of our financial management systems, such as some of our property systems of record, still cannot meet auditing standards. We are working hard to accelerate the retirement of these older systems and bring more of our asset records up to accounting standards.” The Pentagon has reportedly faced pressure from lawmakers to achieve a clean audit by 2027, but McCord and the DoD called on Congress and the defense industry to help. “Our congressional defense committees can help,” McCord said, “by doing their part in stabilizing the budget process and avoiding continuing resolutions and repeated threats of government shutdowns, such as the one we are living through yet again this week; by ensuring timely continuity and confirmation of our military and civilian leadership; by providing adequate and consistent resources for replacing DOD legacy systems; and through continued support of the department's financial transformation efforts.” Number of the Day: $1 In the three weeks since Rep. Mike Johnson became speaker, House Republicans have tried more than two dozen times to use spending bills to slash the salaries of various Biden administration officials to just $1, according to a tally by The New York Times. Since the start of the year, House Republicans have tried the maneuver at least 31 times, the newspaper’s Robert Jimison reports: “On Wednesday, the would-be victims included Xavier Becerra, the health secretary, and Vincent J. Munster, a virus scientist at the National Institute of Allergy and Infectious Diseases. Last week, it was Karine Jean-Pierre, the White House press secretary. Those efforts all failed when dozens of Republicans refused to back them. But others, [such as ones taking aim at Lloyd J. Austin III]( the defense secretary, and Pete Buttigieg, the transportation secretary, have succeeded. “The votes are purely symbolic; there is no way the Democratic-led Senate would agree to any of them. But House Republicans’ choice to repeatedly push such proposals highlights their slash-and-burn approach to federal spending, and why Congress is facing such a steep challenge reaching a longer-term deal to fund the government. … “Their penchant for salary-stripping illustrates a far more prevalent impulse among House Republicans. Driven by the hard right, which is flatly opposed to federal spending, they have weaponized and politicized the appropriations process, primarily using the power of the purse — the most basic role of Congress — to push their political message and punish the Biden administration.” [Read more at The New York Times.]( --------------------------------------------------------------- Send your feedback to yrosenberg@thefiscaltimes.com. --------------------------------------------------------------- Fiscal News Roundup - [Senate Sends Biden Stopgap Funding Bill, Averting a Government Shutdown]( – New York Times - [Senate Votes to Keep Government Open Amid Wide Gulf on Spending]( – Roll Call - [US House Speaker Johnson's 'Honeymoon' Ends as Hardline Republicans Rebel]( – Reuters - [House GOP Plagued by Internal Funding Disputes Despite Shutdown Dodge]( – The Hill - [House GOP Deeply Divided Over Spending Bills]( – The Messenger - [Pentagon Fails Sixth Audit, With Number of Passing Grades Stagnant]( – Defense News - [Senate Republicans Fail to Stop Biden’s New Student Loan Income-Driven Repayment Plan]( – The Hill - [Republicans Have a Bold New Demand for Ukraine Aid]( – Semafor - [Jill Biden Will Lead New Initiative to Boost Federal Government Research Into Women’s Health]( – Associated Press - [COVID Aid Fuels Telehealth Expansion in Rural America]( – Roll Call - [Women Bear the Brunt of Financial Stress in the US Economy, Study Says]( – The Hill - [Santos Ethics Report Finds ‘Substantial Evidence’ of Criminal Wrongdoing]( – Politico Views and Analysis - [Government Shutdown Threat Delayed, but Not Defeated]( – Ed Kilgore, New York - [These Are the Fights That Many House Republicans Really Want]( – David Firestone, New York Times - [The Democrats Are Making a Risky Mike Johnson Gambit]( – Alex Shephard, New Republic - [Bidenomics Has a Mortal Enemy, and It Isn’t Trump]( – Karen Petrou, New York Times - [Should We Seize Russian Funds to Pay for the War in Ukraine? Commentators Weigh In]( – Michael McFaul, Oona A. Hathaway, Maggie Mills and Thomas Poston, Washington Post - [Trump’s Violent Talk Shows Signs of Taking Over Congress]( – Alexander Bolton, The Hill Copyright © 2023 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website or through Facebook. The Fiscal Times, 399 Park Avenue, 14th Floor, New York, NY 10022, United States Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](