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2. Wouldn’t a discretionary cap adjustment for expensive federally-owned capital projects solve the problem?

No, a cap adjustment would be a poor solution.

We have cap adjustments for emergencies, disasters, and wildfires. They share something in common — they are all sudden and unpredictable expenses that require urgent action. That’s not the case for capital spending. The need to replace the aging FBI Building has been well known for some time. Our budget system should be sufficiently robust to address this funding need without resorting to cap adjustments.

A rational budget process would include a long-term capital plan for replacing capital assets as they wear out and adding capital assets to meet emerging needs. The capital planning process should be a permanent feature that provides adequate, but limited, funding and incentives for decision-makers to set priorities and to use the funds efficiently.

Category: What Is The Problem?

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