Chairman’s Corner: September 2017

Following a trip to Arizona, my parents returned home with a dream. That dream was to open up and run a western wear store. My father had previously built up a grocery business with his brothers, but he was ready to take on a new challenge.

In 1962, my parents founded Howard and Phil’s. They would face tumultuous financial times. They put in countless hours of work to keep operations afloat. They sacrificed a great deal.

I would eventually join my parents in their efforts to grow their business. After years of hard work and overcoming a number of obstacles, those efforts started to pay off. Howard and Phil’s was not an overnight success, but eventually it grew to include 52 stores with over 500 employees.

I had the profound opportunity to watch as my parent’s achieved the “American Dream.”

I thought of my parents on Monday as our country celebrated Labor Day, a day that honors the American Labor Movement. To me, it also signifies the right we have in this country to work. We are fortunate enough to work in whatever space we choose. We all have the capacity to achieve our own American Dream.

That being said, these dreams do not come easy. There will be setbacks. It will take perseverance, courage, and hard work in order to see success. These attributes were applied when we started the McKeon Group and it is how we go about our work each and every day. And the best part of our job is helping others achieve their own American Dream.

Chairman’s Corner: July 2017

“Star light, star bright, first star I see tonight, I wish I may, I wish I might, have this wish I wish tonight.”

We recited that poem every night. Following our nightly ritual, my mom would have us “wish” for our father’s safe return in our prayers. Like many little boys during World War II, my brother, Joe, and I yearned to see our dad come home.

Last week was Independence Day. There were parades, fireworks, and barbecues. People flocked to pools and parks. Many of us had the day off. We celebrated the adoption of the Declaration of Independence with our family and close friends.

However, not everyone was afforded that same luxury.

With hundreds of thousands of U.S. troops stationed oversees, their families were left with a vacant chair at the July 4th dinner festivities.

There are so many American children who will, tonight, make a similar “wish” like I did all those years ago in hopes of seeing their parents return home safely. They, along with their parents, are making a selfless sacrifice to ensure our safety and freedoms.

I spent time over the 4th of July holiday thinking about those brave men and women. It is no secret that during my time in Congress I focused on education and defense. Further assisting the military families is one of the reasons I continue to work and fight here in Washington.

I am, and will forever be, grateful for all of those who serve and protect this country.

National Budget Priorities: Time to Repeal Sequestration

By Buck McKeon

Congress is currently holding hearings on various department budget requests submitted by the President. As congressional committees consider how to spend federal dollars for Fiscal Year 2018 with the debt ceiling limit looming, it’s a good time to reflect on what the spending priorities are for the federal government.

When the Framers established the Constitution, they defined those spending priorities in Article One, Section Eight. Among the most paramount is our nation’s defense: “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States.”

In an attempt to balance the budget, Congress passed the Budget Control Act of 2011 (BCA). The act was intended to prevent the sovereign default that could have resulted from the 2011 United States debt-ceiling crisis. The BCA created a special joint select committee, known as the ‘Super Committee,’ to pass a deficit reduction bill. The goal was to cut $1.5 trillion over 10 years to avoid larger across-the-board cuts that would automatically kick in (sequestration). These austere spending caps were put in place to motivate Congress to act. However, the Super Committee failed and sequestration went into effect. Not a pretty moment for Congress.

Since enacted, BCA cuts have weakened our national defense. Where it hurts our military the most is what the brass call ‘Readiness and Reset.’ Readiness means being ready to fight around the clock. It requires qualified personnel, on-going training, refueling, ammunition, and maintenance. Defense Secretary Mattis said before a congressional hearing, “For all the heartache caused by the loss of our troops during these wars, no enemy in the field has done more to harm the readiness of our military than sequestration.”

Today, the U.S. is dealing with more threats than ever before. These include Russia, China, Iran, North Korea, and the fight against ISIS and global terrorism.
The Pentagon is struggling with how to address these threats while their budgets continue to shrink. It means our military is being asked to do more with less.

Military service chiefs have pleaded with Congress to fill readiness gaps caused by repeated Continuing Resolutions and budget cuts. The Administration rightly requested a $30 billion supplemental for 2017 to address the problem. They only received $21 billion.

A recent report uncovered that 62% of the Navy’s F/A-18 Hornet fighters are unfit to fly because of maintenance and repair issues. In the Marine Corps, an astounding 208 of 281 (74%) of aircraft were not ready for combat in December 2016.
All the services are facing similar problems.

The Army is short helicopters, missile systems, and necessitates 10,000 more active duty soldiers with another 7,000 for National Guard and Army Reserve requirements. “Readiness will remain the number one priority,” Army Chief of Staff Gen. Mark Milley said at an event.

The Air Force is facing a massive shortage of pilots and maintenance personnel. Air Force Secretary Wilson told reporters, “The first thing is readiness; we’ve got to restore the readiness of the force.” At the end of Fiscal Year 2016, active and reserve components were short 1,555 pilots, including 1,211 fighter pilots. The cost to train a fifth-generation fighter pilot is around $11 million. “A 1,200-fighter pilot shortage amounts to a $12 billion capital loss for the United States Air Force,” she said.

Both parties have blamed the other for the tough consequences of sequestration. However, the BCA passed both chambers of Congress with bipartisan majorities. The time for blaming has passed. National security is an American issue. It shouldn’t be politicized nor should defense funding priorities be hostage to increased funding of non-defense programs.

It’s time for congressional leaders to separate partisanship from defense budgeting and approach the process in a more practical, predictable, and solutions-based manner. Stable and foreseeable budgets facilitate better planning and help to lower costs for expensive systems.

It’s time to repeal the BCA. Our military leaders and the great men and women who serve under them must be provided the resources they need – when they need it – to get the job done. We at least owe them that much.

Will School Choice Be Expanded by the New Congress?

The Trump Administration has consistently made it clear that their top priority in education is expanding school choices for parents and their children. While the school choice movement has been around for decades and many states have implemented state-funded programs, President Trump and Education Secretary Betsy DeVos have moved the issue to center stage. Now, the focus is on what changes, if any, the new Congress is willing to make.

1. Appropriations:

DC Opportunity Scholarship Program Reauthorized: The FY2017 omnibus appropriation passed in May 2017 reauthorized the District of Columbia (DC) Scholarships for Opportunity and Results (SOAR) voucher program — the only K-12 voucher program funded with federal dollars. SOAR, originally signed into law by President Bush in 2004, provides funds for low-income D.C. families to support traditional public schools, public charter schools, and opportunity scholarships to private schools. The Obama administration had proposed to phase out the program and opposed its expansion and reauthorization. The SOAR program is now authorized at $45 million. DC reports that about 1,200 students – 97 percent are African-American and Hispanic – currently participate in the program, and the average family income is under $22,000 per year.

President’s Fiscal Year 2018 (FY2018) Budget Proposal: On May 23, 2017, the White House announced its budget for the coming fiscal year. Among the changes to the U.S. Department of Education budget were specific provisions to support school choice. The FY2018 budget added:

  • Title I Funding: A record $1 billion increase was proposed in the Title I of the Every Student Succeeds Act (ESSA) to support a specific program — the Furthering Options for Children to Unlock Success (FOCUS) program. FOCUS supports the establishment and expansion of systems within public school districts to use weighted funding formulas based on student characteristics and allow the combined local, State, and Federal funds allocated for students to follow them to the school of the family’s choice. The program builds on a new pilot program included in ESSA which allows up to 50 school districts to adopt a weighted student funding formula that would combine federal, state, and local dollars into a single funding stream tied to individual students.
  • Competitive Grants: $250 million is provided for competitive awards through the Education Innovation and Research program to provide scholarships for students from low-income families to attend the private school of their parents’ choice.
  • Charter Schools: $168 million is added to the charter school program currently authorized under ESSA.

2. Tax Reform and School Choice Authorization Bill(s): The Congress is also considering options through new authorizing bills that could provide states with flexibility to use funds to provide vouchers and other funding portability to attend schools that families choose, as well as expanding tax-advantaged education savings accounts and/or tax credits for contributions made directly to private scholarships.

  • Tax Reform: Congress is working on a tax reform bill that could include funding for new tax credits for individual and corporate contributions to scholarship programs, education savings accounts or both to provide school choice funding options to individual families.
  • Stand Alone Bills: Members of Congress have introduced individual bills in the House and Senate and while these bills are less likely to be considered due to the challenge of passing stand-alone legislation, one or more could be used as the basis for the structure of provisions placed into the tax bill or to guide policy making in the FY2018 or future funding measures. Bills such as: H.R. 610; H.R. 691/S. 235, Creating Hope and Opportunities for Individuals and Communities through Education (CHOICE) Act; and, S. 1294, Native American Education Opportunity Act are several of the bills introduced this year that create block grants for vouchers, opportunities for tax credits and/or target specific populations of students such as Native American Indians or military families.

While the Administration is still working on the details of its proposals and Congress has not yet acted on those it has introduced, the Administration’s public stance has set big expectations – using terms like ‘most ambitious expansion of education in our nation’s history’ and ‘once-in-a-generation opportunity’. Now, we’ll see if Congress has both the political will and the votes to deliver.

Three Steps to Stabilize Your Agency’s Budget

We recently starred down the National Defense Authorization Act of 2018, but Congress and the President have yet to reach an agreement on the full Federal FY’18 budget. Though there are differing perceptions on what final agency budgets will turn out to be, most agree that civilian budgets will bear deep cuts in this fiscally hawkish political environment. The McKeon Group offers three key steps for agencies to prepare for the coming budget woes:

1. Prioritize your agency’s programs from first to last. Base the rating on efficacy and how closely each program aligns with the mission. As a leader of your agency, it is your primary responsibility to champion the agency mission. Scrutinize the ancillary, duplicative, and scope-creeped programs that are not inherently under the agency’s purview. Allot budget accordingly.

Even President Obama highlighted this in his 2011 State of the Union Address: “There are twelve different agencies that deal with exports. There are at least five different entities that deal with housing policy. Then there’s my favorite example: The Interior Department is in charge of salmon while they’re in freshwater, but the Commerce Department handles them in when they’re in saltwater.”

Shrinking budgets demand a more efficient use of resources and, in some cases, handing over some authority to another agency that can streamline processes and programs.

2. Secondly, there are billions in improper payments that can be recovered and reallocated into the current fiscal year’s coffers to help cover budget shortfalls. There is a right and a legal way to recover those misspent funds.

Last year, federal agencies admitted to over $145 billion in improper payments. Yet, most have done little to successfully recover those taxpayer monies. Most duplicative payments, overpayments, or fraudulent payments are recoverable for up to three years. This means your recovery potential is actually three times what you submitted in your 2016 Performance & Accountability Report (PAR). When recovered, agencies can retain up to 45% of the money and reallocate those funds into the same fiscal year.

As an example, the William D. Ford Federal Direct Loan Program under the Department of Education misspent $3.9B last year. Multiply that by three, then multiply by 45% and Ed now has an ‘extra’ $5,265,000,000 of their own funds to spend. Or, take plan B and suffer a 13.5% budget decrease.

Federal Law (IPERA and IPERIA) clearly states that if an agency is deemed noncompliant for three or more consecutive years for the same program or activity, then the agency must submit to Congress reauthorization proposals for those programs or activities, along with proposed statutory changes that may bring the agency into compliance. Thus, the burden is entirely on your shoulders if you don’t want to give Congress a legal reason to not re-authorize your non-compliant programs.

3. Thirdly, fill your gaps. If you don’t have the agency staff you require, cut and paste the parameters of another agency’s internship program onto your letterhead and quickly onboard college students. Hopefully, this will initiate your first success toward the ultimate HR gap fill when Baby Boomers retire.

Take the time to train each Program Manger the art of procurement. Don’t wait two years to get what you need in a full Request for Proposal (RFP), then deal with the protest, then rebid it, and then have GAO finally approve the incumbent vendor. Forget that! Determine what you need and procure it via a GSA Schedule e-buy or pre-competed GWAC or IDIQ. Empower your teams to offer suggestions where efficiencies can be implemented and reward the top two savings suggestions with a reasonable bonus.

Agencies are being compelled to do more with less. By prioritizing your program foci, refilling the agency’s coffers with recaptured funds, and cross-training current and future staff to be more dynamic, we can meet that goal.

Your Agency’s Budget Has Been Slashed. Now What?

On May 23rd, the White House released its proposed budget for Fiscal Year 2018 (FY 2018). Although it is just a proposal, Congress uses this blue print as a starting point to develop its annual spending bills for all mandatory and discretionary programs. The discourse between Congress, the Executive Branch, and the public about how to spend federal dollars is now underway within a compressed timeline.

The House and Senate are required to reach agreement on all required appropriation bills before October 1st, the beginning of the new fiscal year. However, in recent years this has become increasingly difficult. Congress has relied on funding band aids, known as Continuing Resolutions (CRs), to keep the government running until a final spending bill (or separate bills) is agreed to and signed into law by the President.

While Congress debates the whole FY 2018 budget, you may be paying attention to a specific department’s budget – Defense, Education, Labor, Energy, Justice, Homeland Security, etc. In the President’s budget request, most agencies have taken reductions ranging from 12%-18% due to sequestration requirements and other additional cuts proposed by the Administration, with the goal of a balanced budget in 10 years.

Available federal funds for agencies remain constrained because out of the $4 trillion spent annually, President Trump has taken off the negotiation table nearly all the $2.4 trillion currently spent on Social Security ($940 billion), Medicare ($600 billion), defense ($600 billion), and interest on the debt ($270 billion). What’s left are the agencies that make up what is called non-defense discretionary spending. This means Congress must make some tough decisions.

For most, navigating the federal budget process is complicated and challenging. To be successful in any degree, it requires effective and resourceful representation. The
McKeon Group is the firm that brings to bear the experience, expertise, and unique ability to reach the power players in Washington. We strategically advise and assist our clients to:

Understand the Congress’ timeline and process
Develop a guiding strategy to influence legislative and executive branches
Create partnerships and alliances on and off Capitol Hill
Provide access to meet with key decision-makers

The McKeon Group is committed to helping our clients work with Congress to achieve desired authorization and appropriations outcomes. Our team will ensure your budget priorities make it across the finish line.

Chairman’s Corner: June 2017

We just celebrated Memorial Day. Many of us visited with family and friends, held traditional barbecues, or simply appreciated a day at home instead of the office. However, there were also many Americans who spent their day visiting the gravesite of a loved one who made the ultimate sacrifice for our freedom.

Think of all those who have given so much for the freedoms we enjoy. There are so many wonderful blessings that come to us in this great land. We have opportunities and rights in this country that those in other parts of the world can only dream of one day having.

I firmly believe that our thoughts control our actions. Instead of focusing on all that is going wrong in the world, let’s focus on the positive. Develop a way to put a big smile on your face and see if it doesn’t make you feel better, and spread to those around you.

On the gloomiest of days you can bring a ray of sunshine to wherever you are. See how much you can bring into the lives of your loved ones. Decide right now to make the world a better, more productive place. We here at McKeon Group want to help you do that. Let’s make the world even better together.

McKeon Group Launches Internship Program

The McKeon Group is proud to announce the new Versatile Internship Program (V.I.P.) for college-aged juniors, seniors and recent graduates. V.I.P. was created to help prepare young individuals for the different aspects and roles of their future career paths; to work closely with students who desire to shape policy in Washington D.C.; and to gain a new and fresh perspective on government relations from the younger generation.

Interns perform many versatile tasks and work as a part of the McKeon Group team in a variety of ways including: business development, advocacy, marketing, and capital investment work. Students have the opportunity to attend hearings, think tank discussions, meetings with current and past professionals in the D.C. area, and work closely with a mentor on day-to-day activities.

“At the McKeon Group, everyone truly wants what is best for you,” Tai-Lyn Parboosingh, former McKeon Group intern, explained. “There is a family atmosphere that exists where everyone exemplifies good character and values.”

Not only does V.I.P. result in vital work experience and real world applications, but our interns also have the opportunity to develop their professional network.

“During my time with the McKeon Group, I learned just how important it is to identify your value within an organization or company and develop the skills and knowledge necessary to be indispensable,” Parboosingh stated.

Preferred qualifications for interested individuals include: exceptional written and verbal communication skills, as well as an interest or major in government, public policy, or political science.

Candidates must submit a completed application form which includes a formal writing
sample along with a resume and cover letter. Once narrowed the candidates will later be selected for a phone interview.

McKeon Group V.I.P allows the McKeon Group to give back to the community, help educate future leaders, and stay connected with the next generation of policy framers. These qualified individual V.I.P. members bring broad thinking and more knowledge to create a wider body and a more diverse team.

The McKeon Group is excited to have a program dedicated to the next generation of policy leaders, and looks forward to hearing from you. Contact us or refer to our FAQ page for further clarification.  Click to apply now!

Chairman’s Corner: May 2017

April was an exciting month for both the McKeon Group and our nation.

We have been bombarded with news surrounding a possible government shutdown for a number of weeks. The Members and Senators that we are in touch with assured us that it would not happen. We saw on Sunday that Congress was able to reach an agreement that will keep the government operating through September.

As I have stated in the past, the media thrives on fear. They will continue to highlight horror stories and ignore the work that is actually taking place.

It is no secret that it is hard to get things done in Washington. Our forefathers masterfully set up a constitution that would keep power in the hands of many, rather than complete power in the hands of a few. President Trump acknowledged this reality last week when he said that being President was more difficult than he anticipated.

Now, just because the President said his job was difficult does not mean that he is not up for the task. The media will lead us to believe that nothing will get done in the next few years. However, I have confidence in this administration. I am also confident that the members of Congress and the Senate will work together to find solutions to our country’s biggest challenges. Ultimately, I have hope for our nation’s future.

Right now in Washington, the sun is still shining and I believe things in this town will continue to be exciting.

Higher Education Update: Making College More Affordable

As Congress takes up the task of reauthorizing the Higher Education Act (HEA) this year, one of its major challenges will be deciding on what changes to make to the Federal student loan programs.  Americans are now carrying over $1.3 trillion in outstanding Federal student loan debt, according to the most recent statistics published by the Federal Reserve, which now accounts for more than one-third of all of the consumer credit outstanding in the U.S.  

However, the Interest rates on outstanding Federal student loans greatly exceeds market interest rates for other forms of credit.  This is because while market interest rates have fallen to historic lows over the last several years, the interest rates charged on Federal student loans are still largely determined by the political process. In fact, many students and parents who borrowed for college over the last decade are subject to interest rates as high as 8.6 percent.  These high interest rates only further increase the overall cost of an already expensive higher education.

The Federal student loan programs currently do not provide a means for borrowers to get relief from high interest rates or reduce their total borrowing costs. While the current Direct Consolidation Loan program can lower monthly payments by extending the loan term, the borrower’s interest rate is actually increased slightly when using this option, and they are charged thousands of dollars more in interest by the time the loan is finally paid off. Likewise, the various income-driven repayment options available artificially lower monthly payments to a percentage of the borrower’s income, butt slow down repayment of the overall debt and add extra interest costs. In many cases, these plans result in unpaid monthly interest being added to the outstanding debt that the borrower owes at the end of each month.

Providing borrowers a new option to refinance Federal student loans with private lenders at lower market-based interest rates, is one of the many HEA issues that the McKeon Group has been advocating for on behalf of its clients this year.

“Lawmakers have been pondering changes to the HEA for nearly five years now and as former policymakers ourselves we understand the difficult challenges they face,” said Jeff Andrade, who leads the McKeon Group’s practice in higher education. ”Moving forward and effectively addressing today’s challenges requires not only lobbying expertise, but also deep policy experience, knowledge of the budget, scoring, and appropriations processes, and strong relationships across the new political landscape — all of which we have been able to bring to bear on behalf of our clients.”