The project is going to pot in a handbasket

This is a mash up of two similar meaning idioms – “going to pot” (declining or getting worse) and “going to hell in a handbasket” (a situation quickly headed to disaster).  My guess is that the speaker did not want to say the word “hell” and so “pot” came to mind.  Moreover, my notes indicate this phrase was spoken in the 70s, so it is possible that the speaker indeed had “pot” on his mind….