The Federal Budget
Process
OMB Organization
• Part of the Executive Office of the President, not
the Treasury
• Assists the President in the discharge of budget,
policy, legislative, regulatory, procurement, and
management responsibilities
• Policy officials include Director, 2 Deputy
Directors, and several Program Associate
Directors
• 500 career employees who analyze issues, draft
policies, and provide advice and support
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OMB Strategic Goals
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Develop, enact and implement the President’s
Budget, shifting resources to higher priority
and more effective uses;
Improve the effectiveness and efficiency of
government programs;
Improve the effectiveness and efficiency of
government rules and mandates;
Ensure agencies develop, express and
implement policies in accordance with the
President’s priorities.
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OMB’s Non-Budgetary
Responsibilities
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Office of Information & Regulatory Affairs
Office of Federal Financial Management
Legislative Reference Division
Office of E-Government
Office of Federal Procurement Policy
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What is the Federal Budget?
• The President’s budget is a set of books
transmitted to Congress.
• Congress passes a budget resolution,
which is sometimes referred to as the
congressional budget.
• End result is a collection of many separate
laws that govern spending and receipts.
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Federal Budget Process: The
Big Picture
FALL/WINTER
Agencies Develop
Next Request
President Submits
Scorekeeping
MAX Budget Data
ER
M
SP
RI
NG
M
SU
Agencies
Execute
Budget
L
AL
/F
Congress Acts
Appropriations Tracking
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Budget Formulation Happens
in a Dynamic Environment
• Budget Year: Formulation of the 2008 Budget
Summer
Feb
• Current Year: Enactment of 2007 Appropriations
• Prior Year: Execution of 2006 by the Agencies
• Economics and Technicals
MSR
Budget
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Basic Timeline for Formulation
• Agencies develop proposals in Spring/Summer and
send to OMB in early September
• OMB considers proposal (Fall) and sends back
counter-proposal, “Passback” (November)
• Agencies appeal (Early December)
• Appeals are resolved (December)
• Budget Printed (Jan), Budget sent to Congress (Feb)
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OMB Considers the
Request
SEPT - NOV
1 YEAR to
BUDGET YEAR
OMB reviews the agency budget request in meetings with the
agency, by Q&A, etc.
RMOs develop recommendation for Director’s Review at the targets
approved by Director.
OMB sends Passback to the agencies in November.
OMB briefs the White House and the Budget Review Board on the
Passback.
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Economic Assumptions
• Developed by the Troika:
Treasury, OMB and CEA
• Come in November – late in the Formulation
process, because it is difficult to forecast levels
two months in advance. But they affect the
budget year less than the out-years.
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Preparing the budget
request
• RMOs: Develop specific policy proposals, create and
review language and narrative, ensure their numbers
are right!
• BRD: Leads process; reviews numbers, language and
narrative; creates database; and performs crossgovernment calculations; etc.
• Statutory offices: Provide guidance on specific issues.
• General Counsel: Approves all proposed legislative
language.
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Appeals Process
DECEMBER
TO JANUARY
Agencies may appeal OMB’s passback.
RMOs prepare briefing memos.
First appeals are taken to the PADs, who are sometimes given
allocations by the Director.
If not resolved by the PADs, appeals are taken to the Director.
Final appears are taken to the Budget Review Board
(President).
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Controlling Spending during
Budget Execution
• Apportionment
• Reviewing agency actions
• Resolving inter-agency disputes
• Anti-Deficiency Act violations, etc.
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Performance Evaluation of
Federal Programs
• PART introduced in 2002
• Completed assessment of 80% of Federal
programs
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Number of Programs Assessed: 793
Effective: 15%
Moderately Effective: 29%
Adequate: 28%
Ineffective: 4%
Results Not Demonstrated: 24%
• Complete assessment for all programs by end
of 2006
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