The Federal Budget Process
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1 The Federal Budget Process
2 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 2
3 OMB Strategic Goals 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. 3
4 OMB s Non-Budgetary Responsibilities Office of Information & Regulatory Affairs Office of Federal Financial Management Legislative Reference Division Office of E-Government Office of Federal Procurement Policy 4
5 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. 5
6 Federal Budget Process: The Big Picture FALL/WINTER Scorekeeping Agencies Develop Next Request President Submits MAX Budget Data SUMMER/FALL Agencies Execute Budget SPRING Congress Acts Appropriations Tracking 6
7 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 7
8 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) 8
9 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. 9
10 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. 10
11 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. 11
12 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). 12
13 Controlling Spending during Apportionment Budget Execution Reviewing agency actions Resolving inter-agency disputes Anti-Deficiency Act violations, etc. 13
14 Performance Evaluation of Federal Programs PART introduced in 2002 Completed assessment of 80% of Federal programs 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
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