OMB directs agencies to cut 5 percent from 2014 budgets

Monday - 5/21/2012, 4:59pm EDT

The Office of Management and Budget released two memoranda late Friday providing guidance to agencies on their fiscal 2014 budgets.

OMB Acting Director Jeffrey Zients advised agencies that the Budget Control Act of 2011 will continue to "constrain discretionary spending." Agencies will need to cut their budgets even more than the guidance provided in the 2013 budget.

Tightening the belt by another 5 percent

In the first memo, Zients said even if Congress moves to stop sequestration, agencies must cut their budgets by 5 percent.

"Your 2014 submission to [OMB] should reflect the president's commitment to cut waste, set priorities among programs and make targeted investments in critical priorities," Zients said. "Unless your agency has received different guidance from OMB, your overall agency request for 2014 should be 5 percent below the net discretionary total provided for your agency for 2014 in the 2013 budget."

Agencies should also provide a prioritized list detailing which cuts should be added back, if it is deemed possible. Zients said this would give President Barack Obama "the options needed to make the hard choices necessary to adhere to the [Budget Control Act]'s discretionary funding levels, invest in priority areas and focus on programs that work."

Zients said 2014 budget guidance should include:

  • A general narrative of the agency's management priorities and its plan to improve performance and outcomes.
  • Detailed information on existing initiatives that will impact the agency's 2014 budget the most.
  • A "discussion" of how the agency would use any savings from implementing management initiatives.
  • At least three program-reform proposals where legislative, budget or adminstrative changes could improve efficiency, savings or effectiveness.

Evidence-based evaluation stressed

In the second memo, OMB encouraged the use of evidence in evaluating the 2014 budget, providing a detailed description of what OMB will be looking for in agency submissions.

"The budget is more likely to fund requests that demonstrate a commitment to developing and using evidence," Zients said.

Among its many recommendations, OMB suggested:

  • Low-cost evaluations using administrative data or new technology;
  • Expansion of evaluation efforts within existing programs;
  • Using comparative cost-effectiveness data to allocate resources;
  • Tying grant awards to evidence;
  • Using evidence to inform enforcement of criminal, environmental and workplace-safety laws;
  • Appointing a high-level official to strengthen agency evaluation capacity.
To support this push, OMB is partnering with the Council on Economic Advisers, the Performance Improvement Council and the Office of Science and Technology Policy to hold forums throughout the summer. Details on these forums can be found at the end of the second memo.