OMB directs all federal agencies to find savings

////OMB directs all federal agencies to find savings

OMB directs all federal agencies to find savings

Taking a page from Secretary Gates’ playbook, OMB Director Peter Orzag directed federal agencies to set funding levels for their FY2012 budgets at 5 percent below the level for FY2012 assumed in the FY2011 budget request.  In a memo to executive departments and agencies, Orzag and co-signer Rahm Emanuel, White House Chief of Staff, directed each agency to take a look at “their spending and identify those programs that are least critical to advancing their agency missions.”  This additional budget scrutiny, along with the FY2012 budget plan for a three-year freeze on non-security budgets, is necessary, according to Orzag, because “the Nation’s finances are on an unsustainable course.”  He cited the effort underway in DoD as an example of the administration’s commitment to cutting wasteful spending.  The guidance instructs agencies to:  1) evaluate programs to identity program redundancies and performance; 2) set a 5 percent savings target; 3) identify entire programs for reduction or those with potential cuts of at least 50 percent; and 4) justify each proposed cut.   Although the guidance addresses discretionary programs (those programs for which Congress appropriates funding), OMB also asks agencies to submit a list of low-impact mandatory programs. The OMB FY2012 budget guidance advises agencies to avoid a simple across-the board cut when identifying savings.  Rather, they are instructed to use this as an opportunity to “restructure their programs strategically”.  OMB directs agencies to submit their proposals as part of their overall FY2012 budget submission, due to OMB on September 13, 2010.

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