Last week, OMB Director Jacob Lew told agencies to prepare FY2013 budgets under two options:  five percent below the FY2011 enacted level and another at 10 percent lower than FY2011.  But, did Lew really mean that every agency’s FY2013 budget would be at least five percent lower than FY2011?  Not exactly, Lew wrote in his blog on the OMB website.

To be sure, Lew said OMB directed agencies to “provide budgets based on two scenarios: “a five percent cut and a 10 percent cut from the 2011 enacted discretionary level.”  But, he said, this does not mean that OMB will “institute a 5 percent or 10 percent cut in an individual agency’s budget or in All agency budgets.”  Nor, does it mean, Lew went on, that agencies should use an across-the-board cut to reach the lower levels.

What OMB wanted was for agencies to give the president options to meet the stringent FY2013 funding levels established in the Budget Control Act of 2011.  “Thus, some agency budgets will decrease (and some more than others), some will stay flat, and some may increase (and, again, some more than others) – and the same goes for programs within agencies,” Lew explained.

Lew acknowledged that budgeting in the current fiscal environment is difficult.  But, he said, it is possible for agencies to find savings by cutting or eliminating low priority or underperforming programs, getting rid of redundancies, consolidating programs, and reducing overheads costs.  At the same, Lew urged agencies to identify investment opportunities “that spur growth and job creation.”