By Suzanne Kubota
Senior Internet Editor
FederalNewsRadio.com

FederalNewsRadio has reported that agencies are preparing two budgets for 2011 — one that freezes funding, and one that cuts it by 5 percent. But at least one budget expert says the story has been blown out of proportion.

Stan Collender, partner at Qorvis Communications, told FederalNewsRadio when asking for budgets, almost every administration has requested agencies give them alternatives: up, down, and flat.

What was reported last week, said Collender “was just some overstatement of the existing process.”

Collender said there’s a bigger issue. “Starting next year, that is the 2011 budget, the one that the President will submit in early February to Congress, that’s going to have to include a deficit reduction program of some kind.”

At that point, said Collender, agency budgets will be included, but only as a small part of the whole.

Even a 5% cut on a trillion dollar appropriations, said Collender, “would ‘only’… get you fifty billion (dollars) and you’re not going to get a 5% cut and that’s not going to reduce the deficit all by itself. So that’s a small part of the deficit action that’s going to occur next year.”

Collender said the request from OMB for a budget with a 5 percent cut is “not a final decision.”

I don’t think there’s any doubt about it: there’s going to be some restraint. there has to be. But I think that the reports were greatly overstated and overblown last week. This is just an exercise that OMB was running to say “do this and try that and then we’ll pick and choose from what we want to do.”

Bloomberg reports a plan for reducing long-term federal budget deficits will be “a key component” of President Barack Obama’s annual State of the Union address in January.

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