wfedstaff | June 3, 2015 1:15 pm
By Suzanne Kubota
Senior Internet Editor
The clock is ticking for Congress to approve your agency’s budget for 2011. We have about a month before the current fiscal year ends and the new one begins. But agencies are thinking about their 2012 budgets. They’re due to OMB in less than a month. But how do those budgets come together in the first place? A special Federal News Radio Discussion: Meeting Mission Goals Through Technology brought to you by General Dynamics IT looks at the federal budget process.
Joining us for the discussion were Mike McCord, Principal Deputy Under Secretary of Defense, and Karen Evans, National Director for the US Cyber Challenge and founder of KE&T Partners and former Administrator of E-government and IT at the Office of Management and Budget.
Here are some of the topics, questions and excerpts from the responses of the panel:
Insight by Sonatype: Stephan Mitchev, acting CTO at USPTO, discusses how USPTO is looking at supply chain issues to address cybersecurity concerns. Dr. Stephen Magill, VP of product innovation at Sonatype, provides an industry perspective.
Part 1: Surprises
Evans: Every year, it is such a challenge, and yet it’s not like nobody knows this is coming. Is there not a template? A standard operating procedure? Why does this get to be so complicated? “I don’t know why it’s so complicated, because there is a template and in our view, the OMB view…the guidance is out there,” but gets reviewed every year. “So people say ‘well we can’t do it until it’s final when the Director signs off on it,’ and that usually happens around the June timeframe” said Evans. So while agencies work on the process, they don’t get “the top number” and guidance on the priorities “until later on in the cycle.”
McCord: “Certainly we all know that it’s coming and we’re not surprised by that at all. What’s complicated, I think there’s two things for DoD. One is our size and our scope make it complex,” said McCord. Defense can react to a change up or down in the topline, but to distribute the information “and get it back from all the different entities can take a little while.” The second challenge for Defense, according to McCord, is wartime operations. “President Obama doesn’t like the idea of doing supplimentals and we’ve really been pushing to get those into the regular budget. Well, if you’re trying to do your budget, you can’t do the base budget and then come back and do the wartime budget later because you have decisions about what goes where, where should that funding go, and you can’t really do one in isolation.”
Part 2: Impactors
Evans: On the OMB side, said Evans, the “pressure of the deficit levels are what really drive” the guidance given to agencies. After the President promises to cut the deficit, “it really is a policy discussion.” Assumptions have to be made by OMB. “That has to be agreed upon by the economic team, and the economic team, then, is driven by the policies of the Administration.” OMB and the economic team in the White House, said Evans, “have a tendency to be a little bit more optimistic because you want to make sure that your policies are getting enacted.” Then reality sets in when the “Congressional Budget Office then releases what’s happening and that’s the yin and the yang in the pieces going forward.” So, explained Evans, OMB is looking at the top level numbers “that then cascade down to the agencies and you kind of hope that they all meet so that you can meet what the President’s numbers are.”
McCord: Add to that, said McCord, within the figures handed to agencies, are a big part and a small part. “The big part is the deficit which might lead them to say ‘oh, we thought we could afford to give your agency X, but now the deficit number’s looking pretty bad. We’re going to have to give you a little less.'” The small part, said McCord is something like an inflation assumption or a pay raise assumption that can ripple through hundreds of DoD accounts in a small way, but across a wide spread.
Part 3: Where it CAN Go
McCord: While many other departments and agencies are facing a five percent cut in spending, McCord said that doesn’t mean DoD can spend its funds any way they’d like. “A good example would be when the earthquake hit Haiti (January 12, 2010.) It was fairly early in the fiscal year so we had, in terms of our appropriations, had not been all spent down, but we had actually very limited authority to respond to that initially, whereas the State Department has better authorities but didn’t have, necessarily, the money. We have a fairly small pot, about $100 million at best, to respond to emergencies like that.” McCord said Defense “can’t just go into our regular budget and borrow money” because they don’t have the legal authority to spend funds on anything that isn’t strictly Defense missions. “So matching up money and authority is a common problem for us,” said McCord.
Evans: “So this brings in the congressional part of this.” Evans said when the President submits the budget, it’s a request. “All authorities eminate from Congress,” and they’re the ones who appropriate the dollars. Even with a shared mission or project, “depending on what the amount is, you have to go back and make sure Congress is okay with that because they’re the ones who appropriated the money for a very specific purpose.”
McCord: Even the White House can have trouble with that concept. When an Administration asks “who can help me solve a problem,” said McCord, “we owe them then the response of ‘here’s the things that we think we can do’. Lot of work with our general counsels. That was maybe one of the bigger surprises to me when I came is how much you have to check everything with your lawyers.”
Part 4: Who Holds the Purse
McCord: And then there are situations where putting is money in the budget for a project that may be foundering a bit becomes an issue. This, said McCord, can put departments and agencies in the middle of the Secretary and OMB. “Something that OMB has told you ‘we’re looking at this,’ of course that’s going to be looked at very carefully and the word will come back ‘you did it okay’ or ‘you did not do it okay, in our view’,” said McCord. OMB plays a big role, “especially if they give you a broad hint that they expect you to do something, then that’s the first thing they’ll look at.”
Evans: “See, and that was nice,” interjected Evans. “He called it ‘a broad hint.'” Considering all the factors while trying to make the budget deadline means “there’s a lot of hours that the agencies, especially Mike’s office, would put in this time of year all the way to the time that the budget is released, just the same as the agencies would. It’s a lot of hours.”
Part 5: Making Payroll
McCord: While the FY 2012 budget is the focus, the FY 2011 budget is still a concern. If DoD has a budget by the start of the fiscal year on October first, McCord said “at this point, we’d be surprised.” So much work needs to be done in Congress, McCord said Defense is “expecting to be in the CR (continuing resolution) this time with everybody else.” While a concern, McCord didn’t sound worried about it. “A lot of what we need to do will be okay. To pay people, to pay our military personnel, to pay our civilians, to keep the lights on, to keep buying fuel. Those things are pretty well understood and they’re perfectly legal under a CR.” It would, however, prevent the start of any new projects or buying anything that hadn’t been bought in the previous year.
Want to stay up to date with the latest federal news and information from all your devices? Download the revamped Federal News Network app
Evans: As for civilian agencies, said Evans, they “and good program managers are used to the CR process and probably most of them have their projects planned in a way that new starts don’t happen in that October to December time period”.
Final Thoughts/Words of Advice
Evans: “This is going to be a tough year so they’d better have their data aligned so that they can really justify what they need.”
McCord: “If you’re a DoD component, pay attention to Secretary Gates’ speech.”