Like many other countries, the U.S. is newly concerned about the level of public debt. New projections of its Congressional Budget Office are that current policies will cause debt to rise for the foreseeable future. Higher interest rates to service that debt will squeeze other federal government spending. Last year new legislative caps were enacted on discretionary (annually appropriated) federal spending. This part of the federal budget funds administrative expenses as well as most programs.
Spending caps increase the challenge of funding needed investments in government’s capacity to manage its many commitments and meet future shocks. Despite evident need to invest in greater government capacity, recent history suggests that a constrained budget environment will bring pressure for across-the-board cuts in administrative spending. A smarter strategy would be to invest in greater administrative capacity, thereby removing impediments to agile and responsive government. Over time, that would save money and improve performance. Policymakers interested in reducing deficits without abandoning their priorities or weakening performance, and those who oppose revenue increases to pay for more government, may each gravitate toward management efficiencies as the least painful way forward.
In this context, the IBM Center for The Business of Government and the Shared Services Leadership Coalition convened a roundtable of federal management and budgeting experts to explore ideas for strengthening its support for management improvement. A subsequent report, Opportunities for Management when Budgeting, draws insights from that session and presents a range of possible changes supportive of management improvement when developing the President’s annual Budget, during congressional review and appropriations, and in executing the enacted budget.
The current federal budget process presents obstacles to such investments at each stage of the process.
- In the executive’s budget development, despite growing use of strategic reviews and performance metrics to identify barriers to improved management, the linkage between these routines and established routines for developing and reviewing the budget is often weak.The President’s Budget has not presented a comprehensive, governmentwide plan and strategy to overhaul and strengthen management of the government’s far-flung responsibilities, accelerate adoption of modern systems and business methods, and address shortfalls in performance.
- In Congress’s review of the budget and appropriations processes, there is no obvious venue where government-wide management investments are considered.The U.S. Congress plays an outsize role in budgeting compared to the national legislatures of all other countries. It takes much more time to consider and enact annual appropriations, with the process routinely extending well past the start of the fiscal year.Temporary spending authority and occasional appropriations lapses cause uncertainty, disruption, delays, and extra work for executive agencies to plan for potential shutdown.In appropriations, investments in new management systems to increase administrative capacity are routinely crowded out by programs with strong constituencies.Scorekeeping rules and a siloed process work against such investments.A fundamental problem for federal management arises from detailed congressional direction to agencies on how to apportion and use spending amounts. The discretion of federal managers to apply funds in the service of legislatively prescribed missions is hampered—except in cases of some small agencies and accounts—so they find it hard to act strategically or adapt to changing circumstances.
- In budget execution, Congress’s approach to appropriations and oversight reinforces the bureaucracy’s culture of compliance, contributing to problems of efficient budget execution.One promising approach pursued by successive presidential administrations is to help agencies share common administrative processes supporting mission delivery. But progress on this approach has been incremental, with evidence of benefits in the form of cost savings and service improvements so far limited.
Here is a sampling of options described in the report to revise the U.S. federal budget process in ways that support management improvement: empowering government managers to be more agile and responsive, leading to administrative efficiencies, budget savings, and better outcomes:
- Develop and present in the President’s Budget a prioritized and fully priced multiyear plan to address the government’s capital needs.
- Conduct in-depth spending reviews for selected policy objectives to inform options for more productive resource use.
- Create a congressional management resolution and scorecard for management improvements in budget-related legislation.
- Reduce restrictions on executive flexibility accompanying appropriations.
- Use a centralized capital planning process and central revolving capital fund to plan and execute large, cross-agency investments in improved management capacity.
- Centralize responsibility for leading transformative changes across the government in how programs are supported, including through shared services, to address enterprise-wide management challenges.
