OMB Seeks Cuts in FY 2013 Requests

August 19, 2011 03:49 AM

via a special arrangement with Informa Economics, Inc.

USDA Secretary Vilsack wresting with ways to cut budget

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

White House budget officials have directed federal departments and agencies to find ways to set their Fiscal Year 2013 budget requests as much as 10 percent below current spending levels, with some priority programs getting additional funding.

Cuts of 5 to 10 percent. In an Aug. 17 memo, the Office of Management and Budget (OMB) said requests for discretionary appropriations for FY 2013, which begins Oct. 1, 2012, should be at least 5 percent below what departments and agencies received for FY 2011, unless they have been given specific direction otherwise. They were also asked to identify additional cuts that would put their requests 10 percent below the current level.

Link to OMB memo

Perspective: Even a 5 percent cut in discretionary appropriations, if carried out across the government, would amount to significantly less than the amount presumed by the just-enacted debt limit deal ( PL 112-25 ), which established spending caps for each of the next 10 years.

Other instructions. At the same time, particular programs that deserve more money should be identified, Lew’s memo said. Paring less effective or duplicative programs should free resources for those considered to deliver the best results, OMB said.

"I know this will be a difficult year, but it will also offer an opportunity to make the hard decisions to invest where we can get the most done and pare back in other areas," said the memo from OMB Director Jacob J. Lew.

The new budget caps allow a total of $1.047 trillion for discretionary appropriations in FY 2013, excluding costs related to the wars in Iraq and Afghanistan. For the current year, that sum is about $1.050 trillion. A 5 percent cut from the current year would amount to more than $50 billion, but by indicating that some agencies will be exempt, the OMB directive signals the overall cut will be less than that.

The memo instructed agencies not to use gimmicks or shortcuts to find savings, and to avoid across-the-board reductions, and instead to focus on specific programs. The memo also advised against assuming changes in mandatory spending or the adoption of new user fees.

Comments: It will be interesting to see how USDA Secretary Tom Vilsack finds the budget cuts for his department. Some fret he will again go after crop insurance, but others say that is an unlikely move ahead of a major farm bill debate. Some options include reducing the number of Farm Service Agency (FSA) county offices and personnel.


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.







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