Federal Agencies Responsible for Their Own Budget Cuts

Federal agencies will be responsible for cutting their own budgets to meet President Obama’s overall budget request for fiscal year 2013, which is to be sent to Congress for approval in February, 2012. Agencies have been directed to cut five percent in discretionary spending and to come up with independent ideas to cut at least another five percent.

“We want to give agencies tools and do it in a way that is perhaps less directive and more as guidance,” says Jack Lew, director of the Office of Management and Budget (OMB). “I do believe ownership at departmental level at a time of constraint is important.”

Agencies sent their initial budgets to OMB earlier this month. The agency will review the proposals and negotiate through December.

Some agencies will reduce spending on administrative functions while others will cut program areas, and some will look at their workforces to find savings, Lew notes. “We need to look at what the agencies do, what the state of their I.T. systems is and what the state of their workforce is and come up with a package that is right for the agency.”

At least 14 agencies have asked the Office of Personnel Management (OPM) for approval to offer buyouts and early retirements. Other agencies, such as the Navy, are trying to cut spending on technology systems.

Along with OMB, agencies will have to convince Congress, employee unions and other interested parties that the proposed budget cuts are both enough and appropriate.

“I can’t say nothing else will happen regarding the federal workforce,” Lew additionally notes.

The President’s most recent deficit reduction proposal recommends increasing the amount that federal employees contribute to their pensions by 1.2 percent over three years beginning in 2013 — a rate of 0.4 percent annually during that time. Civilian federal employees are under a two-year pay freeze through 2012, and several lawmakers have introduced legislation that targets government pay and benefits.

Federal agencies will be responsible for cutting their own budgets to meet President Obama’s overall budget request for fiscal year 2013, which is to be sent to Congress for approval in February, 2012. Agencies have been directed to cut five percent in discretionary spending and to come up with independent ideas to cut at least another five percent.

“We want to give agencies tools and do it in a way that is perhaps less directive and more as guidance,” says Jack Lew, director of the Office of Management and Budget (OMB). “I do believe ownership at departmental level at a time of constraint is important.”

Agencies sent their initial budgets to OMB earlier this month. The agency will review the proposals and negotiate through December.

Some agencies will reduce spending on administrative functions while others will cut program areas, and some will look at their workforces to find savings, Lew notes. “We need to look at what the agencies do, what the state of their I.T. systems is and what the state of their workforce is and come up with a package that is right for the agency.”

At least 14 agencies have asked the Office of Personnel Management (OPM) for approval to offer buyouts and early retirements. Other agencies, such as the Navy, are trying to cut spending on technology systems.

Along with OMB, agencies will have to convince Congress, employee unions and other interested parties that the proposed budget cuts are both enough and appropriate.

“I can’t say nothing else will happen regarding the federal workforce,” Lew additionally notes.

The President’s most recent deficit reduction proposal recommends increasing the amount that federal employees contribute to their pensions by 1.2 percent over three years beginning in 2013 — a rate of 0.4 percent annually during that time. Civilian federal employees are under a two-year pay freeze through 2012, and several lawmakers have introduced legislation that targets government pay and benefits.

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