Office of Management and Budget (OMB)

Agency within the Executive Office of the President. The OMB has broad financial management power as well as the responsibility of preparing the executive budget. Among the other duties assigned OMB are: (1) to study and recommend to the president changes relative to the existing organizational structure of the agencies, their activities and methods of business, etc.; (2) to apportion appropriations among the agencies and establish reserves in anticipation of cost savings, contingencies, etc.; and (3) to develop programs and regulations for improved data gathering pertaining to the government and its agencies.

US executive agency, created in its present form in 1970, with responsibility for the preparation and administration of the federal budget. The OMB was established to increase the President's control over the federal bureaucracy.

The Office of Management and Budget (OMB) prepares the Budget of the United States, which constitutes the President's annual budget request to Congress. It was created as the Bureau of the Budget (BOB) by the Budget and Accounting Act of 1921. Originally located in the Treasury Department, the BOB was moved to the Executive Office of the President in 1939 and renamed the Office of Management and Budget in 1970.

The OMB has 500 or so professional staff members. Its Budget Division prepares the Budget of the United States and drafts of the President's annual budget message. It also reviews and revises the congressional testimony of department secretaries when they request funds from the appropriations committees. Once Congress has appropriated funds, the OMB controls the rate of spending by departments through a system of quarterly allotments. It can also recommend to the President that he defer spending to future years or even rescind scheduled spending—both actions that require ultimate approval by Congress. It can order the reprogramming of funds (transferring money from one activity to another) within an agency or across agency lines.

The OMB's Management Division suggests to department secretaries ways for the departments to be run more efficiently. Its Division of Federal Procurement Policy recommends ways of cutting purchasing costs. Its Legislative Division performs a legislative clearance function: it reviews all requests by departments to Congress for new legislation and decides if such requests should become “part of the President's program” (bills that the President personally endorses), “in accordance with the program of the President” (merely acceptable to the White House), or should be blocked as “not in accord with the program of the President.” It reviews all legislation passed by Congress within five days and advises the President on whether these “enrolled bills” should be signed or vetoed. Finally, the OMB Division of Information and Regulatory Affairs reviews all regulations proposed by departments to see if they are consistent with the President's policies and should go into effect, a system known as regulatory clearance.

Until the 1970s the Bureau of the Budget was committed to the concept of “neutral competence.” This meant that its career civil servants would provide expert advice to a succession of Presidents from both parties and would work dispassionately for the President's goals, whether liberal or conservative. The BOB's first director, Charles Dawes, established the rule that “the Budget Bureau must be impartial, impersonal, and nonpolitical.”

President Richard Nixon preferred a partisan and political operation. He reorganized the BOB into the Office of Management and Budget. He installed the OMB director in the West Wing of the White House with other senior political advisers. Political appointees, called program associate directors, were placed over career civil servants to make the agency more responsive to Presidential politics. A majority of the division managers and their top-ranking aides soon left, reducing OMB's expertise. Presidents Gerald Ford, Jimmy Carter, Ronald Reagan, and George Bush all appointed key political advisers as OMB directors, reducing to some extent the competence of the agency in forecasting expenditures and consequently reducing its influence with Congress as well.

See also Budget, Presidential; Executive Office of the President; Impoundment of funds

Sources

• Larry Berman, The Office of Management and Budget, 1921–1979 (Princeton, N.J.: Princeton University Press, 1979).
• Frederic C. Mosher, A Tale of Two Agencies: A Comparative Analysis of the General Accounting Office and the Office of Management and Budget (Baton Rouge: Louisiana State University Press, 1984).
• Shelley Lynne Tomkin, Inside OMB: Politics and Process in the President's Budget Office (Armonk, N.Y.: M. E. Sharpe, 1998)

Office of Management and Budget (OMB), established by executive order in 1971 when President Richard M. Nixon issued his Reorganization Plan 2. The Plan created the OMB as part of the reorganization of the Bureau of the Budget, the agency within the Executive Office of the President responsible since 1939 for the formulation of the national budget. (Prior to 1939 the Budget and Accounting Act of 1921 had placed the Bureau of the Budget in the Treasury Department.) The president selects the director of the OMB, who has cabinet-level status within the federal bureaucracy.

The primary function of the OMB is to assist the president in preparing the national budget and to "supervise and control the administration of the budget." In addition, it has a number of other functions of considerable significance and influence. It is charged with aiding the president in achieving governmental efficiency; advising the president about the potential costs of the administration's legislative program and coordinating the legislative requests of governmental agencies; developing information systems and assembling statistical data; monitoring the performance and efficiency of federal programs; developing programs for recruiting, training, and evaluating career personnel; and coordinating all programs of the executive branch in order to achieve maximum efficiency and efficacy. In short, the reorganization and change in agency title from Bureau of the Budget to Office of Management and Budget reflect a significant expansion of the managerial responsibilities and influence of the agency.

In fulfilling its primary responsibility, the preparation of the national budget, the OMB addresses itself not only to fiscal policy but also to the substantive aims of the administration's policy goals for the fiscal year. During the process of drafting the budget, agencies present their program plans and appropriation requests to the OMB, where its staff examines them in detail. Beginning in the mid-1960s the Bureau of the Budget instituted an evaluation process known as "Planning, Programming, Budgeting" (PPB) for assessing agency programs and appropriation requests. In the PPB process the OMB scrutinizes the efficiency with which the available alternative means, or cost effectiveness, meets the program goals stated in the appropriation requests. The objective of PPB is to achieve the program objectives by choosing the alternative with the optimal cost-benefit ratio.

The Office of Management and Budget, the Department of the Treasury, and the Council of Economic Advisors work together to formulate government fiscal policy and to coordinate the performance of the economy in general with government programs and spending. Once the OMB has evaluated the programs and appropriations of all agencies within the eleven cabinet departments, it prepares the annual budget that the president submits to Congress each January.

During the 1980s and 1990s, critics increasingly attacked the OMB for being a political tool of the administration, in part because it had enormous influence without being accountable to the public and in part because its budget projections were frequently much more optimistic than those coming from the Congressional Budget Office (CBO), founded in 1974. Between 1996 and 1999, however, growth defied the CBO's conservative expectations and generated an enormous surplus more in line with President Bill Clinton's OMB projections. In 1999 the CBO revised its projections to mirror more closely those of the OMB, a move that critics decried for allowing budget projections to drive policy rather than using them simply to forecast actual economic growth.

Bibliography

Mackenzie, G. Calvin, and Saranna Thornton. Bucking the Deficit. Boulder, Colo.: Westview Press, 1996.

Myers, Margaret G. A Financial History of the United States. New York: Columbia University Press, 1970.

Wildavsky, Aaron, and Naomi Caiden. The New Politics of the Budgetary Process. 3d ed. New York: Longman, 1997.

An agency of the federal government that evaluates, formulates, and coordinates management procedures and program objectives within and among departments and agencies of the executive branch. It also controls the administration of the federal budget, while routinely providing the president of the United States with recommendations regarding budget proposals and relevant legislative enactments.

The Office of Management and Budget (OMB), formerly the Bureau of the Budget, was established in the Executive Office of the President pursuant to Reorganization Plan No. 1 of 1939 (5 U.S.C.A. app.), effective July 1, 1939. Its functions were reorganized and the office renamed OMB by Executive Order No. 11,541 of July 1, 1970. Since the reorganization the OMB has played a central role in analyzing the federal budget and making recommendations for changes in the budget. Its director, who is appointed by the president, is a key advisor on fiscal policy. The director often appears before congressional committees to explain budgetary proposals.

The OMB assists the president in developing and maintaining effective government by reviewing the organizational structure and management procedures of the executive branch to ensure that the intended results are achieved. It works to develop efficient coordinating mechanisms to implement government activities and to expand interagency cooperation.

The OMB assists the president and executive departments and agencies in preparing the budget and in formulating the government's fiscal program. It publishes the president's proposed Budget of the U.S. Government every year. Once Congress approves a budget, the OMB supervises and controls the administration of it. In addition, it advises the president on proposed legislation and recommends to the president whether to sign or veto legislative enactments.

The office also assists in developing regulatory reform proposals and programs for paperwork reduction, especially reporting burdens of the public. The OMB helps in considering, clearing, and, where necessary, preparing proposed executive orders and proclamations that will have an impact on the federal budget.

The OMB has assumed an oversight role in determining the effectiveness of federal programs. It plans and develops information systems that provide the president with program performance data, and it plans, conducts, and promotes evaluation efforts that assist the president in assessing program objectives, performance, and efficiency.

The office also keeps the president informed of the progress of government agency activities with respect to work proposed, initiated, and completed. It coordinates work among the agencies of the executive branch to eliminate overlap and duplication of effort and to ensure that the funds appropriated by Congress are expended in the most economical manner.

Finally, OMB works to improve the economy, efficiency, and effectiveness of the procurement processes by directing procurement policies, regulations, procedures, and forms for the executive branch.

The Office of Management and Budget (OMB) is a Cabinet level and is the largest office within the Executive Office of the President of the United States (EOP) and is an important conduit by which the White House oversees the activities of federal agencies. OMB is tasked with giving expert advice to senior White House officials on a range of topics relating to federal policy, management, legislative, regulatory, and budgetary issues. The bulk of OMB's 500 employees are charged with monitoring the adherence of their assigned federal programs to presidential policies. OMB performs their coordination role by gathering, filtering, and promulgating the President's annual budget request, by issuing circulars dictating agency management practices, by overseeing the "President's management agenda" (PMA)[1], and by reviewing agency regulations. The Office contains significant numbers of both career and politically appointed staff; OMB staff provide important continuity within the EOP since several hundred career professionals remain in their positions regardless of which party occupies the White House. Six positions within OMB--the Director, the Deputy Director, the Deputy Director for Management, and the Administrators of the Office of Information and Regulatory Affairs, the Office of Federal Procurement Policy, and the Office of Federal Financial Management--are presidentially appointed and Senate-confirmed ("PAS") positions.

Jim Nussle was confirmed as Director of OMB on September 4, 2007, replacing Rob Portman.

Structure of OMB

The largest component of the Office of Management and Budget are the four Resource Management Offices (RMO) which are organized along functional lines mirroring the U.S. federal government, each led by an OMB associate director. Approximately half of all OMB staff are assigned to these offices, the majority of whom are designated as program examiners. Program examiners can be assigned to monitor one or even several federal agencies or may be assigned a topical area, such as monitoring issues relating to U.S. Navy warships. These staff have dual responsibility for both management and budgetary issues, as well as responsibility for giving expert advice on all aspects relating to their programs. Each year they review federal agency budget requests and help decide what resource requests will be sent to Congress as part of the President’s budget. They perform in-depth program evaluations using the Program Assessment Rating Tool (PART) [2], review proposed regulations, agency testimony, analyze pending legislation, and oversee the aspects of the PMA including agency management scorecards. In essence they are the “one stop shop” within OMB and the Executive Office of the President and are often called upon to provide analysis information to any EOP staff member. They also provide important information to those assigned to the statutory offices within OMB, which are OIRA, OFPP, OFFM, and the Office of E-Government whose job it is to specialize in issues such as federal regulations or procurement policy and law.

Other offices are OMB-wide support offices which include the Office of General Counsel, the Office of Legislative Affairs, the Budget Review Division (BRD), and the Legislative Reference Division (LRD). BRD performs government-wide budget coordination and is largely responsibly for the technical aspects relating to the release of the President’s budget each February. With respect to the estimation of spending for the executive branch, BRD serves a purpose parallel to that of the Congressional Budget Office (CBO) for the estimation of spending for Congress, the Department of the Treasury for the estimation of revenues for the executive branch, and the Joint Committee on Taxation for the estimation of revenues for Congress.

The Legislative Reference Division has the important role of being the central clearinghouse across the federal government for proposed legislation or testimony by federal officials. LRD distributes proposed legislation and testimony to all relevant federal reviewers and distills the comments into a consensus opinion of the Administration about the proposal. They are also responsible for writing an Enrolled Bill Memorandum (EBM) to the President once a bill is presented by both bodies of Congress for the President’s signature. The EBM details the particulars of the bill, opinions on the bill from relevant federal departments, and an overall opinion about whether the bill should be signed into law or vetoed. They also issues Statements of Administration Policy (SAP) that let Congress know the White House’s official position on proposed legislation.

History

The Bureau of the Budget (BOB), OMB's predecessor, was established as a part of the Department of the Treasury by the Budget and Accounting Act of 1921. The BOB was moved to the EOP in 1939, and reorganized into OMB in 1970 during the Nixon administration. The first OMB included Roy Ash (head), Paul O'Neill (assistant director), Fred Malek (deputy director) and Frank Zarb (associate director) and two dozen others. In the 1990s, OMB was reorganized to remove the distinction between management staff and budgetary staff by combining those dual roles into each given program examiner within the RMO.

Source

Directors of the Office of Management and Budget

Name	Dates Served ↓	President	Notes
Jim Nussle	September 4, 2007 - present	George W. Bush
Rob Portman	May 26, 2006 - 19 June 2007	George W. Bush
Joshua B. Bolten	June 26, 2003 - April 15, 2006	George W. Bush	Bolten was designated on March 28, 2006, to replace Andy Card as White House Chief of Staff.
Mitchell E. Daniels, Jr.	January 23, 2001 - June 6, 2003	George W. Bush	Daniels left and successfully ran for Governor of the state of Indiana.
Jacob J. Lew	May 21, 1998 - January 19, 2001	Bill Clinton	Jack Lew served as Deputy Director of OMB from 1995 to 1998
Franklin D. Raines	September 13, 1996 - May 21, 1998	Bill Clinton	Raines went on to be CEO of Fannie Mae
Alice M. Rivlin	October 17, 1994 - April 26, 1996	Bill Clinton	Rivlin became a Governor of the Federal Reserve after leaving OMB.
Leon Panetta	January 21, 1993 - October 1994	Bill Clinton	Panetta went on to become President Clinton's Chief of Staff
Richard Darman	January 25, 1989 - January 20, 1993	George H.W. Bush
Joseph R. Wright, Jr.	October 16, 1988 - January 20, 1989	Ronald Reagan
James C. Miller III	October 8, 1985 - October 15, 1988	Ronald Reagan
David A. Stockman	January 21, 1981 - August 1, 1985	Ronald Reagan
James T. McIntyre	September 24, 1977 - January 20, 1981	Jimmy Carter
Bert Lance	January 21, 1977 - September 23, 1977	Jimmy Carter	Lance resigned amid a corruption scandal.
James T. Lynn	February 10, 1975 - January 20, 1977	Gerald Ford	Lynn left to head Aetna Insurance.
Roy Ash	February 2, 1973 - February 3, 1975	Richard Nixon, Gerald Ford
Caspar Weinberger	June 12, 1972 - February 1, 1973	Richard Nixon	Weinberger would later become Ronald Reagan's Secretary of Defense.
George P. Shultz	July 1, 1970 - June 11, 1972	Richard Nixon	Shultz would later become Secretary of Labor and Secretary of the Treasury under Richard Nixon and Secretary of State under Ronald Reagan.
Robert Mayo	January 22, 1969 - June 30, 1970	Richard Nixon
Charles Zwick	January 29, 1968 - January 21, 1969	Lyndon B. Johnson
Charles Schultze	June 1, 1965 - January 28, 1968	Lyndon B. Johnson
Kermit Gordon	December 28, 1962 - June 1, 1965	John F. Kennedy, Lyndon B. Johnson
David E. Bell	January 22, 1961 - December 20, 1962	John F. Kennedy
Maurice H. Stans	March 18, 1958 - January 21, 1961	Dwight D. Eisenhower
Percival Brundage	April 2, 1956 - March 17, 1958	Dwight D. Eisenhower
Rowland Hughes	April 16, 1954 - April 1, 1956	Dwight D. Eisenhower
Joseph Dodge	January 22, 1953 - April 15, 1954	Dwight D. Eisenhower
Frederick Lawton	April 13, 1950 - January 21, 1953	Harry S. Truman
Frank Pace	February 1, 1949 - April 12, 1950	Harry S. Truman
James E. Webb	July 13, 1946 - January 27, 1949	Harry S. Truman
Harold E. Smith	April 15, 1939 - June 19, 1946	Franklin D. Roosevelt
Daniel W. Bell	September 1, 1934 - April 14, 1939	Franklin D. Roosevelt
Lewis Douglas	March 7, 1933 - August 31, 1934	Franklin D. Roosevelt
Clawson Roop	August 15, 1929 - March 3, 1933	Herbert Hoover
Herbert Lord	July 1, 1922 - May 31, 1929	Warren G. Harding, Calvin Coolidge, Herbert Hoover
Charles Dawes	June 23, 1921 - June 30, 1922	Warren G. Harding	Dawes would later become Vice President of the United States under Calvin Coolidge and the U.S. Ambassador to the Court of St. James's (the United Kingdom) under Herbert Hoover.

Source

Other famous people who worked at the OMB

• Joel Kaplan
• Lawrence Kudlow
• Sean O'Keefe -- later the Administrator of NASA
• Jim Tozzi
• Robert Webb

Related Links

• Office of Management and Budget - organization's web site
• Office of Information and Regulatory Affairs
• TheBudgetGraph.com a visual representation of the 2008 federal discretionary budget.
• "The Decision Makers: Office of Management and Budget" GovExec.com, August 22, 2005
• OMB Regulatory Officials By Administration
• History OMB Regulatory Review
• Office Of Management And Budget Meeting Notices and Rule Changes from The Federal Register RSS Feed

Agencies under the Executive Office of the President

White House Chief of Staff Deputy White House Chief of Staff White House Press Secretary • White House Counsel • White House Office of Presidential Communications • White House Office of Presidential Speechwriting • White House Office • White House Office of the Executive Clerk • Office of Management and Budget • National Security Council • Homeland Security Council • Office of the United States Trade Representative • Office of National Drug Control Policy • Council of Economic Advisers • Council on Environmental Quality • Domestic Policy Council • National Economic Council • Office of Administration • Office of Advance • Office of Scheduling • White House Office of Faith-Based and Community Initiatives • United States Office of National AIDS Policy • Office of Science and Technology Policy • President's Critical Infrastructure Protection Board • President's Foreign Intelligence Advisory Board • USA Freedom Corps • White House Military Office

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