E-Gov at Five Years, Part Three: Funding Wars

Mark Forman, head of e-government and information technology at the Office of Management and Budget from June 2001 to August 2003, recalled recently how he just couldn't get through to congressional appropriators on the subject of electronic government.

"I wish there were more than 24 hours in a day and 12 months in the year," Forman said. "We were talking about spending somewhere between $300 million and $500 million, split across 12 appropriations subcommittees. That's rounding error for most of the appropriations staff."

Winning funds for the administration's e-government initiatives has been a constant source of frustration for OMB. Congressional appropriators and their staff members simply have not bought OMB's claims regarding the project's benefits.

The 2002 E-Government Act authorized the creation of a central e-government fund. It was slated to receive $45 million in appropriations in fiscal 2003, $50 million in 2004, $100 million in 2005 and $150 million in 2006. But the fund, which was intended to provide seed money for a series of initiatives, never received the first $45 million -- or the second installment, or anything close to the figures above.

In fact, Congress has never doled out more than $5 million annually for the fund, regularly blocking the administration's request to use excess General Services Administration funds to bolster its resources. In fact, they've repeatedly restricted interagency funding for e-gov projects.

Appropriators, as it turns out, fume at the notion that OMB could order an agency to pay for projects led by another agency outside a particular subcommittee's purview. That amounts to usurping the role of appropriator, they say.

Some agency officials, not surprisingly, also fail to share OMB's enthusiasm for the "pass-the-hat" funding model.

Now, despite the fact that the House Appropriations Committee has acknowledged that OMB is doing a better job of communicating the benefits of the projects, several of the House versions of fiscal 2007 appropriations bills place severe funding restrictions on e-gov efforts.

For example, language in the Labor-Health and Human Services-Education measure requires that any funding of an e-government program be approved by a career agency executive. The House's Transportation-Treasury bill requires OMB to consult with the Appropriations Committee before spending e-gov funds.

While the Senate Appropriations Committee historically has been more amenable to OMB's e-gov funding requests, the Senate version of the fiscal 2007 Science-State-Justice-Commerce appropriations bill (H.R. 5672) contains the most severely restrictive e-gov language yet.

The bill provides no money for the initiatives. E-gov efforts would be funded only if an agency determines that the funds are necessary and submits a request to the committee to reprogram funds from other agency activities, along with a detailed cost-benefit analysis. This documentation must be certified by the agency's inspector general.

The requests also must identify any IT system, program or contracts being terminated in order to migrate to a centralized system.

According to the bill's report language, the committee is skeptical of OMB's cost savings claims regarding e-gov initiatives.

But despite past threats from administration officials to advise President Bush to veto appropriations bills that restrict e-gov funding, he has never actually refused to sign a spending measure.

A staffer for a Senate Appropriations subcommittee said OMB still isn't able to show the benefits that agencies will get from their e-gov investments.

"I'm not going to put $1 million into something if I'm only going to get $750,000 out of it," the staffer said. "I just want to know that the agencies under the [subcommittee] chairman's control are benefiting from them, and it doesn't just provide a press release for OMB."

Outside assessments have at times reinforced appropriators' concerns about the administration's estimates. In 2003, for example, Linda Koontz, director of information management at the Government Accountability Office, testified that the Office of Personnel Management's claim that its e-government initiatives would save $2.7 billion over their lifetime was unrealistic.

In response to appropriators' concerns, OMB issued a memorandum earlier this month asking agencies to begin documenting the savings associated with their e-gov participation.

OMB officials acknowledge that the move may not fully allay lawmakers' concerns. And at any rate, focusing solely on savings misses the point of e-gov, said Karen Evans, OMB administrator for e-government and IT.

Rather than projecting cost savings, Evans said the projects' business cases attempt to show the benefits of improved services made without additional cost.

"So there is an increased cost right now as you're building out that functionality," Evans said. "[But] here are all the costs that we avoided. Technically … that's not cost savings. But now you have an intangible benefit to the citizen for a brand new service that's never been offered."

The Senate Appropriations subcommittee staffer said all that congressional appropriators want is independent verification of projects' costs.

"If they really have savings, then they should have no problem with this," the staffer said.

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