OMB directs agencies to cut 2013 budgets

This story has been updated.

The Obama administration is directing federal agencies to submit fiscal 2013 budget requests that are at least 10 percent below their current appropriation level.

Citing fiscal pressures and the recently enacted deficit reduction package that raised the debt limit, Office of Management and Budget Director Jacob Lew sent a memo Aug. 17 to agencies instructing them to plan a 2013 budget that is at least 5 percent below their 2011 spending levels. Agencies also should identify additional savings that would bring their 2013 budget requests to at least 10 percent below their current enacted appropriations.

"By providing budgets pegged to these two scenarios, you will provide the president with the information to make the tough choices necessary to meet the hard spending targets in place and the needs of the nation," Lew said in the memo.

To identify savings, agencies cannot propose across-the-board reductions or reductions to mandatory spending in appropriations bills, reclassifications of existing discretionary spending to mandatory, or any new user fees to offset existing spending. Agencies can include funding reduction proposals that fall into those categories as separate items on their own merits, or for consideration as alternatives to the main cuts outlined in the budget request, Lew said.

He also directed agencies to identify programs that are cost-effective and "provide the best opportunity for economic growth," by eliminating duplicate or inefficient programs. Agencies should consider program integration, reorganization and realignment of resources.

"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," Lew wrote in the memo.

Carol Bonosaro, president of the Senior Executives Association, hopes agencies target wasteful or redundant programs for cuts rather than slash funds for things like employee training.

"While agencies cannot propose across-the-board reductions, that is exactly what OMB has ordered -- an across-the-board reduction, albeit while telling agencies to identify programs that are cost effective," she said.

The largest federal employee union criticized the administration's directive to cut spending at a time of high unemployment.

"With 14 million Americans officially unemployed, and another 10 million who have either given up looking or are stuck with part-time work when they want and need full-time work, why on earth would the administration be trying to dig an even deeper hole?" asked John Gage, president of the American Federation of Government Employees. "Spending either 5 percent or 10 percent less in 2013 than we spent in 2011 on public safety, veterans' services, law enforcement, anti-terrorism activity and education support will not solve our problems -- it will only make them worse."

Colleen Kelley, president of the National Treasury Employees Union, called the approach "unwise and counterproductive" when it comes to ensuring agencies meet their missions.

"Budget cuts of as much as 10 percent would seriously impede critical progress at federal agencies," she said in a statement. Kelley cited examples of programs at agencies such as the Food and Drug Administration and Internal Revenue Service that could suffer as a result of decreased funding, adversely affecting the public.

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