Cutting the Bottom 5 Percent

Following on yesterday's news that the Obama administration was preparing to launch a program to allow agencies to keep half the savings they generate from cutting spending, Office of Management and Budget Director Peter Orszag is set to detail further details of the plan this morning at the Center for American Progress in Washington. It involves asking domestic agencies to cut their spending by 5 percent, targeting their poorest-performing programs.

Here are some excerpts from Orszag's prepared remarks, courtesy of the White House:

Right now, there are over 110 funded programs in Science, Technology, Engineering and Mathematics Education in 14 departments and agencies; over 100 programs that support youth mentoring scattered across 13 agencies; and more than 40 programs located in 11 departments with responsibility for employment and training. This redundancy wastes resources and makes it harder to act on each of these worthy goals....

I believe that the biggest driver of this productivity divide is the information technology gap. At one time, a federal worker went to the office and had access to the most cutting-edge computing power and programs. Now, he often has more of both in a device clipped to his belt....

As many of you know, in this year's budget, the president proposed a three-year freeze on non-security discretionary funding, saving $250 billion over the next decade. This spending restraint complements other measures in the budget that, together, produce more deficit reduction over the next 10 years than any budget that has been proposed in over a decade.

In his State of the Union address, the president was abundantly clear to Congress that he will use the veto pen to enforce this freeze. And in the budget guidance for fiscal year 2012 issued to agencies this morning, that seriousness of purpose was underscored yet again. We are asking each agency to develop a list of their bottom 5 percent performing discretionary programs, as measured by their impact in furthering the agency's mission.

In addition, to ensure that we can meet the president's insistence on a freeze for non-security agencies while funding priority areas, we are asking non-security agencies to specify how they would reduce their budgets by 5 percent - which will give us the ability to achieve the overall non-security freeze even while meeting inevitable new needs and priorities.