OMB Director Shaun Donovan releases the fiscal 2017 budget. The next presidential administration will be in charge of the fiscal 2018 document.

OMB Director Shaun Donovan releases the fiscal 2017 budget. The next presidential administration will be in charge of the fiscal 2018 document. Susan Walsh/AP

OMB to Agencies: Craft Transition Materials, Not New Budget

Budget director tells agencies not to worry about FY18 funding until new president has a say.

Federal agencies’ budget planners will spend their last months under President Obama preparing for their transition to the next administration rather than crafting funding requests, the president’s top budget official directed in a memorandum last week.

OMB Director Shaun Donovan instructed agencies to prepare a “complete current services baseline” rather than the standard formal budget request. Agencies will not engage in the normal director’s review or “passback processes” with OMB this September, as is typical in non-presidential election years. They will also hold off on issuing their fiscal 2018 performance plans.

Instead, Donovan directed agencies to wait until the new administration, or its transition team, is in place to complete those tasks. A current services baseline provides an estimate of costs to carry on existing programs and assumes no policy changes. That will allow the winner of this November’s election to assess current spending levels and make his or her own policy decisions.

The George W. Bush administration engaged in a similar activity in its last year. The forthcoming baselines will provide estimates from fiscal years 2018 through 2019.

The goal of the activity is to help the next president hit the ground running in executing agency missions. 

Donovan instructed agencies to “proceed with your internal review procedures to prepare information to help the next administration quickly produce its budget.” He told the budget planners to work with OMB to develop current service estimates at the program level, including staffing levels and personnel costs.

They should also identify issues that “may require attention” from the next administration, Donovan said, such as changes from pending legislation or policy implementation. Agencies should highlight where spending might change significantly from current baselines and where the incoming administration will have to make immediate decisions. OMB requested this information by September.

The Obama administration has been working on the transition for more than one year. The president signed a new law in March that requires the General Services Administration to designate a career employee to serve as transition czar and each agency to name a senior career employee for each major component or subcomponent to oversee the transition.

In a similar memo last year, Donovan asked agencies to identify 5 percent reductions in spending for fiscal 2017 -- though the president ended up proposing a funding increase of 4.9 percent. 

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