In a letter to Rep. Edolphus Towns, D-N.Y., chairman of the House Oversight and Government Reform Committee, Orszag said he took seriously allegations that an OMB official promised to "make life miserable" for the IG if he complained publicly about his fiscal 2011 budget.
"Given that the allegations raised in the inspector general's letter relate to an OMB program examiner (a career civil servant), OMB's investigation must be appropriate in accordance with long-standing personnel procedures," Orszag wrote.
The budget director said he would provide the committee with additional information once the investigation was complete.
In a Jan. 12 letter to Orszag, Towns and Rep. Stephen Lynch, D-Mass., chairman of the subcommittee on Federal Workforce, Postal Service and the District of Columbia, said the Oversight Committee had launched its own investigation.
OPM Inspector General Patrick McFarland first alerted Lynch to the incident on Jan. 11.
"As an initial step, we will be determining whether other inspector general offices have received such threats," Towns and Lynch wrote.
The members asked the leadership of the Council of the Inspectors General on Integrity and Efficiency to poll its members to determine whether the OPM incident is isolated or representative of a more troubling pattern.
Robert Shea, who was OMB's associate director for administration and government performance during the Bush administration and supervised agency program examiners, said the incident "sounds like a young, clumsy examiner rather than a systematic approach."
Nonetheless, because "OMB professionals enjoy a high amount of influence over agencies and the budgets they oversee, it's conceivable that this type of thing has happened in the past," he said.
The Senate Homeland Security and Governmental Affairs Committee also has raised alarms about the incident. Earlier this week, five committee members wrote to Orszag, pressuring OMB to fully investigate the matter.
"The OPM IG has indicated that he referred the matter to the White House Counsel's office," the letter said. "We expect that OMB will conduct a thorough review of the alleged incident and take immediate steps to ensure that the IG's authorities under the IG Reform Act are not undermined."
The episode centers on a Jan. 4 phone call between an OMB program examiner and an OPM budget officer.
The program examiner allegedly wanted to know whether McFarland would be taking advantage of a provision in the 2008 Inspector General Reform Act allowing him to inform Congress if his proposed budget would "substantially inhibit" the office from performing its duties. The provision was intended to prevent agencies from retaliating against IGs that had performed rigorous oversight by reducing their budget.
"The troubling aspect of the telephone conversation occurred when the OPM budget officer informed my assistant inspector general for management that there is a 'not so veiled threat from OMB' to expressly inform my office that they [OMB] will be working with the same [congressional] committees that we do and if we go to the Congress regarding our FY 2011 budget, they [OMB] 'will make life miserable for us,' " McFarland wrote in his letter to Lynch. "We take this threat of retaliation and interference to our independence very seriously."
Shea, who is now at the consulting firm Grant Thornton LLP, says the timing of the incident, during the lead-up to the annual budget release, could not have been worse.
"This is a distraction during one of the least opportune times of the year," he said.
Shea said if he was still at OMB and the allegations were proven to be true, he would move to fire the program examiner. OMB has said if any improper interference has occurred, appropriate actions against the employee will be taken.