Budget Of The Federal Government

The US today owes $31 trillion.

The OMB Director should present a fiscal goal to the President early in the budget development process to address the federal government’s fiscal irresponsibility.

This goal would help to align the months-long process of developing the actual proposals for inclusion in the budget. Though some mistakenly regard it as a mere paper-pushing exercise, the President’s budget is in fact a powerful mechanism for setting and enforcing public policy at federal agencies.

The budget team includes six Resource Management Offices that, together with the BRD and other components, help the Director of OMB to develop and execute detailed agency spending plans that bear on every major aspect of policy formation and execution at federal agencies.

Through initial priority-setting and ongoing supervision of agency spending, OMB’s budget team plays a key role in executing policy across the executive branch, including at many agencies wrongly regarded as “independent.”

The RMOs, each of which is led by a political appointee known as the PAD and a career DAD, are separated into six functional units:

lNational Security. lNatural Resources, Energy, and Science. lHealth. lEducation, Income Maintenance, and Labor. lTransportation, Justice, and Homeland Security. lTreasury, Commerce, and Housing.

Because the RMOs are institutionally ingrained in nearly all policymaking and implementation across the executive branch, they play a critical role in helping the Director to implement the President’s public policy agenda. However, because each RMO is responsible for formulating and supervising such a wide range of policy details, many granular but critical policy decisions are effectively left to the career professionals who serve across Administrations.

To enhance the OMB Director’s ability to help the President drive policy at the agencies, the existing six RMOs should be divided into smaller subject-matter areas, allowing for more PADs, and each of these PADs should have a Deputy PAD. This expanded pool of RMOs with additional political leadership would enable more comprehensive direction and oversight of policy development and implementation. Regardless of whether Congress adopts the President’s full set of budget rec- ommendations, the President should reintroduce the concept of administrative pay-as-you-go, or administrative PAYGO. This simple procedural requirement imposes budget neutrality on the discretionary choices of federal agencies, of which there are many in nearly all areas of policymaking. This simple step forces the executive branch to control what it can control. The principle may occasionally yield to other overarching requirements, such as a presidential regulatory budget, but in nearly all cases, administrative PAYGO plays a unique and indispensable role in enforcing fiscal responsibility at federal departments and agencies. The President should use every possible tool to propose and impose fiscal disci- pline on the federal government. Anything short of that would constitute abject failure. Management. The Management Office of OMB (the “M-Side” as it is often called) is responsible for carrying out several important agency oversight functions, many of which are statutory. The Management team includes the following offices led by presidentially appointed Senate-confirmed individuals:

lThe Office of Federal Procurement Policy (OFPP). lThe Office of Performance and Personnel Management (OPPM). lThe Office of Federal Financial Management (OFFM). lThe Office of the Federal Chief Information Officer (OFCIO).

The Made in America Office (MIAO), which was added by the Biden Administration and is not a Senate-confirmed slot. Each of these offices has responsibilities and authorities that a President can use to help drive policy across the government. It is vital that the Director and his political staff, not the careerists, drive these offices in pursuit of the President’s actual priorities and not let them set their own agenda based on the wishes of the sprawling “good government” management community in and outside of govern- ment. Many Directors do not properly prioritize the management portfolio, leaving it to the Deputy for Management, but such neglect creates purposeless bureaucracy that impedes a President’s agenda—an “M Train to Nowhere.”

OFPP. This office plays a critical role in leading the development of new policies and regulations concerning federal contracting and procurement. Through the Federal Acquisition Regulatory Council, which is generally chaired by the OFPP Administrator, OFPP helps the Director to set a wide range of policies for all of those who contract with the executive branch. In the past, those governmentwide contracting rules have played a key role in helping to implement the President’s policy agenda. This office should be engaged early and often in OMB’s effort to drive policy, including by obtaining transparency about entities that are awarded federal contracts and grants and by using government contracts to push back against woke policies in corporate America.

OPPM. Through this office, the Director helps federal agencies to establish their performance goals and performance review processes. OPPM also works with the U.S. Office of Personnel Management (OPM) to establish and manage personnel policies and practices across the federal government. The Director should instruct OPPM to establish annual performance goals and review processes for agencies that reflect the President’s agenda. OPPM should also be part of the President’s strategy to set and enforce sensible policies and practices for the federal workforce. OFFM. This office helps the Director to root out waste, fraud, and abuse in fed- eral programs—for example, through the Do Not Pay program. It should be part of efforts to save precious taxpayer resources. OFCIO. This office guides the federal government’s use and adoption of Internet-based technologies to improve government operations and save taxpayer money. As a function of its leadership role, it is critical in interagency discussions on a wide range of technology issues. The office thus is an important part of the President’s efforts to modernize, strengthen, and set technology-adoption policy for the executive branch.

MIAO. Building on the example and work of the Trump Administration, Presi- dent Biden established this office to centralize, carry out, and further develop the federal government’s Buy-American and other Made-in-America commitments. Its work ought to be continued and further strengthened.

Regulatory and Information Policy.

OMB’s OIRA plays an enormous and vital role in reining in the regulatory state and ensuring that regulations achieve important benefits while imposing minimal burdens on Americans. The President should maintain Executive Order (EO) 12866,4 the foundation of OIRA’s review of regulatory actions. The Administration should likewise maintain the recent extension of those standards to regulatory actions of the U.S. Department of the Treasury.5 Regulatory analysis and OIRA review should also be required of the historically “independent” agencies as the Office of Legal Counsel has found is legally permissible.6

If the current Administration proceeds with its declared intent to modify aspects of EO 12866 or review OMB Circular A-4,7 the related document that provides the foundation for cost-benefit analysis, the next President should imme- diately begin to undo those changes and develop a rigorous, data-driven approach that will result in the least burdensome rules possible. The next President should also revive the directive in Executive Order 138918 that significant guidance doc- uments also must pass through OIRA review.

Because OIRA review often leads to fewer regulatory burdens, more regulatory benefits, and better coordination of regulatory policy, funding for OIRA tends to pay large dividends. Yet over the years, funding for OIRA has diminished. This trend should be reversed. The budget should also include sufficient full-time equiv- alent (FTE) employees to form regulatory advance teams that would consult with agencies on cost-benefit analysis and good regulatory practices at the beginning of the rulemaking process for the most important regulations. These teams would help agencies take cost-benefit analysis into account from the beginning of their rulemaking efforts, which in turn would result in higher-quality regulations and a swifter eventual OIRA review. To preserve the integrity of OIRA review, the staff who consult at the beginning of a rulemaking should not handle its eventual review. The next President should also reinstate the many executive orders signed by President Trump that were designed to make the regulatory process more just, efficient, and transparent. Executive Orders 13771,9 13777,10 13891,11 13892,12 13893,13 13924 Section 6,14 13979,15 and 1398016 should be revived (with modifica- tions as needed). Executive Order 1313217 on federalism should be strengthened so that state regulatory and fiscal operations are not commandeered by the federal government through so-called cooperative federalism programs. Additionally, the President should revise and sign an updated version of President Ronald Reagan’s Executive Order 1263018 on federal takings.

The next President should strengthen implementation of the Information Qual- ity Act,19 robustly use the authority of the Paperwork Reduction Act,20 carefully enforce the Privacy Act,21 and ensure the sound execution of OIRA’s statistical and other information policy functions. Regulatory cooperation agreements can also promote the further adoption of good regulatory practices, which improve market conditions for America and her allies. OIRA should also work with other components of OMB to revise and apply OMB’s uniform Guidance for Grants and Agreements22 and ensure that federal contract and grant guidelines satisfy EO 12866 and other centralized standards as appropriate. But executive reforms and actions, while vital, are not enough: Congress also must act. The next President should work with Congress to pass significant reg- ulatory policy and process reforms, which could go a long way toward reining in the administrative state. Excellent examples of such legislation include the Reg- ulatory Accountability Act,23 SMART Act,24 GOOD Act,25 Early Participation in Regulations Act,26 Unfunded Mandates Accountability and Transparency Act,27 and REINS Act.28

Finally, the next President should work with Congress to maximize the utility of the Congressional Review Act (CRA),29 which allows Congress to undo midnight regulatory actions (including those disguised as “guidance”) on an accelerated timeline. To leverage the CRA’s power to the maximum extent, Congress and the President should enact the Midnight Rules Relief Act,30 which would help to ensure that multiple regulatory actions could be packaged and voted on at the same time. Immediate and robust use of the CRA would allow the President to focus his rulemaking resources on major new regulatory reforms rather than devoting months or years to undoing the final rulemakings of the Biden Administration.

Legislative Clearance and Coordination. OMB plays a critical role in ensuring that the executive branch is aligned on legislative proposals and language, agency testimonies, and other communications with Congress. The Director should use these authorities to enforce policy and message consistency aggressively and promote the effective engagement of the executive branch in legislative processes.