Does The President’s Budget Matter?

The White House released its fiscal 2015 budget proposal on Tuesday. The budget aims to “put a stop to short-sighted cuts to government operations” and to expand funding for federal-employee training. Federal employees’ pocketbooks would also get a slight boost. For the second year in a row, the Obama administration is proposing a 1 percent pay raise. The budget also includes expanded top-level oversight of federal IT projects to prevent surprises like the buggy launch of HealthCare.gov, and a push to create standards for user experience across government websites.

But the President’s budget begs the question, will any of this happen? We know that Congress appropriates the funding for agencies, so is the President’s budget proposal all pomp and circumstance? Jitinder Kohli is a Director in Deloitte’s public sector practice. He told Chris Dorobek on the DorobekINSIDER program that the President’s budget matters because it sets out a list of his priorities.

“The President’s budget does matter. It is an opportunity for the White House to set out as clearly as possible what it regards as its priorities. The budget helps the American people and the people in Washington know where the President’s focus is. Of course Congress gets to decide where funding goes and that is an important part of our system. Nevertheless, the starting point for those conversations is always what is in the President’s budget. So while you can’t be in any way sure the numbers in the President’s budget will stay, you can absolutely be sure that they are something that people need to take into account in determining the real budget that Congress will set,” said Kohli.

Recently, the White House has been adding specific performance plans to the budget. Why is that important?

“People think that budgets are all about deciding what money goes where, and I think that is a deeply unsatisfactory way of thinking about budgets. Budgets are also about helping to decide what the priorities should be for government and helping to define what the American people can expect in return for the funds that government is expending. This is taxpayer money and government has a responsibility to tell the American people what they hope to achieve for the American people. The impetus on defining clear goals is a key emphasis. The fact that the budget is meant to contain new goals for the administration, is extremely important,” said Kohli.

15 years ago people thought you needed to separate the management from the budget because those two things don’t work well together. It seems recently they have understood the link a little better. These things are linked in critical ways right?

“It is absolutely crucial that the money that the government spends is directed towards things that seem to perform well. Gathering evidence about what works, understanding the impact of different programs, and directing resources to the programs that seem to be the most effective or where there is a chance that they could have transformative impact, is fundamentally important,” said Kohli.

• Case Study Findings: “One of the most interesting examples of focus on metrics is the $15 billion announcement of mandatory funding for the Home Visitation Program. This is a very interesting program. There is good evidence that this program works. The evidence has been in place for a number of years. Despite this evidence the program has actually struggled to scale in the way that one would hope. The President is asking Congress to release $15 billion of mandatory funding into a program that we know saves money for every dollar that it spends, I think is a really important initiative today.”

Cross-agency priority goals, is this a more nuanced way of tackling problems?

“Cross-agency priority goals are crucial because they demonstrate some of the most complex and important issues that the federal government is working on, it is essential that agencies work together in order to address those issues. The cross-agency goals are a mechanism to define what the key issues are. What is interesting about today’s budget is that a number of people were expecting the government to reveal a new set of cross-agency priority goals. A lot of that information is not in the budget today. There are references to that information, there are references to the analytical reference volume of the budget, but it has not yet been released,” said Kohli.

• GPRA Changes: “The GPRA Modernization Act required the administration to release the information alongside the budget, but they are not there today. It appears the administration plans to release the appendixes to the budget next week. I think that is important and interesting because we need to wait and see what these goals look like and whether they are genuinely the priorities of the administration. The question will be are these the key priorities that matter most to the administration or are they not? Are they released with a little bit of fanfare or are they released under the table so that people don’t notice. There is a bit of wait and see here about to the extent to the GPRA Modernization Act, which is the cornerstone of the Act,” said Kohli.

How should feds navigate their way through this document?

Three areas to watch:

1. “The areas I care about most are not just the straight numbers, how much is being allocated to each department, because as we said at the beginning, ultimately Congress will decide those figures. I look for the themes that underpin those numbers. I look for the information that tells us what is on the President’s mind.”
2. “You look for the volume of called analytical perspectives which is the appendix to the budget and sets out in some depth a number of things in the performance and evidence base.”
3. “The last section I look for is a volume called Cuts, Consolidations and Terminations. This is the section that really describes where the federal government is looking to bring budgets together. Where the Obama administration believes that programs can be terminated. One thing the administration is really quite proud of is that it has a good track record (better than previous administrations) of finding the proposals in that volume get adopted by Congress. I think that part is more important than people would instinctively say.”

Does the budget make progress on the management agenda too?

“The agenda is really about changing the culture of government such that it directs money towards things that genuinely work. The other thing that is really interesting in this space is the proposals on STEM. For a number of years there has been criticism of the federal government that there are too many programs on STEM, they are too fragmented, and they are not pulling in the same direction. Too many agencies are involved in this space. Today’s budget had a number of ideas around STEM. There is a promise of a reorganization of the program. That is a real sign of the President’s management agenda beginning to come to life. I am personally not a big fan of having big agendas with big turns and lots of announcements that don’t really make much difference. I think it is much more important to question what are they actually proposing and what are the chances that it will become law and make a difference to the way government really works. The questions for the next few months from me are, let’s see if Congress buys into the idea of the performance metrics, the reorganization of STEM. The last time that the President came up with reorganization ideas Congress didn’t really buy into them. Also is the Congress willing to invest, perhaps not $15 billion, but a significant amount of money in scaling up an evidence based program like home visitation,” said Kohli.

Numbers aren’t going to become reality. What should be people watching for in the months ahead?

• “The reality is that Congress will not buy-into the numbers wholesale. They absolutely won’t. Somebody once said to me, ‘The way the budget process works is the numbers the President reveals on budget day are the left hand column of a complex table and it is the right hand column that really makes the difference.’ As the budget proceeds in Congress the numbers will change, but the baseline number, the first number where people start their exercise with is always the one the President came up with.”
• “I would particularly look at the evidence based programs and STEM, because these are significant and potentially far reaching proposals, I would look to see if Congress gets excited to them to the extent that they feel they have to do something in the space. The precise number and the number of programs that need to be consolidated is less important.”

How does the “lame duck” mentality factor in?

“I think on the stuff we have been talking about today, the lame duck doesn’t really factor in that much. I have not seen a tremendous amount of evidence that momentum is slower or faster during an election year. There is enormous agreement between the parties about how to proceed in this area. The differences are very personal and individual, there are occasional differences about vested interests. But overall they agree on how to move forward,” said Kohli