Obama Administration Directs Agencies to Cut Budgets

The Office of Management and Budget (OMB) Director Jacob Lew sent a memo (PDF) on August 17th  to agencies instructing them on the Fiscal Year 2013 budget submission process. Agencies are to plan a 2013 budget that is at least 5% below their 2011 spending levels, unless they have been given explicit permission by OMB to do otherwise. Agencies were also instructed to identify additional savings that would bring their 2013 budget requests to at least 10% below their enacted appropriations. When identifying these savings, agencies are not allowed to propose across-the-board reductions or reductions to mandatory spending in appropriations bills. They are also prohibited from reclassifying existing discretionary spending to mandatory, or implementing any new user fees to offset existing spending.

In addition to finding ways to lower spending, Lew asked agencies to identify programs that are cost-effective and consolidate those that are duplicative or inefficient. He also provides guidance to highlighting program effectiveness and efficiency by encouraging agencies to include specific investments that are directly related to economic growth and those that are know to deliver cost savings.

This memo is concerning to CWLA for many reasons. In our letter (PDF) to the deficit committee members, we note that the Budget Control Act has already set difficult spending caps  on total discretionary spending over the next decade. Those spending caps, together with significant cuts (to the tune of $2.4 trillion) over the next 10 years, and this request for additional cuts will mean many programs will be competing for funding from a smaller budget this upcoming fiscal year.  As we also alluded to in the letter, it will be difficult for many programs to continue to provide the same level of services when discretionary funds are increasing at a rate lower than inflation.  This ensures that adequately funding programs serving children and families either in or at risk of entering the child welfare system will be a difficult undertaking each year during the appropriations process.

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