The president's budget as a source of agency policy control.

Author:Pasachoff, Eloise
Position:Introduction through II. OMB's Control of Agency Policymaking Through the Budget Process A. The Mechanisms of Control Through Budget Preparation 2. The Approval Lever b. The Relationship Between Budget Numbers, Budget Language, and Substantive Policy, p. 2182-2220
 
FREE EXCERPT

ARTICLE CONTENTS INTRODUCTION I. THE ROLE OF BUDGET OVERSIGHT IN OMB A. The Office of Management and Budget--and Policy B. The Resource Management Offices C. Comparing Power Centers for Review of Budgets and Regulations II. OMB'S CONTROL OF AGENCY POLICYMAKING THROUGH THE BUDGET PROCESS A. The Mechanisms of Control Through Budget Preparation 1. The Form-and-Content Lever : 2. The Approval Lever : a. The RMOs' Pyramid Structure b. The Relationship Between Budget Numbers, Budget Language, and Substantive Policy c. Variations in the Approval Lever 3. The Confidentiality Lever B. The Mechanisms of Control Through Budget Execution 1. The Specification Lever a. Apportionment b. Transfers and Reprogramming c. Deferral and Rescission d. Government Shutdowns 2. The Monitoring Lever C. The Mechanisms of Control Through Management Initiatives 1. The Presidential Management Agenda Lever 2. The Budget-Nexus Lever III. ASSESSING OMB'S CONTROL OF AGENCY POLICYMAKING THROUGH THE BUDGET PROCESS A. Salutary Aspects 1. Legality 2. Coordination B. Troublesome Aspects 1. The Lack of Transparency a. Protecting Policy Consistency b. Protecting the Deliberative Process c. Disclosing Procedural Aspects of the Budget Process and Post-Deliberative Decisions 2. The Role of Civil Servants and Political Officials 3. The Policy and Political Implications of Technocratic Decisions IV. RESPONDING TO OMB'S CONTROL OF AGENCY POLICYMAKING THROUGH THE BUDGET PROCESS A. Inside the Executive Branch 1. The President a. Transparency of Procedural Aspects of the Budget Process b. Transparency of Final Budget Execution Decisions c. Transparency of Predecisional Budget Preparation Information 2. OMB B. Outside the Executive Branch 1. Congress 2. Civil Society Organizations C. A Cautionary Note CONCLUSION INTRODUCTION

One of the secrets only the initiated know is that those who labor here [at the Office of Management and Budget] for long do so because the numbers are the keys to the doors of everything. Spending for the arts, the sciences, foreign policy and defense, health and welfare, education, agriculture, the environment, everything--and revenues from every source--all are reflected, recorded, and battled over-in numbers. And the sums of the numbers produce fiscal and monetary policy. If it matters--there are numbers that define it. And if you are responsible for advising the president about numbers, you are-de facto-in the stream of every policy decision made by the federal government.

--Paul O'Neill, Former Deputy Director of OMB. (1)

Scholarship on administrative law is replete with analysis of presidential control of executive agencies through centralized review of regulations in the Office of Information and Regulatory Affairs (OIRA), part of the White House's Office of Management and Budget (OMB). While the literature is sharply divided as to whether OIRA's control is salutary or dangerous, (2) the literature largely shares an underlying framework within which the subject matter is discussed: it tends to focus on regulations as the primary policy lever through which OMB affects agencies' policy choices. (3)

This portrayal of OMB as an institution for asserting presidential control over the administrative state is incomplete. Reviewing regulations is not the only policy lever OMB has to control executive agencies' policy choices. In fact, it may not even be the main one. The budget itself-the core reason for OMB's existence (4)--is a key tool for controlling agencies. (5) Yet the mechanisms of control through the executive budget process remain little discussed and insufficiently understood.

This Article seeks to expand the view of centralized control of the administrative state by describing, categorizing, and analyzing the operations surrounding the President's budget. It maps out the legal documents that govern this work-some statutes, but primarily documents produced by OMB and the White House more generally-as well as the OMB offices and personnel behind this work. These sources help to explain the mechanisms and processes by which OMB uses the budget to get "in the stream of every policy decision made by the federal government." (6)

The Article advances three kinds of arguments: descriptive, normative, and prescriptive. The core descriptive claim is that understanding OMB's budget operations is fundamental to understanding centralized control of agencies' decision making because OMB's work on the budget has important policymaking effects. This insight provides a new perspective on the federal budget process. Much writing on the budget process focuses solely on legislative procedures and general fiscal policy, attending very little to the executive's role. (7) When the administrative law literature discusses the budget, it tends to do so through the lens of institutional battles between Congress and the President rather than by examining the budget as a method through which the White House can control agencies' policymaking. (8) When the literature does discuss the intra-executive role of the budget, it tends to focus on blunt tools and discrete moments in time: the President's ability to propose the funding levels and associated policy choices that Congress acts on, (9) to "recommend budget cuts for agencies that fail to follow administration preferences (and budget increases for those that comply)," (10) and ultimately to veto appropriations legislation not to his liking. (11)

This Article expands this view of the intra-executive budget process, arguing instead that OMB's budget work serves as a regularized and pervasive form of agency control. For each component of the budget process in the executive branch--the preparation of the President's budget, the execution of the budget that Congress eventually passes and the President signs, and the implementation of presidential management initiatives that are embedded in the budget--this Article identifies and names levers that function as a form of policy control. In preparing the budget, OMB uses the form-and-content lever to tell agencies what to put in their budget requests to OMB in the first instance, the approval lever to require that the substance of agency budget requests passes muster with OMB, and the confidentiality lever to direct agencies to remain silent about any policy preference that may differ from what the President's budget ultimately presents to Congress. (12) In executing the budget, OMB uses the specification lever to define how agencies may spend their appropriated money and the monitoring lever to ensure that agencies' ongoing work is acceptable. (13) And in overseeing management initiatives, OMB uses the Presidential Management Agenda lever to develop agency-specific versions of those initiatives, and the budget-nexus lever to ensure that the initiatives are realized throughout the budget process. (14) Collectively, these levers reach widely and deeply into agency policy choices.

In identifying and examining these levers, this Article focuses not on the appropriations process but instead on the periods leading up to the annual submission of the President's budget to Congress and following the passage of the budget. (15) This is not to say that the congressional appropriations process is irrelevant. (16) Rather, OMB's power is rooted more in the system of executive authority that has developed around the budget cycle than in the ultimate appropriation.

As a central part of describing and analyzing this power, the Article surfaces the role of the Resource Management Offices (RMOs), a critically important but understudied part of OMB. The five RMOs collectively contain more than four times as many staff members as OIRA. (17) Working directly with budget and policy officials in each agency, the RMO staff play a large role in overseeing-indeed, at times in directing-the work of agencies throughout the administrative state because they have primary responsibility for pulling the aforementioned levers associated with budget preparation, budget execution, and management initiatives. (18) Yet despite the broad scope of their authority, a recent search of Westlaw's database of law reviews and journals identified only seven references to the RMOs, (19) in contrast to over a thousand articles discussing OIRA during that same time period. (20) Given the omnipresence of the RMOs in agency oversight and direction, the inattention in the literature to the RMOs is remarkable. (21) OIRA is important, but that does not mean that the rest of OMB is not worthy of study. (22)

Three key points about centralized executive control emerge from this study of the RMOs. First, the RMOs provide a direct line into agencies. Each agency has identifiable RMO staff responsible for its work and a regular mode of communication with that staff. (23) The RMOs therefore can serve as a conduit for policy and political direction from the President, the White House policy councils and other White House political advisors, and the OMB Director. If there is a message to be conveyed to agencies, the RMOs are a good way to convey it. The RMOs therefore work to ensure conformity with the President's policy program and political interests. (24) In this sense, the RMOs' work through the budget process reflects presidential, or at least White House, control of the administrative state.

Second, the RMOs are not simply a conduit of information from the top down. They also serve as a source of deep and valuable knowledge of agency programs and practices, and busy senior political officials can accept their judgment calls as final. (25) Thus, the RMOs' work also reflects the power of...

To continue reading

FREE SIGN UP