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

• Author: Pasachoff, Eloise
• Position: II. OMB's Control of Agency Policymaking Through the Budget Process A. The Mechanisms of Control Through Budget Preparation 2. The Approval Lever c. Variations in the Approval Lever through III. Assessing OMB's Control of Agency Policymaking Through the Budget Process B. Troublesome Aspects 1. The Lack of Transparency a. Protecting Policy ...

c. Variations in the Approval Lever

There are some formal variations in how the approval lever functions for different agencies. For example, program examiners work alongside officials in the Department of Defense to develop that agency's budget proposals much more collaboratively and much earlier in the process than with any other agency. (160) This variation in the budget process does not obviously weaken OMB's approval lever. After all, even a cooperative process depends on ultimate OMB approval. Moreover, the early integration of program examiners presents another avenue to ensure that White House priorities are baked into the budget request, while information that program examiners have gleaned during the internal deliberations can influence what OMB subsequently approves. (161)

Another variation in the operation of the approval lever exists for the subset of agencies that have "budget bypass authority," either because they can submit their budget request to Congress at the same time they submit it to the President (162) or because the President must present their original proposal to Congress unchanged. (163) The ability to have a direct line to Congress without first obtaining White House approval somewhat weakens the force of the approval lever, (164) but not entirely. The President can still submit his own proposals for these budget bypass agencies. (165) OMB even instructs such agencies that "OMB may provide you additional materials supporting the President's Budget request that you will forward to the Congress with the agency testimony" and directs agency witnesses to be able to "explain ... the request in the President's Budget" along with their own. (166) Moreover, having the White House's support in a budget request can be valuable. (167)

A third variation in the approval lever may exist for agencies that run programs rooted in "mandatory spending" authority, rather than discretionary spending that goes through the annual appropriations process. (168) In principle, the approval lever might be weaker for agencies running programs that are not subject to the annual appropriations process. OMB, however, still retains significant oversight of these agencies and programs. The discretionary part of the agency's budget is still subject to OMB approval, so priority setting (for example, in the allocation of staff among activities and divisions) continues to be part of the annual appropriations process. (169) Moreover, the President's budget may propose changes to mandatory spending, proposals that OMB has by definition approved. (170) At least in the current and previous administrations, OMB has required agencies to submit, as part of their annual budget requests, a description of any effort to take discretionary action that would increase mandatory spending, and has strictly limited its approval of these efforts. (171)

Only a small subset of agencies are not affected by OMB's approval lever: those that are largely self-funded and obtain their budgets from nongovernmental sources rather than the annual appropriations process. (172) But these agencies are exceptions rather than the norm. (173) The approval lever is generally applicable to and influential in both independent and executive agencies.

3. The Confidentiality Lever

   A third lever OMB uses to control agency policymaking through the budget preparation process is the confidentiality lever: the requirement that agency officials silence their own differing preferences and, if those preferences become known, distance themselves from them. (174) The confidentiality lever seeks first to promote open, vigorous internal debate and then ultimately to ensure that the administration speaks publicly with one voice. (175) As a result, the confidentiality lever limits agencies' ability to state publicly their own views of alternative budget and policy priorities.

   The confidentiality lever overlaps with a more general set of clearance requirements OMB uses for all agency communication with Congress. (176) But the confidentiality lever is broader because it applies to agency disclosures to anyone outside the executive branch, (177) including the media, interest groups, academics, and others. The confidentiality lever also overlaps with the President's constitutional appointment and removal powers because administrators' relationships with the President and interests in keeping their jobs also limit disclosure of policy preferences at odds with the President's program. (178) But again, the confidentiality lever is broader because it applies to independent agency officials (179) and to civil servants, (180) who are not subject to presidential removal.

   When agency officials testify before Congress after the President's budget has been submitted, Circular A-n instructs that "[witnesses will give frank and complete answers to all questions," "avoid volunteering personal opinions that reflect positions inconsistent with the President's program or appropriation request," and "will not provide the agency's request to OMB or plans for the use of appropriations that exceed the President's request." (181) Agency officials may speak only in support of the President's budget, even if they strenuously argued for different sums of money or different policy priorities up until the time the President's budget became final. (182) RMO staff listen to agency officials testifying before Congress about the budget, (183) and efforts to circumvent the confidentiality requirement may have negative consequences for both officials and their agencies. (184)

   The confidentiality requirement applies to written material submitted to Congress as well as to testimony; the circular requires that agencies submit all "budget-related materials to OMB for clearance prior to transmittal to congressional committees, individual Members of the Congress or their staff, or the media." (185) This rule limits even informal communication between congressional staff and agency staff. (186) Further, although the circular requires agencies to post on their websites all of the material underlying their part of the budget request to Congress, (187) it prevents agencies from posting any material that they originally submitted to OMB. (188)

   There are exceptions to the general rule of confidentiality. For example, the Inspector General Reform Act of 2008 provides that the President must include in his budget "any comments" from an Inspector General who concludes that the budget proposal "would substantially inhibit the Inspector General from performing the duties of the office." (189) More generally, the Whistleblower Protection Act limits adverse employment actions against civil servants who disclose information that they "reasonably believe[] evidences ... a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety." (190) In addition, by practice although not by statute, members of the House and Senate Armed Services committees have typically asked the top military officials in the Department of Defense for their "unfunded priority lists"--that is, a list of desired items that did not make it into the President's final budget. (191)

   But these are exceptions that prove the rule, (192) and even these exceptions can be limited in scope. (193) In general, agency officials are reluctant to try to circumvent the confidentiality lever, even in back channels, for fear of adverse consequences from OMB. (194)

   2. The Mechanisms of Control Through Budget Execution

   OMB's role in the budget process does not end when Congress passes and the President signs the annual appropriations bills (or, in more recent years, the continuing resolutions to provide funding for a limited period of time after the fiscal year until the appropriations bills are agreed upon). (195) OMB is intimately involved in budget execution--the way federal agencies carry out their work under the budgetary authority they have been granted. (196) OMB affects budget execution through two different levers: the formal specification lever, through which it "apportions" and otherwise defines how agencies spend the funds Congress has appropriated, and the informal monitoring lever, through which it oversees agencies' implementation of their programs.

1. The Specification Lever

   While OMB "is much too small to oversee all transactions," nevertheless "[o]n any particular matter it may intervene to influence the use of federal dollars." (197) The specification lever provides four main tools for OMB influence: it must (t) apportion agency spending; (2) approve requests to transfer or reprogram funds; (3) approve requests to defer or rescind funds; and (4) oversee decisions regarding a government shutdown in the event of a failure to reach a budget agreement.

   a. Apportionment

   Before agencies can spend the funds that Congress has appropriated, OMB must apportion them by specifying how much may be expended, when it may be expended, and even to some extent how it may be expended. (198) The Anti-Deficiency Act (199) requires agencies to spread out appropriated funds so that they do not spend them too quickly and come back asking for more. (200) Under this authority, OMB limits how much agencies can spend either by time period, project, or both. (201) It also reviews apportionments at least four times a year, (202) with the potential to reapportion funds under certain circumstances. (203) The apportionment power gives OMB a regular opportunity to control how agencies conduct their operations. The RMOs take the lead in this responsibility. (204)

   "Although apportionment is largely a technical procedure," Allen Schick explains, "it is the last point at which OMB formally controls agency spending." (205) Therefore, "OMB sometimes uses apportionment to impose conditions on agency spending or to demand changes in agency practices." (206) For example, the RMO may include a footnote placing further limitations on a...