In another example of how federal spending has tightened, the Office of Management and Budget has instructed federal departments and agencies to develop budget proposals for fiscal year 2013 that reflect cuts of 5% and 10% from enacted 2011 levels.
In an Aug. 17 memo to department and agency heads, OMB Director Jacob J. Lew noted the discretionary-spending caps and 10-year, $2.4-trillion deficit-reduction target set in the recently enacted Budget Control Act of 2011.
“By providing budgets pegged to these two [5% and 10%] scenarios, you will provide the President with the information to make the tough choices necessary to meet the hard spending targets in place and the needs of the nation,” Lew said.
Enacted 2011 appropriations totaled just under $1.05 trillion, so a 10% overall cut would equal about $105 billion and a 5% cut would be $52.5 billion.
In his two-page memo, Lew told the officials that they shouldn’t use across-the-board percentage reductions to achieve the 5% and 10% targets, which would apply to the total budgets for each department and agency.
In fact, he said, agencies should select programs under their purview on which to “double down,”--presumably, spending more--“because they provide the best opportunity to enhance economic growth.”
Although Lew didn’t cite any examples of the “double down” line items, President Obama’s positive comments about the importance of infrastructure could provide hope for construction industry advocates of public-works programs.
Lew’s memo will guide agencies as they prepare their budget filings for the fiscal year that begins on Oct. 1, 2012. Typically agencies go back and forth with OMB over the numbers through the end of a calendar year, before the figures are made final. They then are packaged as the President’s budget request to Congress, which usually goes to Capitol Hill in early February.
But first, Congress must finish work on spending bills for fiscal 2012, which begins less than a month after lawmakers return from their August break. None of the 12 individual appropriations measures, each funding individual departments or groups of agencies, has been enacted so far.
When the 2012 numbers are final, it is likely that some construction programs will be trimmed from 2011 levels.