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OMB Directs Agencies to Budget for FY2013 at Five Percent Below the FY2011 Level

Legislative Update
August 22, 2011

On August 17, Office of Management and Budget (OMB) Director Jack Lew issued a memo to federal agency and department heads providing guidance for the preparation of Fiscal Year (FY) 2013 budget submissions to OMB.

The memo states, “Unless your agency has been given explicit direction otherwise by OMB, your overall agency request for 2013 should be at least 5 percent below your 2011 enacted discretionary appropriation. As discussed at the recent Cabinet meetings, your 2013 budget submission should also identify additional discretionary funding reductions that would bring your request to a level that is at least 10 percent below your 2011 enacted discretionary appropriation.”

The memo directs that FY 2013 budget submissions to OMB “should provide options to support the President's commitment to cut waste and reorder priorities to achieve deficit reduction while investing in those areas critical to job creation and economic growth.” The memo instructs that 2013 budget and management plans:

  • Identify priority investments related to economic growth which the Department proposes to expand or protect;

  • Identify and include cost-saving efforts that will improve operational efficiency and improve the rate of return to taxpayers, including more program integration, reorganizations within and between agency components, and realignment of resources to improve service delivery to the public; and

  • Explain how the agency will acquire, analyze, evaluate, and use data to improve policy and operational decisions, and how it will reallocate and strengthen its analytic and evaluation capacity to set outcome-focused priorities, identify the most effective and cost effective practices and programs, and speed their adoption.
Regarding National Institutes of Health (NIH) funding, its budget was cut by one percent in FY2011 funding, as was that of the National Eye Institute (NEI), so the OMB direction reflects a five percent cut on top of a one percent cut to the FY2010 NIH funding level of $31 billion.

Congress has yet to act on a FY2012 Labor, Health and Human Services, and Education (LHHS) appropriations bill, which includes NIH/NEI funding. NAEVR expects a House markup of a bill in September when Congress returns from its recess.