Strategy

New Boss Means No Budget

Federal departments and agencies don't have to do their forecasts this year because of the upcoming change in Presidential Administrations.
Kate PlourdApril 18, 2008

As the long Presidential campaign continues, the impact of cutting taxes — or not cutting them — on the federal budget is sure to be a point of debate. One other thing is for sure, as well: federal departments and agencies won’t actually be preparing budgets for the fiscal year that begins in 2009.

As has been the case since 1993, the budgets are not prepared in years when a new Presidential Administration takes over. The departments and agencies were reminded of this in a recent memo from the Office of Management and Budget, which said that instead of preparing a full budget forecast based on the President’s policy decisions, as they normally do, they should merely prepare a database with baseline information on their services and gather any other information that would help the incoming Administration develop its budget proposals.

The policy applies to the budget for the 2010 fiscal year, which begins October 1, 2009. The fiscal 2009 budget proposal was sent to Congress in early February, as required by law. That law was changed in 1990; until then, the proposed budget was due a month earlier, about 10 days before departing Presidents leave office.

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The aim of the no-budget policy is to ensure a smooth transition for the incoming Administration and save the departments and agencies from preparing a budget that will never be sent to Congress. OMB deputy director Steve McMillin told CFO.com: “There’s not much point in running a policy process with [President Bush’s] political appointees, because it’s not [he] who will be in charge of the next budget.” He added: “It’s the responsible, good-government thing to do to make sure the basic operations of the government run as smoothly as possible on January 21 of next year.”