OMB program reviews could lead to cuts

Federal programs that budget reviewers decide are ineffective could lose funding or face elimination in the fiscal 2004 budget cycle, President Bush's budget director said Wednesday.

Other programs may get a second chance to improve their performance, OMB Director Mitch Daniels said Wednesday. But the Office of Management and Budget may also challenge programs that are performing well-but performing missions that the federal government shouldn't be involved in, Daniels added.

"This is the major emphasis at OMB," Daniels told a group of reporters from National Journal Group publications during a roundtable interview. Daniels said the reviewers are asking two basic questions of each federal program: "Is it working?" and "Should the government be doing this in the first place?"

In an April 24 memorandum, Daniels said OMB would conduct performance reviews of 20 percent of the programs at each agency as a step toward basing budget decisions more on the results of federal spending.

Examiners are conducting the analyses using 20 standard questions and discussing the results with agency representatives during OMB's current spring review. Proposals about cutting programs or funding would be included in the fiscal 2004 budget, which President Bush will issue next February.

In the 2003 budget, the Bush administration released reviews of more than 100 federal programs, rating them as effective, moderately effective, ineffective or of unknown effectiveness (typically because of a lack of performance data).

Public administration experts have pointed out that tying spending decisions to performance reviews can be difficult because people disagree fundamentally on the goals and necessity of federal programs. For example, if the Forest Service runs an effective timber program, environmentalists might object. If the Forest Service runs an effective forest conservation program, timber companies might object.

Daniels said separating politics from performance reviews is a struggle. He said OMB will try to make its assessments "as objective as we can."

Daniels also said that OMB will review the performance of programs conducted by contractors in the same way it reviews programs performed by federal workers. "Government's job is to see that necessary services are provided. Its job is not necessarily to provide the services itself," Daniels said. The government "has to be just as rigorous on assessments of contracted services as on services performed by in-house workers."