Betwixt and Between

It's hard to imagine a more unstable budget environment for federal agencies. The government ran on a continuing resolution for months after fiscal 2011 started, and as a new Congress rolls into Washington, a wide range of budget battles seem imminent.

In late November, when announcing his opposition to an omnibus spending bill in the lame duck Congress, Senate Minority Leader Mitch McConnell, R-Ky., said the election made it clear that voters want Congress to do business differently. "If this election showed us anything, it's that Americans don't want Congress passing massive trillion-dollar bills that have been thrown together behind closed doors," he said.

And the strong Republican sense that the election was a mandate for more frugal governance is bound to lead to a contentious tug of war over funding.

Lawmakers and others already are debating how far Republicans should go to reduce federal spending. Grover Norquist, president of the conservative group Americans for Tax Reform, told Politico in November 2010 that new House leaders should be willing to force a government shutdown, if necessary.

Mike Lee, the newly elected Republican senator from Utah, told NPR he would vote against increasing the debt limit by 1 cent, even if it meant agency operations must grind to a halt. "It's an inconvenience, it would be frustrating to many, many people and it's not a great thing, and yet at the same time, it's not something that we can rule out," he said. "It may be absolutely necessary."

But barring a total shutdown, the Obama administration seems ready to forge ahead with high-priority goals, despite an uncertain cash flow. Agencies were dealing with a continuing resolution even before the election, and certainly knew that, whatever the results, a budget would not be immediately forthcoming. When the Office of Management and Budget first asked agencies to identify their high-priority performance goals in June 2009, federal Chief Performance Officer Jeffrey Zients said to focus on "significant challenges unlikely to be overcome without a concerted focus of agency resources." That would be existing resources, not additional ones. "The overall goal is to do more with less," Zients said in February 2010.

A year later, those resources are looking more and more scarce, setting the stage for the politicization of priorities the administration wanted to keep above the fray. When OMB approved those goals, they were meant to meet pressing management needs rather than score political points. But if agency leaders start to feel the spending squeeze from the new guard on Capitol Hill, then they might not be so willing to focus their precious time, people and money on administration-driven priorities.

Danny Werfel, OMB controller, says agency leaders know how to overcome budgetary constraints. "It's not a new challenge; it's one the government deals with every year," he says, noting agencies have responded by being both nimble and resilient. "We're learning how to manage through [continuing resolutions] in a way to continue to be transformative. Reorganizing ourselves, redeploying our resources more effectively, having accountability and clear goals -- when those ingredients are in place, we're able to overcome some of the budgetary constraints and move forward and be successful."

Elizabeth Newell covered management, human resources and contracting at Government Executive for three years.