OMB to agencies: Don't bother submitting 2010 budget requests

The Bush administration will leave much for the next president, but its legacy will not include a fiscal 2010 budget, according to a recent memorandum Office of Management and Budget Director Jim Nussle sent to agency heads.

Instead of readying a full federal budget, Nussle said OMB "will prepare a budget database that includes a current services baseline," or an estimate based on current spending that does not include proposed increases and new policy proposals.

In what some budget analysts called a surprising departure from past practices during the transition from one administration to another, Nussle also said agencies this year need not submit budget requests and supporting documents in September as they normally do.

Instead, agencies should estimate their baseline spending and submit budget requests only after a new administration or transition team arrives, Nussle said in his April 7 memo.

The decision means neither President Bush nor federal agencies will have to bother offering proposals that most experts agree are likely to be ignored by the next White House and Congress.

"We would love to have President Bush's budget policies carried on," OMB Deputy Director Steve McMillin said Thursday. "But as a practical matter, it's the next president who will be negotiating the 2010 budget with the Congress, and they'll probably need to own it."

Before Congress changed the law in 1990 to have incoming presidents, not their predecessors, submit budgets in transition years, lame-duck presidents generally sent a budget to Capitol Hill just before departing, McMillan said. Even President George H.W. Bush, hoping to remain in office, followed standard procedures and prepared a budget in late 1992.

McMillin said OMB's approach is similar to the one taken in 2000 by then-OMB Director Jack Lew under President Clinton.

But Nussle's approach was criticized by several budget analysts who argued it could cause agencies to delay consideration of fiscal 2010 budget plans until well into 2009. "It's pretty outrageous," said one veteran of the congressional budget process.

"It might create a kind of crisis environment in 2009, because they won't have done the planning that is needed," observed Cindy Williams, a former assistant director of CBO who studies the defense budget at the Massachusetts Institute of Technology's Security Studies Program.

Other budget experts said OMB's collection of baseline spending information would be sufficient for the transition. "I don't think it's a very big deal . . . as long as you have very good baseline information," said Alice Rivlin, who served as OMB Director under Clinton.

Former Congressional Budget Office Director Robert Reischauer said OMB's plan would not cause problems if agencies work on routine parts of their budget proposals before the transition and, as Nussle's memo suggests, work with the incoming president's transition team before January.

"The issue is you don't want to face the new president and his incoming staff the day after the inauguration with, in a sense, a blank sheet," Reischauer said.

Peter Cohn contributed to this report.