White House asks agencies to trim budgets 5 percent

The White House is asking nonsecurity agencies to outline how they will reduce their budgets by 5 percent, and to make a list of their worst performing programs, all in hopes of sticking to the three-year, non-security discretionary spending freeze.

Office of Management and Budget Director Peter R. Orszag said Tuesday during a Center for American Progress event that having agencies identify where they can cut their budgets by 5 percent will allow the Obama administration to meet the president's "absolute insistence on a freeze for nonsecurity agencies … even while meeting inevitable new needs and priorities."

A memorandum signed by Orszag and White House Chief of Staff Rahm Emanuel also directed all agencies, including those with security responsibilities, to find programs and subprograms collectively worth at least 5 percent of their discretionary budget that have the lowest mission impact. Emanuel and Orszag noted that while this list is to be included with the fiscal 2012 budget submission reflecting a 5 percent cut, identifying poor-performing programs is a "separate exercise."

They said officials should consider whether the program is relevant to a presidential initiative, has a clear and unique purpose, plays a federal role and is effective. Agencies should disregard any challenges to eliminating or reducing the program and focus purely on whether or not it is worthwhile, they wrote.

"Ultimately, our goal is not to cut for cutting's sake, but to modernize and reform government, to empower people with the information they require to make choices about what's best for them, to make their voices heard by government officials, and to give the American people the data they need to bring about change," Orszag said.

Much of Orszag's speech Tuesday focused on the extent to which closing the information technology gap between the federal government and the private sector can increase efficiency and save money.

Orszag laid out facts showing an increasing productivity gap between the private and public sectors. Until 1987, the two sectors were roughly equal, but in the late 1980s, something changed, Orszag said. From 1987 until 1995, private sector productivity rose by an average of 1.5 percent a year while public sector productivity rose by only 0.4 percent annually, he said, citing Bureau of Labor Statistics.

While the bureau stopped collecting productivity numbers after 1995, Orszag said other analyses show the federal government continued to fall behind. The administration believes private sector advances in management techniques and the challenges of recruiting top talent to the federal government contribute to this gap, but Orszag said the biggest driver is the information technology divide.

"At one time, a federal worker went to the office and had access to the most cutting-edge computer power and programs," he said. Now, he said, the personal devices workers carry around on their belts and in their pockets, such as iPhones and Blackberrys, are likely to be more advanced than their work-issued computers.

Orszag said a focus on IT is what differentiates this administration's efforts to modernize and reform government from past attempts.

"Clearly, we have massive room for improvement," Orszag said. "Pursuing that improvement and closing the IT gap will help us create a government that is more efficient and less wasteful, and that is more open and more responsive to the American people."