What I Learned About "Budgeting At The Brink"

By Dennis D. McDonald

On July 30 in Washington, D.C. I attended a morning seminar titled Budgeting At The Brink that was co-sponsored by George Mason University (GMU) and the Bipartisan Policy Center (BPC).  

The first session, chaired by Paul Posner of GMU, focused on a historical perspective on past sequesters and past budget log-jams and shutdowns. The second session was chaired by Jonathan Breul of the IBM Center for the Business of Government. His session focused on what’s happening “in the trenches” given the current US Federal budget sequester and ongoing bipartisan disagreements over the budget.

Breul  also runs the Government Performance Coalition which meets every month at George Washington University to discuss Federal program performance measurement and management. I’ve written about previous meetings (e.g., see Developing Digital Strategies for Web-based Public Access to Government Performance Data).

Recently Breul suggested I attend this week’s meeting when I talked with him about my own research into the impacts of the Federal budget sequester on the management of Federal IT projects. He thought the information about how the budget process “works” might be useful as I research how to manage Federal IT projects in an environment that appears to be increasingly opposed to rational planning and management processes.

At the Budgeting at the Brink meeting just about everyone agreed that the sequester has been a disaster for rational planning. Across the board cuts have had to be imposed regardless of program performance or value.

That many agency managers never really expected that a sequester would happen caught many flat footed and unprepared, in which case the blunt instrument of staff “furloughs” was imposed, regardless of program impacts.

As the speakers discussed the issues some interesting facts about the sequester and how it impacts different agencies and programs began to emerge:

1. Those agencies that did not plan were the ones that had to scramble using the furlough to reduce expenditures.
2. Some programs (e.g., social security, other entitlement programs, military pay and active duty personnel, etc.) were exempt and not directly impacted.
3. Some agencies with large capital programs (e.g., DoD) have in some cases found “pockets” of money to reduce direct impacts of the sequester — though the ability to do this this may not last forever.
4. Agency “business models” to a great extent drive how the sequestration of funds is managed. For example, those with many annual grant delivery programs (e.g., NIH, Department of Education education grants, etc.) are able to maintain staffing month to month while reducing cash outlays at year end by reducing grants and contracts to local institutions. On the other hand, agencies that are primarily staffing oriented — e.g., Justice — see the inevitable need to reduce critical biweekly and monthly payments for public safety and law enforcement.
5. Speakers were all over the board on whether or not they thought another economy-damaging government shutdown was inevitable this Fall. 
6. There seemed to be some agreement that failure to address the constant growth in demographically-driven health related entitlement spending — which for the most part seems to be “off the table” from the current sequester — will not solve the deficit problem and will inevitably lead to recurring gridlock surrounding individual programs dependent on “discretionary” funding. 

I came away from the meeting with several reactions:

1. In researching how project and program managers address adjustments driven by the sequestration and continued funding uncertainty, we need to take into account the “business model” of individual agencies and how their IT programs are organized around programs dependent on discretionary vs. entitlement spending. I’ve begun to address such distinctions in my own planning.
2. Much of the decision making around budgets and programs occurs “behind closed doors.” The traditional excuse for this is the old saw about the comparison between politics and “sausage-making.” One complaint I heard about Federal programs concerns the current gulf between Congress and its understanding of how agencies actually do their work. According to one speaker, Congress no longer understands what individual Federal programs do. This is reflected in what I’ve heard at the meetings of the Government Performance Coalition as well. When people do not understand the implications of their actions they choose to measure their performance in terms of things like sequesters and furloughs, not the provision of needed services to the public.

As a result, one thing I’m investigating is whether or not it makes sense to make the process of reviewing and reprioritizing programs and projects more “open” and “transparent.”  After all, if “business as usual” has taken us to the brink of where we are now, maybe we should be trying something different.

I expect that adjustments to IT projects at some agencies and programs are going to be pretty messy, painful, and ugly as indiscriminate budget cuts continue to ripple down to individual programs. In many cases mid level managers are going to have to make the best of a bad situation. In addition to direct cuts in real employment related to project cutbacks, we’ll also see much jockeying around prioritizing of individual programs and their constituent projects.

In theory, decisions about reprioritizing projects that support legislatively-driven programs should be made based on how inputs relate to outputs, i.e., how resources can be managed to generate desire program performance and outcome. Many different stakeholders must be involved in this process on a collaborative basis if it is to succeed. 

Getting stakeholders involved in a more “transparent” process, as recommended by one speaker (Jane Garvey, former FAA Administrator) will be a challenge, though. Like the proverbial sausage making of legislation, planning and prioritization decisions have often been made outside public view. Given my longtime interest in collaboration, though, I have some interest in taking advantage of modern tools that support rapid gathering and sharing of information among stakeholders in the context of reviewing, revising, and recalibrating budget-threatened groups of projects. Whether this approach can overcome traditional behind the scenes — and secretive — decisionmaking remains to be seen.

Copyright © 2013 by Dennis D. McDonald, Ph.D.