Skip Main Navigation
Office of Management and Budget
President's Budget
Management
Information &
Regulatory Affairs
Legislative Information
Agency Information

Testimony of OMB Director Robert J. Portman
President’s FY 2008 Budget
Subcommittee on Financial Services
Committee on Appropriations
United States House of Representatives

March 19, 2007

Chairman Serrano, Ranking Member Regula, and distinguished members of the Subcommittee, I am pleased to be here today regarding the President’s FY 2008 Budget request for the Office of Management and Budget, or OMB.

And I would like to thank the Chairman and Mr. Regula for your willingness to take time to meet with me last week regarding our request.

We have submitted a disciplined FY 2008 request for OMB. When rent and other costs are included, OMB’s total budget request amounts to $78.8 million – a 2.7% increase compared to the FY 2007 funding level.    

To achieve this spending restraint, I have asked OMB to pursue cost savings wherever possible.  As the subcommittee is aware, OMB has been operating under very tight budgets.  Over the past 6 years, our budget has increased by an average of 1.8% per year.  Our budget is nearly entirely comprised of salaries and expenses and our only significant means to achieve savings is through reductions in staffing.  To accommodate lower funding levels, we have reduced OMB staff from 527 positions in fiscal year 2001, to 510 positions in 2004, to 489 positions in 2007. 

The Budget we have proposed for OMB will allow us to maintain a high caliber workforce of 489 employees, 38 employees below the levels we had in 2001.  We believe OMB can continue to deliver high-quality performance and fulfill our many important core responsibilities at this proposed staff level. 

The best known of OMB’s responsibilities is the preparation of the President’s annual Budget.  In addition, our responsibilities include oversight of agency budgetary matters, management issues, legislative proposals, regulations, procurement policies and other important matters. We work to ensure that all the Administration’s proposals in these areas are consistent with relevant statutes and Presidential objectives.  I believe our dedicated staff – 91% of whom are career civil servants – are performing their responsibilities in an outstanding manner within the constraints of a tight budget.

I want to briefly draw your attention to one of our important responsibilities: to ensure the most efficient and effective use of taxpayer dollars through better management practices in Federal agencies and departments.  This effort, led by OMB’s deputy for management, Clay Johnson, is focused on five key initiatives:  1) strategic management of our federal workforce; 2) improving financial performance, 3) expanding electronic government (including e-gov and IT management), 4) improving the performance of commercial functions through competitive sourcing, and 5) budget and performance integration, meaning how to achieve better results with Federal resources.

To ensure greater government accountability, last year we launched a new website:  ExpectMore.gov.  This site provides information on programs that have been assessed for effectiveness using the Program Assessment Rating Tool, commonly referred to as the PART.  With this website, Congress and the public now have an unprecedented view into which programs work, which do not, and the steps being taken to improve them.  It is one aspect of our effort to provide greater transparency, hold ourselves accountable – and demand results.  

With the new and improved version of this website launched last month with the 2008 Budget, we now have program-level information about the performance of nearly 1,000 Federal programs representing about 96 percent of program dollars, and nearly $2.5 trillion of federal spending.  If you haven’t already done so, I urge Members and staff to check out this updated web site: ExpectMore.gov.

I would also like to take a moment to review the President’s entire FY 2008 Budget, which we submitted for your review five weeks ago.  Our 2008 Budget proposal shows how working together we can reduce the deficit every year and balance the budget by 2012, while keeping taxes low and meeting our nation’s priorities.  It builds on the progress we’ve made over the past two years, which has led to a $165 billion reduction in the deficit. 

One 2008 Budget proposal that is particularly relevant for this subcommittee is our new initiatives to address the tax gap.  First, we improve the effectiveness of the IRS' activities with a $410 million package of new funding aimed at better compliance.  It includes new initiatives to enhance enforcement as well as taxpayer service, and to improve the IRS’ information systems.  Second, we include in the Budget 16 carefully targeted tax law changes that improve compliance while maintaining that important balance between the burden being imposed on taxpayers and our shared interest in collecting taxes owed.  The Budget also includes other investments in program integrity throughout the Federal government that has the potential to generate additional savings.

A balanced budget by 2012 will be a major accomplishment, but will be short-lived without addressing our long-term budgetary challenge:  the unsustainable growth in Medicare, Medicaid, and Social Security.  Mandatory spending is overwhelming the rest of the Budget.  In the space of four decades, mandatory spending has grown from 26 percent of our budget in 1962 to 53 percent of our budget in 2006.  We must begin the reform of these programs now in order to protect those commitments.  Addressing entitlement spending is the right thing to do because small changes now have a big impact later.

Mr. Chairman, thank you for having me before this important subcommittee today.  I believe OMB is staffed with some of the highest quality and most dedicated professionals in the federal government.  I’m sure you agree with me because your subcommittee staff includes a number of former OMB employees.  As noted, we are recommending a disciplined budget for OMB that still provides the necessary resources for this agency to serve the President and meet its duties to the Congress and the American people.  I look forward to working with the members of this Subcommittee as we move forward with the appropriations bills.

I thank the Committee for its time, and I look forward to your questions.