Office of Management and Budget

Fact Box

Office of Management and Budget

Formed in 1970
Preceding departments- Bureau of the Budget
Headquarters- Old Executive Office Building, Washington, D.C.
Director- LS Donovan
Employees- 529
Annual budget (2011) $92.8 million

The Office of Management and Budget (OMB) functions as the primary budget office for the Executive Branch of the federal government. The OMB oversees the budgetary activities of various federal agencies for the White House and offers advice to senior White House officials on policy, management, legislation, regulatory, procurement, e-gov, and budgetary functions. One of the largest tasks assigned to the office is preparing the President’s annual budget request submitted to Congress, a document that runs into the thousands of pages. Over the last 30 years, the agency has sometimes found itself in the thick of political debates over balancing the federal budget. Its most famous director, David Stockman, became a high-profile figure (unlike most OMB officials) during the 1980s when President Ronald Reagan declared war on big government and attempted (unsuccessfully) to shrink the size of federal agencies.


In 1921 the Bureau of the Budget was established as part of the U.S. Department of the Treasury, according to the Accounting Act. The Treasury Department continued overseeing the budget office until 1939, when the Executive Office of the President (EOP) was given authority over the bureau.

In 1970, during the Nixon administration, the Bureau of the Budget was reorganized and renamed the Office of Management and Budget (OMB). In the 1990s, it was further reorganized to combine management and budgetary staff responsibilities under the heading of the various Resource Management Offices.

Historically, the OMB and its predecessor have quietly gone about its work, leaving public debates over the state of the federal budget in the hands of the White House or Congress. The exception was David Stockman, President Ronald Reagan’s first director of OMB.

Stockman entered the White House a true believer in supply-side economics and was gung-ho about radically shrinking the size of government. His ambition to cut federal spending made him a poster child for Reaganomics and a much despised figure among liberals. Despite his zeal, Stockman failed to achieve significant budget cuts in federal spending, which, combined with Reagan’s tax cuts, caused massive budget deficits in the 1980s. A story in the Atlantic Monthly depicted Stockman as a brilliant young conservative idealist who gradually became disillusioned with the conservative movement’s grand theories about how the world worked. Stockman expressed his own disgust with the political process in his memoir,The Triumph of Politics: Why the Reagan Revolution Failed.

For some OMB directors, the position has proven to be a launching pad for bigger assignments in the federal government. Caspar Weinberger and George Shultz both served as head of the budget office for Nixon, with Weinberger going on to serve as Secretary of Defense and Shultz as Secretary of State, both under Reagan. In the Clinton administration, Leon Panetta went from OMB to White House Chief of Staff, as did Joshua Bolten in the administration of President George W. Bush.

Peter Orszag, on the other hand, departed the Obama administration after his OMB directorship to become a Distinguished Visiting Fellow at the Council on Foreign Relations and a contributing columnist for the New York Times Op-Ed page and Bloomberg View, subsequently joining Citigroup as Vice Chairman of Global Banking. As Obama’s first head of OMB, Orszag was involved with the health care reform plan and responsible for the creation of the Independent Payment Advisory Board.

What it Does

The Office of Management and Budget (OMB) is a cabinet-level agency operating under the authority of the Executive Office of the President. The agency is responsible for administering the President’s annual budget request, issuing circulars on agency management practices, and reviewing agency regulations. 

Six positions within the OMB are nominated by the President and confirmed by the Senate. These include the director, the deputy director, the deputy director for management, and the administrators of the Office of Information and Regulatory Affairs, the Office of Federal Procurement Policy and the Office of Federal Financial Management.

The agency is divided into five Resource Management Offices (RMOs), each led by an OMB associate director. Program examiners within these RMOs are assigned to monitor one or more federal agencies or may be assigned a specific area, along with its management and budgetary issues. Examiners analyze trends and consequences of budget policy, provide strategic and technical support for budget decision making and negotiations, and monitor congressional action on spending legislation.

Each year, staff members review federal agency budget requests and help to decide what resource requests will be sent to Congress as part of the President’s budget. Using the Program Assessment Tool, staff members can also review proposed regulations, agency testimony, analyze pending legislation, and oversee all aspects of the President’s Management Agenda. Additionally, they are often called upon to provide information to the agency’s sub-offices, including the Office of Federal Procurement Policy, and the Office of Federal Financial Management.

The Office of Federal Financial Management provides direction on how to successfully implement financial management policies and systems. The Office of Federal Procurement Policy coordinates efforts to improve federal procurement law, policies and practices, and the Office of Information and Regulatory Affairs (OIRA) oversees federal regulations and information requirements and develops policies to improve statistics and information management. The Office of Performance and Personnel Management (OPPM) guides agency strategic and annual planning, performance reviews and reporting, and federal personnel policy. The Office of E-Government and Information Technology oversees the use of Internet-based technologies to facilitate citizen interaction with the federal government; it is managed by the Chief Information Officer.

Other OMB offices include the Office of General Counsel, the Office of Legislative Affairs, the Budget Review Division (BRD) and the Legislative Reference Division, which distributes proposed legislation and testimony to all relevant federal reviewers and writes an Enrolled Bill Memorandum to the President once a bill is presented on both sides of Congress. The Enrolled Bill Memorandum details the various elements of the bill, including opinions from relevant federal department and an overall opinion about whether the law should be signed or vetoed. The Legislative Reference Division also issues Statements of Administration Policy, which makes the White House’s official opinions known.

Where Does the Money Go?

The FY 2013 Congressional Budget Submission for the Office of the President provides the following outline of expected Office of Management and Budget (OMB) expenditures for that year:

Personnel Compensation & Benefits                                                  $75,779,000

          Includes salaries, terminal leave, premium pay, reimbursable

          details, assignments under the Intergovernmental Personnel

          Act, and all employee benefits.

Rental Payments to GSA                                                                     $7,235,000

Other Contractual Services                                                                   $6,470,000

          Includes advisory and assistance services, other purchases

          of goods and services from government accounts, operations

          and maintenance of facilities, research and development

          contracts, medical care, operations and maintenance of equipment,

          or subsistence and support of persons, and MAX Budget

          System contractor costs.

Communication, Utilities & Misc. Charges                                             $603,000

          Includes data, voice, and wireless communications, as well

          as utilities, postage, and miscellaneous rental charges.

Equipment                                                                                               $519,000

          Includes IT hardware and software, customized software

          programming, printers and network devices, office furniture,

          photocopiers, fax machines, and telephones.

Supplies and Materials                                                                            $416,000

          Includes general and information technology (IT) supplies,

          newspapers, magazine subscriptions, and government publications.

Travel & Transportation of Persons                                                       $348,000

          Includes official travel, such as per diem, hotel and transportation,

          auto rental, and local transportation.

Printing and Reproduction                                                                       $167,000

Official Entertainment                                                                                 $3,000

Transportation of Things                                                                            $2,000

          Includes commercial express delivery as well as freight

          and other shipping charges.

Total Estimated Budget                                                                       $91,542,000

The OMB does not have any information regarding contracts on Document6. However, the office does work with private contractors. In August 2007, REI Systems announced that it had received a contract from SRA Touchstone, which supports the development of a pilot Web site designed to support OMB’s Federal Funding Accountability and Transparency Act. The site makes acquisition, grant, and loan award data available to the general public, and REI Systems assists with technical support and integration services. In May 2011, REI Systems reported that it had developed for OMB the IT Dashboard, a tool to manage complex federal information technology projects, and that the OMB subsequently released the tool’s source code so that it could be adapted for use by outside companies and agencies.

WinMagic, a company supplying disk encryption services, announced in June 2007 that it had been selected to provide protection for sensitive, unclassified data on OMB laptops, other computing devices and removable storage media. The contract extended to the Department of Defense and General Services Administration and could result in contract values exceeding $79 million.