OMBlog

Shutting Down Duplicative Data Centers

Just as our cell phones and computers have gotten progressively more efficient over the past decade, so too have data servers. However, the government has not taken advantage of the increasing efficiency of data storage. Rather than follow the private sector's lead of shrinking the size and number of the facilities used to house the computers that store their data, agencies have gone in the opposite direction.

Between 1998 and 2010, the Federal government quadrupled the number of data centers we operate.  Moreover, on average these centers have been using only 27 percent of their computer power even though taxpayers are footing the bill for the entire infrastructure, real estate and energy costs. The need for backup power supplies, environmental controls (air conditioning, fire suppression, etc.) and special security devices mean that data centers can consume 200 times as much electricity as standard office spaces.

While such inefficiency is unacceptable at anytime, cracking down on waste is particularly important in these challenging budgetary times. By shrinking our data center footprint we will save taxpayer dollars, cutting costs for infrastructure, real estate and energy. At the same time, moving to a more nimble 21st century model will strengthen our security and the ability to deliver services for less.

Cut Waste and SAVE

Watch the video announcing the third annual SAVE Award here.

Today, we launched the third annual SAVE Award (Securing Americans Value and Efficiency) – a contest for federal employees to submit ideas about how to cut waste, save taxpayer dollars, and make government more effective and efficient. 

Over the past two years, OMB has received more than 56,000 cost-cutting ideas through the SAVE Award from federal employees from across the country. The ideas range from stopping the overnight, express delivery of empty containers to allowing people to make appointments with their Social Security office online and ending the printing and shipping to employees across the country of thousands of Federal Register volumes that could be read online.

These ideas have made a difference. The President’s last two budgets each included approximately 20 SAVE Award ideas.  Already, those submissions are saving hundreds of millions of dollars, rooting out redundancy and waste, and giving the American people a more accountable government. 

Wasting taxpayer dollars is unacceptable at anytime, but particularly when we face huge budget deficits.  That’s why this year’s SAVE Award is a critical part of the recently launched Campaign to Cut Waste – an Administration-wide initiative to hunt down and eliminate wasted tax dollars in every agency and department across the federal government. 

The idea behind the SAVE Award is the belief that federal employees on the front lines know better than anyone where there is waste to cut and how to make government more effective and efficient.  If you’re a federal employee, please take a minute and send us your idea. You will help your government, your fellow citizens, and if you win, will get to present your idea directly to the President. 

Make no mistake: these ideas alone aren’t going to close the deficit of fix our fiscal situation, but they are critical to making sure that the American people can trust their government to treat every tax dollar with the same care and attention they do.

So, if you’re a member of the federal workforce, please send us your idea, and for everyone else, stay tuned as we will ask your help in picking the winner.

As Vice President Biden wrote in an Op-Ed today, “This effort involves more than just eliminating fraud and waste; it means instilling a new culture of efficiency, of responsiveness, of accountability. We're changing the way government does business. We're working to give the American people the government they expect - and deserve.”

Kenneth Baer is Senior Advisor and Associate Director for Communications and Strategic Planning at the White House Office of Management and Budget.

Our Nation’s First Federal CIO

Today, Vivek Kundra, our nation’s first federal Chief Information Officer (CIO) announced that later this summer he will be leaving the post for a fellowship at Harvard University.

When President Obama appointed Vivek Kundra as the first U.S. CIO, he said, "Vivek Kundra will bring a depth of experience in the technology arena and a commitment to lowering the cost of government operations to this position. As Chief Information Officer, he will play a key role in making sure our government is running in the most secure, open, and efficient way possible."

When he began at the White House, he brought with him the promise of good ideas and a hard-charging style focused on getting things done, necessary qualities to tackle the difficult issues facing Federal IT – an aging infrastructure with rising operating costs, too many major projects failing to deliver, and increasing vulnerability to outside threats. Two and a half years after joining the Administration, Vivek has delivered on that promise.  He has cracked down on wasteful IT spending, saved $3 billion in taxpayer dollars; moved the government to the cloud; strengthened the cybersecurity posture of the nation while making it more open, transparent, and participatory.  His work has been replicated across the world from 16 countries that have deployed the data.gov model to tap into the ingenuity of their people to multiple countries that have deployed the IT dashboard to save money.

I want to congratulate him on his move to Harvard in mid-August to serve as a joint fellow at the Kennedy School and the Berkman Center for Internet and Society.  We are planning for a smooth transition, continuing these remarkable gains in changing the way the Federal government manages IT and Vivek’s impact on cutting waste and making government work better for the American people will continue to be felt well beyond his departure from Federal service.

CBO and the 2012 Budget

Today, the Congressional Budget Office (CBO) released its preliminary analysis of the President’s FY 2012 budget.

Their analysis leads them to a different projection of the deficit picture, and it’s worth understanding our analytical differences.

There are two main reasons why our projections differ. First, is that the CBO re-estimate does not reflect two important budget policies. In the budget, the President laid out a plan to make a historic investment in our transportation infrastructure in order that our country can keep pace with our competitors in the global economy. We were crystal clear that this spending had to be paid for with a bipartisan funding source and that if one was not identified, that the Administration would not support making these investments. This way there would be no risk that this spending would add to the deficit. CBO chose to treat this spending as a free-standing initiative, not in tandem with our commitment to pay for it – which is not the policy we proposed.

Similarly, the budget proposes that we fully pay for the cost of fixing the Medicare physician payment formula so that reimbursement rates are not cut dramatically which could lead to doctors refusing to treat Medicare beneficiaries. In past years, this fix was not paid for, but last year, the President signed into law a fully paid for fix for one year, and our budget identified tens of billions of dollars in specific health care savings that will pay for another two years. With three years of the fix paid for, we believe that this establishes a pattern of practice – critically important in scoring policies -- that strengthens our commitment to work with Congress on a permanent solution. Again, CBO chooses not to make this assumption.

The second main difference between our and CBO’s analysis is that our economic assumptions differ. The economic forecast in our 2012 Budget, which was prepared in November 2010, is actually more cautious than the consensus forecast for 2011, and is well within the range of the Federal Reserve’s assumptions in all years. Beyond the short-term, we believe that the economy will fully recover after this recession as it has after previous ones. It is our view that the economy will return to full strength, and that is a view shared by the Federal Reserve as well.

There is large uncertainty in economic projections and differences of opinion when it comes to assessing individual policies. But regardless of our differences, CBO confirms what we already know: current deficits are unacceptably high, and if we stay on our current course and do nothing, the fiscal situation will hurt our recovery and hamstring future growth. That is why the President’s 2012 Budget puts forward more than $1 trillion of deficit reduction including a five-year freeze in annual domestic spending that will save more than $400 billion over the next decade, and puts the nation on a sustainable fiscal course. And that is why we are committed to making real progress on our fiscal situation this year and not put off action any longer. As this debate continues, we look forward to working with people from across the spectrum to rein in our deficits, grow our economy, and win the future.

Jack Lew is the Director of the Office of Management and Budget

Women in America: Investing in What Works

At a time when the Government is striving to do more with less, it is more important than ever to ensure we are investing in what works.

This week, the White House released a new report entitled Women in America: Indicators of Social and Economic Well-Being, receiving well-deserved and wide attention. Women in America compiles statistics from across the Federal government that indicate how women are faring in the United States today and how their lives have changed over time.  This is the first comprehensive federal report on women since 1963, when the Commission on the Status of Women, established by President Kennedy and chaired by Eleanor Roosevelt, produced a report on the conditions of women.

One of the Office of Management and Budget’s roles is to oversee the Federal statistical system—a range of agencies that produce the data that drive what we do as a government. In that role, we initiated this data project and worked with the Economics and Statistics Administration within the Department of Commerce and the Federal statistical agencies to create Women in America in support of the White House Council on Women and Girls (CWG).

Of course, the report only touches upon a few of the many indicators collected by the federal government concerning the lives of women.  In order to facilitate public access to these broader resources, we have compiled on the CWG website links to many other reports, and sections of reports, related to women produced by the federal statistical agencies, making it easier than ever for policymakers, journalists, researchers, and interested members of the public to get the facts.

The project is consistent with the Obama Administration’s commitments to pursuing evidence-based policymaking; to partnering with the private sector - including academic researchers - to analyze data and formulate policy; and to pursuing a comprehensive, cross-agency approach to addressing special issues affecting Americans.

The tough fiscal situation necessitates doing more with less, not only to reduce budget deficits, but ensure that taxpayers are receiving maximum value for their hard-earned dollars. By gathering and consolidating the data gathered across the Administration, we can learn more about how services and programs are impacting lives. Armed with the facts, we can target our resources to deliver the best results for women, families, and all Americans.

Jack Lew is the Director of the Office of Management and Budget

A Primer on Primary Balance

After two days of hearings on Capitol Hill and reading scores of articles, commentaries, and blogposts about the President’s Budget, there seems to be some confusion about a key accomplishment of this plan: putting the Budget into primary balance by the middle of the decade.

“Primary balance” does not mean that a budget is balanced. It is a technical term that describes something that is actually quite easy to understand. For a moment, put national finances aside and think about the finances of a family.

Imagine a family – already living beyond its means -- where one of the parents is laid off at the same time that the roof of their house needs repair and they are hit by unexpected health expenses. With less money coming in and more money needed to go out, they are forced to charge more and more on their credit card. The result is that they sink deeper in to debt.

The first thing that this family would need to do on the way to getting their finances in order is to stop charging new items onto their credit card. Once they do that, the income they have coming in would be enough to cover their current household expenses. Of course, they would still have the overhang of the debts they incurred, and those debts would grow as the interest payments did. But, the rate at which their debts would grow would slow. They would have reached an important milestone toward being fiscally sound.

While the federal budget is enormously more complex, it works in a similar way. In the years leading up to the Obama Administration, the government was not living within its means, notably, taking on two large tax cuts and a new prescription drug benefit for Medicare without paying for it. Once the economic crisis hit, revenues plummeted just as outlays – including automatic stabilizers such as unemployment insurance and one-time emergency measures needed to jump-start the economy – increased. As a result, our deficits – already large – grew even larger, reaching 10.9 percent of the economy this year.

Like our hypothetical family, what we need to do now that a recovery is underway is to get to the point where our current spending on programs is no longer adding to our debts by increasing the principal that we owe. The 2012 Budget does that: it includes more than $1 trillion in deficit reduction – two-thirds from lower spending -- and puts the nation on a path toward fiscal sustainability.  

Specifically, by the middle of the decade, we will be able to pay our current bills and remain in primary balance for the remainder of the decade (for those of you so inclined, go to this table in the Budget and look at the last line on page 176). This does not mean that the federal government is debt-free. It means that the government will be in a place where it is paying for all of its programs—in other words, where spending on government programs will not be adding to our debt, and debt is growing no faster than the economy. Just as no longer charging new purchases to a credit card is a crucial first step for a family to start living within its means, reaching primary balance is an important first step for a nation on the road back from high deficits. That is why one of the charges to the Fiscal Commission was to find a path to primary balance because policymakers on both sides of the aisle saw how important reaching this milestone was.

Reaching primary balance will mean implementing the most deficit reduction since the end of World War II as we go from our current historic deficit of more than 10 percent of GDP to around 3 percent of GDP, the level at which we will reach primary balance and be paying for the government’s programs.

To be sure, reaching this milestone is not enough. The debt is still there, and it is still accumulating interest—just like a credit card bill. And we are going to have to start paying that debt down too. That is why the President has called this budget a down payment, because we will still have work to do to pay down the debt and address our long-term fiscal challenges.

Doing that work will take all sides being clear about our goals, finding areas of agreement, and then exploring where we can work together. The Administration is committed to doing that because what we need now is not more partisanship, but more problem-solving.

Jack Lew is the Director of the Office of Management and Budget.

A Tribute to Bob Ball

Last Friday, I had the honor to deliver remarks at the dedication of the Robert M. Ball Federal Building in Baltimore. Bob Ball and I first met when, as a young staffer for House Speaker Thomas P. O’Neill, Jr.,  I was assigned to work on the bipartisan effort to reform and strengthen Social Security that culminated in the 1983 Social Security Reforms.  He was the object lesson of how one person – dedicated to learning as much as he could and working as hard as he can – can make a difference, not just in the lives of millions of people, but in the life of the country. For his entire career, across six decades, Bob Ball gave so much of himself -- deep into his own retirement – in order to make sure that millions of Americans could have a dignified retirement.

My full remarks are here and I hope they reflect my great respect for this examplar of public service who represented the best of both career and political leadership in government.  

 Jack Lew is the Director of the Office of Management and Budget.

Welcoming our 2010 SAVE Award Winner

On Tuesday night, President Obama spoke about giving the American people a government that’s not only more affordable, but also more effective and more efficient. Federal employees are important partners in that effort. From inspecting the food heading to our tables and making sure Social Security checks go out on time to treating wounded troops and helping returning Veterans pursue higher education, Federal employees are working day in and day out to serve the American people. The President believes these frontline workers are essential to any effort to improve government.

That’s why he launched the first ever SAVE Award in 2009 to gather ideas from employees across the country about how to cut waste and make government work smarter for the American people. Today, the President met with the employee who the public voted this year’s winner: Trudy Givens of Portage, Wisconsin.

Trudy is a 19-year employee of the Bureau of Prisons, currently serving as a Business Administrator at the Federal Correctional Institution in Oxford, Wisconsin. Over the course of her career, Trudy noticed that several copies of the Federal Register — the federal government’s official daily publication for rules, proposed rules, and notices from Federal agencies and organizations, as well as executive orders and other presidential documents– were delivered to her workplace several times per week, but employees rarely referenced the documents. The Federal Register was made available online years ago, and most members of the interested public reference that online version now. Trudy thought that in keeping with the President’s spirit of cutting out waste and going green, the government should cease the printing and mailing of thousands of Federal Registers to employees who don’t need them.

Even ideas that sound small can add up. Printing just one page of the Federal Register costs a little more than a penny, but when you amplify that across the whole of government, suddenly your talking millions of dollars. We expect to save the vast majority of those dollars – at current costs that could be up to $4 million dollars per year-- by limiting print distribution to those who need it.

And Trudy’s not alone. Employees across the government are contributing ideas to make their agency work more effectively and efficiently. Through the SAVE competition, we are starting to see a cultural shift where employees are really becoming engaged in rooting out waste. Several agencies including the Departments of Housing and Urban Development, Interior, and Defense have launched their own internal competitions or online engagement tools to encourage employees to submit their ideas to save money and make government work more efficiently and effectively all year round.

It is incumbent upon all of us in public service to be conscientious stewards of your taxpayer dollars. But it is particularly important to do so when the fiscal times are tough. Congratulations, Trudy, for winning this year’s award, and thank you for your contribution to making the government more effective and efficient.

Regulatory Strategy

OMB plays a central role in implementing a President’s regulatory agenda. Through our Office of Information and Regulatory Affairs (OIRA), OMB acts as a clearinghouse for the most significant regulations and rules, making sure that policies are consistent across the federal government and with the agenda of the President.  OMB also ensures that analysis of rules is done properly, according to one set of standards.

With that in mind, I want to point readers to the op-ed that President Obama wrote in today’s Wall Street Journal, detailing his approach to regulation and the strategy that has guided his Administration from the start.  As the President wrote, our aim is to “strike the right balance” between what is needed to protect the safety and health of all Americans, and what we need to foster economic growth, job creation, and competitiveness. The Administration has followed this balanced approach since taking office, and this executive order formally details our basic operating principles.

With this EO, there should be no confusion about what guides this Administration when crafting regulations. The basic tenets are: to consider costs and how best to reduce burdens for American businesses and consumers; to expand opportunities for public participation and stakeholder involvement; to seek the most flexible, least burdensome approaches; to ensure that regulations are scientifically-driven; and to review old regulations so that rules which are no longer needed can be modified or withdrawn. This smarter approach builds on the best practices of the past, while adapting to serious economic challenges the country faces today.