Budget Changes Coming to Most Agencies

Some agencies are going to see an increase in their budgets but most are likely to see cuts as the impact of the huge federal budget deficit is felt.

Changes are coming to the federal budget and probably coming to the spending habits of your agency.

This isn’t a big surprise. As the federal deficit is hitting record numbers, agencies are inevitably going to start feeling the change as pressure mounts to cut back on government spending.

There is little doubt that funding for fighting terrorism will continue to increase. That means the Department of Defense and Department of Homeland Security will be largely exempt from cuts that are coming. This also means the rest of government will feel the pressure to cut back on spending.

One of the first to feel the pressure may be the Federal Aviation Administration. According to the Wall Street Journal, the administration is proposing a 16% cut in spending on air-traffic-control equipment and facilities. This would save about 500 million a year. It would also mean postponing projects that are designed to make traveling by air more efficient.

The FAA’s facilities and equipment budget is currently $2.9 billion a year. The proposal to cut back is apparently a response to government reports criticizing the agency’s oversight of its contracting process. The agency’s inspector general said in a report to Congress that while the agency’s budget has increased 70% since 1996, part of the increase is due to not overseeing contracts efficiently.

There will also be some surprises for other agencies–and not always unpleasant ones. For example, the National Endowment for the Arts may be getting a huge increase in its budget.

The administration is proposing an increase to this agency’s budget of between $15 and $20 million dollars-the largest increase in two decades for this small agency.

NEA currently has a budget of $121 million. This is 31 percent lower than its peak of $176 million in 1992.

It wasn’t too long ago that some politicians were trying to eliminate the agency as they did not want to provide taxpayer money to an agency they believed was lowering moral standards for the country. The current director of the agency apparently has been more political savvy. He has tried to move the agency out of the dispute involving “culture wars” and, instead, courted influential members of Congress who have the power to influence the agency’s future funding.

According to the New York Times, the agency’s chairman has sent an e-mail message inviting arts advocates to a news briefing with Mrs. Bush. The email says that “You will be present for an important day in N.E.A. history.”

In short, while funding for agencies has been increasing rapidly, many federal agencies are about to feel the impact of the record budget deficits starting with the 2005 budget.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47