Using Evidence and Evaluation in Federal Budget Decisions
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The annual exercise of formulating the Federal budget typically takes at least a year – or longer – to run its full course. During that period of time, numerous actors and institutions within multiple branches of government consider and recommend funding levels for Federal programs. This panel will discuss how and to what extent key institutions and their respective processes incorporate available evidence, research, and program evaluations in reaching funding levels to recommend for Federal programs.
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Using Evidence and Evaluation in Federal Budget Decisions
- 1. 1 Using Evidence and Evaluation in Federal Budget Decisions Nicholas Hart U.S. Office of Management and Budget (OMB) Maria Williams U.S. Environmental Protection Agency (EPA) Emily Sharp U.S. Senate Appropriations Committee April 11, 2015 Association for Public Policy Analysis and Management (APPAM) “How Policymakers Use APPAM Member Research” 2015 Spring Conference in Washington, D.C.
- 2. Presentation Overview • Federal Budget Formulation Process Overview • Opportunities for Evaluation Use – Agency Formulation – White House Review – Appropriations • Crosscutting Themes • Discussion 2Using Evidence and Evaluation in Federal Budget DecisionsHart, Williams, Sharp
- 3. Federal Budget Formulation Process • Budgets are policy documents, including funding and other policy matters. • Formulation process takes more than a year and involves thousands of agency staff, policy officials, congressional staff, and elected officials. 3Using Evidence and Evaluation in Federal Budget DecisionsHart, Williams, Sharp
- 4. Federal Budget Formulation Process 4Using Evidence and Evaluation in Federal Budget Decisions OMB Guidance (May) Agency Budget Process (May – Sept.) OMB/White House Review Process (Sept. – Nov.) Agency-OMB Collaboration Process (Nov. – Dec) Preparation and Transmittal of President’s Budget (Jan. – Feb.) Budget Committee Resolutions (Feb. – Apr.) Appropriations Subcommittees / Committees (Feb. – June) Mid-Session Review (June) Floor Consideration (June-Sept) Conference Committees (Sept.) Enacted Appropriations (Sept?) Hart, Williams, Sharp
- 5. OMB Guidance • Indicates President’s top priorities for formulating proposals • Includes guidance for agency budget requests (e.g., +/- 5%) • May request additional performance and evaluation activities and submissions 5Using Evidence and Evaluation in Federal Budget Decisions . . . . . . . . . . . Hart, Williams, Sharp
- 6. Agency Process – EPA’s Approach • The annual planning formulation processes can take many forms but some needs are common: – Highest priority funding or policy areas • New or existing priorities or initiatives • Program changes to increase effectiveness or efficiency or respond to emerging issues/concerns – Possible offsets to cover any increases to fixed costs • Pay and benefits, rent, security, major IT systems, and other operational costs such as workforce support – Support for government-wide initiatives Using Evidence and Evaluation in Federal Budget Decisions 6 . . . . . . . . . . . Hart, Williams, Sharp
- 7. Payroll $2,318 Contracts $1,665 Grants $4,010 Other $598 EPA’s FY 2016 $8.6 B President’s Budget Request (Dollars in Millions) Using Evidence and Evaluation in Federal Budget Decisions 7Hart, Williams, Sharp
- 8. Use of Evidence and Evaluation at EPA • During agency formulation processes evidence and evaluation data can be used to guide decisions in: – Designing/supporting new programs/initiatives – Eliminating or reducing existing programs – Reshaping/refocusing existing programs • Strategic Reviews include information to support these choices: – Past performance results and trends – good and bad – Evaluations – formal as well as internal – Findings of audits and evaluations (GAO, IG, others) – Emerging issues opportunities and challenges • Throughout budget cycle, performance results and analyses are used to support budget and policy choices and communicate impact and results of agency programs Using Evidence and Evaluation in Federal Budget Decisions 8 . . . . . . . . . . . Hart, Williams, Sharp
- 9. Important Considerations for EPA • The President’s budget request is a product of agency and OMB collaboration supporting the administration’s policies and priorities • Evidence and evaluations guide agency decisions; however, high quality, timely, cost and performance information is not always available at the right level of detail to inform choices • The linkages between funding levels and program results are not always well understood and the contributing factors, including lag times, are not always within agency span of control or influence • In recent years, the EPA’s enacted budgets primarily reflect the impact of incremental changes to previous year’s enacted budget and not the policy choices in the President’s request Using Evidence and Evaluation in Federal Budget Decisions 9 . . . . . . . . . . . Hart, Williams, Sharp
- 10. The EPA’s Formulation Process • March – May: Agency conducts Strategic Reviews to consider annual progress toward long-term strategic objectives to inform annual planning – NEW • May – Sept: Agency considers priorities and discusses options for funding and policy direction – Highly collaborative internal process considers agency, state and tribal partners and stakeholder needs and priorities – Over 40% of the EPA’s budget supports our partner’s environmental efforts – Leadership from the 13 national program offices and 10 regional offices meet to discuss priorities and proposals developed by agency – Relative merits of policy choices, increases, decreases and realignments within the agency’s top-line targets are considered • Oct – Jan: Agency engages in discussions with OMB Using Evidence and Evaluation in Federal Budget Decisions 10 . . . . . . . . . . . Hart, Williams, Sharp
- 11. OMB & White House Review • Staff Review (Sept.) – The career staff consider agency requests and Presidential priorities, identified by OMB and White House Policy Councils. – Specifically looking for alignment with previous and upcoming priorities, agency strategic plans, and performance goals. – Discuss proposals, program performance, and evaluations with Agency staff. – Build a case for funding levels and develop funding recommendations, rely on submitted and “discovered” information. • Policy Official Reviews (Oct. & Nov.) – Prepare formal briefing books and issue papers, with appropriate evidence for policy recommendations – Meet with OMB’s Director, Deputies, etc. to develop recommendations. May request additional information or research on specific issues. – Brief and solicit feedback from White House policy councils and tee up sensitive issues for West Wing decisions. – Brief POTUS for final decisions. 11Using Evidence and Evaluation in Federal Budget Decisions . . . . . . . . . . . Hart, Williams, Sharp
- 12. OMB-Agency Collaboration • OMB Passback (Nov.) – Provide formal White House recommendations to agencies for discretionary and mandatory funding issues as well as other policy announcements in the Budget • Agency Appeals and Settlement (Nov.-Dec.) – Agencies can request reconsideration of White House funding levels through direct appeals, often accompanied with new or additional information when possible – Final agreement reached for presentation 12Using Evidence and Evaluation in Federal Budget Decisions . . . . . . . . . . . Hart, Williams, Sharp
- 13. OMB-Agency Collaboration • Prepare Materials (Dec.-Feb.) – Justifications developed to articulate rationale – Incorporate evidence considered – May include some ex post decision evidence • Transmittal (Feb.) – The EPA/Agencies and OMB support the request at congressional hearings, through stakeholder outreach, and in responses to congressional questions – Frequently asked to provide justification and support for program changes or funding increments 13Using Evidence and Evaluation in Federal Budget Decisions . . . . . . . . . . . Hart, Williams, Sharp
- 14. Congressional Budget and Appropriations Processes • Review Budget Request (Feb-March) – Staff meet with agencies and external groups • Budget Hearings (March-May) – Members review agency budget requests in public setting • Member Request Letters (March-April) – Members of Congress, Committees, groups submit requests for bill 14Using Evidence and Evaluation in Federal Budget Decisions . . . . . . . . . . . Hart, Williams, Sharp
- 15. Congressional Budget and Appropriations Processes • Budget Resolution (April) – Nonbinding resolution, sets 10-year plan for spending and taxes • Appropriations 302(a) and 302(b) allocations (May) – Set totals for each subcommittee • Appropriations staff begin writing bills & reports (May) • Markups and Floor Action (May – July) – Amendments at each stage: subcommittee, committee and floor 15Using Evidence and Evaluation in Federal Budget Decisions . . . . . . . . . . . Hart, Williams, Sharp
- 16. Mid-Session Review • OMB submits re-estimates of the Budget 16Using Evidence and Evaluation in Federal Budget Decisions . . . . . . . . . . . Hart, Williams, Sharp
- 17. Congressional Budget and Appropriations Processes • Conference (Aug) – Official or not, based on House and Senate reported bills • Final Appropriation (Sept) – Within 30 days, agency develops operating plan adhering to funding levels and Congressional direction • Continuing Resolutions (Sept) – Extra time to complete negotiations – Can complicate timing of any proposed program changes 17Using Evidence and Evaluation in Federal Budget Decisions . . . . . . . . . . . Hart, Williams, Sharp
- 18. Crosscutting Themes • Evaluation use limited in budget decisions, more likely to consider timely performance indicators • Analysts are interested in evaluation results, may have difficulty locating due to large portfolio responsibilities and limited time/resources • Negative results do not translate to lower funding; positive results do not mean higher funding levels • Numerous opportunities to discuss evaluation and program learning through formal budget process 18Using Evidence and Evaluation in Federal Budget Decisions . . . . . . . . . . . Hart, Williams, Sharp
- 19. Discussion • Question #1: How do budget and program staff identify and process relevant evidence and evaluations? • Question #2: How do budget and program staff weigh different types of studies—such as reports from agency program offices, General Accountability Office, Inspectors General, or external research produced by APPAM members—in reaching budget decisions? • Question #3: In presenting budget recommendations to policy officials within the executive and legislative branches, how and to what extent do budget and program staff translate research to justify recommendations? • Question #4: What types of evidence are most useful for informing budget decisions? • Question #5: What practices are most effective for researchers to communicate findings to be relevant for budget decisions? 19Using Evidence and Evaluation in Federal Budget Decisions . . . . . . . . . . . Hart, Williams, Sharp
- 20. Thank you. Nicholas Hart U.S. Office of Management and Budget (OMB) nhart@omb.eop.gov Maria Williams U.S. Environmental Protection Agency (EPA) williams.maria@epa.gov Emily Sharp U.S. Senate Appropriations Committee Emily_Sharp@appro.senate.gov 17Using Evidence and Evaluation in Federal Budget Decisions . . . . . . . . . . . Hart, Williams, Sharp
Editor's Notes
- Overview – Nick Thanks for joining This panel is going to talk about how evaluation is used --- or not --- throughout the Federal budget process. We have experts from three different organizations that each play important roles in formulating the annual Federal budget. Intros: Nick Hart – 7th year at OMB, with background in environmental and energy issues; currently work on HHS and SSA Maria Williams – EPA’s Acting Deputy Budget Director since last fall and managed EPA’s formulation process in OCFO for several years prior Emily Sharp –professional staff on Financial Services and General Government subcommittee of SAC for the last two years, and prior to that spent about 5 years at OMB working on Interior and International affairs issues.
- Overview – Nick Start with very brief overview of the budget process Then discuss where the opportunities are in key points of the budget process Briefly mention some themes then cover a series of discussion questions Conclude with your questions
- Overview – Nick BUDGET Note at outset – budgets are policy documents and more than just a bunch of numbers They frame subsequent discussions in the policy process Can be used for messaging, summarizing priorities, and to document past spending and future plans Might also be used as both an economic and a political instrument Decision forcing TIMING
- Overview – Nick [circles indicate key decision points we will discuss]
- Overview -- Nick
- EPA was an early adopter of Budget and performance integration and looks for opportunities to support our budget justifications with solid information about the impact of our programs on human health and the environment. Our entire budget is allocated to our 5 strategic goals as well as the objectives underneath them. Although it may be a little more intense lately, the EPA budget has long been subject to intense scrutiny as it is almost entirely domestic discretionary funding. We look to the use of evidence and evaluation to make the case for our resources where we can. Each year we set out an agency-wide process to establish priorities and if needed find offsets for increasing fixed costs or new initiatives. Within our mission we establish priorities and approaches to support them in the budget requests. These can range from a new grant program to a new approach to delivering environmental services to communities to harnessing the power of electronic reporting to reduce reporting burdens. Despite efforts to manage growth in our payroll and rent/security and utilities, each year we need to be prepared to cover around $100 M in fixed costs increases
- The EPA’s FY 2016 budget shown here was a great year for us. The president’s request for EPA manifested the administration’s commitment to our mission. We have reshaped and reduced our workforce down to around 15,000 and worked to reduce our space needs But as you see in this pie which breaks things along rough purpose lines – the biggest part of our budget goes out as grants and the majority of that supports state and tribal environmental programs and water and wastewater infrastructure. A big piece of the contracts slice is superfund contracts. The three small slices are what we use to support our workforce with things like computers, phones and travel.
- Our formulation process looks to all lines of evidence to ensure we are making the right decisions as we allocate our resources so we are getting the most for the resources we are entrusted with. While a great deal of our resources are provided to our partners as you saw in mature programs, we constantly look to new ways to do the work more effectively, efficiently and for the greatest impact. Given the pressure on all government spending, we also look to see what programs have achieved their goals, have matured to the point that the work can be done by others, or are no longer needed. To be clear, this is a complex assessment and there is no single factor like performance results that is used directly to increase or decrease funding for a program. Over the last couple years, EPA has been looking to the strategic review framework to synthesize information to guide choices
- OMB and EPA work together to ensure the budget for EPA is strongly justified, well supported and in line with administration policies and expectations. Although it would be fantastic to have the same or even similar information for all programs so that that some level of comparative analysis could be done to support budget choice, that is not the case. It would also be nice if we could make that clean direct link between funding levels and results. Measuring water quality improvements resulting from the cleaner discharge coming from a wastewater plant that was built with the Stare Revolving Funds capitalized through EPA’s budget is more complicated that seeing decreased production time in a factory after you add a new process line. And a very important thing to consider when looking at EPA’s budget over time is that our enacted budget – at least in recent years – is based on the prior year appropriation with some adjustments. For example, we have proposed elimination of some mature programs in our request over the past three years that are restored in the enacted budget.
- Walk through steps
- OMB REVIEW – EXAMINERS (SEPTEMBER) Congressional letters; staff director and LD calls w/ priorities Staff gather information from agencies to help justify requests – consider additional modifications Consider efficiency, performance, information provided directly by agencies, back and forth discussion and third party information But OMB not just looking at effectiveness questions – broader issues b/c policy document alignment with POTUS priorities, campaign commitments, alignment with agency strategic plans and within current authorities Process improvements, avoid inadvertent damage, ability to spend, literature, evaluation. Initial recommendations tend to be merit-based with little to no consideration of political or congressional circumstances. Analysts make recommendations based on evidence presented and available Very little time for this step; having a staff well-versed in programmatic activities is critical to the success of this process This part of the process rarely gets off schedule. OMB DIRECTOR’S REVIEW (OCTOBER) Staff prepare briefing book usually 50-75 pages for each agency. Includes: Topline/summary --- Papers with most sensitive issues where need decisions – flag other major decisions ---- management issues Formal meeting with senior political staff who meticulously review briefing books Run differently based on directors – stockman notorious for multiple day reviews; last few years are hours to 30 min Opportunity to question decisions, ask for details, political questions, who’s interested or impacted May ask for more information Identify issues to flag or discuss with POTUS, or where coordination needed May present ideas that will go nowhere – i.e. Nick in 2014 reviews
- OMB – Nick Discuss use of evaluation for analysis and Director’s review Discuss consideration of analysis and evaluation in appeals POTUS DECISIONS (NOVEMBER) Incorporate feedback from President same time POTUS is preparing SOTU priorities PASSBACK AND APPEALS (NOVEMBER/DECEMBER) Process by which OMB notifies agencies of funding levels Agencies generally have ~3 days to respond to appeal – can be with new information or just a plea for more funds, many do cite research to make points Staff prepare analyses of appeals, reiterate why certain decisions were made and present any additional information from the agency Attempts are made to reach consensus as low as possible in the organization but some decisions are then teed up for Director, COS, and POTUS Reach agreement on top-line and accounts – and eventually the details
- OMB – Nick Discuss incorporation of evaluations and analysis in PB documents PRODUCTION (JANUARY) Develop agency congressional justifications – often with extensive citations to support rationales and available evidence, but not always PB volumes / fact sheets / testimony and briefing documents DELIVERY TO CONGRESS (FEB first MONDAY) On the first day, most people only look at the 50-60 page summary document we put out with snapshot tables
- Hill -- Kelly
- Hill -- Kelly
- Hill -- Kelly
- Overview -- Nick
- Discussion Questions to highlight. Identify – most common from agencies and interest groups. Also some independent research for journal articles, tends to be limited to big ticket items. May also conduct primary analysis of survey data Weigh – all over the map. Not going to read most of it, so weighed most heavily if its understood and from a reputable source. In are processes, biased think tanks are not generally used. IG reports tend to be of limited use Timing is really important. If it’s too late in the process, decisions have already been made – and may be made for an entire administration, not just the single year. Translate – often that’s our role, but we’re also reliant on other translators. Useful – everything. While rhetorically bias in favor of RCTs, in practice if it’s a high quality study the method doesn’t matter. Limitation when can’t figure out how to translate to our work or programs. Practices – be brief. Don’t inundate with emails, we stop reading them. Target to an appropriate audience. Meetings and short briefings are great. Especially at right time of year.