OMB: The Most Powerful Office in Washington That You’ve Never Heard Of

Last year, it oversaw a budget of $2.9 trillion. Its 500 employees manage hundreds of agencies and commissions that employ another 4.3 million people. This makes it one of the largest organizations in Washington, DC, and, as part of the executive branch, it keeps an eye on the performance of federal agencies. It’s an office that reports directly to the president and administers the federal budget.

So why is it that most Americans don’t know much about the Office of Management and Budget?

The Mission

Unlike the Department of Defense, for instance, the Office of Management and Budget, or OMB, generally stays out of the national spotlight. This doesn’t make its job less important. The agency helps the president implement his vision for the country.

The OMB gathers, analyzes, and filters budget requests. It coordinates and reviews federal regulations related to the executive branch, and assesses requests for information. The OMB oversees communication between the executive branch and Congress and also prepares executive orders and presidential memoranda.

The Organization

While the OMB may not be in the everyday consciousness of the public, its five statutory offices are. These five offices play an important management role and oversee and coordinate operations related to financial management, procurement, technology, personnel management, and policy.

  • The Office of Federal Financial Management (OFFM) plots strategic direction and policies related to federal finance. It ensures that payments, grants, and real estate holdings are effectively managed.
  • The Office of Federal Procurement Policy (OFFP) sets priorities and defines policies for government-wide procurement practices. It works with agencies to ensure the responsible use of contractors and leads cost-saving initiatives.
  • The Office of E-Government and Information Technology provides direction on the use of Internet-based technologies by government agencies. It develops programs to streamline interaction of businesses and citizens with the federal government.
  • The Office of Performance and Personnel Management (OPPM) helps agencies set performance goals, provides performance reviews, and gives personnel policy guidance across the federal government.
  • The Office of Information and Regulatory Affairs (OIRA) was created by Congress with the enactment of the Paper Reduction Act of 1980. It is charged with reviewing federal regulations, overseeing privacy policies, and reducing paperwork burdens.

The statutory offices assist the president by making sure regulations address a clearly defined problem, adhere to the president’s policies and commitments, and serve the interests of the public.

The OMB also includes five resource management offices that are responsible for budget and agency management within specific policy areas. The staffs in these offices are experts in the following policy areas.

  • National resource programs
  • Education, income maintenance, and labor programs
  • Health programs
  • General government programs
  • National security programs

The OMB also includes some organization-wide support offices, including the Office of General Counsel, the Office of Legislative Affairs, the Legislative Reference Division, and the Budget Review Division.

Impact on Citizens

While the OMB deals with many macro-level issues for the federal government, many of its policies and responsibilities impact citizens on a day-to-day basis, even it they don’t realize it. The annual budget prepared by the OMB determines how much Americans pay in taxes and how that money will be spent. Based on the president’s goals, the OMB decides how much will be spent on national security, defense, education, housing, research, the environment, and all of the other areas that vie for federal funding. The organization also determines how citizens and businesses will interact with the federal government and how information about the government will be released through the media.

Leadership

With all of this responsibility, you’d think the director of the OMB would be a well-known public figure. But like the agency itself, the head of the OMB often flies under the radar. The president appoints the director, but the confirmation process isn’t as contentious or highly publicized as for other cabinet-level positions.
 

On July 10, 2014, Shaun Donovan, the secretary for housing and urban development, was confirmed by the senate to be the director of the OMB.

Prior to serving in President Obama’s cabinet, Donovan led the New York City Department of Housing Preservation and Development. He was an assistant secretary at the Department of Housing and Urban Development and the acting Federal Housing Administration commissioner during the Clinton administration. Donovan’s academic background includes master’s degrees in public administration and architecture from Harvard.

He replaced Sylvia Mathews Burwell, who recently left to become the secretary of health and human services. Burwell succeeded Kathleen Sebelius, who resigned in the aftermath of problems associated with the launch of HealthCare.gov, the website set up to process enrollment for health insurance exchanges.

The Office of Management and Budget is a complex agency, which may explain why you may have had a vague notion of its many functions. It is clear, however, that the OMB is a powerful office with far-reaching impact on our daily lives.