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Thursday, August 29, 2013

Agencies' FY 2015 budget planning 'tied up in knots' by uncertainty

The budget situation for fiscal 2014 is still murky. Funding for the current year runs out Sept. 1, there's no word on a budget or even a stopgap continuing resolution and the across-the-board sequestration cuts are still threatening to gum up the works.

But, believe it or not, agencies are already planning for their 2015 budgets. Preliminary plans are due to the Office of Management and Budget next month.

But with no funding deal in sight for the next fiscal year, how can agencies already be planning for the following year?

"I think it's safe to say, agencies are used to this situation," said Robert Shea, a former OMB official in the George W. Bush administration and now a principal at Grant Thornton in an interview on In Depth with Francis Rose.

Agencies have, by and large, become inured to widespread budget uncertainty, Shea said. For example, last year, there were five stopgap funding measures, which kept government spending afloat in the absence of a full-year budget. The year prior, there were eight.

OMB has also provided exhaustive guidelines for agencies as they plot out their budgets.

In May, the Office of Management and Budget released guidance directing agencies to cut discretionary spending by 10 percent by targeting low-priority programs.

But while it's possible for agencies to plan budget reductions amid so much uncertainty, it's still not an optimal situation.

Congress returns to Washington from its August recess in a few weeks, but House and Senate leaders and appropriators have been mum, so far, on any funding deal that spells out how to deal with sequestration.

Still, even that seems a remote possibility, Shea said. "I hate to be a pessimist, but I think we're likely to see FY '14 and '15 look a lot like '13."

-Jack Moore, FederalNewsRadio.com

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