OMB establishes ceilings for dollars and head counts for the agency in the spring preceding the request to Congress. The guidance includes the President's policy priorities and preferences, instructs agencies on what programs to develop, emphasize, reduce or eliminate, and provides the overall policy direction for the budget year.
OMB also provides technical guidance on how to prepare strategic plans and budget request submissions, and integrates the requirements of the laws and regulations applicable to the budget process. This makes it the most significant element that an agency considers in its budget process actions. This guidance is issued as Circular A-11, which is revised every year.
The law places all control of Executive Branch agency budgets in the President's hands. The President's assistant in carrying out the budget laws is OMB. The numbers provided by OMB to the agencies are targets for the appropriations levels in the upcoming budget request. These numbers are related to the overall Federal budget for the year, as well as whatever agreements may have been made with Congress on the overall Federal budget deficit or surplus. OMB makes sure that the cumulative requests of all agencies meet the overall level of budget request that the President wants to submit to Congress. OMB makes sure that the President's policies are implemented through the budget process. The best way to accomplish this is to set the amounts of money and people that the agency may have. Programs favored by the President get ample funding while those not favored are cut or kept short of funds. Allocation of resources is a powerful "attention getter."
Agency heads accept the ceilings and policy guidance or negotiate through the summer to get a higher ceiling or change policy. These negotiations can get heated. They are a test of the agency head's political "clout" as well public interest in an issue: The more the public interest favoring the agency, the more likely it is that the agency will prevail. No political leader wants to look inattentive to an issue. The budget is a clear way to make a leader look like one.
Operating managers have little influence on the "top down" guidance for any given year. They must keep in mind the effect that the actions at the beginning of the process will have on the end of the process (the execution of the budget), which is what affects them directly and for which they are directly responsible. (For more information on budget execution, see EXECUTE.)
OMB issues its guidance in late spring and early July.
Documents and Links
OMB's guidance on numbers and policy is not available to the public. It is generally contained in a memorandum to a specific agency head; there may also be guidance that is more general, which may be addressed to all agencies.
OMB's technical and procedural guidance are documented in Circular A-11, on how to assemble and present the budget request and strategic plans. (A-11 now incorporates what was formerly in Circular A-34, on how to account for funds; A-34 no longer exists.) These are public documents, available at OMB's web site.
The documents are also available from the Government Printing Office (GPO) in either paper copy or on a CD ROM, in PDF format (the CD ROM has the same information as is available from the web site). You may also also find these documents in larger libraries or educational web sites.