Few surprises are in store as IT budgets win Hill approval

After last year's federal budget storms, the fiscal 1997 budget season seems only
partly cloudy, and the outlook is bright for information technology spending between $26
billion and $27 billion next year, according to industry analysts.

With lawmakers back briefly after the August recess and hoping to return to their
districts by Oct. 1 for re-election campaigns, one of the few must-do items is the
appropriations for the fiscal year that begins next week.

Overall, industry analysts and Capitol Hill staff members said they see IT budgets
faring well this year. Bob Deller, director of market research services for Global Systems
and Strategies in Potomac, Md., predicted growth in total federal IT spending and said
some agencies will get bigger increases than the White House requested.

Though only four of the 13 spending bills have cleared Congress, the fights among
lawmakers are not generally about IT, Deller said. "This is an election year,"
he said, which means that lawmakers don't want to be seen as holding back too much, he

Congress could finish work on the spending bills in the coming week, but it seems
unlikely. The House has completed work on all 13 bills, but the Senate has about a
half-dozen to go before the bills can be reconciled, approved by the full Congress and
sent to President Clinton for his signature.

Some agency authorization bills still are winding their way through Congress, too. They
often cause changes in the final appropriations package.

At press time, only two appropriations bills had been signed into law, for the
Agriculture Department and for the District of Columbia. The legislative branch and
military construction bills were awaiting the president's signature.

Most of the remaining bills, however, probably will be rolled into a continuing
resolution package to keep the government running come Oct. 1, congressional sources said.
Although there were significant unresolved issues, congressional staff members said they
expected few last-minute changes in systems funding.

Areas where systems spending are at issue are the Treasury, Postal Service and general
government appropriations bill. The funding in the bill for IRS' Tax Systems Modernization
is receiving new scrutiny in the Senate.

Whatever the outcome, the agency likely will not receive the $850 million the Treasury
Department originally requested for TSM. The House and Senate already have voted to spend
less than $425 million. The big questions are not about the money as much as other
provisions, such as whether Congress will force the Defense Department to take over IRS
systems contracting, as the House wants.

The Office of Management and Budget is vowing to fight an amendment tagged onto the
bill that would prohibit agencies from buying services from other federal agencies without
demonstrating that those services cannot be had more cheaply from industry. The
administration says the requirement would hurt cross-servicing initiatives that it has
been promoting for data processing and other functions.

Deller predicted Congress will approve a continuing resolution to carry the government
through the end of March. He said given the elections, lawmakers will avoid short-term
resolutions like those passed repeatedly during the budget feud last winter.

"Federal spending will be stable this year, where it was not at all last
year," Deller said.

Other analysts, including the Electronic Industries Association in Washington,
predicted a slight increase or at least steady IT spending for the coming year.

Deller said he is more bullish. "I've never been one of the doomsday boys,"
he said, projecting "marginal increases every year until we see some real profound
improvement" once programs begin to prove their worth.

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