PERSPECTIVES

Surplus won't trickle down to IT budgets

By Christopher J. Dorobek

GCN Staff

My mother always told me to be careful of what you get good at because you are likely to find yourself doing it a lot.

In a sense, that problem has confronted federal agencies in recent years: They've become good at doing more with less. Now, it's expected of them.

The more-with-less equation has been made possible only by rapid technological changes. Federal Reserve Chairman Alan Greenspan has credited the remarkable economic boom on the underlying changes made possible by streamlining antiquated processes. And federal agencies have been able to reap large savings.

Good for some

But despite government's improving bottom line, most agencies are unlikely to see an improvement in their own bottom line'funding'even for technological renovations.

The overall economic boom has turned the federal balance sheet from red to black quicker than you can say spending cap. The Congressional Budget Office recently forecast a surplus of $161 billion for fiscal 2000. Even when Social Security is removed from the equation, the surplus is $14 billion, according to congressional projections.

CBO noted, however, that those figures will hold true only if discretionary spending does not exceed the spending caps set by the 1997 budget deal, which put limits on appropriations through the end of 2002. The caps were designed to eliminate the deficit after five years'and to postpone the most difficult spending decisions until after the 1998 elections.

Those decisions were eventually postponed further by the economy, which has grown more quickly than almost anyone anticipated. The caps, however, remain in place because Congress never set an out clause. The pressure is on now because the fiscal 2000 budget is the first one drafted since the 1998 elections.

The caps are proving to be tough pills to swallow for all sides, especially in light of the rosy budget figures for the foreseeable future. In January, CBO estimated that the budget authority limit was up to $45 billion below the level needed for all programs to continue at their current levels in fiscal 2000, the biweekly newsletter Federal Budget Report reported recently.

The result has been regular predictions of a coming budget battle over the caps themselves. The era of surplus politics does not appear to be any less fractional than the era of deficit politics. Already there are groups clustering around their favored causes.

In one corner are the debit hawks, who point out that although the government may now have a surplus, it still has a $5.5 trillion debt. Staunch conservatives argue that the government should return surpluses to taxpayers in the form of across-the-board tax cuts. Others stress the importance of Social Security, and still others are focused on Medicare. There is little new money left over for federal agencies.

The situation is further complicated by partisan politics. Rep. John Kasich (R-Ohio), chairman of the House Budget Committee, has stressed that the caps are important because they impose discipline.

No spare change

One possible settlement is that funds would be set aside for Social Security and some extra money would go to education. But there doesn't appear to be any windfall for agencies generally.

'If the president doesn't want to make an agreement, then what we ought to say is that we're going to spend at last year's level,' Kasich said. 'We're going to honor the budget agreement. We're not going to break down that discipline and ruin something good that's going right now, which is a government that's a little bit under control.'

So agencies, which have been working to do more with less, better continue to improve those skills. Even in these surplus days, it seems unlikely that they will be floating in money.

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