Federal Plans To 'Cut' Spending Don't Amount To Much - InformationWeek
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11/11/2010
12:23 PM
Rob Preston
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Federal Plans To 'Cut' Spending Don't Amount To Much

When it comes to government outlays on IT or anything else, a dollar saved is rarely ever a dollar removed from a budget and returned to a taxpayer.

And of course, the technology vendors whose CEOs sit on the council stand to benefit from such a massive overhaul, as the government would surely have to spend countless billions to achieve the neat trillion in savings. But considering the myriad jobs, bureaucratic fiefdoms, and political constituencies such an overhaul would dismay, disrupt, and destroy, it would be a miracle if only a tiny fraction of that plan were to see the light of day. And an even bigger miracle if those savings were returned to the bottom line rather than shuffled around to other government spending priorities.

As I wrote in a column earlier this year in which I criticized the "soft financial discipline of federal IT," the OMB continues to justify ever-rising federal IT spending -- $80 billion and counting for fiscal 2011 -- on the grounds that agency CIOs are on the hook to improve cybersecurity, deliver more and better services to citizens, and do lots of other important stuff. As if private sector CIOs haven't been under the same kinds of pressures over the past several years though most of them have been saddled with flat or declining budgets.

While OMB director Peter Orszag seemed at the time to be reining in IT spending by halting all big federal financial system modernization projects, ordering detailed reviews of the highest-risk IT projects, and calling for improved IT procurement and management practices at agencies, Orszag later made it clear that those efforts weren't intended to cut spending, but to "make sure $80 billion spent on IT each year is spent in a way that has much higher returns in efficiency of operations and service quality." In other words, just spread the savings around to other programs.

It's a pattern that's evident across the federal government, not just in IT. For another example, look to a plan laid out in August by Secretary of Defense Robert Gates to cut DoD spending by $100 billion over the next five years. As Gates made clear in a Q&A session with reporters after his briefing, "this is not about cutting the defense budget," but about reallocating money to preserve "force modernization and force structure" amid fiscal pressures.

Given this pervasive posture, federal government IT and other spending will never be cut. It's why I'm deeply skeptical of the draft proposal released Nov. 10 by a White House-organized commission that, among other steps, recommends deep cuts to domestic and defense spending and an overhaul of the tax code to erase nearly $4 trillion from projected federal deficits from 2012 to 2020. Even if those tough decisions are made and trillion-dollar savings are realized (given the hue and cry from vested interests so far, I'm less than confident), much of that money would surely find its way into other "must have" federal programs. Politicians and bureaucrats just can't help themselves.

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