Federal spending on information technology is scheduled to decrease by 1.2%, or about $586 million, in the next fiscal year, according to the president’s fiscal year 2013 budget, with most of the reduction coming from cuts in the Department of Defense.
Several major civilian agencies, however, will get small to moderate increases in IT spending, including the Departments of Treasury, Health and Human Services, and Veterans Affairs.
Overall, the IT budget will go from $79.5 billion, enacted for this fiscal year, to $78.9 billion as proposed. When inflation is taken into account, the spending on information technology has been essentially flat over the fiscal 2009-2013 period, according to details issued by the CIO’s Office from the proposed FY 2013 budget which was released Monday.
“There is a lot going on in federal IT; it is part of almost everything we do,” said Federal Chief Information Officer Steven VanRoekel. “All of this investment … is meant to deliver on the mission of innovating in a declining budget. It sets us up to do more with less and make us the leader of the world.”
The IT budget was part of the overall $3.8 trillion fiscal 2013 budget President Barack Obama sent Congress Monday. The budget shows annual deficits of more than $600 billion every year up to 2017. The president proposed some major budget cuts in the document, including the proposed cuts in IT spending.
The budget document attributed some of the reduction in federal IT spending on programs that have succeeded in consolidating data centers, moving to cloud computing and the success of the “TechStat” initiative, which involves reviews of agency IT investments by OMB and the agency leadership.
For example, according to the budget:
- The Data Center Consolidation effort resulted in agencies committing to close nearly 1,100 data centers by 2015 (exceeding the 800 closures called for in earlier documents)
- Agencies report that 40 services have moved to the cloud — which have reduced future projected spending on duplicative systems
- The TechStat initiative has saved $3 billion already and is expected to save a total of $4 billion by the end of the next fiscal year. This involves face-to-face meetings with OMB and agency officials aimed at streamlining IT efforts.
VanRoekel said the approximately $300 million in IT savings in DOD spending in the coming year are due largely to “efficiencies through modernization … including data center consolidation.”
Federal IT expert Alan Balutis of Cisco Systems said the overall IT budget news “is positive. The proposed spending only goes down by a modest amount with the savings coming from cloud computing and the data center consolidation effort.
“I would expect more of the savings reinvested in IT as opposed to taken out of production. I view that as an encouraging sign and part of a continuing trend to view IT as an enabler and important investment in the way government delivers service,” he said.
Many departments received increases, largely aimed at “maximizing return on investment,” according to the budget documents.
For example, the Department of Veterans Affairs got a 7% increase in funding in the budget. VanRoekel said that was partially due to an initiative that allows veterans to access their medical records online so they can more easily share those records with civilian health care providers. That process eliminated costly paperwork and bureaucratic processing, he said.
The Treasury Department also received an 11% increase in funding to pay for modernization efforts expected to help improve tax collection.
He also said the IT Dashboard, which allows more open data collection and oversight, is helping to save money.
Mark Forman, who was the first federal CIO, appointed by President George W. Bush, said the IT budget document reflects more of the underlying budget philosophy of the president than the IT spending itself. The cuts in defense spending, for example, mean cuts in defense IT, he said.
“The IT is an afterthought of program decisions that were made,” he said. “If you get more funding for your program, you get more for IT. There were no IT decisions made independent of program decisions.”
In addition, Forman suggested that the pure IT cuts that were articulated in the document may be a very small drop in a very big bucket. He said the Clinger-Cohen act, which called for consolidation of IT information and spending, noted that it takes five years to save $42 million from the initial cloud computing initiative. “At the same time you are spending $400 billion (over five years on IT),” he said.
And Balutis pointed out that no matter what’s in the IT budget (or the rest of the budget for that matter) big budget decisions probably will have to wait until after the November elections.
“Part of me feels like when I finish looking through it this evening, I’ll put it away and open it up in November after we see what happens in the elections in the House and Senate and presidency,” he said. “I don’t think anything is going to happen on the budget front until then.”