Office of Management and Budget (OMB)

The Office of Management and Budget is the largest component of the Executive Office of the President and arguably the most powerful federal agency that most Americans have never heard of. OMB prepares the President's budget, reviews all significant federal regulations before they're published, clears agency testimony and legislative proposals, oversees federal procurement policy, manages government-wide performance (through GPRA), and sets information policy for all agencies. Every major policy action in the executive branch passes through OMB.

Current Law (2026)

Parameter	Value
Location	Executive Office of the President
Head	Director (appointed by President, Senate-confirmed)
Deputy	Deputy Director (appointed by President, Senate-confirmed)
Key offices	OIRA (regulatory review), budget divisions, management divisions
Budget authority	Prepares and submits the President's budget to Congress
Regulatory review	Reviews all "significant" regulations through OIRA (Executive Order 12866)
Information policy	Oversees federal information collection, privacy, and data standards
Procurement	Sets government-wide procurement policy
Circular system	Issues management directives (Circulars A-11, A-76, A-123, A-130, etc.)

Legal Authority

31 U.S.C. § 501 — Office of Management and Budget (OMB is in the Executive Office of the President)
31 U.S.C. § 502 — Officers (Director and Deputy Director appointed by the President with Senate confirmation)
31 U.S.C. § 503 — Functions (assist the President in preparing the budget and supervising its administration; develop programs for economic and efficient government; coordinate federal statistical programs)
31 U.S.C. § 1104 — Budget and appropriations authority of the President (the President submits a budget for each fiscal year; agencies submit budget requests to the President through OMB)
31 U.S.C. § 1105 — Budget contents and submission (the budget must include estimated expenditures, proposed appropriations, estimated revenues, and the President's policy priorities)
44 U.S.C. § 3504 — Authority of the Director (OMB Director oversees federal information policy, including data collection, privacy, and information technology)
44 U.S.C. § 3553 — FISMA authority (OMB oversees agency information security policies; the Director develops and implements cybersecurity policies for the executive branch)

How It Works

OMB controls the executive branch through three core functions: budget formulation, regulatory review, and management oversight.

Budget formulation is OMB's most fundamental power. Every federal agency's budget request must pass through OMB before it reaches Congress as part of the congressional budget process. OMB analysts review agency requests, negotiate spending levels, and assemble the President's budget — the comprehensive spending proposal submitted to Congress each February. The process, known as "passback," gives OMB enormous power: agencies that disagree with OMB's recommended funding level can appeal to the Director or ultimately the President, but OMB's initial recommendation shapes the entire debate. After Congress appropriates funds, OMB apportions them to agencies — controlling the rate at which money is spent.

Regulatory review through the Office of Information and Regulatory Affairs (OIRA) gives OMB a chokepoint over all significant federal regulations. Under Executive Order 12866 (and its successors), agencies must submit "significant" proposed and final rules to OIRA for review before publication. OIRA reviews rules for consistency with the President's priorities, cost-benefit analysis, legal authority, and coordination with other agencies. This review process can delay, modify, or effectively block regulations — making OIRA one of the most consequential and controversial offices in government.

Management oversight encompasses government-wide policies for procurement, financial management, performance measurement, information technology, data collection, and organizational structure. OMB issues Circulars — management directives that agencies must follow — covering topics from regulatory analysis (A-4) to internal controls (A-123) to capital programming (A-11). The legacy grant-administration circulars A-87, A-110, and A-133 were consolidated in 2014 into the Uniform Guidance at 2 CFR Part 200. These circulars and the Uniform Guidance set the operational rules for the entire executive branch.

OMB also reviews agency compliance with the Paperwork Reduction Act through OIRA and ensures CFO Act financial management standards are met. OMB also clears agency testimony, legislative proposals, and comments on pending legislation — ensuring consistency with the President's policy positions before agencies communicate with Congress. This clearance function means OMB knows about and can influence virtually every policy position taken by the executive branch.

Circular A-11 — Federal Budget Preparation & GPRA

OMB Circular A-11 is the comprehensive annual guidance document that governs how executive branch agencies prepare, submit, and execute their budget requests. At over 900 pages, it is the operational bible of the federal budget process — specifying the data formats, exhibit requirements, performance information templates, and deadlines agencies must follow to participate in the annual budget cycle. A-11 is reissued and updated each year, typically in June or July, before agencies begin preparing their budget submissions for the next fiscal year.

Budget formulation under A-11 runs on a structured timeline. Agencies receive OMB's "Spring Guidance" (April–May) setting the overall resource levels and policy priorities for the upcoming budget year. Agencies then prepare their internal budget requests and submit them to OMB by September. OMB analysts conduct "budget reviews" from October through November and issue "passback" letters in late November or December — OMB's bottom-line decisions on agency funding levels. Agencies that object can appeal to the OMB Director or, in limited cases, to the President. The final President's Budget, incorporating all of these decisions, is submitted to Congress by the first Monday in February.

Performance integration is where A-11 implements the Government Performance and Results Act (GPRA, 31 U.S.C. §§ 1115–1120) and the GPRA Modernization Act of 2010. A-11 Part 6 requires agencies to:

Develop four-year Agency Strategic Plans aligned with the President's cross-agency priority goals
Prepare annual Agency Performance Plans identifying performance goals, measures, and target levels for the upcoming fiscal year
Publish annual Agency Performance Reports comparing actual results to prior-year targets, explaining missed targets, and presenting plans for improvement
Participate in Performance Improvement Council reviews chaired by the Deputy Director for Management at OMB
Designate a Performance Improvement Officer responsible for coordinating the agency's performance management activities

Capital planning and IT investment (A-11 Part 7, Appendix J) establishes the federal Capital Planning and Investment Control (CPIC) process. Agencies must maintain a portfolio of major IT investments, designate a Chief Information Officer with budget authority, and submit detailed Exhibit 300 Business Cases for any major IT investment — including cost estimates, risk assessments, schedule milestones, and performance metrics. OIRA reviews Exhibit 300s alongside the budget. A-11 Part 7 was substantially revised after the enactment of the Federal Information Technology Acquisition Reform Act (FITARA, 2014), which gave agency CIOs a formal role in IT budget decisions and created the TechStat review process for troubled IT projects.

Federal credit programs (A-11 Part 5) govern how agencies budget for direct loans and loan guarantees under the Federal Credit Reform Act (31 U.S.C. § 661a). The credit reform model requires agencies to estimate the long-run cost (subsidy rate) of new loans and guarantees and to appropriate that subsidy cost up front, rather than treating the full loan principal as a budget outlay. OMB reviews agencies' subsidy rate estimates and reestimates them annually as actual loan performance is observed.

Parameter	Value
Document	OMB Circular A-11
Reissued	Annually (June–July)
Statutory authority	31 U.S.C. §§ 1104–1105 (budget preparation); 31 U.S.C. §§ 1115–1120 (GPRA); 31 U.S.C. § 661a (federal credit)
Applies to	All executive branch agencies
Key deliverables	Agency Strategic Plans, Annual Performance Plans, Performance Reports, Exhibit 300 IT business cases
Related circulars	A-123 (internal controls), A-94 (discount rates), A-130 (IT management)

How It Affects You

If you work at a federal agency and wonder why your budget request got cut or your regulation got delayed: OMB is the answer. Through the annual "passback" process, OMB analysts review each agency's budget request, propose significant reductions or restructuring, and give agencies a limited window to appeal before the final President's Budget is submitted to Congress in February. If your program's funding was cut, OMB made that call — not the agency's leadership. On the regulatory side, OIRA review (required for all "significant" rules — defined as those with $100M+ annual economic impact or raising novel policy issues) can delay a rule for 90 days or longer. OIRA returns rules for reconsideration when they conflict with the President's priorities, have inadequate cost-benefit analysis, or lack sufficient coordination with other agencies. Understanding which desk officer at OIRA covers your agency, and what OMB Circular A-4 (regulatory cost-benefit methodology) requires, is essential for successfully navigating the review process. OMB's legislative clearance function is equally important: every agency communication to Congress — testimony, legislative proposals, responses to congressional inquiries — must clear OMB to ensure consistency with the President's program.

If you manage a nonprofit, university, state agency, or local government that receives federal grants: OMB's Uniform Guidance (2 CFR Part 200) governs how you manage every dollar of federal grant funding — cost principles (what you can and cannot charge to grants), audit requirements (Single Audit for entities spending $1,000,000+ in federal awards per year, raised from $750,000 in the April 2024 Uniform Guidance revision), reporting obligations, procurement standards, and conflict of interest rules. Non-compliance with the Uniform Guidance can result in disallowed costs, grant drawback, and suspension or debarment from future federal funding. The Single Audit requirement is auditors' core federal grant accountability mechanism. The 2024 revision also raised the de minimis indirect cost rate from 10% to 15% and the subaward MTDC threshold from $25,000 to $50,000. OMB sets policy on indirect cost rates (the overhead allocation that allows grantees to charge a portion of facilities and administrative costs to grants), and the negotiation process between grantees and their cognizant federal agency determines how much indirect cost recovery you receive — a significant budget item for research universities and large nonprofits.

If you run a business that is subject to federal regulation: Every significant federal regulation passes through OIRA before taking effect — making OIRA one of the most consequential (and least publicly visible) chokepoints in federal rulemaking. OIRA review can be followed in real time through the Office of Information and Regulatory Affairs' website (reginfo.gov), which tracks every rule under review, when it entered review, and when it was cleared or returned. For businesses facing a proposed rule with major cost implications, the OIRA review period is the optimal window for substantive engagement — OIRA is more receptive to detailed economic analysis and alternative approaches than the agency proposing the rule. OMB's Regulatory Agenda (published twice annually in the Federal Register) provides advance notice of rules agencies plan to propose or finalize in the coming year — the regulatory agenda is your early warning system for upcoming regulatory changes that may affect your operations. The current administration's deregulatory posture means OIRA is more likely to require agencies to justify regulations and conduct sunset reviews of existing rules.

If you care about fiscal policy, government spending, or the federal budget: OMB's President's Budget (submitted to Congress each February) is the opening bid in the annual appropriations process. It's a political document as much as a fiscal one — it reflects the administration's priorities, proposes mandatory spending changes, requests tax policy changes, and establishes the White House's baseline for negotiations with Congress. Congress is not required to adopt the President's budget (it usually doesn't, in detail), but the budget shapes the debate. OMB's mid-session review (July) updates the economic and fiscal projections for the current fiscal year. The OMB Director's testimony before the House and Senate Budget Committees is often the clearest statement of the administration's fiscal strategy. For understanding what's actually in the President's Budget: OMB's Analytical Perspectives volume provides the most detailed breakdown of budget assumptions, and the Historical Tables (also from OMB) are the authoritative source for federal spending and revenue data going back to 1940.

State Variations

OMB is exclusively a federal executive branch institution. However, its policies affect states significantly:

OMB Uniform Guidance governs how states manage federal grants (~$1 trillion annually to state/local governments)
OMB statistical standards (including metropolitan area definitions) affect federal funding formulas
OMB regulatory review affects federal rules that states must implement (Medicaid, environmental, education)
Many states have their own budget offices modeled on OMB's functions

Implementing Regulations

OMB operates primarily through circulars (A-11 budget preparation, A-123 internal controls, A-130 information management) rather than CFR rulemaking. 5 CFR Parts 1300–1320 contain OMB procedural regulations — including 5 CFR Part 1303 (OMB's FOIA implementing regulations governing public access to OMB records: budget documents, regulatory review correspondence, policy memos, and OIRA regulatory review files; OMB charges search, review, and duplication fees; requesters may appeal denials to OMB's General Counsel; OIRA regulatory review records — correspondence with agencies about proposed rules — are among the most-requested OMB record types for public interest and academic researchers). 2 CFR Part 200 (Uniform Guidance) is OMB's most significant regulatory product, governing federal grant administration.

5 CFR Part 1321 — Responsibilities of Recognized Statistical Agencies and Units: OMB's regulations establishing independence standards and quality obligations for the principal federal statistical agencies — including the Bureau of Labor Statistics (BLS), Census Bureau, Bureau of Economic Analysis (BEA), National Center for Health Statistics (NCHS), National Agricultural Statistics Service (NASS), Economic Research Service (ERS), and others recognized by OMB (implements 44 U.S.C. §§ 3504 and 3563; 31 U.S.C. § 1104):

§ 1321.4 — Four fundamental responsibilities: recognized statistical agencies must uphold four core obligations: (1) relevance and timeliness — produce statistics that meet the needs of data users and are released on schedule; (2) credibility and accuracy — use appropriate methods and correct statistical errors promptly; (3) objectivity — make independent decisions about methods, practices, and release schedules free from political or programmatic interference; (4) confidentiality — protect respondent data so that reported information cannot be used against respondents in any non-statistical proceeding
§ 1321.5 — Relevance and timeliness: each recognized agency must maintain a public schedule of data releases; releases must occur on the scheduled dates regardless of political or programmatic pressure; agencies must engage stakeholders about statistical relevance needs; parent agency heads must not delay or suppress data releases
§ 1321.6 — Credibility and accuracy: statistical agencies determine their own methodologies and analytical practices independently; no parent agency official may change methodology, suppress a finding, or require reanalysis based on policy preferences rather than statistical validity; if errors are found, the agency corrects and publicly explains them
§ 1321.7 — Objectivity: recognized agencies must make independent decisions about what statistics to collect and how to collect them; the head of a recognized statistical agency must be a career statistical professional, not a political appointee; statistical agency heads may communicate directly with OMB about budget and statistical program needs
§ 1321.8 — Confidentiality: data collected for statistical purposes must be used only for statistical purposes; individually identifiable data cannot be disclosed to law enforcement, tax authorities, regulatory agencies, or other non-statistical users; this confidentiality protection is the basis of respondent trust in federal data collection — weakening it would undermine response rates for the Census, the CPS, and other foundational surveys
§ 1321.9 — Compliance review: the Inspector General of each parent agency must conduct a review assessing whether the agency is complying with the four fundamental responsibilities; the compliance review must be conducted using IG guidance issued by OMB; reports are public

Part 1321 codifies in regulation the independence norms that have governed the major statistical agencies for decades. The objectivity provisions became particularly significant during the 2025 debates over whether DOGE-directed workforce reductions could affect the integrity of BLS employment reports and Census operations — the regulation makes clear that the parent agency (Labor, Commerce) cannot direct the statistical agency's methodological decisions or data release schedules. The confidentiality provisions are foundational to the federal data collection enterprise: BLS, Census, and other agencies collect sensitive individual and business data by promising that it will be used only for statistical purposes; Part 1321 gives that promise regulatory force.

Pending Legislation

HR 6571 — Require federal officials to label AI-generated content, OMB rules, audits, and penalties. Status: Introduced.
HR 6949 — Let up to five states combine federal antipoverty funds into pilots to reduce benefit cliffs. Status: Introduced.

Recent Developments

OMB has been at the center of executive power debates, particularly regarding impoundment (withholding congressionally appropriated funds), regulatory review intensity, and the scope of presidential management authority. OIRA's regulatory review function has expanded under recent administrations, with increased attention to cost-benefit analysis methodology, retrospective review of existing regulations, and coordination of AI governance across agencies. OMB's role in federal cybersecurity has grown through its FISMA oversight authority, with the office setting zero-trust architecture and software supply chain security requirements for all agencies.

OMB issued memorandum M-26-07 on reopening federal departments and M-26-06 on agency operational guidance, reflecting the administration's government reorganization priorities under the broader federal workforce and department restructuring effort.
In early 2026, the White House published OMB's schedule of principal federal economic indicators, maintaining the standard release calendar for GDP, employment, CPI, and other key economic data series that inform budget projections and monetary policy decisions.