Up to the year 1921, the different government branches and departments of the federal government prepared budget requests. These were sent to the Department of the Treasury who forwarded them to Congress. At this time Congress had the job of setting up the budget. The Budget and Accounting Act was passed by Congress in 1921 which created the Bureau of the Budget as part of the Treasury Department and it reported directly to the president. This new Bureau was responsible for putting together the budget, so the job of setting priorities for the budget fell to the president. The Executive Office of the President was established in 1939 and the Bureau of the Budget was shifted from Treasury to the Executive Office. The Office of Management and Budget was created in 1970 and replaced the Bureau of the Budget and was given additional responsibilities. With the guidelines set by the president, the Office of Management and Budget develops the budget for the president. Some of the Office of Management and Budget’s responsibilities include gathering information, evaluating agency programs, framing priorities, screening agency concerns, reviewing proposals for new programs, and weighing budgetary alternatives.
The Office of Management and Budget (OMB) for short, was created in 1970. The purpose of this office is to help the President prepare the budget for the federal government. In addition, once the budget is passed, the OMB is supposed to help the President to administer it.
The whole point of having this office is to help the President have a relatively independent agency working on budgetary matters. Before the OMB existed, Presidents had to ask each agency for advice on those agencies' budgets. Of course, no agency would ever say they needed less money. When OMB was created, it was meant to help presidents look more objectively at all the parts of government and try to come up with ways to save money.
Office Management and Budget (OMB) is a department within the Executive Office of the President of USA. It was organized in its current form in 1970, replacing the earlier version, the Bureau of Budget. The OMB is responsible for preparation and administration of Federal Budget. The functions of OMB include assisting the president in:
- Preparation of the annual federal budget, which constitutes the President's budget request to Congress
- Supervision of administration in Executive Branch agencies.
- Formulation of the President's spending plans
- Evaluation of the effectiveness of agency programs, policies, and procedures, assessing competing funding demands among agencies, and setting funding priorities.
- Ensuring that agency reports, rules, testimony, and proposed legislation are consistent with the President's Budget and with Administration policies.
- Overseeing and coordinating the Administration's procurement, financial management, information, and regulatory policies.
OMB suggests to department secretaries ways for the departments to be run more efficiently. It studies and recommends changes in existing organizational structure of government agencies, their activities and methods of business, etc. It develops programs and regulations for improved data gathering about functioning of the government and its agencies.