CBO projects deficit to decline to $506 billion in FY2014

Wednesday, August 27th, 2014


The baseline federal budget deficit for FY2014 is expected to be $506 billion, according to the Congressional Budget Office’s (CBO) latest report on the budget and economic outlook. CBO baseline estimates assume a continuation of current law for both expenditures and revenue.

This estimate is $14 billion more than CBO’s April estimate ($492 billion), but if realized would mark an improvement of over $170 billion from the 2013 deficit ($680 billion).

The slight increase in the projected FY2014 deficit reflects lower estimated revenue (-$24 billion), driven by a decline in estimated corporate income taxes, which will more than offset a projected $11 billion decline in expenditures.

For the period FY2015 to 2024, CBO expects the baseline deficit to be $422 billion lower than projected in April.  The deficit will drop to $469 billion in FY2015 before beginning to increase again due to rising mandatory spending and growing interest payments on the debt, according to the CBO report.  By FY2022, CBO projects the deficit will exceed $900 billion, unless changes are made to current law. 

CBO expects the deficit as a percentage of Gross Domestic Product (GDP) to drop to 2.9 percent, significantly lower than the 4.1 percent recorded in 2013. The deficit share of GDP will remain at or below 3 percent until 2019 according to CBO. For the period 2020-2020, the measure will approach 4 percent because deficits will begin to grow at a much faster rate than GDP, CBO reports.

But, while the deficit as a share of GDP will stay under 4 percent through 2024, CBO expresses concern about the growing size of the total federal debt. CBO estimates that federal debt held by the public will be 74 percent of GDP by the end of FY2014 and could grow to 77 percent by 2024. This is over twice that recorded in 2007 and “higher than in any year since 1950.”

CBO worries that a growing national debt will have “negative consequences” on federal spending (increased interest payments) and economic growth, and would restrain the flexibility policymakers need to be able to deal with future challenges and crises.

Air Force partners with GSA to improve buying efficiency

Monday, August 25th, 2014


In a move to achieve savings while buying products and services more efficiently, the Air Force has entered into a partnership agreement with the General Services Administration (GSA).

The Air Force’s Sustainment Center (AFSC) and GSA’s Federal Acquisition Service (FAS) signed a Memorandum of Understanding (MOU) earlier this month. The MOU, announced by GSA on August 18, 2014, will “assist the AFSC to more effectively obtain the products and services they need to accomplish their mission and serve the American people,” according to a GSA Blog post.

The agreement sets up a working group to identify potential GSA contracts that the Air Force could use. Some of the FAS programs that might assist the Air Force include: professional services contracts; General Supplies and Services Fourth Party Logistics program; Federal Strategic Sourcing Initiative (FSSI); and Global Supply Special Order Program (SOP).

This agreement follows the MOU the Air Force signed with GSA in December 2013. That agreement was for the AF use of the One Acquisition Solution for Integrated Services (OASIS) and OASIS small business contracts to buy complex professional services.

The AFSC , headquartered at Tinker Air Force Base, Oklahoma City, “provides critical sustainment for the Air Force’s most sophisticated weapons systems, including: A-10 Thunderbolt II, AC-130, B-1 Lancer, B-52 Stratofortress, and C-5 Galaxy.”  

Per Diem rates for federal employees unchanged for FY2015

Tuesday, August 19th, 2014


The General Services Administration (GSA) has announced the daily Per Diem reimbursement rates for federal employees in FY2015.

Per Diem rates in Standard areas in the Continental United States (CONUS) for lodging will be $83 in FY2015, unchanged from rates in FY2014. Rates for and meals and incidental expenses (M&IE) will also remain unchanged at $46.  The Standard area rate covers most of the continental CONUS counties. 

GSA sets per diem rates for locations in CONUS.  These rates are the maximum amounts a federal employee can receive as reimbursement for allowable expenses while on official duty travel. 

The GSA Per Diem Bulletin FTR 15-01 states that Per  Diem rates for lodging for the some 400 Non-Standard areas (NSAs) will vary depending on local conditions. The MIE rate for NSAs will to range from $46 to $71, also unchanged from FY2014. 

All rates are effective on October 1, 2014.

There will be two new NSAs in FY2014: Kayenta, AZ (Navajo County) and San Angelo, TX (Tom Green County).

GSA also announced changes for some locations in FY2015. Elmore County, ID will be included with Sun Valley, ID NSA. Middlebury, VT (Addison County) NSA will be combined with the Burlington/St. Alban’s, VT (Chittenden/Franklin Counties) NSA. And, the Manhattan NSA has will be renamed New York City (NYC). GSA no longer sets rates for individual NYC boroughs.

In addition, the following NSAs will move to the Standard category: Glenwood Springs/Grand Junction, CO; Lakeville, CT; Chesapeake/Suffolk, VA; Lake Geneva, and WI; Sheridan, WY.

White House establishes U.S. Digital Service

Thursday, August 14th, 2014


The Office of Management and Budget (OMB) announced this week the establishment of the U.S. Digital Service. OMB called this initiative a key component of efforts to improve and simplify the government’s delivery of services through information technology (IT).

This initiative follows on the successful efforts last fall by a group of IT experts brought into government to fix the website.

According to a blog posted on the OMB website, “the Digital Service will be a small team made up of our country’s brightest digital talent that will work with agencies to remove barriers to exceptional service delivery and help remake the digital experience that people and businesses have with their government.”

The first administrator of the Digital Service will be Mikey Dickerson, who was an integral part of the group that worked to fix Dickerson, a former Google site reliability engineer, will also become the Deputy Federal Chief Information Officer. He has described himself not as a policy expert but as one who knows “how to make big distributed systems work technically.”

The new team expects to hire people who “have talent and expertise in a variety of disciplines, including procurement, human resources, and finance.”

OMB expects the Digital Service to achieve its mission by: 1) establishing standards to align the government’s digital services with best in the private sector; 2) identifying common technology patterns to scale services effectively; 3) collaborating with agencies to fix gaps in their ability to design, develop, deploy, and operate top-notch customer interface services; and 4) to provide accountability to ensure results.

Concurrent with this announcement, OMB released two critical components of the IT toolkit to support the work of the Digital Service. The Digital Services Playbook will guide leveraging private-sector best practices and the TechFAR Handbook will help ensure agencies get the right technical tools to buy digital services consistent with the Federal Acquisition Regulation (FAR).

OMB will fund the Digital Team in FY2014 with existing funds and “will scale in 2015 as outlined in the President’s FY 2015 Budget.”

OPM finalizes Phased Retirement rule

Monday, August 11th, 2014


Last week, the Office of Personnel Management OPM) issued the final rule for implementation of the phased retirement program for eligible federal employees.

Congress approved the phased retirement program (Sec. 100121 H.R. 4348) in July of 2012. Last year, OPM issued a draft rule for comments.

Phased Retirement offers an innovative alternative to traditional retirement for the 21st century workforce,” OPM Director Katherine Archuleta said in announcing the final rule. Archuleta said the program also gives federal managers a new tool to “provide unique mentoring opportunities for employees while increasing access to the decades of institutional knowledge and experience that retirees can provide.”

Under the program, federal employees approaching retirement are able continue working part time, while beginning retirement. 

The final rule includes information on employee eligibility, benefits received during phased retirement, and how OPM will calculate the annuity during and after retirement, and how employees can fully retire after a phased retirement period.

To be eligible for the program employees must have been in full employment status for the previous three years and be eligible for immediate retirement under either the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS). Employees subject to mandatory retirement, such as law-enforcement officers, firefighters, air traffic controllers, and most Border Protection officers are not eligible for phased retirement. An employee in phased retirement status is considered a part-time employee, not a reemployed annuitant.

The eligible employee receives income from a combination of part-time salary (50%) and partial annuity payments (50%). The phased retiree also accrues future retirement benefits proportional to the time they work. Phased retirees are expected to spend 20 percent of their time mentoring other employees.

The final rule goes into effect in 90 days. Agencies can begin to submit phased retirement applications to OPM on November 6, 2014.

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