Obama turns to tech tools to carry out vision
Budget documents, cybersecurity review reveal key trends
- By Bill Loomis
- Jun 08, 2009
Wall Street is worrying about the climbing record federal budget deficit, which is starting to drive long-term interest rates higher and prompt growing fears of inflation. Based on the past, the omnibus spending bill, fiscal 2009 budgets and the fiscal 2010 request from President Barack Obama, the government will not be cutting back over the next couple of years.
Budgets will likely get tighter as the economy improves, and the president and Congress feel pressure to reduce the deficit in fiscal 2011. Defense may be hit particularly hard, assuming there are no significant new troop deployments. But I believe even in this difficult budget environment, the outlook for federal information looks strong. Two documents released in May offer evidence about how the Obama administration regards information technology as a key factor in moving its agenda forward and not a cost-savings opportunity: the fiscal 2010 IT budget request and the 60-day cybersecurity review.
On May 11, the Office of Management and Budget released details of the president’s fiscal 2010 IT spending request. Although the overall federal IT spending growth in fiscal 2010 is 3.9 percent — in line with what I expected on a percentage basis — it was growth off of a fiscal 2009 IT budget that ended up more than $2 billion above President George W. Bush’s request a year ago. Even with the higher fiscal 2009 base, the fiscal 2010 civilian IT budget is requested to grow 4.3 percent, and defense requests 3.4 percent.
Along with the numbers, Obama provided commentary on several key initiatives to improve government efficiency, reduce costs and improve citizen service. These include more extensive use of cloud computing and Web 2.0 tools to improve transparency, accountability, public participation, collaboration, citizen involvement and IT infrastructure upgrades. He wants to make federal information more accessible to the public through several Web sites, such as usaspending.gov (for data on spending and its effectiveness), data.gov (for public access to government data), and recovery.gov (for information on stimulus funds).
The president views Web 2.0 technologies such as syndicated feeds, video sharing, podcasts, social networking, bookmarking, widgets, virtual worlds and micro-blogs as a path toward greater effectiveness and better decision-making because citizens are more able to participate in the government process.
The federal government plans to take a closer look at its technology infrastructure through its infrastructure modernization program, which it expects can lead to cost savings by making the government more efficient and effective. Cloud computing is cited in the budget as one of its major IT initiatives, allowing the federal government to transform its IT infrastructure by virtualizing data centers, consolidating data centers and operations.
Also, at end of May, Obama released the cybersecurity review and announced the White House will have a new cybersecurity policy position. This review created a road map for the cybersecurity policy official to follow, but offered no specifics or answers to the key issues, and offered no budget numbers. However, the president reiterated that cybersecurity is a national security priority for the country. With IT taking such an important role in moving the president’s agenda forward, I believe the outlook for IT budgets is good, despite dark federal budget clouds on the horizon.
Bill Loomis is a managing director at Stifel Nicolaus.