The Office of Management and Budget (OMB), as part of the executive office of the president, is the largest office within the executive branch of the U.S. federal government. The OMB works directly with the president to implement the chief executive’s commitments and priorities and execute the executive branch’s budget.

The main roles of the Office of Management and Budget include developing a budget, overseeing various agencies and how they execute their spending, reviewing all federal regulations, handling proposals and communications with other branches, and lastly, assessing presidential executive orders before they are issued.

What Is the Office of Management and Budget (OMB)?

First and foremost, the OMB works alongside the president to prepare the annual budget, which takes effect during the following fiscal year. The director and staff look at current spending practices as well as proposed changes, which must be presented to Congress. The office also oversees other agencies under the executive branch and evaluates the performance of agency programs, policies, and procedures.

The OMB also determines the funding priorities and makes sure that all communications are consistent with the president’s mission. In addition, the Office of Management and Budget ensures that agency reports, rules, testimony, and proposed legislation are consistent with the president’s budget and policies.

Its overall goal is the proper execution of the budget and overseeing that all departments are managed well and performing efficiently. At the beginning of each presidency, the newly elected president chooses a leadership candidate to direct the OMB.

History of the OMB

The presidency didn’t always have a budget, which led to an imbalance of power and occasionally unchecked spending practices. In 1921, as part of the Budget and Accounting Act, the Bureau of the Budget was created and placed under the jurisdiction of the U.S. Treasury. The act also put forth that the president would have to put together an annual budget.

In 1939, under then-President Franklin Roosevelt, the bureau was moved to the newly created Executive Office of the President. In 1970, under then-President Richard Nixon, the Bureau of the Budget became the Office of Management and Budget. Subsequently, Congress added four departments under the OMB: the Office of Federal Procurement Policy (OFPP) in 1974, the Office of Information and Regulatory Affairs (OIRA) in 1980, the Office of Federal Financial Management (OFFM) in 1990, and the Office of Electronic Government (E-Gov) in 2002.

OMB Leadership

The office is currently led by Director Shalanda D. Young and Deputy Director for Management Jason S. Miller. There is also the general counsel as well as assistant directors, heads of statutory offices, and various other staffers.

The administrators oversee the Office of Federal Financial Management (OFFM), the Office of Information and Regulatory Affairs (OIRA), and the Office of Federal Procurement Policy (OFPP). These administrators are appointed by the president and then confirmed by the Senate.

Qualifications for Working at the OMB

There are many positions outside of leadership roles, and candidates should have at least a master’s degree in a relevant field, such as public policy, economics, or public administration. Aside from an advanced degree, examiners should be experts on an array of issues such as homeland security, health policy, and trade.

Limitations of the OMB

Prior to the founding of the OMB and Congress handing budgeting power to the president in 1921, there wasn’t a budget. Though the executive office has control over the budgeting function, whoever the president appoints must be approved by Congress. Not only that, but Congress has control over the actual amount that is put toward the budget.

The OMB is also limited in how much control it has over policies, since there are departments that are independent of the executive branch.

The Bottom Line

The Office of Management and Budget—originally the Bureau of the Budget—was created in 1921, became part of the office of the president under President Franklin Roosevelt, and acquired its current name under President Richard Nixon. Later, Congress expanded its departments. Although the OMB plans the budget with the president, Congress controls funding it.