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White House orders $7.7 billion cut in IT budgets in 2014

Aug. 17, 2012 - 05:38PM   |  

The White House is instructing agencies to cut a combined $7.7 billion from their information technology budgets in 2014 and propose ways to redirect it to other priority projects.

Agencies must outline how they would like to reinvest those funds into projects that will show a return on investment within 18 months, according to Office of Management and Budget guidance released this week. OMB will then decide whether to approve those plans. Projects can include:

• Improved citizen services or administrative efficiencies.

• Shared services.

• IT consolidation, including data centers consolidation.

• Improved IT security and information assets.

• Improved energy efficiency of IT facilities and equipment.

• Innovative investments such as cloud computing, modular development, improper payments reduction, and digital government.

• Data analytics or data management consistent with administration priorities.

The amount being cut from each agency’s IT budget amounts to 10 percent of the average IT spending from 2010 to 2012.

Agencies that will be hit hardest by the proposed budget cuts are the Defense Department, which will see a $3.5 billion reduction. The Health and Human Services Department must cut $662 million, and the Department of Homeland Security will have to cut $587 million.

The combined cuts would reduce agencies’ IT budgets from $74.1 billion — the figure in the president’s 2013 budget plan — to $66.4 billion for 2014.

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