In 1993, under then-Director Leon Panetta and then-Deputy Directors Alice Rivlin and Phil Lader, OMB reached out to agencies and other White House staff as it began to create a far more collaborative, less adversarial effort at crafting the President's budget.
In years past, agencies used to craft their budget requests through the spring and summer and send them to OMB in September. Even then, the process was more adversarial than anything else, with OMB questioning the requests and forcing agencies to launch appeals to its decisions that could lead all the way to the President.
In spring 1993, however, OMB and agency staff began to work together on the agencies" requests; they held joint "management and budget" reviews of agency operations. Thus, OMB could outline the fiscal restrictions that all agencies had to face.
This year, OMB has taken the collaboration a step or two further. As part of its OMB 2000 process, the agency's "most comprehensive self-examination . . . in recent memory,"  OMB is beginning to take a number of steps that will enable it to work more effectively with agencies in ensuring that priorities are set and programs are working as intended, including placing more emphasis on agency experience in filling OMB jobs, on agency relations, and on OMB exchange programs and electronic communications.
OMB-agency relations also are improving in the area of federal regulation. OMB's Office of Information and Regulatory Affairs (OIRA) is working more collaboratively with agencies both to reduce rules subject to review and to streamline reviews deemed necessary. OIRA also is more open with the public; it discusses its internal processes, logs the private parties with whom it has met to discuss regulations, and publishes a list of rules under review as well as information on concluded reviews.
More fundamentally, OMB is elevating the issue of government management. Under its OMB 2000 plan, the agency will integrate its budget and management sides with the goal of making performance and management issues key elements in budgetary decisions. Under Panetta and now Acting Director Rivlin, that goal more than ever is likely to become reality. "My hope is for a more informed discussion at all levels concerning what we know about the effectiveness of programs," Rivlin, a long-time proponent of the importance of performance, told agency budget officers on August 11, 1994. "What performance information can we bring to bear in decisions that we make and that the President has to make?"
A similar integration failed in the early 1970s. Then-Deputy Director Fred Malek did some restructuring but did little to institutionalize the changes he sought; they evaporated after he left. This time, however, the effort is credited by Donald Kettl of the Brookings Institution as a "transformation within people," not a reshuffling of boxes.
Operationally, OMB has created five Resource Management Offices (RMOs) responsible and accountable for budget formulation, analysis, and execution; program effectiveness and efficiency; short- and long-range policy and program analysis; implementation of government wide management policies; and program evaluation. The RMOs cover similar, though not the same, areas as OMB's former divisions: (1)national security and international affairs, (2) natural resources, energy, and science, (3) health and personnel, (4) human resources, and (5) general government.
Calling the OMB 2000 reorganization "quite simply, the most fundamental change in the agency since its creation," Kettl said it "promised several important innovations." He cited: