Bureau of the Budget BOB

Before 1921, each federal agency sent its own spending requests directly to Congress, and no one assembled a government-wide budget. After deficits from World War I and years of reform advocacy, the Budget and Accounting Act, signed by President Warren Harding on June 10, 1921, required the President to submit an annual budget and created the Bureau of the Budget in the Treasury Department to prepare it, along with the General Accounting Office to audit spending for Congress.

The Bureau reviewed agency requests, cut and combined them into the President's budget, and later cleared agency testimony and proposed legislation to make sure they matched the President's program. Following the Brownlow Committee's recommendations, Reorganization Plan No. 1 of 1939 moved it into the new Executive Office of the President, making it the President's main management and policy staff. During the New Deal and World War II it grew into a powerful, professional, nonpartisan agency that coordinated the expanding federal government.

In the 1960s presidents wanted more attention to how programs were managed, not just how much they cost. Reorganization Plan No. 2 of 1970, effective July 1, 1970, under President Richard Nixon, replaced the Bureau with the Office of Management and Budget, adding a stronger management role and more political appointees at the top. Admirers of the old Bureau remember it as a model of neutral expertise, while others argue that presidents needed a more responsive staff to control a large bureaucracy, a tension that continues at OMB today.