It was President Nixon who first put the “M” into the Office of Management and Budget. Nixon reorganized the Bureau of the Budget into OMB in 1970, adding program management duties to its mission. Originally created as part of the Treasury Department in 1921, the agency had already moved into the Executive Office of the President in 1939.
Since 1970, a succession of presidents has molded OMB to suit their needs and priorities. The Bush administration took office in 2001 with the belief that OMB had largely been engaged in budgetary matters and pledged to put an emphasis on the agency’s management function.
The primary manifestation of that has been the President’s Management Agenda, which is known for using a score card system that rates agencies’ management efforts as red, yellow or green — the colors correspond to traffic signals — in quarterly progress reports.
Clay Johnson, OMB’s deputy director of management, has described the scoring system as “shame and humiliation.” Agencies that don’t perform well can’t downplay the rating. On the other hand, agencies that do perform well get a series of green scores to be proud of.
Johnson, discussing the latest PMA score card, said OMB deliberately made it difficult to earn a green score because it was important that the score card be meaningful.
“It’s not easy to be green,” he said. “To get to green and yellow is hard, so the big agencies were having a harder time than smaller agencies. But it became a lot more credible. People realized it served a purpose.”
If every agency had been able to earn green scores quickly, he said, the system would have lost credibility.
“We didn’t invent the score card,” he said. “It preceded us in many places. But it’s a very simple way to communicate what’s working and what’s not.”
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