Government IT may fare well under debt ceiling deal

The $2.5 trillion in projected cuts are unlikely to lead to canceling major IT initiatives, experts say, but automatically triggered cuts could do damage.

The deal struck between the Obama White House and congressional leaders to immediately raise the limit on federal borrowing in exchange for $2.5 trillion in spending cuts over 10 years is unlikely to mean a major scaling down of federal information technology initiatives, experts told Nextgov on Monday.

That's because there's a generally strong consensus in Congress and the administration that increased efficiencies from new technology offer the government's only hope of slashing such a huge portion of federal spending without drastically reducing services, said Alan Balutis, a former chief information officer at the Commerce Department and now a director at Cisco's Internet Business Solutions Group.

The key question, Balutis said, will be who serves on the 12-member bipartisan and bicameral commission charged with identifying $1.5 trillion of the total spending cuts and how many of those members come from the government reform wings of both parties, which have championed technological innovation as a way to save money.

"I think government will be faced with this situation where either it's going to do less with less, or it's going to have to look at technology as an enabler and as a transformative mechanism to change the way government delivers services," Balutis said.

Sunday's debt ceiling deal calls for about $1 trillion in immediate cuts rolled out over 10 years. It leaves the remaining $1.5 trillion in cuts to the yet-to-be-named congressional committee. If that committee doesn't complete its work and win approval from the full Congress by Dec. 23, then about $1.2 trillion in across-the-board automatic cuts will be triggered.

In exchange, Obama won authority to increase the limit on federal borrowing by $2.1 trillion, which will keep the government safe from default until after the 2012 presidential election.

Although the precise details of the debt ceiling deal only emerged Sunday night, it's been clear for some time that any deal worked out between Republicans and Democrats would involve a significant reduction in government spending, Balutis said.

Despite that consensus, early drafts of the few fiscal 2012 appropriations bills that are making their way through Congress generally have not included major cuts in federal IT spending, he said, and market research firms also are not projecting a major dip in the federal IT market.

TechAmerica, a technology vendor industry group, is preparing for a possible reduction in the growth of federal IT spending, Olga Grkavac, executive vice president for the group's public sector division, said. But TechAmerica also expects the ultimate reductions will not cut heavily into technology spending.

"We're all taxpayers, too, and we understand there have to be some reductions in the growth of government spending in the tech arena, but that can easily be offset by efficiencies that could be gained by the use of more technology," Grkavac said.

As examples, she cited a projected $5 billion in annual government savings from the shift to more nimble and efficient cloud computing and a projected $3 billion in savings over five years from consolidating federal data centers.

TechAmerica's primary response to the debt ceiling compromise was relief that a deal had been reached, Grkavac said. Many of its members are government contractors who, in the past, have fared worse during government shutdowns than their government employee counterparts. During the Clinton-era shutdowns, contractors were not paid for the time they spent not working.

While a default on the federal debt -- or a massive reduction in government services to keep paying off loans without new cash -- would be technically different from a shutdown, the effect on federal employees and contractors would likely have been similar.

The Aerospace Industries Association said it also was glad a deal had been reached, but was very concerned about the prospect of triggered cuts, especially the $600 billion in cuts that would come from the defense sector, if the Congressional commission doesn't get its job done.

In a statement, the organization called the trigger cuts, "a sword of Damocles" hanging "over our national security priorities" and "so draconian that it's hard to believe they are even on the table."

A major question for transparency advocates is how open the 12-member commission will be and the extent to which the public will be able to weigh in on its recommendations, said Daniel Schuman, policy counsel for the Sunlight Foundation.

Ad hoc and standing joint congressional committees have a mixed record on transparency, Schuman said. The issue is further complicated because it's not clear whether House rules on transparency or Senate rules should apply.

"This commission is invested with so much power," he said, "we hope they'll be open enough that the American people will be able to see what's going on."

The deal is expected to go before both houses by Tuesday when the Treasury Department's credit card will officially run out. It may yet be defeated by House conservatives who believe the spending cuts aren't deep enough.