Channeling the 20th Century economist Joseph Schumpeter, the federal budget is experiencing “creative disruption” where innovation and technical progress creates “new ways” replacing “old ways” of doing business. While Colorado River interests “freak out” about potential outcomes under DOGE, the Department of the Interior remains “committed to ensuring fiscal responsibility for the American people.”
Background: The Inflation Reduction Act of 2022 allocated $4 billion to address drought in the West. This funding supports the Bureau of Reclamation (BOR”)—particularly in the Colorado River Basin—implementing water conservation measures, habitat restoration, and drought mitigation projects. Seven Colorado River Basin states are now engaged in discussions with BOR to develop a long-term strategy to address Colorado River water shortages after 2026. The funding provided by the Biden Administration jump started short-term actions for the 2023-2026 period. State and local water agencies will undoubtedly develop long-term plans based on requests for additional long-term federal taxpayer funding.
En Attendant DOGE: How will DOGE ensure that federal taxpayer funding is efficient? Colorado River interests have their “hair on fire” worrying about DOGE pausing existing funding. For those who look down the road at bit, post-2026 planning may need to “reboot.”
Proposal. Support federal funding commitments be justified by a transparent Department of the Interior (“DOI”) cost-benefit analysis consistent with sound economic/finance principles, risk management and use of cutting-edge forecasts defining the dimensions of future challenges and estimated impacts of proposed actions under guidance provided by the Office of Management and Budget (“OMB”). Transparency requires that DOI analysis be subject to public review prior to entering into funding commitments or cancelling earlier federal funding.
Precedent: OMB Circular No. A-4 provides guidance to federal agencies on developing regulatory analysis as required under Section 6(a)(3)(C) Executive Order 12866 of September 30, 1993, as subsequently amended. In effect, the proposal has OMB developing comparable explicit guidance for DOI funding decisions, which would supplement existing guidance on budgeting procedures in 2 CFR 200 and OMB Circular A-11.
Public Policy Benefits: A rigorous review prior to cancelling existing or approving new funding commitments increases the prospect that the use of federal taxpayer dollars is efficient. This proposal enhances communication between the Executive and Congressional branches on budget requests and provides incentives for improved planning and decision-making by parties seeking federal funding:
- Proposed budget items for Congressional approval would have stronger “case statements” for funding decisions that pass rigorous screening.
- Parties seeking federal funding will know the “burden of proof” facing requests for federal funding.
The second point is an alternative to the strategy of channeling “chicken little.”
Implementation: President Trump may wish to issue an Executive Order that directs OMB in collaboration with DOGE to provide guidance principles to DOI for the use of federal taxpayer dollars to address drought in the western United States. The guidelines would place sidebars on the inevitable policy and political debate on where, for what and how much federal taxpayer dollars should be invested in the Colorado River Basin.