Introduction

Government spending on information technology (IT) has evolved from a minor component of the President's annual budget submission to a dedicated chapter over the past two decades. This evolution reflects the increased importance of IT systems to agencies' operations as well as the increased focus on IT policy issues by the Office of Management and Budget (OMB) and the President.

In recognition of IT's role in sustaining government operations and achieving policy goals, Congress has passed a series of measures that assign certain IT planning and management responsibilities to executive branch agencies, agency chief information officers (CIOs), and OMB. These actors play significant roles in the budgeting, management, and funding of IT.

Federal agencies increasingly use IT systems as a way to interact with many groups outside individual agencies' boundaries, including

• members of the public (e.g., providing information or services);
• other federal agencies (e.g., collaborating with or providing services to one another);
• state and local governments (e.g., operating joint programs or providing funds); and
• the private sector (e.g., receiving goods and services from contractors).

This report discusses how congressional and executive branch actions have shaped the format and content of federal IT budgetary reporting, including aggregated reporting on IT spending that has been included in the President's budget submission. Drawing on this data, the report analyzes how aggregate federal IT spending, as reported by OMB, has changed since FY2003. The report concludes by briefly analyzing budget data presented in the most recent presidential budget submission for FY2025.¹ The proposed IT spending aggregates contained in this report, as well as the spending trends, may be of interest to authorizing and appropriations committees that oversee agencies with substantial IT investments. For more information about federal IT budgeting processes in the context of the broader executive budget process, see CRS Report R46877, Federal Information Technology (IT) Budgeting Process in the Executive Branch: An Overview, by Dominick A. Fiorentino.

The President's Budget Submission

The President's annual budget submission is one of the most comprehensive modes of reporting budgetary information at the federal level. In practice, OMB prepares the budget submission on the President's behalf. In recent decades, the President's budget submission has included several printed and electronic volumes, including the Budget of the U. S. Government, Appendix, Historical Tables, and Analytical Perspectives.²

A Focus on IT Spending in the Analytical Perspectives Volume

The Analytical Perspectives volume contains in-depth discussion of government programs, technical explanation of budget baselines and concepts, and policy-area-focused budgetary breakouts including proposed IT spending, research and development, and credit and insurance programs. The form and content of the IT budgetary information has evolved over time, reflecting increased reliance on IT systems by executive agencies to carry out their missions as well as increased focus on IT policy issues by OMB and the President.³

Evolving Reporting of IT Spending in Analytical Perspectives

Presentation of IT-related spending in the principal volumes of the President's budget submission has evolved over time. Prior to the FY2000 budget submission, IT investments were grouped under the category of "major equipment," which also included capital assets such as weapons systems.⁴ In FY2000, the budget submission began listing individual IT investments separately from other types of capital asset investments.⁵ The Analytical Perspectives volume began including an aggregate federal IT spending figure for the first time in FY2003.⁶

In 2009, OMB created the IT Dashboard website to increase transparency of agency IT investments.⁷ The resulting publicly accessible website currently displays data from 26 agencies on the cost, schedule, and performance of certain IT investments.⁸ In FY2013, OMB began using the Analytical Perspectives volume to report aggregated information about IT spending. OMB used information submitted to the IT Dashboard by agencies to produce Department of Defense (DOD) and non-DOD (referred to as "civilian agency") IT spending totals.⁹

While spending totals presented in the Analytical Perspectives include both classified and non-classified DOD IT spending, only non-classified IT spending appears on the IT Dashboard. DOD reports classified IT investments separately to OMB.¹⁰

Since the President's FY2018 budget submission, OMB has presented disaggregated IT spending by agency in the Analytical Perspectives volume based on data submitted to the IT Dashboard.¹¹ This disaggregation includes 26 agencies—25 civilian agencies and DOD—that report spending data to the IT Dashboard. Those reporting to the dashboard include all of the major executive branch departments and agencies. The inclusion of these agencies is driven by statute, namely the Chief Financial Officers Act of 1990 (CFO Act) and Federal Information Technology Acquisition Reform Act (FITARA), which are discussed in the section below.

Statutory Requirements Related to IT Budgeting

Several pieces of legislation have shaped the presentation of IT spending data in the President's budget submission and other modes of reporting.

Clinger-Cohen Act of 1996

Congress passed the Clinger-Cohen Act of 1996 due to growing concern about the federal government's ability to develop and maintain IT infrastructure and personnel.¹² Provisions pertinent to IT budgeting include

• establishing the role of CIOs within agencies to develop and maintain IT systems as well as to evaluate and report on IT improvements; and
• establishing a new federal IT capital planning and investment control process, with prominent roles for OMB and agencies.¹³

From FY2003 to FY2009, OMB noted that the inclusion of the IT chapter in the Analytical Perspectives fulfilled the reporting requirements of Clinger-Cohen.¹⁴

E-Government Act of 2002

The E-Government Act of 2002 created the Office of Electronic Government (E-Gov) within OMB,¹⁵ which, among other responsibilities, helps guide executive branch agencies' IT budgeting and IT capital planning.¹⁶ E-Gov is responsible for aspects of two annually issued documents:

• 1. OMB Circular No. A-11, which provides agencies with instructions and schedules for the submission of budget requests and justifications to OMB; and
• 2. the corresponding IT Budget—Capital Planning Guidance, which provides annual guidance around IT budget submissions and budgetary reporting.¹⁷

Federal Information Technology Acquisition Reform Act (2014)

Multiple provisions of FITARA were built upon provisions associated with Clinger-Cohen and codified into the U.S. Code.¹⁸ FITARA's provisions that relate to IT budgeting include

• the increased transparency of reporting for IT investments via the IT Dashboard;¹⁹
• requirements for categorizing IT investments according to risk;²⁰ and
• requirements for an agency IT portfolio review process, where individual investments are viewed in the context of the agency's broader set of projects.²¹

Enactment of FITARA followed in the wake of several administrative initiatives undertaken by OMB during the Obama Administration, including the creation of the IT Dashboard website in 2009.²²

The CFO Act established the role of CFO and deputy CFO at certain executive agencies, commonly referred to as the "CFO Act agencies."²³ FITARA applies only to the CFO Act agencies, of which there are currently 24. OMB guidance encourages, but does not require, non-CFO Act agencies to comply with FITARA.²⁴ The IT Dashboard currently includes IT spending data from 26 agencies: the 24 CFO Act agencies, the National Archives and Records Administration, and the U.S. Army Corps of Engineers.²⁵

Perspectives on IT Spending Trends: FY2003-FY2025

Reporting on overall IT-related spending for the executive branch has evolved over recent decades, although it has been inconsistent in format and content. Nevertheless, the President's budget submission has given increased attention to the topic of IT funding and spending.

A review of presidential budget proposals may reveal trends in proposed IT spending. In practice, OMB has frequently presented IT spending in terms of proposed amounts rather than obligated amounts.²⁶ The history of proposed amounts may provide perspective on the evolving scale of IT spending in the executive branch as well as how that spending is allocated across agencies.

Proposed IT spending, in nominal terms, has generally increased each year since FY2003 (see Figure 1). After adjusting for inflation, proposed IT spending totals have remained relatively constant, with real proposed spending peaking in FY2018 (see Figure 2). Total proposed IT spending was not provided in the FY2019, FY2022, FY2023, FY2024, and FY2025 budget submissions because DOD IT spending figures were excluded.²⁷

OMB's methodology for measuring IT spending has varied since FY2003, as outlined in a number of updates:

• In FY2015, OMB revised the FY2013 and FY2014 DOD IT spending figures downward by 3% to account for past overstatements in amounts for the Defense Working Capital Fund.²⁸
• Prior to FY2019, the IT budgets for the U.S. Department of Agriculture and the Department of Health and Human Services included grants made to state and local governments for IT systems used to administer federal benefits. In FY2018, these grants totaled $9 billion, accounting for approximately 10% of the total federal IT budget. In FY2019, OMB updated its guidance to exclude these funds, because state and local governments, rather than federal CIOs, are responsible for the development and maintenance of these IT systems.²⁹

Figure 1. Presidential Proposals for IT Spending in Nominal Terms FY2003-FY2025 (Billions of Nominal Dollars)

Source: CRS analysis of data from annual publications of OMB, Analytical Perspectives, Budget of the United States Government, FY2003-FY2025. Notes: Data for FY2019, FY2022, FY2023, FY2024, and FY2025 are excluded because aggregated DOD IT spending figures were not provided. Starting in FY2020, IT spending totals have excluded grants made to state and local governments. Nominal spending totals have not been adjusted to reflect changes in prices (inflation or deflation) over time.

Figure 2. Presidential Proposals for IT Spending in Real Terms FY2003-FY2025 (Billions of 2017 Dollars)

Source: CRS analysis of data from annual publications of OMB, Analytical Perspectives, Budget of the United States Government, FY2003-FY2025. Data are adjusted for inflation using the gross domestic product deflator for federal government consumption expenditures and gross investment. See U.S. Bureau of Economic Analysis, "Table 1.1.9. Implicit Price Deflators for Gross Domestic Product" (accessed March 20, 2024). Notes: FY2019, FY2022, FY2023, FY2024, and FY2025 are excluded because aggregated DOD IT spending figures were not provided. Starting in FY2020, IT spending totals have excluded grants made to state and local governments.

In FY2013, OMB began providing aggregated DOD and civilian IT spending figures, with DOD consistently accounting for 40% or more of total IT spending (see Figure 3). In real terms, DOD-proposed IT spending peaked in FY2018. Civilian-agency-proposed IT spending increased until FY2018, decreased in FY2019, and peaked again in FY2025 (see Figure 4).

Figure 3. Non-DOD vs. DOD Proposed IT Spending in Nominal Terms FY2013-FY2025 (Billions of Nominal Dollars)

Source: CRS analysis of data from OMB, Analytical Perspectives, Budget of the United States Government, FY2003-FY2025. Notes: DOD IT spending figures were not provided for FY2019, FY2022, FY2023, FY2024, and FY2025.

Figure 4. Non-DOD vs. DOD Proposed IT Spending in Real Terms FY2003-FY2025 (Billions of 2017 Dollars)

Source: CRS analysis of data from annual publications of OMB, Analytical Perspectives, Budget of the United States Government, FY2003-FY2025. Data are adjusted for inflation using the gross domestic product deflator for federal government consumption expenditures and gross investment. See U.S. Bureau of Economic Analysis, "Table 1.1.9. Implicit Price Deflators for Gross Domestic Product" (accessed March 20, 2024). Notes: DOD IT spending figures were not provided for FY2019, FY2022, FY2023, FY2024, and FY2025.

Analysis of Proposed IT Spending: FY2025

The President's budget submission for FY2025 proposes $75.1 billion in IT spending at civilian agencies, a 0.93% increase from the FY2024 total proposed amount of $74.4 billion.³⁰ DOD IT funding is not included in the total IT spending figure provided by OMB in the FY2025 Analytical Perspectives. The FY2025 budget includes funding for 4,446 investments at 25 agencies, of which 595 are categorized as "major" IT investments.³¹ According to a breakdown of this data by OMB, these investments support the following three IT portfolio areas:

• 1. Part 1: Mission Delivery (i.e., IT investments that directly support an agency's mission);
• 2. Part 2: Administrative Services and Support Systems (activities that are common across all agencies such as human resources and financial management); and
• 3. Part 3: IT Infrastructure, IT Security, and IT Management (IT goods and services common to all agencies such as IT security and IT network infrastructure).³²

The Administrative Services and Support Systems category accounts for approximately 10% of total proposed spending, with the remaining amount divided among Mission Delivery and IT Infrastructure, IT Security, and IT Management (see Figure 5).

Figure 5. Proposed FY2025 Spending: Federal Civilian IT Investments

Source: CRS analysis of data from OMB, Analytical Perspectives, Budget of the United States Government, Fiscal Year 2025, "Information Technology and Cybersecurity Funding," March 11, 2024. Notes: DOD IT funding was not included in the total IT spending figure provided by OMB in the FY2025 Analytical Perspectives.

The FY2025 budget submission also disaggregated total proposed civilian IT spending by agency (see Table 1). The top three civilian agencies by proposed IT spending are (1) the Department Homeland Security, (2) the Department of Health and Human Services, and (3) the Department of the Treasury.