Managing as President: Nixon Creates the Office of Management and Budget (OMB)

Managing the Presidency:
Nixon Creates the Office of Management and Budget
Nixon Legacy Forum
Drexel University, LeBow College of Business
September 11, 2014

Participants included former Secretary of the Treasury Paul O’Neill, who also served as assistant director of OMB in the Nixon administration; Ed Harper, assistant director of the Nixon White House Domestic Council, and later deputy director of OMB and head of domestic policy under President Reagan; Andrew Rouse, executive director of President Nixon’s Advisory Council on Executive Organization (Ash Council); and Richard Nathan, former director of the Rockefeller Institute at the State University of New York, who also served as assistant director of OMB in RN’s first term. Geoff Shepard, former Nixon White House Domestic Council associate director for general government, moderated the discussion.

Office of Management and Budget

Picture: President Nixon with 9 of the men from OMB in Oval Office (Nathan, Rice, Webber, Shultz, Weinberger, Cullen, (unknown), Ink, Schlesinger) (R5505 F04to10)

Background:

Upon winning the presidential election of 1968 President-elect Richard Nixon began the process of preparing to assume the presidency in January of 1969. Given his experience in government and his vision for a more modern presidency Richard Nixon knew the work that had been assigned to his pre-presidential task force was not a small one. To make the most efficient use of the time as possible President-elect Nixon set up seventeen task forces to study the Executive Branch. These task forces were to determine how to modernize and make the presidency more effective. Arthur F. Burns (Councilor to the President) was to oversee these task forces and submit their reports prior to President Nixon’s inauguration. Eleven of the task force summaries were forwarded on to President-elect Nixon on January 18, 1969. The full report for the other six task forces were forwarded to the president-elect intact as they were deemed to be most important and thus not summarized but presented in their entirety.

After the inauguration President Nixon sought to act upon the recommendations of the task force and reorganize the operations of the Executive Office of the President. This was done to make it more responsive to the president’s desires and would be done in part based on the recommendations of the pre-presidential task forces. President Nixon recognized the world was changing, and the federal government of the United States has grown. President Nixon sought to transform the Executive Office of the President from one where the heads of the various cabinets directed operations of that department nearly independently to one where the president had more direct input into the various activities by the departments. To study the most effective way to make these changes President Nixon authorized the creation of the President’s Advisory Council on Executive Organization.

The President’s Advisory Council on Executive Organization (PACEO) would be led by Chairman Roy L. Ash, thus the council would also be known as the Ash Council. Amongst many others, the Ash Council made three major recommendations. These changes resulted in the transformation the Bureau of the Budget into the Office of Management and Budget, the revitalization of the National Security Council, and the creation of the Domestic Council.

President Nixon’s strategy for reorganization for the Bureau of the Budget into the Office of Management and Budget was designed to add an element of managerial oversight, by the president, to the Bureau of the Budget and to reduce the number of direct reports to the president from the previous arrangements over 100 direct reports to a more manageable number. President Nixon’s strategic approach to restructuring the Office of Management and Budget included not only a restructuring of the staff but by reinforcing the idea that the nation’s budget was not a product of the unelected bureaucracy. The idea was to make clear the nation’s budget was a product of the Executive Office and the president who does answer to the public. To give that concept a visualization the Director of the Bureau of the Budget and the Assistant Director of the Bureau of the Budget were given an office in the White House so as to reinforce the idea that the Executive Office is responsible for and managing the nation’s budget.