Keating Report: 2014 forecast on government budgets and spending-Part 2

Just after Christmas, the president signed a bipartisan budget deal that eases federal spending cuts and delivers an estimated $85 billion in savings over the next decade. The deal restores $63 billion in planned sequester spending cuts over the next two years.

Recent federal spending cuts and the strengthening economy are having a positive impact on the budget deficit, which shrank from $1.1 trillion in fiscal 2012 to $680 billion in the fiscal year that ended this past October. Economists polled in the most recent National Association for Business Economics survey expect the federal deficit to narrow a little, to $600 billion, when the current fiscal year ends Oct. 2014. Economists predict that the federal deficit will shrink further through 2016, but then start to grow again.

Federal purchases of goods and services will rise to $1.27 trillion in 2014, up slightly from $1.25 trillion in 2013, according to IHS Global Insight. Federal revenues, says the Congressional Budget Office (CBO), will rise to $3.04 trillion in 2014, up from $2.81 trillion in 2013. In 2015, the CBO projects that federal revenues will reach $3.40 trillion. Download the projections of the CBO’s recent “Updated Budget Projections: Fiscal Years 2013 to 2023,” from this CBO web page.

Federal agencies will continue to invest to make operations more efficient, predicts Russ Colbert (photo at right), who is Federal Market Director at San Jose, Calif.-based Polycom. “Technology’s importance to government entities in 2014, in many ways, was initiated at the beginning of 2013. Under the dark cloud of sequestration, and the continued heavy emphasis on doing ‘more with less,’ technology will play a vital role in assuring critical programs and missions — both state and federal — remain on track.”

Colbert told GPN that one of the hottest news topics in 2013 — within business enterprises and government agencies — was teleworking. “Many high profile enterprises made news this year by showing a willingness to include, or in some cases forgo, teleworking as a benefit to its employees. In the case of Capital Hill, legislation was introduced where all federal government agencies will be forced to cut travel costs by 50 percent by 2017. That means a large investment in video collaboration and mobile video at face level, and a need for greater investment in Internet bandwidth and partnerships with device manufacturers downstream.”

Yes, governments are buying new technologies in 2014, says government marketing expert Mark Amtower (photo at left) and author of Amazon best-seller “Selling to the Government.”

“Government will buy the technologies they need for mission fulfillment, but there will be a price-cutting component in federal purchases,” says Amtower. Vendors to federal agencies, Amtower told GPN, should be knowledgeable about the concept of LPTA, which means “low price/technically acceptable.” Technologies with a track record of performance in the public sector can gain traction in 2014, he adds.

Michael Keating (photo at right) is senior editor for Government Product News and the GPN web site. He can be reached via e-mail at [email protected]
 

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