<P> The Bureau of the Budget, OMB's predecessor, was established in 1921 as a part of the Department of the Treasury by the Budget and Accounting Act of 1921, which was signed into law by president Warren G. Harding . The Bureau of the Budget was moved to the Executive Office of the President in 1939 and was run by Harold D. Smith during the government's rapid expansion of spending during the Second World War . James L. Sundquist, a staffer at the Bureau of the Budget described the relationship between the President and the Bureau as extremely close and of subsequent Bureau Directors as politicians and not public administrators . </P> <P> The Bureau was reorganized into the Office of Management and Budget in 1970 during the Nixon administration . The first OMB included Roy Ash (head), Paul O'Neill (assistant director), Fred Malek (deputy director) and Frank Zarb (associate director) and two dozen others . </P> <P> In the 1990s, OMB was reorganized to remove the distinction between management staff and budgetary staff by combining the dual roles into each given program examiner within the Resource Management Offices . </P> <P> OMB prepares the President's budget proposal to Congress and supervises the administration of the executive branch agencies . OMB evaluates the effectiveness of agency programs, policies, and procedures, assesses competing funding demands among agencies, and sets funding priorities . OMB ensures that agency reports, rules, testimony, and proposed legislation are consistent with the president's budget and with administration policies . </P>

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