True savings will come from the bottom up, however those savings will be irrelevant if Agency managers are forced to make unnecessary purchases at the end of the year on a use or lose budget.
This theory isn’t new, it’s basic economics --- No manager wants to cut their own budget just to risk penalization for being over budget the following year.
Perhaps the most economical way to manage this is to put ALL savings from all agencies into a lump, discretionary fund that can be accessed on an emergency basis with congressional approval, and carry a 1 year turn around period. This fund can act as a “buffer” for all government expenditures such as over budget expenditures, Social Security or crisis relief.
For Example, Agency A, B and C have annual budgets of 100 million, and each cuts 10 million out of necessary spending. As a result 30 million is put into a lump, discretionary fund. Two months later, Agency A realizes that they will be over budget for the year. They can request 10 million from the discretionary fund (matching their investment) and seek congressional approval for anything over their 10 million investment.
This is not a perfect solution. However, it creates a means of collecting unused budget money without penalizing frugal managers.
The Fed can then use all contributions for investments so that not only is wasteful spending cut, but also the savings are multiplied.
At the end of the year, anything left in the Discretionary fund becomes savings and can be used to pay off the national debt.
This makes it possible for all managers to cut their funds, creates a way to supplement other government programs that may be lacking or far over budget and offers a way to fund government operations without increasing the national debt. And if this fund is treated like an investment account, then the budget can multiply while its not being used.