    [Budget of the U.S. Government]
    [VI. Investing in the Common Good: The Major Functions of the Federal Government]
    [28. General Government]
    [From the U.S. Government Publishing Office, www.gpo.gov]

    [[Page 207]]

                             28.  GENERAL GOVERNMENT

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                             Table 28-1.  FEDERAL RESOURCES IN SUPPORT OF GENERAL GOVERNMENT
                                                (In millions of dollars)
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                                                                                Estimate
                Function 800                1996   -----------------------------------------------------------------
                                           Actual      1997       1998       1999       2000       2001       2002
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    Spending:
      Discretionary Budget Authority...     11,539     11,807     12,809     12,514     12,052     11,796     11,828
      Mandatory Outlays:
        Existing law...................        129        934        787        761        942        726        731
        Proposed legislation...........  .........  .........        -15         57        162        281        419
    Credit Activity:
      Direct loan disbursements........        379        461  .........  .........  .........  .........  .........
    Tax Expenditures:
      Existing law.....................     46,745     48,130     49,500     50,770     52,130     53,560     55,140
      Proposed legislation.............  .........  .........         11         37         46         53         57
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      The General Government function encompasses the central management
    activities of the executive and legislative branches. Its major
    activities include Federal finances, tax collection, personnel
    management, and general administrative and property management.
       Four central management agencies, for which the budget proposes a
    combined $12.2 billion for 1998, establish policies and provide
    administrative and other services--the Treasury Department ($11.8
    billion); the General Services Administration (GSA, $226 million); the
    Office of Personnel Management (OPM, $188 million); and the Office of
    Management and Budget, in the Executive Office of the President (OMB,
    $56 million). The Federal Government also provides tens of billions of
    dollars in tax incentives to help State and local governments and those
    who are subject to their taxes.

    Department of the Treasury

       Treasury is the Federal Government's chief financial agent--producing
    and protecting U.S. currency; helping to set the Nation's fiscal, tax,
    and economic policies; regulating financial institutions and the
    alcohol, tobacco, and firearms industries; protecting citizens against
    criminals who launder money and threaten our borders; and helping
    agencies to strengthen their financial systems. In 1996, Treasury
    collected $1.4 trillion in revenues and issued nearly 850 million
    payments (99 percent on time and 50 percent electronically). Treasury
    plans to further improve its performance by issuing Government-wide
    Audited Financial Statements and modernizing the Nation's tax
    administration systems.
       The Internal Revenue Service (IRS), a part of Treasury, administers
    the Federal tax system with the goal of collecting the proper revenue at
    the least cost. In 1996, the IRS collected $1.36 trillion in net
    revenue, including $38 billion in direct enforcement collections, at a
    cost of $7.3 billion. The IRS estimates that compliance with Federal tax
    laws is now 86 percent--calculated by adding together the income and
    employment taxes that come in through voluntary compliance (83 percent),
    with those that come in through direct enforcement (three percent).
       The IRS processed over 195 million individual tax returns (including
    over 20 million which were transmitted electronically) and one billion
    information returns in 1996, and it issued 90.5 million individual
    refunds.

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    It provides customer service through telephone assistance
    (answering close to 45 million TeleTax calls and 54 million live
    assisted calls in 1995) and maintains information for taxpayers on the
    Internet.
       The IRS is improving the administration of Federal tax laws by
    investing in changes in work practices and information technology. Of
    the over 20 million taxpayers filing electronically in 1996, 2.8 million
    used the Telefile option, which allows taxpayers to file a simple tax
    return over the telephone in under 10 minutes. Forms and other
    information are readily available on the Internet. Ongoing investments
    in modern technology will allow the IRS to improve taxpayer compliance
    by improving access to data and allowing the Federal Government to
    target resources to cases of deliberate noncompliance.
       The complexity of our tax laws, and of the systems designed to
    administer them, imposes a significant burden on individuals and
    businesses--by some estimates, a burden of over $70 billion a year. The
    IRS is taking steps to reduce the burden by providing alternative ways
    to file and pay taxes, easing reporting requirements, expanding access
    to needed information, making it easier for taxpayers to contact the
    IRS, and reducing the need for the IRS to contact taxpayers.

    General Services Administration

       GSA provides administrative services to other agencies, including
    housing, supplies, transportation, and telecommunications. GSA also
    works with the agencies to establish and oversee the implementing of
    policies and standards for administrative services--except for personnel
    and financial management--that affect work environments.
       In the last two years, GSA has aggressively responded to the changing
    needs of its customer agencies by working to transform itself into a
    market-driven, customer-oriented agency. Two recent initiatives, Can't
    Beat GSA Space Alterations and Can't Beat GSA Leasing, focus on revising
    the way it delivers services to meet or beat private sector performance
    standards.
       Since GSA provides services on a reimbursable basis, the budgets of
    the individual agencies themselves provide most of the funding for GSA's
    activities. In 1997, for example, GSA's budget authority was $550
    million, but projected obligations through its revolving funds exceeded
    $11 billion.
       GSA also is working to develop a new Federal management model,
    focusing on performance measurement, accountability for agencies and
    employees, and the effective use of technology in changing work
    environments.

    Office of Personnel Management

       Working with agencies and employees, OPM provides human resource
    management leadership and services, based on merit principles. It
    provides policy guidance, advice, and direct personnel services. OPM
    also operates a Nation-wide job information and application system every
    hour of every day, available to the public through multiple electronic
    (including the Internet) and traditional sources at convenient and
    accessible locations. It also develops and administers compensation
    systems for both blue-collar and white-collar employees.
       But perhaps OPM's most important function is administering the
    Federal civil service merit systems, which includes recruiting,
    examining, and promoting people on the basis of their knowledge and
    skills--regardless of race, religion, sex, political influence, or other
    non-merit factors. OPM runs an aggressive oversight program, identifying
    opportunities for improving Federal personnel policies and programs and
    helping agencies meet mission goals by effectively recruiting,
    developing, and utilizing employees. It encourages maximum employment
    and advancement opportunities in the Federal service for disabled
    veterans and others qualified for veteran's preference.
       Likewise, OPM helps to implement the President's directive for
    helping dislocated and surplus employees by assisting agencies with
    career transition planning and, when vacancies arise, protecting hiring
    preferences for dislocated and surplus employees. Working with the
    National Partnership Council, OPM supports and promotes labor-management
    partnerships throughout the executive branch--partnerships that help
    transform

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    agencies into organizations that can deliver the highest-quality services to the American people.
       OPM helps Federal program managers in their personnel
    responsibilities through a range of programs, such as training and
    performance management, designed to develop the most effective Federal
    employee. OPM also provides fast, friendly, accurate, and cost effective
    retirement, health benefit, and life insurance services to employees,
    annuitants, and agencies.
       Other Federal agencies with personnel management responsibilities are
    the Merit Systems Protection Board, the Office of Special Counsel, the
    Office of Government Ethics, and the Federal Labor Relations Authority.

    Office of Management and Budget

       OMB provides direction and management to Federal agencies, helping
    the President discharge his responsibilities for budget, management,
    policy development, and other executive matters.
       OMB's most dominant function each year is preparing the President's
    budget, working with the departments and agencies across the Government.
    In helping to formulate the President's spending plans, OMB evaluates
    the effectiveness of agency programs, policies, and procedures; assesses
    competing funding demands among agencies; and sets funding priorities
    according to the President's direction. OMB also ensures that agency
    reports, rules, testimony, and proposed legislation are consistent with
    the President's budget and with Administration policies.
       OMB oversees and coordinates the Administration's procurement,
    financial management, information technology, and regulatory polices. In
    each area, OMB helps improve administrative management, develop better
    performance measures and coordinating mechanisms, and reduce unnecessary
    burdens on the public.
       Due to OMB's predominantly cross-cutting approach to budget and
    management matters, it is continuously and actively involved in agency
    efforts to develop strategic plans (under the 1993 Government
    Performance and Results Act), streamline organizations and work
    processes, downsize, and improve human resource management.

    Tax Incentives

       The Federal Government provides significant tax breaks for State and
    local governments. State and local tax-exempt borrowing for public
    purposes, for instance, will cut Federal revenues by an estimated $77
    billion from 1998 to 2002 \1\. Taxpayers also can deduct their State and
    local income taxes against their Federal income tax, and State death
    taxes are creditable against Federal estate taxes up to certain limits.
    Finally, corporations that conduct business in Puerto Rico also receive
    a special tax credit.
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      \1\ The budget describes various forms of tax-exempt borrowing for
    non-public purposes in other functions.