[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]


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                         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.