[Budget of the United States Government]
[III. Creating a Better Government]
[1. Improving Government Performance]
[From the U.S. Government Publishing Office, www.gpo.gov]
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III. CREATING A BETTER GOVERNMENT
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1. IMPROVING GOVERNMENT PERFORMANCE
The Federal Government's performance needs to improve. The past
Administration, Congress, and the General Accounting Office concluded
that we still have much work to do to improve the management and
performance of the Federal Government.
True Government reform must be based on a reexamination of the role of
the Federal Government. The President has called for an ``active, but
limited'' Government: one that empowers States, cities, and citizens to
make decisions; ensures results through accountability; and promotes
innovation through competition. Thus, the Administration will reform and
modernize Government on the basis of three objectives to make
Government:
Citizen-centered, not bureaucracy centered;
Results-oriented, not process-oriented; and
Market-based, actively promoting not stifling, innovation and
competition.
This task will not be easy and it will take time. The agenda for
management reform outlined in the discussion below and in the following
chapters of the President's Budget is just the first step in the
process. As a next step, in the next few months the Administration will
announce a more comprehensive Government reform and management agenda
that will expand on the initiatives discussed below, and address other
key reforms.
Section III, ``Creating a Better Government,'' of this budget is a
Government-wide Performance Plan with an integrated view of the goals
and descriptions of program activity as contemplated by the Government
Performance and Results Act of 1993 (GPRA). Rather than examining
performance only in individual organizational units (such as departments
and agencies), the functional presentation in the chapters that follow
groups together similar programs. The Government-wide Performance Plan
contains a significant number of key performance goals that serve as a
window into the agencies' 2002 Performance Plans, which will be sent to
Congress following the transmittal of the budget.
Good beginnings are not the measure of success, in Government or any
other pursuit. What matters in the end is performance. Not just making
promises, but making good on promises. This will be the standard for
this Administration--from the farthest field office to the highest
office in the land--as we begin the process of getting results from
Government.
Making Government Citizen-Centered
Use the Internet to Create a Citizen-Centric Government: The explosive
growth of the Internet has transformed communications between customers
and businesses. It is also transforming communications between citizens
and Government. The President believes that providing access to
information and services is only the first step in electronic Government
(e-gov). Citizen-centered Government will use the Internet to bring
about transformational change: agencies will conduct transactions with
the public along secure web-enabled systems that use portals to link
common applications and protect privacy. This will give citizens the
ability to go online and interact with their Government and with their
State and local Governments that provide similar information and
services around citizen preferences and not agency boundaries.
Create an E-Government Fund: The budget proposes $20 million in 2002
as the first installment of a fund that will grow to a total of $100
million over three years to support interagency e-gov initiatives. OMB
would control the allocation of the fund to support information
technology (IT) projects in the e-gov arena.
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Projects that operate across agency boundaries will build off the
foundation of essential building blocks, including: www.firstgov.gov,
the online information portal that provides 24 hours a day/seven days a
week access to all Government online information, searchable by topic
rather than by agency; and the development of a Public Key
Infrastructure to implement digital signatures that are accepted across
agencies for secure online communications.
The fund will also further the Administration's ability to implement
the Government Paperwork Elimination Act of 1998, which calls upon
agencies to provide the public with optional use and acceptance of
electronic information, services and signatures, when practicable, by
October 2003. In recent years, funding for interagency e-gov initiatives
has been obtained, as authorized by law, by passing the hat among
agencies to support activities of interagency councils. The e-gov fund
will accelerate the improvements this Administration will make to
provide for interagency e-gov innovation.
Making Government Results-Oriented
Link Budget and Management Decisions to Performance: The Government's
budget decision-making process allows elected officials--the President
and members of Congress--to set broad priorities for Government programs
and their managers through resource allocation. Choices are framed by
the assessments of these officials about the country's needs for
education, defense, energy, health, and a host of other national needs,
within a framework of the resources available.
Making spending choices and allocating the appropriate resource level
is an important step, but it is also important for spending to produce
meaningful results. Performance information is necessary to determine
the value and success of Government programs in achieving their goals.
Passage of GPRA elevated the importance of good information on program
performance, and at the same time signaled dissatisfaction with the
performance information that has been available in the past.
The initial years of GPRA implementation have focused on developing a
performance management framework, accompanied by a growing increase in
the use of this performance information to support budget decisions.
However, a systematic integration of budgeting with program performance
has yet to occur, and GPRA has not been fully harnessed to improve
management and managerial accountability. Bringing about a better
linkage between performance and budget information will be a priority of
this Administration. As a first step, department and agency heads have
been directed to ensure that their 2002 Performance Plans, which will be
submitted to Congress in April, also include performance goals for
Presidential initiatives and for Government-wide and agency-specific
reform proposals.
Over the coming year, the Administration will take a number of steps
to strengthen the linkage between budget decision making and program
performance.
Formally integrate performance with budget decisions: Agencies
will be asked to submit performance-based budgets this
September for a selected set of programs. For the selected
programs, agencies will be advised of specific performance
targets that are compatible with funding levels, and program
managers will be held directly accountable for managing to the
targets. In future years, policy officials at all levels in
the Executive Branch will be expected to set output targets to
match funding levels for selected programs.
Develop legislation to enable program managers to be charged
for support services, capital assets, and employer benefits:
If program managers are going to be held more accountable for
the achievement of output targets, they should be given
accurate information on the cost of their programs and
flexibility in choosing service providers. At present, program
managers do not always have information on, or control of, the
full costs of support services, retirement, and other non-
direct costs associated with their programs, which can distort
budget choices. Legislation will be developed this year to
address this problem by changing the way support services,
capital assets, and employee benefits are budgeted.
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Publish detailed performance data: The 2003 Budget will
include more performance information and the 2004 Budget will
integrate detailed performance and budget data to establish a
stronger, more extensive and public link between the agency
budget requests and performance measurement in the President's
Budget.
Ensure Financial Accountability: The President believes that
Government must ensure a basic level of financial accountability that is
expected of any company in the private sector. He is holding agency
heads accountable for obtaining and maintaining unqualified or ``clean''
opinions on their agencies' annual financial statement audits. More than
60 percent of agencies currently receive ``clean'' opinions; heads of
the agencies without clean opinions are expected to attack vigorously
the long-standing difficulties and record-keeping deficiencies that
prevent clean opinions.
Reduce Erroneous Payments to Beneficiaries and Other Recipients of
Government Funds: Financial accountability also requires assurance that
Federal funds are being used for their intended purpose and not being
distributed due to error. The General Accounting Office identified $19.1
billion in erroneous payments made last year, and noted that the amount
could be considerably larger. The President will direct agency heads to
develop more rigorous controls to ensure that Federal funds reach their
intended recipients at the correct time and in the proper amount.
Further, he will promote the use of recovery audits and other steps to
ensure that overpayments are avoided or returned to the Government.
Use Capital Planning to Improve Performance: Agencies invest more than
$40 billion in IT to support some 26,000 information systems. Technology
now affects virtually every aspect of the way the Government operates,
and IT investments are extremely important to the success of e-gov
transforming the delivery of information and services. Agencies will use
capital planning and investment control to promote security and privacy
in the use of technology and guide the results of this investment, and
ultimately for ensuring results from other capital assets as well. The
Government can thus achieve outcomes from IT investments that match
agency strategic priorities and provide real benefits for the American
people.
Eliminate Duplicative and Ineffective Programs: The Federal Government
spends billions of dollars on programs that are obsolete, ineffective,
or better performed by the private sector. The Administration will seek
to redeploy resources from old priorities to make room for new
Administration priorities by reducing or eliminating funding for
programs that have completed their mission or that are redundant,
ineffective, or obsolete.
Expand the Use of Performance-Based Contracts: Because of expanding
missions and declining staff, agencies are increasingly relying on
outside contractors. The Federal Government spends roughly $110 billion
a year in service contracts. The increase in the amount and type of
contracting creates the opportunity and the necessity to move toward
performance-based contracting--where the focus is on the results to be
achieved, rather than the manner in which the work is performed or the
``effort'' involved. Agencies will convert Federal service contracts to
performance-based contracts wherever possible, saving an estimated $8.3
billion over five years.
Incorporate Successful Private Sector Reforms Throughout the Federal
Work Force: The current civil service system does not do all it should
to reward achievement or encourage excellence. It also limits the
ability of agency heads to compete successfully for high-skilled senior
talent. In an effort to get closer to the customer, American businesses
have increasingly replaced old, hierarchical organizations with flatter,
more entrepreneurial ones. To shrink the distance between citizens and
decision makers who shape Government programs, the Administration will
incorporate successful private sector reforms throughout the Federal
work force: flatten the Federal hierarchy; reduce the number of layers
in the upper echelon of Government; and use work force planning to help
agencies redistribute higher-level positions to front-line, service
delivery positions that interact with citizens. The Administration will
also seek legislation to provide program managers new and expanded work
force restructuring tools. These actions, combined with improved
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accountability through better linkage of program performance with budget
decision making and other reforms, will make the Federal Government more
nimble and responsive. The Government can also be made more effective.
These same work force planning tools can help ensure that agencies have
people with the right skills in the right places in the right numbers to
deliver programs people care about.
Making Government Market-Based
Make e-Procurement the Government-wide Standard: Businesses are
experiencing significant cost savings by shifting their procurement to
the Internet. Savings are derived from reduced transaction-processing
costs, more efficient inventory management, and greater competition from
vendors lowering prices. In an effort to lower costs and utilize market-
based solutions wherever possible, agencies will move to paperless
contracting processes in which information from one step of the process
is automatically fed to the next step in the process, eliminating the
need to re-enter data. Procurement data will be linked to financial
systems, making the payment process both faster and more accurate;
disposal of excess Government property will become more effective.
Agencies will also expand use of ``share-in-savings'' approaches, in
which market incentives reward contractors who can retain a portion of
any savings that result from innovation.
Open Government Activities to Competition: Opening Government
functions to competition to the fullest extent possible is the best way
to ensure market-based pricing and encourage innovation, while saving
the taxpayers an estimated $14 billion over five years. Since 1998,
agencies have been required to inventory their activities that are
commercial in nature--that is activities that are not ``so intimately
related to the public interest as to require performance by Federal
Government employees.'' In the past, agencies have found that when
competitive bidding is employed, they experience average savings of 30
percent when a private contractor wins, and 20 percent when the public
sector wins. Consequently, for these activities, agencies will use an
open, competitive process (considering both public and private bidders)
to choose the providers. The competitive process will be studied so that
it can be streamlined.
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Table 1-1. Federal Resources by Function
(In billions of dollars)
----------------------------------------------------------------------------------------------------------------
Estimate
Category 2000 -----------------------------------------------------------------------
Actual 2001 2002 2003 2004 2005 2006
----------------------------------------------------------------------------------------------------------------
NATIONAL DEFENSE:
Spending:
Discretionary Budget 300.8 311.3 325.1 333.9 343.2 352.7 362.5
Authority..............
Mandatory Outlays:
Existing law.......... -0.5 -0.4 -0.1 -0.2 -0.5 -0.6 -0.6
Proposed legislation.. .......... .......... 0.1 0.2 0.2 0.1 0.1
Credit Activity:
Direct loan .......... * 0.1 0.1 0.2 .......... ..........
disbursements..........
Guaranteed loans........ * * 0.1 0.5 0.5 .......... ..........
Tax Expenditures:
Existing law............ 2.1 2.2 2.2 2.2 2.2 2.3 2.3
-----------------------------------------------------------------------------------
INTERNATIONAL AFFAIRS:
Spending:
Discretionary Budget 23.5 22.7 23.9 24.4 24.9 25.5 26.0
Authority..............
Mandatory Outlays:
Existing law.......... -4.1 -6.7 -3.5 -3.4 -3.4 -3.4 -3.4
Credit Activity:
Direct loan 1.6 2.3 2.0 0.5 0.2 0.2 0.1
disbursements..........
Guaranteed loans........ 11.4 11.1 11.5 10.8 10.7 11.6 11.2
Tax Expenditures:
Existing law............ 16.6 18.1 18.3 18.9 20.0 21.3 22.6
-----------------------------------------------------------------------------------
GENERAL SCIENCE, SPACE, AND
TECHNOLOGY:
Spending:
Discretionary Budget 19.2 20.9 21.2 21.9 22.4 22.9 23.5
Authority..............
Mandatory Outlays:
Existing law.......... * 0.1 0.1 0.2 0.2 0.1 0.1
Tax Expenditures:
Existing law............ 3.3 7.7 8.4 7.2 6.6 4.7 3.3
-----------------------------------------------------------------------------------
ENERGY:
Spending:
Discretionary Budget 2.7 3.1 2.8 2.9 3.1 3.2 3.3
Authority..............
Mandatory Outlays:
Existing law.......... -4.0 -3.7 -3.3 -3.2 -3.7 -3.6 -3.6
Credit Activity:
Direct loan 1.4 1.9 2.2 2.5 2.7 2.8 2.9
disbursements..........
Guaranteed loans........ 0.2 0.1 0.1 0.1 0.1 0.1 0.1
Tax Expenditures:
Existing law............ 2.0 2.1 2.1 1.9 1.6 1.8 1.9
-----------------------------------------------------------------------------------
NATURAL RESOURCES AND
ENVIRONMENT:
Spending:
Discretionary Budget 24.6 28.7 26.4 27.0 27.6 27.6 27.4
Authority..............
Mandatory Outlays:
Existing law.......... * -0.2 -0.1 0.1 0.2 0.1 0.1
Proposed legislation.. .......... .......... -* -0.1 -* * 0.1
Credit Activity:
Direct loan * * * * * * *
disbursements..........
Guaranteed loans........ .......... .......... * 0.1 * .......... ..........
Tax Expenditures:
Existing law............ 1.5 1.6 1.6 1.7 1.8 1.9 2.0
-----------------------------------------------------------------------------------
AGRICULTURE:
Spending:
Discretionary Budget 4.7 5.1 4.8 5.2 5.2 5.3 5.4
Authority..............
Mandatory Outlays:
Existing law.......... 32.0 20.4 13.2 9.8 8.8 8.8 9.1
Credit Activity:
Direct loan 11.0 10.3 10.4 8.9 8.8 8.6 8.9
disbursements..........
Guaranteed loans........ 5.4 6.5 6.8 6.9 6.9 6.9 6.9
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Tax Expenditures:
Existing law............ 1.0 1.1 1.1 1.2 1.2 1.3 1.3
-----------------------------------------------------------------------------------
COMMERCE AND HOUSING CREDIT:
Spending:
Discretionary Budget 5.1 0.7 -0.3 -0.1 -0.4 -0.5 -0.5
Authority..............
Mandatory Outlays:
Existing law.......... -1.3 -2.5 6.7 4.7 4.0 4.2 2.9
Proposed legislation.. .......... .......... -0.1 -0.1 -0.1 -0.1 -0.1
Credit Activity:
Direct loan 1.3 1.7 1.6 1.6 1.6 1.6 1.6
disbursements..........
Guaranteed loans........ 218.7 231.3 250.8 263.2 272.8 282.4 290.0
Tax Expenditures:
Existing law............ 242.5 254.7 266.7 277.8 289.5 301.2 314.8
-----------------------------------------------------------------------------------
TRANSPORTATION:
Spending:
Discretionary Budget 15.2 18.9 16.8 17.8 18.2 18.6 19.0
Authority..............
Mandatory Outlays:
Existing law.......... 2.1 2.2 1.8 2.0 2.0 1.9 1.9
Credit Activity:
Direct loan 0.3 0.4 0.7 1.1 1.5 2.0 2.2
disbursements..........
Guaranteed loans........ 0.9 0.6 0.4 0.2 0.2 0.2 0.2
Tax Expenditures:
Existing law............ 2.1 2.2 2.4 2.5 2.7 2.8 3.0
-----------------------------------------------------------------------------------
COMMUNITY AND REGIONAL
DEVELOPMENT:
Spending:
Discretionary Budget 12.2 11.0 10.4 10.7 10.9 11.1 11.3
Authority..............
Mandatory Outlays:
Existing law.......... -0.8 -0.6 -0.3 -0.7 -0.7 -0.8 -0.9
Proposed legislation.. .......... .......... -* -0.1 -0.1 -0.2 -0.4
Credit Activity:
Direct loan 1.9 2.2 1.9 1.8 2.0 2.0 2.0
disbursements..........
Guaranteed loans........ 1.4 2.8 2.4 2.0 1.8 1.8 1.9
Tax Expenditures:
Existing law............ 1.2 1.4 1.9 2.4 2.4 2.6 3.1
-----------------------------------------------------------------------------------
EDUCATION, TRAINING,
EMPLOYMENT, AND SOCIAL
SERVICES:
Spending:
Discretionary Budget 44.4 61.1 65.4 67.1 69.0 70.7 72.3
Authority..............
Mandatory Outlays:
Existing law.......... 10.3 9.1 14.3 14.5 14.8 15.3 16.2
Proposed legislation.. .......... .......... 0.1 0.3 0.4 0.4 0.4
Credit Activity:
Direct loan 16.4 19.1 16.6 17.5 18.4 19.4 20.4
disbursements..........
Guaranteed loans........ 26.6 29.5 30.7 32.4 34.2 36.2 38.2
Tax Expenditures:
Existing law............ 36.0 37.8 38.8 40.4 43.2 45.0 47.5
-----------------------------------------------------------------------------------
HEALTH:
Spending:
Discretionary Budget 33.8 38.9 41.0 45.7 46.9 48.1 49.4
Authority..............
Mandatory Outlays:
Existing law.......... 124.5 138.7 152.4 168.9 183.6 199.7 216.6
Proposed legislation.. .......... 2.5 10.7 13.7 14.6 4.3 0.1
Credit Activity:
Guaranteed loans........ * * * * * * *
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Tax Expenditures:
Existing law............ 91.1 99.8 108.6 117.8 127.5 136.8 147.1
-----------------------------------------------------------------------------------
MEDICARE:
Spending:
Discretionary Budget 3.0 3.4 3.5 3.5 3.6 3.7 3.8
Authority..............
Mandatory Outlays:
Existing law.......... 194.1 216.0 226.4 238.6 252.2 270.8 279.4
Proposed legislation.. .......... .......... .......... .......... .......... 8.3 12.8
-----------------------------------------------------------------------------------
INCOME SECURITY:
Spending:
Discretionary Budget 31.6 39.5 42.8 45.1 46.7 48.3 49.6
Authority..............
Mandatory Outlays:
Existing law.......... 206.5 217.2 228.5 237.0 246.3 258.2 265.5
Proposed legislation.. .......... .......... 0.3 0.9 1.0 1.2 1.3
Credit Activity:
Direct loan * * * .......... .......... .......... ..........
disbursements..........
Guaranteed loans........ * * 0.1 0.1 0.1 0.1 0.1
Tax Expenditures:
Existing law............ 147.6 153.4 159.1 165.7 172.3 179.1 187.7
-----------------------------------------------------------------------------------
SOCIAL SECURITY:
Spending:
Discretionary Budget 3.2 3.4 3.5 3.6 3.7 3.8 3.8
Authority..............
Mandatory Outlays:
Existing law.......... 406.0 430.0 451.6 473.5 498.0 524.3 553.0
Tax Expenditures:
Existing law............ 24.8 26.0 27.3 28.4 29.7 31.3 33.0
-----------------------------------------------------------------------------------
VETERANS BENEFITS AND
SERVICES:
Spending:
Discretionary Budget 20.9 22.5 23.5 24.0 24.5 25.1 25.7
Authority..............
Mandatory Outlays:
Existing law.......... 26.3 23.0 28.1 29.7 31.3 35.4 34.1
Proposed legislation.. .......... .......... * -* -0.1 -0.1 -0.1
Credit Activity:
Direct loan 1.5 1.7 1.7 1.9 2.0 2.0 2.0
disbursements..........
Guaranteed loans........ 20.2 29.5 29.0 29.6 30.2 30.8 31.5
Tax Expenditures:
Existing law............ 3.3 3.5 3.7 3.9 4.0 4.3 4.5
-----------------------------------------------------------------------------------
ADMINISTRATION OF JUSTICE:
Spending:
Discretionary Budget 27.1 30.0 29.8 31.9 32.3 32.8 33.5
Authority..............
Mandatory Outlays:
Existing law.......... 1.0 0.7 1.5 1.1 2.5 2.5 2.5
-----------------------------------------------------------------------------------
GENERAL GOVERNMENT:
Spending:
Discretionary Budget 12.4 14.0 14.8 15.0 15.4 15.7 16.0
Authority..............
Mandatory Outlays:
Existing law.......... 1.0 2.3 1.8 1.8 2.0 1.8 1.8
Proposed legislation.. .......... .......... * .......... 1.2 * *
Credit Activity:
Direct loan * * * .......... .......... .......... ..........
disbursements..........
Tax Expenditures:
Existing law............ 67.7 71.3 74.8 78.3 82.1 86.0 88.7
-----------------------------------------------------------------------------------
NET INTEREST:
Mandatory Outlays:
Existing law.......... 223.2 206.4 188.1 175.2 161.5 144.6 127.1
Proposed legislation.. .......... .......... * * * 0.1 0.1
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Tax Expenditures:
Existing law............ 0.5 0.5 0.5 0.5 0.6 0.6 0.6
-----------------------------------------------------------------------------------
ALLOWANCES:
Spending:
Discretionary Budget .......... .......... 5.3 5.4 5.6 5.7 5.8
Authority..............
-----------------------------------------------------------------------------------
UNDISTRIBUTED OFFSETTING
RECEIPTS:
Mandatory Outlays:
Existing law.......... -42.6 -47.7 -51.8 -60.7 -62.4 -56.2 -57.8
Proposed legislation.. .......... .......... 2.4 0.3 -8.2 -2.7 -4.6
-----------------------------------------------------------------------------------
FEDERAL GOVERNMENT TOTAL:
Spending:
Discretionary Budget 584.4 634.9 660.6 685.1 702.7 720.1 737.9
Authority..............
Mandatory Outlays:
Existing law.......... 1,174.0 1,204.4 1,255.4 1,289.2 1,336.6 1,403.0 1,444.0
Proposed legislation.. .......... 2.5 13.4 15.2 8.9 11.2 9.6
Credit Activity:
Direct loan 35.5 39.6 37.3 35.9 37.5 38.6 40.2
disbursements..........
Guaranteed loans........ 284.9 311.6 332.0 346.0 357.6 370.1 380.0
----------------------------------------------------------------------------------------------------------------
* $50 million or less.
Notes: Tax expenditure proposals are presented in Table S-10.
The Administration proposes to reverse the misleading budget practice of using advance appropriations simply to
avoid spending limitations and is requesting sufficient appropriations in 2002 to cover normal funding,
instead of requesting advance appropriations for 2003. This increases budget authority by $22.7 billion in
2002 only.