    [Analytical Perspectives]
    [Introduction]
    [1. Introduction]
    [From the U.S. Government Printing Office, www.gpo.gov]

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                                  INTRODUCTION

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                                 1. INTRODUCTION

                             Purpose of This Volume

      The Analytical Perspectives volume presents analyses that highlight
    specific subject areas or provide other significant budget data that
    place the budget in context. The volume presents crosscutting analyses
    of Government programs and activities from various perspectives.
      Presidential budgets have included separate analytical presentations
    of this kind for many years. The 1947 Budget and subsequent budgets
    included a separate section entitled ``Special Analyses and Tables''
    that covered four or more topics. For the 1952 Budget, this section was
    expanded to have ten analyses, including many subjects that are still
    covered today, such as receipts, investment, credit programs, and aid to
    State and local governments. With the 1967 Budget this material became a
    separate volume entitled ``Special Analyses,'' and included 13 chapters.
    The material has generally remained a separate volume since then, with
    the exception of the budgets for 1991-1994, when the material was
    included in one large volume with other budget material. Beginning with
    the 1995 Budget, the volume has been named Analytical Perspectives.

              Changes from the  2004 Analytical Perspectives Volume

      The volume this year reflects an interest in publishing more
    information on program performance, so that Executive agencies, the
    Congress, and the public will become increasingly informed about how
    well programs are performing. Better performance information can help
    managers improve program effectiveness, and can help Executive and
    Congressional policymakers improve the allocation of public resources.
    The performance assessment information is summarized in Chapter 2,
    ``Performance and Management Assessments,'' and discussed in many other
    chapters, especially those in the section, ``Crosscutting Programs.''
      In order to present a smaller document, this year many tables that
    have been included in prior years are no longer printed in this volume
    but are included as part of the budget on the enclosed Analytical
    Perspectives CD ROM. A list of the items on the CD ROM is in the Table
    of Contents of this volume.
      The next section discusses briefly the material covered in each
    chapter, and technical changes in the chapter from last year's volume.

                     Summary of the Chapters in This Volume

    Introduction

      1. Introduction. This chapter highlights the changes in this volume
    compared to last year, particularly the new emphasis on performance in a
    crosscutting context.

    Performance and Management Assessments

      2. Budget and Performance Integration and the Program Assessment
    Rating Tool. This chapter summarizes this year's performance and
    management assessments, based primarily on the Program Assessment Rating
    Tool (PART). The enclosed Analytical Perspectives CD ROM includes one-
    page summaries of the program evaluations. This material is similar to
    the separate volume published last year, FY 2004 Performance and
    Management Assessments. Details of each of the assessments can be found
    on the OMB web page under ``Budget Documents'' at http://
    www.whitehouse.gov/omb/ .

    Crosscutting Programs

      3. Homeland Security Funding Analysis. This chapter discusses homeland
    security funding and provides information on homeland security program
    requirements, performance, and priorities. Additional detailed
    information is available on the enclosed Analytical Perspectives CD ROM.
      4. Strengthening Federal Statistics. This chapter discusses the
    development of standards that principal statistical programs can use to
    assess their performance and presents highlights of their 2005 Budget
    proposals.
      5. Research and Development. This chapter presents a crosscutting
    review of research and development funding in the budget, including
    discussions about priorities, performance, and coordination across
    agencies.
      6. Federal Investment. This chapter discusses spending across Federal
    agencies that yields long-term benefits, and presents information on
    physical capital, research and development, and education and training.
    For the first time the chapter includes material on the PART assessments
    related to direct Federal investment spending. There is also a section
    on capital stocks. The sections from last year on capital budgeting and
    supple

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    mental capital spending are not included this year because they vary
    little from year to year, and the reader may refer to last year's
    chapter for this material.
      7. Credit and Insurance. This chapter provides crosscutting analyses
    of the roles and risks of Federal credit and insurance programs and
    government sponsored enterprises (GSEs), as well as criteria for
    evaluation. It covers the categories of Federal credit (housing,
    education, business including farm operations, and international) and
    insurance programs (deposit insurance, pension guarantees, disaster
    insurance, and insurance against security-related risks). Two detailed
    tables that were part of this chapter last year, ``Table 9-9. Direct
    Loan Transactions of the Federal Government'' and ``Table 9-10.
    Guaranteed Loan Transactions of the Federal Government'' appear this
    year on the enclosed Analytical Perspectives CD ROM as Tables 7-10 and
    7-11.
      8. Aid to State and Local Governments. This discussion presents
    crosscutting information on Federal grants to State and local
    governments, including Administration proposals. For the first time the
    chapter includes material on the PART assessments related to grants. An
    Appendix to this chapter includes State-by-State spending estimates of
    major grant programs.
      9. Integrating Services with Information Technology. This chapter
    presents a crosscutting look at investments in information technology
    (IT). The chapter describes various aspects of the Administration's
    information technology agenda, with special emphasis on the performance,
    efficiency, and effectiveness of the Government's IT investments. Two
    detailed tables that were part of this chapter last year, ``Table 22-1.
    Effectiveness of Agency's IT Management and E-Gov Processes'' and Table
    22-2, which reported on the status of E-Gov initiatives, appear this
    year on the enclosed Analytical Perspectives CD ROM as Table 9-1,
    ``Effectiveness of Agency's IT Management & E-Gov Processes'' and Table
    9-2, ``Status of Presidential E-Government Initiatives.''
      10. Federal Drug Control Funding. This section presents estimated drug
    control funding for Federal departments and agencies.

    Economic Assumptions and Analyses

      11. Economic Assumptions. This discussion reviews recent economic
    developments; presents the Administration's assessment of the economic
    outlook, including the expected effects of macroeconomic policies; and
    compares the economic assumptions on which the budget is based with the
    assumptions for last year's budget and those of other forecasters.
      12. Stewardship. This chapter assesses the Government's financial
    condition in an integrated framework that includes Federal assets and
    liabilities; 75-year projections of the Federal budget under alternative
    discretionary spending, health cost, productivity, and demographic
    assumptions; actuarial estimates for the shortfalls in Social Security
    and Medicare; a national balance sheet that shows the Federal
    contribution to national wealth; and a table of economic and social
    indicators. Together these elements serve similar analytical functions
    to a business's accounting statements.
      13. National Income and Product Accounts. This chapter discusses how
    Federal receipts and outlays fit into the framework of the National
    Income and Product Accounts (NIPAs) prepared by the Department of
    Commerce. The NIPAs measures are the basis for reporting Federal
    transactions in the gross domestic product (GDP) and for analyzing the
    effect of the budget on aggregate economic activity.

    Budget Reform Proposals

      14. Budget Reform Proposals. This chapter is a brief description of
    the Administration's budget reform agenda for addressing the need for
    responsible budgeting and other reforms.

    Federal Borrowing and Debt

      15. Federal Borrowing and Debt. This chapter analyzes Federal
    borrowing and debt and explains the budget estimates. It includes
    sections on special topics such as the trends in debt, agency debt,
    investment by Government accounts, and the debt limit.

    Federal Receipts and Collections

      16. Federal Receipts. This discussion presents information on receipts
    estimates, enacted tax legislation, and the receipts proposals in the
    budget.
      17. User Charges and Other Collections. This chapter presents
    information on receipts from regulatory fees and on collections from
    market-oriented activities, such as the sale of stamps by the Postal
    Service, which are recorded as offsets to outlays rather than as Federal
    receipts.
      18. Tax Expenditures. This discussion describes and estimates tax
    expenditures, which are defined as revenue losses from special
    exemptions, credits, or other preferences in the tax code. This section
    is prepared by the Department of the Treasury.

    Dimensions of the Budget

      19. Comparison of Actual to Estimated Totals. This chapter compares
    the actual receipts, outlays, and deficit for 2003 with the estimates
    for that year published two years ago in the 2003 Budget. It also
    includes a historical comparison of the differences between receipts,
    outlays, and the deficit as originally proposed with final outcomes.

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      20. Outlays to the Public, Net and Gross. This section provides
    information on outlays net and gross of offsetting collections.
    Offsetting collections that are netted against outlays result primarily
    from the Government's business-like activities, such as the sale of
    stamps by the Postal Service.
      21. Trust Funds and Federal Funds. This chapter provides summary
    information on Federal funds and trust funds, which comprise the entire
    budget. For trust funds the information includes income, outgo, and
    balances. Two detailed tables that were part of this chapter last year,
    ``Table 16-4. Income, Outgo, and Balances of Major Trust Funds'' and
    ``Table 16-5. Income, Outgo, and Balances of Selected Federal Funds''
    appear this year on the enclosed Analytical Perspectives CD ROM as
    Tables 21-4 and 21-5.
      22. Off-Budget Federal Entities and Non-Budgetary Activities. This
    chapter provides summary information on the off-budget Federal entities
    (Social Security and Postal Service) and non-budgetary activities (such
    as cash flows for credit programs, deposit funds, and regulation).
      23. Federal Employment and Compensation. This chapter provides summary
    data on the level and recent trends in civilian and military employment,
    and personnel compensation and benefits.

    Current Services Estimates

      24. Current Services Estimates. This chapter presents estimates, based
    on rules contained in the Budget Enforcement Act, of what receipts,
    outlays, and the deficit would be if no changes were made to laws
    already enacted. It discusses the conceptual framework for these
    estimates and provides an alternative formulation of a baseline, which
    is used in the main budget document. Two detailed tables that appeared
    in this chapter last year, ``Table 15-11. Current Services Budget
    Authority by Function, Category, and Program'' and ``Table 15-12.
    Current Services Outlays by Function, Category, and Program'' appear
    this year on the enclosed Analytical Perspectives CD ROM as Tables 24-12
    and 24-13.

    Budget System and Concepts and Glossary

      25. The Budget System and Concepts. This is a basic reference to the
    budget process, concepts, laws, and terminology. The chapter includes
    information on the relationship of budget authority to outlays, which
    was formerly a separate chapter in this volume.

    Other

      The following tables appeared as separate sections last year in this
    volume and appear this year on the enclosed Analytical Perspectives CD
    ROM:

        Detailed Functional Tables. Two detailed tables, which last
              year appeard as, ``Table 25-1. Budget Authority by Function,
              Category, and Program'' and ``Table 25-2. Outlays by Function,
              Category, and Program'', this year are combined on the
              enclosed Analytical Perspectives CD ROM as Table 26-1.

        Federal Programs by Agency and Account. This detailed table
              ``Federal Programs by Agency and Account,'' appears this year
              on the enclosed Analytical Perspectives CD ROM as Table 27-1.

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                     PERFORMANCE AND MANAGEMENT ASSESSMENTS

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