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

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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 data that place the
    budget in context. The volume presents crosscutting analyses of
    Government programs and activities from several 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 ten analyses, including many subjects 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 remained a separate volume since then, with the exception
    of the Budgets for 1991-1994, when all of the budget material was
    included in one large volume. Beginning with the 1995 Budget, the volume
    has been named Analytical Perspectives.
      The volume this year continues to reflect 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 is discussed in many
    other chapters, especially those in the section, ``Crosscutting
    Programs.'' One-page summaries of each program assessment are available
    at http://www.ExpectMore.gov.
      Again this year, several large tables 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.

                            Overview of the Chapters

    Introduction

      1. Introduction. This chapter discusses each chapter briefly and
    highlights the emphasis on performance in a crosscutting context.

    Performance and Management Assessments

      2. Budget and Performance Integration. This chapter summarizes the
    performance and management assessments that have been completed to date
    using the Program Assessment Rating Tool (PART). One-page summaries of
    the program evaluations, as well as detail on each of the assessments
    can be found at http://www.ExpectMore.gov.

    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 2007 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.
    The chapter includes material on the PART assessments related to direct
    Federal investment spending. There is also a section on capital stocks.
      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). The chapter
    also includes material on the new President's Management Agenda
    initiative to improve credit program management. Two detailed tables,
    ``Table 7-10. Direct Loan Transactions of the Federal Government'' and
    ``Table 7-11. Guaranteed Loan Transactions of the Federal Government'',
    are on the enclosed Analytical Perspectives CD ROM.
      8. Aid to State and Local Governments. This discussion presents
    crosscutting information on Federal grants to State and local
    governments, including highlights of Administration proposals. The
    chapter also 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 Govern

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    ment's IT investments. Three detailed tables: ``Table 9-1. Effectiveness
    of Agency's IT Management and E-Gov Processes,'' ``Table 9-2. Management
    Guidance,'' and ``Table 9-3. Status of Presidential E-Government
    Initiatives,'' are on the enclosed Analytical Perspectives CD ROM.
      10. Federal Drug Control Funding. This section presents estimated drug
    control funding for Federal departments and agencies.
      11. California-Federal Bay-Delta Program Budget Crosscut (CALFED).
    This chapter presents information on Federal and State funding for the
    California-Federal Bay-Delta Program, in fulfillment of the reporting
    requirements for this program. Detailed tables on funding and project
    descriptions are on the enclosed Analytical Perspectives CD ROM.

    Economic Assumptions and Analyses

      12. 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. This
    chapter also covers topics related to the effects on the budget of
    changes in economic conditions and assumptions.
      13. Stewardship. This chapter assesses the Government's financial
    condition and sustainability in an integrated framework that includes
    Federal assets and liabilities; 75-year projections of the Federal
    budget under alternative assumptions for discretionary spending, health
    cost, productivity, and demographics; 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.
      14. 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 NIPA measures are the basis for reporting Federal
    transactions in the gross domestic product and for analyzing the effect
    of the budget on aggregate economic activity.

    Budget Reform Proposals

      15. 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

      16. 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

      17. Federal Receipts. This discussion presents information on receipts
    estimates, enacted tax legislation, and the receipts proposals in the
    Budget.
      18. 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.
      19. Tax Expenditures. This discussion describes and presents estimates
    of tax expenditures, which are defined as revenue losses from special
    exemptions, credits, or other preferences in the tax code. An appendix
    discusses possible alternatives to the current tax expenditure
    baselines. This section is prepared by the Department of the Treasury.

    Dimensions of the Budget

      20. Comparison of Actual to Estimated Totals. This chapter compares
    the actual receipts, outlays, and deficit for 2005 with the estimates
    for that year published two years ago in the 2005 Budget. It also
    includes a historical comparison of the differences between receipts,
    outlays, and the deficit as originally proposed with final outcomes.
      21. Outlays to the Public, Gross and Net. This section provides
    information on outlays gross and net of offsetting collections and
    offsetting receipts by agency. Outlays are a measure of Government
    spending. Offsetting collections and offsetting receipts are netted
    against gross outlays and result primarily from the Government's
    business-like activities, such as the sale of stamps by the Postal
    Service.
      22. 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, ``Table 22-4. Income, Outgo, and Balances
    of Major Trust Funds'' and ``Table 22-5. Income, Outgo, and Balances of
    Selected Federal Funds'' are on the enclosed Analytical Perspectives CD
    ROM.
      23. Off-Budget Federal Entities and Non-Budgetary Activities. This
    chapter discusses off-budget Federal entities (Social Security and
    Postal Service) and non-budgetary activities (such as cash flows for
    credit programs, deposit funds, and regulation).
      24. Federal Employment and Compensation. This chapter provides summary
    data on the level and recent trends in civilian and military employment,
    personnel compensation and benefits, and overseas staffing.

    Current Services Estimates

      25. Current Services Estimates. This chapter presents estimates, based
    on rules similar to those contained in the Budget Enforcement Act (BEA),
    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 describes dif

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    ferences with the BEA requirements. Two detailed tables, ``Table 25-12.
    Current Services Budget Authority by Function, Category, and Program''
    and ``Table 25-13. Current Services Outlays by Function, Category, and
    Program'', are on the enclosed Analytical Perspectives CD ROM.

    Budget System and Concepts

      26. The Budget System and Concepts. This is a basic reference to the
    budget process, concepts, laws, and terminology, and includes a glossary
    of budget terms.

    Other

      The following material appears only on the enclosed Analytical
    Perspectives CD ROM:
        Detailed Functional Tables. Table 27-1. ``Budget Authority
              and Outlays by Function, Category, and Program''.
        Federal Programs by Agency and Account. Table 28-1.
              ``Federal Programs by Agency and Account''.