Budget Issue Area Plan--Fiscal Year 1996 (Letter Report, 05/01/96,
GAO/IAP-96-1).

GAO provided information on its Budget Issue area plan, focusing on the:
(1) federal deficit; (2) effects of the budget and the budget process on
policymakers' ability to make choices; and (3) budget's impact on
government operations.

GAO plans to: (1) identify the causes, implications, and appropriate
responses to the persistent budget deficit; (2) identify how the
government can improve decisionmaking to better allocate federal
resources and meet national priorities through improvements to the
budget structure, process, and reporting mechanisms; (3) assess the
issues involved in effectively restructuring the government and the
appropriate federal role; (4) identify the long-term economic impact of
current fiscal policy and deficit reduction options; (5) develop
alternative analytical perspectives to educate the public and Congress
on budget trends and the policy choices of deficit reduction; (6)
develop alternative approaches to structuring, presenting, and analyzing
the budget so that the implications of budget choices are highlighted;
(7) explore areas where accounting concepts can add value to the budget
and the budget process can be streamlined; and (8) improve the basis on
which Congress makes decisions concerning federal government
restructuring, privatization, and devolution.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  IAP-96-1
     TITLE:  Budget Issue Area Plan--Fiscal Year 1996
      DATE:  05/01/96
   SUBJECT:  Deficit reduction
             Budgeting
             Federal agency reorganization
             Budget administration
             Privatization
             Fiscal policies
             Accounting procedures
             Economic analysis
             Budget deficit

             
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Cover
================================================================ COVER


Accounting and Information Management Division

May 1996

BUDGET ISSUES AREA PLAN UPDATE -
FISCAL YEAR 1996

GAO/IAP-96-1



Abbreviations
=============================================================== ABBREV


FOREWORD
============================================================ Chapter 0

As the investigative arm of Congress and the nation's auditor, the
General Accounting Office is charged with following the federal
dollar wherever it goes.  Reflecting stringent standards of
objectivity and independence, GAO's audits, evaluations, and
investigations promote a more efficient and cost-effective
government; expose waste, fraud, abuse, and mismanagement in federal
programs; help Congress target budget reductions; assess financial
information management; and alert Congress to developing trends that
may have significant fiscal or budgetary consequences.  In fulfilling
its responsibilities, GAO performs original research and uses
hundreds of databases or creates its own when information is
unavailable elsewhere. 

To ensure that GAO's resources are directed toward the most important
issues facing Congress, each of GAO's 34 issue areas develops a
strategic plan that describes the significance of the issues it
addresses, its objectives, and the focus of its work.  Each issue
area relies heavily on input from congressional committees, agency
officials, and subject-matter experts in developing its strategic
plan. 

The Budget Issues area covers questions related to the structure of
the federal budget, the budget process, and budget control, including
deficit-cutting options that encompass the work of all other GAO
issue areas. 

GAO's work in the Budget Issues area focuses on the federal deficit,
the effects of the budget and the budget process on policymakers'
ability to make choices, and the impact of the budget on the
operations of the government.  The principal issues in this area are

  -- increasing public and congressional recognition of the
     importance of reducing the deficit and making the decisions
     necessary to achieve that goal;

  -- improving the presentation of budgetary choices to focus on
     important policy choices, including the amount and quality of
     federal investment and long-term consequences of decisions; and

  -- analyzing the interaction of budget and management and using the
     budget as a window on the design and structural issues of
     federal government activities. 

In the pages that follow, we describe our key planned work on these
important issues. 

Because events may significantly affect even the best of plans, our
planning process allows for updating the plan and provides the
flexibility to respond quickly to emerging issues.  If you have any
questions or suggestions about this plan, please call me at (202)
512-9573. 

Paul L.  Posner
Director
Budget Issues


CONTENTS
============================================================ Chapter 1


   FOREWORD
---------------------------------------------------------- Chapter 1:1

1


   TABLE I:  KEY ISSUES
---------------------------------------------------------- Chapter 1:2

4


   TABLE II:  PLANNED MAJOR WORK
---------------------------------------------------------- Chapter 1:3

6


   TABLE III:  GAO CONTACTS
---------------------------------------------------------- Chapter 1:4

8


TABLE I:  KEY ISSUES
============================================================ Chapter 2

Issue                         Significance
----------------------------  --------------------------------------------------
Deficit reduction: What are   Continuing large deficits pose significant long-
the causes, implications,     term economic and fiscal consequences for our
and appropriate responses to  nation. Congress has sharpened its focus on
a persistent federal budget   budgetary matters, in hopes of balancing the
deficit?                      federal budget in fiscal year 2002. The need for
                              and the prospect of deficit reduction offers an
                              opportunity to address program and management
                              reforms that have been long overdue.








Improving budget choices:     How we reduce the deficit is of great importance
What improvements could be    for the nation's fiscal and economic future. In
made in the existing budget   many instances, the existing federal budget
structure, processes, and     structure does not provide an adequate focus for
reporting mechanisms to       congressional decision-making: federal spending on
improve budget decision-      investments that affect the long-term health of
making, better allocate       the country are not highlighted in the budget, nor
federal resources, and meet   does the budget reveal the true cost of some
national priorities,          federal programs.
including increased
attention to the amount and
quality of federal
investment?











Government restructuring and  Congress has renewed interest in restructuring the
the federal role: What is     government, including award of block grants to
the potential and what are    states, privatization of federal assets, and
the issues in effectively     program and agency consolidations and
restructuring the federal     terminations. As Congress considers these
government? What are issues   substantial issues, it will need an analytical
in the choice and design of   base for careful decision-making.
the federal role, including
divestiture (privatization)
and block grants?


--------------------------------------------------------------------------------
Objectives                    Focus of work
----------------------------  --------------------------------------------------
 Identify long-term           Overview of budgetary implications of all GAO
economic impact of current    work.
fiscal policy.                 Update of our model on the long-term economic
                              impact of the deficit.
 Coordinate a GAO-wide        Office of Management and Budget and
effort to identify deficit    Congressional Budget Office compliance with the
reduction options.            Budget Enforcement Act of 1990.
                               Leakages in budgetary control building on our
 Provide alternative         inventory of accounts with backdoor spending
analytical perspectives to    authority.
educate the public and         Perspectives on the size of the public debt.
Congress on budget trends      Budget trends analyses: federal spending by
and to suggest new ways of    mission area, item of expense, and investment
viewing policy choices posed  category; long-term fiscal trends of outlays and
by deficit reduction.         revenues; and analysis of department and agency
                              personnel trends.


 Continue to develop          Federal budgeting for uncertainties, including
alternative approaches to     emergencies, disasters, and rainy day funds.
structuring, presenting, and   Budgetary treatment of federal insurance
analyzing the budget to       programs.
highlight the key              Budgetary treatment of government-owned
implications of budget        capital.
choices for social and         Dedicated revenues in the federal budget.
economic policy.               Options to change the federal budget process,
                              such as biennial budgeting, line-item veto,
 Explore areas where         balanced budget amendment, and automatic
accrual accounting concepts   continuing resolution.
and accounting data can add    Federal budget and accounting linkages.
value to the budget.           Implementation of performance budgeting.
                               Use of performance information in federal agency
 Analyze proposals to        strategic planning and budget formulation.
streamline the budget          Contributions to the revenue and stewardship
process. Analyze              standards that are being developed by the Federal
implications for the budget   Accounting Standards Advisory Board's task forces.
process of issues identified
in other work.

 Assess ways that
performance measures can be
integrated into the budget
process.


 Improve the analytical and   Early budget and program implementation issues
information base Congress     regarding new block grant programs.
has available to make          Budget issues related to the design of subsidy
decisions concerning federal  tools, such as federal grant design, tax
government restructuring.     expenditures, and insurance programs.
                               Identify issues that should be addressed when
 Improve decision-making on  considering privatization of federal assets.
privatization and devolution   Treatment of asset sales in the federal budget.
by identifying issues that
affect success.
--------------------------------------------------------------------------------

TABLE II:  PLANNED MAJOR WORK
============================================================ Chapter 3

Issue                         Planned major job starts
----------------------------  --------------------------------------------------
Deficit reduction              Assess the budgetary implications of GAO work.
                               Update assessment of the long-term economic
                              impact of the federal deficit.
                               Review trends in federal spending.
                               Evaluate problems in federal budgetary control.
                               Assess the implementation of the Budget
                              Enforcement Act of 1990.


Improving budgetary choices    Evaluate the adequacy of federal budgeting for
                              uncertainties, including budgeting for
                              emergencies, disasters, and rainy day funds.
                               Evaluate options to improve the budgetary
                              treatment of federal insurance programs.
                               Review the adequacy of federal budgetary
                              treatment of government-owned capital.
                               Review issues related to dedicated revenues in
                              the federal budget.
                               Examine federal budget and accounting linkages.
                               Evaluate previous efforts to implement
                              performance budgeting.
                               Review the use of program performance
                              information in federal agency strategic planning
                              and budget formulation.
                               Assess proposals to improve the federal budget
                              process.


Government                     Evaluate budget issues related to federal
restructuring and the         privatization efforts.
federal role                   Review budget and program implementation issues
                              related to federal block grants.
                               Assess efficiency and equity issues related to
                              the design of federal grants.


--------------------------------------------------------------------------------

TABLE III:  GAO CONTACTS
============================================================ Chapter 4


      DIRECTOR
-------------------------------------------------------- Chapter 4:0.1

Paul L.  Posner (202) 512-9573


      ASSOCIATE DIRECTOR
-------------------------------------------------------- Chapter 4:0.2

Susan J.  Irving (202) 512-9142


      ASSISTANT DIRECTORS
-------------------------------------------------------- Chapter 4:0.3

Christine E.  Bonham
Barbara D.  Bovbjerg
Michael J.  Curro
Margaret T.  Wrightson


*** End of document. ***