a

GAO

United States Government Accountability Office

Testimony

Before the Subcommittee on Federal Financial 

Management, Government Information, and International 

Security, Committee on Homeland Security and 

Governmental Affairs, U.S. Senate

For Release on Delivery

Expected at 2:00 p.m. EDT

Tuesday, June 14, 2005 21ST CENTURY 

CHALLENGES

Performance Budgeting 

Could Help Promote 

Necessary Reexamination

Statement of David M. Walker

Comptroller General of the United States

GAO-05-709T
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-709T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Paul L. Posner 

at (202) 512-9573 or posnerp@gao.gov. 

Highlights of GAO-05-709T, a testimony 

before the Chairman, Subcommittee on 

Federal Financial Management, 

Government Information, and International 

Security, Committee on Homeland 

Security and Governmental Affairs, U.S. 

Senate 

June 14, 2005

21ST CENTURY CHALLENGES 

Performance Budgeting Could Help 

Promote Necessary Reexamination 

The federal government is in a period of profound transition and faces an 

array of challenges and opportunities to enhance performance, ensure 

accountability, and position the nation for the future. A number of 

overarching trends—including the nation’s long-term fiscal imbalance—

drive the need to reexamine what the federal government does, how it does 

it, who does it, and how it gets financed. This will mean bringing a variety of 

tools and approaches to bear on the situation. 

Performance budgeting holds promise as a means for facilitating a 

reexamination effort. It can help enhance the government’s capacity to 

assess competing claims for federal dollars by arming decision makers with 

better information both on the results of individual programs as well as on 

entire portfolios of tools and programs addressing common goals. 

However, it is important to remember that in a political process, 

performance information should be one, but will not be the only, factor 

in decision making. 

Existing performance budgeting efforts, such as PART, provide a means for 

facilitating a baseline review of certain federal policies, programs, functions, 

and activities. Successful application of these initiatives in this 

reexamination process rests on 

• building a supply of credible and reliable performance information, 

• encouraging demand for that information by garnering congressional 

buy-in on what is measured and how it is presented, and 

• developing a comprehensive and crosscutting approach to assessing the 

performance of all major federal programs and policies encompassing 

spending, tax expenditures, and regulatory actions. 

Through the President’s Management Agenda and its related initiatives, 

including PART, the Administration has taken important steps in the right 

direction by calling attention to successes and needed improvements in 

federal management and performance. However, it is not clear that PART 

has had any significant impact on authorization, appropriations, and 

oversight activities to date. It will only be through the continued attention of 

the executive branch and Congress that progress can be accelerated and 

sustained. Such an effort can strengthen the budget process itself and 

provide a valuable tool to facilitate a fundamental reexamination of the base 

of government. We recognize that this process will not be easy. Furthermore, 

given the wide range of programs and issues covered, the process of 

rethinking government programs and activities could take a generation or 

more to complete. 

As part of its work to improve the 

management and performance of 

the federal government, GAO 

monitors progress and continuing 

challenges in performance 

budgeting and the Administration’s 

related initiatives, such as the 

Program Assessment Rating Tool 

(PART). In light of the nation’s 

long-term fiscal imbalance and 

other emerging 21st century 

challenges, we have also reported 

that performance budgeting can 

help facilitate a needed 

reexamination of what the federal 

government does, how it does it, 

who does it, and how it is financed 

in the future. GAO remains 

committed to working with 

Congress and the Administration to 

help address these important and 

complex issues. 

What GAO Recommends

GAO is not making new 

recommendations in this 

testimony. However, as we have 

reported, governmentwide 

strategic and performance plans 

could provide a framework for 

reexamining existing federal 

programs and policies. This could 

help decision makers articulate the 

role, goals, objectives, and 

effectiveness of the federal 

government. Obtaining 

congressional buy-in on what to 

measure is important given 

Congress’s constitutional budgeting

role. GAO has also suggested that 

Congress consider the need to 

develop a more systematic vehicle 

for communicating its top 

performance concerns. 
Page 1 GAO-05-709T 

Mr. Chairman and Members of the Subcommittee:

I am pleased to be here today to discuss performance budgeting and the 

Office of Management and Budget’s (OMB) Program Assessment Rating 

Tool (PART).1

 Given current trends and challenges facing the nation—

including the federal government’s long-term fiscal imbalance—it is critical 

to reexamine the relevancy of federal programs and their fit with national 

priorities, while maximizing program performance within current and 

expected resource levels. The implementation of performance budgeting 

approaches can be an important step to help achieve this goal. 

As Congress is well aware, our nation is currently on an unsustainable 

fiscal path. Long-term budget simulations by GAO,2

 the Congressional 

Budget Office (CBO), and others show that we face a large and growing 

long-term structural deficit due primarily to known demographic trends 

and rising health care costs. Continuing on this unsustainable fiscal path 

will gradually erode, if not suddenly damage, our economy, our standard of 

living, and ultimately our national security. All reasonable simulations 

indicate that the problem is too big to be solved by economic growth alone 

or by making modest changes to existing spending and tax policies. Rather, 

a fundamental reexamination of major spending and tax policies and 

priorities will be important to recapture our fiscal flexibility and ensure 

that our programs and priorities respond to key emerging social, economic, 

and security changes and challenges.

Performance budgeting holds promise as part of a process of reexamining 

the base of the federal government. It can help enhance the government’s 

capacity to assess competing claims for federal dollars by arming decision 

makers with better information both on the results of individual programs 

as well as on entire portfolios of policies, programs, and other tools 

designed to address common goals. However, it is also important to 

remember that in a political process performance information is likely to 

be one, but not the only, factor in budgetary decision making. In other 

words, performance information can change the terms of debate but it will 

not necessarily determine the ultimate decision. 

1

In this testimony, the term performance budgeting refers to any linkage between budgeting 

and expected or actual evidence-based performance information.

2

For more information see GAO’s Web site “Our Nation’s Fiscal Outlook: The Federal 

Government’s Long-Term Budget Imbalance,” http://www.gao.gov/special.pubs/longterm.
Page 2 GAO-05-709T 

Existing performance budgeting efforts, such as the Government 

Performance and Results Act of 1993 (GPRA) 3 and PART, provide a 

foundation for a baseline review of existing federal policies, programs, 

functions, and activities. We recognize that this will not be easy. Reforming 

programs and activities leads to winners and losers, notwithstanding 

demonstrated shortfalls in performance and design. Given prior 

experiences and political realities, there is little real “low-hanging fruit” in 

the federal budget. 

Today I will touch first on the need for a fundamental reexamination of 

government given our nation’s long-term fiscal challenge. Then I will turn 

to and discuss the important role of performance budgeting in any such 

reexamination. The successful application of performance budgeting in 

this reexamination process rests on

• continuing to build on the legacy of GPRA by improving the reliability 

and credibility of performance information and increasing program 

evaluation capacity;

• encouraging demand for that information by garnering stakeholder buyin—particularly from Congress—on what to measure and how to 

present this information, since only then will it be linked to the 

congressional authorization, appropriations, and oversight processes; 

and

• developing a comprehensive, crosscutting approach to assessing the 

performance of all programs—including tax expenditures—relevant to 

common goals.

This testimony draws upon our wide-ranging work on GPRA and federal 

budget and performance integration and on information in the President’s 

Budget of the U.S. Government, Fiscal Year 2006, specifically the budget 

and performance integration initiative of the President’s Management 

Agenda (PMA). We conducted our work in accordance with generally 

accepted government auditing standards.

3

Pub. L. No. 103-62 (1993).
Page 3 GAO-05-709T 

Long-term Fiscal 

Challenge Provides 

Reexamination 

Impetus 

As I noted, known demographic trends and rising health care costs are 

major drivers of the nation’s large and growing structural deficits. The 

nation cannot ignore this fiscal pressure—it is not a matter of whether the 

nation deals with the fiscal gap, but how and when. GAO’s long-term budget 

simulations illustrate the magnitude of this fiscal challenge. Figures 1 and 2 

show these simulations under two different sets of assumptions. Figure 1 

uses the CBO January 2005 baseline through 2015. As required by law, that 

baseline assumes no changes in current law, that discretionary spending 

grows with inflation through 2015, and that all tax cuts currently scheduled 

to expire are permitted to expire. In Figure 2, two assumptions about that 

first 10 years are changed: (1) discretionary spending grows with the 

economy rather than with inflation and (2) all tax cuts currently scheduled 

to expire are made permanent. In both simulations discretionary spending 

is assumed to grow with the economy after 2015 and revenue is held 

constant as a share of Gross Domestic Product (GDP) at the 2015 level. 

Also in both simulations long-term Social Security and Medicare spending 

are based on the 2005 trustee’s intermediate projections, and we assume 

that benefits continue to be paid in full after the trust funds are exhausted. 

Long-term Medicaid spending is based on CBO’s December 2003 long-term 

projections under midrange assumptions. 
Page 4 GAO-05-709T 

Figure 1: Composition of Spending as a Share of GDP under Baseline Extended

Note: In addition to the expiration of tax cuts, revenue as a share of GDP increases through 2015 due 

to (1) real bracket creep, (2) more taxpayers becoming subject to the Alternative Minimum Tax (AMT), 

and (3) increased revenue from tax-deferred retirement accounts. After 2015, revenue as a share of 

GDP is held constant. 

0

10

20

30

40

50

2004 2015 2030 2040

Percent of GDP

Net interest

Social Security

Medicare and Medicaid

All other spending

Revenue

Source: GAO’s March 2005 analysis.

Fiscal year
Page 5 GAO-05-709T 

Figure 2: Composition of Spending as a Share of GDP Assuming Discretionary 

Spending Grows with GDP after 2005 and All Expiring Tax Provisions Are Extended

Note: Although expiring tax provisions are extended, revenue as a share of GDP increases through 

2015 due to (1) real bracket creep, (2) more taxpayers becoming subject to the AMT, and (3) increased 

revenue from tax-deferred retirement accounts. After 2015, revenue as a share of GDP is held 

constant. 

As these simulations illustrate, absent policy changes on the spending 

and/or revenue side of the budget, the growth in spending on federal 

retirement and health entitlements will encumber an escalating share of the 

government’s resources. Indeed, when we assume that recent tax 

reductions are made permanent and discretionary spending keeps pace 

with the economy, our long-term simulations suggest that by 2040 federal 

revenues may be adequate to pay little more than interest on the federal 

debt. Neither slowing the growth in discretionary spending nor allowing 

the tax provisions to expire—nor both together—would eliminate the 

imbalance. Although federal tax policies will likely be part of any debate 

about our fiscal future, making no changes to Social Security, Medicare, 

Medicaid, and other drivers of the long-term fiscal gap would require at 

0

10

20

30

40

50

2004 2015 2030 2040

Fiscal year

Percent of GDP

Net interest

Social Security

Medicare and Medicaid

All other spending

Source: GAO’s March 2005 analysis.

Revenue
Page 6 GAO-05-709T 

least a doubling of federal taxes in the future—and that seems both 

unrealistic and inappropriate.

These challenges would be difficult enough if all we had to do is fund 

existing commitments. But as the nation continues to change in 

fundamental ways, a wide range of emerging needs and demands can be 

expected to compete for a share of the budget pie. Whether national 

security, transportation, education, or public health, a growing population 

will generate new claims for federal actions on both the spending and tax 

sides of the budget. 

Although demographic shifts and rising health care costs drive the longterm fiscal outlook, they are not the only forces at work that require the 

federal government to rethink its role and entire approach to policy design, 

priorities, and management. Other important forces are working to reshape 

American society, our place in the world, and the role of the federal 

government. These include evolving defense and homeland security 

policies, increasing global interdependence, and advances in science and 

technology. In addition, the federal government increasingly relies on new 

networks and partnerships to achieve critical results and develop public 

policy, often including multiple federal agencies, domestic and 

international non- or quasi-government organizations, for-profit and notfor-profit contractors, and state and local governments. If government is to 

effectively address these trends, it cannot accept all of its existing 

programs, policies, and activities as “givens.” Many of our programs were 

designed decades ago to address earlier challenges. Outmoded 

commitments and operations constitute an encumbrance on the future that 

can erode the capacity of the nation to better align its government with the 

needs and demands of a changing world and society. Accordingly, 

reexamining the base of all major existing federal spending and tax 

programs, policies, and activities by reviewing their results and testing 

their continued relevance and relative priority for our changing society is 

an important step in the process of assuring fiscal responsibility and 

facilitating national renewal.4

A periodic reexamination offers the prospect of addressing emerging needs 

by weeding out programs and policies that are redundant, outdated, or 

4

For more information on reexamination of federal programs, see GAO, 21st Century 

Challenges: Reexamining the Base of the Federal Government, GAO-05-325SP 

(Washington, D.C.: February 2005).
Page 7 GAO-05-709T 

ineffective. Those programs and policies that remain relevant could be 

updated and modernized by improving their targeting and efficiency 

through such actions as redesigning allocation and cost-sharing provisions, 

consolidating facilities and programs, and streamlining and reengineering 

operations and processes. The tax policies and programs financing the 

federal budget can also be reviewed with an eye toward both the overall 

level of revenues that should be raised as well as the mix of taxes that are 

used. 

We recognize that taking a hard look at existing programs and carefully 

reconsidering their goals and financing are challenging tasks. Reforming 

programs and activities leads to winners and losers, notwithstanding 

demonstrated shortfalls in performance and design. Moreover, given the 

wide range of programs and issues covered, the process of rethinking 

government programs and activities may take a generation to unfold. 

We are convinced, however, that reexamining the base offers compelling 

opportunities to both redress our current and projected fiscal imbalance 

while better positioning government to meet the new challenges and 

opportunities of this new century. In this regard, the management and 

performance reforms enacted by Congress in the past 15 years have 

provided new tools to gain insight into the financial, program, and 

management performance of federal agencies and activities. The 

information being produced as a result can provide a strong basis to 

support the needed review, reassessment, and reprioritization process.

Current Performance 

Budgeting Initiatives 

Hold Promise for 

Reexamining the Base

While this kind of oversight and reexamination is never easy, it is helped by 

the availability of credible performance information focusing on the 

outcomes achieved with budgetary resources and other tools. Performance 

budgeting can help enhance the government’s capacity to assess competing 

claims in the budget by arming budgetary decision makers with better 

information on the results of both individual programs as well as entire 

portfolios of tools and programs addressing common outcomes. To 

facilitate application of performance budgeting in reexamination, it is 

useful to understand the current landscape. Going forward, decision 

makers need a road map—grounded in lessons learned from past 

initiatives—that defines what successful performance budgeting would 

look like and identifies the key elements and potential pitfalls on the 

critical path to success. Central to this is an understanding of what is meant 

by success in performance budgeting and the key factors that influence 

that success. 
Page 8 GAO-05-709T 

Current Performance 

Budgeting Initiatives Are 

Grounded in Past Efforts

Performance budgeting efforts are not new at the federal level. In the 

1990s, Congress and the executive branch drew on lessons learned from 

50 years of efforts to link resources to results to lay out a statutory and 

management framework that provides the foundation for strengthening 

government performance and accountability. With GPRA as its centerpiece, 

these reforms also laid the foundation for performance budgeting by 

establishing infrastructures in the agencies to improve the supply of 

information on performance and costs. GPRA is designed to inform 

congressional and executive decision making by providing objective 

information on the effectiveness and efficiency of federal programs and 

spending. A key purpose of GPRA is to create closer and clearer links 

between the process of allocating scarce resources and the expected 

results to be achieved with those resources. Importantly, GPRA requires 

both a connection to the structures used in congressional budget 

presentations and consultation between the executive and legislative 

branches on agency strategic plans. Because these requirements are 

grounded in statute, this gives Congress an oversight stake in GPRA's 

success.5

 Over a decade after its enactment, GPRA has succeeded in 

expanding the supply of performance information and institutionalizing a 

culture of performance as well as providing a solid foundation for more 

recent budget and performance initiatives.6

 In part, this success can be 

attributed to the fact that GPRA melds the best features, and avoids the 

worst, of its predecessors.

Building on GPRA’s foundation, the current administration has made the 

integration of performance and budget information one of five 

governmentwide management priorities under its PMA.7

 PART is central to

5

See Pub. L. No. 103-62 § 2, 5 U.S.C. § 306, and 31 U.S.C. §§ 1115-1116.

6

GAO, Results-Oriented Government: GPRA Has Established a Solid Foundation for 

Achieving Greater Results, GAO-04-38 (Washington, D.C.: Mar. 10, 2004).

7

In addition to budget and performance integration, the other four priorities under PMA are 

strategic management of human capital, expanded electronic government, improved 

financial performance, and competitive sourcing. 
Page 9 GAO-05-709T 

the Administration’s budget and performance integration initiative.8 OMB 

describes PART as a diagnostic tool meant to provide a consistent 

approach to assessing federal programs as part of the executive budget 

formulation process. It applies 25 questions to all “programs”9

 under four 

broad topics: (1) program purpose and design, (2) strategic planning, 

(3) program management, and (4) program results (i.e., whether a program 

is meeting its long-term and annual goals) as well as additional questions 

that are specific to one of seven mechanisms or approaches used to deliver 

the program.10

Drawing on available performance and evaluation information, the PART 

questionnaire attempts to determine the strengths and weaknesses of 

federal programs with a particular focus on individual program results and 

improving outcome measures. PART asks, for example, whether a 

program’s long-term goals are specific, ambitious, and focused on 

outcomes, and whether annual goals demonstrate progress toward 

achieving long-term goals. It is designed to be evidence-based, drawing on a 

wide array of information, including authorizing legislation, GPRA strategic 

plans and performance plans and reports, financial statements, inspector 

general and GAO reports, and independent program evaluations.

Since the fiscal year 2004 budget cycle, OMB has applied PART to 607 

programs (about 60 percent of the federal budget) and given each program 

one of four overall ratings: (1) “effective,” (2) “moderately effective,”

(3) “adequate,” or (4) “ineffective” based on program design, strategic 

planning, management, and results. A fifth rating, “results not 

demonstrated,” was given—independent of a program’s numerical score—

8

For a detailed examination of PART, see GAO, Performance Budgeting: Observations on 

the Use of OMB’s Program Assessment Rating Tool for the Fiscal Year 2004 Budget, GAO04-174 (Washington, D.C.: Jan. 30, 2004). Another significant element of the performance 

and budget integration initiative is efforts to restructure budgets. See GAO, Performance 

Budgeting: Efforts to Restructure Budgets to Better Align Resources with Performance, 

GAO-05-117SP (Washington, D.C.: February 2005).

9

There is no standard definition for the term “program.” For purposes of PART, OMB 

described the unit of analysis (program) as (1) an activity or set of activities clearly 

recognized as a program by the public, OMB, and/or Congress; (2) having a discrete level of 

funding clearly associated with it; and (3) corresponding to the level at which budget 

decisions are made.

10The seven major categories are competitive grants, block/formula grants, capital assets 

and service acquisition programs, credit programs, regulatory-based programs, direct 

federal programs, and research and development programs. 
Page 10 GAO-05-709T 

if OMB decided that a program’s performance information, performance 

measures, or both were insufficient or inadequate. During the next 2 years, 

the Administration plans to assess all remaining executive branch 

programs with limited exceptions.11

As I testified before this subcommittee in April,12 PMA and its related 

initiatives, including PART, demonstrate the Administration’s commitment 

to improving federal management and performance. By calling attention to 

successes and needed improvements, the focus that these initiatives bring 

is certainly a step in the right direction, and our work shows that progress 

has been made in several important areas over the past several years. 

However, it is not clear that PART has had any significant impact on 

congressional authorization, appropriations, and oversight activities to 

date. In order for such efforts to hold appeal beyond the executive branch, 

developing credible performance information and garnering congressional 

buy-in on what to measure and how to present this information to them are 

critical. Otherwise, as some congressional subcommittees have noted, 

PART is unlikely to play a major role in the authorization, appropriations, 

and oversight processes.

Prior initiatives have left us with some lessons about how to build a 

sustainable approach to linking resources to results. Before I discuss those 

critical factors let me touch briefly on the importance of realistic 

expectations. I say this because previous management reforms have been 

doomed by inflated and unrealistic expectations. Performance budgeting 

can do a great deal: it can help policymakers address important questions 

such as whether programs are contributing to their stated goals, are wellcoordinated with related initiatives at the federal level or elsewhere, and 

are targeted to the intended beneficiaries. However, it should not be 

expected to provide the answers to all resource allocation questions in 

some automatic or formula-driven process. Performance problems may 

well prompt budget cuts, program consolidations, or eliminations, but they 

may also inspire enhanced investments and reforms in program design and 

management if the program is deemed to be of sufficiently high priority to 

the nation. Conversely, even a program that is found to be exceeding its 

11The administration is considering alternative methods and timelines for assessment of 

programs with limited impact and large activities where it is difficult to determine an 

appropriate unit of analysis.

12GAO, Management Reform: Assessing the President's Management Agenda, GAO-05-

574T (Washington, D.C.: Apr. 21, 2005).
Page 11 GAO-05-709T 

performance expectations can be a candidate for budgetary cuts if it is a 

lower priority than other competing claims in the process. The 

determination of priorities is a function of competing values and interests 

that may be informed by performance information but also reflects other 

factors, such as the overall budget situation, the state of the economy, 

security needs, equity considerations, unmet societal needs, and the 

appropriate role of the federal government in addressing any such needs.

Accordingly, we found that while PART scores for fiscal year 2004 were 

generally positively related to the Administration’s proposed funding 

changes in discretionary programs, the scores did not automatically 

determine funding changes. That is, for some programs rated “effective” or 

“moderately effective” OMB recommended funding decreases, while for 

several programs judged to be “ineffective” OMB recommended additional 

funding in the President’s budget request with which to implement 

changes.13 As we have noted, success in performance budgeting should not 

be defined only by its impact on funding decisions but also on the extent to 

which it helps inform Congress and executive branch policy decisions and 

improve program management.14 In this regard, for the fiscal year 2004 

PART assessments we reported that over 80 percent of the PART 

recommendations focused on improving program management, 

assessment, and design; less than 20 percent related to funding.15

We also reported that OMB’s ability to use PART to identify and address 

future program improvements and measure progress—a major purpose of 

PART—is predicated on its ability to oversee the implementation of PART 

recommendations. At the request of the Chairman of the House 

Subcommittee on Government Management, Finance, and Accountability, 

Committee on Government Reform, we are currently conducting a review 

of (1) OMB's and agencies' perspectives on the effects PART 

recommendations are having on agency operations and results and issues 

encountered in responding to PART recommendations; (2) OMB's 

leadership and direction in ensuring an integrated, complementary 

relationship between PART and GPRA, including how OMB is assessing 

performance when multiple programs or agencies are involved in meeting 

13GA0-04-174, 14.

14GAO, The Government Performance and Results Act: 1997 Governmentwide 

Implementation Will Be Uneven, GAO/GGD-97-109 (Washington, D.C.: June 2, 1997), 90.

15GA0-04-174, 12.
Page 12 GAO-05-709T 

goals and objectives; and (3) steps OMB has taken to involve Congress in 

the PART process.

Achieving Success in 

Performance 

Budgeting Requires 

Credible Information, 

Congressional “Buyin,” and a 

Comprehensive and 

Crosscutting 

Perspective

Let me now turn to three factors we believe are critical to sustaining 

successful performance budgeting over time:

1. building a supply of credible performance information,

2. encouraging demand for that information and its use in congressional 

processes by garnering stakeholder buy-in, and 

3. taking a comprehensive and crosscutting approach to assessing related 

programs and policies.

Having a Supply of Credible 

Performance Information

The credibility of performance information, including related cost data, and 

the ability of federal agencies to produce credible evaluations of their 

programs’ effectiveness are key to the success of performance budgeting. 

As I testified before this subcommittee in April, this type of information is 

critical for effective performance measurement to support decisions in 

areas ranging from program efficiency and effectiveness to sourcing and 

contract management. To be effective, this information must not only be 

timely and reliable, but also both useful and used. Agencies are expected to 

implement integrated financial and performance management systems that 

routinely produce information that is (1) timely—to measure and affect 

performance, (2) useful—to make more informed operational and investing 

decisions, and (3) reliable—to ensure consistent and comparable trend 

analysis over time and to facilitate better performance measurement and 

decision making. Producing timely, useful, and reliable information is 

critical for achieving the goals that Congress established in GPRA, the 

Chief Financial Officers (CFO) Act of 1990,16 and other federal financial 

management reform legislation. 

16Pub. L. No. 101-576 (1990).
Page 13 GAO-05-709T 

Unfortunately, as our work on PART and GPRA implementation shows, the 

credibility of performance data has been a long-standing weakness.17

Likewise, our work has noted limitations in the quality of agency evaluation 

information and in agency capacity to produce rigorous evaluations of 

program effectiveness. We have previously reported that agencies have had 

difficulty assessing many program outcomes that are not quickly achieved 

or readily observed and contributions to outcomes that are only partly 

influenced by federal funds.18 Furthermore, our work has shown that few 

agencies deployed the rigorous research methods required to attribute 

changes in underlying outcomes to program activities.19 Our 2003 review of 

agencies’ evaluation capacity identified four main elements that can be 

used to develop and improve evaluation efforts. They are (1) an evaluation 

culture, (2) data quality, (3) analytic expertise, and (4) collaborative 

partnerships.20

OMB, through its development and use of PART, has provided agencies 

with a powerful incentive for improving data quality and availability. 

Agencies may make greater investments in improving their capacity to 

produce and procure quality information if agency program managers 

perceive that program performance and evaluation data will be used to 

make actual resource decisions throughout the resource allocation process 

and can help them get better results.

Improvements in the quality of performance data and the capacity of 

federal agencies to perform program evaluations will require sustained 

commitment and investment of resources. Over the longer term, failing to 

discover and correct performance problems can be much more costly. 

More importantly, it is critical that budgetary investments in this area be 

viewed as part of a broader initiative to improve the accountability and 

management capacity of federal agencies and programs. 

17GAO has suggested various approaches to addressing this and other challenges. See 

GAO/GGD-97-109 and GAO-04-38.

18GAO, Performance Budgeting: Opportunities and Challenges, GAO-02-1106T

(Washington, D.C.: Sept. 19, 2002).

19GAO, Program Evaluation: Agencies Challenged by New Demand for Information on 

Program Results, GAO/GGD-98-53 (Washington, D.C.: Apr. 24, 1998).

20GAO, Program Evaluation: An Evaluation Culture and Collaborative Partnerships Help 

Build Agency Capacity, GAO-03-454 (Washington, D.C.: May 2, 2003).
Page 14 GAO-05-709T 

Obtaining Congressional 

Buy-in

Federal performance and accountability reforms have given much 

attention to increasing the supply of performance information over the past 

several decades. However, improving the supply of performance 

information is in and of itself insufficient to sustain performance 

management and achieve real improvements in management and program 

results. Rather, it needs to be accompanied by a demand for and use of that 

information by decision makers and managers alike. Key stakeholder 

outreach and involvement is critical to building demand and, therefore, 

success in performance budgeting. 

Lack of consensus by a community of interested parties on goals and 

measures and the way that they are presented can detract from the 

credibility of performance information and, subsequently, its use. Fifty 

years of past executive branch efforts to link resources with results have 

shown that any successful effort must involve Congress as a full partner. 

We have previously reported that past performance budgeting initiatives 

faltered in large part because they intentionally attempted to develop 

performance plans and measures in isolation from the congressional 

authorization, appropriations, and oversight processes.21 While 

congressional buy-in is critical to sustain any major management initiative, 

it is especially important for performance budgeting given Congress’s 

constitutional role in setting national priorities and allocating the resources 

to achieve them. 

Obtaining buy-in on goals and measures from a community of interested 

parties is critical to facilitating use of performance information in resource 

allocation decisions. PART was designed for and is used in the executive 

branch budget preparation and review process; as such, the goals and 

measures used in PART must meet OMB’s needs. However, the current 

statutory framework for strategic planning and reporting is GPRA—a 

broader process involving the development of strategic and performance 

goals and objectives to be reported in strategic and annual plans. OMB’s 

desire to collect performance data that better align with budget decision 

units means that the fiscal year 2004 PART process became a parallel 

competing structure to the GPRA framework. Although OMB 

acknowledges that GPRA was the starting point for PART, the emphasis is 

shifting. Over time, as the performance measures developed for PART are 

21GAO, Performance Budgeting: Past Initiatives Offer Insights for GPRA Implementation, 

GAO/AIMD-97-46 (Washington, D.C.: Mar. 27, 1997).
Page 15 GAO-05-709T 

used in the executive budget process, these measures may come to drive 

agencies’ strategic planning processes. 

Opportunities exist to strengthen PART’s integration with the broader 

GPRA planning process. Some tension about the amount of stakeholder 

involvement in the internal deliberations surrounding the development of 

PART measures and the broader consultations more common to the GPRA 

strategic planning process is inevitable. Compared to the relatively openended GPRA process, any budget formulation process is likely to seem 

closed. However, if PART is to be accepted as other than one element in the 

development of the President’s budget proposal, congressional 

understanding and acceptance of the tool and its analysis will be critical. 

As part of the executive branch budget formulation process, PART must 

clearly serve the President’s interests. However, measures developed solely 

by the executive branch for the purposes of executive budget formulation 

may discourage their use in other processes, such as internal agency 

management and the congressional budget process, especially if measures 

that serve these other processes are eliminated through the PART process. 

PART’s focus on outcome measures may ignore stakeholders’ needs for 

other types of measures, such as output and workload information. Our 

recent work examining performance budgeting efforts at both the state and 

federal levels revealed that appropriations committees consider workload 

and output measures important for making resource allocation decisions.22

Workload and output measures lend themselves to the budget process 

because workload measures, in combination with cost-per-unit 

information, can be used to help develop appropriation levels and 

legislators can more easily relate output information to a funding level to 

help define or support a desired level of service. Like PART, GPRA states a 

preference for outcome measures. However, in practice, GPRA also 

recognizes the need to develop a range of measures, including output and 

process measures. Since different stakeholders have different needs and no 

one set of goals and measures can serve all purposes, PART can and should 

complement GPRA but should not replace it.

Moreover, as we have previously reported, several appropriations 

subcommittees have cited the need to link PART with congressional

22See GAO, Performance Budgeting: States’ Experiences Can Inform Federal Efforts, GAO05-215 (Washington, D.C.: Feb. 28, 2005) and GAO-05-117SP.
Page 16 GAO-05-709T 

oversight.23 For example, the House Report accompanying the 

Transportation and Treasury Appropriations Bill for fiscal year 2004 

included a statement in support of PART, but noted that the 

Administration’s efforts must be linked with the oversight of Congress to 

maximize the utility of the PART process, and that if the Administration 

treats as privileged or confidential the details of its rating process, it is less 

likely that Congress will use those results in deciding which programs to 

fund.24 Moreover, the subcommittee said it expects OMB to involve the 

House and Senate Committees on Appropriations in the development of the 

PART ratings at all stages in the process.

In our January 2004 report on PART,25 we suggested steps for both OMB 

and Congress to take to strengthen the dialogue between executive branch 

officials and key congressional stakeholders, and OMB generally agreed. 

We recommended that OMB reach out to key congressional committees 

early in the PART selection process to gain insight about which program 

areas and performance issues congressional officials consider warrant 

PART review. Engaging Congress early in the process may help target 

reviews with an eye toward those areas most likely to be on the agenda of 

Congress, thereby better ensuring the use of performance assessments in 

resource allocation processes throughout government. 

The importance of getting buy-in for successful performance budgeting can 

be seen in the experience of OMB’s recent efforts to restructure budget 

accounts.26 While OMB staff and agency officials credited budget 

restructuring with supporting results-oriented management, the budget 

changes did not meet the needs of some congressional appropriations 

committees. While congressional appropriations subcommittee staff 

expressed general support for budget and performance integration, they 

objected to changes that substituted rather than supplemented information 

traditionally used for appropriations and oversight purposes. As we said in 

our February 2005 report on this issue,27 the greatest challenge of budget 

restructuring may be discovering ways to reflect both the broader planning 

23GAO-04-174.

24H.R. Rep. No. 108-243, pp. 168-69 (2003).

25GAO-04-174. 

26For more information on this effort, see GAO-05-117SP.

27GAO-05-117SP.
Page 17 GAO-05-709T 

perspective that can add value to budget deliberations and foster 

accountability in ways that Congress considers appropriate for meeting its 

authorizing, appropriations, and oversight objectives. 

Going forward, infusing a performance perspective into budget decisions 

may only be achieved when the underlying information becomes more 

credible, accepted, and used by all major decision makers. Thus, Congress 

must be considered a full partner in any efforts to infuse a performance 

budget perspective into budget structure and budget deliberations. In due 

course, once the goals and underlying data become more compelling and 

used by Congress, budget restructuring may become a more compelling 

tool to advance budget and performance integration.

Reexamination Requires a 

Crosscutting Perspective 

While existing performance budgeting initiatives provide a foundation for a 

baseline review of federal policies, programs, functions, and activities, 

several changes are in order to support the type of reexamination needed. 

For example, PART focuses on individual programs, but key outcomeoriented performance goals—ranging from low income housing to food 

safety to counterterrorism—are addressed by a wide range of 

discretionary, entitlement, tax, and regulatory approaches that cut across a 

number of agencies. While PART’s program-by-program approach fits with 

OMB’s agency-by-agency budget reviews, it is not well suited to addressing 

crosscutting issues or to looking at broad program areas in which several 

programs address a common goal. 

The evaluation of programs in isolation may be revealing, but a broader 

perspective is necessary for an effective overall reexamination effort. It is 

often critical to understand how each program fits with a broader portfolio 

of tools and strategies—such as regulations, direct loans, and tax 

expenditures—to accomplish federal missions and performance goals. 

Such an analysis is necessary to capture whether a program complements 

and supports other related programs, whether it is duplicative and 

redundant, or whether it actually works at cross-purposes to other 

initiatives. OMB reported on a few crosscutting PART assessments in the 

fiscal year 2006 budget and plans to conduct additional crosscutting 

reviews in 2005. However, we would urge a more comprehensive and 

consistent approach to evaluating all programs relevant to common goals.

Such an approach would require assessing the performance of all programs 

related to a particular goal—including tax expenditures and regulatory 

programs—using a common framework. Our federal tax system includes 
Page 18 GAO-05-709T 

hundreds of billions of dollars of annual expenditures—the same order of 

magnitude as total discretionary spending. Yet relatively little is known 

about the effectiveness of tax incentives in achieving the objectives 

intended by Congress. PART, OMB’s current framework for assessing the 

performance of federal programs, has not been applied to tax expenditures. 

Assessing complete portfolios of tools related to key outcome-oriented 

goals is absolutely critical to the type of reexamination needed. The 

governmentwide performance plan required by GPRA could help address 

this issue. 

GPRA requires the President to include in his annual budget submission a 

federal government performance plan. Congress intended that this plan 

provide a “single cohesive picture of the annual performance goals for the 

fiscal year.”28 The governmentwide performance plan could help Congress 

and the executive branch address critical federal performance and 

management issues, including redundancy and other inefficiencies in how 

we do business. It could also provide a framework for any restructuring 

efforts. Unfortunately, this provision has not been fully implemented. 

Instead, OMB has used the President’s budget to present high-level 

information about agencies and certain program performance issues. The 

agency-by-agency focus of the budget does not provide the integrated 

perspective of government performance envisioned by GPRA.

If the governmentwide performance plan were fully implemented, it could 

also provide a framework for congressional oversight and other activities. 

In that regard, we have also suggested that Congress consider the need to 

develop a more systematic vehicle for communicating its top performance 

concerns and priorities; develop a more structured oversight agenda to 

prompt a more coordinated congressional perspective on crosscutting 

performance issues; and use this agenda to inform its authorization, 

appropriations, and oversight processes. One possible approach would 

involve developing a congressional performance resolution identifying the 

key oversight and performance goals that Congress wishes to set for its 

own committees and for the government as a whole. Such a resolution 

could be developed by modifying the current congressional budget 

resolution, which is already organized by budget function. Initially, this may 

involve collecting the “views and estimates” of authorization and 

appropriations committees on priority performance issues for programs 

under their jurisdiction and working with such crosscutting committees as 

28S. Rep. No. 103-58, p. 27 (1993).
Page 19 GAO-05-709T 

this committee, the House Committee on Government Reform, and the 

House Committee on Rules. 

In addition, we have previously recommended that Congress consider 

amending GPRA to require the President to develop a governmentwide 

strategic plan to provide a framework to identify long-term goals and 

strategies to address issues that cut across federal agencies.29 A strategic 

plan for the federal government, supported by key national outcome-based 

indicators to assess the government’s performance, position, and progress, 

could be a valuable tool for governmentwide reexamination of existing 

programs, as well as proposals for new programs. Developing a strategic 

plan can help clarify priorities and unify stakeholders in the pursuit of 

shared goals. Therefore, developing a strategic plan for the federal 

government would be an important first step in articulating the role, goals, 

and objectives of the federal government. If fully developed, a 

governmentwide strategic plan can potentially provide a cohesive 

perspective on the long-term goals of the federal government and provide a 

much-needed basis for fully integrating, rather than merely coordinating, a 

wide array of federal activities. The development of a set of key national 

indicators could be used as a basis to inform the development of 

governmentwide strategic and annual performance plans. The indicators 

could also link to and provide information to support outcome-oriented 

goals and objectives in agency-level strategic and annual performance 

plans. Successful strategic planning requires the involvement of key 

stakeholders. Thus, it could serve as a mechanism for building consensus. 

Further, it could provide a vehicle for the President to articulate long-term 

goals and a road map for achieving them. In addition, a strategic plan can 

provide a more comprehensive framework for considering organizational 

changes and making resource decisions. 

Concluding 

Observations

The federal government is in a period of profound transition and faces an 

array of challenges and opportunities to enhance performance, ensure 

accountability, and position the nation for the future. In addition to the 

serious long-term fiscal challenges facing the nation, a number of 

overarching trends, such as defense and homeland security policies, 

increasing global interdependence, and advances in science and 

technology, drive the need to reconsider the proper role for the federal 

29GAO-04-38.
Page 20 GAO-05-709T 

government in the 21st century, including what it does, how it does it, who 

does it, and how it gets financed. This will mean bringing a variety of tools 

and approaches to bear. In our February 2005 report on 21st century 

challenges, we outline a number of approaches that could facilitate a 

reexamination effort.30 Today, I’ve discussed several of these, as well as 

some additional steps that I believe are necessary for an effective 

reexamination effort.

Much is at stake in the development of a collaborative performance 

budgeting process. This is an opportune time for the executive branch and 

Congress to consider and discuss how agencies and committees can best 

take advantage of and leverage the new information and perspectives 

coming from the reform agenda under way in the executive branch. 

Through PMA and its related initiatives, including PART, the 

Administration has taken important steps in the right direction by calling 

attention to successes and needed improvements in federal management 

and performance. Some program improvements can come solely through 

executive branch action, but for PART to meet its full potential the 

assessments it generates must also be meaningful to and used by Congress 

and other stakeholders. 

Successful integration of inherently separate but interrelated strategic 

planning and performance budgeting processes is predicated on 

(1) ensuring that the growing supply of performance information is 

credible, useful, reliable, and used (2) increasing the demand for this 

information by developing goals and measures relevant to the large and 

diverse community of stakeholders in the federal budget and planning 

processes, and (3) taking a comprehensive and crosscutting approach. It 

will only be through the continued attention of the executive branch and 

Congress that progress can be sustained and, more importantly, 

accelerated. This effort can both strengthen the budget process itself and 

provide a valuable tool to facilitate a fundamental reexamination of the 

base of government. We recognize that this process will not be easy. Given 

the wide range of programs and issues covered, the process of rethinking 

the full range of federal government programs, policies, and activities could 

take a generation or more to complete. Regardless of the specific 

combination of reexamination approaches adopted, success will require 

not only the factors listed above but also sustained leadership throughout 

the many stages of the policy process. In addition, for comprehensive 

30GA0-05-325SP, 82-7.
Page 21 GAO-05-709T 

reexamination of government programs and policies, clear and transparent 

processes for engaging the broader public in the debate are also needed.

Mr. Chairman, this concludes my prepared statement. I would be pleased to 

answer any questions you or the other Members of the Subcommittee may 

have at this time.

For future information on this testimony, please contact Paul L. Posner at 

(202) 512-9573 or posnerp@gao.gov. Individuals making key contributions 

to this testimony include Jacqueline Nowicki, Tiffany Tanner, and Benjamin 

Licht. 

(450417)
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