United States General Accounting Office

GAO Accounting and Information

Management Division

May 1996 Budget Issues Area

Plan Update

Fiscal Year 1996

G O A

years

1921 - 1996

GAO/IAP-96-1

Foreword

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.

Page 1 GAO/IAP-96-1
Foreword

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

Page 2 GAO/IAP-96-1
Contents

Foreword 1

Table I: Key Issues 4

Table II: Planned

Major Work

6

Table III: GAO

Contacts

8

Page 3 GAO/IAP-96-1
Table I: Key Issues

Issue Significance

Deficit reduction: What are the causes,

implications, and appropriate responses to

a persistent federal budget deficit?

Continuing large deficits pose significant long-term economic and fiscal consequences

for our nation. Congress has sharpened its focus on budgetary matters, in hopes of

balancing the 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: What

improvements could be made in the existing

budget structure, processes, and reporting

mechanisms to improve budget

decision-making, better allocate federal

resources, and meet national priorities,

including increased attention to the amount

and quality of federal investment?

How we reduce the deficit is of great importance for the nation’s fiscal and economic

future. In many instances, the existing federal budget structure does not provide an

adequate focus for congressional decision-making: federal spending on investments that

affect the long-term health of the country are not highlighted in the budget, nor does the

budget reveal the true cost of some federal programs.

Government restructuring and the federal

role: What is the potential and what are the

issues in effectively restructuring the federal

government? What are issues in the choice

and design of the federal role, including

divestiture (privatization) and block grants?

Congress has renewed interest in restructuring the government, including award of block

grants to states, privatization of federal assets, and program and agency consolidations

and terminations. As Congress considers these substantial issues, it will need an

analytical base for careful decision-making. 

Page 4 GAO/IAP-96-1
Table I: Key Issues

Objectives Focus of work

• Identify long-term economic impact of

current fiscal policy.

• Coordinate a GAO-wide effort to identify

deficit reduction options. 

• Provide alternative analytical perspectives

to educate the public and Congress on

budget trends and to suggest new ways of

viewing policy choices posed by deficit

reduction.

• Overview of budgetary implications of all GAO work.

• Update of our model on the long-term economic impact of the deficit.

• Office of Management and Budget and Congressional Budget Office compliance with

the Budget Enforcement Act of 1990.

• Leakages in budgetary control building on our inventory of accounts with backdoor

spending authority.

• Perspectives on the size of the public debt.

• Budget trends analyses: federal spending by mission area, item of expense, and

investment category; long-term fiscal trends of outlays and revenues; and analysis of

department and agency personnel trends.

• Continue to develop alternative

approaches to structuring, presenting, and

analyzing the budget to highlight the key

implications of budget choices for social

and economic policy.

• Explore areas where accrual accounting

concepts and accounting data can add

value to the budget.

• Analyze proposals to streamline the

budget process. Analyze implications for the

budget process of issues identified in other

work.

• Assess ways that performance measures

can be integrated into the budget process. 

• Federal budgeting for uncertainties, including emergencies, disasters, and rainy day

funds.

• Budgetary treatment of federal insurance programs.

• Budgetary treatment of government-owned capital.

• Dedicated revenues in the federal budget.

• Options to change the federal budget process, such as biennial budgeting, line-item

veto, balanced budget amendment, and automatic continuing resolution.

• Federal budget and accounting linkages.

• Implementation of performance budgeting.

• Use of performance information in federal agency strategic planning and budget

formulation.

• Contributions to the revenue and stewardship standards that are being developed by

the Federal Accounting Standards Advisory Board’s task forces.

• Improve the analytical and information

base Congress has available to make

decisions concerning federal government

restructuring. 

• Improve decision-making on privatization

and devolution by identifying issues that

affect success.

• Early budget and program implementation issues regarding new block grant programs. 

• Budget issues related to the design of subsidy tools, such as federal grant design, tax

expenditures, and insurance programs. 

• Identify issues that should be addressed when considering privatization of federal

assets.

• Treatment of asset sales in the federal budget.

Page 5 GAO/IAP-96-1
Table II: Planned Major Work

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

restructuring and the

federal role

• Evaluate budget issues related to federal privatization efforts.

• Review budget and program implementation issues related to federal block grants.

• Assess efficiency and equity issues related to the design of federal grants.

Page 6 GAO/IAP-96-1
Table III: GAO Contacts

Director Paul L. Posner (202) 512-9573

Associate Director Susan J. Irving (202) 512-9142

Assistant Directors Christine E. Bonham

Barbara D. Bovbjerg

Michael J. Curro

Margaret T. Wrightson

Page 7 GAO/IAP-96-1
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