ANALYTICAL PERSPECTIVES

BUDGET OF THE UNITED STATES GOVERNMENT

Fiscal Year 2008

THE BUDGET DOCUMENTS

Budget of the United States Government, Fiscal Year 2008 contains the Budget Message of the President, information on the Presidents priorities, and budget overviews organized by agency.

Analytical Perspectives, Budget of the United States Govern-ment, Fiscal Year 2008 contains analyses that are designed to high-light specified subject areas or provide other significant presentations of budget data that place the budget in perspective. This volume includes economic and accounting analyses; information on Federal receipts and collections; analyses of Federal spending; information on Federal borrowing and debt; baseline or current services estimates; and other technical presentations.

The Analytical Perspectives volume also contains a CD-ROM with several detailed tables, including tables showing the budget by agency and account and by function, subfunction, and program.

Historical Tables, Budget of the United States Government, Fiscal Year 2008 provides data on budget receipts, outlays, sur-pluses or deficits, Federal debt, and Federal employment over an extended time period, generally from 1940 or earlier to 2008 or 2012. To the extent feasible, the data have been adjusted to provide consist-ency with the 2008 Budget and to provide comparability over time.

Appendix, Budget of the United States Government, Fiscal Year 2008 contains detailed information on the various appropria-tions and funds that constitute the budget and is designed primarily for the use of the Appropriations Committees. The Appendix contains more detailed financial information on individual programs and ap-

propriation accounts than any of the other budget documents. It includes for each agency: the proposed text of appropriations lan-guage; budget schedules for each account; legislative proposals; expla-nations of the work to be performed and the funds needed; and proposed general provisions applicable to the appropriations of entire agencies or group of agencies. Information is also provided on certain activities whose outlays are not part of the budget totals.

AUTOMATED SOURCES OF BUDGET INFORMATION

The information contained in these documents is available in electronic format from the following sources:

Budget CD-ROM. The CD-ROM contains all of the budget docu-ments in fully indexed PDF format along with the software required for viewing the documents. The CD-ROM has many of the budget tables in spreadsheet format. The budget CD-ROM also contains the material on the separate Analytical Perspectives CD-ROM.

Internet. All budget documents, including documents that are released at a future date, will be available for downloading in several formats from the Internet. To access these documents use the following address:

www.budget.gov/budget

For more information on access to electronic versions of the budget documents (except CD-ROMs), call (202) 5121530 in the D.C. area or toll-free (888) 2936498. To purchase the budget CD-ROM or print-ed documents call (202) 5121800.

GENERAL NOTES

1. All years referred to are fiscal years, unless otherwise noted.

2. Detail in this document may not add to the totals due to rounding.

3. At the time of this writing, only two of the appropriations bills for 2007 had been enacted; therefore, the programs provided for in the remaining 2007 appropriations bills were operating under a continuing resolution (P.L. 109289, Division B, as amended). For these programs, references to 2007 spending in the text and tables reflect the levels provided by the con-tinuing resolution.

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON 2007

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC area (202) 512-1800

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ISBN 978-0-16-077507-9

i

TABLE OF CONTENTS

Page

List of Charts and Tables ............................................................................................. v

Introduction

1. Introduction ....................................................................................................... 3

Performance and Management Assessments

2. Budget and Performance Integration .............................................................. 9

Crosscutting Programs

3. Homeland Security Funding Analysis ............................................................. 19

4. Strengthening Federal Statistics ..................................................................... 37

5. Research and Development .............................................................................. 45

6. Federal Investment ........................................................................................... 55

7. Credit and Insurance ........................................................................................ 67

8. Aid to State and Local Governments ............................................................... 101

9. Integrating Services with Information Technology ........................................ 153

10. Federal Drug Control Funding ......................................................................... 159

11. California-Federal Bay-Delta Program Budget Crosscut (CALFED) ............ 161

Economic Assumptions and Analyses

12. Economic Assumptions ...................................................................................... 165

13. Stewardship ....................................................................................................... 175

14. National Income and Product Accounts .......................................................... 203

Budget Reform Proposals

15. Budget Reform Proposals .................................................................................. 211

Federal Borrowing and Debt

16. Federal Borrowing and Debt ............................................................................ 223

ii

TABLE OF CONTENTSContinued

Page

Federal Receipts and Collections

17. Federal Receipts ................................................................................................ 239

18. User Charges and Other Collections ............................................................... 271

19. Tax Expenditures .............................................................................................. 285

Dimensions of the Budget

20. Comparison of Actual to Estimated Totals ..................................................... 331

21. Outlays to the Public, Gross and Net .............................................................. 339

22. Trust Funds and Federal Funds ...................................................................... 341

23. Off-Budget Federal Entities and Non-Budgetary Activities .......................... 357

24. Federal Employment and Compensation ........................................................ 361

Current Services Estimates

25. Current Services Estimates .............................................................................. 371

The Budget System and Concepts

26. The Budget System and Concepts ................................................................... 391

Detailed Functional Tables

27. Budget Authority and Outlays by Function, Category, and Program .......... CDROM

Federal Programs by Agency and Account

28. Federal Programs by Agency and Account ...................................................... CDROM

iii

LIST OF CHARTS AND TABLES

v

LIST OF CHARTS AND TABLES

LIST OF CHARTS

Page

21. Program Ratings are Improving ........................................................................................................ 15 41. ICSP Statistical Quality and Program Performance Dimensions ................................................... 38 42. Most Recent PART Summary Ratings for Statistical Programs ..................................................... 40 51. Research in the American Competitiveness Initiative ..................................................................... 45 52. Scores of R&D PART Assessments .................................................................................................... 47 71. Fannie Mae and Freddie Mac Combined Retained Mortgage Portfolios Year-End 2005 ............. 74 72. Face Value of Federal Credit Outstanding ....................................................................................... 87

131. The Financial Condition of the Federal Government and the Nation ............................................ 177 132. Net Federal Liabilities ........................................................................................................................ 180 133. Health Care Cost Alternatives ........................................................................................................... 185 134. Effect of Entitlement Savings ............................................................................................................ 186 135. Alternative Receipts Projections ........................................................................................................ 186 136. Alternative Productivity Assumptions .............................................................................................. 187 137. Alternative Fertility Assumptions ..................................................................................................... 187 138. Alternative Immigration Assumptions .............................................................................................. 188 139. Alternative Mortality Assumptions ................................................................................................... 188

1310. Sources of the Gross Tax Gap ............................................................................................................ 194 171. Major Provisions of the Tax Code Under the 2001, 2003, 2004 and 2006 Enacted Tax Relief .... 240 201. Illustrative Range of Budget Outcomes ............................................................................................ 337 241. Post Cold War End Strength and Spending ..................................................................................... 362 242. DoD Direct Compensation Costs ........................................................................................................ 363 261. Relationship of Budget Authority to Outlays for 2008 .................................................................... 402

LIST OF TABLES

Page

Crosscutting Programs Homeland Security Funding Analysis:

31. Homeland Security Funding by Agency .................................................................................. 20 32. Homeland Security Funding by National Strategy Mission Area ......................................... 21 33. Intelligence and Warning Funding .......................................................................................... 22 34. Border and Transportation Security Funding ........................................................................ 23 35. Domestic Counterterrorism Funding ....................................................................................... 25 36. Protecting Critical Infrastructure and Key Assets Funding ................................................. 26 37. Defending Against Catastrophic Threats Funding ................................................................ 28 38. Emergency Preparedness and Response Funding .................................................................. 29 39. Discretionary Fee-Funded Homeland Security Activities by Agency ................................... 32

310. Mandatory Homeland Security Funding by Agency .............................................................. 32 311. Baseline EstimatesTotal Homeland Security Funding by Agency .................................... 33 312. Homeland Security Funding by Budget Function .................................................................. 34 313. Baseline EstimatesHomeland Security Funding by Budget Function .............................. 35

AppendixHomeland Security Mission Funding by Agency and Budget Account ............. CDROM

vi ANALYTICAL PERSPECTIVES

LIST OF TABLESContinued

Page

Strengthening Federal Statistics: 41. 20062008 Budget Authority for Principal Statistical Agencies ........................................... 43

Research and Development: 51. Federal Research and Development ........................................................................................ 51 52. Federal Science and Technology Budget ................................................................................. 53 53. Agency Detail of Selected Interagency R&D Efforts .............................................................. 54

Federal Investment: 61. Composition of Federal Investment Outlays .......................................................................... 57 62. Federal Investment Budget Authority and Outlays: Grant and Direct Federal Programs 58 63. Summary of PART Ratings and Scores for Direct Federal Investment Programs .............. 61 64. Net Stock of Federally Financed Physical Capital ................................................................. 64 65. Net Stock of Federally Financed Research and Development ............................................... 65 66. Net Stock of Federally Financed Education Capital .............................................................. 66

Credit and Insurance: Text Tables:

Summary of PART Scores ..................................................................................................... 69 Largest Ten Claims Against the PBGCs Single-Employer Insurance Program, 19752006 .............................................................................................................................. 83

71. Estimated Future Cost of Outstanding Federal Credit Programs ........................................ 87 72. Reestimates of Credit Subsidies on Loans Disbursed Between 19922006 ......................... 89 73. Direct Loan Subsidy Rates, Budget Authority, and Loan Levels, 20062008 ..................... 91 74. Loan Guarantee Subsidy Rates, Budget Authority, and Loan Levels, 20062008 .............. 92 75. Summary of Federal Direct Loans and Loan Guarantees ..................................................... 93 76. Direct Loan Writeoffs and Guaranteed Loan Terminations for Defaults ............................. 94 77. Appropriations Acts Limitations on Credit Loan Levels ....................................................... 96 78. Face Value of Government-Sponsored Lending ...................................................................... 98 79. Lending and Borrowing By Government-Sponsored Enterprises (GSEs) ............................ 99

710. Direct Loan Transactions of the Federal Government ........................................................... CDROM 711. Guaranteed Loan Transactions of the Federal Government ................................................. CDROM

Aid to State and Local Governments: 81. Federal Grant Outlays by Agency ........................................................................................... 101 82. Summary of PART Ratings and Scores for Grants to State and Local Governments ........ 105 83. Trends in Federal Grants to State and Local Governments ................................................. 107 84. Federal Grants to State and Local GovernmentsBudget Authority and Outlays ............ 110 85. Summary of Programs by Agency, Bureau, and Program ..................................................... 119 86. Summary of Programs by State ............................................................................................... 120 87. School Breakfast Program ........................................................................................................ 121 88. National School Lunch Program .............................................................................................. 122 89. Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) ......... 123

810. Child and Adult Care Food Program ....................................................................................... 124 811. State Administrative Matching Grants for Food Stamp Program ........................................ 125 812. Title I Grants to Local Educational Agencies ......................................................................... 126 813. Improving Teacher Quality State Grants ............................................................................... 127 814. Special EducationGrants to States ...................................................................................... 128 815. Rehabilitation ServicesVocational Rehabilitation Grants to States .................................. 129 816. State Childrens Health Insurance Program .......................................................................... 130 817. Grants to States for Medicaid .................................................................................................. 131 818. Temporary Assistance for Needy Families (TANF)Family Assistance Grants ................ 132 819. Child Support EnforcementFederal Share of State and Local Administrative Costs

and Incentives ........................................................................................................................ 133 820. Low Income Home Energy Assistance Program ..................................................................... 134

vii LIST OF CHARTS AND TABLES

LIST OF TABLESContinued

Page

821. Child Care and Development Block Grant ............................................................................. 135 822. Child Care and Development FundMandatory ................................................................... 136 823. Child Care and Development FundMatching ...................................................................... 137 824. Head Start ................................................................................................................................. 138 825. Foster CareTitle IVE ........................................................................................................... 139 826. Adoption Assistance .................................................................................................................. 140 827. Social Services Block Grant ..................................................................................................... 141 828. Homeland Security Grant Program ......................................................................................... 142 829. Disaster GrantsPublic Assistance (Presidentially Declared Disasters) ............................ 143 830. Public Housing Operating Fund .............................................................................................. 144 831. Section 8 Housing Choice Vouchers ........................................................................................ 145 832. Public Housing Capital Fund ................................................................................................... 146 833. Community Development Block Grants .................................................................................. 147 834. Mineral Leasing and Associated Payments ............................................................................ 148 835. Airport Improvement Program ................................................................................................ 149 836. Highway Planning and Construction ...................................................................................... 150 837. Capital Investment GrantsFixed Guideway Modernization .............................................. 151 838. Federal Transit Formula Grants and Research ..................................................................... 152

Integrating Services with Information Technology: 91. Effectiveness of Agencys IT Management and E-Gov Processes .......................................... CDROM 92. Management Guidance ............................................................................................................. CDROM 93. Agencies with IT Investments on the Management Watch List ........................................... CDROM 94. Status of the Presidential E-Government Initiatives ............................................................. CDROM 95. Lines of Business (LoB) Update ............................................................................................... CDROM

Federal Drug Control Funding: 101. Federal Drug Control Funding, FY 20062008 ...................................................................... 159

California-Federal Bay-Delta Program Budget Crosscut (CALFED): Text Table:

CALFED-Related Federal Funding Budget Crosscut ..................................................... 161 CALFED FY 19982008 Budget Crosscut Methodology ........................................................ CDROM CALFED Federal Agency FundingSummary by Category and Agency Breakout ........... CDROM CALFED Project Descriptions .................................................................................................. CDROM CALFED Fiscal Years 20052006 Federal Funding .............................................................. CDROM CALFED Fiscal Years 20072008 Funding Under New and Old Authority ........................ CDROM CALFED State Agency Funding .............................................................................................. CDROM Department of the Interior Certification of Budget Numbers ............................................... CDROM

Economic Assumptions and Analyses Economic Assumptions:

121. Economic Assumptions ............................................................................................................. 168 122. Comparison of Economic Assumptions .................................................................................... 170 123. Comparison of Economic Assumptions in the 2007 and 2008 Budgets ................................ 171 124. Adjusted Structural Balance .................................................................................................... 171 125. Sensitivity of the Budget to Economic Assumptions .............................................................. 173

Stewardship: 131. Government Assets and Liabilities .......................................................................................... 181 132. Long-Run Budget Projections ................................................................................................... 184 133. Benefits in Excess of Future Taxes and PremiumsActuarial Present Values ................. 192 134. Sources of the Tax Gap from Income Underreporting ........................................................... 194 135. National Wealth ........................................................................................................................ 196 136. Trends in National Wealth ....................................................................................................... 197 137. Economic and Social Indicators ............................................................................................... 198

viii ANALYTICAL PERSPECTIVES

LIST OF TABLESContinued

Page

National Income and Product Accounts: 141. Federal Transactions in the National Income and Product Accounts, 19972008 .............. 205 142. Relationship of the Budget to the Federal Sector, NIPAs .................................................... 207

Budget Reform Proposals Budget Reform Proposals:

151. Mandatory Proposals Subject to PAYGO ................................................................................ 211 152. Discretionary Caps and Adjustments ...................................................................................... 213 153. Program Integrity Base and Cap Adjustments ...................................................................... 214 154. Direct Savings Estimated from 2008 Program Integrity Funding ........................................ 215 155. Transportation Category for Highways and Mass Transit Spending ................................... 216

Federal Borrowing and Debt Federal Borrowing and Debt:

161. Trends in Federal Debt Held by the Public ............................................................................ 223 162. Federal Government Financing and Debt ............................................................................... 225 163. Agency Debt ............................................................................................................................... 228 164. Debt Held by Government Accounts ....................................................................................... 230 165. Federal Funds Financing and Change in Debt Subject to Statutory Limit ......................... 234 166. Foreign Holdings of Federal Debt ............................................................................................ 235

Federal Receipts and Collections Federal Receipts:

171. Receipts by SourceSummary ................................................................................................ 239 172. Effect on Receipts of Changes in the Social Security Taxable Earnings Base .................... 239 173. Effect of Proposals on Receipts ................................................................................................ 266 174. Receipts by Source .................................................................................................................... 269

User Charges and Other Collections: 181. Gross Outlays, User Charges, Other Offsetting Collections and Receipts from the Public,

and Net Outlays .................................................................................................................... 271 182. Total User Charge Collections ................................................................................................. 274 183. User Fee and Other User Charge Proposals .......................................................................... 276 184. Offsetting Collections and Receipts from the Public .............................................................. 281 185. Offsetting Receipts by Type ..................................................................................................... 282

Tax Expenditures: 191. Estimates of Total Income Tax Expenditures ......................................................................... 287 192. Estimates of Tax Expenditures for the Corporate and Individual Income Taxes ............... 291 193. Income Tax Expenditures Ranked by Total 20082012 Projected Revenue Effect ............. 296 194. Present Value of Selected Tax Expenditures for Activity in Calendar Year 2006 .............. 299

Appendix A: Treasury Review of the Tax Expenditure Presentation ...................................................... 313 Appendix Tables:

1. Comparison of Current Tax Expenditures with Those Implied by a Comprehensive Income Tax ............................................................................................................................. 322

2. Comparison of Current Tax Expenditures with Those Implied by a Comprehensive Consumption Tax ................................................................................................................... 323

3. Revised Tax Expendixture Estimates ..................................................................................... 323 Appendix B: Performance Measures and the Economic Effects of Tax Expenditures ............................ 324

Dimensions of the Budget Comparison of Actual to Estimated Totals:

201. Comparison of Actual 2006 Receipts with the Initial Current Services Estimates ............. 331 202. Comparison of Actual 2006 Outlays with the Initial Current Services Estimates ............. 332 203. Comparison of the Actual 2006 Deficit with the Initial Current Services Estimate ........... 333

ix LIST OF CHARTS AND TABLES

LIST OF TABLESContinued

Page

204. Comparison of Actual and Estimated Outlays for Mandatory and Related Programs Under Current Law ............................................................................................................... 334

205. Reconciliation of Final Amounts for 2006 ............................................................................... 335 206. Comparison of Estimated and Actual Surpluses or Deficits Since 1982 .............................. 336 207. Differences Between Estimated and Actual Surpluses or Deficits for Five-Year Budget

Estimates Since 1982 ............................................................................................................ 337 Outlays to Public, Gross and Net:

211. Total Outlays, Gross and Net of Offsetting Collections and Receipts from the Public, by Agency, 20062008 ................................................................................................................ 339

Trust Funds and Federal Funds: 221. Receipts, Outlays, and Surplus or Deficit by Fund Group .................................................... 342 222. Income, Outgo, and Balances of Trust Funds Group ............................................................. 343 223. Relationship of Total Federal Fund and Trust Fund Receipts to Unified Budget Re-

ceipts, Fiscal Year 2006 ........................................................................................................ 344 224. Income, Outgo, and Balances of Major Trust Funds .............................................................. 346 225. Income, Outgo, and Balances of Selected Federal Funds ...................................................... 353

OffBudget Federal Entities and Non-Budgetary Activities: 231. Comparison of Total, On-Budget, and Off-Budget Transactions ........................................... 358

Federal Employment and Compensation: Text Table:

Overseas Staffing Under Chief of Mission Authority ......................................................... 363 241. Federal Civilian Employment in the Executive Branch ........................................................ 364 242. Total Federal Employment (As measured by total positions filled) ...................................... 365 243. Total Federal Employment (As measured by Full-Time Equivalents) ................................. 366 244. Personnel Compensation and Benefits .................................................................................... 367

Current Services Estimates Current Services Estimates:

251. Baseline Category Totals .......................................................................................................... 371 252. Impact of Budget Policy ............................................................................................................ 372 253. Alternative Baseline Assumptions ........................................................................................... 374 254. Summary of Economic Assumptions ....................................................................................... 374 255. Beneficiary Projections for Major Benefit Programs .............................................................. 375 256. Impact of Regulations, Expiring Authorizations, and Other Assumptions in the Baseline 376 257. Baseline Receipts by Source ..................................................................................................... 382 258. Change in Baseline Outlay Estimates by Category ............................................................... 383 259. Current Services Outlays by Function .................................................................................... 384

2510. Current Services Outlays by Agency ....................................................................................... 385 2511. Current Services Budget Authority by Function .................................................................... 386 2512. Current Services Budget Authority by Agency ....................................................................... 387 2513. Current Services Budget Authority by Function, Category and Program ........................... CDROM 2514. Current Services Outlays by Function, Category and Program ............................................ CDROM

The Budget System and Concepts The Budget System and Concepts:

261. Totals for the Budget and the Federal Government .............................................................. 395 Detailed Functional Tables

Detailed Functional Tables: 271. Budget Authority and Outlays by Function, Category and Program ................................... CDROM

Federal Programs by Agency and Account Federal Programs by Agency and Account:

281. Federal Programs by Agency and Account ............................................................................. CDROM

1

INTRODUCTION

3

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. This volume presents crosscutting analyses of Government programs and activities from several perspectives.

Presidential budgets have included separate analyt-ical presentations of this kind for many years. The 1947 Budget and subsequent budgets included a separate section entitled Special Analyses and Tables that cov-ered four or more topics. For the 1952 Budget, the section was expanded to ten analyses, including many subjects still covered today, such as receipts, invest-ment, credit programs, and aid to State and local gov-ernments. With the 1967 Budget this material became a separate volume entitled Special Analyses, and in-cluded 13 chapters. The material has remained a sepa-rate volume since then, with the exception of the Budg-ets for 19911994, when all of the budget material was included in one large volume. Beginning with the 1995 Budget, the volume has been named Analytical Perspec-tives.

The Analytical Perspectives volume this year con-tinues to reflect an interest in publishing more informa-tion on program performance, so that Executive agen-cies, the Congress, and the public will become increas-ingly informed about how well programs are per-forming. Increased performance information can help managers improve program effectiveness, and can help Executive and Congressional policymakers improve the allocation of public resources. The performance assess-ment information is summarized in Chapter 2, Budget and Performance Integration, and is discussed in many other chapters, especially those in the section, Cross-cutting Programs. One-page summaries of each pro-gram assessment are available at www.ExpectMore.gov.

Again this year, several large tables are included as part of the Budget on the enclosed Analytical Perspec-tives CDROM. A list of the items on the CDROM is in the Table of Contents of this volume.

Overview of the Chapters

Introduction 1. Introduction. This chapter discusses each of the

subsequent chapters briefly and highlights the empha-sis on performance in a crosscutting context.

Performance and Management Assessments 2. Budget and Performance Integration. This chapter

summarizes the performance and management assess-ments that have been completed to date using the Pro-gram Assessment Rating Tool (PART). One-page sum-maries of the program evaluations, as well as detail

on each of the assessments can be found at www.ExpectMore.gov.

Crosscutting Programs 3. Homeland Security Funding Analysis. This chapter

discusses homeland security funding and provides infor-mation on homeland security program requirements, performance, and priorities. Additional detailed infor-mation is available on the enclosed Analytical Perspec-tives CDROM.

4. Strengthening Federal Statistics. This chapter dis-cusses the development of standards that principal sta-tistical programs can use to assess their performance and presents highlights of the related 2008 Budget pro-posals.

5. Research and Development. This chapter presents a crosscutting review of research and development funding in the Budget, including discussions about pri-orities, performance, and coordination across agencies.

6. Federal Investment. This chapter discusses spend-ing across Federal agencies that yields long-term bene-fits, and presents information on physical capital, re-search and development, and education and training. Also included in this chapter is material on the PART assessments related to direct Federal investment spend-ing. There is also a section on capital stocks.

7. Credit and Insurance. This chapter provides cross-cutting analyses of the roles, risks, and performance of Federal credit and insurance programs and Govern-ment-sponsored enterprises (GSEs). It covers the cat-egories of Federal credit (housing, education, business including farm operations, and international) and insur-ance programs (deposit insurance, pension guarantees, disaster insurance, and insurance against security-re-lated risks). Two detailed tables, Table 710. Direct Loan Transactions of the Federal Government and Table 711. Guaranteed Loan Transactions of the Fed-eral Government, are on the enclosed Analytical Per-spectives CDROM.

8. Aid to State and Local Governments. This chapter presents crosscutting information on Federal grants to State and local governments, including highlights of Administration proposals. This 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 invest-ments in information technology (IT). It describes var-ious aspects of the Administrations information tech-nology agenda, with special emphasis on the perform-ance, efficiency, and effectiveness of the Governments IT investments. Five detailed tables: Table 91. Effec-tiveness of Agencys IT Management and E-Gov Proc-

4 ANALYTICAL PERSPECTIVES

esses, Table 92. Management Guidance, Table 93. Agencies with IT Investments on the Management Watch List, Table 94. Status of Presidential E-Gov-ernment Initiatives, and Table 95. Lines of Business (LoB) Update are on the enclosed Analytical Perspec-tives CDROM.

10. Federal Drug Control Funding. This chapter pre-sents estimated drug control funding for Federal de-partments 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 re-quirements for this program. Detailed tables on funding and project descriptions are on the enclosed Analytical Perspectives CDROM.

Economic Assumptions and Analyses 12. Economic Assumptions. This chapter reviews re-

cent economic developments; presents the Administra-tions assessment of the economic situation and outlook, including the effects of macroeconomic policies; and compares the economic assumptions on which the Budg-et is based with the assumptions for last years 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 Govern-ments financial condition and sustainability in an inte-grated framework that includes Federal assets and li-abilities; 75-year projections of the Federal budget under alternative assumptions for discretionary spend-ing, health costs, productivity, and demographics; actu-arial estimates for the shortfalls in Social Security and Medicare; a discussion of tax compliance; 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 ana-lytical functions to a businesss 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 Com-merce. The NIPA 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 15. Budget Reform Proposals. This chapter includes

a brief description of the Administrations budget re-form agenda for addressing the need for responsible budgeting and other reforms.

Federal Borrowing and Debt 16. Federal Borrowing and Debt. This chapter ana-

lyzes 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 chapter presents informa-

tion 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 chapter describes and pre-sents estimates of tax expenditures, which are defined as revenue losses from special exemptions, credits, or other preferences in the tax code. An appendix dis-cusses possible alternatives to the current tax expendi-ture baselines.

Dimensions of the Budget 20. Comparison of Actual to Estimated Totals. This

chapter compares the actual receipts, outlays, and def-icit for 2006 with the estimates for that year published two years ago in the 2006 Budget. It also includes a historical comparison of the differences between re-ceipts, outlays, and the deficit as originally proposed with final outcomes.

21. Outlays to the Public, Gross and Net. This chapter provides information on outlays gross and net of offset-ting collections and offsetting receipts by agency. Out-lays are a measure of Government spending. Offsetting collections and offsetting receipts are netted against gross outlays and result primarily from the Govern-ments 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 bal-ances.

23. Off-Budget Federal Entities and Non-Budgetary Activities. This chapter discusses off-budget Federal en-tities (Social Security and Postal Service) and non-budg-etary 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, overseas staffing, and the full compensation of military personnel.

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 concep-tual framework for these estimates and describes dif-ferences with the BEA requirements. Two detailed ta-bles, Table 2513. Current Services Budget Authority by Function, Category, and Program and Table 2514. Current Services Outlays by Function, Category, and

5 1. INTRODUCTION

Program, are on the enclosed Analytical Perspectives CDROM.

Budget System and Concepts 26. The Budget System and Concepts. This chapter

includes a basic reference to the budget process, con-cepts, laws, and terminology, and includes a glossary of budget terms.

Other The following material appears only on the enclosed

Analytical Perspectives CDROM: Detailed Functional Tables. Table 271. Budget

Authority and Outlays by Function, Category, and Program.

Federal Programs by Agency and Account. Table 281. Federal Programs by Agency and Account.

7

PERFORMANCE AND MANAGEMENT ASSESSMENTS

9

2. BUDGET AND PERFORMANCE INTEGRATION

I. INTRODUCTION

Good Governmenta government fiscally responsible to the peoplemust have as one of its core purposes the achievement of results for the taxpayers. Taxpayers expect the Federal Government to implement programs that will ensure the Nations security and provide crit-ical services. Taxpayers want their money spent wisely and used to gain maximum benefit. Taxpayers have the right to hold the Federal Government accountable for its actions. To exercise this right, the taxpayers must have clear, candid, and up-to-date information about each programs successes and failures. For the second straight year, the Administration is providing this type of information to all Americans on ExpectMore.gov, a user-friendly government website that describes which programs are performing, which ones are not, and in both situations, what is being done to improve them. (Greater detail about ExpectMore.gov will be provided in a subsequent sec-tion.)

The Administration is making the Federal Govern-ment increasingly effective by making program budget decisions based on program performance. The objective of the Presidents Budget and Performance Integration (BPI) Initiative is to ensure that Federal dollars produce the greatest results. Under the BPI Initiative, agencies and OMB identify which programs work well, which are deficient, and what can be done to improve performance of each program. In some cases, the Ad-ministration may find it necessary to reallocate funding from less effective programs to more effective ones. The final decisions about the scope of programs and the size of program budgets are ultimately made jointly by the Congress and the President. The BPI Initiative provides information on program performance to help the Executive and Legislative branches make better, more informed decisions. Information about program performance is now readily available and accessible to the public on ExpectMore.gov.

The BPI Initiative measures a programs success in two principal ways:

Improved Program Performance: The initiative re-quires each agency to identify opportunities to im-prove program management and design, and then develop and implement clear, aggressive plans to get more for tax dollars every year. Agencies have ready access to program performance information by using the results of the Program Assessment Rating Tool (PART) assessments of each program, program evaluations, investigations, audits, and analyses from a variety of sources.

Greater Investment in Successful Programs: Over-all, there are now more program-funding needs

and thus fewer resources to be allocated to each funded program. These scarce resources need to be allocated to programs that benefit the Nation most effectively and efficiently. Though perform-ance is not the only factor used to decide the size of a programs budget, Congress and the President can utilize information about a programs effec-tiveness and efficiency in decision-making so that taxpayer dollars are invested in programs that provide the greatest return to the Nation. If poor performing programs are unable to demonstrate improved results, then their resources may be re-allocated to programs that can demonstrate great-er success and returns to the taxpayer.

Currently, the BPI Initiative is showing great progress toward the first goal. Programs are becoming more efficient and more effective through implementa-tion of meaningful improvement plans.

Many programs are demonstrating improved results. For example:

The Social Security Administration increased agency productivity by 13.1 percent since 2001 through increased use of information technology and improved business processes. SSA would have required $800 million more in 2006 to process the same work if productivity improvements had not been realized.

In 2005, the Bureau of Prisons reduced the con-struction cost per bed in high security facilities, saving an estimated $54 million.

The Federal Transit Administration implemented its plan to process Formula Grants faster. In the past, the highest reported processing time for processing grants was 90 days. FTA now expects to process such grants within only 36 days.

Agencies are identifying additional actions to improve the performance of each of their programs. All agencies, regardless of whether their programs perform poorly or well, strive for increased program performance each year.

Progress toward the second goal of improving re-source allocation has been slow, but this year, the ad-ministration had greater success. We have been suc-cessful in terminating some low-performing programs and better at targeting resources to well-performing programs. In 2006, seven programs were terminated, saving $230 million. Four programs were reduced, sav-ing $300 million. Though no decision is based purely on performance, overall, high performing programs re-ceived larger funding increases than those that did not perform as well.

10 ANALYTICAL PERSPECTIVES

II. HOW THE BUDGET AND PERFORMANCE INTEGRATION INITIATIVE WORKS

Several aspects of the Budget Performance Integra-tion (BPI) Initiative are designed to maximize program performance. They include:

Assessment of performance with the PART (Pro-gram Assessment Rating Tool);

Publishing a Scorecard to hold agencies account-able for managing for results, addressing PART findings, and implementing follow-up actions;

Broadcasting results to the public on ExpectMore.gov; and

Facilitating program improvement through inter-agency collaboration and cooperation.

Comprehensive Assessment with the Program Assessment Rating Tool (PART)

How do we ensure that Federal programs are improv-ing every year? First, we assess their current perform-ance. In order to improve a programs outcomes, it is critical to have a good understanding of how the pro-gram is currently performing. To date, we have as-sessed the performance of nearly 1,000 programs, com-prising 96 percent of all Federal programs, using the PART.

History of the PART

The Federal Government spends trillions of dollars on programs annually, but until the advent of the PART, there was not a uniform basis for assessing how well these programs actually work. For example, were the billions of taxpayer dollars the Federal Government spent on foster care actually preventing the maltreat-ment and abuse of children? Are Federal efforts to re-duce air pollution successful? Previous administrations from President Johnson to President Clinton and Con-gress have grappled with this problem. Each prior ad-ministration has tried to come up with means by which government programs are measured for results. The most significant advance in bringing accountability to government programs was the Government Perform-ance and Results Act of 1993 (GPRA). This law requires

Federal agencies to identify both annual and long-term goals and collect and report performance data. For the first time, agencies were required to explicitly identify measures and goals for judging the performance of each of their programs and to collect information on an an-nual basis in order to determine if they were meeting those goals.

This Administration built upon GPRA requirements by creating the PART (Program Assessment Rating Tools), an objective, evidence-based and easy-to-under-stand questionnaire about program design, planning, management, and performance. Objectivity is para-mount to a PART rating. For example, when the devel-opment of the PART began in 2002, the first draft included a question relating to whether a particular program served an appropriate federal role. Because many people believed that the answer to that question would vary depending on the reviewers philosophical outlook, the question was removed.

Public and private sector entities have reviewed the PART. Private sector reviewers have praised the PART assessment process for its transparency and objectivity and have also raised concerns that OMB has striven to address. For instance, some reviewers found assess-ments of different programs lack consistency in the an-swers to the same questions. OMB now audits all draft assessments to correct any obvious inconsistencies. Re-viewers also found that agencies did not always agree with the final assessment of their programs. Agencies can now appeal to a high level subcommittee of the Presidents Management Council to dispute answers with which they disagree. To address concerns that OMB and agencies were not doing enough to involve Congress in the assessment process, agencies are now required to brief and consult their Congressional appro-priators, authorizers, and overseers before the annual assessments begin.

The accompanying timeline provides a history of the development of the PART.

11 2. BUDGET AND PERFORMANCE INTEGRATION

July 2005

*NAPA = National Academy of Public Administration

PCIE = President's Council on Integrity and Efficiency

PMAC = Performance Measurement Advisory Council

PMC = President's Management Council

**20% of Programs Assessed in each Spring/Summer 2002 - 2006

Aug. 2005

Feb. 2006

Jan. 2004

June 2003

Nov. 2002

Sept. 2002

Aug. 2002

July 2002

May 2002

April 2002

Feb. 2003

PMC Approves Final PART/First List of Programs to be Assessed*

Draft PART Tested on 67 ProgramsPublic Input Requested

External Review of PART - NAPA/PCIE/PMAC*

PART Assessments Conducted with Agencies**

First Congressional Hearing HeldPMAC Met

First Interagency Review Panel Conducted Consistency Audit & Appeals Review

Published First Set of PARTs

Established Annual OMB Consistency Check

GAO Conducted Latest Review of PART

PART received Harvard's Innovations in American Government Award Online Tool - PARTWeb Launched

Established Formal Annual Appeals Process

Online Tool - ExpectMore.gov LaunchedEstablished Annual Consultation with Congress

12 ANALYTICAL PERSPECTIVES

What is the PART and How is it Used?

The PART helps assess the management and performance of individual programs. With the PART, agencies and OMB evaluate a programs purpose, design, planning, management, results, and accountability to determine its overall effectiveness. Agencies then identify and complete follow-up actions to improve program results.

To reflect the fact that Federal programs deliver goods and services using different mechanisms, the PART is customized by program type. The seven PART types are: Direct Federal, Competitive Grant, Block/Formula Grant, Research and Development, Capital Assets and Service Acquisition, Credit, and Regulatory. The PART types apply to both discretionary and mandatory pro-grams. ExpectMore.gov also classifies each program by its specific program area (such as environment, transportation, edu-cation, etc.) to facilitate comparison so we can accelerate the improved performance of programs with similar missions.

Each PART includes 25 basic questions and there are additional questions tailored to the different program types. The questions are divided into four sections. The first section of questions gauges whether a program has a clear purpose and is well de-signed to achieve its objectives. The second section evaluates strategic planning, and weighs whether the agency establishes outcome-oriented annual and long-term goals for its programs. The third section rates the management of an agencys program, including the quality of efforts to improve efficiency. The fourth section assesses the results programs can report with accuracy and consistency.

The answers to questions in each of the four sections result in a numerical score for each section from 0 to 100 (100 being the best score). Because reporting a single weighted numerical rating could suggest false precision, or draw attention away from the very areas most in need of improvement, numerical scores are combined and translated into qualitative ratings. The bands and associated ratings are as follows:

Rating Range

Effective ................................................................... 85100

Moderately Effective ............................................... 7084

Adequate ................................................................. 5069

Ineffective ................................................................ 049

Regardless of overall score, programs that do not have acceptable performance measures or have not yet collected perform-ance data generally receive a rating of Results Not Demonstrated. This rating suggests that not enough information and data are available to make an informed determination about whether a program is achieving results.

PART ratings do not result in automatic decisions about funding. Clearly, over time, funding should be targeted to programs that can prove they achieve measurable results. In some cases, a PART rating of Ineffective or Results Not Demonstrated may suggest that greater funding is necessary to overcome identified shortcomings, while a funding decrease may be proposed for a program rated Effective if it is not a priority or has completed its mission. However, most of the time, an Effective rating is an indication that the program is using its funding well and that major changes are not needed.

Publish a Scorecard To Hold Agencies Accountable

Agencies are achieving greater results with the help of the habits and disciplines established through the BPI Initiative. These agencies recognize that the PART can be a useful tool to drive improvement in the per-formance of their programs.

Agency success is judged by clear, Government-wide goals or standards for Budget and Performance Integra-tion. Agencies have developed and are implementing detailed, aggressive action plans to achieve these goals. Most importantly, agencies are held publicly account-able for adopting these disciplines. To meet the Stand-ards for Success for the BPI Initiative, an agency must:

Demonstrate that senior agency managers meet at least quarterly to examine reports that inte-grate financial and performance information that covers all major responsibilities of the Depart-ment;

Have strategic plans that contain a limited num-ber of outcome-oriented goals and objectives. An-nual budget and performance documents incor-porate measures identified in the PART and focus on the information used in the senior management report described in the first criterion;

Report the full cost of achieving performance goals accurately in budget and performance documents and accurately estimate the marginal cost of changing performance goals;

13 2. BUDGET AND PERFORMANCE INTEGRATION

Have at least one efficiency measure for all PART-ed programs;

Use PART evaluations to direct program improve-ments and hold managers accountable for those improvements, and PART findings and perform-ance information are used consistently to justify funding requests, management actions, and legis-lative proposals; and

Have less than 10 percent of agency programs receive a Results Not Demonstrated rating for two years in a row.

Each quarter, agencies receive two ratings. First, they are rated on their status in achieving the overall goals for each initiative. They are then given a green, yellow or red rating to clearly announce their perform-ance. Green status is for success in achieving each of the criteria listed earlier; yellow is for an intermediate level of performance; and red is for unsatisfactory per-formance.

Second, agency progress toward reaching the Budget and Performance Integration standards is assessed sep-arately. This is reviewed on a case-by-case basis against the work plan and related time lines established for each agency. Progress is also given a color rating. Green is given when implementation is proceeding according to plans agreed upon with the agencies; Yellow for when some slippage or other issues require adjustment by the agency in order to achieve the initiative objec-tives on a timely basis; and Red when the Initiative is in serious jeopardy. In this case, it is unlikely to realize objectives absent significant management inter-vention.

As of December 31, 2006, fifteen agencies achieved green status on the Budget and Performance Integra-tion Initiative Scorecard. The agencies at green are:

1. Department of Agriculture 2. Department of Commerce 3. Department of Education 4. Department of Energy 5. Department of Justice 6. Department of Labor 7. Department of Transportation 8. Department of State 9. General Services Administration

10. National Aeronautics and Space Administration 11. National Science Foundation 12. Small Business Administration 13. Smithsonian 14. Social Security Administration 15. U.S. Agency for International Development

The Scorecard is an effective accountability tool to ensure agencies manage the performance of their pro-

grams. Although a scorecard rating is not directly linked to any specific consequences, it is quickly under-stood at the highest levels of the Administration as an indicator of an agencys strength or weakness.

The Government-wide scorecard reporting on indi-vidual agency progress is published quarterly at www.results.gov/agenda/scorecard.html.

Broadcast Results on ExpectMore.gov

ExpectMore.gov provides Americans with candid in-formation about which programs work, which do not, and what all programs are doing to get better every year.

Up until the launch of ExpectMore.gov last year, Americans had limited access to information on how well the Federal Government performed. Now, every American can see for themselves how their government is performing. In many cases, the Federal Government performs well. In some cases, it performs better than the private sector.

ExpectMore.gov contains PART summaries for all pro-grams that have been assessed to date. The site pro-vides the program information that a concerned citizen would need to assess a programs performance. Each assessment includes a brief description of the programs purpose, its overall rating, some highlights about its performance and the steps it will take to improve in the future. For individuals interested in more informa-tion, the site also provides links to the detailed program assessment, as well as that programs website and the assessment summaries of other similar programs. The detailed PART assessment includes the answer to each PART question with an explanation and supporting evi-dence. It also includes the performance measures for the program along with current performance informa-tion. In addition, there is an update on the status of follow-up actions to improve program performance.

A visitor to the site may find, at least initially, pro-grams are not performing as well as they should or program improvement plans are not sufficiently ambi-tious. We expect this site to help change that. The website has a variety of benefits, including:

Increased public attention to performance; Greater scrutiny of agency action (or inaction) to

improve program results: Improvement plans will be transparent Statements about goals and achievements will

be clearer; and Demand for better quality and more timely per-

formance data.

14 ANALYTICAL PERSPECTIVES

Implement Inter-Agency Program Improvement

The Administration continues to look for new ways to improve the performance of programs with similar purposes or designs by using the PART to analyze per-formance across agencies (i.e., cross-cutting analysis) and State and local levels. Cross-cutting analysis can improve coordination and communication by getting managers from multiple agencies to agree to a common set of goals and placing the focus on quantifiable re-sults. This type of analysis breaks down barriers across the Federal, State, and local levels so that all entities work toward the same goal. Only topics that are ex-pected to yield meaningful results are selected for cross- cutting analyses. This past year the Administration completed cross-cutting analysis of the governments math and science programs as part of the ACC (Aca-demic Competitiveness Council).

Academic Competitiveness Council. The ACC set out to identify all Federal education programs with a science, technology, engineering, and math focus; clarify the goals of these programs; identify the extent to

which the programs have undergone independent, ex-ternal evaluation based on sound, scientific principles and have quantitative evidence of achieving their goals; and identify better ways to measure and evaluate these programs and efficiently integrate and coordinate Fed-eral spending on Science, Technology, Engineering, and Mathematics (STEM) education programs.

The ACC first identified 109 STEM education pro-grams funded in 2006 for a total of $3.13 billion. Within that total, elementary and secondary programs received approximately $640 million (20 percent of the total), postsecondary programs, including graduate and postdoctoral programs, nearly $2.4 billion (76 percent) and informal education and outreach programs close to $103 million (4 percent). The group agreed on com-mon goals for the programs, but found that few had been rigorously evaluated and determined to be effec-tive. These programs, like many managed by the Fed-eral Government, must do more to gather and report evidence of what activities are most effective at achiev-ing common goals.

III. RESULTS

As mentioned above, the BPI Initiative measures its success according to two measures:

Improved Program Performance; and Greater Investment in Successful Programs

There has been greater success in achieving the goals of the first measure. The BPI Initiative has caused agencies to think more systematically about how they measure and improve program performance. Though there are many factors that impact program perform-ance, it is clear that the BPI Initiative has framed the discussion around results. Agencies have developed

ways to measure their efficiency so they can figure out how to achieve more with Americans tax dollars.

This marks the fifth year that the PART was used to (1) assess program performance, (2) take steps to improve program performance, and (3) help link per-formance to budget decisions. To date, the Administra-tion has assessed nearly 1000 programs, representing approximately 96 percent of the Federal budget. Over the next year, the Administration will use the PART to assess the performance and management of most of the remaining Federal programs.

15 2. BUDGET AND PERFORMANCE INTEGRATION

With the help of the PART, we have improved pro-gram performance and transparency. There has been a substantial increase in the total number of programs rated either Effective, Moderately Effective, or Ade-

quate. This increase came from both re-assessments and newly PARTed programs. The chart below shows the percentage of programs by ratings category.

6% 11% 15% 15% 17%

24%26%

26% 29% 30%

15%

20%26%

28%28%5%

5%

4%4%

3%

50%

38%

29%24% 22%

2002 (234) 2003 (407) 2004 (607) 2005 (793) 2006 (977)

0%

20%

40%

60%

80%

100%

Effective

Moderately Effective

Adequate Ineffective Results not Demonstrated

Chart 2-1. Program Ratings are ImprovingCumulative Program Results by Ratings Category

These results demonstrate that the BPI Initiative has been very successful in focusing Agencies attention on program performance. For example, approximately:

14 percent of programs improved their perform-ance rating overall;

80 percent of programs have acceptable perform-ance measures;

74 percent have achieved their long-term goals and 80 percent have achieved their annual goals; and

90 percent of programs have efficiency measures and about half of them have achieved their effi-ciency targets.

Unfortunately, there has not been a similar level of accomplishment in the second measure: Greater Invest-ment in Successful Programs. Though congressional use of performance information has been limited, most in

the Congress are aware of the PART. This topic was discussed extensively in a Government Accountability Office (GAO) report issued last year.

GAO recommends that OMB select PART reassess-ments and crosscutting reviews based on factors that include the relative priorities, costs, and risks associ-ated with clusters of related programs, and reflect con-gressional input. Additionally, GAO recommended OMB solicit congressional views on the performance issues and program areas most in need of review; the most useful performance data and the presentation of those data. As mentioned above, OMB is using the PART to improve the performance of similar programs in areas that are expected to yield meaningful results. OMB and agencies are also actively soliciting the views of the Congress in PART assessments, on improvement plans, and oversight efforts.

IV. NEXT STEPS

The BPI Initiative has identified several activities to improve its effectiveness over the coming year:

Ensure Plans are Aggressive and Result in Improved Performance.Rigorous follow-up on recommendations from the PART will accelerate improvements in the performance of Federal programs. This will ensure that the hard work done through the PART produces per-formance and management improvements. Additionally,

implementation of these plans must be tracked and reported.

Expand Cross-Cutting Analyses.Use the PART to facilitate cross-cutting analysis where there is a higher return than approaching programs individually. The goal of these efforts is to increase efficiency and save dollars, building on the success of previous cross-cutting analyses. Congressional guidance will be a factor in

16 ANALYTICAL PERSPECTIVES

choosing topics for the next group of cross-cutting anal-yses.

Maximize ExpectMore.gov Impact.The Federal Gov-ernment should be accountable to the public for its performance. This web-based tool provides candid infor-mation on how programs are performing and what they are doing to improve. The BPI Initiative will work to increase the reach and impact of this valuable informa-tion to improve program performance and account-ability for results.

Note.A table with summary information for all pro-grams that have been reviewed using the Program As-sessment Rating Tool (PART) is available at: www.whitehouse.gov/omb/budget/fy2008/sheets/ part.pdf. This table provides program ratings, section scores, funding levels, and other information. Addition-ally, a complete data file and data model of all assess-ments on ExpectMore.gov is available at: www.whitehouse.gov/omb/expectmore/whatsnew.htm. This is a comma-separated values file that academics and researchers can use to analyze performance data.

17

CROSSCUTTING PROGRAMS

19

1 All data in the Federal expenditures section are based on the Presidents policy for the 2008 Budget. Additional policy and baseline data is presented in the Additional Tables section. Due to rounding, data in this section may not add to totals in other Budget volumes.

2 Federal homeland security activities are currently defined by OMB in Circular A-11 as, activities that focus on combating and protecting against terrorism, and that occur within the United States and its territories (this includes Critical Infrastructure Protection (CIP) and Continuity of Operations (COOP) data), or outside of the United States and

its territories if they support domestically-based systems or activities (e.g., visa processing or pre-screening high-risk cargo at overseas ports). Such activities include efforts to detect, deter, protect against, and, if needed, respond to terrorist attacks.

3 Aside from DHS and DOD, all other agencies 2007 funding is at the estimated full- year Continuing Resolution levels. Further, the FY07 gross homeland security funding ex-cludes supplemental and emergency funding received in 2007 ($1.7 billion) and the Depart-ment of Commerces mandatory borrowing authority for emergency communications inter-operability grants ($1 billion).

3. HOMELAND SECURITY FUNDING ANALYSIS

Since the terrorist attacks of September 11, 2001, the Federal Government, with State, local and private sector partners, has engaged in a broad, determined effort to thwart terrorism, identify and pursue terrorists abroad and implement an array of measures to secure our citizens and resources at home. The Administration has worked with the Congress to reorganize the Federal Government; acquire countermeasures to chemical, bio-logical, radiological, and nuclear (CBRN) weapons; en-hance the security of our borders, transportation modes and critical infrastructure; and strengthen Americas preparedness and response capabilities in our cities and local communities. Elements of our national homeland security strategyto prevent terrorist attacks within the United States, reduce Americas vulnerability to ter-rorism, and minimize the damage from attacks that may occurinvolve every level of government as well as the private sector and individual citizens. Since Sep-tember 11th, homeland security has continued to be a major policy focus for all levels of government, and one of the Presidents highest priorities.

Underscoring the importance of homeland security as a crosscutting Government-wide function, section 889 of the Homeland Security Act of 2002 requires a home-land security funding analysis to be incorporated in the Presidents Budget. This analysis addresses that legislative requirement. This analysis covers the home-land security funding and activities of all Federal agen-cies, not only those carried out by the Department of Homeland Security (DHS), but also addresses State, local, and private sector expenditures. Since not all ac-tivities carried out by DHS constitute homeland secu-rity funding (e.g., response to natural disasters, Coast Guard search and rescue activities), DHS estimates in this section do not represent the entire DHS budget.

Data Collection Methodology and Adjustments

The Federal spending estimates in this analysis uti-lize funding and programmatic information collected on the Executive Branchs homeland security efforts. 1 Throughout the budget formulation process, the Office of Management and Budget (OMB) collects three-year funding estimates and associated programmatic infor-mation from all Federal agencies with homeland secu-rity responsibilities. These estimates do not include the efforts of the Legislative or Judicial branches. Informa-

tion in this chapter is augmented by a detailed appen-dix of account-level funding estimates, which is avail-able on the Analytical Perspectives CDROM.

To compile this data, agencies report information using standardized definitions for homeland security. 2 The data provided by the agencies are developed at the activity level, which is a set of like programs or projects, at a level of detail sufficient to consolidate the information to determine total Governmental spend-ing on homeland security.

To the extent possible, this analysis maintains pro-grammatic and funding consistency with previous esti-mates. Some discrepancies from data reported in earlier years arise due to agencies improved ability to extract homeland security-related activities from host programs and refine their characterizations. As in the Budget, where appropriate, the data is also updated to reflect agency activities, Congressional action, and technical re-estimates. In addition, the Administration may re-fine definitions or mission area estimates over time based on additional analysis or changes in the way specific activities are characterized, aggregated, or disaggregated.

Federal Expenditures

Total funding for homeland security has grown sig-nificantly since the attacks of September 11, 2001. For 2008, the Presidents Budget includes $61.1 billion of gross budget authority for homeland security activities, a $4.7 billion (8.4 percent) increase over the 2007 esti-mated level. 3 Not including the Department of De-fenses (DOD) funding, the gross non-defense 2008 re-quest for homeland spending is $43.6 billion, or a $3.8 billion (9.5 percent) increase over the 2007 estimated level. Excluding mandatory spending, fees, and the DODs homeland security budget, the 2008 Budget pro-poses a net, non-Defense discretionary increase of $3.4 billion (10.3 percent) over the 2007 level (see Table 31).

The 2008 Budget proposes homeland security funding for a total of 31 agencies. Of those, five agencies the Departments of Homeland Security, Defense, Health and Human Services (HHS), Justice (DOJ) and Energy (DOE)account for approximately 93 percent of total Government-wide homeland security funding in 2008.

20 ANALYTICAL PERSPECTIVES

Table 31. HOMELAND SECURITY FUNDING BY AGENCY (Budget authority, in millions of dollars)

Budget Authority 2006 Actual

2006 Supplemental/

Emergency

2007 Enacted/CR

2007 Supplemental/ Emergency 1

2008 Request 2

Department of Agriculture ....................................................................................................................... 597.4 ........................ 522.5 ........................ 718.5 Department of Commerce 3 ..................................................................................................................... 181.1 ........................ 194.1 ........................ 217.7 Department of Defense ........................................................................................................................... 16,479.3 1,030.5 16,538.3 ........................ 17,461.2 Department of Education ........................................................................................................................ 24.7 ........................ 24.0 ........................ 23.2 Department of Energy ............................................................................................................................. 1,702.1 ........................ 1,696.6 ........................ 1,833.9 Department of Health and Human Services .......................................................................................... 4,351.8 0.1 4,313.2 ........................ 4,424.1 Department of Homeland Security .......................................................................................................... 25,154.9 1,416.1 26,872.2 1,816.4 29,666.5 Department of Housing and Urban Development .................................................................................. 1.9 ........................ 1.9 ........................ 3.4 Department of the Interior ....................................................................................................................... 59.5 ........................ 46.8 ........................ 48.4 Department of Justice ............................................................................................................................. 2,995.4 30.3 3,089.3 96.0 3,330.5 Department of Labor ............................................................................................................................... 48.3 ........................ 49.4 ........................ 51.8 Department of State ................................................................................................................................ 1,107.9 ........................ 1,239.6 ........................ 1,405.7 Department of Transportation ................................................................................................................. 181.0 ........................ 178.6 ........................ 200.0 Department of the Treasury .................................................................................................................... 113.5 1.3 108.8 3.0 118.0 Department of Veterans Affairs .............................................................................................................. 297.8 ........................ 243.6 ........................ 270.0 Corps of Engineers ................................................................................................................................. 72.0 ........................ 43.0 ........................ 42.0 Environmental Protection Agency ........................................................................................................... 129.4 ........................ 132.9 ........................ 152.4 Executive Office of the President ........................................................................................................... 20.8 ........................ 20.8 ........................ 20.8 General Services Administration ............................................................................................................. 98.6 0.1 73.7 ........................ 42.3 National Aeronautics and Space Administration .................................................................................... 212.6 ........................ 199.2 ........................ 193.9 National Science Foundation .................................................................................................................. 344.2 ........................ 344.2 ........................ 375.4 Office of Personnel Management ........................................................................................................... 2.7 ........................ 2.8 ........................ 2.3 Social Security Administration ................................................................................................................. 176.4 ........................ 194.0 ........................ 217.1 District of Columbia ................................................................................................................................. 13.5 ........................ 8.0 ........................ 3.0 Federal Communications Commission ................................................................................................... 2.3 ........................ 2.3 ........................ 3.6 Intelligence Community Management Account ...................................................................................... 56.0 ........................ 56.0 ........................ 58.0 National Archives and Records Administration ...................................................................................... 18.2 ........................ 18.2 ........................ 18.1 Nuclear Regulatory Commission ............................................................................................................. 79.3 ........................ 66.0 ........................ 68.9 Securities and Exchange Commission ................................................................................................... 5.0 ........................ 14.3 ........................ 18.3 Smithsonian Institution ............................................................................................................................ 83.7 ........................ 80.6 ........................ 92.8 United States Holocaust Memorial Museum .......................................................................................... 7.8 ........................ 7.8 ........................ 8.4 Corporation for National and Community Service ................................................................................. 20.4 ........................ 20.4 ........................ 14.9

Total, Homeland Security Budget Authority ...................................................................................... 54,639.4 2,478.4 56,403.0 1,915.4 61,104.9 Less Department of Defense .............................................................................................................. 16,479.3 1,030.5 16,538.3 ........................ 17,461.2

Non-Defense Homeland Security Budget Authority, excluding Mandatory Interoperability Communications Grants 4 ................................................................................................................ 38,160.1 1,447.9 39,864.7 1,915.4 43,643.7 Less Fee-Funded Homeland Security Programs ............................................................................... 3,512.9 ........................ 4,396.4 ........................ 4,986.2 Less Mandatory Homeland Security Programs ................................................................................. 2,256.9 ........................ 2,487.7 ........................ 2,291.0

Net Non-Defense Discretionary Homeland Security Budget Authority, excluding Mandatory Interoperability Communications Grants 4 ..................................................................................... 32,390.3 1,447.9 32,980.6 1,915.4 36,366.5 Plus Mandatory Interoperability Communications Grants .................................................................. .................... ........................ 1,000.0 ........................ ....................

Net Non-Defense, Discretionary Homeland Security Budget Authority, including Mandatory Interoperability Communications Grants 4 ..................................................................................... 32,390.3 1,447.9 33,980.6 1,915.4 36,366.5

Obligations Limitations Department of Transportation Obligations Limitation ............................................................................. 121.0 ........................ 121.0 ........................ 121.3

1 The 2007 supplemental and emergency funding levels for the Departments of Homeland Security (DHS), Justice (DOJ), and Treasury include both enacted and requested sup-plemental funding. In the 2007 Global War on Terror (GWOT) supplemental request, DHS, DOJ, and Treasury request $120 million, $96 million, and $3 million, respectively, for additional 2007 budget authority.

2 The 2008 request levels for DHS and DOJ does not include additional budget authorities for 2008 requested in the 2007 GWOT supplemental request. Specifically, DHS and DOJ request $225 million and $85 million, respectively, in additional budget authority for 2008 to be provided in the 2007 GWOT supplemental appropriation bill.

3 DOCs 2007 gross Continuing Resolution full-year estimate for homeland security excludes $1 billion in mandatory borrowing authority to provide Federal grants to public safe-ty agencies for communications interoperability purposes. Although technically scored in 2007, this funding will be made available from proceeds of the Federal Communications Commissions 2008 auction of returned television spectrum.

4 The Deficit Reduction Act of 2005 appropriated $1 billion from anticipated spectrum auction receipts for the Department of Commerce, in consultation with the Department of Homeland Security, to make grants to public safety agencies for communications interoperability purposes.

The growth in Federal homeland security funding is indicative of th