Comments on the President's February 18, 1981, Budget Proposals and Additional Cost-Saving Measures

To assist Congress during its consideration of the fiscal year 1982 budget, GAO presented its views on the budget reduction proposals provided by the Administration on February 18, 1981. The report is divided into three chapters. The first chapter consists of general GAO discussions. The second chapter contains a statement of each presidential proposal followed by the GAO view on that proposal, a listing of the relevant GAO reports, and the name of a GAO contact. The third chapter is comprised of cost-saving proposals not included in the Administration package.

GAO believes that the key to significantly improving the administration of Federal domestic assistance programs lies in the legislative consolidation of separate categorical programs serving similar objectives into broader categories of assistance and the placing of like programs in a single agency; it strongly endorses the Administration's consolidation initiative. Seven basic approaches are offered for Congress to consider in controlling that portion of the budget consisting of entitlements and indexed spending: (1) eliminate a program altogether, (2) limit the indexing of program benefits, (3) tighten eligibility criteria to target available funds to the most needy, (4) reduce the level of benefits, (5) place a cap on the program's total spending, (6) limit spending to amounts annually appropriated, and (7) improve the efficiency with which a program is administered.