Budget Issues

The United States stands at a crossroads. After nearly 30 years of federal deficits, a combination of hard policy choices and remarkable economic growth has led to a budget surplus. The Congressional Budget Office projects both unified and on-budget surpluses throughout the next 10 years. Continuing budget surpluses, however, will neither eliminate the need for prudent stewardship of the national economy nor absolve the government of its responsibility to make good use of taxpayer dollars. The Comptroller General's testimony discusses selected performance challenges within federal agencies and programs and possible changes to congressional oversight to help address such problems. Drawing on the breadth of GAO's work, the Comptroller General provides examples that respond to the following five thematic questions: What federal services could be better provided by the private sector? What federal subsidies to individuals, businesses, or state and local governments are no longer needed or poorly targeted? What overlapping or fragmented programs could be consolidated or better coordinated? What federal facilities or locations are outmoded, ineffective, or in excess to requirements? In which areas could major federal capital investments be more cost effective? In related correspondence, GAO provides a list of federal programs, projects, activities, and facilities that Congress could consider for possible termination, reduction, deferral, or reform. (See GAO/OCG-00-3R, Nov. 1.)

GAO noted that: (1) one of the lessons drawn from the history of deficit reduction efforts during the 1990s is that reconsidering federal programs and activities individually is less likely to lead to change than basing reform initiatives on broad policy rationales or themes; (2) a consistent, clear, and complete set of overarching themes can be an effective means to formulate and package oversight and re-examination of federal agencies and programs; (3) Congress originally defines the intended beneficiaries for any federal program or service based on certain perceptions of eligibility and need; (4) periodic oversight can be an effective means to ensure that limited resources are properly targeted in light of changing conditions, current program operations, and overall congressional priorities; (5) virtually all of the results that the federal government strives to achieve require the concerted and coordinated efforts of two or more federal agencies; (6) yet GAO's work has repeatedly shown that mission fragmentation and program overlap are widespread and that crosscutting federal program efforts are not well coordinated; (7) in program area after program area, GAO has found that unfocused and uncoordinated crosscutting programs waste scarce resources, confuse and frustrate taxpayers and program beneficiaries, and limit overall program effectiveness; (8) better information is needed to permit decisionmakers to sort through claims and determine the investments that promise to effectively address critical needs; (9) GAO's recent work discussing how other countries are dealing with current surpluses can be informative about the character of a new fiscal paradigm for the nation; and (10) Congress might consider whether a more structured oversight mechanism is needed to permit a coordinated congressional perspective on governmentwide performance matters.