Congressional Testimony

TESTIMONY OF
MITCHELL E. DANIELS, JR.
DIRECTOR
OFFICE OF MANAGEMENT AND BUDGET
BEFORE THE
SUBCOMMITTEE ON TREASURY, POSTAL SERVICE AND
GENERAL GOVERNMENT
COMMITTEE ON APPROPRIATIONS
U.S. HOUSE OF REPRESENTATIVES

MAY 10, 2001

Mr. Chairman, Representative Hoyer, Members of the Subcommittee, I am pleased to be here this morning to discuss the President's FY 2002 budget request for the Office of Management and Budget (OMB).

I will make a short statement and then I would be pleased to answer any questions that you have.

Overview

First, I would like to reiterate the President's overarching commitment to ensuring that key national priorities are funded within a moderate rate of growth for discretionary spending. The Administration will continue to work with the Congress to realize our shared purposes and common principles. Keeping faith with this approach, the President is committed to ensuring economy and efficiency in managing the Executive Office of the President, which includes the Office of Management and Budget. As a result, OMB's budget request for FY 2002 reflects Administration policy guidance freezing spending at the FY 2001 level adjusted only for the expected pay adjustment.

For FY 2002, the Office of Management and Budget requests budget authority of $70.5 million. This request is an increase of $1.9 million (or 2.7 percent) over the FY 2001 funding level of $68.6. The OMB budget request will provide 527 full-time equivalent (FTE) positions, the same FTE level as FY 2001.

The Office of Management and Budget provides fiscal and budgetary analysis to the President. We believe that this office, as the chief management and budget office of the executive branch, has a special obligation to adhere to budgetary discipline and to maximize the productivity of our resources. As you can see from our budget request for FY 2002, OMB is committed to maintaining budgetary restraint.

Consolidated EOP Appropriation

As you know, the Executive Office of the President, despite the name, has never been managed or budgeted for as a single entity and is not currently covered under a single appropriation. One new feature in the President's Budget request is to consolidate the Executive Office of the President offices and councils under one appropriation. The reason for the consolidation is to enable genuine resource management in the Executive Office of the President.

To ensure that the Executive Office of the President has the ability to fulfill the requirements of the Chief Financial Officers Act, the Administration prepared a budget amendment to establish this single appropriation. A consolidated appropriation will enable the President to effectively manage and align resources to meet the evolving requirements of his office. The initiative also supports a single, integrated financial management system consistent with the requirements of the Chief Financial Officers Act.

The Administration recognizes that the current fragmented financial structure does not allow the Executive Office of the President to maximize buying power by purchasing in bulk. Further, it does not allow for control of the number of service contracts that are needed to support various types of equipment. In addition, the existing financial structure creates an unnecessary amount of procurement actions and paperwork. It is our belief that a consolidated appropriation will allow the Executive Office of the President to achieve these and other streamlining objectives.

Government-wide Performance

Mr. Chairman, let me briefly touch on what we plan to do to get better results from the government's programs. We want to focus on performance as a key tool in improving agency management, reforming the way we do business, and making government officials more accountable for how well their programs and organizations perform.

Our main focus over the next months will be working toward full integration of budget and performance information, and using performance data to help make program and budget decisions. OMB annually receives the performance plans and reports of approximately 100 departments and agencies for our review and use. At least every three years, we receive a set of updated strategic plans from these departments and agencies. And annually, we prepare a government-wide performance plan, which has become a major part of the President's budget. These plans and reports are required by the Government Performance and Results Act of 1993 (the Results Act), which was passed unanimously by Congress. We are nearing the fifth year of full-scale government-wide implementation of the Results Act. While the quality and scope of the plans and reports has improved over time, further progress is still needed and expected. Our effort spans several related initiatives. Let me briefly describe these for you.

First, we will insist that agencies develop a credible linkage between resources and performance. We need to be able to answer the question: "What are we getting for the money we are spending?" As we work to establish this linkage, we expect to make some changes to the traditional process of how we review budget requests, and the nature of our passback to the agencies on their requests.

Second, we intend to improve our ability to understand the true cost of each program. Full costing of certain program budget accounts will necessitate significant accounting changes, and we are developing a legislative proposal permitting us to assign currently unallocated costs and present these in the budget.

Third, you should see a more robust presentation of performance information in the FY 2003 President's Budget. We also intend to explore how a significant restructuring of the budget document itself might enhance public and Congressional understanding of governmental performance.

Work is already underway on these and several related initiatives. These tasks will engage nearly every OMB office, and will comprise a significant part of the workload over the next year. We believe that this work will lead to a big potential payoff in improved effectiveness and efficiency of government.

Electronic Government (E-Gov)

I'd like to spend a little time discussing an item that is important to the President and that is under the purview of this subcommittee - the E-Gov fund. The President is committed to bringing the Federal government closer to its citizens and has proposed to accelerate Federal efforts to implement "electronic government," or E-Gov, as an important step in this endeavor. The FY 2002 Budget seeks an appropriation of $20 million as the first installment of this fund, which will total $100 million over the next three years.

The E-Gov fund will be used to fund interagency initiatives that will expand the use of the Internet to provide individuals, businesses, and other government agencies with simpler and more timely access to Federal information, benefits, services, and business opportunities. OMB would manage allocations from the fund, which would be housed in an account in the General Services Administration, and assure its use for information technology projects that offer the greatest improvements in access and service. Criteria for using the fund are still under development, but would include placing a priority on funding innovative interagency projects that would deliver services directly to the public, or create the infrastructure to support such delivery. We have briefed your staff on our preliminary thoughts in this area and welcome input from the Subcommittee as these criteria are developed.

Conclusion

Mr. Chairman, OMB is a professional organization committed to producing the best possible work in support of both executive and legislative branch policy decisions. For this reason, I recommend that you approve our request for FY 2002.

Mr. Chairman, that concludes my statement. I would be happy to answer any of the Subcommittee's questions.

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