FRANKLIN D. RAINES
OFFICE OF MANAGEMENT AND BUDGET
SUBCOMMITTEE ON TREASURY,
POSTAL SERVICE, AND GENERAL GOVERNMENT
COMMITTEE ON APPROPRIATIONS
U.S. HOUSE OF REPRESENTATIVES
March 11, 1997
Mr. Chairman, Members of the
Subcommittee, I am
pleased to be here this afternoon to discuss President Clintons
request for fiscal 1998
funding for the Office of Management and Budget (OMB).
I will make a short statement, and
then I would be
delighted to answer any questions that you have.
Mr. Chairman, if I have one message
for you today, it is
this: OMB is doing more than it ever has, it is continuing to perform
at a very high professional
level, and it is doing so with fewer resources and less staff.
On one hand, the workload has
exploded in recent
years, due to the year-round, all- consuming nature of the budget
process as well as a host of new
laws and reporting requirements designed to make our Government work
better. With these new
laws, the President and Congress have taken significant steps to
ensure that the Federal
Government and its programs operate as efficiently and effectively as
On the other hand, OMB is operating
with fewer people
and a very constrained budget. At OMBs request, Congress has
held the agencys
budget essentially flat since fiscal 1993, when it totaled $56,039,
000. Also since 1993, OMB has
cut the number of funded full-time equivalent (FTE) positions by 55 --
from the 573 in 1993 to
518 in 1998 -- or nearly 10 percent. Over those six years, OMB has
cut its administrative costs
by $1,467,000 -- from $6,831,000 in 1993 to $5,364,000 in 1998 -- or
We are proud of the work we do. We
feel strongly that
we are providing high-quality work, both in support of the President
as well as in response to the
varied new legal requirements that we face.
At the same time, I want to make it
clear today that the
work will continue to increase at OMB. The legal requirements that
Congress has imposed will
add even more to our workload in fiscal 1998.
To ensure that OMB continues to
high-quality work that the President and Congress have come to expect,
the President requests
$57,240,000 in 1998, three percent more than the enacted level of $55,
573,000 in 1997. The
budget provides for 518 FTEs, the same as in 1997. Anything less will
jeopardize our ability to
meet the goals that Congress has set for us.
The last two Congresses -- the 103rd
and the 104th --
added numerous new or broadened responsibilities for OMB, requiring
the institution to perform
at even higher levels of production.
OMB is on the cutting edge of major
Government. Congress has asked OMB to manage and oversee numerous new
are playing a leading role in balancing the budget, improving
Government performance, auditing
Government programs, and managing information technology.
I would like to take a moment to walk
some of the new requirements that we must fulfill:
- The Government Performance and Results Act of 1993 (GPRA):
devoted considerable resources to setting overall Government policy
and coordinating the
development of strategic plans by the agencies. OMB also has
reviewed the results of the pilot
projects that GPRA authorized. And we will continue such efforts in
Beginning in 1998, however, OMB will face a whole new set of major
They include preparing the initial Government-wide performance plan,
which will become part
of the Presidents budget for 1999, and reviewing and approving
the initial set of agency
annual performance plans.
Also in 1998, GPRA calls for Government-wide implementation of
accountability and flexibility provisions. In this area, OMB will
review and decide whether to
approve agency requests for waivers from administrative requirements.
- The Unfunded Mandates Reform Act of 1995: Title II of this
Act requires that --
before promulgating any proposed or final rule that may lead to annual
spending by State, local,
and Tribal governments, or the private sector of over $100,000,000 --
each agency must conduct
a cost-benefit analysis and select the least costly, most cost-
effective, or least burdensome
alternative. Also, each agency must seek State, local, and Tribal
OMB must issue guidelines to agencies, monitor agency compliance
with Title II, and
publish an annual report on agency compliance.
- The Paperwork Reduction Act of 1995: This Act requires
that OMB review and
approve (or disapprove) over 3,000 proposed agency collections of
information each year. It
explicitly added third-party disclosures to OMBs review
(totaling over 500,000,000
annual burden hours across the Nation).
The Act also requires agencies to plan more carefully and
explicitly for each new
information collection, and OMB must ensure compliance with this
requirement in reviewing
Finally, the Act requires agencies to reduce information collection
burdens by set
percentages each year, and OMB must promulgate guidance and track
agency compliance with
- The Information Technology Management Reform Act of 1996:
This Act requires
that OMB develop Government-wide policy and guidance to oversee
agencies in implementing
the Act. Examples include OMB Memorandum 97-02, the Capital Planning
multi-agency contracting guidance.
Under the Act, OMB must (1) examine agency capital investment
proposals for information
technology, (2) oversee the establishment and evaluate the
effectiveness of agency Chief
Information Officers, and (3) oversee multi-agency and Government-wide
for information technology.
The Act directs OMB to report annually on the benefits of Federal
Finally, as part of its oversight under the Act, an Executive Order
directs OMB to: coordinate
the work of the Information Technology Resources Board to help
agencies evaluate and improve
major information technology systems investments; participate in the
Technology Services Board to promote the effective use of information
agency lines (in order to cut costs and improve Government
effectiveness and customer service);
and chair the Chief Information Officers Council.
- The Regulatory Flexibility Act Amendments (1996): These
the Environmental Protection Agency and the Occupational Safety and
Health Administration to
convene a small business advocacy review panel for certain
rulemakings. The review panel
comprises the host agency, OMB, and the Small Business Administration
(SBA) -- all of whom
must review the proposed rule, hear from SBA-designated
representatives of small business, and
prepare a report on the panels recommendations for the host
OMB must advise the SBA on whether it should waive the small
business comment process
for particular rules.
- The Congressional Review of Agency Rulemaking Act (1996):
Under the law,
each agency now must send each final rule to both houses of Congress
and the General
Accounting Office (GAO).
OMB must determine whether a rule is major (that is,
whether it will have an
effect on the economy of at least $100,000,000). Unless it is
exempted, the law imposes a
60-day waiting period before a major rule takes effect.
In the past year, OMB has designated at least 58 rules as major,
and, particularly at the
outset, helped agencies understand how the new law works.
- The National Technology Transfer and Advancement Act of 1995:
regularly consult with, and advise, the agencies as to how this Act
applies to their programs.
To ensure agency compliance, OMB must reach out to the agencies and
solicit formal written
and oral public comments in order to revise and maintain OMB Circular
Also, due to requirements of the Act, OMB must coordinate with the
National Institute of
Standards and Technology on developing and implementing Government-
wide standard policies,
and on how agencies are implementing them.
Finally, OMB must communicate policy and seek agency views on
compliance with the Act
by participating in the Interagency Council on Standards Policy.
- The Single Audit Amendment Act of 1996: The Act requires
OMB to provide
guidance to implement the Act, which includes revising the single
audit circular (OMB A-133)
and annually updating the Compliance Supplement to help auditors
perform audits under the
The Act also authorizes the OMB Director to review and approve
pilot projects to test
alternative methods of achieving the Acts purposes.
- The Federal Financial Management Improvement Act of 1996:
The Act will
necessitate that OMB revise several of its OMB documents, including
Management Systems (A-127), Management Accountability and
(A-123), and Audit of Federal Financial Statements
The Act requires that OMB staff work with agency staff on a
remediation plan when an audit
determines that agency financial systems do not comply with the Act. P>
In addition, when an agency head disagrees with an auditors
finding, the OMB
Director must review such determinations and provide a report to
- The Government Management and Reform Act of 1994: The Act
OMB revise its bulletin on the Audit of Federal Financial
In addition, OMB will spend a considerable amount of time helping
agencies meet the
department-wide and Government-wide financial statements requirements
under the Act. They
include identifying and resolving complex and long-standing
difficulties that prevent agencies,
and the Government as a whole, from producing accurate and timely
- The Federal Workforce Restructuring Act of 1994: The Act
requires that executive
agencies cut their staffing levels, measured by FTEs, by 272,900 by
the end of 1999.
The Act includes declining annual targets, and requires that OMB
compliance. On a quarterly basis, OMB must determine whether the
required reductions are
being met, and if not, freeze hiring until they are. We are ahead of
schedule in meeting these
OMB manages the voluntary separation incentive payment (
that the Act (and the subsequent buyout authority enacted in 1996)
compliance with the requirement that total non-Defense employment
levels be reduced by one
FTE for each buyout separation under the Act.
Mr. Chairman, OMB is a proud
institution that has
performed well over the years. I can tell you with great confidence
that the more than 500
employees want to continue serving at the highest possible level.
At a time of tight resources, we have
sought to ensure
that we are working as efficiently as possible. Our proposed budget
request will allow us to meet
the new or broadened workload requirements of the laws that I have
discussed, in addition to our
many existing functions, with the same number of FTE as in 1997.
Mr. Chairman, that concludes my
statement. I would be
happy to answer any questions that the Subcommittee has.