Dr. RIVLIN. If you will look at the chart, it shows very schematically how the Congressional Budget Office is organized. It is very simple and corresponds to the jobs that we have to do.

Our Assistant Director for Budget Analysis, James Blum, is right here. Jim is responsible for our budget information costing and projecting functions and I will say more about that in a minute.

Our Assistant Director for Fiscal Policy, Dr. Frank de Leeuw, is right here. He is responsible for forecasting the economy and making estimates of the impact of Federal budget policy on the economy.

Our Assistant Director for Tax Policy, Charles Davenport, is right here. He looks at the revenue side of the budget and the estimating of revenue tax expenditures which are an important part of our responsibility under the law.

Our Assistant Director for Energy, Environment, and Natural Resources, Douglas Costle, right here, looks at that range of programs and budget alternatives in those areas.

Assistant Director for Human Resources and Community Development, William Fischer, looks at programs and budget alternatives in those areas.

Assistant Director for National Security and International Affairs, John Koehler, looks at that range of programs and budget alternatives. You have already met Howard Messner, Director for Management Programs. However, you did not meet Stanley Greigg, who is the Director of our Office of Information. He is responsible, among other things, for getting our output into a form which we can read easily.

ROLE OF CBO

Mr. Chairman, I will be very brief in summarizing my prepared statement. We come before this subcommittee today for the first time to seek our first appropriation for a new agency.

As you know, the Congressional Budget Office is part of the new structure of budget decision making that the Congress set up for itself in passing the Budget Control and Impoundment Act of 1974. We are the analytical arm of that process-a nonpartisan technical agency-presenting analysis and budget information for the Congress in hopes of improving the budget decision process.

We have a great many specific jobs spelled out in the law. They fall roughly into three categories:

Economic forecasting and projecting, that is looking at what seems to be happening to the economy and how inflation and unemployment might be affected by alternative courses of action that the Congress might take with respect to the budget as a whole.

Our second general job is improving the budget information available to the Congress. That includes the scorekeeping responsibility that Senator Schweiker has referred to.

CBO SCOREKEEPING RESPONSIBILITY

The job of the Congressional Budget Office is to keep the score once the Congress has set targets for itself as it does in the first concurrent resolution on the budget under the new process. We are to keep the score and inform the Congress of how it is doing with respect to its own targets.

Let me say, because Senator Schweiker has raised the question, the scorekeeping responsibility was difficult to implement this year for the simple reason that the act itself was only partially implemented. Next year, when the act is fully implemented, not only will the concurrent resolution set budget targets by functional area, but the Appropriations Committee will then have the responsibility to allocate the targeted amounts among the appropriations subcommittees.

That wasn't done this year and it was a source of part of the confusion. Next year I think the scorekeeping will be easier because the Congress will have more specific targets than it is operating against

now.

5-YEAR PROJECTIONS

Another responsibility under the general topic of budget information is projecting the costs of Government programs 5 years ahead as well as projecting revenues and tax expenditures.

We will be doing that for the first time in early December when we put out a 5-year projection of costs of Government programs if no new policies are undertaken; what revenues will be forthcoming under the current law; and what tax expenditures will amount to in terms of revenue loss.

Then we have a responsibility to make outlay projections for all spending bills; that is, appropriations bills, give 5-year projections of outlays, which should be particularly useful to the Appropriations Committees to provide some idea of what things will cost in terms of outlays in the future.

We have the responsibility to cost out all proposed tax expenditures; that is, changes in the tax laws that are equivalent to subsidies to one group or another and to project the revenue loss from any such proposal 5 years into the future.

CBO COST ESTIMATES

Finally, we have the responsibility to provide 5-year cost estimates for all public bills reported except appropriations bills. This is essentially a service to the legislative committees but also to the whole Congress to keep them informed of the costs of what any new proposed actions are likely to be several years hence.

Those are informational responsibilities. We then have a major responsibility to analyze budget options, costs, and effects of budget alternatives.

It is extremely important to the carrying out of the new budget process that Congress have some idea of what the consequences of alternative targets might be when it sets the targets.

So far as the Congressional Budget Office is concerned, the output of such an activity takes two forms.

CBO ANNUAL REPORT

One is our annual report on the budget. The law specifies that we make a report early in each legislative session to the Budget Committees, analyzing budget alternatives, and the President's budget, looking at what the options are in order to help the Budget Committees formulate the first concurrent resolution.

We envision this report as a major document for the Congress, which will be somewhat similar to a combination of the President's budget message and also the Council of Economic Advisors' report. But this is to be a different kind of document; it will not be a congressional budget.

It will be an analytical document, which looks at the options and alternatives that face the Congress in formulating the first concurrent resolution on the budget.

We will also produce specific reports and studies of budget alternatives prepared at the request of various congressional committees.

The law specifies a kind of hierarchy of customers for the Congressional Budget Office: First, the Budget Committees; second the Appropriations Committees; third, all other committees; and finally, Members.

We will respond to Members' requests when the information is available.

We have so far put out several studies of this sort on request. The New York study, to which Senator Schweiker referred, is one. We will be prepared to act on requests of other committees in producing analyses of budget alternatives that are important to various committees.

CBO STAFFING NEEDS

The request before you, Mr. Chairman, is, as you said, for 259 positions. The detail is presented in the justification. We originally asked for a 12-month request, to carry us through fiscal year 1976, including the transition quarter of $10 million to go with the 259 positions.

We really believe that the 259 positions is a good estimate, as good an estimate as we can make of the number of people we need to do this job well, to carry out our responsibilities under the law and to help the Congress in this very complicated area.

We consider the 259 positions as a target for completely staffing CBO. It is not an intermediate stage. We will not come back to you for more positions next year. It is what we think it will take to do this job well.

The House of Representatives, as you know, has cut that request by 66 positions to 193. This was sort of an accidental level. It was the level we happened to be at when we came before the House committee for a hearing.

We believe it is too low, and particularly because of its accidental nature, it catches us with an imbalance in the staff which will make it difficult for us to carry out our statutory responsibilities.

In particular, we are low on staff in the area of defense analysis simply because we were a little slower in recruiting there than we were in some of our other divisions. We are also low on numbers and costing people.

We have come to realize as we got into this job that the budget analysis-projecting and costing-was a very big job. It is going to take a good many people to do it well and we don't feel that 193 positions will give us enough people.

So we are asking this committee for restoration of at least 35 positions over what the House allowed us, which would take us to 228 positions.

That corresponds to a dollar figure of $6.9 million for 9 months, since the House has funded us only for 9 months, rather than 12, which is perfectly all right with us.

If we had the 228 positions instead of 193, we would add 8 professional positions to our defense staff, 14 to our budget analysis staff, and 6 other professionals where we desperately need to fill a need. For example, we need a programer on our revenue estimating staff and we need seven other clerical positions to support the rest of the operation.

We believe that this is a minimum necessary to do the job well. If we had this number, we would still have to do some rearranging of our staff. We would have to cut down on some of the services that we would have performed with the larger number of staff, particularly on services to individual members.

HOUSE REDUCTIONS

The House made some other cuts in our budget, but they were not extremely significant and I really just want to emphasize that what it takes to get this job done well is people. We hope we will have enough people to do this job well and to make a strong start for the Congress in this coming year on the implementation of the new budget process.

We feel that the CBO is a significant new resource for the Congress, that it does not duplicate and should not duplicate resources already available. We are asking your help in carrying out our responsibilities. Senator HOLLINGS. Senator McClellan?

Chairman MCCLELLAN. Go ahead. You go ahead.
Senator HOLLINGS. Senator Schweiker?

Senator SCHWEIKER. Go ahead.

Senator HOLLINGS. You go ahead.

POSSIBILITY OF DUPLICATION OF EFFORT

Senator SCHWEIKER. All right. I guess the area I am most concerned about is duplication, Dr. Rivlin. I think that we should give you the resources to do two things without question, economic forecasting projections and improving budget information. I think that is vital to what your role is.

I think we are really getting into a problem with the research area. I notice in the House report-I haven't even read this before I came here this morning, but it makes almost the same point that I was making about duplication.

The conference report on the Congressional Budget Act expressed strong congressional intent, that the Congressional Budget Office not duplicate the resources or functions of other congressional agencies such as the Congressional Research Service, the Office of Technology Assessment, or the General Accounting Office.

I am looking through the projections here of some of your projects. For example, you have earmarked some in Transportation. We just have had underway and are completing a number of projects in Transportation in OTA.