WORKLOAD OF THE BUREAU OF THE BUDGET

In considering the budget request for fiscal 1969, it is advisable at this point to review selected highlights of the workload of the Bureau of the Budget. In setting forth illustrations of the magnitude, variety, and complexity of the continuing work responsibilities of the Bureau, attention will be given to the rapidly increasing number and variety of Federal programs and legislative proposals. The scope, complexity, and diversity of such programs provide some understanding of the need for concentrated attention to these areas of activity.

Planning-programing-budgeting system

The planning-programing-budgeting system (PPBS) of the Federal Government represents a major advance in the application of economic analysis to decisions on resource allocation. It serves to help find both the most desirable combination of goods and services to be provided, and the most efficient way of providing them.

1. General.-PPBS has helped place the process of preparing and reviewing the budget for 1969 on a stronger foundation. New tabulations of program costs and results in program budget categories provided means for reviewing programs in a new context. New background information and carefully documented studies produced by the system have been of value in the assessment of the effectiveness of various programs. Although agency managers have come to recognize the need for systematic evaluation of the programs they administer, there remains much to be done before the system is fully operational.

Planning-programing-budgeting involves the development and annual refinement and updating of long-range program projections for each agency. These projections are based on systematic analysis of the costs and benefits of the proposed programs. PPBS is designed to help measure program effectiveness and evaluate alternative means of attaining objectives. The system can be used to define objectives more clearly-as a proposed plan of work to accomplish the objective, an outline of alternative plans, an analysis of the full costs and probable effectiveness of the proposed plan as against the alternatives, and some indication of the certainty or uncertainty with which these costs and benefits are estimated. The system provides both a basis for decisions between competing program proposals, and a standard for the later measurement of actual performance. PPBS becomes increasingly important as Federal programs expand in comprehensiveness and complexity.

2. The role of the Bureau.-The degree to which the planning-programingbudgeting system achieves its full potential will depend, in large part, on the Bureau of the Budget. The Bureau is responsible to the President for putting this system into operation. This work comprises mainly three responsibilities.

First, the Bureau is responsible for reviewing the multiyear program plans of the various agencies and for assessing critically the analysis on which those plans are based. Second, the Bureau is required to conduct analyses of the many programs which cut across agency lines. No other organization is in a position to make such multiagency comparisons objectively. Third, the Bureau is responsible for insuring that each of the agencies translates the plans on which budgetary requests are based into properly funded, time-phased sets of specific operations. The first of these functions-that of the review of agency submissionscurrently involves the greatest Bureau workload. To a large degree this work represents an evolution of the traditional work of the Bureau in evaluating agency budget requests. Now, however, the Bureau is reviewing plans which are increasingly more comprehensive in scope and in time-scale and more dependent on modern analytic techniques to compare cost and effectiveness. The second of the Bureau's tasks-that of analyzing Federal programs in education, health, transportation, poverty, manpower, and other areas where major Federal efforts cross agency boundaries will fall primarily in the small program evaluation and resources planning units in the Director's office. These staffs have the responsibility of working with agency PPB staffs in extending and improving PPB analysis and of developing procedures and analyses which place the total range of Federal activities and operations in perspective.

The third task of the Bureau-that of insuring that the programing and budgeting machinery of the various agencies is capable of translating agency plans into properly timed and funded agency activities-remains primarily the responsibility of the several divisions of the Bureau working with the Office of Budget Review.

In fiscal 1969 our efforts to improve the PPB system will continue in two main directions: The preparation by the various Federal agencies of a greater number of cost-effectiveness studies, utilizing improved techniques and drawing upon the experience of the last several years; and the development of procedures and analytical techniques which help bring together the results of PPB analysis so that decisions on resource allocation for competing proposals can consider relative needs and relative benefit as well as costs.

Program and budget review

The most fundamental decisions with respect to the budget are those that relate to the programs to be carried out to meet the national needs-the choice of objectives, the determination of the level, and the quality of effort to be sought in a particular fiscal year. The budget, including the legislative program, reflects the President's proposals with regard to all the programs of the Government for each succeeding year.

Budget review also requires the evaluation of the input-the application of resources-necessary to achieve the desired program output. This necessitates the examination of budgetary requirements for personnel, space, travel, material, contractual services, and the other pertinent elements. Surveillance of budget execution must be maintained in order to see that money, men, and materials are not wasted, and that their utilization produces planned results.

The Government's programs must be considered within the framework of economic and fiscal policy as well as national needs, with attention to the impact of the Federal activities and taxation upon the Nation as a whole and upon differing regions and industrial groups. While the budget is basically a set of proposals, and not merely a collection of forecasts, its development in the overall economic setting requires the use of the best available techniques of forecasting and projection. The relation of Government programs to monetary and credit policy has become a matter of growing importance with the increase in Federal lending and loan guarantee activities, as well as in the light of international monetary developments.

The workload continues to increase. The number of appropriation and fund accounts has increased 20 percent in recent years; for the most part these are the fundamental building blocks around which the budget process is organized. There are two more Cabinet agencies than there were 2 years ago, and several new independent agencies. All Federal funds, trust funds, and loan and expenditure activities must be examined by the Bureau of the Budget. The 89th Congress, in its 2 years in session, enacted more than 40 new pieces of grant-in-aid legislation alone, each of which added to the workload of the Bureau of the Budget.

Some special analyses of the budget have been remodeled to further the public's understanding of the new budget concept and of all Federal activities. Additional tables and other data are contained in the volume of special analyses this year; other unprinted analyses have been made as a necessary part of the task of program and budget review.

Program and budget review engage a large portion of the time of the six divisions and nearly the whole time of the Office of Budget Review.

Workload problems requiring special attention in 1969 include:

1. Evaluation of programs and program issues.-Efforts to institute a combined planning-programing-budgeting system in the 22 larger agencies of the Government have continued. PPB, which has now completed its second year of operation, provides information and analysis to relate the programs undertaken to the ends they are to achieve and the means of attaining those ends. This year the program budgets developed under the system have been employed as the framework within which program costs and accomplishments were reviewed. As a result, the different programs now stand in a clearer relationship to each other and to their objectives, but analytical techniques must be further sharpened and extended.

2. Data management.-The planning-programing-budgeting system is based upon a program structure which identifies the basic missions of the various departments and agencies and establishes program categories and appropriate subcategories in each. In most cases this structure is unrelated to the basic data system utilized for budget presentation and budget execution. In order to achieve a suitable integration of the processes concerned, it is necessary that the data structures be synchronized with each other, looking toward a common system for the development of both financial data and output measures that can be utilized throughout the budget process. The possibility of using the Treasury Department's

data banks for actual year data must be explored. The entire computer program system used in the Bureau must be revamped to incorporate the changes recommended by the Budget Concepts Commission.

3. Federal-State-local fiscal relations.-The substantial increase in the number of grant-in-aid programs, the emphasis upon creative federalism, and a growing interest in the impact of Government expenditures upon urban areas-all of these make it necessary to devote additional effort to economic and fiscal analysis pertaining to the level and types of Government spending in relation to States, cities, and metropolitan areas. The economic effects of program decisions upon intergovernmental relations need careful assessment. The refinement of both administrative and funding techniques for making grant programs more effective at the point of impact will continue to require increased attention.

4. Establishment of the new budget concept.-The Bureau has assumed the difficult task of putting as many of the recommendations of the President's Commission on Budget Concepts as possible into the 1969 budget. An additional 2 to 4 man-years will be required to accomplish the necessary cleanup work and to implement two recommendations accrual accounting and identification of loan subsidies that were impossible to incorporate in this last budget. Computer programs must be revised and tested; accounting systems must be changed and recoded; historical tables must be thoroughly adjusted; and methods of specifically disclosing loan subsidies must be devised.

5. Coordination of credit activities.—During the past year staff have provided substantial assistance in the development of programs to broaden private financing of credit programs, including substitution of guaranteed loans for direct loans and increasing sales of financial assets to private lenders. Further attention needs to be given to the mechanics for coordinating lending programs, to the supervision provided by Federal agencies over private credit institutions, and to the continued coordination of monetary and credit policy with fiscal policy. In addition, methods must be developed to identify and measure the subsidy elements in loan programs in accordance with the recommendations of the Commission on Budget Concepts.

Legislative clearance

The following table furnishes recent data on the volume of the workload involved in the Bureau's legislative clearance function:

This large volume of work affects all organizational units of the Bureau since the specialists in each program or functional area are called upon to assist in the review, analysis and clearance of agency legislative proposals and reports and in the preparation of replies to committee requests for views on pending legislation.

It should be noted that the table does not include all legislative coordination and clearance functions of the Bureau, such as responding to requests for information, coordinating agency testimony, and handling enrolled bills. Also. Bureau officials and staff members spend a substantial amount of time in testifying before congressional committees, attending committee hearings relating to their work, and working informally with committee staff on pending legislation.

Statistical coordination and improvement

The Bureau of the Budget is responsible for the coordination and improvement of the statistical activities of Federal agencies. The Bureau will continue its emphasis in fiscal year 1969 on avoiding duplication, improving statistical standards, and achieving a better balanced. Government-wide statistical program which will provide comprehensive, accurate, and timely information to appraise the functioning of the economy, the welfare of the people, and the status of individual Federal programs.

Work will continue on interagency projects to review the concepts and principles incorporated in the standard classifications developed by the Bureau ⚫ (standard industrial classification, standard enterprise classification, and standard metropolitan statistical areas) to reflect the current structure and organization of industry and the growth of metropolitan centers. These standard classifications are used by Federal agencies and many private organizations in presenting statistical data on a uniform and comparable basis. The last major review of the concepts underlying the standard industrial classification was made in 1957-59, and the last review of the criteria used in establishing standard metropolitan statistical areas was made in 1958. Further development of the system, based on the standard industrial classification, for classifying commodities in production, export, import, and domestic transportation statistics will be undertaken. The Bureau's Office of Statistical Standards is also spearheading a review of the occupational classifications in use in the Federal Government, with a view toward establishing a standard classification of occupations, if feasible.

At the same time, under the provisions of the Federal Reports Act, attention must be given to the burdens placed on business enterprises and on individuals by the demands from the Federal agencies for information. Through improved planning and coordination, more effective measures must be adopted to bring about elimination, consolidation, or simplification of reporting and record-retention requirements imposed on enterprises and individuals.

The Bureau, through its Office of Statistical Standards, reviewed over 2,600 individual questionnaires or report forms issued by Federal agencies in fiscal 1967. In conducting these reviews, several hundred business respondent representatives were consulted through the auspices of the Bureau's Advisory Council on Federal Reports to insure that the data needed would be obtained at a minimum cost and burden. Increasing reliance on the use of statistics in reaching policy decisions and in evaluating the performance of newly initiated programs calls for strengthening of existing series and the development of new sources and types of information. Thus, the review load in fiscal 1969 is expected to continue at, or increase above, present levels.

In fiscal 1969, special programs to eliminate informational gaps and to strengthen existing statistical series within the Government will be required in the following areas to meet the needs of Congress, the executive agencies, and private economy.

1. Labor statistics.-Attention will be focused on two major needs during 1969. The first is the further development of a statistical program which will indicate the nature, extent, and causes of barriers to full labor force participation at adequate remuneration. This program will be developed in part by supplementing the current population survey with additional questions, in part by devising intensive surveys in selected poverty areas of large cities. The Bureau will stress the development of concepts, the conduct of experimental work on data measurement problems, and coordination of the interests of the several agencies working in this field. The second major need is for the development of a coordinated set of operating statistics for manpower development and training programs which will permit analysis of the effectiveness of manpower program operations across agency lines. The Bureau has already arranged for the appropriate agencies to work together in developing this program under Labor Department leadership. The Bureau will participate in this continuing effort, which involves decisions on the data needed for program planning, operation, and evaluation; development of standard forms, questionnaires, and reporting procedures; and analysis and evaluation of the resulting informational system.

2. Demographic and social statistics.-The Bureau-sponsored Federal Council on the 1970 Census will concentrate in 1969 upon the development, with the Census Bureau, of tabulation plans for the decennial census. Although special tabulations can be made of data collected in the census, it is important that the regular planned tabulations provide information of comprehensive scope which is both promptly and widely available to general data users. Other work to be undertaken in this area involve: determination of criteria for bounding “poverty areas"; further development of procedures and methodology for making population estimates for local areas; extension of work on developing data required for evaluation of social programs; development of new measures of housing quality; and intensive analysis of the results of the recent health examination survey of children.