Joyce performance informed budgeting in the united states—tastes great or less filling
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Joyce performance informed budgeting in the united states—tastes great or less filling

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Philip Joyce, George Washington University describes US federal deficit and debt questioning whether the United States will restore fiscal responsibility suggesting that performance management is not ...

Philip Joyce, George Washington University describes US federal deficit and debt questioning whether the United States will restore fiscal responsibility suggesting that performance management is not as high a priority for the current administration as other issues

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Joyce performance informed budgeting in the united states—tastes great or less filling Presentation Transcript

  • 1. Performance-Informed Budgeting in the United States—Tastes Great or Less Filling?
    Philip G. Joyce
    November 3, 2010
  • 2. Sustained economic recovery
    2008-present
    Ballooning budget deficits
    2009-?
    Bringing more of a performance orientation to the budget process
    1960-present (in fits and starts, but not when something else is more important)
    How can these three coexist peacefully or happily?
    Competing Imperatives in the United States
  • 3. 3
    Historical Deficits and Debt ($ billions)
  • 4. August 2010 CBO Baseline Projections
    Actual deficits:
    2007: $161 billion (1.2% of GDP)
    2008: $455 billion (3.2% of GDP)
    2009: $1,413 billion (9.9% of GDP)
    Under “current law”, deficits are very large in short run and decline in later years (but remember: only with no significant change in laws/policy)
    FY10--$1,342 billion (9.1% of GDP)
    FY11--$1,066 billion (7.0% of GDP)
    FY12--$665 billion (4.2% of GDP)
    FY13--$525 billion (3.1% of GDP)
    These projections assume the scheduled expiration of the tax cuts enacted in 2001 and 2003 (most cuts expire after 2010)
    4
  • 5. Ten-Year Cost (2011-2020) of Policy Alternatives Not Included in the CBO Baseline
    Extending all expiring tax provisions--$6.1 trillion
    Extend only Bush tax cuts—$3.3 trillion
    Extend Bush tax cuts for only taxpayers < $250k—$2.6 trillion
    Index the alternative minimum tax for inflation--$720 billion
    Increase discretionary spending at rate of GDP growth--$2.1 trillion
    Freeze discretionary expenditures at 2010 level--$1.65 trillion (savings)
    Reduce troops in Iraq and Afghanistan to 30,000 by 2013--$1.5 trillion (savings)
    5
  • 6. Budget Deficit or Surplus
    Percentage of GDP
    With
    Tax Cuts Extended and AMT Indexed
  • 7. Debt Burden Across Countries in 2007
    Percentage of GDP
    Source: OECD.
  • 8. Projected Federal Spending Over the Long Term
    TheCapitol.Net 202-678-1600
    8
    Percentage of GDP
  • 9. Will the U.S. restore fiscal responsibility?
    Will there be targets, and what will they be?
    What will be the impact of the Obama deficit commission?
    What effect will the 2010 midterm election have?
    How substantial will the effort be to reduce the deficit in the President’s fiscal year 2012 budget (February 2011)?
    If so, will this include an effort to reduce programs based on performance considerations?
    What about the “big four” spending programs (Social Security, Medicare, Medicaid, and Defense), which represented 60 percent of federal spending in 2009?
    9
    Key Questions Related to Fiscal Responsibility
  • 10. Federal Performance-Informed Budgeting
    The Bush Agenda and Legacy
    The Obama Agenda
    Observations about the Obama Agenda in Historical Context
    10
    The Current State of Performance-Informed Budgeting in the U.S.
  • 11. Efforts date back 50 years
    GPRA brought more attention
    Focus has typically been on OMB/Congress
    Performance-informed budgeting is multidimensional
    In particular, lots of activity in budget execution
    Enduring challenges
    Identifying and measuring outcomes
    Getting performance information used
    Establishing a culture of performance
    11
    Federal Performance-Informed Budgeting
  • 12. Traffic light” scorecard
    Apparent substantial progress—from 1 “green” to 72; from 110 “red” to 14
    PART--1000 programs in 6 years
    Effective or moderately effective—30% to 51%
    Conclusions by studies of PART
    Agencies said PART lacked credibility
    Decentralized approach does not work for crosscutting functions
    Too much work/ too little payoff for OMB/agencies
    Congress was apathetic or hostile
    One size fits all approach
    Measures improved, but still need work
    Hard to reconcile PART with GPRA
    12
    The Bush Administration Performance Initiatives
  • 13. Uneven progress made in measuring outcomes
    Attempts made to reduce programs based on performance (PART) not supported by Congress
    Much more success in budget execution (management) than government-wide resource allocation
    Uneven commitment from top leadership in departments/agencies
    Some confusion as to the appropriate locus of performance (department or agency v. program)
    Continuing Challenges Present at Outset of Obama Administration
  • 14. Evaluating effects of economic stimulus
    Determining programs to reduce or eliminate as part of deficit reduction
    Establishing “high priority performance goals”
    Significant investment in a limited number of more in-depth program evaluations
    Developments in Obama Administration
  • 15. Current estimate--$814 billion in total costs
    Major goal is job creation/saving
    Administration estimates that 6.8 million jobs will be created/saved
    Recovery.gov tracks spending and jobs
    Very difficult to track jobs reliably
    Current definition—anyone who works in an ARRA-funded job
    Broader definition involves tracking “multiplier effect” of jobs
    American Recovery and Reinvestment Act (Stimulus)
  • 16. Obama 2010 Budget identified 121 programs for reduction or elimination ($17 billion)
    OMB says 60% of cuts enacted by Congress
    Obama 2011 budget included 126 terminations, reductions and savings totaling $23 billion (FY11)
    Those savings would represent a .7% reduction in spending for FY11
    It is uncertain how much will be approved by Congress since they left town without passing any appropriation bills
    In both FY10 and FY11 these reductions were argued on the basis of lack of program effectiveness
    The Role of Performance Information in Deficit Reduction
  • 17. These are agency directed
    Emphasis on goals where progress can be shown within 12 to 24 months
    “The ultimate test of an effective performance management system is whether it is used, not the number of goals and measures produced.”
    Majority of goals are specific and measurable, although some are ambiguous
    Social Security—”achieving an average speed of answer of 264 seconds by the national 800-number”
    Education—”a system with rigorous processes for determining teacher effectiveness”
    Obama High Priority Performance Goals
  • 18. “Performance measures can answer only so many questions. More sophisticated evaluations” necessary to draw conclusions
    It is necessary to “isolate the effect of government action from other possible influencing factors”
    Obama administration established competitive process to secure funds for evaluation
    17 agencies funded to do evaluations of 36 programs
    In some cases funds provided to improve agency evaluation capacity
    A centralized approach to SELECTION of evaluation topics, but a decentralized approach to the CONDUCT of evaluations
    Program Evaluation
  • 19. Agencies instructed to identify 5% of budgets as lowest priority
    Unclear how performance plays out
    Also ongoing effort to reform procurement ($40 billion savings estimate)
    Continued suggestion that agencies that do evaluations will be favored
    Will deficit commission findings be embraced?
    Timing is problematic
    Transparent and open government
    Creation of performance dashboards
    Preparing for the 2012 Budget
  • 20. Not as high a priority as other issues (health reform, the economy)
    Short-term could force out long-term
    More targeted, in-depth evaluation
    Transparency is major stated focus
    Quantitative measures may force out qualitative ones
    Performance agenda must fit with pressures to reduce spending and the deficit
    Stated goal is use, but not at all clear how that will be achieved
    Continued uneven results
    Concluding Observations about the Obama Performance Agenda