Difficult as it may  seem to deal with these long-term challenges, policymakers must not only  address these entitlement programs but also reexamine other budgetary  priorities in light of the changing needs of this nation in the 21st century. Accordingly, reexamining the base of all major existing federal spending  and tax programs, policies, and activities by reviewing their results and  testing their continued relevance and relative priority for our changing  society is an important step in the process of assuring fiscal responsibility  and facilitating national renewal. Performance Budgeting Can Help Facilitate Reexamination

Performance budgeting can help enhance the government’s capacity to  assess competing claims in the budget by arming budgetary decision  makers with better information on the results of both individual programs  as well as entire portfolios of policies, tools, and programs designed to  address common outcomes. With GPRA as its centerpiece, the statutory and  management framework laid out in the 1990s provided a foundation for  strengthening government performance and accountability. As I have previously said, PMA and its related initiatives, including PART,  demonstrate the Administration’s commitment to improving federal  management and performance. Properly done, performance assessment  and performance budgeting information produced by GPRA and PART  could provide a strong basis to support the needed review, reassessment,  and reprioritization process. Moreover, little is known about the performance of tax expenditures,  which are often aimed at policy goals similar to those of federal spending  programs, such as those intended to encourage economic development in  disadvantaged areas, finance postsecondary education, and stimulate  research and development. Lack of Congressional “Buy-in” and Participation Limits the Potential of Performance Budgeting Efforts

In order for performance budgeting and program reviews to hold appeal  beyond the executive branch, and to actually have an impact on  legislation, garnering congressional buy-in on what to measure and how to  present this information is critical. We would urge as a next step a more comprehensive and consistent  approach to evaluating all programs relevant to common goals. Such an  approach would require assessing the performance of all programs related  to a particular goal—including tax expenditures and regulatory  programs—using a common framework. In some years, total tax expenditures have  approximated the size of total discretionary spending. PART, OMB’s current framework for  assessing the performance of federal programs, has generally not been  applied to tax expenditures.
Why GAO Did This Study

As part of its work to improve the management and performance of the federal government, GAO monitors progress and continuing challenges in using performance information to inform budgetary choices (performance budgeting). In light of the nation's long-term fiscal imbalance and other 21st century challenges, we have reported that the Government Performance and Results Act of 1993 (GPRA) and performance budgeting can support needed reexamination of what the federal government does, how it does it, and who does it. GAO remains committed to working with Congress and the Administration to help address these important and complex issues.

What GAO Found

Reexamining the base of all major existing federal spending and tax programs, policies, and activities by reviewing their results and testing their continued relevance and relative priority for our changing society is an important step in the process of assuring fiscal responsibility and facilitating national renewal. Reexamination can arm decision makers with better information on both individual program results and entire portfolios of programs and tools-- encompassing a wide range of discretionary, entitlement, tax, and regulatory approaches--addressing common goals. GPRA provided a foundation for strengthening government performance and accountability. The President's Management Agenda and the Program Assessment Rating Tool (PART)--OMB's framework for assessing federal program performance--continue to build on GPRA's foundation. Properly done, these and future efforts--along with a set of Key National Indicators (KNI)--could provide a strong basis to support the needed review, reassessment, and reprioritization process. Moving forward, for performance budgeting and program reviews to hold appeal beyond the executive branch and actually have an impact on legislation, congressional buy-in on what to measure and how to present this information is critical. In addition, tax expenditures result in forgone revenue that in some years has approximated the size of total discretionary spending. Yet relatively little is known about the effectiveness of these provisions, which are often aimed at policy goals similar to those of federal spending programs. To date, PART has generally not been applied to tax expenditures. GAO continues to urge as a next step a more comprehensive and consistent approach to evaluating all programs relevant to common goals. This would require assessing the performance of all programs related to a particular goal--including tax expenditures--using a common framework.