NCPA - National Center for Policy Analysis

A Budget Accenting Performance

February 4, 2002

President Bush's new budget, being released today, links funding to actual performance for scores of federal programs. That means more money for programs that work, less or none for those that don't accomplish much -- a radical change inside the Beltway, experts note.

Budget items marked for defense or homeland security will see increases in funds. All other programs are held to a 2 percent rise -- the lowest in many years.

  • The new budget contains an Office of Management and Budget scorecard rating each federal agency on how well it manages its operations.
  • Green dots signify that nearly all management goals have been met; yellow dots indicate only some have been met; and red dots mean substantial improvement is necessary or it is headed for the chopping block.
  • This year, over 75 percent of the OMB's grades were red dots.
  • Program overlap is rampant -- with each of the federal government's 478 lines of business being performed by an average of 19 agencies.

One flagrant example is the 48 different federal job training programs -- one-third of which reside in the Department of Labor. The Bush budget proposes cutting the ineffectual Youth Opportunity Grants by $180 million -- and granting a $73 million increase to the effective Job Corps.

The president wants to axe the $33 million shipbuilding loan program -- which subsidizes the construction of cruise ships. Bush believes the federal government has no appropriate role in the cruise ship business.

Will performance-based budgeting fly in Congress? Some observers are cautiously optimistic.

Source: William D. Eggers (Manhattan Institute), "The Accountability Budget," Wall Street Journal, February 4, 2002.


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