nes THURSDAY, FEBRUARY 21, 1985. CONGRESSIONAL BUDGET OFFICE WITNESSES I e RUDOLPH G. PENNER, DIRECTOR ERIC A. HANUSHEK, DEPUTY DIRECTOR ALFRED B. FITT, GENERAL COUNSEL STANLEY L. GREIGG, DIRECTOR, OFFICE OF INTERGOVERNMENTAL RE- JAMES L. BLUM, ASSISTANT DIRECTOR BUDGET ANALYSIS DIVISION POLLY HODGES, BUDGET AND FINANCE OFFICER ELIZABETH BERNING, PERSONNEL OFFICER MARK G. DESAUTELS, ASSISTANT FOR INTERGOVERNMENTAL RELA- Mr. FAZIO. We will now begin the budget hearing for the Congressional Budget Office. They are requesting $18,455,000 and 222 positions for fiscal year 1986, which is an increase of $792,000 or 42 percent over the 1985 appropriation, including the pending pay supplemental of $245,000. No additional positions are requested. INTRODUCTION OF WITNESS I would like to welcome Dr. Rudy Penner, who became Director of CBO in September of 1983. It is nice to have you back again. If you wish to introduce your staff at this time, we can put your statement in the record. Do you want to sumarize it? We would be happy to hear whatever you have to say? Mr. PENNER. Thank you, Mr. Chairman. I will introduce the people at the table. Eric A. Hanushek, the Deputy and Polly Hodges, who is in a new role this year. She is the person who has memorized all the numbers on our books. Mr. FAZIO. The pressure is on you. CBO BUDGET REQUEST Mr. PENNER. I am pleased to present CBO's budget this year. As you noted, we are requesting $18,455,000, a 4.5 percent increase over our anticipated level including the supplemental in 1985. The increase of $792,000 comprises $291,000 for personnel costs, $351,000 for automated data processing operations and systems, and $150,000 for other administrative office service costs. CBO'S MAIN ACTIVITIES The Congressional Budget Act of 1974 as amended mandated that CBO prepare certain reports on a regular basis, and do other studies are prepared in response to Congressional requests. Specifically, CBO carries out the following tasks: maintains current tabulations of Congressional revenue and spending actions [scorekeeping]; prepares five-year cost estimates for bills reported by authoriz ing committees (some 687 were done last year), prepares outlay estimates for bills providing new budget authority; supplies tax expenditure and revenue information; annually reports projections of new budget authority, outlays, and revenues for the coming five fiscal years; estimates the cost to state and local governments that might be implied by different sorts of legislation; issues periodic forecasts of economic trends and fiscal policy, and in general analyzes policy issues that affect the Federal budget. My complete statement goes into a great deal of detail on all of these functions, and I would be glad to answer questions on them. But I won't go through them all right now. Just to go into a little more detail on the specific budget request, however, the main areas are automated data processing and personnel. In terms of automated data processing, the funds for this category support CBO's use of commercial timesharing services; government computers, which mainly consist of the House Information System; Micro computers; and CBO's development of new systems. The fiscal year 1986 budget request for computer-related costs is $5.4 million, an increase of $338,000 over the 1985 level. We have been able to hold our requested increase at this level because we have taken a number of steps to check the rising costs of our essential computer work. The major factors contributing to the requested increase are price increases of $320,000 from our timesharing suppliers, $185,000 for upgrading of existing systems, and $98,000 for new work and expansion to allow direct committee access to selected data series. These various increases are offset by $265,000 reduction in current costs as a result of productivity gains. Furthermore, a large part of those productivity gains is related to the more extensive use of personal computers in our offices, which means less purchase of outside services. In addition to our ADP request, there is a small $13,000 increase for systems data and model development. In regard to personnel, I would like to underscore that this request does not seek any additional staff positions. The increase of $291,000 for personnel is a 2.8 percent increase for fiscal year 1985. It is primarily for merit increases and staff benefits at the full staffing level. As I have previously stated several times, CBO will continue its practice of not seeking additional slots unless there are specific duties imposed on us by the Congress. Other support services involve an increase of $150,000. That covers things like postage, telephone services, photocopy leases, and so forth. This category includes travel and training costs as well. Mr. Chairman, as I stated at the beginning of the justification, the fiscal year 1986 budget request essentially provides for a continuation of our basic legislatively mandated services to the Congress. The increase is 4.5 percent; no increase in staff. It is in effect a current services budget. [The statement of Mr. Penner follows:] CONGRESSIONAL BUDGET OFFICE Testimony of Rudolph G. Penner before the Subcommittee on Legislative Branch United States House of Representatives Appropriations Request for Fiscal Year 1986 February 21, 1985 Mr. Chairman and Members of the Subcommittee, I am pleased to present the fiscal year 1986 budget request for the Congressional Budget Office (CBO). I have been Director of the CBO for 18 months now and have had an opportunity to scrutinize the agency's budgetary needs. Accordingly, the fiscal year 1986 request we submit today has been carefully planned. As you know, CBO is a nonpartisan analytic organization that furnishes the Congress with information and analyses on issues relating to the U. S. economy, the federal budget, and federal programs. The CBO does not make policy recommendations, but presents the Congress with options and the possible budgetary and economic consequences of those options. BUDGET REQUEST For fiscal year 1986, CBO is requesting $18,455,000, an increase of 4.5 percent (or $792,000) over our anticipated operating level for fiscal year 1985 of $17,663,000. 1/ This increase differs little from the rate of inflation CBO projects for 1985, making this a current services budget. We are requesting no additional staff positions for fiscal year 1986, but will maintain staffing at the current authorized level of 222. 1. The fiscal year 1985 appropriation for CBO is $17,418,000. We have submitted a supplemental request for $245,000. This request represents the January 1, 1985 cost-of-living adjustment (COLA). The increase of $792,000 comprises the following items: O $291,000 for personnel costs; o $351,000 for increased costs, upgrading and maintenance, and new work relating to our automated data processing (ADP operations and systems); o $150,000 for other administrative office services costs. Mr. Chairman, I would like to reiterate, this is a current services budget, and in preparing our request we have maintained a most prudent funding approach. I will discuss these areas in more detail later. First, however, I would like to review for the Committee the principal services CBO provided to the Congress in the past fiscal year. CURRENT CBO SERVICES TO THE CONGRESS The Congressional Budget Act of 1974, as amended, mandates that CBO prepare certain reports on a regular basis; and other studies are prepared in response to Congressional requests. Specifically, CBO carries out the following tasks: revenue and spending actions (scorekeeping); prepares five-year cost estimates for bills reported by authorizing committees; prepares outlay estimates for bills providing new budget authority; supplies tax expenditure maintains current tabulations of Congressional |