OVERVIEW OF CBO'S ROLE

The Congressional Budget Act of 1974 established the Congressional Budget Office (CBO) as a nonpartisan Congressional support agency. Its mandate is to be analytically precise, professional, and politically unbiased in providing the Congress with information on matters of budgetary and fiscal policy.

In addition to the work products specified in the Act, including scorekeeping, five-year cost estimates of reported bills, and five-year projections of new budget authority, outlays, and revenues, the Congressional Budget Office has three principal statutory tasks: (1) to provide information to the two Budget Committees on all matters within their jurisdiction and such further reports "as may be necessary and appropriate"; (2) to provide information to the appropriating and tax committees on request; and (3) on request of any other committees, to provide information compiled for the budget, taxing, and appropriating committees plus "to the extent practicable" additional requested information.

The Budget Enforcement Act of 1990 (Title XIII of the Omnibus Budget Reconciliation Act of 1990) (BEA) assigned CBO additional statutory tasks through 1995 when the act expires. Three times a year, CBO must report whether a sequestration of budgetary resources will be necessary to adhere to the discretionary appropriation caps, the pay-as you-go requirement for direct spending and receipts legislation, or the maximum deficit amount for a fiscal year. Also, as soon as practicable after Congress completes action on an appropriation bill or on any direct spending or receipts legislation, CBO must provide the Office of Management and Budget with a cost estimate. The Director of CBO is also responsible for alerting the Congress to a recession or downturn in the economy that might warrant a suspension of the Budget Enforcement Act's procedures. Finally, the Budget Enforcement Act directed CBO to prepare studies on the budget accounting for deposit insurance programs and on the financial risks posed by government-sponsored enterprises.

CBO'S ACCOMPLISHMENTS DURING FY 1992

Once again in FY 1992, budget issues and the health of the economy dominated the legislative agenda of the Congress. As a result, the work of the CBO figured prominently in Congressional deliberations of the issues before the nation. The agency's workload remained steady except for the task of implementing the BEA, which involved working with the Congress and the Office of Management and Budget to settle various issues and questions relating in particular to discretionary spending caps and pay-as-you-go requirements. In addition to the continuing priority given to reducing the

CBO'S ACCOMPLISHMENTS DURING FY 1992 cont.

reform, the financial health of various government-backed financial institutions, the budgetary and economic impacts of reduced defense spending, and trade and competitiveness.

During the year, the Budget Analysis Division continued to support the Congress on the FY 1993 budget formulation and produced hundreds of bill cost estimates, regular scorekeeping reports, baseline budget projections, and budget estimates for budget reduction options. The division continued to assist the Congress with the implementation of the new Budget Enforcement Act and working closely with the Office of Management and Budget (OMB) to minimize differences in spending estimates.

In addition to providing the Congress with regular analyses and projections of the U.S. economy, the Macroeconomic Analysis Division published major studies in many economic areas including the economic effects of the savings and loan crisis, the economic impact of reduced defense spending, the rising costs of health care, and limiting conventional arms exports.

In addition to its revenue scorekeeping reports and revenue cost estimates, the Tax Analysis Division prepared analyses on adopting a valueadded tax and corporate tax receipts since the Tax Reform Act of 1986.

The CBO's four program divisions--Natural Resources and Commerce, Human Resources and Community Development, National Security, and Special Studies--continued to assist the Congress in focusing its debate by organizing and presenting budget analyses that outlined options and alternatives. The topics of these analyses included government-backed financial institution reform, infrastructure spending, reforming and controlling health care spending, economic effects of reduced defense spending, trends in costs of military health care, the administrative costs of credit reform, and the marketing activity of the Resolution Trust Corporation.

Micro-to-mainframe capabilities continued to be developed by the automated systems staff, enabling analysts to quickly move data between their microcomputer models and mainframe data bases, thereby increasing productivity by reducing manual data handling as well as reducing timesharing costs. Also in FY 1992, CBO continued to expand its local-area-network (LAN) capability, and completed the connection of all divisions to a LAN. And, in FY 1992, the agency completed the conversion to a more efficient automated procurement and inventory system, upgraded its document

CHANGES IN CBO'S PLANS FOR FY 1992 AND FY 1993

The CBO FY 1992 spending plan was designed to fund 220 work-years, to pay for price increases in the ADP and administrative areas, and to fund expected workload increases in ADP timesharing and printing costs.

Actual results show a significant variance from this plan in only one area. Printing costs in FY 1992 were $132,000 below the plan because a change in the format of CBO's published studies and reports reduced their length, and therefore printing costs, by about one third.

FY 1993. Since the CBO FY 1993 appropriation was frozen at the FY 1992 level, the new CBO FY 1993 spending estimate varies significantly from the original 1993 request. Pay and benefit spending for 220 workyears of permanent staff fell by $650,000. This reduction of nearly $3,000 per workyear is the cumulative two-year effect of cost reductions in three main areas: lower salary rates--in real terms-- for new employees due to labor market conditions; additional restraint on the size of merit increases for CBO staff; and less upward pressure on fringe benefit costs. CBO also moderated its across-theboard January 1993 ECI pay adjustment. Rather than the 3.7 percent increase given to most Executive Branch employees, CBO salary rates increased by 3.2 percent.

Nonpermanent staff spending has been reduced by $151,000 (38 percent) by restricting the use of interns and temporary employees. Printing costs were reduced $105,000 because of the savings realized from the new report format adopted in FY 1992. And, systems, data and model development spending was reduced by $318,000.

CBO'S GOALS FOR FY 1994

In FY 1994, the Congressional Budget Office will continue to fulfill its mandate as previously stated. In order to achieve this goal, the following objectives support this budget request:

To maintain the quality of analysis currently being provided the Congress while absorbing a growing workload. This requires the heavy utilization of all staff in the budget and fiscal analysis areas specifically responsible for the CBO's duties under the Budget Enforcement Act;

To increase the efficiency of all analysts with the most up-to-date computer resources available, while reducing costs by the sharing