CONGRESSIONAL BUDGET OFFICE

STATEMENT OF DR. ALICE M. RIVLIN, DIRECTOR

ACCOMPANIED BY:

RAYMOND C. SCHEPPACH, DEPUTY DIRECTOR

ALFRED B. FITT. GENERAL COUNSEL

STANLEY L. GREIGG, DIRECTOR, OFFICE OF INTERGOVERNMENTAL RELATIONS

JAMES L. BLUM, ASSISTANT DIRECTOR, BUDGET ANALYSIS DIVISION ROBERT D. HARRIS, DEPUTY ASSISTANT DIRECTOR, BUDGET ANALY SIS DIVISION

CHARLES S. BARDEN, JR., BUDGET ANALYST

INTRODUCTION OF ASSOCIATES

Senator MATTINGLY. We will recess for approximately 10 minutes until the Congressional Budget Office gets here.

[A brief recess was taken.]

Senator MATTINGLY. We are happy to have from the Congressional Budget Office Dr. Alice M. Rivlin, the Director. We would like you to go ahead with your statement. Welcome aboard. It seems like you and I run into each other regularly.

Dr. RIVLIN. Right.

Thank you, Mr. Chairman. I am delighted to be here. Let me very briefly introduce the gentlemen at the end of the table: Raymond Scheppach who is my Deputy Director: Bob Harris, who handles our computer operations; Stanley Greigg, who heads our Office of Intergovernmental Relations; Jim Blum, who runs our Budget Analysis Divisions; and Alfred Fitt, our General Counsel.

BUDGET REQUEST AND PERSONNEL

I know you want to move ahead quickly. I thought I might just read the very beginning of the statement to refresh your memory on the numbers and then the section on our computer costs, because that is one of the main things that is going up now. Then I will leave the rest of the statement for the record.

For fiscal year 1983, the Congressional Budget Office is requesting $16,352,000. This appropriation level would allow us to fund our currently authorized staff level of 218 positions, which we are not now fully funding, to continue our present services to the Congress in support of the budget process, and to carry out a newly legislated responsibility to estimate the costs that State and local governments would incur as a result of Federal legislation.

95-563 - 82 - 9

1982 APPROPRIATIONS

You will recall that our fiscal year 1982 spending request was $14,298,000. A lower funding level was agreed to in conference, however, and we are currently operating at a fiscal year 1982 appropriation level of $12,868,000.

This does not provide the necessary funds for the October 1981 costof-living increase nor the January 1982 pay cap increase. The combined costs associated with these activities is $408,000, bringing our fiscal year 1982 requirements to $13,276,000. The approved increases in our funding levels for both fiscal year 1981 and fiscal year 1982 have averaged less than 3 percent annually.

WORKLOAD

I should add that these small increases have come at a period of extraordinary increase in the demand for Congressional Budget Office assistance. The intense budget activity over the last year, which is continuing heavily into this year, has increased enormously the workload of the Congressional Budget Office and put great strain on our staff. Our economic forecasts have been central to the budget debate and we have been inundated with requests for additional fiscal analysis. Both budget committees have greatly increased their demands for budget projections and estimates while other committees have turned to us far more than ever before for estimates of fiscal savings and program impacts of legislative changes. Our staff is dedicated to the success of the budget process and has worked very hard, often putting in extremely long hours late into the night and on the weekends. We have made occasional mistakes, but by and large I have been extraordinarily proud of how well the staff has performed under pressure and of the quality of the product we have produced.

1983 REQUIREMENTS

Our 1983 estimate reflects our needs in four key areas: The ability to perform our existing services at the currently authorized staff level of 218 positions; to bolster our data processing capabilities, especially those of our fiscal, tax, and budget analysis divisions; to support the systems, data, and model development work fundamental to our ability to analyze the complex issues before the Congress; and to comply with the requirements of the State and Local Government Cost Estimate Act of 1981, Public Law 97-108. Each of these is discussed at more length in the statement.

PERSONNEL

Basically, Mr. Chairman, this request, which is for about $3 million in additional money, divides into two parts. First, it is for additional people for two reasons. One of these is to bring us up to our currently authorized level. We have not been running at the authorized level recently because, with the cut of last year, we simply couldn't afford to fill all positions. And the other is more people to perform the new re

sponsibility for State and local estimates. So essentially about half of the increase is for additional salary and related expenses.

COMPUTER SUPPORT SERVICES

The other half reflects the enormous increase in the demand for our computer operations, reflecting the intensity of the budget process, current and prospective, as well as the computer operations that will be involved in carrying out the new State and local responsibility.

ADP CONTRACTS

Computer support services are essential to the Congressional Budget Office's budget estimating and analytical capability. With the budget dominating the agendas of both the Congress and the administration, the whole Congress, not just the Budget Committees, has become increasingly dependent on the accuracy and timeliness of the Congressional Budget Office budget numbers.

Our request for an increase of $1,577,000 for computer services in fiscal year 1983 is due to three factors: (1) increased charges, (2) increased computer utilization, and (3) required maintenance for existing systems.

Anticipated price increases account for $269,000 of the $1,577,000. Under a 3-year contract with our largest commercial supplier, we have enjoyed price protection since March 1980. In 1983 this contract must be renewed, and consequently we must expect that our commercial costs will increase we are estimating a 12-percent increase. To minimize such price increases, we have continued to follow our policy of using existing Government facilities when they can provide the services we need at less cost. We have a commitment from our largest Government supplier that their price increases will not exceed 2 percent. Accordingly, we estimate that price increases in our 1983 automated data processing budget will average out to 5.3 percent.

INCREASED COMPUTER UTILIZATION

Increased computer utilization in fiscal year 1983 is estimated to require an additional $1,124,000, amounting to 21 percent of our total computer costs. These resources are needed to support defense costing and scoring, analysis of the impact of tax changes, development of more frequent and more detailed economic assumptions, analysis of human service program revisions, improved services to the appropriations committees, and development of State and local government cost estimates. Those are detailed on page 142.

SYSTEMS REVISIONS AND MAINTENANCE

The final factor for automated data processing resources is the need for systems revisions and maintenance. In 1982 we have had to limit. our maintenance activities very strictly. We believe that the $184,000 requested to improve systems will enable us to be more responsive to the increasing number of new requests from congressional committees.

SYSTEMS, DATA, AND MODEL DEVELOPMENT

Another piece of the increase, Mr. Chairman, is for what we call systems, data, and model development, which is basically improving and updating the various models that we use to estimate things, from social security to defense and other things. I will not go through that in detail, although I would be happy to come back to it.

Let me skip to the last page of the statement and talk for a minute about positions.

BUDGET REQUEST

For fiscal year 1983, we are requesting $7,877,000 to fully fund our current 218 positions and to make allowance for 8 additional staff members to handle the increased workload of State and local cost estimating.

EXPANDED RESPONSIBILITIES

Although the extraordinary attention to budget matters has put a great strain on our staff, I am on record to this committee that the Congressional Budget Office would not seek additional positions unless more responsibilities were mandated by the Congress. We have had a constant number of positions now for quite a number of years and have not asked for more, but the Congress did act. The recently passed State and Local Government Cost Estimate Act of 1981 expanded the Congressional Budget Office responsibilities by requiring us to make State and local cost estimates for pending legislation.

After consulting with the congressional sponsors of the legislation and after thoroughly analyzing our needs, we are requesting eight additional full-time positions to perform that task. Seven of these would be for professional analysts. The eighth position would provide clerical support.

In summary, Mr. Chairman, the resources we are requesting for permanent positions would fund our currently authorized staff level and would allow us to bring on the staff required to implement the provisions of the State and Local Government Cost Estimate Act of 1981. That is a brief run through of the highlights of our situation. I would be happy to answer any questions.

PREPARED STATEMENT

Senator MATTINGLY. Thank you. Your prepared statement will be inserted in the record at this point.

[The statement follows:]

STATEMENT OF ALICE M. RIVLIN

Mr. Chairman and Members of the Subcommittee, I am pleased to present the fiscal year 1983 budget estimate for the Congressional Budget Office (CB0). CBO is a nonpartisan organization that provides the Congress with budget-related information and analyses of fiscal, budgetary, and programmatic issues. CBO does not make recommendations on policy matters; rather, we analyze options,

their costs to the federal government, and their impact on the national economy.

BUDGET ESTIMATE

For fiscal year 1983, CBO is requesting $16,352,000. This appropriation level would allow us to fund our currently authorized staff level of 218 positions, to continue our present services to the Congress in support of the budget process, and to carry out a newly legislated responsibility to estimate the costs that state and local governments would incur as a result of federal legislation.

You will recall that our fiscal year 1982 spending request was $14,298,000. A lower funding level was agreed to in conference, however, and we are currently operating at a fiscal year 1982 appropriation level of $12,868,000.

This does not provide the necessary funds for the October 1981 cost-of-living increase nor the January 1982 pay cap increase. The combined costs associated with these activities is $408,000, bringing our fiscal year 1982 requirements to $13,276,000. The approved increases in our funding levels for both fiscal year 1981 and fiscal year 1982 have averaged less than 3 percent annually. I should add that these small increases have come at a period of extraordinary increase in the demand for CBO assistance.