1. INTRODUCTION
Purpose of This Volume
The Analytical Perspectives volume presents analyses
that highlight specific subject areas or provide other
significant data that place the budget in context. The
volume presents crosscutting analyses of Government
programs and activities from several perspectives.
Presidential budgets have included separate analytical
presentations of this kind for many years. The 1947
Budget and subsequent budgets included a separate
section entitled ‘‘Special Analyses and Tables’’ that covered
four or more topics. For the 1952 Budget, this
section was expanded to ten analyses, including many
subjects still covered today, such as receipts, investment,
credit programs, and aid to State and local governments.
With the 1967 Budget this material became
a separate volume entitled ‘‘Special Analyses,’’ and included
13 chapters. The material has remained a separate
volume since then, with the exception of the budgets
for 1991–1994, when all of the budget material was
included in one large volume. Beginning with the 1995
Budget, the volume has been named Analytical Perspectives.
The volume this year continues to reflect an interest
in publishing more information on program performance,
so that Executive agencies, the Congress, and
the public will become increasingly informed about how
well programs are performing. Better performance information
can help managers improve program effectiveness,
and can help Executive and Congressional policymakers
improve the allocation of public resources.
The performance assessment information is summarized
in Chapter 2, ‘‘Performance and Management Assessments,’’
and is discussed in many other chapters,
especially those in the section, ‘‘Crosscutting Programs.’’
One-page summaries of each program are on the Analytical
Perspectives CD ROM (inside back cover).
The volume includes a new chapter this year on the
California Bay-Delta restoration program (Chapter 11).
Again this year, several large tables are included as
part of the Budget on the enclosed Analytical Perspectives
CD ROM, along with evaluations and analyses
of programs and management at Federal departments
and agencies. A list of the items on the CD ROM is
in the Table of Contents of this volume.
Overview of the Chapters
Introduction
1. Introduction. This chapter discusses each chapter
briefly and highlights the emphasis on performance in
a crosscutting context.
Performance and Management Assessments
2. Budget and Performance Integration. This chapter
summarizes this year’s performance and management
assessments, based primarily on the Program Assessment
Rating Tool (PART). The enclosed Analytical Perspectives
CD ROM includes one-page summaries of the
program evaluations. Additional details of each of the
assessments can be found on the OMB web page under
‘‘Budget Documents’’ at http://www.budget.gov/budget/.
Crosscutting Programs
3. Homeland Security Analysis. This chapter discusses
homeland security funding and provides information
on homeland security program requirements, performance,
and priorities. Additional detailed information
is available on the enclosed Analytical Perspectives
CD ROM.
4. Strengthening Federal Statistics. This chapter discusses
the development of standards that principal statistical
programs can use to assess their performance
and presents highlights of their 2006 Budget proposals.
5. Research and Development. This chapter presents
a crosscutting review of research and development
funding in the budget, including discussions about priorities,
performance, and coordination across agencies.
6. Federal Investment. This chapter discusses spending
across Federal agencies that yields long-term benefits,
and presents information on physical capital, research
and development, and education and training.
The chapter includes material on the PART assessments
related to direct Federal investment spending.
There is also a section on capital stocks.
7. Credit and Insurance. This chapter provides crosscutting
analyses of the roles and risks of Federal credit
and insurance programs and Government-sponsored enterprises
(GSEs), as well as criteria for evaluation. It
covers the categories of Federal credit (housing, education,
business including farm operations, and international)
and insurance programs (deposit insurance,
pension guarantees, disaster insurance, and insurance
against security-related risks). Two detailed tables,
‘‘Table 7–10. Direct Loan Transactions of the Federal
Government’’ and ‘‘Table 7–11. Guaranteed Loan Transactions
of the Federal Government’’, are on the enclosed
Analytical Perspectives CD ROM.
8. Aid to State and Local Governments. This discussion
presents crosscutting information on Federal
grants to State and local governments, including highlights
of Administration proposals. The chapter also includes
material on the PART assessments related to
grants. An Appendix to this chapter includes Stateby-
State spending estimates of major grant programs.
4 ANALYTICAL PERSPECTIVES
9. Integrating Services with Information Technology.
This chapter presents a crosscutting look at investments
in information technology (IT). The chapter describes
various aspects of the Administration’s information
technology agenda, with special emphasis on the
performance, efficiency, and effectiveness of the Government’s
IT investments. Three detailed tables, ‘‘Table
9–1. Effectiveness of Agency’s IT Management and EGov
Processes,’’ ‘‘Table 9–2. Management Guidance,’’
and ‘‘Table 9–3. Status of Presidential E-Government
Initiatives,’’ are on the enclosed Analytical Perspectives
CD ROM.
10. Federal Drug Control Funding by Agency. This
section presents estimated drug control funding for Federal
departments and agencies.
11. California-Federal Bay-Delta Program Budget
Crosscut (CALFED). This chapter presents information
on Federal funding for the California Bay-Delta restoration
program, in partial fulfillment of the reporting requirements
for this program. A detailed table,
‘‘CALFED-Related Federal Funding’’ is on the enclosed
Analytical Perspectives CD ROM.
Economic Assumptions and Analyses
12. Economic Assumptions. This discussion reviews
recent economic developments; presents the Administration’s
assessment of the economic outlook, including
the expected effects of macroeconomic policies; and compares
the economic assumptions on which the budget
is based with the assumptions for last year’s budget
and those of other forecasters. This chapter also covers
topics related to the effects on the budget of changes
in economic conditions and assumptions.
13. Stewardship. This chapter assesses the Government’s
financial condition and sustainability in an integrated
framework that includes Federal assets and liabilities;
75-year projections of the Federal budget
under alternative assumptions for discretionary spending,
health cost, productivity, and demographics; actuarial
estimates for the shortfalls in Social Security and
Medicare; a national balance sheet that shows the Federal
contribution to national wealth; and a table of economic
and social indicators. Together these elements
serve similar analytical functions to a business’s accounting
statements.
14. National Income and Product Accounts. This
chapter discusses how Federal receipts and outlays fit
into the framework of the National Income and Product
Accounts (NIPAs) prepared by the Department of Commerce.
The NIPA measures are the basis for reporting
Federal transactions in the gross domestic product
(GDP) and for analyzing the effect of the budget on
aggregate economic activity.
Budget Reform Proposals
15. Budget Reform Proposals. This chapter is a brief
description of the Administration’s budget reform agenda
for addressing the need for responsible budgeting
and other reforms.
Federal Borrowing and Debt
16. Federal Borrowing and Debt. This chapter analyzes
Federal borrowing and debt and explains the
budget estimates. It includes sections on special topics
such as the trends in debt, agency debt, investment
by Government accounts, and the debt limit.
Federal Receipts and Collections
17. Federal Receipts. This discussion presents information
on receipts estimates, enacted tax legislation,
and the receipts proposals in the budget.
18. User Charges and Other Collections. This chapter
presents information on receipts from regulatory fees
and on collections from market-oriented activities, such
as the sale of stamps by the Postal Service, which are
recorded as offsets to outlays rather than as Federal
receipts.
19. Tax Expenditures. This discussion describes and
presents estimates of tax expenditures, which are defined
as revenue losses from special exemptions, credits,
or other preferences in the tax code. An appendix discusses
possible alternatives to the current tax expenditure
baselines. This section is prepared by the Department
of the Treasury.
Dimensions of the Budget
20. Comparison of Actual to Estimated Totals. This
chapter compares the actual receipts, outlays, and deficit
for 2004 with the estimates for that year published
two years ago in the 2004 Budget. It also includes
a historical comparison of the differences between receipts,
outlays, and the deficit as originally proposed
with final outcomes.
21. Outlays to the Public, Net and Gross. This section
provides information on outlays net and gross of offsetting
collections and offsetting receipts by agency. Offsetting
collections and offsetting receipts are netted
against outlays and result primarily from the Government’s
business-like activities, such as the sale of
stamps by the Postal Service.
22. Trust Funds and Federal Funds. This chapter
provides summary information on Federal funds and
trust funds, which comprise the entire budget. For trust
funds the information includes income, outgo, and balances.
Two detailed tables, ‘‘Table 22–4. Income, Outgo,
and Balances of Major Trust Funds’’ and ‘‘Table 22–5.
Income, Outgo, and Balances of Selected Federal
Funds’’ are on the enclosed Analytical Perspectives CD
ROM.
23. Off-Budget Federal Entities and Non-Budgetary
Activities. This chapter provides summary information
on the off-budget Federal entities (Social Security and
Postal Service) and non-budgetary activities (such as
cash flows for credit programs, deposit funds, and regulation).
24. Federal Employment and Compensation. This
chapter provides summary data on the level and recent
trends in civilian and military employment, and personnel
compensation and benefits.
5 1. INTRODUCTION
Current Services Estimates
25. Current Services Estimates. This chapter presents
estimates, based on rules similar to those contained
in the Budget Enforcement Act (BEA), of what receipts,
outlays, and the deficit would be if no changes were
made to laws already enacted. It discusses the conceptual
framework for these estimates and describes differences
with the BEA requirements. Two detailed tables,
‘‘Table 25–12. Current Services Budget Authority
by Function, Category, and Program’’ and ‘‘Table 25–13.
Current Services Outlays by Function, Category, and
Program’’ are on the enclosed Analytical Perspectives
CD ROM.
Budget System and Concepts
26. The Budget System and Concepts. This is a basic
reference to the budget process, concepts, laws, and
terminology, and includes a glossary of budget terms.
