Analytical Perspectives of 2010 Federal Budget

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Analytical PerspectivesBudget of the U.S. Government

O f f i c e o f M a n a g e m e n t a n d B u d g e t

w w w . b u d g e t . g o v

Fiscal Year 2010


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A New Era o Responsibility: Renewing AmericasPromise contains the Budget Message o the President,inormation on the Presidents priorities, and budget over-

views organized by agency. This document was pub lishedon February 26, 2009.

Since publication o this initial volume, the Adminis-tration has produced updated budget estimates basedon new technical and other inormation. The ollowing

volumes are based on those new estimates, and updatedsummary tables were published in the ollowing volume.

Updated Summary Tables, May, 2009, Budget othe United States Government, Fiscal Year 2010 con-tains a set o summary tables updated and expanded romthe February FY 2010 Presidents Budget overview.

Analytical Perspectives, Budget o the United

States Government, Fiscal Year 2010 containsanalyses that are designed to highlight specied subjectareas or provide other signicant presentations o budgetdata that place the budget in perspective. This volumeincludes economic and accounting analyses; inormationon Federal receipts and collections; analyses o Federalspending; inormation on Federal borrowing and debt;baseline or current services estimates; and other techni-cal presentations. TheAnalytical Perspectivesvolume alsocontains supplemental material with several detailedtables, including tables showing the budget by agencyand account and by unction, subunction, and program,that is available on the Internet and as a CD-ROM in theprinted document.

Historical Tables, Budget o the United StatesGovernment, Fiscal Year 2010 provides data on budgetreceipts, outlays, surpluses or decits, Federal debt, andFederal employment over an extended time period, gener-ally rom 1940 or earlier to 2010 or 2014.

To the extent easible, the data have been adjusted toprovide consistency with the 2010 Budget and to providecomparability over time.

Appendix, Budget o the United States Government, Fiscal Year 2010 contains detailed inormationon the various appropriations and unds that constitutethe budget and is designed primarily or the use o the

Appropriations Committees. TheAppendix contains more

detailed nancial inormation on individual programsand appropriation accounts than any o the other budgetdocuments. It includes or each agency: the proposed texto appropriations language; budget schedules or each ac-count; legislative proposals; explanations o the work tobe perormed and the unds needed; and proposed generalprovisions applicable to the appropriations o entire agen-cies or group o agencies. Inormation is also provided oncertain activities whose transactions are not part o thebudget totals.

AUTOMATED SOURCES OF BUDGETINFORMATION

The inormation contained in these documents is available in electronic ormat rom the ollowing sources:

Internet. All budget documents, including documentsthat are released at a uture date, spreadsheets o manyo the budget tables, and a public use budget database areavailable or downloading in several ormats rom the In-ternet at www.budget.gov/budget . Links to documents andmaterials rom budgets o prior years are also provided.

Budget CD-ROM. The CD-ROM contains all o thebudget documents in ully indexed PDF ormat along withthe sotware required or viewing the documents. The CDROM has many o the budget tables in spreadsheet or-mat and also contains the materials that are included onthe separateAnalytical Perspectives CD-ROM.

For more inormation on access to electronic versionso the budget documents (except CD-ROMs), call (202)512-1530 in the D.C. area or toll-ree (888) 293-6498. Topurchase the budget CD-ROM or printed documents cal(202) 512-1800.

THE BUDGET DOCUMENTS

GENERAL NOTES

1. All years reerred to are scal years, unless otherwise noted.2. Detail in this document may not add to the totals due to rounding.

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON 2009

For sale by the Superintendent o Documents, U.S. Government Printing OceInternet: bookstore.gpo.gov Phone: (202) 512-1800 Toll-Free 1-866-512-1800 Fax: (202) 512-2104

Mail: Stop IDCC, Washington, DC 20402-0001ISBN 978-0-16-082762-4


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TABLE OF CONTENTS

List o Charts and Tables ..................................................................................................................... iii

Introduction

1. Introduction ..................................................................................................................................3

Building a High-Perorming Government

2. Building a High-Perorming Government .................................................................................. 9

Crosscutting Programs

3. Homeland Security Funding Analysis ......................................................................................15

4. Strengthening Federal Statistics .............................................................................................. 23

5. Research and Development .......................................................................................................27

6. Federal Investment ....................................................................................................................33

7. Credit and Insurance .................................................................................................................43

8. Aid to State and Local Governments ........................................................................................89

9. Leveraging the Power o Technology to Transorm the Federal Government ...................... 155

10. Federal Drug Control Funding ................................................................................................ 161

11. Caliornia-Federal Bay-Delta Program Budget Crosscut (CALFED) ...................................163

Economic Assumptions and Analses

12. Economic Assumptions ............................................................................................................167

13. Stewardship ..............................................................................................................................183

14. National Income and Product Accounts ..................................................................................207

Budget Reorm Proposals

15. Budget Reorm Proposals ........................................................................................................215

Federal Borrowing and Debt

16. Federal Borrowing and Debt ...................................................................................................223

Federal Receipts and Collections

17. Federal Receipts .......................................................................................................................241

18. User Charges and Other Collections.......................................................................................281

19. Tax Expenditures .....................................................................................................................297

Dimensions o the Budget

20. Comparison o Actual to Estimated Totals .............................................................................333


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21. Trust Funds and Federal Funds..............................................................................................341

22. O-Budget Federal Entities and Non-Budgetary Activities .................................................. 357

23. Federal Employment and Compensation ................................................................................363Current Services Estimates

24. Current Services Estimates .....................................................................................................373

The Budget Sstem and Concepts

25. The Budget System and Concepts ...........................................................................................395


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LIST OF CHARTS AND TABLES

LIST OF CHARTS

71. Face Value o Federal Credit Outstanding .......................................................................... 71

91. Maturity o Segment ArchitecturesMajor Agencies......................................................159

121. Percentage Decline in Payroll Employment Business Cycle Downturns Since 1955 .....167

122. Relative House Prices Have Fallen Substantially ............................................................ 168

123. One-Month LIBOR Spread Over One-Month Treasury Yield .........................................169

124. The Personal Saving Rate ..................................................................................................170

125. Economic Growth Following a Recession: Five-Year Averages ........................................173

126. Alternative Projections o Real GDP Growth ...................................................................176

127. Alternative Scenarios or Read GDP .................................................................................181

131. The Financial Condition o the Federal Government and the Nation ............................185

132. Ned Federal Liabilities ......................................................................................................187

133. Sources o Projected Growth in Medicare, Medicaid, and Social Security ......................191

134. Health Care Cost Alternatives ..........................................................................................193

135. Alternative Discretionary Projections ...............................................................................194

136. Alternative Revenue Projections .......................................................................................194

137. Alternative Productivity Assumption ...............................................................................195

138. Alternative Fertility Assumptions ..................................................................................... 195

139. Alternative Immigration Assumptions .............................................................................196

1310. Alternative Mortality Assumptions...................................................................................196

1311. Sources o the Gross Tax Gap ............................................................................................198

201. Illustrative Range o Budget Outcomes ............................................................................339

231. 2010 Budget Executive Branch Civilian FTE ..................................................................365

251. Relationship o Budget Authority to Outlays or 2010 ....................................................406

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LIST OF TABLES


Homeland Security Funding Analysis: 31. Homeland Security Funding by Agency .............................................................................15

32. Prevent and Disrupt Terrorist Attacks ...............................................................................16

33. Protect the American People, Our Critical Inrastructure, and Key Resources ...............17

34. Respond To and Recover From Incidents............................................................................18

35. Discretionary Fee-unded Homeland Security Activities By Agency ................................20

36. Mandatory Homeland Security Funding by Agency ..........................................................21

37. Baseline Estimates -- Total Homeland Security Funding by Agency ...............................21

38. Homeland Security Funding by Budget Function .............................................................22

39. Baseline EstimatesHomeland Security Funding by Budget Function ..........................22

AppendixHomeland Security Mission Funding by Agency and Budget Account ..... CD-ROM

Strengthening Federal Statistics: 41. 2008-2010 Budget Authority For Principal Statistical Agencies .......................................26

Research and Development: 51. Federal Research and Development Spending ...................................................................30

52. Agency Detail o Selected Interagency R&D Eorts ..........................................................31

Federal Investment: 61. Composition o Federal Investment Outlays ......................................................................34

62. Federal Investment Budget Authority and Outlays: Grant and DirectFederal Programs .................................................................................................................36

63. Net Stock o Federally Financed Physical Capital .............................................................39

64. Net Stock o Federally Financed Research and Development ...........................................40

65. Net Stock o Federally Financed Education Capital ..........................................................41Credit and Insurance:

71. Largest 10 Claims Against the PBGCs Single-EmployerInsurance Program 1975-2007............................................................................................56

72. Budgetary Costs o Troubled Asset Relie Program Actions (excluding debt service) .....66

73. Troubled Asset Relie Program Current Value as Refected in the Budget ..................... 66

74. Troubled Asset Relie Program Eects on the Decit and Debt asRefected in the Budget .......................................................................................................67

75. Troubled Asset Relie Program Eects on the Decit and Debt Calculatedon a Cash Basis .....................................................................................................................68

76. Comparison o OMBs Cost Estimates with CBOs or TransactionsIncluded in the CBO January TARP Report ......................................................................70

77. Estimated Future Cost o Outstanding Federal Direct Loans and Loan Guarantees .....71 78. Reestimates o Credit Subsidies on Loans Disbursed Between 1992-2008 ......................73

79. Direct Loan Subsidy Rates, Budget Authority, and Loan Levels, 2008-2010 ...................76

710. Loan Guarantee Subsidy Rates, Budget Authority, and Loan Levels, 2008-2010 ............ 78

711. Summary o Federal Direct Loans and Loan Guarantees .................................................80

712. Direct Loan Write-Os and Guaranteed Loan Terminations or Deaults .......................81

713. Appropriations Acts Limitations on Credit Loan Levels ...................................................84

714. Face Value o Government-Sponsored Lending ..................................................................86

715. Lending and Borrowing by Government-Sponsored Enterprises (GSEs) .........................87

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7-16. Direct Loan Transactions o the Federal Government ......................................... CD-ROM

7-17. Guaranteed Loan Transactions o the Federal Government ................................ CD-ROM

Aid to State and Local Governments:

81. Federal Grant Outlays by Agency .....................................................................................89 82. Trends in Federal Grants to State and Local Governments .............................................94

83. Federal Grants to State and Local GovernmentsBudget Authority and Outlays ........95

84. Summary o Programs by Agency, Bureau, and Program ................................................ 107

85. Summary o Programs by State ........................................................................................108

86. Summary o Recovery Act Grants by Agency, Bureau, and Program..............................109

87. Summary o Recovery Act Grants by State ......................................................................110

88. School Breakast Program (10.553) ..................................................................................111

89. National School Lunch Program (10.555) .........................................................................112

810. Special Supplemental Nutrition Program or Women, Inants,and Children (WIC) (10.557) .............................................................................................113

811. Child and Adult Care Food Program (10.558) ..................................................................114

812. State Administrative Matching Grants or the SupplementalNutrition Assistance Program (Food Stamps) (10.561) ...................................................115

813. Title I Grants to Locational Agencies (84.010) .................................................................116

814. Improving Teacher Quality State Grants (84.367) ...........................................................117

815. Education State Grants, State Fiscal Stabilization Fund (84.394) .................................118

816. Government Services, State Fiscal Stabilization Fund (84.397) ....................................119

817. Vocational Rehabilitation State Grants (84.126) .............................................................120

818. IDEA Part B: Grants to States & Grants to States Recovery Act (84.323) .....................121

819. State Energy Program (81.041) .........................................................................................122

820. Weatherization Assistance or Low-Income Persons (81.042) .........................................123

821. Energy Eciency and Conservation Block Grant (81.043) .............................................124

822. Childrens Health Insurance Program (93.767) ...............................................................125

823. Grants to States or Medicaid (93.778) .............................................................................126824. Temporary Assistance or Needy Families (TANF) - Family Assistance

Grants (93.558) ..................................................................................................................127

825. Child Support Enorcement - Federal Share o State and LocalAdministrative Costs and Incentives (93.563) .................................................................128

826. Low Income Home Energy Assistance Program (93.568) ................................................129

827. Child Care and Development Block Grant (93.575).........................................................130

828. Child Care and Development Fund - Mandatory (93.596a) ............................................131

829. Child Care and Development Fund - Matching (93.596b) ...............................................132

830. Head Start (93.600)............................................................................................................133

831. Foster Care - Title IVE (93.658) ......................................................................................134

832. Adoption Assistance (93.659).............................................................................................135

833. Social Services Block Grant (93.667) ................................................................................136834. Ryan White HIV/AIDS Treatment Modernization Act Part B HIV

Care Grants (93.917) .........................................................................................................137

835. Public Housing Operating Fund (14.850) .........................................................................138

836. Section 8 Housing Choice Vouchers (14.871) ....................................................................139

837. Public Housing Capital Fund (14.872) .............................................................................140

838. Community Development Block Grants and Neighborhood StabilizationProgram (14.218) ...............................................................................................................141

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839. Emergency Shelter Grant, Homelessness Prevention and Rapid-Re-housingProgram (14.231) ...............................................................................................................142

840. HOME Investment Partnership Program (14.258) ..........................................................143

841. Tax Credit Assistance Program (14.258) ..........................................................................144842. Edward Byrne Memorial Justice Assistance Grant Program (16.738) ...........................145

843. Unemployment Insurance (17.225) ...................................................................................146

844. WIA Youth Activities (17.259) ...........................................................................................147

845. WIA Dislocated Workers (17.260) .....................................................................................148

846. Airport Improvement Program (20.106) ...........................................................................149

847. Highway Planning and Construction (20.205) .................................................................150

848. Federal Transit Formula Grants Programs (20.507) .......................................................151

849. Capitalization Grant or Clean Water State Revolving Funds (66.458) .........................152

850. Capitalization Grant or Drinking Water Stae Revolving Funds (66.468) ....................153

Leveraging the Power o Technology to Transorm the Federal Government: 91. The Federal IT Workorce .................................................................................................. 156

92. Federal IT Spending, Budgets o 2008-2010, Including Major FederalIT Investments ..................................................................................................................159

Federal Drug Control Funding:101. Federal Drug Control Funding, FY 20082010 ................................................................161

Caliornia-Federal Bay-Delta Program Budget Crosscut (CALFED): CALFED-Related Federal Funding Budget Crosscut .....................................................163

CALFED FY 1998-2009 Budget Crosscut Methodology ....................................... CD-ROM

CALFED Federal Agency Funding Summary by Category and Agency Breakout .. CD-ROM

CALFED Project Descriptions ............................................................................... CD-ROM

CALFED Fiscal Years 2006-2008 Federal Funding .............................................. CD-ROM

CALFED Fiscal Years 2009-2010 Funding Under New and Old Authority ........ CD-ROM

Economic Assumptions and Analses

Economic Assumptions:121. Economic Assumptions ......................................................................................................172

122. Comparison o Economic Assumptions .............................................................................175

123. Comparison o Economic Assumptions in the 2009 and 2010 Budgets ..........................178

124. Sensitivity to the Budget to Economic Assumptions .......................................................180

125. Budget Eects o Alternative Scenarios ...........................................................................181

126. Adjusted Structural Balance .............................................................................................182

Stewardship:131. Government Assets and Liabilities ...................................................................................188

132. Long-run Budget Projections ............................................................................................192

133. Intermediate Actuarial Projections or HI and OASDI ...................................................197134. Sources o the Tax Gap From Income Underreporting ....................................................198

135. National Wealth .................................................................................................................199

136. Economic and Social Indicators ........................................................................................202

National Income and Product Accounts:141. Federal Transactions in the National Income and Product Accounts, 19992010 .........210

142. Relationship o the Budget to the Federal Sector, NIPAs ................................................ 211

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Budget Reorm Proposals:151. Proposed Budget Authority and Outlays or Pell Grants ................................................217


Federal Borrowing and Debt:161. Trends in Federal Debt Held by the Public ......................................................................223

162. Federal Government Financing and Debt ........................................................................226

163. Debt Held by the Public Net o Financial Assets .............................................................229

164. Agency Debt........................................................................................................................230

165. Debt Held by Government Accounts .................................................................................231

166. Federal Funds Financing and Change in Debt Subject to Statutory Limit ...................234

167. Foreign Holdings o Federal Debt ..................................................................................... 236


Federal Receipts:171. Receipts by SourceSummary .........................................................................................241

172. Adjustments to the Budget Enorcement Act (BEA) Baseline Estimates oReceipts to Refect Current Policy ....................................................................................265

173. Eect o Proposals..............................................................................................................274

174. Receipts by Source .............................................................................................................277

User Charges and Other Collections:181. Total User Charges ............................................................................................................281

182. Gross Outlays, User Charges, Other Osetting Collections, and OsettingReceipts From the Public, and Net Outlays ...................................................................282

183. Total User Charge Collections ...........................................................................................283

184. User Charge Proposals in the FY 2010 Budget ................................................................286

185. Osetting Collections and Osetting Receipts From the Public .....................................290186. Osetting Receipts by Type ...............................................................................................291

Tax Expenditures:191. Estimates o Total Income Tax Expenditures or Fiscal Years 2008-2014 ...................... 299

192. Estimates o Tax Expenditures or the Corporate and Individual IncomeTaxes or Fiscal Years 2008-2014 ......................................................................................303

193. Income Tax Expenditures Ranked by Total Fiscal Year 20102014Projected Revenue Eect ................................................................................................308

194. Alternative Estimates or Capital Gains and Dividends, Pre-2005 Methodology ..........311

195. Present Value o Selected Tax Expenditures or Activity in Calendar Year 2008 .......... 311


Comparison o Actual to Estimated Totals:201. Comparison o Actual 2008 Receipts with the Initial Current Services

Estimates .........................................................................................................................333

202. Comparison o Actual 2008 Outlays with the Initial Current ServicesEstimates ...........................................................................................................................334

203. Comparison o the Actual 2008 Decit with the Initial CurrentServices Estimate ............................................................................................................335

204. Comparison o Actual and Estimated Outlays or Mandatory andRelated Programs Under Current Law ..........................................................................336

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205. Reconciliation o Final Amounts or 2008 ...................................................................337

206. Comparison o Estimated and Actual Surpluses or Decits Since 1982...................338

207. Dierences Between Estimated and Actual Surpluses or Decits orFive-year Budget Estimates Since 1982 .................................................................339

Trust Funds and Federal Funds: 211. Receipts, Outlays, and Surplus or Decit by Fund Group .......................................342

212. Income, Outgo, and Balances o Trust Funds Group ................................................343 213. Comparison o Total Federal Fund and Trust Fund Receipts to

Unied Budget Receipts, Fiscal Year 2008 .............................................................344

214. Income, Outgo, and Balances o Major Trust Funds ...............................................346

215. Income, Outgo, and Balances o Selected Federal Funds ........................................353

O-Budget Federal Entities and Non-Budgetary Activities: 221. Comparison o Total, On-Budget, and O-Budget Transactions .............................358

Federal Employment and Compensation: 231. Federal Civilian Employment in the Executive Branch .........................................367

232. Total Federal Employment ........................................................................................368

233. Personnel Compensation and Benets .....................................................................369

Current Services Estimates: 241. Category Totals or the Baseline Projection o Current Policy ................................373

242. Impact o Budget Policy .............................................................................................374

243. Alternate Baseline Assumptions ...............................................................................376

244. Summary o Economic Assumptions .........................................................................377

245. Baseline Beneciary Projections or Major Benet Programs ................................378

246. Impact o Regulations, Expiring Authorizations, and OtherAssumptions in the Baseline ...................................................................................379

247. Receipts by Source in the Baseline Projection o Current Policy ............................387

248. Eect on Receipts o Changes in the Social Security Taxable Earnings Base .......388

249. Change in Outlay Estimates by Category in the Baseline Projectiono Current Policy .......................................................................................................388

2410. Outlays by Function in the Baseline Projection o Current Policy .........................3892411. Outlays by Agency in the Baseline Projection o Current Policy ............................390

2412. Budget Authority by Function in the Baseline Projections o Current Policy ........391

2413. Budget Authority by Agency in the Baseline Projection o Current Policy ............392

2414. Current Services Budget Authority and Outlays by Function,Category, and Program .................................................................................. CD-ROM

The Budget Sstem and Concepts

The Budget System and Concepts: 251. Totals or the Budget and the Federal Government ................................................399

Detailed Functional Tables:261. Budget Authority and Outlays by Function, Category, and Program .......... CD-ROM

Federal Programs by Agency and Account:271. Federal Programs by Agency and Account .................................................... CD-ROM

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INTRODUCTION


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TheAnalytical Perspectives volume presents analysesthat highlight specic subject areas or provide othersignicant data that place the budget in context. This

volume presents crosscutting analyses o Governmentprograms and activities rom several perspectives.

Presidential budgets have included separate analyti-cal presentations o this kind or many years. The 1947Budget and subsequent budgets included a separate sec-tion entitled Special Analyses and Tables that coveredour and sometimes more topics. For the 1952 Budget,the section was expanded to 10 analyses, including manysubjects 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 chap-ters. The material has remained a separate volume sincethen, with the exception o the Budgets or 19911994,when all o the budget material was included in one large

volume. Beginning with the 1995 Budget, the volume hasbeen namedAnalytical Perspectives.

Again this year, several large tables are included athttp://www.whitehouse.gov/omb/budget/y2010/spec.html and on the Analytical Perspectives CD-ROM en-closed with the printed version o this volume. A list othese items is in the Table o Contents.

Overview o the Chapters

Introduction

1. Introduction. This chapter briefy discusses each othe subsequent chapters.

Perormance and Management Assessments

2. Building a High-Perorming Government. This chapterdiscusses development o a new management andperormance agenda based around the ollowing themes:

Putting Perormance First: Replacing PART with

a New Perormance Improvement and AnalysisFramework;

Ensuring Responsible Spending o Recovery ActFunds;

Transorming the Federal Workorce;

Managing Across Sectors;

Reorming Federal Contracting and Acquisition; and

Enhancing Transparency, Technology and Participa-tory Democracy.


3. Homeland Security Funding Analysis. This chapterdiscusses homeland security unding and provides inor-mation on homeland security program requirements, perormance, and priorities. Additional detailed inormationis available at the Internet address cited above or theelectronic version o this volume and on the Analytica

Perspectives CD-ROM enclosed with the printed versiono this volume.

4. Strengthening Federal Statistics. This chapter

discusses 2010 Budget proposals or the Governmentsprincipal statistical programs.

5. Research and Development. This chapter presents acrosscutting review o research and development undingin the Budget, including discussions about prioritiesperormance, and coordination across agencies.

6. Federal Investment. This chapter discusses ederallynanced spending that yields long-term benets. It pres-ents inormation on annual spending on physical capitalresearch and development, and education and trainingand on the cumulative capital stocks resulting rom thatspending.

7. Credit and Insurance. This chapter provides crosscutting analyses o the roles, risks, and perormance o Federacredit and insurance programs and Government-sponsoredenterprises (GSEs). This year, the chapter also includes asection ocusing on eorts to stabilize the economy andpromote nancial recovery, including the Troubled AssetRelie Program (TARP). The general portion o the chaptercovers the categories o Federal credit (housing, educationbusiness including arm operations, and international) andinsurance programs (deposit insurance, pension guarantees, disaster insurance, and insurance against terrorismrelated risks). Additionally, two detailed tables, Table 7-10Direct Loan Transactions o the Federal Government andTable 7-11. Guaranteed Loan Transactions o the FederaGovernment, are available at the Internet address citedaboveor the electronic version o this volume and on the

Analytical Perspectives CD-ROM enclosed with the printed version o this volume.

8. Aid to State and Local Governments. This chapterpresents crosscutting inormation on Federal grants toState and local governments, including highlights o

Administration proposals. An Appendix to this chapter in-cludes State-by-State spending estimates o major grant

1. INTRODUCTION

PURPOSE OF THIS VOLUME


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programs, including estimates or grant unding romthe American Recovery and Reinvestment Act o 2009(ARRA).

9. Leveraging the Power o Technology to Transorm the Federal Government. This chapter presents a crosscut-ting look at Federal activities, policy, and spending re-

lated to inormation technology (IT). It describes theAdministrations inormation technology agenda, alignedwith the broad goals o transparency, participation, andcollaboration, and promoting innovation or ecient andeective delivery o value to citizens.

10. Federal Drug Control Funding. This chapter displaysenacted and proposed drug control unding or Federaldepartments and agencies.

11.Caliornia-Federal Bay-Delta Program Budget Crosscut(CALFED). This chapter presents inormation on Federaland State unding or the CALFED program, in ulllmento the reporting requirements or this program. Additional

detailed tables on CALFED unding and project descrip-tions are available at the Internet address cited above orthe electronic version o this volume and on theAnalytical

Perspectives CD-ROM enclosed with the printed versiono this volume.

Economic Assumptions and Analyses

12. Economic Assumptions. This chapter re- views recent economic developments; presents the Administrations assessment o the economic situa-tion and outlook, including the eects o macroeco-nomic policies; compares the economic assumptions onwhich the Budget is based with the assumptions orlast years Budget and those o other orecasters; andillustrates the budget impact o alternatives to theBudgets economic orecast. This chapter also coverstopics related to the eects on the budget o changesin economic conditions and assumptions.

13. Stewardship. This chapter assesses theGovernments nancial condition and sustainability inan integrated ramework that includes Federal assetsand liabilities; 75-year projections o the Federal bud-get under alternative assumptions; actuarial estimatesor the uture spending and dedicated income or SocialSecurity and Medicare; a discussion o tax compliance;a national balance sheet that shows the Federal contri-bution to national wealth; and a table o economic andsocial indicators.

14. National Income and Product Accounts. This chapterdiscusses how Federal receipts and outlays t into theramework o the National Income and Product Accounts(NIPAs) prepared by the Department o Commerce.The NIPA measures are the basis or reporting Federaltransactions in the gross domestic product (GDP) andor analyzing the eect o the budget on aggregate eco-nomic activity.


15. Budget Reorm Proposals. This chapter includesa brie description o the Administrations proposalsto make the budget process more responsible and tomake budgets more transparent, accurate, and com-prehensive.


16. Federal Borrowing and Debt. This chapter analyzesFederal borrowing and debt and explains the budget estimates. It includes sections on special topics such as thetrends in debt, agency debt, investment by Governmentaccounts, and the statutory debt limit.


17. Federal Receipts. This chapter presents inormationon receipts estimates, enacted tax legislation, and thereceipts proposals in the Budget.

18. User Charges and Other Collections. This chapterpresents inormation on collections rom market-orientedactivities, such as the sale o stamps by the Postal Service(which are recorded as osets to outlays rather than asFederal receipts), and on receipts rom regulatory eesThis chapter also presents inormation on all other collec-tions that oset outlays, which result rom both intragov-ernmental transactions and transactions with the public

19. Tax Expenditures. This chapter describes and presents estimates o tax expenditures, which are dened asrevenue losses rom special exemptions, credits, or otherpreerences in the tax code.


20. Comparison o Actual to Estimated Totals. This chapter compares the actual receipts, outlays, and decit or2008 with the estimates or that year published two yearsago in the 2008 Budget. It also includes a historical com-parison o the dierences between receipts, outlays, andthe decit as originally proposed with nal outcomes.

21. Trust Funds and Federal Funds. This chapter pro vides summary inormation on Federal unds and trusunds, which comprise the entire budget. For trust undsthe inormation includes income, outgo, and balances.

22. O-Budget Federal Entities and Non-BudgetaryActivities. This chapter discusses o-budget Federal enti-ties (Social Security and Postal Service) and non-budgetary activities, such as deposit unds, regulation, and thecash fows or credit programs.

23. Federal Employment and Compensation. This chapter provides summary data on the level and recent trendsin civilian and military employment, personnel compen-sation and benets, and the cost o overseas stang.


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1. INTRODUCTION 5

Current Services Estimates

24.Current Services Estimates. This chapter presents esti-mates o what receipts, outlays, and the decit would be icurrent policies remained in orce. It discusses the concep-tual ramework or these estimates and describes dier-ences with the baseline under the Budget Enorcement Act

(BEA) rules. Two detailed tables, Table 2513. CurrentServices Budget Authority by Function, Category, andProgram and Table 2514. Current Services Outlays byFunction, Category, and Program, are available at theInternet address cited aboveor the electronic version othis volume and on the Analytical Perspectives CD-ROMenclosed with the printed version o this volume.

The Budget System and Concepts

25. The Budget System and Concepts. This chapter in-cludes a basic reerence to the budget process, concepts,

laws, and terminology, and includes a glossary o budgetterms.

Detailed Displays o Program Costs

The ollowing materials are available at the Internet ad-dress cited above or the electronic version o this volume

and on the Analytical Perspectives CD-ROM enclosedwith the printed version o this volume.

26. Detailed Functional Tables. Table 261. Bud-get Authority and Outlays by Function, Category,and Program."

27. Federal Programs by Agency and Account. Table271. Federal Programs by Agency and Account.


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BUILDING A HIGH-PERFORMING GOVERNMENT


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9

2. BUILDING A HIGH-PERFORMING GOVERNMENT

Just as important as changing what Washington doesis changing how it does it. We cannot begin to tackle thechallenges we ace without restoring responsibility andaccountability to government. The Administration is cur-rently working to develop a new management and peror-mance agenda based around the ollowing themes:

I. Putting Perormance First: Replacing PARTwith a New Perormance Improvement and

Analsis Framework

Several Administrations have made eorts to mea-sure and improve government perormance. BothCongressional and Administration eorts have produced

some meaningul progress, though there is much more wecan do to drive improved program results.

The Government Perormance and Results Act (GPRA)o 1993 requires agencies to submit to the Oce oManagement and Budget (OMB) and Congress ve-yearStrategic Plans (updated every three years) as well as

Annual Perormance Plans and Reports. These require-ments were ully implemented in 1999. The law requiresFederal agencies to identiy both annual and long-termgoals and to collect and report perormance data. UnderGPRA, agencies were required or the rst time to iden-tiy measures and targets or judging their perormancein achieving their strategic goals and managing their pro-grams. Agencies collect inormation on an annual basis inorder to determine whether they are meeting those goals.The aim is not simply to measure perormance, but also touse GPRA plans and reports to instill a culture o activeperormance management within agencies.

The November 13, 2007 Executive Order (EO) onImproving Government Program Perormance requiresthe head o each agency to designate a PerormanceImprovement Oicer (PIO) to coordinate agency per-ormance management activities. PIOs are respon-sible or helping the head o the agency deine cleargoals, measure progress, and hold people account-able or achieving results. The EO also establishes aPerormance Improvement Council (PIC) to acilitatecollaboration between PIOs on perormance manage-ment eorts.

The Program Assessment Rating Tool (PART), usedduring the past six years, has helped the FederalGovernment establish perormance measures acrossFederal programs. But it has been less successul in en-couraging the actual use o perormance measurementas a perormance improvement tool. A recent GAO studyound that among Federal managers amiliar with PART,only 26 percent said that PART results are used in man-agement decision making, and only 14 percent viewed

PART as improving perormance.1 Others have been concerned about the lack o transparency o the PART rat-ings process and have argued that it has ocused too muchon rating programs and not enough on explaining perormance trends and improving perormance.

The Obama Administration will work with the PIC toundamentally recongure how the Federal Governmentassesses program perormance. A reormed perormanceimprovement and analysis ramework will switch theocus rom grading programs as successul or unsuccessul to requiring agency leaders to set priority goalsdemonstrate progress in achieving goals, and explainperormance trends. In order to break down silos, cross-program and cross-agency goals would receive as much

or more ocus as program-specic ones. In developingthis new approach, the Administration will engage thepublic, Congress, and outside experts to develop a betterand more open perormance measurement process thatimproves results and outcomes or Federal Governmentprograms while reducing waste and ineciency.

As a rst step in this process, OMB, during the next ewmonths, will ask each major agency to identiy a limited seto high priority goals, supported by meaningul measuresand quantitative targets, that will serve as the basis or thePresidents meetings with cabinet ocers to review theirprogress toward meeting perormance improvement targetsThe Administration will also identiy on-going opportunitiesto engage the public, stakeholders, and Congress in this eort

A reormed perormance improvement and analysiramework also would emphasize program evaluation. Justas the Administration is proposing historic investments incomparative eectiveness research so that our health careservices will produce better results, the Administrationwill conduct quality research evaluating the eectivenesso government spending in order to produce better results

In the coming months, the Administration will workwith agency leaders and the PIC to develop options or:

Establishing a comprehensive program and perormance measurement system that shows how Fed-eral programs link to agency and Government-widegoals;

Reorming program assessment and perormancemeasurement processes to emphasize the reportingo perormance trends, explanations or the trendsmitigation o implementation risks, and plans orimprovement with accountable leads;

Streamlining reporting requirements under GPRAand PART to reduce the burden on agencies andOMB;

1 Government Perormance Lessons Learned or the Next Administration on Using Peror

mance Inormation to Improve Results, GAO-08-1026T, July 24, 2008, page 9.


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Improving the communication o perormance re-sults to Congress, the public, and other stakeholdersthrough better data display in agency reports andtheExpectMore.gov website; and

Launching a comprehensive research program tostudy the comparative eectiveness o dierent pro-

gram strategies to ensure that programs achievetheir ultimate desired outcomes.

II. Ensuring Responsible Spending o Recover

Act Funds

Passing the Recovery Act was an important step to-ward immediate economic recovery and the restoration olong-term scal stability. But or the Recovery Act to beeective, unds need to be spent quickly and wisely. The

Administration is committed to investing Recovery Actdollars with an unprecedented level o transparency andaccountability so Americans know where their tax dollarsare going and how they are being spent.

The Administration has moved switly to implementprocesses necessary to oversee this massive eort. OMBguidance contains critical action steps that Federal agen-cies must take immediately to meet these objectives andto implement the Act eectively. The guidance calls onagencies to go beyond standard operating proceduresand recognize the unusual nature o Recovery unds. Forexample, agencies are required to ensure that Recoverymoney is distinguished rom other unding in their nan-cial systems, grant and contract writing systems, and re-porting systems. This allows or more ecient trackingo Recovery unds and a better evaluation o their impact.

Recovery Act planning and implementation require-ments are intended to meet crucial accountabilityobjectives to ensure:

Funds are awarded and distributed in a prompt, air,and reasonable manner;

The recipients and uses o all unds are transparentto the public, and the public benets o these undsare reported clearly, accurately, and in a timelymanner;

Funds are used or authorized purposes and instanc-es o raud, waste, error, and abuse are mitigated;

Projects unded under this Act avoid unnecessarydelays and cost overruns; and

Program goals are achieved, including specic pro-gram outcomes and improved results on broadereconomic indicators.

III. Transorming the Federal Workorce

Government perormance depends heavily on the qual-ity o its workorce. Almost hal o the Federal workorce isprojected to retire during the coming decade. This retire-ment wave presents a challenge because the Governmentwill be losing a lot o top talent, expertise, and institutional

memory. I the Government ails to recruit and retain newtalent to critical management and mission-critical positions then it will be dicult or it to achieve key publicobjectives. However, the retirement wave also presents anopportunity to reorm and reenergize the Federal workorce by re-evaluating what the workorce does and howit does it. It will provide an opportunity to transorm the

Governments workorce capacity to address 21st Centurychallenges by implementing 21st Century systems andprocesses to acquire, develop, engage, compensate, recog-nize, and eectively retain talented employees.

The Federal Government will hire several hundredthousand new civilian employees during the next ouryears. In lling these positions, it is essential to restorethe prestige o public service and reorm the recruitmentprocess to improve targeting and outreach to talented

Americans eager to serve.The Federal hiring process also needs to be reormed

The current Federal hiring process is lengthy and en-cumbered by burdensome requirements and outdatedtechnology systems. For example, the Department o

Educations Oce o Federal Student Aid (FSA), usinginormation gathered through interviews with sta members, developed the detailed process map that refectedevery activity, requirement and hand-o associated withFSAs hiring process. The map consisted o 114 discretesteps, and more than 45 hand-os between managersadministrative ocers, and human resources specialistsThe Department has worked to streamline its process

Agencies need to develop strategic workorce plans, posbrie, clear job announcements in plain language, providetimely notication to applicants on the status o their applications, and measure the average length o the hiringprocess along with the eectiveness o hiring eorts andreorms. The Oce o Personnel Management will leadthe retooling o the Federal hiring process.

Additionally, the Federal Government needs to makegreater investments in its existing workorce, help-ing workers build skills and gain expertise to meet newchallenges. Agencies need to increase and improve theirtraining eorts, and implement plans to measure the eectiveness o their training investments. They shouldmake greater use o management rotations both withinand between agencies ollowing the lead o many pri

vate sector organizations which move top talent aroundearly in their careers so that individuals have a widerange o experiences and skills beore they reach topmanagement roles. Agencies should also put a healthyleadership pipeline in place, identiying possible succes-sors or mission critical positions several years beorepotential retirees leave Federal service. General Services

Administration and Oce o Personnel Management willwork with other agencies to improve work-lie issues orthe Federal workorce.

Finally, agencies need to improve methods or evaluating employee perormance, implementing mechanismsor rewarding both success and smart risk-taking orindividuals as well as teams, and creating incentives toretain talented workers.


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2. BUILDING A HIGH-PERFORMING GOVERNMENT 11

Transorming the Federal workorce is a critical compo-nent o enhanced public service or the Nation. Withouta strong civil service, it will be impossible to achievethe high level o perormance that the American peopledeserve.

IV. Managing Across Sectors

Governing eectively in the 21st Century involvesmanaging public sector resources, acquiring needed re-sources rom the private and nonprot sectors, and col-laborating across levels o government. The goal throughall o these activities is to provide the highest level o gov-ernment perormance with the least cost to taxpayers. Inthe new management agenda, the ocus will be on deter-mining and then implementing government services in amanner that provides the best value or taxpayers.

V. Reorming Federal Contracting and Acquisition

Since 2001, spending on Federal contracts has more

than doubled, reaching more than $500 billion in 2008.During this same period, there has been a signicant in-crease in the dollars awarded without ull and open com-petition and an increase in the dollars obligated throughcost-reimbursement contracts. Between scal years 2000and 2008, or example, dollars obligated under cost-re-imbursement contracts nearly doubled, rom $71 billionin 2000 to $135 billion in 2008. Reversing these trendsaway rom ull and open competition and toward cost-re-imbursement contracts could result in savings o billionso dollars each year or the American taxpayer.

When awarding contracts, the Federal Governmentmust strive or an open and competitive process. However,executive agencies must have the fexibility to tailor con-tracts to carry out their missions and achieve the policygoals o the Government. In certain exigent circumstanc-es, agencies may need to consider whether a competitiveprocess will not accomplish the agencys mission. In suchcases, the agency must make sure that the risks associ-ated with noncompetitive contracts are minimized.

Moreover, it is essential that the Federal Governmenthave the capacity to carry out robust and thorough man-agement and oversight o its contracts in order to achieveprogrammatic goals, avoid signicant overcharges, andcurb wasteul spending.

Outsourcing or services raises special concerns. Fordecades, the Federal Government has relied on the pri-

vate sector or core services used by the Government,such as transportation, ood, and maintenance. OMBCircular A-76, rst issued in 1966, was based on the rea-sonable premise that while inherently governmental ac-tivities should be perormed by Government employees,taxpayers may receive more value or their dollars i non-inherently governmental activities that can be providedcommercially are subject to the orces o competition.

However, the line between inherently governmental ac-tivities that should not be outsourced and commercial ac-tivities that may be subject to private-sector competitionhas been blurred and inadequately dened. As a result,

contractors may be perorming inherently governmentalunctions or other critical unctions that are more properly perormed by Government. Agencies and departments must operate under clear rules prescribing whenoutsourcing is and is not appropriate.

On March 4, 2009, the President issued a memorandum on Government contracting that stated: It is the

policy o the Federal Government that executive agenciesshall not engage in noncompetitive contracts except inthose circumstances where their use can be ully justiedand where appropriate saeguards have been put in placeto protect the taxpayer. In addition, there shall be a pre-erence or xed-price type contracts. Cost-reimbursementcontracts shall be used only when circumstances do notallow the agency to dene its requirements sucientlyto allow or a xed-price type contract. Moreover, theFederal Government shall ensure that taxpayer dollarsare not spent on contracts that are wasteul, inecientsubject to misuse, or otherwise not well designed to servethe Federal Governments needs and to manage the riskassociated with the goods and services being procured

The Federal Government must have sucient capacity tomanage and oversee the contracting process rom start tonish, so as to ensure that taxpayer unds are spent wiselyand are not subject to excessive risk. Finally, the FederalGovernment must ensure that those unctions that areinherently governmental in nature are perormed by ex-ecutive agencies and are not outsourced.

The memorandum instructs the Director o the OMBto work with other Administration ocials to issue newguidance on: 1) reviewing contracts; 2) maximizing use ocompetitive procurement processes; 3) appropriate use oall contracts types; 4) assessing the capacity and ability othe Federal acquisition workorce to develop, manage, andoversee acquisitions appropriately; and 5) clariying whenoutsourcing is and is not appropriate.

VI. Transparenc, Technolog, and Participator

Democrac

Transparency promotes accountability and provides inormation or citizens about what their Government is doing. Inormation maintained by the Federal Governmentis a national asset. The Administration will take appropriate action, consistent with law and policy, to discloseinormation rapidly in orms that the public can readily nd and use. Executive departments and agenciesshould harness new technologies to publish online inormation about their operations and decisions in ways thatare readily available to the public. Executive departmentsand agencies also should solicit public eedback to identiy inormation o greatest use to the public.

Technology increasingly allows the Federal Governmentto provide citizens with improved access to inormationabout the use o their tax dollars and with the opportunity to give eedback. The Administration will continue toinnovate in providing better levels o transparency andopenness, and in devising new tools to let citizens havetheir voices heard by those who serve them.


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With citizens increasingly interacting with Governmentagencies through the Internet and agencies more reliantthan ever on technology to drive their operations, it is crit-ical that the Government manage its inormation technol-ogy program eectively and securely. This includes the

delivery o services eciently while reducing redundancy and risk rom outdated or overextended computersystems. It also means addressing complications such asprivacy concerns that arise with new technologies.


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13

CROSSCUTTING PROGRAMS


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15

Section 889 o the Homeland Security Act o 2002 re-quires a homeland security unding analysis be incorpo-rated in the Presidents Budget. This analysis addressesthat legislative requirement, and covers the homelandsecurity unding and activities o all Federal agencies,not only those carried out by Department o HomelandSecurity (DHS), as well as State, local, and private sectorexpenditures. Since not all activities carried out by DHSconstitute traditional homeland security unding (e.g. re-

sponse to natural disasters and Coast Guard search andrescue activities), DHS estimates in this section do notencompass the entire DHS budget.

In the coming months, uture homeland security bud-getary priorities will be inormed by the comprehensiveNational Security Strategy o the Obama Administrationthe Quadrennial Homeland Security Review and otherrelated eorts. One principle that will remain constant

3. HOMELAND SECURITy FUNDING ANALySIS

T 31. Homeland SecuriTy Funding by agency(budget authority in millions o dollars)

Agency2008

Enacted

2008Supplemental/

Emergency

2009Enacted

2009Supplemental/

Emergency

2010Request

Department o Agriculture 5746 5071 5747Department o Commerce 2069 2581 129 2675Department o Deense 17,3744 6577 19,4135 3650 19,3033Department o Education 271 318 306Department o Energy 1,8273 1,9388 2,0075Department o Health and Human Services 4,3006 4,6268 500 4,8398Department o Homeland Security 29,7558 2,7300 34,3509 2,5091 34,7315Department o Housing and Urban Development 19 48 49Department o the Interior 502 527 542Department o Justice 3,2775 2500 3,6413 467 3,9739Department o Labor 478 485 527Department o State 1,7191 1,8092 1,7678Department o Transportation 2053 2209 2479Department o the Treasury 1200 1337 1298Department o Veterans Aairs 3089 3046 3691

Corps o Engineers 420 420 430Environmental Protection Agency 1381 1570 1601Executive Oce o the President 210 191 170General Services Administration 1430 2330 1594 3690 1920National Aeronautics and Space Administration 2052 2218 2204National Science Foundation 3651 10 3772 294 3855Oce o Personnel Management 23 19 22Social Security Administration 1842 2146 2288District o Columbia 34 390 150Federal Communications Commission 23 23 30Intelligence Community Management Account 1220 328 155National Archives and Records Administration 177 207 206Nuclear Regulatory Commission 721 728 646Securities and Exchange Commission 134 140 150Smithsonian Institution 910 923 981United States Holocaust Memorial Museum 80 90 90

Tt, H St bt atht .. .............. ............. .............. .............. ............. .............. . 61,227.8 3,871.6 68,818.5 3,382.1 69,845.0

Less Department o Deense 17,3744 6577 19,4135 3650 19,3033

n-ds H St ba, bSh ......................... .............. ............. ........ 43,853.4 3,213.9 49,405.0 3,017.1 50,541.6

Less Fee-Funded Homeland Security Programs 4,7438 5,4786 5,4145Less Mandatory Homeland Security Programs 2,8870 2,6043 79 2,6227

nt n-ds dst H St ba, bSh .............................. 36,222.6 3,213.9 41,322.0 3,009.2 42,504.4

Plus BioShield 1,2640

nt n-ds dst H St ba , bSh .............................. 36,222.6 3,213.9 41,322.0 3,009.2 43,768.4


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is that the Presidents highest priority is to keep theAmerican people sae.

Data Collection Methodolog and Adjustments

The Federal spending estimates in this analysis uti-lize unding and programmatic inormation collected

on the Executive Branchs homeland security eorts.Throughout the budget ormulation process, the Oce oManagement and Budget (OMB) collects three-year und-ing estimates and associated programmatic inormationrom all Federal agencies with homeland security respon-sibilities. These estimates do not include the eorts o theLegislative or Judicial branches. Inormation in this chap-ter is augmented by a detailed appendix o account-levelunding estimates, which is available on the Analytical

Perspectives CD-ROM.To compile this data, agencies report inormation us-

ing standardized denitions or homeland security.1 Thedata provided by the agencies are developed at the ac-tivity level, which incorporates a set o like programs or

projects, at a level o detail sucient to consolidate theinormation to determine total Governmental spendingon homeland security.

To the extent possible, this analysis maintains pro-grammatic and unding consistency with previous esti-mates. Some discrepancies rom data reported in earlieryears arise due to agencies improved ability to extracthomeland security-related activities rom host programsand rene their characterizations. As in the Budget, whereappropriate, the data is also updated to refect agency ac-tivities, Congressional action, and technical re-estimates.In addition, the Administration may rene denitions

1

Federal homeland security activities are currently dened by OMB in Circular A11 as,activities that ocus on combating and protecting against terrorism, and that occur within the

United States and its territories (this includes Critical Inrastructure Protection (CIP) and Con-

tinuity o Operations (COOP) data), or outside o the United States and its territories i they

support domestically-based systems or activities (e.g., visa processing or pre-screening high-risk

cargo at overseas ports). Such activities include eorts to detect, deter, protect against, and, i

needed, respond to terrorist attacks.

or mission area estimates over time based on additionalanalysis or changes in the way specic activities are char-acterized, aggregated, or disaggregated.

Federal Expenditures

Total unding or homeland security has grown signi-

cantly since the attacks o September 11, 2001. For 2010the Presidents Budget includes $69.8 billion o gross budget authority or homeland security activities, a $1.0 billion (1.5 percent) increase above the 2009 enacted level.2

Excluding mandatory spending, ees, and the Departmento Deenses (DOD) homeland security budget, the 2010Budget proposes a net, non-Deense, discretionary budget authority level o $42.5 billion, which is an increaseo $1.2 billion (3 percent) above the 2009 level (see Table31).

A total o 31 agency budgets include Federal homeland security unding in 2010. Five agenciestheDepartments o Homeland Security, Deense, Healthand Human Services (HHS), Justice (DOJ) and Energy

(DOE)account or approximately $64.9 billion (93 per-cent) o total Government-wide gross discretionary homeland security unding in 2010.

As required by the Homeland Security Act, this analysis presents homeland security risk and spending in threebroad categories: Prevent and Disrupt Terrorist AttacksProtect the American People, Our Critical Inrastructureand Key Resources, and Respond to and Recover FromIncidents.

Prevent and Disrupt Terrorist Attacks

Activities o both intelligence-and-warning and domestic counterterrorism aim to disrupt the ability oterrorists to operate within our borders and prevent theemergence o violent radicalization. Intelligence-and-warning unding covers activities designed to detect ter

2 The 2010 gross homeland security unding request level excludes $1.3 billion or BioShield

T 32. PrevenT and diSruPT TerroriST aTTackS(budget authority in millions o dollars)

Agency 2008Enacted

2008Supplemental/

Emergency

2009Enacted

2009Supplemental/

Emergency

2010Request

Department o Agriculture 2651 1822 2068Department o Commerce 36 Department o Energy 512 507Department o Homeland Security 22,2547 2,6700 25,5756 1,7991 27,5500Department o the Interior 02 02 02Department o Justice 2,8091 2317 2,9657 438 3,2710Department o Labor 04 04Department o State 1,6593 1,7382 1,6863Department o Transportation 383 403 585Department o the Treasury 666 762 735General Services Administration 1150 2250 1100 3000 1510Social Security Administration 02 Intelligence Community Management Account 764

Tt, Pt dspt Tst atts .................................................... 27,288.5 3,126.7 30,739.8 2,142.9 33,048.4


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3. HOMELAND SECURITY FUNDING ANALYSIS 17

rorist activity beore it maniests itsel in an attack sothat proper preemptive, preventive, and protective actioncan be taken. Specically, it is made up o eorts to iden-tiy, collect, analyze, and distribute source intelligenceinormation or the resultant warnings rom intelligenceanalysis. It also includes inormation sharing activitiesamong Federal, State, and local governments, relevant

private sector entities, and the public at large; but it doesnot include most oreign intelligence collectionalthoughthe resulting intelligence may inorm homeland securityactivities. In 2010, unding or intelligence-and-warningis distributed between DHS (53 percent), primarily in theOce o Intelligence and Analysis; and DOJ (43 percent),primarily in the Federal Bureau o Investigation (FBI).The 2010 unding or intelligence and warning activitiesis 12 percent above the 2009 level.

Activities to deny terrorists and terrorist-relatedweapons and materials entry into our country and acrossall international borders include measures to protect bor-der and transportation systems, such as screening air-port passengers, detecting dangerous materials at ports

overseas and at U.S. ports-o-entry, and patrolling ourcoasts and the land between ports-o-entry. Securing ourborders and transportation systems is a complex task.Security enhancements in one area may make anotheravenue more attractive to terrorists. Thereore, our bor-der and transportation security strategy aims to makethe U.S. borders smartertargeting layered resourcestoward the highest risks and sharing inormation sothat rontline personnel can stay ahead o potential ad-

versarieswhile acilitating the fow o legitimate visi-tors and commerce. The majority o unding or borderand transportation security ($24.6 billion, or 92 percent,in 2010) is in DHS, largely or the U.S. Customs andBorder Protection (CBP), the Transportation Security

Administration (TSA), and the U.S Coast Guard. OtherDHS bureaus and other Federal Departments, such asthe Departments o State and Justice, also play a signi-cant role. The Presidents 2010 request would increase

unding or border and transportation security activitiesby 8 percent over the 2009 level.

Funding or domestic counterterrorism containsFederal and Federally-supported eorts to identiythwart, and prosecute terrorists in the United States. Italso includes pursuit not only o the individuals directlyinvolved in terrorist activity, but also their sources o sup

port: the people and organizations that knowingly undthe terrorists and those that provide them with logisticaassistance. In todays world, preventing and interdictingterrorist activity within the United States is a priority orlaw enorcement at all levels o government. The largestcontributors to the domestic counterterrorism goal arelaw enorcement organizations: DOJ (largely or the FBIand DHS (largely or ICE), account or 52 and 46 percento unding or 2010, respectively.

Protect the American People, Our CriticalInrastructure, and Ke Resources

Critical inrastructure includes the assets, systems

and networks, whether physical or virtual, so vital to theUnited States that their incapacitation or destructionwould have a debilitating eect on security, national eco-nomic security, public health or saety, or any combinationthereo. Key resources are publicly or privately controlledresources essential to the minimal operations o the economy and government whose disruption or destructioncould have signicant consequences across multiple di-mensions, including national monuments and icons.

Eorts to protect the American people include deending against catastrophic threats through researchdevelopment, and deployment o technologies, systemsand medical measures to detect and counter the threato chemical, biological, radiological, and nuclear (CBRN)weapons. Funding encompasses activities to protectagainst, detect, deter, or mitigate the possible terroristuse o CBRN weapons through detection systems andprocedures, improving decontamination techniques, and

T 33. ProTecT THe american PeoPle, our criTicalinFraSTrucTure, and key reSourceS

(budget authority in millions o dollars)

Agency 2008Enacted

2008Supplemental/

Emergency

2009Enacted

2009Supplemental/

Emergency

2010Request

Department o Agriculture 2553 2697 3105Department o Commerce 1572 2030 110 2104Department o Deense 16,8811 6577 18,8527 3650 18,7597

Department o Energy 1,6665 1,7215 1,7862Department o Health and Human Services 2,2007 2,5106 500 3,8611Department o Homeland Security 4,8925 5,3609 5000 3,9705Department o Justice 4586 183 6660 29 6300Department o Veterans Aairs 2361 2282 2709National Aeronautics and Space Administration 2052 2218 2204National Science Foundation 3651 10 3772 294 3855Social Security Administration 1730 2134 2282Other Agencies 6813 80 7348 690 7469

Tt, Ptt th a Pp, o ct istt, k rss ......... ............. .............. .............. ............. .. 28,172.6 684.9 31,359.8 1,027.3 31,380.2


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the development o medical countermeasures, such asvaccines, drugs and diagnostics to protect the public romthe threat o a CBRN attack or other public health emer-gency. The agencies with the most signicant resourcesto help develop and eld technologies to counter CBRNthreats are: DOD ($5.0 billion, or 56 percent, o the 2010total); HHS, largely or research at the National Institutes

o Health (NIH) and or advanced development o medi-cal countermeasures ($2.3 billion, or 26 percent, o the2010 total); and DHS ($1.5 billion, or 12 percent, o the2010 total). The Presidents 2010 request maintains und-ing or activities to deend against catastrophic threats.In addition to the 2010 request, DHS will have access to2009 resources or the deployment o new radiation portalmonitor equipment at ports o entry once successul test-ing and evaluation is completed.

Protecting the Nations critical inrastructure and keyresources (CI/KR) is a complex challenge or two reasons:(1) the diversity o inrastructure and (2) the high levelo private ownership (85 percent) o the Nations criti-cal inrastructure and key assets. Eorts to protect CI/

KR include uniying disparate eorts to protect criticalinrastructure across the Federal Government, and withState, local, and private stakeholders; accurately assess-ing CI/KR and prioritizing protective action based on risk;and reducing threats and vulnerabilities in cyberspace.DOD continues to report the largest share o unding inthis category or 2010 ($13.7 billion, or 60 percent), whichincludes programs ocusing on physical security and im-proving the militarys ability to prevent or mitigate theconsequences o attacks against departmental personneland acilities. DHS has overall responsibility or prioritiz-

ing and executing inrastructure protection activities atthe national level and accounts or $4.5 billion (20 per-cent) o 2010 unding. Another 25 agencies also reportunding to protect their own assets and work with Stateslocalities, and the private sector to reduce vulnerabilitiesin their areas o expertise.

The Presidents 2010 request increases unding or ac

tivities to protect the Nations people, critical inrastructure and key assets by $20.3 million. Funding in scalyear 2009 included a number o one-time non-recurringunding increases. When compared to 2008, the 2010 request represents a $3.2 billion (11 percent) increase overthe two-year period.

Respond To and Recover From Incidents

The ability to respond to and recover rom incidents requires eorts to bolster capabilities nationwide to preventand protect against terrorist attacks, and also minimizethe damage rom attacks through eective response andrecovery. This includes programs that help to plan, equip

train, and practice the response capabilities o many di-erent response units (including rst responders, such aspolice ocers, reghters, emergency medical providerspublic works personnel, and emergency management o-cials) that are instrumental in the preparedness to mobilize without warning or an emergency. Building thiscapability encompasses a broad range o agency incidentmanagement activities, as well as grants and other assis-tance to States and localities or rst responder preparedness capabilities. Response to natural disasters and othermajor incidents, including catastrophic natural events

T 34. reSPond To and recover From incidenTS Funding(budget authority in millions o dollars)

Agency 2008 Enacted

2008Supplemental/

Emergency2009

Enacted

2009Supplemental/

Emergency2010

Request

Department o Agriculture 542 552 574Department o Commerce 461 513 531Department o Deense 4933 5607 5436Department o Education 06 04 04Department o Energy 1608 1662 1706Department o Health and Human Services 2,0999 2,1163 2,2427Department o Homeland Security 2,4254 600 3,2100 2100 2,9806Department o Housing and Urban Development 19 48 49Department o the Interior 29 37 39Department o Justice 98 97 88Department o Labor 69 148 176Department o State 123 170 243Department o Transportation 177 188 193

Department o the Treasury 383 401 362Department o Veterans Aairs 728 764 982Environmental Protection Agency 582 702 706Executive Oce o the President 95 84 52General Services Administration 30 30 30Oce o Personnel Management 17 07 08Social Security Administration 110 12 06District o Columbia 34 390 150Federal Communications Commission 23 23 30Intelligence Community Management Account 456 328 155National Archives and Records Administration 11 26 17Securities and Exchange Commission 21 20 20

Tt, rsp T r F its ........................ 5,580.8 60.0 6,507.6 210.0 6,378.9


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3. HOMELAND SECURITY FUNDING ANALYSIS 19

such as Hurricane Katrina and chemical or oil spills,do not directly all within the denition o a homelandsecurity activity or unding purposes, as dened by sec-tion 889 o the Homeland Security Act o 2002. However,preparing or terrorism-related threats includes manyactivities that also support preparedness or catastrophicnatural and man-made disasters. Additionally, lessons

learned rom the response to Hurricane Katrina havebeen used to revise and strengthen catastrophic re-sponse planning. The agencies with the most signicantparticipation in this eort are: HHS ($2.2 billion, or 35percent, o the 2010 total); and DHS ($3.0 billion, or 47percent, o the 2010 total). Twenty-three other agenciesinclude emergency preparedness and response unding.The Presidents 2010 request would decrease unding by$128.7 million (2 percent) below the 2009 level, largelydue to reductions in state and local grant programs thatwere not awarded based on a risk methodology and weresubject to earmarking or non-risk based projects.

Continue to Strengthen the Homeland

Securit Foundation

Preventing and disrupting terrorist attacks; protectingthe American people, critical inrastructure, and key re-sources; and responding to and recovering rom incidentsthat do occur are enduring homeland security responsi-bilities. For the long-term ulllment o these responsibil-ities it is necessary to continue to strengthen the princi-ples, systems, structures, and institutions that cut acrossthe homeland security enterprise and support our activi-ties to secure the Nation. Long-term success across sev-eral cross-cutting areas is essential to protect the UnitedStates. While these areas are not quantiable in terms obudget gures, they are important elements in the man-agement and budgeting processes. As the Administrationsets priorities and determines unding or new and exist-ing homeland security programs, consideration must begiven to areas such as the assessment and management orisk, which underlie the ull spectrum o homeland secu-rity activities. This would include decisions about when,where, and how to invest resources in capabilities or as-sets that eliminate, control, or mitigate risks. Likewise,research and development initiatives promote the ap-plication o science and technology to homeland securityactivities, and can drive improvements in processes andeciencies to reduce the vulnerability o the nation.

Non-Federal Expenditures3

State and local governments and private-sector rmsalso have devoted resources o their own to the task odeending against terrorist threats. Some o the addi-tional spending has been o a one-time nature, such as in-

vestment in new security equipment and inrastructure;some additional spending has been ongoing, such as hir-ing more personnel, and increasing overtime or existing

3 OMB does not collect detailed homeland security expenditure data rom State, local, or

private entities directly.

security personnel. In many cases, own-source spendinghas supplemented the resources provided by the FederalGovernment.

Many governments and businesses, though not all,place a high priority on, and provide additional resourc-es, or security. A 2004 survey conducted by the National

Association o Counties ound, that as a result o th

homeland security process o intergovernmental planningand unding, three out o our counties believed they werebetter prepared to respond to terrorist threats. Moreoveralmost 40 percent o the surveyed counties had appropri-ated their own unds to assist with homeland security.Own-source resources supplemented unds provided byStates and the Federal Government. However, the samesurvey revealed that 54 percent o counties had not usedany o their own unds.4 The surveys ndings were basedon the responses rom 471 counties (15 percent) nation-wide, out o 3,140 counties or equivalents.5

A recent study conducted by the Heritage Foundationone o the ew organizations to compile homeland securityspending estimates rom states and localities, provides

data on state and local spending in support o home-land security activities.6 The report surveyed 43 juris-dictions that are eligible or DHS Urban Areas SecurityInitiative (UASI) grant unds due to the risk o a terroristattack.7 These jurisdictions are home to approximately145 million people or 47 percent o the total United Statespopulation. According to the report, the 2007 homelandsecurity budgets or the jurisdictions examined (which in-clude 26 states and the District o Columbia, 50 primarycities, and 35 primary counties) totaled $37 billion, whilethe same entities received slightly more than $2 billionin ederal homeland security grants.8 The report urtherstates that rom 2000 - 2007, these states and localitiesspent $220 billion on homeland security activities, whichincludes increases o three to six percent a year or lawenorcement and re services budgets, and received over$10 billion in ederal grants. Caliornia, the most popu-lous state, is also the largest recipient o ederal home-land security unds, having received almost $1.5 billionrom 2000 - 2007, while spending over $45 billion in Stateand local unding. Over the same time period, the top tenmost populous states (including Caliornia) spent $148billion on state and local homeland security related ac-tivities.

4 Source: National Association o Counties, Homeland Security Funding2003 State

Homeland Security Grants Programs I and II.5 The National Association o Counties conducted a survey through its various state as

sociations (48), responses were received rom 471 counties in 26 states.

6 Source: Matt A. Mayer, An Analysis o Federal, State, and Local Homeland Security Bud-

gets, A Report o the Heritage Center or Data Analysis, CDA09-01, March 9, 2009, at http://

www.heritage.org/Research/HomelandSecurity/upload/CDA_09_01.pd. Figures cited in this re-

port have not been independently veried by the Oce o Management and Budget.

7 The Heritage Foundation reports methodology in selecting the states, cities, and counties

to include in the report is as ollows: the state had to possess a designated UASI jurisdiction and

the city and county had to belong to a designated UASI jurisdiction that had received at least

$15 million rom 2003 to 2007 rom the DHS.

8 The Heritage Foundation reports budget data or homeland security included primary

law enorcement agencies, re departments, hom

Analytical Perspectives of 2010 Federal Budget

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