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ANALYTICAL PERSPECTIVES BUDGET OF THE UNITED STATES GOVERNMENT Fiscal Year 2006 THE BUDGET DOCUMENTS Budget of the United States Government, Fiscal Year 2006 contains the Budget Message of the President, information on the President’s budget and management priorities, and budget overviews organized by agency. Analytical Perspectives, Budget of the United States Government, Fiscal Year 2006 contains analyses that are designed to highlight specified subject areas or provide other significant presentations of budget data that place the budget in perspective. This volume includes economic and accounting analyses; information on Federal receipts and collections; analyses of Federal spending; detailed information on Federal borrowing and debt; baseline or current services estimates; and other technical presentations. The Analytical Perspectives volume also contains a CD–ROM with several large tables previously published in the budget documents, along with summaries of new performance assessments and updates on earlier assessments for approximately 600 Federal programs. Historical Tables, Budget of the United States Government, Fiscal Year 2006 provides data on budget receipts, outlays, surpluses or deficits, Federal debt, and Federal employment over an extended time period, generally from 1940 or earlier to 2006. To the extent feasible, the data have been adjusted to provide consistency with the 2006 Budget and to provide comparability over time. Appendix, Budget of the United States Government, Fiscal Year 2006 contains detailed information on the various appropriations and funds that constitute the budget and is designed primarily for the use of the Appropriations Committee. The Appendix contains more detailed financial information on individual programs and appropriation accounts than any of the other budget documents. It includes for each agency: the proposed text of appropriations language, budget schedules for each account, new legislative proposals, explanations of the work to be performed and the funds needed, and proposed general provisions applicable to the appropriations of entire agencies or group of agencies. Information is also provided on certain activities whose outlays are not part of the budget totals. AUTOMATED SOURCES OF BUDGET INFORMATION The information contained in these documents is available in electronic format from the following sources: Budget CD-ROM. The CD-ROM contains all of the budget documents and software to support reading, printing, and searching the documents. The CD-ROM also has many of the tables in the budget in spreadsheet format. The budget CD–ROM also contains the material on the separate Analytical Perspectives CD–ROM. Internet. All budget documents, including documents that are released at a future date, will be available for downloading in several formats from the Internet. To access documents through the World Wide Web, use the following address: http://www.budget.gov/budget For more information on access to electronic versions of the budget documents (except CD–ROMs), call (202) 512–1530 in the D.C. area or toll-free (888) 293–6498. To purchase the budget CD–ROM or printed documents call (202) 512-1800. GENERAL NOTES 1. All years referred to are fiscal years, unless otherwise noted. 2. Detail in this document may not add to the totals due to rounding. U.S. GOVERNMENT PRINTING OFFICE WASHINGTON 2005 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: (202) 512–1800 Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001 TABLE OF CONTENTS Page List of Charts and Tables ............................................................................................. iii Introduction 1. Introduction ....................................................................................................... 3 Performance and Management Assessments 2. Budget and Performance Integration .............................................................. 9 Crosscutting Programs 3. Homeland Security Funding Analysis ............................................................. 37 4. Strengthening Federal Statistics ..................................................................... 53 5. Research and Development .............................................................................. 61 6. Federal Investment ........................................................................................... 73 7. Credit and Insurance ........................................................................................ 85 8. Aid to State and Local Governments ............................................................... 123 9. Integrating Services with Information Technology ........................................ 173 10. Federal Drug Control Funding ......................................................................... 181 11. California-Federal Bay-Delta Program Budget Crosscut (CALFED) ............ 183 Economic Assumptions and Analyses 12. Economic Assumptions ...................................................................................... 187 13. Stewardship ....................................................................................................... 199 14. National Income and Product Accounts .......................................................... 227 Budget Reform Proposals 15. Budget Reform Proposals .................................................................................. 235 Federal Borrowing and Debt 16. Federal Borrowing and Debt ............................................................................ 245 i ii TABLE OF CONTENTS—Continued Page Federal Receipts and Collections 17. Federal Receipts ................................................................................................ 263 18. User Charges and Other Collections ............................................................... 301 19. Tax Expenditures .............................................................................................. 315 Dimensions of the Budget 20. Comparison of Actual to Estimated Totals ..................................................... 361 21. Outlays to the Public, Net and Gross .............................................................. 369 22. Trust Funds and Federal Funds ...................................................................... 371 23. Off-Budget Federal Entities and Non-Budgetary Activities .......................... 377 24. Federal Employment and Compensation ........................................................ 381 Current Services Estimates 25. Current Services Estimates .............................................................................. 389 The Budget System and Concepts 26. The Budget System and Concepts ................................................................... 407 Detailed Functional Table 27. Detailed Functional Table ................................................................................ CD-ROM Federal Programs by Agency and Account 28. Federal Programs by Agency and Account ...................................................... CD-ROM Program Assessment Rating Tool (PART), Program Summaries 29. PART Assessments by Agency ......................................................................... CD-ROM LIST OF CHARTS AND TABLES iii LIST OF CHARTS AND TABLES LIST OF CHARTS Page 2–1 4–1 4–2 5–1 7–1 7–2 13–1 13–2 13–3 13–4 13–5 13–6 13–7 13–8 17–1 20–1 26–1 Comparison of Ratings from Initial PART to Most Recent Reassess ............................................. ICSP Statistical Quality and Program Performance Dimensions, 2006 ......................................... Most Recent PART Summary Ratings for Statistical Programs ..................................................... Scores of R&D PART Assessments .................................................................................................... Total Mortgages, 1990–2003 .............................................................................................................. Face Value of Federal Credit Outstanding ....................................................................................... A Presentation of the Federal Government’s and the Nation’s Financial Condition .................... Net Federal Liabilities ........................................................................................................................ Health Care Cost Alternatives ........................................................................................................... Alternative Discretionary Spending Assumptions ............................................................................ Alternative Productivity Assumptions .............................................................................................. Alternative Fertility Assumptions ..................................................................................................... Alternative Mortality Assumptions ................................................................................................... Alternative Immigration Assumptions .............................................................................................. Major Provisions of the Tax Code Under the 2001, 2003 and 2004 Tax Cuts ............................... Illustrative Range of Budget Outcomes ............................................................................................ Relationship of Budget Authority to Outlays for 2006 .................................................................... 13 54 56 62 92 108 201 205 210 211 212 212 213 214 264 367 418 LIST OF TABLES Page Performance and Management Assessments Budget and Performance Integration: 2–1 Program Ratings are Improving ................................................................................................ 2–2 Sections of the PART .................................................................................................................. 2–3 The PART Questionnaire ........................................................................................................... 2–4 The PART, By Category ............................................................................................................. 2–5 Program Assessment and Funding Information ...................................................................... Crosscutting Programs Homeland Security Funding Analysis: 3–1 Homeland Security Funding by Agency ................................................................................... 3–2 Homeland Security Funding by National Strategy Mission Area .......................................... 3–3 Intelligence and Warning Funding ........................................................................................... 3–4 Border and Transportation Security Funding .......................................................................... 3–5 Domestic Counterterrorism Funding ........................................................................................ 3–6 Protecting Critical Infrastructure and Key Assets Funding ................................................... 3–7 Defending Against Catastrophic Threats Funding .................................................................. 3–8 Emergency Preparedness and Response Funding ................................................................... 3–9 Discretionary Fee-funded Homeland Security Activities by Agency ...................................... 3–10 Mandatory Homeland Security Funding by Agency ................................................................ 3–11 Baseline Estimates—Total Homeland Security Funding by Agency ..................................... 3–12 Homeland Security Funding by Budget Function ................................................................... 3–13 Baseline Estimates—Homeland Security Funding by Budget Function ............................... Appendix—Homeland Security Mission Funding by Agency and Budget Account ............... 12 17 17 19 20 38 39 40 41 43 44 45 47 49 49 50 51 52 CD-ROM v vi ANALYTICAL PERSPECTIVES LIST OF TABLES—Continued Page Strengthening Federal Statistics: 4–1 2004–2006 Budget Authority for Principal Statistical Agencies ............................................ Research and Development: 5–1 Permanent Extension of the Research and Experimentation Tax Credit ............................. 5–2 Federal Research and Development Spending ......................................................................... 5–3 Federal Science and Technology Budget .................................................................................. 5–4 Agency Detail of Selected Interagency R&D Efforts ............................................................... 5–5 Allocation of Federal Research Funding, 2004 and 2005 ........................................................ Federal Investment: 6–1 Composition of Federal Investment Outlays ............................................................................ 6–2 Federal Investment Budget Authority and Outlays: Grant and Direct Federal Programs.. 6–3 Summary of PART Ratings and Scores for Direct Federal Investment Programs ............... 6–4 Net Stock of Federally Financed Physical Capital .................................................................. 6–5 Net Stock of Federally Financed Research and Development ................................................ 6–6 Net Stock of Federally Financed Education Capital ............................................................... Credit and Insurance: Text Tables: Summary of PART Scores ...................................................................................................... Percentage of Fannie Mae and Freddie Mac Loans to First-time Minority Homebuyers Compared to the Full Marketplace, 2001–2003 Averages ............................................... 7–1 Estimated Future Cost of Outstanding Federal Credit Programs ......................................... 7–2 Reestimates of Credit Subsidies on Loans Disbursed Between 1992–2004 .......................... 7–3 Direct Loan Subsidy Rates, Budget Authority, and Loan Levels, 2004–2006 ....................... 7–4 Loan Guarantee Subsidy Rates, Budget Authority, and Loan Levels 2004–2006 ................ 7–5 Summary of Federal Direct Loans and Loan Guarantees ...................................................... 7–6 Direct Loan Write-Offs and Guaranteed Loan Terminations for Defaults ............................ 7–7 Appropriations Acts Limitations on Credit Loan Levels ......................................................... 7–8 Face Value of Government-Sponsored Enterprise Lending .................................................... 7–9 Lending and Borrowing By Government–Sponsored Enterprises (GSEs) ............................. 7–10 Direct Loan Transactions of the Federal Government ............................................................ 7–11 Guaranteed Loan Transactions of the Federal Government .................................................. Aid to State and Local Governments: 8–1 Federal Grant Outlays by Agency ............................................................................................. 8–2 Summary of PART Ratings and Scores for Grants to State and Local Governments .......... 8–3 Trends in Federal Grants to State and Local Governments ................................................... 8–4 Federal Grants to State and Local Governments—Budget Authority and Outlays ............. 8–5 Summary of Programs by Agency, Bureau, and Program ...................................................... 8–6 Summary of Programs by State ................................................................................................ 8–7 National School Lunch Program ............................................................................................... 8–8 Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) ........... 8–9 Child and Adult Care Food Program ........................................................................................ 8–10 State Administrative Matching Grants for Food Stamp Program ......................................... 8–11 Title I Grants to Local Educational Agencies .......................................................................... 8–12 Improving Teacher Quality State Grants ................................................................................. 8–13 Special Education—Grants to States ........................................................................................ 8–14 Rehabilitation Services—Vocational Rehabilitation Grants to States ................................... 8–15 State Children’s Health Insurance Program ............................................................................ 8–16 Grants to States for Medicaid ................................................................................................... 8–17 Temporary Assistance for Needy Families (TANF)—Family Assistance Grants .................. 8–18 Child Support Enforcement—Federal Share of State and Local Administrative Costs and Incentives ................................................................................................................................. 57 65 66 68 69 71 75 76 79 82 83 84 87 95 109 110 112 113 114 115 118 120 121 CD-ROM CD-ROM 123 129 131 134 142 143 144 145 146 147 148 149 150 151 152 153 154 155 vii LIST OF CHARTS AND TABLES LIST OF TABLES—Continued Page 8–19 Child Care and Development Block Grant ............................................................................... 8–20 Child Care and Development Fund—Mandatory .................................................................... 8–21 Child Care and Development Fund—Matching ....................................................................... 8–22 Head Start ................................................................................................................................... 8–23 Foster Care—Title IV–E ............................................................................................................ 8–24 State Homeland Security Grant Program ................................................................................ 8–25 Public Housing Operating Fund ................................................................................................ 8–26 Section 8 Moderate Rehabilitation ............................................................................................ 8–27 Housing Choice Vouchers .......................................................................................................... 8–28 Public Housing Capital Fund .................................................................................................... 8–29 HOME Investment Partnerships Program ............................................................................... 8–30 Airport Improvement Program .................................................................................................. 8–31 Airport Improvement Program—Emergency Response Fund ................................................. 8–32 Airport Improvement Program—Emergency Assistance to Airports ..................................... 8–33 Highway Planning and Construction ........................................................................................ 8–34 Federal Transit Formula Grants and Research ....................................................................... Integrating Services with Information Technology: 9–1 Effectiveness of Agency’s IT Management and E–Gov Processes .......................................... 9–2 Management Guidance .............................................................................................................. 9–3 Status of Presidential E-Government Initiatives ..................................................................... Federal Drug Control Funding: 10–1 Federal Drug Control Funding, FY 2004–2006 ........................................................................ California-Federal Bay-Delta Program Budget Crosscut (CALFED): CALFED-Related Federal Funding Budget Crosscut (Summary) .......................................... CALFED 1998–2006 Budget Crosscut Methodology ............................................................... CALFED-Related Federal Funding ........................................................................................... Economic and Accounting Analyses Economic Assumptions and Analyses: 12–1 Economic Assumptions ............................................................................................................... 12–2 Comparison of Economic Assumptions ..................................................................................... 12–3 Comparison of Economic Assumptions in the 2005 and 2006 Budgets ................................. 12–4 Adjusted Structural Balance ..................................................................................................... 12–5 Sensitivity of the Budget to Economic Assumptions ............................................................... Stewardship: 13–1 Government Assets and Liabilities ........................................................................................... 13–2 Long–Run Budget Projections of 2006 Budget Policy ............................................................. 13–3 Actuarial Present Values of Benefits in Excess of Future Taxes and Premiums ................. 13–4 National Wealth .......................................................................................................................... 13–5 Economic and Social Indicators ................................................................................................. National Income and Product Accounts: 14–1 Federal Transactions in the National Income and Product Accounts, 1995–2006 ............... 14–2 Relationship of the Budget to the Federal Sector, NIPA’s ...................................................... 14–3 Federal Receipts and Expenditures in the NIPA’s, Quarterly, 2004–2006 ........................... Budget Reform Proposals Budget Reform Proposals: 15–1 General Purpose Discretionary Caps and Adjustments .......................................................... 15–2 Transportation Category for Highways and Mass Transit Spending .................................... 15–3 PAYGO Proposals ....................................................................................................................... 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 CD-ROM CD-ROM CD-ROM 181 183 CD-ROM CD-ROM 191 193 194 194 197 206 209 217 220 222 230 231 232 235 237 239 viii ANALYTICAL PERSPECTIVES LIST OF TABLES—Continued Page Federal Borrowing and Debt Federal Borrowing and Debt: 16–1 Trends in Federal Debt Held by the Public ............................................................................. 16–2 Federal Government Financing and Debt ................................................................................ 16–3 Agency Debt ................................................................................................................................ 16–4 Debt Held by Government Accounts ......................................................................................... 16–5 Federal Funds Financing and Change in Debt Subject to Statutory Limit .......................... 16–6 Foreign Holdings of Federal Debt ............................................................................................. Federal Receipts and Collections Federal Receipts: 17–1 Receipts by Source–Summary ................................................................................................... 17–2 Effect on Receipts of Changes in the Social Security Taxable Earnings Base ...................... 17–3 Effect of Proposals on Receipts .................................................................................................. 17–4 Receipts by Source ...................................................................................................................... User Charges and Other Collections: 18–1 Gross Outlays, User Charges, Other Offsetting Collections and Receipts from the Public, and Net Outlays ...................................................................................................................... 18–2 Total User Charge Collections ................................................................................................... 18–3 User Fee and Other User Charge Proposals ............................................................................ 18–4 Offsetting Collections and Receipts from the Public ............................................................... 18–5 Offsetting Receipts by Type ....................................................................................................... Tax Expenditures: 19–1 Estimates of Total Income Tax Expenditures .......................................................................... 19–2 Estimates of Tax Expenditures for the Corporate and Individual Income Taxes ................. 19–3 Income Tax Expenditures Ranked by Total 2006–2010 Projected Revenue Effects ............. 19–4 Present Value of Selected Tax Expenditures for Activity in Calendar Year 2004 ................ 19–5 Outlay Equivalent Estimates of Income Tax Expenditures .................................................... Appendix: 1. Comparison of Current Tax Expenditures with Those Implied by a Comprehensive Income Tax .................................................................................................................................. 2. Comparison of Current Tax Expenditures with Those Implied by a Comprehensive Consumption Tax ........................................................................................................................... 3. Revised Tax Expenditure Estimates ......................................................................................... Dimensions of the Budget Comparison of Actual to Estimated Totals: 20–1 Comparison of Actual 2004 Receipts with the Initial Current Services Estimates .............. 20–2 Comparison of Actual 2004 Outlays with the Initial Current Services Estimates ............... 20–3 Comparison of the Actual 2004 Deficit with the Initial Current Services Estimate ............ 20–4 Comparison of Actual and Estimated Outlays for Mandatory and Related Programs Under Current Law ................................................................................................................ 20–5 Reconciliation of Final Amounts for 2004 ................................................................................ 20–6 Comparison of Actual and Estimated Surpluses or Deficits Since 1982 ............................... 20–7 Differences Between Estimated and Actual Surpluses or Deficits for Five-year Budget Estimates Since 1982 .............................................................................................................. Outlays to Public, Net and Gross: 21–1 Total Outlays, Net and Gross of Offsetting Collections and Receipts from the Public, by Agency, 2004–2006 .................................................................................................................. Trust Funds and Federal Funds: 22–1 Receipts, Outlays, and Surplus or Deficit by Fund Group ...................................................... 22–2 Income, Outgo, and Balances of Trust Funds Group .............................................................. 245 247 251 254 256 258 263 263 296 299 301 304 305 310 311 317 320 324 326 327 357 358 358 361 362 363 364 365 366 366 369 371 373 ix LIST OF CHARTS AND TABLES LIST OF TABLES—Continued Page 22–3 Relationship of Total Federal Fund and Trust Fund Receipts to Unified Budget Receipts, Fiscal Year 2004 ...................................................................................................................... Trust Funds and Federal Funds: 22–4 Income, Outgo, and Balances of Major Trust Funds ............................................................... 22–5 Income, Outgo, and Balances of Selected Federal Funds ....................................................... Off–Budget Federal Entities and Non–Budgetary Activities: 23–1 Comparison of Total, On–Budget, and Off–Budget Transactions .......................................... Federal Employment and Compensation: 24–1 Federal Employment in the Executive Branch ........................................................................ 24–2 Total Federal Employment (as measured by total positions filled) ........................................ 24–3 Total Federal Employment (as measured by Full-Time Equivalents) ................................... 24–4 Personnel Compensation and Benefits ..................................................................................... Current Service Estimates Current Service Estimates: 25–1 Baseline Category Totals ........................................................................................................... 25–2 Alternative Baseline Assumptions ............................................................................................ 25–3 Summary of Economic Assumptions ......................................................................................... 25–4 Beneficiary Projections for Major Benefit Programs ............................................................... 25–5 Impact of Regulations, Expiring Authorizations, and Other Assumptions in the Baseline 25–6 Baseline Receipts by Source ...................................................................................................... 25–7 Change in Baseline Outlay Estimates by Category. ................................................................ 25–8 Current Services Outlays by Function ..................................................................................... 25–9 Current Services Outlays by Agency ........................................................................................ 25–10 Current Services Budget Authority by Function ..................................................................... 25–11 Current Services Budget Authority by Agency ........................................................................ 25–12 Current Services Budget Authority by Function, Category and Program ............................. 25–13 Current Services Outlays by Function, Category and Program ............................................. 374 CD-ROM CD-ROM 377 382 383 384 385 390 392 392 393 394 399 400 401 402 403 404 CD-ROM CD-ROM Budget System and Concepts and Glossary The Budget System and Concepts: 26–1 Totals for the Budget and the Federal Government ............................................................... 26–2 Department of Defense Contributions for Tricare Benefits Earned by Military Personnel.. 411 423 Detailed Functional Tables Detailed Functional Tables: 27–1 Budget Authority and Outlays by Function, Category and Program ..................................... CD-ROM Federal Programs by Agency and Account Federal Programs by Agency and Account: 28–1 The Budget for Fiscal Year 2006 by Agency and Account ...................................................... CD-ROM Program Rating Assessment Tool (PART), Program Summaries PART Summaries: PART Summary File .................................................................................................................. PART Data File—Funding, Scores, and Ratings ..................................................................... CD-ROM CD-ROM INTRODUCTION 1 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. 3 4 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. ANALYTICAL PERSPECTIVES 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. Other The following material appears only on the enclosed Analytical Perspectives CD ROM: • Detailed Functional Tables. Table 27–1. ‘‘Budget Authority and Outlays by Function, Category, and Program’’. • Federal Programs by Agency and Account. Table 28–1. ‘‘Federal Programs by Agency and Account’’. • PART Summaries. This section provides one-page summaries of the program assessments and a summary list of all of the assessments with funding, scores, and ratings. PERFORMANCE AND MANAGEMENT ASSESSMENTS 7 2. BUDGET AND PERFORMANCE INTEGRATION The President’s Management Agenda (PMA) aims to improve the management and performance of the Federal government. The Budget and Performance Integration (BPI) initiative of the PMA specifically directs departments to improve program results and to ensure that performance is routinely considered in funding and management decisions. It’s not enough to advocate reform. You have to be able to get it done. And that’s what we have done. When it comes to reforming schools to provide excellent education for all our children, we got the job done. Results matter. When it comes to health care reforms to give families more access and more choices, results matter. When it comes to improving our economy and creating jobs, results matter. When it comes to having a strong farm economy, results matter. When it comes to better securing our homeland, fighting the forces of terror, and spreading the peace, results matter. President George W. Bush Mankato, Minnesota August 4, 2004 I. THE OBJECTIVES OF THE BUDGET AND PERFORMANCE INTEGRATION INITIATIVE The Federal government spends over $2 trillion a year on its programs. In a results-oriented government, the burden of proof rests with these Federal programs and their advocates to show that programs are achieving results for the American people in the most effective and efficient manner. Furthermore, it is the government’s responsibility to make difficult decisions about whether to increase or decrease the funding of a program, or terminate a program’s funding entirely if it is not producing the desired results. The Budget and Performance Integration Initiative is making this link between a program’s performance and decisions about its funding more routine. American taxpayers expect managers of Federal programs to constantly assess whether their programs are achieving the desired results at acceptable costs. If the answer is ‘‘no’’ or ‘‘we don’t know,’’ the taxpayer expects those in charge to take immediate corrective action. This results-focus is evident in the meaningful progress that agencies make in the BPI Initiative, which has three specific objectives all supporting the goal of using performance information in budgeting and improving program performance and efficiency: • Increasing accountability, effectiveness, and efficiency—implementing plans designed to improve the management and performance of programs. • Investing in high pay-off or high priority activities—focusing most on programs that can achieve demonstrably greater results for the same or less cost. • Improving program design—developing, enacting, and implementing legislative or other proposals to fix flaws identified through the Program Assessment Rating Tool (PART) that impede performance. 9 10 ANALYTICAL PERSPECTIVES What is the PART and How is it Used? The Program Assessment Rating Tool (PART) is designed to help assess the management and performance of individual programs. The PART evaluates a program’s purpose, design, planning, management, results, and accountability to determine its overall effectiveness. Recommendations are then made to improve program results. To reflect that Federal programs deliver goods and services using different mechanisms, the PART is customized by program category. The seven PART categories are: Direct Federal, Competitive Grant, Block/Formula Grant, Research and Development, Capital Assets and Acquisition, Credit, and Regulatory. The PART types apply to both discretionary and mandatory programs. Each PART includes 25 basic questions and some additional questions tailored to the program type all divided up into four sections. The first section of questions gauges whether a program’s design and purpose are clear and defensible. The second section involves strategic planning, and weighs whether the agency establishes valid annual and long-term goals for its programs. The third section rates the management of an agency’s program, including financial oversight and program improvement efforts. The fourth section of questions focuses on results that programs can report with accuracy and consistency. The answers to questions in each of the four sections result in a numerical score for each section from 0 to 100 (100 being the best score). Because reporting a single weighted numerical rating could suggest false precision, or draw attention away from the very areas most in need of improvement, numerical scores are translated into qualitative ratings. The bands and associated ratings are as follows: Rating Range Effective ................................................................... 85–100 Moderately Effective ............................................... 70–84 Adequate ................................................................. 50–69 Ineffective ................................................................ 0–49 Regardless of overall score, programs that do not have acceptable performance measures or have not yet collected performance data generally receive a rating of ‘‘Results Not Demonstrated.’’ PART ratings do not result in automatic decisions about funding. Clearly, over time, funding should be targeted to programs that can prove they achieve measurable results. In some cases, a PART rating of ‘‘Ineffective’’ or ‘‘Results Not Demonstrated’’ may suggest that greater funding is necessary to overcome identified shortcomings, while a program rated ‘‘Effective’’ may be in line for a proposed funding decrease if it is not a priority or has completed its mission. However, most of the time, an ‘‘Effective’’ is an indication that the program is using its funding well and that major changes may not be needed. 11 2. BUDGET AND PERFORMANCE INTEGRATION II. RESULTS AGENCIES AND PROGRAMS ARE ACHIEVING BPI Initiative Success More and more agencies are achieving greater results with the help of the habits and discipline established through the Budget and Performance Integration (BPI) Initiative. These agencies recognize that BPI is much broader than the PART and that the PART is simply a tool used to achieve the much larger goals of the initiative. In 2004, eight agencies achieved green status on the BPI Scorecard, a quarterly rating that assesses whether agencies have achieved clear standards of success for the initiative. The agencies at green are: Department of Energy, Department of Labor, Department of Transportation, Department of State, National Aeronautics and Space Administration, National Science Foundation, Small Business Administration, and Social Security Administration. Scorecard—Standards for Success For each initiative, the PMA established clear, Government-wide goals or Standards for Success (http://results.gov/agenda/standards.pdf). Agencies then develop and implement detailed, aggressive action plans to achieve these goals. Most importantly, agencies are held publicly accountable for adopting these disciplines. The Standards for Success for the BPI Initiative are below: • Senior agency managers meet at least quarterly to examine reports that integrate financial and performance information that covers all major responsibilities of the department. Agency demonstrates improvement in program performance and efficiency in achieving results; • Strategic plans contain a limited number of outcome-oriented goals and objectives. Annual budget and performance documents incorporate all measures identified by the PART and focus on the information used in the senior management report described in the first criterion; • Has performance appraisal plans and awards programs for all SES and managers, and more than 60% of agency positions that effectively: link to agency mission, goals and outcomes; hold employees accountable for results appropriate to their level of responsibility; differentiate between various levels of performance; and provide consequences based on performance. The agency is also working to include all agency employees under such systems • Reports the full cost of achieving performance goals accurately in budget and performance documents and can accurately estimate the marginal cost (+/ - 10%) of changing performance goals; • Has at least one efficiency measure for all PARTed programs; and • Uses PART evaluations to direct program improvements, and PART ratings and performance information are used consistently to justify funding requests, management actions, and legislative proposals. Fewer than 10% of agency programs receive a Results Not Demonstrated rating for more than two years in a row. Each quarter, agencies are rated on their status in achieving the overall goals for each initiative and progress in implementing their respective action plans. To that end, a simple grading system of red, yellow, and green was developed. Green status is for success in achieving results in each of the criteria above; yellow is for an intermediate level of performance; and red is for unsatisfactory results. The Government-wide scorecard reporting on individual agency progress is published quarterly at http://results.gov/agenda/scorecard.html. 12 ANALYTICAL PERSPECTIVES Best Practices Executive branch agencies are using and sharing with each other innovative management practices to achieve the goals of the BPI initiative and thereby improving organizational and program performance. One of the best practices shared across the Executive Branch came from the Department of State (DOS). Management at DOS has integrated the PART into their automated performance planning system. This capability allows DOS to 1) monitor the quality and content of PART submissions, 2) track the status of PART recommendations to improve program performance, and 3) most importantly, allows the Department of State to make this information available to managers so that they can use performance information to influence budget decisions. The Department of Transportation (DOT) shared with other agencies its successes with implementing marginal cost methodologies, which assists in articulating the cost/benefit of putting additional resources into a program. This year, DOT improved its performance budgeting by estimating the marginal cost of performance for selected programs. DOT’s disciplined approach allows it to see how inputs affect outputs and how outputs roll up to produce outcomes. As an example, DOT is able to estimate the reduction in rail-related accidents and incidents it expects to achieve at various funding levels. DOT now submits a budget that shows expected performance at both a baseline level and a specified marginal level. As a result, annual performance targets will be adjusted accordingly to reflect the specified levels of funding. The bottom line is that without solid performance baselines, you cannot accurately predict performance changes resulting from varying resource levels. Programs Assessed Using the PART This marks the third year that the PART was used to assess program performance, make recommendations to improve program performance, and help link performance to budget decisions. To date, the Administration has assessed 607 programs, which represent ap- Table 2–1. proximately 60 percent of the Federal budget. Over the next two years, the Administration will use the PART to assess the performance and management of all remaining Federal programs with limited exceptions. Alternative methods and timelines for assessment are being considered for programs with limited impact and large activities where it is difficult to determine an appropriate unit of analysis. With the help of the PART, we have improved program performance and transparency. There has been a substantial increase in the total number of programs rated either ‘‘Effective,’’ ‘‘Moderately Effective,’’ or ‘‘Adequate’’. This increase came from both re-assessments and newly PARTed programs. The Table 2–1 below shows the percentage of programs by ratings category. Of the 607 programs assessed, 71 percent have defined and are tracking clear outcome goals to measure their results and 59 percent have efficiency measures in place to manage costs. Unfortunately, in 2004 33 percent of PARTed programs are rated ‘‘Results Not Demonstrated’’ or ‘‘Ineffective.’’ Particularly in a period of tight budgets, these programs must improve their performance or their resources may be moved to higher performing programs. Programs Reassessed Programs are reassessed when significant changes have been made to improve the program and those improvements can be demonstrated. For example, programs might be reassessed when new performance measures are agreed upon, PART recommendations have been implemented, new performance data have been compiled, or a program evaluation has been completed. In the last two years more than 127 programs were reassessed. Chart 2–1 which follows demonstrates that PART recommendations are being implemented and we are seeing results. The chart illustrates a significant increase in ‘‘Effective’’ programs and a decrease in programs rated ‘‘Results Not Demonstrated.’’ PROGRAM RATINGS ARE IMPROVING (Cumulative program results by ratings category 2002–2004) Year Ratings/year 2002 Number of Programs 1 ............................................................ 234 2003 407 2004 607 Effective ................................................................................... 6% 11% 15% Moderately Effective ................................................................ 24% 26% 26% Adequate .................................................................................. 15% 20% 26% Ineffective ................................................................................. 5% 5% 4% Results Not Demonstrated ...................................................... 50% 38% 29% 13 2. BUDGET AND PERFORMANCE INTEGRATION Chart 2-1. Comparison of Ratings from Initial PART to Most Recent Reassess Number of programs 140 4 120 27 100 80 60 40 20 76 8 0 Initial PART Effective Reassessment Adequate Moderately Effective Following up on PART Recommendations. While the Administration believes that an increasing number of programs will earn ‘‘Effective’’ ratings, we also stress that PART recommendations are more important than PART ratings because the focus of the PART is on continuous improvement of program performance. The PART serves its purpose if its findings and recommendations play a substantial role in guiding decisions on spending, management and program improvements. A number of Federal programs across the government have improved their management or performance by implementing recommendations made through the PART process: • Health Centers: The President’s Health Centers Initiative is creating 1,200 new and expanded health center sites to serve an additional 6.1 million people by 2006. From 2001 to 2005, this program increased the number of low-income individuals served by over 30 percent. In 2006, the program has a goal to serve approximately 16.4 million people, up from 10.3 million in 2001. • Broadcasting Board of Governors: As a result of the PART, this program established goals for weekly audience size, program quality, signal strength and cost-per-listener for all language programs. The Near East Asia and South Asia programs are on track to attain their long-term weekly audience size goal in Arabic speaking countries of 21 million listeners and viewers by 2008—a Ineffective Results Not Demonstrated nearly 700% increase from 3.1 million weekly listeners and viewers in 2002. • FAA’s Facilities and equipment Program: The PART helped management determine the reasons projects in this program consistently experienced large costs and schedule overruns. In response to a PART recommendation, the FAA began focusing on increasing the use of performance based contracts as a means of controlling costs. Managers are now held accountable for achieving cost, schedule, and performance targets through the FAA’s Performance management system, which is evaluated semiannually. • National Weather Service (NWS): During a PART reassessment it was determined that NWS increased its tornado warning lead time from 10 minutes to 13 minutes; improved its flash flood warning accuracy from 86 percent to 89 percent; and accurately predicted the tracks of hurricanes within 94 nautical miles. It has set goals to improve these and other key indicators of its ability to protect lives and property from national disasters. • The Migratory Bird Management Program: This year the program developed new performance goals during the PART process. Specifically, one of the new goals examines the percent of migratory birds that are at healthy and sustainable levels. If the program is successful, and external factors that also affect migratory bird populations do not dramatically change, by 2008, 62 percent 14 ANALYTICAL PERSPECTIVES • • • • • of all migratory bird populations will be healthy and sustainable. Corps Hydropower Program: A reassessment of the Hydropower Program credited the Corps with developing an overall asset management plan for plant and program mangers. This management plan is used by managers in making risk-based hydropower investment decisions, as well as setting regional and national hydropower investment priorities. The management plan was developed in response to deficiencies cited in the initial PART. Nonpoint Source Grants (NPS): The Environmental Protection Agency’s program provides grants to states to identify and address NPS pollution problems, a leading cause of water quality impairment. NPS pollution comes from both urban and rural sources, including roads, farms, and mines. A previous program assessment recommended that the NPS program improve its performance metrics and take steps to reduce any activities duplicated by similar Department of Agriculture (USDA) programs. As a result, in agricultural areas, the program refocused its efforts on watershed planning to avoid redundancy with USDA’s efforts. The program also developed good long-term, annual, and efficiency measures. The Capital Security Construction Program: A past program assessment identified a standard embassy design which would promote the construction of new embassy compounds more quickly, efficiently and in a cost effective manner. This year’s reassessment found that the Department of State implemented this design recommendation across overseas capital construction programs and for security and non-security projects. Citizenship and Immigration Services (CIS): In response to an assessment completed two years ago, Citizenship and Immigration Services has begun to implement significant IT and process improvements. Since May 2003, more than 182,000 immigration applications have been filed on-line, reducing processing time and errors. One CIS field office is piloting a green card replacement project. This field office is accepting e-filed applications and has demonstrated results by reducing the average renewal processing time from eight months to approximately two business weeks. This improvement is accompanied by a significant rise in e-filed applications from an average of 650 per month prior to the pilot to about 1,650 per month. Occupational Safety and Health Administration: In response to the PART recommendations, this program now identifies the monetary costs and net benefits for all new economically significant regulations. In addition, the 2006 Budget requests $1 million for an initiative to allow OSHA to develop more timely data to assess performance. Efficiency Measures One of the greatest challenges for agencies has been developing meaningful measures of program efficiency. Ideally, programs should be able to articulate production costs for each unit of what it is they are achieving. Agencies should be able to use efficiency measures to capture skillfulness in executing programs and achieving results while avoiding wasted resources, time, and effort. Although much work remains, this year we experienced many notable examples of success: • Department of Commerce. In 2005 the Patent and Trademark Office (PTO) continues to align resources with its goal of promoting scientific progress by securing inventors’ rights to their respective discoveries. PTO has clearly defined quantitative performance measures that are linked to its annual funding request. For example, for 2005, PTO set the following annual targets for the patent program: quality (as measured by an error rate of 3.75%), processing time (as measured by patent pendency of 31 months), and unit cost of $4,052 per production unit for a funding level of $1.337 billion. Moreover, PTO’s budget is not only framed around its strategic plan, but its specific initiatives are linked to PTO’s three strategic goals: improving the quality, processing times, and flexibility of its organization. • Department of Justice. The Drug Enforcement Administration (DEA) has demonstrated proficiency at quantifying the impact of funding increases (or decreases) on its performance measures relative to targets established from the PART process. DEA is capable of translating a budget increase for additional drug enforcement agents into a specific number of drug trafficking organizations that will be either disrupted or dismantled in the fiscal year. • Social Security Administration (SSA). SSA’s ability to link financial resources and performance has assisted executive and legislative branch decision makers during the appropriations process. SSA was able to determine the number of claims that could be processed at different funding level proposals. This efficiency measure provided the requisite information to arrive at the best possible funding decision. • Department of State. The State Department has developed efficiency measures for each of its programs and is using them to drive down cost while increasing performance. For instance, the Refugee Admissions program has decreased the per-person cost of admitting refugees to the United States from nearly $4,500 in 2002 to $3,500 in 2004, while exceeding the goal of admitting 50,000 refugees. • Department of Energy. The Weatherization Assistance program increases the energy efficiency of dwellings occupied by low-income Americans, thereby reducing their energy costs, while safeguarding their health and safety. The program 15 2. BUDGET AND PERFORMANCE INTEGRATION added a long-term efficiency measure to maintain a benefit-cost ratio greater than one, which compares estimated lifetime energy cost savings of all homes weatherized in a given year to total program costs for that year. Cross-cutting Review of Federal Programs The Administration continues to look for new ways to improve the performance of programs with similar purpose or design by using the PART to analyze performance across agencies (i.e., cross-cutting analysis). Cross-cutting analysis can improve coordination and communication by getting managers from multiple agencies to agree to a common set of goals and placing the focus on quantifiable results. This type of analysis breaks down barriers across the Federal government and at the state and local levels so that all are working toward the same goal. This past year the Administration began a cross-cutting analysis of community and economic development programs and rural water programs. Community and Economic Development crosscut analysis. To help foster community and economic development, the Federal Government provides financial assistance to communities through 35 grant, loan, and tax incentive programs spread across seven agencies. In 2005 nearly $16 billion will be spent on efforts to revitalize distressed communities and increase economic opportunity in areas that, despite increases in national economic growth and productivity, continue to suffer from high unemployment, low incomes and economic disruption. During 2004, OMB reviewed the effectiveness and structure of Federal community and economic development programs. An inter-agency group, the Interagency Collaborative on Community and Economic Development, also assisted this review by highlighting the strengths, weaknesses and challenges of community and economic development efforts. OMB reviewed the PART assessments of several programs to identify challenges shared by these programs. First, several of these programs had unclear long-term objectives, which resulted in many instances in a focus on short-term outputs (e.g., number of people assisted and number of housing units constructed), not on long-term community impacts. Second, the programs did not coordinate effectively, and in many cases overlapped in mission and function. For example, assistance for infrastructure investment is provided by at least four Federal agencies. Third, and most importantly, the programs were unable III. to demonstrate that they were achieving long-term outcomes. In fact, there was little research to demonstrate that Federal investment had improved communities over the long-term. Ultimately, these programs should be able to measure conditions and track changes in key indicators such as job creation, homeownership, commercial development and increases in private sector investment. To ensure the efficient use of taxpayer resources and improve the focus on results, the Budget proposes a $3.7 billion program within the Department Commerce to support communities’ economic development and revitalization efforts. This initiative will consolidate programs such as Community Development Block Grants and the Economic Development Assistance Programs into a more targeted, unified program that sets accountability standards in exchange for flexible use of the funds. Further discussion on this initiative can be found in the Department of Commerce budget chapter. Rural Water cross-cut analysis. At least 12 different Federal programs participate in building facilities that provide drinking water or wastewater services to rural areas of the country. These programs have some overlapping missions and use similar service delivery mechanisms. Water development is part of the core mission of the Bureau of Reclamation in the Department of Interior, the Rural Utilities Service in USDA, and the Environmental Protection Agency’s Clean Water and Drinking Water State Revolving Funds. Other agencies, such as the Indian Health Service in the Department of Health and Human Services and the Economic Development Administration in the Department of Commerce, support activities related to rural water development, but use them as means to achieve broader program goals such as promoting economic development. Analysis of these programs also revealed that the Federal government’s role in developing water resources is unclear, which hampers the long-term strategic planning of these agencies and creates uncertainty as to what actions Federal agencies should undertake and how to prioritize funding for Federal water projects. Consolidating some of these programs may result in more efficient program management and better delivery of on-the-ground services for rural communities. The Administration will develop recommendations regarding consolidation and reform of Federal rural water programs that it will forward to a proposed Results Commission, if authorized by Congress. (See next section). NEXT STEPS FOR THE BPI INITIATIVE Results Commission Dysfunctional program overlap is why many of the 30 percent of programs are rated either ineffective or unable to demonstrate results. Cross-cutting analysis can help in many of these areas, but overlapping juris- dictions in Congress provide daunting hurdles to legislative remedies for the poor performance of duplicative programs. To overcome this challenge, the President will propose that Congress enact legislation that gives him the authority to recommend the creation of ‘‘Re- 16 ANALYTICAL PERSPECTIVES sults Commissions’’ to consider and revise Administration proposals to improve the performance of programs or agencies by restructuring or consolidating them. Proposals approved by a commission would then be approved by the President and considered by Congress under expedited procedures. The President’s proposal to the Congress will also include a process by which programs undergo the regular scrutiny brought about by having to defend their existence before a Sunset Commission. Programs would be reviewed by the Sunset Commission according to a schedule enacted by Congress. The Commission would consider and revise Administration proposals to retain, restructure, or terminate programs. Programs would automatically terminate according to the schedule unless Congress took some action to reauthorize them. Both components of this proposal—the Results Commissions and the Sunset Commission—will require enactment by Congress and the President. In the absence of these reforms, the Administration will continue to pursue all opportunities to improve program performance to include using the PART for cross-cutting analysis. Other Cross-Cuts of Federal Programs In 2005, the Administration will conduct additional cross-cuts in three different areas: block grant programs, small business innovation research programs and credit programs. Block Grants. One of the most common tools used by the Federal government is the block grant, particularly in the social services area where states and localities are the service providers. Block grants are embraced for their flexibility to meet local needs and criticized because accountability for results can be difficult when funds are allocated based on formulas and population counts rather than achievements or needs. In addition, block grants pose performance measurement challenges precisely because they can be used for a wide range of activities. The obstacles to measuring and achieving results through block grants are reflected in PART scores: they receive the second lowest average score of the seven PART types, 8 percent of block grant programs assessed to date are rated ineffective, and 45 percent are rated Results Not Demonstrated. Nonetheless, the PART shows that some Federal block grant programs are achieving results superior to others, effectively combining the flexibility that localities need with the results that taxpayers deserve. In the coming year, the Administration will apply the lessons learned from the effective block grants to several of those performing inadequately. This project will identify the methods used to manage highly rated block grant programs and adapt and implement those practices in large, low-scoring programs. Each of the programs targeted for improvement will develop an action plan and implementation timeline that will be tracked quarterly. The targeted programs will be re-analyzed through the PART in one to two years to assess wheth- er implementing the block grant best practices results in improved performance. Small Business Innovation Research (SBIR). The SBIR program established in 1982, sets aside 2.5 percent of government research and development (R&D) contract and grant funding to allow small businesses to explore innovative ideas. The goal of the program is to assist small businesses in undertaking and obtaining the benefits of research and development, while assisting the funding agencies to realize their mission. Approximately $2 billion was spent last year in SBIR programs. All Federal agencies with R&D budgets above $100 million per year must publish a list of technical topics that they would like to support, after which small businesses are encouraged to submit research funding proposals addressing opportunities in those areas. First, agencies investigate the feasibility of the project and, if deemed promising, funding is provided for research and development. Awards generally are limited to about $1 million per project. Agencies monitor the progress of the selected projects and report key data annually to the Small Business Administration. This year the Administration will review the SBIR programs of several agencies in a cross-agency review. Key questions to be asked include how well the program is managed; how well it is coordinated among the participating agencies; how well the program has done in commercializing products in the marketplace; and how well it has contributed to the success of the missions of the participating agencies. Credit Programs. The Federal Government is one of the world’s largest lenders. At the end of 2003, the Government held a financial asset portfolio of nearly $1.5 trillion, including direct loans, loan guarantees, defaulted loans, and non-credit debt owed to agencies. Many agencies lack the data, processes, or overall understanding of the credit lifecycle (origination, loan servicing/lender monitoring, liquidation, and debt collection) needed to effectively assist intended borrowers while also proactively reducing errors, risk, and cost to the Government. Some credit program PART scores reflect these fundamental inefficiencies. A cross-cutting analysis will identify best practices that can be implemented across the major credit agencies, with the goal of strengthening Government credit management practices at all stages of the credit lifecycle. This will in turn lead to improved credit program PART scores as well as substantial budgetary savings: upfront subsidy costs and administrative expenses could be reduced by hundreds of millions of dollars, and delinquent debt could be reduced by up to $10 billion. Additional discussion of the credit program cross-cut can be found in chapter seven of this Analytical Perspectives volume (‘‘Credit and Insurance’’). Follow-up on Recommendations Rigorous follow-up on recommendations from the PART will accelerate improvements in the performance 17 2. BUDGET AND PERFORMANCE INTEGRATION of Federal programs. The Administration is developing a web-based PART recommendation tracking system that will monitor what actions are required and their APPENDIX 1: DESCRIPTION OF HOW THE PART WORKS Sections of the PART. The accompanying table provides a brief description of the four sections along with examples of programs that scored high or low in this Table 2–2. Section state of completion. This will ensure that the hard work done through the PART produces performance and management improvements. year. For more detailed information regarding PART guidance and PART worksheets, visit the OMB website at www.omb.gov/part. SECTIONS OF THE PART Description Low Score Example High Score Example Program Purpose and Design Weight = 20 percent To assess whether the program’s purpose and design are clear and sound Migrant and Seasonal Farm workers—program design needs significant improvement Nonproliferation and International Security Program—clear purpose and strong design, which is not duplicated in the Federal government Strategic Planning Weight = 10 percent To assess whether the agency has established valid long-term and annual measures and targets for the program Juvenile Accountability Block Grants— lacks strategic planning, ambitious goal setting Healthcare Facilities Construction—Longterm and annual measures that assess critical health-focused outcomes Program Management Weight = 20 percent To rate agency management of the program, including financial oversight and program improvement efforts Alaska Native Villages Program—poor program management resulted in significant contracting, accounting, and performance problems Capital Security Construction Program— strong and responsive management and oversight Program Results/Accountability Weight = 50 percent To rate program performance on measures and targets reviewed in the strategic planning section through other evaluations Natural Gas Technologies Program—has shown little evidence of improved outcomes and results DOD Energy Conservation Improvement Program—achieves results, reduction in cost, and net savings for investment PART Questionnaire. The table below illustrates key questions from each section of the PART. Table 2–3. THE PART QUESTIONNAIRE Key Questions for Every Program PROGRAM PURPOSE AND DESIGN • Is the program purpose clear? • Does the program address a specific and existing problem, interest, or need? • Is the program designed so it is not redundant or duplicative of any other federal, state, local or private effort? • Is the program designed free of major flaws that would limit program effectiveness or efficiency? • Is the program effectively targeted, so that resources will reach the intended beneficiaries and/or otherwise address the program’s purpose directly? Description This section examines the clarity of program purpose and soundness of program design. It looks at factors including those the program, agency, or Administration may not directly control but which are within their influence, such as legislation and market factors. Programs should generally be designed to address a market failure—either an efficiency matter, such as a public good or externality, or a distributional objective, such as assisting low-income families—in the least costly or most efficient manner. A clear understanding of program purpose is essential to setting meaningful program goals, measures, and targets; maintaining focus; and managing the program. Potential source documents and evidence for answering questions in this section include authorizing legislation, agency strategic plans, annual performance plans, and other agency reports. Options for answers are Yes, No or Not Applicable 18 ANALYTICAL PERSPECTIVES Table 2–3. THE PART QUESTIONNAIRE—Continued Key Questions for Every Program Description STRATEGIC PLANNING • Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program? • Does the program have ambitious targets and timeframes for its long-term measures? • Does the program have a limited number of specific annual performance goals that can demonstrate progress toward achieving the program’s long-term goals? • Does the program have baselines and ambitious targets for its annual measures? • Do all partners (grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program? • Are independent evaluations of sufficient scope conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest or need? • Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program’s budget? • Has the program taken meaningful steps to address its strategic planning deficiencies? This section focuses on program planning, priority setting, and resource allocation. Key elements include an assessment of whether the program has a limited number of performance measures with ambitious—yet achievable—targets, to ensure planning, management, and budgeting are strategic and focused. Potential source documents and evidence for answering questions include strategic planning documents, agency performance plans and reports, reports and submissions from program partners, evaluation plans, budget submissions and other program documents. Options for answers are Yes, No or Not Applicable. PROGRAM MANAGEMENT • Does the agency regularly collect timely and credible performance information from key program partners, and use it to manage the program and improve performance? • Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results? • Are funds (Federal and partners’) obligated in a timely manner and spent for the intended purpose? • Does the program have procedures (i.e. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution? • Does the program collaborate and coordinate effectively with related programs? • Does the program use strong financial management practices? • Has the program taken meaningful steps to address its management deficiencies? This section focuses on a variety of elements related to whether the program is effectively managed to meet program performance goals. Key areas include financial oversight, evaluation of program improvements, performance data collection, and program manager accountability. Additionally, specific areas of importance for each program type are also explored. Potential source documents and evidence for answering questions in this section include financial statements, GAO reports, IG reports, performance plans, budget execution data, IT plans, and independent program evaluations. Options for answers are Yes, No or Not Applicable. PROGRAM RESULTS/ACCOUNTABILITY • Has the program demonstrated adequate progress in achieving its long-term performance goals? • Does the program (including program partners) achieve its annual performance goals? • Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year? • Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals? • Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results? This section considers whether a program is meeting its long-term and annual performance goals. This section also assesses how well the program compares to similar programs and how effective the program is based on independent evaluations. Potential source documents and evidence for answering questions in this section include annual performance reports, evaluations, GAO reports, IG reports and other agency documents. Assessments of program results should be based on the most recent reporting cycle or other relevant data. The PART worksheet, under the ‘‘Measures Page,’’ calls for data on a few years of performance targets and results to be reported. Answers in this section are rated as Yes, Large Extent, Small Extent, and No. PART Categories. The PART segments mandatory and discretionary Federal programs into seven cat- egories. The accompanying table describes the program categories: 19 2. BUDGET AND PERFORMANCE INTEGRATION Table 2–4. Program Type THE PART, BY CATEGORY Description Examples Competitive Grant Programs Programs that distribute funds to state, local and tribal governments, organizations, individuals and other entities through a competitive process. • Head Start • Weed and Seed Block/Formula Grant Programs Programs that distribute funds to state, local and tribal governments and other entities by formula or block grant. • Vocational Education State Grants • Native American • Housing Block Grants Regulatory-Based Programs Programs that employ regulatory action to achieve program and agency goals through rulemaking that implements, interprets or prescribes law or policy, or describes procedure or practice requirements. These programs issue significant regulations, which are subject to OMB review. • Occupational Safety and Health Administration • Food Safety and Inspection Service Capital Assets and Service Acquisition Programs Programs where the primary means to achieve goals is the development and acquisition of capital assets (such as land, structures, equipment, and intellectual property) or the purchase of services (such as maintenance and information technology) from a commercial source. • Youth Anti-Drug Media Campaign • DoD—Shipbuilding Credit Programs Programs that provide support through loans, loan guarantees and direct credit. • Rural Electric Utility Loans and Guarantees Direct Federal Programs Programs in which support and services are provided primarily by Federal employees. • Coin Production • National Weather Service Research and Development Programs Programs that focus on creating knowledge or applying it toward the creation of systems, devices, methods, materials or technologies. • Solar Energy Program • Mars Exploration APPENDIX 2: SUMMARY RESULTS OF PROGRAMS EVALUATED USING THE PART Since its inception, the PART has been improved annually based on feedback received from agencies and the public. Although there were no changes to the PART questions for this past year, the guidance has been refined each year to improve consistency in application of the PART across programs. Feedback from Federal agencies, General Accounting Office, Center for Excellence in Government, National Academy of Public Administrators, the public, and internal quality control reviews all helped improve the guidance. The table that follows lists summary PART results and funding information for each of the assessed pro- grams. It affirms the fact that PART ratings are one factor, but not the only factor, in the Administration’s budget formulation process. The PART gives the Executive Branch, Congress, and individual program managers valuable insight into ways we can improve program performance on behalf of the American people. Individual PART summaries are included on the CD that accompanies the Analytical Perspectives volume, and full PART worksheets can be found on OMB’s web page (www.budget.gov/budget/fy2006/part.html) 20 ANALYTICAL PERSPECTIVES Table 2–5 PROGRAM ASSESSMENT AND FUNDING INFORMATION (Current Data for All Programs Assessed by PART) Program Funding Level (dollars in millions) Agency/Program Title Rating Primary Program Type 2004 Actual Department of Agriculture: Agricultural Credit Insurance Fund—Guaranteed Loans. Agricultural Credit Insurance Fund Direct Loans. Animal Welfare ................................................ APHIS Plant and Animal Health Monitoring Programs. Bioenergy ......................................................... CCC Marketing Loan Payments .................... CCC Export Credit Guarantee Programs (GSM–102, GSM–103, SCGP, FGP). Commodity Grading and Certification Programs. Commodity Supplemental Food Program (CSFP). Community Facilities Program ...................... Conservation Technical Assistance ................ Counter Cyclical Payments ............................ Crop Insurance ................................................ Dairy MILC Program ...................................... Dairy Price Support Program ......................... Direct Crop Payments ..................................... Emergency Watershed Protection Program .. Environmental Quality Incentives Program (EQIP). Farmland Protection Program ....................... Food Aid Programs .......................................... Food Safety and Inspection Service ............... Food Safety Research ...................................... Food Stamp Program ...................................... Forest Service: Forest Legacy Program ......... Forest Service: Invasive Species Program ..... Forestry Research Grants ............................... In House Research: Economic Opportunities for Producers. Intermediary Relending Program (IRP) ........ Land Acquisition ............................................. Multifamily Housing Direct Loans and Rental Assistance. Mutual Self Help Housing—Technical Assistance Grants. National Agricultural Statistics Service ........ National Forest Improvement and Maintenance. National Resources Inventory ........................ National School Lunch .................................... Perishable Agricultural Commodities Act ..... Pest and Disease Exclusion ............................ Pesticide Data/Microbiological Data Programs. Plant Materials Program ................................ RBS Business and Industry Guaranteed Loan Program. Research/Extension Grants: Economic Opportunities for Producers. Resource Conservation and Development ..... Rural Business Enterprise Grant Program .. Rural Business-Cooperative Service ValueAdded Producer Grants. Rural Distance Learning and Telemedicine Loan and Grant Program. Rural Electric Utility Loans and Guarantees Rural Telecommunications Loan Programs .. Estimate 2005 2006 Moderately Effective Credit 2,402 2,763 2,866 Moderately Effective Credit 844 955 937 Adequate Effective Regulatory Based Regulatory Based 17 173 17 232 18 283 Adequate Moderately Effective Moderately Effective Direct Federal Direct Federal Credit 150 843 4,275 100 6,423 4,556 60 5,096 4,556 Adequate Direct Federal 171 185 189 Results Not Demonstrated Block/Formula Grant 109 110 107 Results Not Demonstrated Results Not Demonstrated Adequate Results Not Demonstrated Results Not Demonstrated Results Not Demonstrated Adequate Results Not Demonstrated Moderately Effective Credit Direct Federal Direct Federal Direct Federal Direct Federal Direct Federal Direct Federal Direct Federal Direct Federal 726 729 812 3,437 221 399 5,289 150 903 527 706 3,942 3,091 500 280 5,303 250 1,017 527 622 5,950 3,730 50 130 5,303 0 1,000 Results Not Demonstrated Moderately Effective Adequate Results Not Demonstrated Moderately Effective Moderately Effective Results Not Demonstrated Results Not Demonstrated Moderately Effective Competitive Grant Competitive Grant Regulatory Based Research and Development Block/Formula Grant Competitive Grant Direct Federal Block/Formula Grant Research and Development 91 515 778 98 27,205 64 263 22 381 112 524 820 103 32,397 57 167 22 385 84 539 853 108 35,922 80 173 11 321 Adequate Results Not Demonstrated Results Not Demonstrated Credit Direct Federal Mixed 40 102 631 34 156 620 34 41 884 Moderately Effective Competitive Grant 34 34 34 Moderately Effective Adequate 128 635 128 704 145 391 Results Not Demonstrated Results Not Demonstrated Moderately Effective Effective Adequate Direct Federal Capital Assets and Service Acquisition Direct Federal Block/Formula Grant Direct Federal Regulatory Based Direct Federal 35 6,649 10 126 21 37 6,967 9 125 21 37 7,254 10 144 22 Results Not Demonstrated Adequate Research and Development Credit 12 26 15 30 11 44 Moderately Effective Research and Development 382 396 424 Results Not Demonstrated Results Not Demonstrated Results Not Demonstrated Direct Federal Competitive Grant Competitive Grant 53 43 14 51 40 16 27 40 16 Results Not Demonstrated Mixed 325 74 25 Adequate Adequate Credit Credit 3,989 514 3,317 518 2,520 670 21 2. BUDGET AND PERFORMANCE INTEGRATION Table 2–5 PROGRAM ASSESSMENT AND FUNDING INFORMATION—Continued (Current Data for All Programs Assessed by PART) Program Funding Level (dollars in millions) Agency/Program Title Rating Primary Program Type 2004 Actual Rural Water and Wastewater Grants and Loans. School Breakfast Program .............................. Single Family Housing Direct Loans ............. Single Family Housing Loan Guarantees ..... Snow Survey Water Supply Forecasting ....... Soil Survey Program ....................................... USDA Wildland Fire Management ................ Watershed Protection and Flood Prevention Wildlife Habitat Incentives Program ............. Mixed Moderately Effective Moderately Effective Moderately Effective Moderately Effective Moderately Effective Results Not Demonstrated Adequate Results Not Demonstrated 2005 2006 601 548 450 Block/Formula Grant Credit Credit Direct Federal Direct Federal Direct Federal Direct Federal Direct Federal 1,792 1,351 2,610 10 87 1,876 126 38 1,910 1,100 2,500 11 89 2,014 111 47 2,030 1,100 3,100 10 88 1,493 20 60 Adequate Effective Results Not Demonstrated Results Not Demonstrated Competitive Grant Direct Federal Block/Formula Grant Competitive Grant 169 67 136 9 136 73 128 7 0 81 96 5 Effective Moderately Effective Effective Moderately Effective Adequate Moderately Effective Moderately Effective Results Not Demonstrated Adequate Effective Effective Moderately Effective Moderately Effective Adequate Results Not Demonstrated Effective Adequate Moderately Effective Direct Federal Direct Federal Direct Federal Competitive Grant Regulatory Based Direct Federal Competitive Grant Competitive Grant Regulatory Based Direct Federal Research and Development Research and Development Direct Federal Regulatory Based Block/Formula Grant Direct Federal Direct Federal Direct Federal 58 253 73 308 26 9 39 29 644 825 300 242 89 62 89 13 1,098 131 59 388 68 284 26 9 108 30 686 783 375 275 83 71 89 11 1,380 174 62 464 71 27 31 10 47 31 627 839 412 250 92 46 90 10 1,517 186 Adequate Direct Federal 225 216 232 Department of Defense—Military: Air Combat Program ....................................... Moderately Effective 13,904 14,537 14,559 Air Force Aircraft Operations ........................ Air Force Depot Maintenance ........................ Airlift Program ................................................ Effective Effective Moderately Effective 10,481 3,402 5,143 8,299 3,576 6,356 9,341 3,533 5,960 Army Land Forces Operations ....................... Basic Research ................................................. Chemical Demilitarization .............................. Effective Effective Ineffective 9,236 1,358 1,620 9,710 1,513 1,454 9,488 1,319 1,406 Comanche Helicopter Program ...................... Results Not Demonstrated 1,068 0 0 Communications Infrastructure ..................... Results Not Demonstrated 3,625 4,244 4,021 Defense Health ................................................ Depot Maintenance—Naval Aviation ............ Depot Maintenance—Ship .............................. DoD Applied Research Program .................... DoD Small Business Innovation Research/ Technology Transfer. Energy Conservation Improvement ............... Adequate Effective Effective Moderately Effective Results Not Demonstrated Capital Assets and Service Acquisition Direct Federal Direct Federal Capital Assets and Service Acquisition Direct Federal Research and Development Capital Assets and Service Acquisition Capital Assets and Service Acquisition Capital Assets and Service Acquisition Direct Federal Direct Federal Direct Federal Research and Development Research and Development 17,769 1,078 4,107 4,350 1,100 18,177 980 3,889 4,850 1,133 19,792 962 3,967 4,139 1,500 Facilities Sustainment, Restoration, Modernization, and Demolition. Housing ............................................................ Department of Commerce: Advanced Technology Program ...................... Bureau of Economic Analysis ......................... Coastal Zone Management Act Programs ..... Commerce Small Business Innovation Research (SBIR) Program. Current Demographic Statistics ..................... Decennial Census ............................................ Economic Census ............................................. Economic Development Administration ........ Export Administration .................................... Intercensal Demographic Estimates .............. Manufacturing Extension Partnership .......... Minority Business Development Agency ....... National Marine Fisheries Service ................ National Weather Service ............................... NIST Laboratories ........................................... NOAA Climate Program ................................. NOAA Navigation Services ............................. NOAA Protected Areas ................................... Pacific Coastal Salmon Recovery Fund ......... Survey Sample Redesign ................................ U.S. Patent and Trademark Office—Patents U.S. Patent and Trademark Office—Trademarks. US and Foreign Commercial Service (USFCS). Results Not Demonstrated Estimate Effective 50 50 60 Adequate Capital Assets & Service Acquisition Direct Federal 11,189 11,291 12,795 Moderately Effective Direct Federal 17,001 15,554 16,371 22 ANALYTICAL PERSPECTIVES Table 2–5 PROGRAM ASSESSMENT AND FUNDING INFORMATION—Continued (Current Data for All Programs Assessed by PART) Program Funding Level (dollars in millions) Agency/Program Title Rating Military Force Management ........................... Missile Defense ................................................ Effective Moderately Effective Navy Ship Operations ..................................... Navy/Marine Corps Air Operations ............... Recruiting ........................................................ Shipbuilding ..................................................... Effective Effective Moderately Effective Adequate Department of Education: 21st Century Community Learning Centers Adult Education State Grants ........................ American Indian Vocational Rehabilitation Services. Assistive Technology (AT) Alternative Financing Program. B.J. Stupak Olympic scholarships ................. Byrd Honors Scholarships .............................. Child Care Access Means Parents in School College Assistance Migrant Program (CAMP). Comprehensive Regional Assistance Centers Comprehensive School Reform ....................... Even Start ........................................................ Federal Family Education Loans ................... Federal Pell Grants ......................................... Federal Perkins Loans .................................... Federal Work-Study ........................................ GEAR UP ......................................................... Graduate Assistance in Areas of National Need. High School Equivalency Program (HEP) ..... IDEA Grants for Infants and Families .......... IDEA Grants to States .................................... IDEA Part D—Parent Information Centers .. IDEA Part D—Personnel Preparation ........... IDEA Part D—Research and Innovation ...... IDEA Part D—Technical Assistance and Dissemination (TA&D). IDEA Preschool Grants ................................... Impact Aid Payments for Federal Property .. Improving Teacher Quality State Grants ..... Independent Living (IL) Programs ................ International Education Domestic ................. Javits Fellowships ........................................... Leveraging Educational Assistance Partnership. Magnet Schools ................................................ National Assessment ....................................... National Center for Education Statistics ...... National Writing Project ................................. Nat’l Institute on Disability and Rehab. Research (NIDRR). Occupational and Employment Information Parental Information and Resource Centers Projects with Industry .................................... Ready to Learn Television .............................. Safe and Drug Free Schools State Grants .... State Assessment Grants ................................ Student Aid Administration ........................... Supplemental Educational Opportunity Grants. Teacher Quality Enhancement ....................... Teaching American History ............................ Primary Program Type Direct Federal Capital Assets and Service Acquisition Direct Federal Direct Federal Direct Federal Capital Assets and Service Acquisition Estimate 2004 Actual 2005 2006 115,549 8,618 105,273 10,044 108,942 8,567 4,372 4,632 1,935 11,989 4,224 5,687 2,048 11,384 4,406 5,649 2,217 9,354 999 574 31 991 570 32 991 200 33 0 4 15 Adequate Results Not Demonstrated Adequate Block/Formula Grant Block/Formula Grant Competitive Grant Results Not Demonstrated Competitive Grant Results Results Results Results Demonstrated Demonstrated Demonstrated Demonstrated Competitive Grant Block/Formula Grant Competitive Grant Competitive Grant 1 41 16 16 1 41 16 16 0 0 16 16 Results Not Demonstrated Adequate Ineffective Adequate Adequate Ineffective Results Not Demonstrated Adequate Results Not Demonstrated Competitive Grant Block/Formula Grant Block/Formula Grant Credit Block/Formula Grant Credit Block/Formula Grant Competitive Grant Competitive Grant 28 234 247 9,602 12,007 165 999 298 31 0 205 225 10,111 12,365 66 990 306 30 0 0 0 7,241 17,953 0 990 0 30 Results Results Results Results Results Results Results 19 444 10,068 26 91 78 53 19 441 10,590 26 91 83 52 19 441 11,098 26 91 73 49 388 62 2,930 127 89 10 66 385 62 2,917 131 92 10 66 385 62 2,917 131 92 10 0 Not Not Not Not Not Not Not Not Not Not Not Demonstrated Demonstrated Demonstrated Demonstrated Demonstrated Demonstrated Demonstrated Competitive Grant Block/Formula Grant Block/Formula Grant Competitive Grant Competitive Grant Research and Development Competitive Grant Results Not Results Not Results Not Results Not Results Not Adequate Results Not Demonstrated Demonstrated Demonstrated Demonstrated Demonstrated Block/Formula Grant Block/Formula Grant Block/Formula Grant Competitive Grant Competitive Grant Competitive Grant Block/Formula Grant Demonstrated Adequate Effective Effective Results Not Demonstrated Results Not Demonstrated Competitive Grant Research and Development Research and Development Competitive Grant Research and Development 109 90 92 18 107 108 89 91 20 108 108 111 91 0 108 Results Not Demonstrated Results Not Demonstrated Adequate Results Not Demonstrated Ineffective Adequate Adequate 9 42 22 23 441 390 912 9 42 22 23 437 412 914 0 0 0 23 0 412 939 Results Not Demonstrated Competitive Grant Competitive Grant Competitive Grant Competitive Grant Block/Formula Grant Block/Formula Grant Capital Assets and Service Acquisition Block/Formula Grant 770 779 779 Results Not Demonstrated Results Not Demonstrated Competitive Grant Competitive Grant 89 119 68 119 0 119 23 2. BUDGET AND PERFORMANCE INTEGRATION Table 2–5 PROGRAM ASSESSMENT AND FUNDING INFORMATION—Continued (Current Data for All Programs Assessed by PART) Program Funding Level (dollars in millions) Agency/Program Title Rating Primary Program Type 2004 Actual Tech-Prep Education State Grants ................ Training and Advisory Services ..................... Tribally Controlled Postsecondary Vocational and Technical Institutions. TRIO Student Support Services ..................... TRIO Talent Search ........................................ TRIO Upward Bound ...................................... Troops-to-Teachers .......................................... Vocational Education State Grants ............... Vocational Rehabilitation State Grants ........ William D. Ford Direct Student Loans ......... Estimate 2005 2006 Results Not Demonstrated Results Not Demonstrated Results Not Demonstrated Block/Formula Grant Competitive Grant Competitive Grant 107 7 7 106 7 7 0 7 7 Results Not Demonstrated Results Not Demonstrated Ineffective Adequate Ineffective Adequate Adequate Competitive Grant Competitive Grant Competitive Grant Competitive Grant Block/Formula Grant Block/Formula Grant Credit 263 144 312 15 1,195 2,548 –169 275 145 313 15 1,194 2,636 –89 275 0 0 15 0 2,720 –616 Department of Energy: Advanced Fuel Cycle Initiative ...................... Advanced Scientific Computing Research ..... Advanced Simulation and Computing (ASCI) Basic Energy Sciences ..................................... Biological and Environmental Research ........ Bonneville Power Administration .................. Moderately Effective Moderately Effective Effective Effective Effective Moderately Effective 66 202 718 1,011 641 1,403 67 232 741 1,105 582 –10 70 207 666 1,146 456 –10 Building Technologies ..................................... Clean Coal Research Initiative ...................... Directed Stockpile Work (DSW) ..................... Adequate Adequate Moderately Effective 58 378 1,349 65 273 1,406 58 286 1,421 Distributed Energy Resources ........................ Elimination of Weapons-Grade Plutonium Production Program. Energy Information Administration (EIA) .... Environmental Management .......................... Moderately Effective Results Not Demonstrated 61 65 60 50 57 132 81 7,052 84 7,284 86 6,505 Facilities and Infrastructure .......................... Moderately Effective 239 316 284 Fuel Cells (Stationary) .................................... Fusion Energy Sciences .................................. Generation IV Nuclear Energy Systems Initiative. Geothermal Technology .................................. High Energy Physics ....................................... High Temperature Superducting (HTS) R&D Hydrogen Technology ...................................... Inertial Confinement Fusion Ignition and High Yield Campaign/NIF Construction Project. International Nuclear Materials Protection and Cooperation. National Nuclear Infrastructure .................... Adequate Moderately Effective Moderately Effective Research and Development Research and Development Research and Development Research and Development Research and Development Capital Assets and Service Acquisition Research and Development Research and Development Capital Assets and Service Acquisition Research and Development Capital Assets and Service Acquisition Direct Federal Capital Assets and Service Acquisition Capital Assets and Service Acquisition Research and Development Research and Development Research and Development 69 263 27 74 274 40 65 291 45 Moderately Moderately Moderately Moderately Moderately Research Research Research Research Research 26 734 34 82 513 25 736 55 94 492 23 714 45 99 460 258 238 343 76 113 98 Natural Gas Technologies ............................... Nonproliferation and International Security Nuclear Energy Research Initiative .............. Nuclear Physics ............................................... Nuclear Power 2010 ........................................ Oil Technology ................................................. Readiness in Technical Base and Facilities (RTBF), Operations. Safeguards and Security ................................. Secure Transportation Asset (STA) ............... Solar Energy .................................................... Southeastern Power Administration ............. Southwestern Power Administration ............. State Energy Programs ................................... Strategic Petroleum Reserve (SPR) ............... Vehicle Technologies ....................................... Weatherization Assistance ............................. Ineffective Effective Results Not Demonstrated Effective Adequate Ineffective Moderately Effective 43 114 6 390 19 35 1,314 45 124 0 405 50 34 1,310 10 80 0 371 56 10 1,388 626 186 83 5 29 44 176 177 227 707 201 85 5 29 44 170 165 228 708 212 84 0 3 41 166 166 230 Results Not Demonstrated Adequate Effective Effective Effective Effective Effective and and and and and Development Development Development Development Development Effective Direct Federal Results Not Demonstrated Capital Assets and Service Acquisition Research and Development Direct Federal Research and Development Research and Development Research and Development Research and Development Capital Assets and Service Acquisition Direct Federal Direct Federal Research and Development Direct Federal Direct Federal Block/Formula Grant Direct Federal Research and Development Block/Formula Grant Moderately Effective Moderately Effective Moderately Effective Moderately Effective Moderately Effective Results Not Demonstrated Effective Moderately Effective Moderately Effective 24 ANALYTICAL PERSPECTIVES Table 2–5 PROGRAM ASSESSMENT AND FUNDING INFORMATION—Continued (Current Data for All Programs Assessed by PART) Program Funding Level (dollars in millions) Agency/Program Title Rating Primary Program Type 2004 Actual Western Area Power Administration ............. Moderately Effective Wind Energy .................................................... Yucca Mountain Project .................................. Moderately Effective Adequate Department of Health and Human Services: 317 Immunization Program ............................ Administration on Aging ................................ Adolescent Family Life Program (AFL) ......... Agency for Toxic Substances and Disease Registry. Assets for Independence ................................. CDC State and Local Preparedness Grants .. CDC: Buildings and Facilities ........................ Capital Assets and Service Acquisition Research and Development Capital Assets and Service Acquisition Adequate Moderately Effective Results Not Demonstrated Adequate Competitive Grant Block/Formula Grant Competitive Grant Competitive Grant Adequate Results Not Demonstrated Adequate Estimate 2005 2006 177 172 54 41 577 41 572 44 651 469 1,243 31 73 520 1,253 31 76 429 1,272 31 76 25 918 260 25 927 270 25 797 30 92 222 277 296 4,804 33 92 226 286 298 4,801 43 92 225 286 299 4,801 43 CDC: Epidemic Services ................................. CDC: Infectious Diseases ................................ CDC: Occupational Safety and Health .......... CDC: STD and TB ........................................... Child Care and Development Fund ............... Child Welfare—Community-Based Child Abuse Prevention (CBCAP). Child Welfare- CAPTA State Grant .............. Children’s Hospitals Graduate Medical Education Payment Program. Childrens Mental Health Services ................. Chronic Disease—Breast and Cervical Cancer. Chronic Disease—Diabetes ............................. Community Mental Health Services Block Grant. Community Services Block Grant .................. Data Collection and Dissemination ............... Developmental Disabilities Grant Programs Domestic HIV/AIDS Prevention ..................... Emergency Medical Services for Children .... Family Violence Prevention and Services Program. Food and Drug Administration ...................... Foster Care ...................................................... Head Start ....................................................... Health Alert Network ..................................... Health Care Facilities Construction .............. Results Not Demonstrated Adequate Adequate Adequate Moderately Effective Results Not Demonstrated Competitive Grant Block/Formula Grant Capital Assets and Service Acquisition Direct Federal Competitive Grant Research and Development Competitive Grant Block/Formula Grant Block/Formula Grant Results Not Demonstrated Adequate Block/Formula Grant Block/Formula Grant 22 303 27 298 27 200 Moderately Effective Adequate Competitive Grant Competitive Grant 102 197 105 204 105 204 Adequate Adequate Competitive Grant Block/Formula Grant 60 435 63 433 63 433 Results Not Demonstrated Moderately Effective Adequate Results Not Demonstrated Results Not Demonstrated Results Not Demonstrated Block/Formula Grant Research and Development Block/Formula Grant Competitive Grant Competitive Grant Block/Formula Grant 642 65 150 668 20 129 637 65 154 662 20 129 0 63 154 658 0 129 Moderately Effective Adequate Results Not Demonstrated Adequate Effective 1,695 4,974 6,774 0 94 1,801 4,855 6,843 0 89 1,881 4,855 6,888 0 3 Health Care Fraud and Abuse Control (HCFAC). Health Centers ................................................ Health Professions .......................................... HIV/AIDS Research ........................................ Hospital Preparedness Grants ....................... IHS Federally-Administered Activities ......... IHS Sanitation Facilities Construction Program. Independent Living Program ......................... Low Income Home Energy Assistance Program. Maternal and Child Health Block Grant (MCHBG). Medicare ........................................................... Medicare Integrity Program (HCFAC) .......... National Bone Marrow Donor Registry ......... National Health Service Corps ....................... NIH Extramural Research Programs ............ Results Not Demonstrated Regulatory Based Block/Formula Grant Competitive Grant Competitive Grant Capital Assets and Service Acquisition Direct Federal 160 160 160 1,617 409 2,850 515 1,698 93 1,734 416 2,920 491 1,793 92 2,038 129 2,933 483 1,887 94 Results Not Demonstrated Results Not Demonstrated Competitive Grant Competitive Grant Research and Development Block/Formula Grant Direct Federal Capital Assets and Service Acquisition Block/Formula Grant Block/Formula Grant 140 1,889 140 2,182 140 2,000 Moderately Effective Block/Formula Grant 730 724 724 Moderately Effective Effective Moderately Effective Moderately Effective Effective Direct Federal Block/Formula Grant Competitive Grant Competitive Grant Research and Development 296,825 720 23 170 20,880 328,239 720 25 132 21,146 396,347 795 23 127 21,385 Effective Ineffective Moderately Effective Results Not Demonstrated Moderately Effective Moderately Effective 25 2. BUDGET AND PERFORMANCE INTEGRATION Table 2–5 PROGRAM ASSESSMENT AND FUNDING INFORMATION—Continued (Current Data for All Programs Assessed by PART) Program Funding Level (dollars in millions) Agency/Program Title Rating Primary Program Type 2004 Actual Nursing Education Loan Repayment and Scholarship Program. Office of Child Support Enforcement ............. Office on Women’s Health .............................. Organ Transplantation ................................... Patient Safety .................................................. Pharmaceutical Outcomes .............................. Poison Control Centers ................................... Projects for Assistance in Transition from Homelessness. Refugee and Entrant Assistance .................... Resource and Patient Management System Adequate Competitive Grant Effective Results Not Demonstrated Adequate Adequate Moderately Effective Adequate Moderately Effective Adequate Effective Runaway and Homeless Youth ...................... Rural Health Activities ................................... Ryan White ...................................................... State Children’s Health Insurance Program Substance Abuse Prevention and Treatment Block Grant. Substance Abuse Prevention PRNS ............... Substance Abuse Treatment Programs of Regional and National Significance. Translating Research into Practice ................ Traumatic Brain Injury .................................. Urban Indian Health Program ....................... Estimate 2005 2006 27 31 31 Block/Formula Grant Competitive Grant Competitive Grant Research and Development Research and Development Block/Formula Grant Block/Formula Grant 3,815 29 25 80 13 24 50 3,934 29 24 84 27 24 55 4,081 30 23 84 26 23 55 201 34 214 36 214 37 Results Not Demonstrated Adequate Adequate Adequate Ineffective Block/Formula Grant Capital Assets and Service Acquisition Competitive Grant Competitive Grant Block/Formula Grant Block/Formula Grant Block/Formula Grant 89 147 2,045 4,607 1,779 89 147 2,073 5,343 1,775 89 33 2,083 6,233 1,775 Moderately Effective Adequate Competitive Grant Competitive Grant 198 419 199 422 185 448 Adequate Results Not Demonstrated Adequate Research and Development Competitive Grant Block/Formula Grant 8 9 32 6 9 32 1 0 33 Department of Homeland Security: Aids to Navigation ........................................... Assistance to Firefighters Grant Program .... Baggage Screening Technology ...................... Results Not Demonstrated Results Not Demonstrated Results Not Demonstrated 843 746 310 942 715 645 1,031 500 594 Biological Countermeasures ........................... Border Patrol ................................................... Coast Guard Domestic Icebreaking Program Coast Guard Fisheries Enforcement .............. Coast Guard Migrant Interdiction Program Coast Guard Polar Icebreaking Program ...... Container Security Initiative ......................... Detention and Removal .................................. Drug Interdiction ............................................. Federal Air Marshal Service .......................... Federal Law Enforcement Training Center .. Federal Protective Service .............................. FEMA Response .............................................. Foreign Protectees and Foreign Missions ..... Hazard Mitigation Grant ................................ Immigration Services ...................................... Inspection Technology ..................................... Marine Environmental Protection ................. Metropolitan Medical Response System ........ National Flood Insurance ............................... Office of Investigations ................................... Passenger Screening Technology ................... Effective Results Not Demonstrated Effective Moderately Effective Moderately Effective Results Not Demonstrated Results Not Demonstrated Moderately Effective Results Not Demonstrated Results Not Demonstrated Results Not Demonstrated Moderately Effective Adequate Effective Results Not Demonstrated Adequate Results Not Demonstrated Moderately Effective Results Not Demonstrated Moderately Effective Adequate Results Not Demonstrated 286 1,441 48 615 244 47 61 1,084 904 623 192 424 617 80 155 1,576 184 230 50 2,153 941 27 398 1,547 52 715 267 47 126 1,257 985 663 196 478 1,307 106 161 1,775 205 295 30 1,524 1,181 103 385 1,606 72 779 301 0 139 1,493 1,114 689 224 487 326 110 161 1,854 232 288 0 1,632 1,399 147 Protective Intelligence .................................... Recovery ........................................................... Screener Training ............................................ Screener Workforce ......................................... Search and Rescue .......................................... Standards ......................................................... State Homeland Security Grants ................... Threat and Vulnerability, Testing and Assessment (TVTA). Effective Adequate Adequate Results Not Results Not Adequate Results Not Results Not Direct Federal Competitive Grant Capital Assets and Service Acquisition Research and Development Direct Federal Direct Federal Direct Federal Direct Federal Direct Federal Direct Federal Direct Federal Direct Federal Direct Federal Direct Federal Direct Federal Direct Federal Direct Federal Block/Formula Grant Direct Federal Direct Federal Regulatory Based Block/Formula Grant Direct Federal Direct Federal Capital Assets and Service Acquisition Direct Federal Direct Federal Direct Federal Direct Federal Direct Federal Research and Development Block/Formula Grant Research and Development 57 3,031 106 2,334 691 38 1,200 93 59 6,466 89 2,522 768 40 1,500 66 60 1,374 91 2,669 794 37 1,020 50 Demonstrated Demonstrated Demonstrated Demonstrated 26 ANALYTICAL PERSPECTIVES Table 2–5 PROGRAM ASSESSMENT AND FUNDING INFORMATION—Continued (Current Data for All Programs Assessed by PART) Program Funding Level (dollars in millions) Agency/Program Title Rating Primary Program Type 2004 Actual Department of Housing and Urban Development: Community Development Block Grant (Formula). Fair Housing Assistance Program ................. Fair Housing Initiatives Program .................. Family Self-Sufficiency Program (FSS)— within Housing Vouchers. FHA Single-Family Mortgage Insurance ...... HOME Investment Partnerships Program ... Homeownership Voucher ................................ HOPE VI .......................................................... Housing Counseling ........................................ Housing for Persons with Disabilities ........... Housing for the Elderly .................................. Housing Opportunities for Persons with AIDS. Housing Vouchers ............................................ Indian Community Development Block Grant Program. Lead Hazard Grants ....................................... National Community Development Initiative Native American Housing Block Grants ....... Partnership for Advancing Technology in Housing (PATH). Project-Based Rental Assistance .................... Rural Housing and Economic Development .. Department of the Interior: Abandoned Mine Land Reclamation .............. DOI Wildland Fire Management ................... Energy and Minerals Management ............... Energy Resource Assessments ....................... Federal Regulatory and Abandoned Mine Land Program. Geologic Hazard Assessments ........................ Habitat Restoration Activities ........................ Indian 477—Job Placement and Training .... Indian Forestry Program ................................ Indian Law Enforcement ................................ Indian Post Secondary Education—Tribal Colleges. Indian Roads—Operation and Maintenance Indian School Construction ............................ Estimate 2005 2006 Ineffective Block/Formula Grant 4,331 4,117 0 Moderately Effective Results Not Demonstrated Adequate Block/Formula Grant Competitive Grant Competitive Grant 28 20 48 26 20 46 23 16 55 Adequate Moderately Effective Moderately Effective Ineffective Adequate Results Not Demonstrated Results Not Demonstrated Results Not Demonstrated Credit Block/Formula Grant Competitive Grant Competitive Grant Competitive Grant Competitive Grant Competitive Grant Block/Formula Grant –2,660 2,006 4 149 40 249 773 297 –2,121 1,900 3 143 42 238 741 282 –1,867 1,941 5 –143 40 120 741 268 Moderately Effective Adequate Competitive Grant Competitive Grant 14,415 72 14,717 68 15,784 58 Moderately Effective Moderately Effective Results Not Demonstrated Results Not Demonstrated Competitive Grant Block/Formula Grant Block/Formula Grant Research and Development 164 35 650 7 167 34 622 7 110 0 522 0 Ineffective 4,769 4,950 4,682 Ineffective Capital Assets and Service Acquisition Competitive Grant 25 24 0 Results Not Demonstrated Results Not Demonstrated Adequate Moderately Effective Results Not Demonstrated Block/Formula Grant Direct Federal Direct Federal Research and Development Regulatory Based 172 685 109 25 54 168 733 108 24 58 170 757 117 21 58 Moderately Effective Moderately Effective Moderately Effective Adequate Results Not Demonstrated Adequate Research and Development Direct Federal Block/Formula Grant Direct Federal Direct Federal Block/Formula Grant 75 144 8 49 172 94 76 150 9 53 180 97 82 158 9 53 192 88 Results Not Demonstrated Results Not Demonstrated 27 295 27 263 27 174 522 91 518 90 522 0 Indian School Operations ............................... Land & Water Conservation Fund (LWCF) State Grants. LWCF Land Acquisition ................................. Migratory Bird Program ................................. Mineral Resource Assessments ...................... Minerals Revenue Management ..................... National Fish Hatchery System ..................... National Historic Preservation Programs ..... National Mapping ............................................ National Park Service Cultural Resource Stewardship. National Park Service Facility Management Adequate Results Not Demonstrated Direct Federal Capital Assets and Service Acquisition Direct Federal Block/Formula Grant Results Not Demonstrated Results Not Demonstrated Moderately Effective Results Not Demonstrated Moderately Effective Moderately Effective Effective Adequate Direct Federal Direct Federal Research and Development Direct Federal Direct Federal Block/Formula Grant Research and Development Direct Federal 98 119 55 99 58 97 130 92 103 129 54 103 57 98 119 95 114 141 26 104 58 88 139 96 Adequate 700 690 717 National Park Service Natural Resource Stewardship. National Wildlife Refuge Operations and Maintenance. Moderately Effective Capital Assets and Service Acquisition Direct Federal 198 206 210 Results Not Demonstrated Direct Federal 412 402 415 27 2. BUDGET AND PERFORMANCE INTEGRATION Table 2–5 PROGRAM ASSESSMENT AND FUNDING INFORMATION—Continued (Current Data for All Programs Assessed by PART) Program Funding Level (dollars in millions) Agency/Program Title Rating Primary Program Type 2004 Actual Estimate 2005 2006 Outer Continental Shelf Environmental Studies. Partners for Fish and Wildlife ....................... Project Planning and Construction ................ Moderately Effective Research and Development 27 27 26 Adequate Results Not Demonstrated 42 143 48 143 52 143 Realty and Ownership Management ............. Reclamation Hydropower ................................ Adequate Effective 107 59 107 69 97 71 Recreation and Concessions ........................... Adequate 10 10 10 Recreation Management ................................. Regulation of Surface Coal Mining Activities Resource Evaluation and Leasing Program .. Rural Water Supply Projects .......................... Adequate Results Not Demonstrated Moderately Effective Results Not Demonstrated 64 70 54 75 63 71 58 89 68 71 59 55 Science & Technology Program (S&T) ........... Southern Nevada Public Land Management Act. Title XVI Water Reuse and Recycling ........... Tribal Courts ................................................... Tribal Land Consolidation .............................. Effective Results Not Demonstrated Direct Federal Capital Assets and Service Acquisition Direct Federal Capital Assets and Service Acquisition Capital Assets and Service Acquisition Direct Federal Regulatory Based Direct Federal Capital Assets and Service Acquisition Research and Development Direct Federal 16 240 17 401 10 521 28 18 22 26 18 35 10 18 35 Water Information Collection and Dissemination. Water Resources Research ............................. Moderately Effective Competitive Grant Direct Federal Capital Assets and Service Acquisition Research and Development 66 64 64 Moderately Effective Research and Development 143 141 140 Moderately Effective Moderately Effective Direct Federal Direct Federal 215 596 188 673 195 712 Moderately Effective Results Not Demonstrated Moderately Effective Adequate Results Not Demonstrated Adequate Ineffective Moderately Effective Direct Federal Competitive Grant Direct Federal Direct Federal Competitive Grant Direct Federal Block/Formula Grant Block/Formula Grant 4,755 742 291 183 38 2,070 59 30 4,776 499 435 234 39 2,208 54 25 5,066 22 464 251 70 2,269 0 58 Adequate Results Not Demonstrated Results Not Demonstrated Adequate Adequate Adequate Adequate Adequate Direct Federal Block/Formula Grant Block/Formula Grant Direct Federal Direct Federal Direct Federal Competitive Grant Direct Federal 379 0 297 1,525 181 539 58 429 581 25 301 1,542 186 551 61 508 545 44 0 1,623 191 599 60 529 Moderately Effective Effective Ineffective Direct Federal Direct Federal Direct Federal 1,451 524 439 1,446 534 437 1,401 543 437 Results Not Demonstrated Adequate Moderately Effective Regulatory Based Block/Formula Grant Regulatory Based 10 1,236 134 10 1,203 148 10 1,094 154 Adequate Moderately Effective Block/Formula Grant Direct Federal 787 2,571 780 2,634 696 2,702 Moderately Effective Adequate Direct Federal Competitive Grant 5 111 5 93 6 12 Moderately Effective Ineffective Direct Federal Competitive Grant 1,566 79 1,576 78 1,547 0 Department of Justice: ATF Arson & Explosives Program ................. ATF Firearms Programs—Integrated Violence Reduction Strategy. Bureau of Prisons ............................................ Community Oriented Policing Services ......... Criminal Justice Services ............................... Cybercrime ....................................................... Drug Courts ..................................................... Drug Enforcement Administration ................ Juvenile Accountability Block Grants ........... National Criminal History Improvement Program. Organized Crime/Drug Enforcement ............. Residential Substance Abuse Treatment ...... State Criminal Alien Assistance Program .... U.S. Attorneys ................................................. USMS Apprehension of Fugitives .................. USMS Protection of the Judicial Process ...... Weed and Seed ................................................ White Collar Crime ......................................... Department of Labor: Black Lung Benefits Program ........................ Bureau of Labor Statistics .............................. Community Service Employment for Older Americans. Davis-Bacon Wage Determination Program Dislocated Worker Assistance ........................ Employee Benefits Security Administration (EBSA). Employment Service ....................................... Federal Employees’ Compensation Act (FECA). H–1B Labor Condition Applications Program International Child Labor Program and Office of Foreign Relations. Job Corps ......................................................... Migrant and Seasonal Farmworkers ............. Moderately Effective Results Not Demonstrated Moderately Effective 28 ANALYTICAL PERSPECTIVES Table 2–5 PROGRAM ASSESSMENT AND FUNDING INFORMATION—Continued (Current Data for All Programs Assessed by PART) Program Funding Level (dollars in millions) Agency/Program Title Rating Primary Program Type 2004 Actual Mine Safety and Health Administration ....... Native American Programs—Workforce Investment Act. Occupational Safety and Health Administration. Office of Federal Contract Compliance Programs (OFCCP). Pension Benefit Guaranty Corporation ......... Permanent Labor Certification Program ....... Trade Adjustment Assistance ......................... Unemployment Insurance Administration State Grants. Youth Activities ............................................... Department of State: Andean Counterdrug Initiative (ACI) ............ Capital Security Construction Program ........ Contribution to the United Nations Development Programme (UNDP). Contributions For International Peacekeeping Activities. Educational and Cultural Exchange Programs in Near East Asia and South Asia. Global Educational and Cultural Exchanges Humanitarian Migrants to Israel .................. International Narcotics Control and Law Enforcement Programs in the Western Hemisphere (INCLE WHA). International Fisheries Commissions ............ Nonproliferation of WMD Expertise (NWMDE). Non-Security Based Capital Construction Program. Refugee Admissions to the U.S ...................... UN High Commissioner for Refugees (UNHCR). Visa and Consular Services ............................ Worldwide Security Upgrades ........................ Department of Transportation: FAA Air Traffic Services ................................. FAA Grants-in-Aid for Airports (Airport Improvement Program). Facilities and Equipment ............................... Estimate 2005 2006 Adequate Adequate Regulatory Based Competitive Grant 269 57 279 56 280 56 Adequate Regulatory Based 458 464 467 Adequate Regulatory Based 79 80 82 Moderately Effective Adequate Ineffective Moderately Effective Direct Federal Direct Federal Direct Federal Block/Formula Grant 294 37 1,341 2,815 312 38 1,060 2,699 297 40 969 2,660 Ineffective Block/Formula Grant 1,005 1,012 960 Adequate Effective 727 753 725 775 735 810 Effective Direct Federal Capital Assets and Service Acquisition Block/Formula Grant 101 108 95 Effective Direct Federal 795 483 1,036 Effective Competitive Grant 80 89 125 Effective Effective Adequate Competitive Grant Block/Formula Grant Direct Federal 321 49 47 356 50 45 430 40 51 Adequate Moderately Effective Block/Formula Grant Direct Federal 19 36 21 38 25 44 Effective 64 0 0 Effective Effective Capital Assets and Service Acquisition Competitive Grant Block/Formula Grant 142 297 138 270 223 285 Effective Effective Direct Federal Direct Federal 649 640 755 650 791 690 Adequate Moderately Effective Direct Federal Competitive Grant 6,581 3,784 7,475 3,987 7,247 3,021 Adequate 2,863 2,525 2,448 436 458 430 664 193 750 193 973 225 32,728 4,427 14 102 32,926 5,384 14 101 33,167 5,024 14 156 224 227 469 1,438 175 112 101 143 871 1,531 229 278 116 157 903 1,531 233 285 92 148 942 Federal Highway Administration (FHWA): Research and Development/Intelligent Transportation Systems (ITS). Federal Lands .................................................. Federal Motor Carrier Safety Administration Grant Program. FHWA Highway Infrastructure ..................... Formula Programs—Section 5307 and 5309 Hazardous Materials Transportation ............ Maritime Security Program ............................ Moderately Effective Capital Assets and Service Acquisition Research and Development Moderately Effective Moderately Effective Block/Formula Grant Block/Formula Grant Moderately Effective Effective Moderately Effective Effective National Highway Traffic Safety Administration Grant Program. New Starts ....................................................... Operations and Programs ............................... Operations and Research ................................ Pipeline Safety ................................................. Railroad Safety Program (RSP) ..................... Regulation & Certification .............................. Moderately Effective Block/Formula Grant Block/Formula Grant Block/Formula Grant Capital Assets and Service Acquisition Block/Formula Grant Moderately Moderately Moderately Moderately Moderately Moderately Competitive Grant Direct Federal Regulatory Based Regulatory Based Regulatory Based Regulatory Based Effective Effective Effective Effective Effective Effective 29 2. BUDGET AND PERFORMANCE INTEGRATION Table 2–5 PROGRAM ASSESSMENT AND FUNDING INFORMATION—Continued (Current Data for All Programs Assessed by PART) Program Funding Level (dollars in millions) Agency/Program Title Rating Primary Program Type 2004 Actual Research and Development ............................ Research, Engineering & Development ......... Department of the Treasury: Administering the Public Debt ....................... ATF Consumer Product Safety Activities ..... Bank Enterprise Award .................................. CDFI Fund: Financial and Technical Assistance. Coin Production ............................................... Debt Collection ................................................ Earned Income Tax Credit (EITC) Compliance. Financial Management Service (FMS): FMS Collections. IRS Tax Collection .......................................... IRS Taxpayer Advocate Service ..................... IRS Taxpayer Service ...................................... New Currency Manufacturing ........................ New Markets Tax Credit ................................ OCC Bank Supervision ................................... Office of Foreign Assets Control (OFAC) ...... OTS Thrift Supervision ................................... Submission Processing (SP) ............................ U.S. Mint: Numismatic Program ................... Department of Veterans Affairs: Burial Benefits ................................................ Disability Compensation ................................. General Administration .................................. Housing ............................................................ Medical Care .................................................... Montgomery GI Bill (MGIB) (Education Benefits). VA Research and Development ...................... Estimate 2005 2006 Moderately Effective Effective Research and Development Research and Development 37 137 44 165 51 146 Effective Adequate Results Not Demonstrated Adequate Direct Federal Regulatory Based Competitive Grant Competitive Grant 173 20 15 38 175 37 10 32 177 41 0 0 Effective Effective Ineffective Direct Federal Direct Federal Direct Federal 431 64 197 481 44 165 480 50 169 Effective Direct Federal 17 20 17 Results Not Demonstrated Moderately Effective Adequate Effective Adequate Effective Results Not Demonstrated Effective Results Not Demonstrated Effective Direct Federal Direct Federal Direct Federal Direct Federal Competitive Grant Regulatory Based Direct Federal Regulatory Based Direct Federal Direct Federal 1,773 166 2,361 340 5 477 22 178 1,275 452 1,826 170 2,329 345 6 488 22 182 1,276 709 2,015 174 2,254 410 4 509 24 187 1,274 696 Moderately Effective Results Not Demonstrated Moderately Effective Results Not Demonstrated Adequate Results Not Demonstrated Direct Federal Direct Federal Direct Federal Credit Direct Federal Direct Federal 431 26,995 551 9,385 28,207 1,968 453 29,845 622 11,440 29,925 1,991 467 30,644 677 10,678 30,705 2,580 Results Not Demonstrated Research and Development 866 784 786 Corps of Engineers-Civil Works: Coastal Ports and Harbors ............................. Results Not Demonstrated Service 914 911 907 Coastal Storm Damage Reduction ................. Results Not Demonstrated Service 93 82 69 Corps Hydropower ........................................... Adequate Service 245 285 240 Emergency Management ................................ Flood Damage Reduction ................................ Moderately Effective Results Not Demonstrated Service 3 1,077 148 1,059 70 967 Inland Waterways Navigation ....................... Results Not Demonstrated Service 866 844 898 Non-regulatory Wetlands Activities ............... Results Not Demonstrated Service 413 423 507 Recreation Management ................................. USACE Regulatory Program .......................... Moderately Effective Moderately Effective Capital Assets and Acquisition Capital Assets and Acquisition Capital Assets and Acquisition Direct Federal Capital Assets and Acquisition Capital Assets and Acquisition Capital Assets and Acquisition Direct Federal Regulatory Based 260 140 268 144 268 160 Moderately Effective Adequate Ineffective Adequate Adequate Adequate Adequate Adequate Adequate Results Not Demonstrated Adequate Results Not Demonstrated Regulatory Based Regulatory Based Block/Formula Grant Competitive Grant Direct Federal Block/Formula Grant Direct Federal Direct Federal Block/Formula Grant Research and Development Direct Federal Competitive Grant 19 96 43 170 446 1,342 110 43 845 115 17 9 19 99 45 210 446 1,091 109 46 850 94 17 9 19 100 15 210 467 730 113 51 850 84 18 0 Environmental Protection Agency: Acid Rain .......................................................... Air Toxics ......................................................... Alaska Native Villages .................................... Brownfields ...................................................... Civil Enforcement ............................................ Clean Water State Revolving Fund ............... Climate Change Programs .............................. Criminal Enforcement ..................................... Drinking Water State Revolving Fund .......... Ecological Research ......................................... Endocrine Disruptors ...................................... Environmental Education ............................... 30 ANALYTICAL PERSPECTIVES Table 2–5 PROGRAM ASSESSMENT AND FUNDING INFORMATION—Continued (Current Data for All Programs Assessed by PART) Program Funding Level (dollars in millions) Agency/Program Title Rating Primary Program Type 2004 Actual Existing Chemicals .......................................... Leaking Underground Storage Tanks ........... Mobile Source Standards and Certification .. New Chemicals ................................................ Nonpoint Source Grants ................................. Particulate Matter Research .......................... Pesticide Enforcement Grant Program .......... Pesticide Field Programs ................................ Pesticide Registration ..................................... Pesticide Reregistration .................................. Pollution Prevention and New Technologies Public Water System Supervision Grant Program. RCRA Base Program, Permits and Grants ... RCRA Corrective Action ................................. Stratospheric Ozone Protection ...................... Superfund Remedial Action ............................ Superfund Removal ......................................... Tribal General Assistance .............................. U. S.-Mexico Border Water Infrastructure .... Underground Injection Control (UIC) Grant Program. General Services Administration: Asset Management of Federally-Owned Real Property. GSA New Construction (BA51) Program DRAFT. GSA’s Regional IT Solutions Program ........... 2005 2006 Adequate Adequate Moderately Effective Moderately Effective Adequate Results Not Demonstrated Ineffective Results Not Demonstrated Adequate Adequate Results Not Demonstrated Adequate Direct Federal Block/Formula Grant Regulatory Based Direct Federal Block/Formula Grant Research and Development Block/Formula Grant Block/Formula Grant Direct Federal Direct Federal Research and Development Block/Formula Grant 16 72 61 15 237 57 20 38 43 54 43 102 16 69 68 14 209 64 20 40 45 61 34 105 17 69 70 15 209 66 19 38 44 61 26 101 Adequate Adequate Adequate Adequate Results Not Demonstrated Adequate Adequate Adequate Regulatory Based Regulatory Based Regulatory Based Direct Federal Direct Federal Block/Formula Grant Block/Formula Grant Block/Formula Grant 152 40 17 622 232 62 50 11 156 41 19 748 229 63 50 11 158 41 18 622 246 58 50 11 Effective Capital Assets and Acquisition Capital Assets and Acquisition Capital Assets and Acquisition Capital Assets and Acquisition Direct Federal Capital Assets and Acquisition Regulatory Based Direct Federal Service 2,384 2,393 2,725 Service 1,035 956 845 Service 5,401 5,217 5,311 Service 3,722 4,164 4,198 Service 463 1,829 479 1,847 506 1,937 93 32 133 29 125 31 Direct Federal Capital Assets and Service Acquisition Capital Assets and Service Acquisition Capital Assets and Service Acquisition 27 1,075 47 1,166 45 1,226 1,292 1,321 1,376 1,117 1,138 1,161 Moderately Effective Results Not Demonstrated Results Not Demonstrated Moderately Effective Adequate Effective Moderately Effective Research and Development Research and Development Research and Development Research and Development Competitive Grant Research and Development Research and Development 1,057 365 103 1,505 230 596 459 906 482 76 1,384 217 681 0 852 385 76 1,248 167 723 0 Effective Adequate Research and Development Capital Assets and Service Acquisition Capital Assets and Service Acquisition Capital Assets and Service Acquisition Research and Development Research and Development 1,296 466 1,125 485 1,043 376 4,061 4,669 4,531 1,364 1,676 1,857 451 731 378 696 353 740 Results Not Demonstrated Results Not Demonstrated Leasing Space .................................................. Results Not Demonstrated Multiple Award Schedules .............................. National IT Solutions Program ...................... Results Not Demonstrated Results Not Demonstrated Office of Governmentwide Policy ................... Personal Property Management Program (FBP). Real Property Disposal (PR) ........................... Supply Depots and Special Order .................. Results Not Demonstrated Results Not Demonstrated Vehicle Acquisition .......................................... Adequate Vehicle Leasing ................................................ Moderately Effective National Aeronautics and Space Administration: Aeronautics Technology .................................. Biological Sciences Research .......................... Earth Science Applications ............................. Earth System Science ..................................... Education ......................................................... Mars Exploration ............................................. Mission and Science Measurement Technology. Solar System Exploration ............................... Space and Flight Support ............................... Estimate Results Not Demonstrated Adequate Space Shuttle ................................................... Results Not Demonstrated Space Station ................................................... Moderately Effective Structure and Evolution of the Universe ...... Sun-Earth Connection ..................................... Effective Effective 31 2. BUDGET AND PERFORMANCE INTEGRATION Table 2–5 PROGRAM ASSESSMENT AND FUNDING INFORMATION—Continued (Current Data for All Programs Assessed by PART) Program Funding Level (dollars in millions) Agency/Program Title Rating Primary Program Type 2004 Actual National Science Foundation: Biocomplexity in the Environment ................ Collaborations .................................................. Facilities ........................................................... Individuals ....................................................... Information Technology Research .................. Institutions ...................................................... Nanoscale Science and Engineering .............. Polar Tools, Facilities and Logistics .............. Office of Personnel Management: Federal Employees Group Life Insurance (FEGLI). Federal Employees Health Benefits Program Federal Employees Retirement Program ...... FEHBP Integrity ............................................. Small Business Administration: Business Information Centers ........................ Disaster Loan Program ................................... SCORE ............................................................. Section 504 Certified Development Company Guaranteed Loan Program. Section 7 (a) Guaranteed Loan Program ....... Small Business Development Centers ........... Small Business Investment Company ........... Social Security Administration: Disability Insurance ........................................ Supplemental Security Income ...................... International Assistance Programs Department of State: Anti-Terrorism Assistance .............................. Assistance Coordination of SEED/FSA .......... Economic Support Fund (HRDF) ................... Economic Support Fund (WHA) ..................... Export Controls ............................................... Humanitarian Demining ................................ Military Assistance to new NATO and NATO Aspirant Nations. Nonproliferation & Disarmament Fund ........ PKO—OSCE Programs ................................... Security Assistance for the Western Hemisphere. Security Assistance to Sub-Saharan Africa .. Terrorist Interdiction Program (TIP) ............. Department of the Treasury: African Development Fund ............................. Global Environment Facility .......................... International Development Association ........ Treasury Technical Assistance ....................... Tropical Forest Conservation Act 1 ................ Overseas Private Investment Corporation: Overseas Private Investment Corporation— Finance. Overseas Private Investment Corporation— Insurance. U.S. Trade and Development Agency: U.S. Trade and Development Agency ............ United States Agency for International Development: Child Survival and Health (CSH—LAC) ....... Development Assistance (LAC) ...................... Office of Transition Initiatives ....................... Effective Effective Effective Effective Effective Effective Effective Effective Research Research Research Research Research Research Research Research Adequate and and and and and and and and Development Development Development Development Development Development Development Development Estimate 2005 2006 104 398 566 567 309 181 256 277 99 306 615 547 197 177 297 257 84 298 692 519 167 159 257 301 Direct Federal 3,499 3,607 3,844 Adequate Adequate Effective Direct Federal Direct Federal Direct Federal 29,220 52,475 12 32,126 55,951 13 34,625 58,850 13 Results Not Demonstrated Effective Moderately Effective Adequate Direct Federal Credit Block/Formula Credit 0 169 5 0 0 112 5 0 0 138 5 0 Adequate Moderately Effective Adequate Credit Block/Formula Credit 78 88 0 0 88 0 0 88 0 Moderately Effective Moderately Effective Direct Federal Direct Federal 78,162 36,903 83,951 41,843 90,041 41,381 Effective Effective Adequate Moderately Effective Effective Effective Moderately Effective Direct Federal Competitive Grant Competitive Grant Competitive Grant Direct Federal Direct Federal Direct Federal 141 1,026 34 149 35 50 149 128 949 37 146 38 59 173 150 864 27 174 44 72 141 Effective Moderately Effective Moderately Effective Direct Federal Direct Federal Direct Federal 29 28 133 32 2 140 38 2 149 Moderately Effective Effective Direct Federal Direct Federal 57 4 86 4 147 8 Results Not Demonstrated Results Not Demonstrated Adequate Adequate Results Not Demonstrated Block/Formula Grant Block/Formula Grant Block/Formula Grant Direct Federal Credit 112 138 908 19 20 105 107 843 19 20 136 108 950 20 0 Adequate Credit 24 24 20 Adequate Credit 1,800 2,000 2,000 Moderately Effective Competitive Grant 67 58 52 Moderately Effective Moderately Effective Moderately Effective Competitive Grant Competitive Grant Competitive Grant 150 265 55 130 255 49 132 224 325 32 ANALYTICAL PERSPECTIVES Table 2–5 PROGRAM ASSESSMENT AND FUNDING INFORMATION—Continued (Current Data for All Programs Assessed by PART) Program Funding Level (dollars in millions) Agency/Program Title Rating Primary Program Type Estimate 2004 Actual Operating Expenses and Capital Investment Fund (OE/CIF). Public Law 480 Title II Food Aid ................... USAID Climate Change .................................. USAID Development Assistance—Population Other Independent Agencies American Battle Monuments Commission: World War II Memorial .................................. Appalachian Regional Commission: Appalachian Regional Commission ................ Armed Forces Retirement Home: Asset Management of AFRH Real Property Broadcasting Board of Governors: Broadcasting to Africa .................................... Broadcasting to East Asia & Eurasia ............ Broadcasting to Near East Asia and South Asia. Commodity Futures Trading Commission: Enforcement Program ..................................... Consumer Product Safety Commission: Consumer Product Safety Commission ......... Corporation for National and Community Service: AmeriCorps ...................................................... Court Services and Offender Supervision Agency for the District: Community Supervision Program .................. Pretrial Services Agency ................................. Delta Regional Authority: Delta Regional Authority ................................ Denali Commission: Denali Commission ......................................... Export-Import Bank of the United States: Export Import Bank—Long Term Guarantees. Federal Communications Commission: Schools and Libraries—Universal Service Fund. Federal Election Commission: Compliance—Enforcement .............................. National Archives and Records Administration: Electronic Records Services ............................ Records Services Program .............................. National Credit Union Administration: Community Development Revolving Loan Fund—Loan and Technical Assistance Grant components. Neighborhood Reinvestment Corporation: Neighborhood Reinvestment Corporation ..... Nuclear Regulatory Commission: Fuel Facilities Licensing & Inspection .......... Nuclear Materials Users Licensing & Inspection (NMULI). Reactor Inspection and Performance Assessment. Office of National Drug Control Policy: CTAC Counterdrug Research & Development. CTAC Technology Transfer Program ............. Drug-Free Communities Support Program ... Moderately Effective Direct Federal Adequate Adequate Moderately Effective Competitive Grant Competitive Grant Competitive Grant Effective 2005 2006 737 672 758 1,185 180 373 1,173 180 372 885 150 346 Capital Assets and Service Acquisition 22 0 0 Adequate Competitive Grant 66 65 65 Moderately Effective Capital Assets and Service Acquisition 68 65 61 Moderately Effective Moderately Effective Moderately Effective Direct Federal Direct Federal Direct Federal 13 102 136 14 100 145 13 106 170 Results Not Demonstrated Direct Federal 35 38 40 Results Not Demonstrated Regulatory Based 60 62 62 Results Not Demonstrated Competitive Grant 312 288 277 Adequate Moderately Effective Direct Federal Direct Federal 118 38 110 39 131 42 Results Not Demonstrated Competitive Grant 5 6 6 Adequate Competitive Grant 59 70 6 Moderately Effective Credit 585 764 490 Results Not Demonstrated Regulatory Based 2,250 2,250 2,250 Results Not Demonstrated Regulatory Based 50 52 55 Results Not Demonstrated 54 50 49 Adequate Capital Assets and Service Acquisition Direct Federal 351 363 384 Results Not Demonstrated Credit 4 6 6 Moderately Effective Block/Formula Grant 114 114 118 Effective Effective Regulatory Based Regulatory Based 22 44 39 63 36 65 Effective Regulatory Based 107 180 193 Results Not Demonstrated Research and Development 18 18 10 Results Not Demonstrated Adequate Competitive Grant Competitive Grant 24 70 24 79 20 80 33 2. BUDGET AND PERFORMANCE INTEGRATION Table 2–5 PROGRAM ASSESSMENT AND FUNDING INFORMATION—Continued (Current Data for All Programs Assessed by PART) Program Funding Level (dollars in millions) Agency/Program Title Rating Primary Program Type 2004 Actual High Intensity Drug Trafficking Areas (HIDTA). Youth Anti-Drug Media Campaign ................ Public Defender Service for the District of Columbia: Public Defender Service for the District of Columbia. Securities and Exchange Commission: Enforcement ..................................................... Full Disclosure Program (Corporate Review) Tennessee Valley Authority: TVA Power ....................................................... TVA Resource Stewardship (Non-Power) ...... Estimate 2005 2006 Results Not Demonstrated Competitive Grant 225 227 100 Results Not Demonstrated Capital Assets and Service Acquisition 144 119 120 Results Not Demonstrated Direct Federal 25 30 30 Results Not Demonstrated Results Not Demonstrated Direct Federal Regulatory Based 303 96 361 128 356 129 Moderately Effective Capital Assets and Service Acquisition Capital Assets and Service Acquisition 7,657 7,875 8,153 87 87 85 Effective 1Tropical Forest Conservation Act——Funding for 2006 will be provided within the amount appropriated for debt relief based on the program’s ability to demonstrate results in 2005 CROSSCUTTING PROGRAMS 35 3. HOMELAND SECURITY FUNDING ANALYSIS Since the terrorist attacks of September 11, 2001, America has engaged in a broad, determined effort to thwart terrorism, identifying and pursuing terrorists abroad and implementing an array of measures to secure our citizens and resources at home. The Administration has worked with the Congress to reorganize the Federal Government, acquire countermeasures to biological weapons, enhance security at our borders, transportation systems, critical infrastructure and local communities, and strengthen America’s preparedness and response capabilities. To build upon these accomplishments, the President signed landmark legislation to reorganize America’s intelligence agencies and implement other recommendations of the 9/11 Commission, the Intelligence Reform and Terrorism Prevention Act of 2004. These are elements of our national homeland security strategy—to prevent terrorist attacks within the United States, reduce America’s vulnerability to terrorism, and minimize the damage from attacks that may occur—involving every level of government, the private sector, and individual citizens. Since September 11th, homeland security has remained a major policy focus for all levels of government, and one of the President’s highest priorities. To underscore the importance of homeland security as a crosscutting Government-wide function, section 889 of the Homeland Security Act of 2002 requires a homeland security funding analysis to be incorporated in the President’s Budget. This analysis addresses that legislative requirement. It covers the homeland security funding and activities of all Federal agencies, not only those carried out by the Department of Homeland Security (DHS), and discusses State, local, and private sector expenditures. In addition, not all activities carried out by DHS constitute homeland security funding (e.g., Coast Guard search and rescue activities), so DHS estimates in this section do not represent the entire DHS budget. Federal Expenditures The Federal spending estimates in this analysis utilize funding and programmatic information collected on the Executive Branch’s homeland security efforts. 1 Throughout the budget formulation process, the Office of Management and Budget (OMB) collects three-year funding estimates and associated programmatic information from all Federal agencies with homeland security responsibilities. These estimates do not include the efforts of the Legislative or Judicial branches. Information in this chapter is augmented by a detailed appen1 All data in the Federal expenditures section are based on the President’s policy for the 2006 Budget. Additional policy and baseline data is presented in the ‘‘Additional Tables’’ section. Due to rounding differences, data in this section may not add to totals in other Budget volumes. dix of account-level funding estimates, which is available on the Analytical Perspectives CD ROM. To compile these data, agencies report information using standardized definitions for homeland security. The data provided by the agencies are developed at the ‘‘activity level,’’ which is a set of like programs or projects that make up a coherent effort, at a level of detail sufficient to analyze total governmental spending on homeland security. To the extent possible, this analysis maintains programmatic and funding consistency with previous estimates. Some discrepancies from data reported in earlier years arise due to agencies’ improved ability to extract terrorism-related activities from host programs and refine their characterizations. 2 As in the Budget, where appropriate, the data is also updated to reflect agency activities, Congressional action, and technical re-estimates. In addition, the Administration may refine definitions or mission area estimates over time based on additional analysis or changes in the way specific activities are characterized, aggregated, or disaggregated. Activities in many of the mission areas are closely related. For example, information gleaned from activities in the intelligence and warning category may be utilized to inform law enforcement activities in the domestic counterterrorism category. Augmentation of pharmaceutical stockpiles, categorized as emergency preparedness and response, may address agents that represent catastrophic threats. Total funding for homeland security has grown significantly since the attacks of September 11, 2001. For 2006, the President’s Budget includes $49.9 billion for homeland security activities, a $3.9 billion (8.6 percent) increase over the 2005 level, excluding DHS’ Project BioShield. 3 The 2006 level is more than $29 billion above, or approximately 240 percent, of the 2002 level of $20.7 billion. Excluding mandatory funding, the Department of Defense, and DHS’ Project BioShield, the 2006 Budget proposes a gross discretionary increase of $2.9 billion (8.3 percent) over the 2005 level. The Budget also proposes to increase aviation security fees to allow the Government to recover most of the cost of Federal aviation screening operations. Including this 2 For the estimates in this section, the significant changes of this type are: 1) a change to estimates in the U.S. Coast Guard to reflect distribution of defense-related funding consistent with appropriations, 2) a change to estimates to capture additional resources for plant and animal monitoring and surveillance programs in the Animal and Plant Health Inspection Service, and 3) a change to estimates to remove resources for the Health Resources and Services Administration’s poison control activities. Historical data has been adjusted to reflect these changes. Major changes to the classification of homeland security activities will be reviewed pursuant to section 889 of the Homeland Security Act of 2002. 3 The Department of Homeland Security Appropriations Act, 2004, provided $5.6 billion for Project BioShield, to remain available through 2013. Pursuant to that Act, specific amounts became available in 2004 ($0.9 billion) and 2005 ($2.5 billion) that are intended to cover programmatic activities through 2008. The remainder will become available in 2009. Including this uneven funding stream can distort year-over-year comparisons. 37 38 ANALYTICAL PERSPECTIVES fee proposal, the net non-defense discretionary increase from 2005 to 2006 is 3.1 percent. A total of 33 agencies comprise Federal homeland security funding. Of those, five agencies—the Departments of Homeland Security (DHS), Defense (DOD), Table 3–1. Health and Human Services (HHS), Justice (DOJ) and Energy (DOE)—account for approximately 92 percent of total Government-wide homeland security funding in 2006: HOMELAND SECURITY FUNDING BY AGENCY (Budget authority, in millions of dollars) Budget Authority 2004 Enacted 2004 Supplemental 2005 Enacted * 2006 Request Department of Agriculture ...................................................................................................................................................... Department of Commerce ...................................................................................................................................................... Department of Defense .......................................................................................................................................................... Department of Education ....................................................................................................................................................... Department of Energy ............................................................................................................................................................ Department of Health and Human Services ......................................................................................................................... Department of Homeland Security ......................................................................................................................................... Department of Housing and Urban Development ................................................................................................................. Department of the Interior ...................................................................................................................................................... Department of Justice ............................................................................................................................................................ Department of Labor .............................................................................................................................................................. Department of State ............................................................................................................................................................... Department of Transportation ................................................................................................................................................ Department of the Treasury ................................................................................................................................................... Department of Veterans Affairs ............................................................................................................................................. Corps of Engineers ................................................................................................................................................................ Environmental Protection Agency .......................................................................................................................................... Executive Office of the President .......................................................................................................................................... General Services Administration ............................................................................................................................................ National Aeronautics and Space Administration ................................................................................................................... National Science Foundation ................................................................................................................................................. Office of Personnel Management .......................................................................................................................................... Social Security Administration ................................................................................................................................................ District of Columbia ................................................................................................................................................................ Federal Communications Commission .................................................................................................................................. Intelligence Community Management Account ..................................................................................................................... National Archives and Records Administration ..................................................................................................................... Nuclear Regulatory Commission ............................................................................................................................................ Postal Service ......................................................................................................................................................................... Securities and Exchange Commission .................................................................................................................................. Smithsonian Institution ........................................................................................................................................................... United States Holocaust Memorial Museum ......................................................................................................................... Corporation for National and Community Service ................................................................................................................ 411.1 124.6 7,024.0 8.0 1,364.0 4,062.2 22,832.7 1.7 82.9 2,164.9 52.4 696.4 283.5 90.4 271.3 101.5 131.0 35.0 78.9 207.0 340.0 3.0 143.4 19.0 1.0 1.0 16.0 66.8 .................... 5.0 78.3 8.0 22.8 ...................... ...................... ...................... ...................... ...................... ...................... 90.7 ...................... ...................... 15.5 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 599.9 166.7 8,570.1 23.8 1,562.0 4,230.3 24,870.7 2.0 65.0 2,677.8 56.1 824.1 181.7 101.1 280.4 89.0 106.8 29.5 65.2 218.0 342.2 3.0 159.4 15.0 1.6 72.4 17.1 59.2 503.0 5.0 75.0 8.0 17.0 703.7 183.2 9,513.5 22.7 1,665.8 4,406.7 27,332.5 1.9 57.1 3,103.6 47.9 938.1 191.5 110.5 298.9 72.0 184.3 22.4 79.8 205.0 344.2 3.8 177.5 15.0 3.5 55.8 20.2 61.0 .................... 5.0 86.6 8.7 20.4 Total, Homeland Security Budget Authority ..................................................................................................................... Less Department of Defense ............................................................................................................................................. 40,727.7 –7,024.0 106.2 ...................... 45,998.2 –8,570.1 49,942.9 –9,513.5 Non-Defense Homeland Security Budget Authority excluding BioShield .................................................................... Less Fee-Funded Homeland Security Programs .............................................................................................................. Less Mandatory Homeland Security Programs ................................................................................................................ 33,703.7 –3,289.1 –1,940.2 106.2 ...................... ...................... 37,428.1 –3,941.0 –2,225.1 40,429.5 –5,889.5 –2,302.0 Net Non-Defense Discretionary, Homeland Security Budget Authority excluding BioShield ................................... Plus BioShield .................................................................................................................................................................... Net Non-Defense Discretionary, Homeland Security Budget Authority including BioShield .................................... 28,474.4 885.0 29,359.4 106.2 ...................... 106.2 31,262.0 2,508.0 33,770.0 32,237.9 .................... 32,237.9 Obligations Limitations Department of Transportation Obligations Limitation ....................................................................................................... 139.8 ...................... 57.7 54.6 * Excludes $16M in supplemental appropriations provided to the Coast Guard in 2005. The growth in Federal homeland security funding is indicative of the efforts that have been initiated to secure our Nation. However, it should be recognized that fully developing the strategic capacity to protect America is a complex effort. There is a wide range of potential threats and risks from terrorism. To optimize lim- ited resources and minimize the potential social costs to our free and open society, homeland security activities should be prioritized based on the highest threats and risks. Homeland security represents a partnership among the Federal Government, State and local govern- 39 3. HOMELAND SECURITY FUNDING ANALYSIS ments, the private sector, and individual citizens, each with a unique role in protecting our Nation. The National Strategy for Homeland Security provides a framework for addressing these challenges. It guides the highest priority requirements for securing the Nation. As demonstrated below, the Federal Government has used the National Strategy to guide its homeland security efforts. For this analysis, agencies categorize their funding data based on the critical mission areas defined in the National Strategy: intelligence and warning, border and transportation security, domestic counterterrorism, protecting critical infrastructures and key assets, defending against catastrophic threats, and emergency preparedness and response. In all tables, classified funding for the Intelligence Community is combined with the Department of Defense and titled ‘‘Department of Defense.’’ The National Strategy is a dynamic document; it includes actions that agencies use and must build upon to measure progress. In some cases, progress may be easily measured. In others, Federal agencies, along with Table 3–2. State and local governments and the private sector, are working together to develop measurable goals. Finally, in some areas, Federal agencies and partners must continue to develop a better understanding of risks and threats—such as the biological agents most likely to be used by a terrorist group or the highestrisk critical infrastructure targets—in order to develop benchmarks. This chapter highlights some significant results from OMB’s Performance Assessment Rating Tool (PART), as well as some major performance metrics and milestones. These are not an exhaustive list of homeland security PART results, measures, or milestones; nor are they exempt from the performance measurement challenges highlighted above. However, they do illustrate the Government’s efforts in building a more robust architecture to measure homeland security performance. The following table summarizes funding levels by the National Strategy’s mission areas; more detailed analysis is provided in subsequent mission-specific analysis sections. HOMELAND SECURITY FUNDING BY NATIONAL STRATEGY MISSION AREA (Budget authority, in millions of dollars) Agency 2004 Enacted 2004 Supplemental 2005 Enacted 2006 Request Intelligence and Warning ........................................ Border and Transportation Security ....................... Domestic Counterterrorism ..................................... Protecting Critical Infrastructure and Key Assets .. Defending Against Catastrophic Threats ............... Emergency Preparedness and Response ............. Other ........................................................................ 242.2 15,840.8 3,379.3 12,279.1 2,974.2 6,002.6 9.6 ...................... 90.7 12.3 2.5 0.7 ...................... ...................... 349.8 17,550.2 3,944.5 14,939.4 3,399.2 5,765.2 49.8 431.9 19,285.8 4,468.7 15,632.2 3,898.3 6,121.6 104.5 Total, Homeland Security Budget Authority Plus BioShield ..................................................... 40,727.7 885.0 106.2 ...................... 45,998.2 2,508.0 49,942.9 .................... Total, Homeland Security Budget Authority, including BioShield ...................................... 41,612.7 106.2 48,506.2 49,942.9 National Strategy Mission Area: Intelligence and Warning The intelligence and warning mission area covers activities to detect terrorist threats and disseminate terrorist-threat information. The category includes intelligence collection, risk analysis, and threat-vulnerability integration activities for preventing terrorist attacks. It also includes information sharing activities among Federal, State, and local governments, relevant private sector entities (particularly custodians of critical infrastructure), and the public at large. It does not include most foreign intelligence collection—although the resulting intelligence may inform homeland security activities—nor does it fully capture classified intelligence activities. In 2006, the bulk of the funding for intelligence and warning is in DHS (61 percent in 2006), primarily in the Information Analysis and Infrastructure Protection (IAIP) Directorate and the Secret Serv- ice, DOJ (21 percent in 2006), primarily in the Federal Bureau of Investigation (FBI), and the Intelligence Community Management Account (13 percent in 2006). 2006 funding for intelligence and warning activities would increase by 23 percent over the 2005 level. The major requirements addressed in the intelligence and warning mission area include: • Unifying and enhancing intelligence and analytical capabilities to ensure officials have the information they need to prevent attacks; and • Implementing the Homeland Security Advisory System and other information sharing and warning mechanisms to allow Federal, State, local, and private authorities to take action to prevent attacks and protect potential targets. The recently-passed Intelligence Reform and Terrorism Prevention Act of 2004, supported by executive orders on information sharing, management of the in- 40 ANALYTICAL PERSPECTIVES Table 3–3. INTELLIGENCE AND WARNING FUNDING (Budget authority, in millions of dollars) Agency 2004 Enacted 2004 Supplemental 2005 Enacted 2006 Request Department of Agriculture ....................................... Department of Homeland Security ......................... Department of Justice ............................................. Department of the Treasury ................................... Intelligence Community Management Account ...... 0.8 236.0 2.0 2.5 1.0 ...................... ...................... ...................... ...................... ...................... 6.3 226.4 44.2 0.6 72.4 22.3 262.4 90.9 0.6 55.8 Total, Intelligence and Warning ...................... 242.2 ...................... 349.8 431.9 telligence community, and the National Counterterrorism Center, will improve the Nation’s intelligence and warning capabilities. The new Director of National Intelligence (DNI) is empowered to set collection and analysis priorities, which will help ensure that homeland security requirements are addressed. The DNI is also empowered to ensure that information sharing takes place across the intelligence community. These changes implement the recommendations of the 9/11 Commission, and should allow the intelligence community to ‘‘connect the dots’’ more effectively, develop a better integrated system for identifying and analyzing terrorist threats, and issue warnings more rapidly. In addition, the newly created National Counterterrorism Center (NCTC) is specifically chartered to centralize U.S. Government terrorism threat analysis and ensure that all agencies receive relevant analysis and information. The NCTC will serve as the primary organization in the U.S. Government for analyzing and integrating all intelligence pertaining to terrorism and counterterrorism (excepting purely domestic terrorism); operate as the central and shared knowledge bank on known and suspected terrorists and international terror groups; and ensure that agencies, as appropriate, have access to and receive the all-source intelligence support needed to execute their counterterrorism plans or perform independent, alternative analysis. NCTC is tasked to coordinate counterterrorism operations on a global basis and develop strategic, operational plans for the Global War on Terrorism. The NCTC will use this capability to allocate requirements to the agencies with the assets and capabilities to address them. NCTC will not direct operations, leaving mission execution to the appropriate agencies. This structure will ensure that the chain of command remains intact and prevent bureaucratic micromanagement of counterterrorism missions. Taken together, the creation of the NCTC and recent legislation and executive orders will ensure that counterterrorism assets are better allocated and coordinated to produce improved indications and warning intelligence to benefit homeland security. These structural changes complement ongoing efforts to improve information sharing. The Information Systems Council (ISC) established by Executive Order 13356, ‘‘Strengthening of Terrorism Information to Protect Americans,’’ was directed to establish an interoper- able terrorism ‘‘environment’’ to automate information sharing among the homeland security, law enforcement, and intelligence communities. The ISC recently reported to the President a plan to improve sharing of terrorism information through the establishment of an interoperable terrorism information sharing ‘‘environment.’’ The proposed plan includes a vision for the future of the environment, including additional functions and capabilities, and a four-phase plan for moving forward, including near-term solutions to address gaps. The environment will enable the interchange of information between appropriate Federal, State, and local authorities and the private sector while protecting the privacy rights and civil liberties of Americans. As discussed above, the DNI and the NCTC will continue to utilize the unique assets and capabilities of other Government agencies—some of which are reorganizing to improve these capabilities and better interface with the new intelligence structure. After 9/11, the FBI created an Office of Intelligence to establish intelligence requirements and coordinate information collection and sharing. The 2005 Department of Justice Appropriations Act and the Intelligence Reform and Terrorism Prevention Act directed the FBI to re-designate the Office of Intelligence as the Directorate of Intelligence. The new Directorate supervises all national intelligence programs of the FBI, oversees field intelligence operations, and is developing an FBI intelligence career service. The 2006 Budget provides $117 million in new funding for FBI to enhance its intelligence programs. Performance measures that will be used by the FBI program include the percentage of intelligence products meeting all standards and the percentage of investigations that are intelligence-based. The Department of Homeland Security’s Information Analysis and Infrastructure Protection Directorate (IAIP) will also contribute to the new intelligence structure. By maintaining and expanding its partnership the NCTC, IAIP will continue to coordinate its activities with other members within the newly reorganized intelligence community. IAIP was established as part of DHS to fill a unique role: mapping threat information against our nation’s vulnerabilities and working with the Federal, State, and local government officials and private sector custodians of critical infrastructure to mitigate those vulnerabilities. IAIP’s Office of Information Analysis, which is the Department’s intelligence division, centralizes analysis and information about 41 3. HOMELAND SECURITY FUNDING ANALYSIS threats to homeland security. IAIP is also the focal point for disseminating information to states and local entities. For example, IAIP is connected to homeland security directors of States and territories through the Homeland Security Information Network (HSIN). All fifty States and major urban areas are now connected to HSIN. In 2006, HSIN will be rolled out to major counties as well. In addition, IAIP’s analysis informs the Secretary as he administers the Homeland Security Advisory System. National Strategy Mission Transportation Security Area: Border and This mission area covers activities to protect border and transportation systems, such as screening airport passengers, detecting dangerous materials at ports overseas and at U.S. ports-of-entry, and patrolling our coasts and the land between ports-of-entry. The majority of funding in this mission area ($18.2 billion, or 94 percent, in 2006) is in DHS, largely for the U.S. Customs and Border Protection (CBP), the Transportation Security Administration (TSA), and the Coast Guard. Other DHS bureaus and other Departments, such as State and Agriculture, also play significant roles. The President’s 2006 request would increase funding for border and transportation security activities by 10 percent over the 2005 level. Securing our borders and transportation systems is a complex task. Security enhancements in one area may make another avenue more attractive to terrorists. Therefore, our border and transportation security strategy aims to make the U.S. borders ‘‘smarter’’—targeting resources toward the highest risks and sharing information so that frontline personnel can stay ahead of potential adversaries—while facilitating the flow of legitimate visitors and commerce. The creation of DHS, which unified the Federal Government’s major border and transportation security resources, facilitates the integration of risk targeting systems and ensures greater accountability in border and transportation security. Rather than having separate systems for managing goods, people, and agricultural products, one agency is now accountable for ensuring that there is one cohesive border management system. In 2005 and 2006, the Administration will focus on implementing Homeland Security Presidential Directive Table 3–4. (HSPD) 11, Comprehensive Terrorist-Related Screening Procedures. Although resources related to screening are spread throughout mission areas, the majority are captured in border and transportation security because of the sizable Federal efforts to screen people, cargo, and conveyances as they cross U.S. borders or travel through U.S. transportation systems. A cohesive screening system is a key element of a smart border strategy. Internally, DHS will modify its own organizational structure to consolidate screening programs previously spread throughout the Department’s components. The new Screening Coordination and Operations Office (SCO) will manage the two DHS centerpiece screening programs: US-VISIT, which screens international travelers arriving at our ports of entry; and the Secure Flight program, which conducts automated screening of all domestic aviation passengers. At least nine other existing programs will also be consolidated, including the Free and Secure Trade (FAST) and the Transportation Worker Identification (TWIC) card programs. DHS is also leading the HSPD-11 interagency effort to implement a coordinated approach to terrorist-related screening in immigration, law enforcement, intelligence, counterintelligence, border and transportation systems, and critical infrastructure. This effort covers diverse areas, from information sharing to screener training. SCO will play a central coordinating role. The 2006 Budget includes more than $800 million in discretionary, fee-funded, and mandatory resources to support SCO. Key to the Federal government’s screening of international visitors is the US-VISIT program, which will be incorporated into SCO. US-VISIT is designed to expedite the clearance of legitimate travelers while identifying and denying clearance to those who may intend to do harm. In 2004 and 2005 the first phases of USVISIT were successfully deployed. The 2006 Budget includes a $50 million increase for accelerated deployment of US-VISIT at land border ports of entry and for enhancing border personnel’s access to immigration, criminal, and terrorist information. Through 2006, over $1.4 billion will be appropriated to support this initiative. In the area of aviation security, the Administration continues to strengthen multiple layers of security implemented in the wake of the September 11th attacks. The Federal Government will continue to improve the BORDER AND TRANSPORTATION SECURITY FUNDING (Budget authority, in millions of dollars) Agency Department Department Department Department Department of of of of of 2004 Enacted 2004 Supplemental 2005 Enacted 2006 Request Agriculture ....................................... Homeland Security ......................... Justice ............................................. State ............................................... Transportation ................................. 147.9 14,941.7 20.1 663.9 67.2 ...................... 90.7 ...................... ...................... ...................... 163.1 16,560.6 34.5 778.2 13.9 164.2 18,207.3 20.8 878.4 15.1 Total, Border and Transportation Security ... 15,840.8 90.7 17,550.2 19,285.8 42 airport screening system to ensure that it provides effective security with less bother to travelers. TSA will refine its training programs and screening procedures to ensure a balance among security needs, screening efficiency, and traveler privacy. While maintaining the more than 10,000 screening devices at 448 airports, TSA will also begin to upgrade equipment and address technology gaps, such as screening for explosives on higher risk passengers and property. TSA will receive an increase of more than $400 million over 2005 for aviation security. Improved domestic and international passenger prescreening systems and processes will be fully implemented in 2006 to ensure that higher risk passengers receive scrutiny before boarding aircraft. The Budget also proposes to set aviation security fees at a level that allows the Government to recover most of the cost of Federal aviation screening operations. Outside of passenger and baggage screening, DHS has recently proposed a comprehensive set of air cargo security requirements. The rulemaking process should be completed this year. The Budget will support a strong air cargo prescreening and regulatory enforcement program in CBP and TSA, and air cargo technology research and development program in the DHS Science and Technology (S&T) Directorate. In addition, the S&T Directorate will continue its R&D program on the viability of countermeasures that could be placed on commercial aircraft to defend against the threat of shoulder-fired missiles. The Budget provides $110 million to test these systems to determine operational, safety, and reliability issues. The security of our seaports is critical since terrorists may seek to use them to enter the country or introduce weapons or other dangerous materials. With 95 percent of all U.S. cargo passing through the Nation’s 361 ports, a terrorist attack on a seaport could be economically devastating. The Maritime Transportation Security Act (MTSA) and its implementing regulations, issued by DHS in October 2003, require ports, vessels, and facilities to conduct security assessments. In 2006, the Coast Guard will continue implementation of MTSA to ensure compliance with port and vessel security standards and regulations. The 2006 Budget provides more than $2 billion for port security across DHS, including $1.9 billion in discretionary funding for Coast Guard port security activities such as Maritime Safety and Security Teams and harbor patrols for ports with liquefied natural gas terminals. In addition, the Coast Guard budget funds operations to strengthen intelligence collection and surveillance capabilities in the maritime environment, both of which contribute to the broader Coast Guard effort to enhance Maritime Domain Awareness. To secure our borders while also maintaining openness to travel and trade, CBP utilizes a risk-based, layered security approach. Overall funding for CBP homeland security activities in 2006 would increase by ANALYTICAL PERSPECTIVES more than $150 million over the 2005 level, with enhancements supporting additional inspectors at portsof-entry, additional Border Patrol agents, inspection equipment, enhancements to tracking and targeting databases, and information technology upgrades. Further, through its Container Security Initiative (CSI), CBP has addressed an area of identified risk—the security of international shipping containers. CSI screens cargo containers at foreign ports before the containers are placed on ships bound for the United States. The 2006 Budget requests $138 million for CSI. A major focus across mission areas for 2006 is the effort to upgrade our radiological and nuclear detection capability. The 2006 Budget provides $178 million to CBP (along with an increase for radiological and nuclear detection research, discussed below) to defend against radiological and nuclear threats by deploying current non-intrusive inspection technologies and piloting next-generation radiation detection technologies. The 2006 PART on the Inspection Technology program found that while the program is lacking in specific targets to measure long-term success, it has a very clear program purpose and sound management. To ensure detention and removal of illegal aliens present in the U.S., the 2006 Budget also supports a $176 million increase for the Detention and Removal Program. This includes funding to expand the program to apprehend alien fugitives and to increase efforts to ensure that aliens convicted of crimes in the U.S. are deported directly from correctional institutions after their time is served. A 2005 PART found this program moderately effective because DHS Immigration and Customs Enforcement (ICE) has reorganized its operations and engaged in significant strategic and performance planning efforts to identify ambitious goals to improve program performance. The State Department is the second largest agency contributor to border and transportation security. The Bureau of Consular Affairs Border Security program consists of visa, passport and American Citizen Services programs. The State Department Border Security program underwent a PART analysis in 2004, 2005 and 2006 budgets, and was found to be effective. The analysis determined that State, working in coordination with the other border and transportation security agencies, has effectively targeted programs and funding, established achievable annual and long term goals as well as developed thoughtful policies that not only secure processes related to screening of all travelers to the US but also facilitate legitimate travel. The 2006 Budget includes funding in State for technology related to increased interviews, screening, and information sharing between Federal agencies on visa applicants; the development and production of new machine-readable biometric U.S. passports; and for increased interoperability of border security and counterterrorism systems between State, DHS, and FBI. 43 3. HOMELAND SECURITY FUNDING ANALYSIS National Strategy Counterterrorism Mission Area: Domestic Funding in the domestic counterterrorism mission area covers Federal and Federally-supported efforts to identify, thwart, and prosecute terrorists in the United States. The largest contributors to the domestic Table 3–5. counterterrorism mission are law enforcement organizations: the Department of Justice (largely for the FBI) and DHS (largely for ICE), accounting for 53 and 45 percent of funding for 2006, respectively. The President’s 2006 request would increase funding for domestic counterterrorism activities by 13 percent over the 2005 level. DOMESTIC COUNTERRORISM FUNDING (Budget authority, in millions of dollars) Agency 2004 Enacted 2004 Supplemental 2005 Enacted 2006 Request Department of Homeland Security ......................... Department of Justice ............................................. Department of Transportation ................................. Department of the Treasury ................................... Social Security Administration ................................ 1,703.7 1,608.4 21.0 45.2 1.0 ...................... 12.3 ...................... ...................... ...................... 1,867.0 1,999.0 20.0 54.9 3.7 2,008.8 2,372.7 22.0 61.0 4.2 Total, Domestic Counterterrorism .................. 3,379.3 12.3 3,944.5 4,468.7 Since the attacks of September 11th, preventing and interdicting terrorist activity within the United States has become a priority for law enforcement at all levels of government. The major requirements addressed in the domestic counterterrorism mission area include: • Developing a proactive law enforcement capability to prevent terrorist attacks. • Apprehending potential terrorists. • Improving law enforcement cooperation and information sharing to enhance domestic counterterrorism efforts across all levels of government. Over the past three years, FBI has transformed its organization and established priorities to ensure that protecting the U.S. from terrorist attack is its primary focus. To support this transformation, resources have been shifted from lower priority programs, counterterrorism analytical capability has been enhanced, additional field investigators have been hired, and headquarters oversight and management of terrorism cases has been strengthened. Overall, FBI resources in the domestic counterterrorism category have increased from $0.9 billion in 2002 to over $1.7 billion in 2006, with the 2006 Budget providing an increase of approximately $300 million over the 2005 level. The increase will support a range of activities, such as counterterrorism investigations and countering cyber crime. To specifically promote information sharing efforts, it includes an additional $17 million for FBI to upgrade its Integrated Automated Fingerprint Identification System. This will enhance system capacity, speed, and capabilities, and will promote information sharing between the FBI, DHS, and other agencies. By merging existing immigration and customs enforcement functions into ICE, the Department of Homeland Security created one of America’s largest law en- forcement agencies. The Nation is better prepared to apprehend potential terrorists because DHS has combined the information and resources to identify and investigate illegal activities—such as smuggling, identity theft, and money laundering, and trafficking in dangerous materials. The 2006 PART found that the investigative arm of ICE, the Office of Investigations, has made significant progress in the integration of former customs and immigration investigators, and has started to reap the benefits of additional investigative authorities. However, the program must institute stronger financial and management controls to ensure appropriate expenditure and budgeting of resources and to hold managers and agency partners accountable for performance results. The 2006 Budget provides an increase of $34 million to expand these enforcement activities. The interagency Terrorist Screening Center (TSC) is a hub for domestic counterterrorism activity. TSC was established in September 2003 pursuant to HSPD-6 in order to consolidate terror screening watch lists and to support Federal screeners worldwide. In its first year, TSC has created a single point for terrorist screening data; established a round-the-clock call center for officials encountering suspects; coordinated response for Federal, State, and local law enforcement; and instituted a formal process for tracking encounters. TSC staff, who include participants from DOD, DHS, DOJ, State, and other agencies, currently field nearly 100 calls per day from Federal, State, and local law enforcement representatives. The 2006 Budget provides $104 million for TSC, a $75 million increase over 2005, to enable TSC to meet its increasing responsibilities, particularly in support of the DHS Secure Flight program. 44 ANALYTICAL PERSPECTIVES National Strategy Mission Area: Protecting Critical Infrastructure and Key Assets Funding in the protecting critical infrastructure and key assets mission area captures the efforts of the U.S. Government to secure the Nation’s infrastructure, including information infrastructure, from terrorist attacks. Protecting the Nation’s key assets is a complex challenge because an estimated more than 85 percent are not Federally-owned. DOD reports the largest share of funding in this category for 2006 ($8.7 billion, or 56 percent), and includes programs focusing on physical security and improving the military’s ability to prevent or mitigate the consequences of attacks against personnel and bases. DHS has overall responsibility for prioritizing and executing infrastructure protection activities at a national level and accounts for $2.8 billion (18 percent) of 2006 funding. A total of 26 other agencies report funding to protect their own assets and to Table 3–6. work with States, localities, and the private sector to reduce vulnerabilities in their areas of expertise. The President’s 2006 request increases funding for activities to protect critical infrastructure and key assets by $0.7 billion (5 percent) over the 2005 level. Securing America’s critical infrastructure and key assets is a complex task. The major requirements include: • Unifying disparate efforts to protect critical infrastructure across the Federal Government, and with State, local, and private stakeholders. • Building and maintaining a complete and accurate assessment of America’s critical infrastructure and key assets and prioritizing protective action based on risk. • Enabling effective partnerships to protect critical infrastructure. • Reducing threats and vulnerabilities in cyberspace. PROTECTING CRITICAL INFRASTRUCTURE AND KEY ASSETS FUNDING (Budget authority, in millions of dollars) Agency 2004 Enacted 2004 Supplemental Department of Agriculture ....................................... Department of Defense .......................................... Department of Energy ............................................ Department of Health and Human Services .......... Department of Homeland Security ......................... Department of Justice ............................................. Department of Transportation ................................. Department of Veterans Affairs .............................. National Aeronautics and Space Administration .... National Science Foundation .................................. Social Security Administration ................................ Postal Service ......................................................... Other Agencies ....................................................... 36.9 6,543.8 1,256.4 162.8 2,128.3 409.2 180.1 239.2 207.0 313.0 142.1 .................... 660.4 ...................... ...................... ...................... ...................... ...................... 2.5 ...................... ...................... ...................... ...................... ...................... ...................... ...................... 150.7 7,916.9 1,456.1 168.3 2,585.9 455.8 137.0 242.9 218.0 315.2 155.0 503.0 634.6 129.3 8,700.8 1,481.0 170.3 2,820.0 566.1 141.2 262.3 205.0 317.2 172.6 .................... 666.3 Total, Protecting Critical Infrastructure and Key Assets .................................................... 12,279.1 2.5 14,939.4 15,632.2 IAIP is the focal point for DHS infrastructure protection efforts, and is responsible for prioritizing and addressing requirements at a national level. IAIP maintains the National Asset Database, which catalogues critical infrastructure and key assets. IAIP leverages tactical intelligence with a risk-based strategy that identifies critical infrastructures in targeted areas, assesses the vulnerabilities of that infrastructure, and recommends protective measures. IAIP conducts site visits and assessments of more than 1,000 sites each year, and has used this information to develop site security guidelines for nuclear power plants and chemical facilities. Security guidelines are also being developed for all infrastructure sectors, covering spent nuclear fuel, petroleum refineries, natural gas facilities, and railroads, for example. In addition, IAIP trains State and local officials and infrastructure owners to improve security in the areas immediately surrounding critical sites. The 2006 Budget provides $530 million 2005 Enacted 2006 Request for IAIP activities in the protecting critical infrastructures and key assets mission area. In addition, the Administration proposes $600 million for Targeted Infrastructure Protection (TIP) grants. Awarded through the Office of State and Local Government Coordination and Preparedness, TIP grants and assistance will supplement state and local infrastructure protection efforts, especially detection and security investments. Cyberspace security is a key element of infrastructure protection because the internet and other computer systems link infrastructure sectors. The consequences of a cyber attack could cascade across the economy, imperiling public safety and national security. To address this threat, DHS has established the National Cyber Security Division (NCSD) to identify, analyze and reduce cyber threats and vulnerabilities, coordinate incident response, and provide technical assistance. Since its formal establishment in 2003, NCSD has worked with the private sector to improve security of the Na- 45 3. HOMELAND SECURITY FUNDING ANALYSIS tion’s information infrastructure. For example, it coordinated the response and mitigation of the Blaster worm and SoBig virus. NCSD has also established the U.S. Computer Emergency Response Team (US-CERT). USCERT supports watch and warning capability responsible for tracking incident and trend data, ranking associated severity, and generating real-time alerts. $73 million is requested for the NCSD in 2006. HSPD-7, signed in December 2003, established a national policy to protect critical infrastructures and key resources from attack, ensure the delivery of essential goods and services, and maintain public safety and security. Under HSPD-7, DHS is responsible for coordinating Federal critical infrastructure protection efforts. To provide a consistent structure to integrate critical infrastructure protection, DHS has an interim National Infrastructure Protection Plan. Under the plan’s framework, DHS will coordinate the infrastructure protection efforts of other Federal departments and agencies. A number of agencies rely on specialized expertise and long-standing relationships with industry in conducting infrastructure protection activities. Recognizing that each infrastructure sector possesses it own unique characteristics, a sector-specific agency has been designated to oversee infrastructure protection efforts for each sector. Consequently, sector-specific agencies are pursuing infrastructure protection efforts in concert with DHS. For example, the Department of Energy is coordinating protection activities within the energy sector. The Department of Agriculture is protecting agricultural resources, a source of essential commodities, through research and testing programs. There are 13 critical infrastructure sectors and nine sectorspecific agencies. The Environmental Protection Agency (EPA), the water sector-specific agency under HSPD-7, guides the protection of water infrastructure through training and technical support for water utilities and grants for State water security coordinators. In 2006, EPA will address the HSPD-9 requirement to lead the development of surveillance and monitoring systems for water quality. EPA will introduce Water Sentinel, a program Table 3–7. to develop and demonstrate cost-effective, real-time sampling and analysis capabilities at critical points in a water system for early detection of disease, pest, or poisonous agents. The Administration’s request for $44 million in 2006 will fund Water Sentinel as a pilot program in five major cities. National Strategy Mission Area: Defending Against Catastrophic Threats The defending against catastrophic threats mission area covers activities to research, develop, and deploy technologies, systems, and medical measures to detect and counter the threat of chemical, biological, radiological, and nuclear (CBRN) weapons. The agencies with the most significant resources in this category are HHS ($2.0 billion, or 51 percent, of the 2006 total), largely for research in the National Institutes of Health, and in DHS, mostly for the Directorate of Science and Technology (S&T) ($1.2 billion, or 31 percent, of the 2006 total), to help develop and field technologies to counter CBRN threats. The President’s 2006 request would increase funding for activities defending against catastrophic threats by 15 percent over the 2005 level. The major requirements addressed in this mission area include: • Developing countermeasures, including broad spectrum vaccines, antimicrobials, and antidotes. • Preventing terrorist use of CBRN weapons through detection systems and procedures, and improving decontamination techniques. A key element in addressing these requirements is developing and maintaining adequate countermeasures for a CBRN attack. This not only means stockpiling countermeasures that are currently available, but developing new countermeasures for agents that currently have none and next-generation countermeasures that are safer and more effective than those that presently exist. Also, unlike an attack with conventional weapons, a CBRN attack may not be immediately apparent. Working to ensure earlier detection and characterization of an attack helps protect and save lives. DEFENDING AGAINST CATASTROPHIC THREATS FUNDING (Budget authority, in millions of dollars) Agency 2004 Enacted 2004 Supplemental 2005 Enacted 2006 Request Department of Agriculture ....................................... Department of Commerce ...................................... Department of Defense .......................................... Department of Energy ............................................ Department of Health and Human Services .......... Department of Homeland Security ......................... Department of Justice ............................................. National Science Foundation .................................. Nuclear Regulatory Commission ............................ 168.2 60.0 146.8 .................... 1,754.1 774.0 27.9 27.0 16.2 ...................... ...................... ...................... ...................... ...................... ...................... 0.7 ...................... ...................... 222.7 73.4 178.2 7.5 1,901.8 936.1 33.5 27.0 19.0 317.2 84.7 158.9 62.8 1,971.5 1,212.1 43.0 27.0 21.2 Total, Defending Against Catastrophic Threats ........................................................... 2,974.2 0.7 3,399.2 3,898.3 46 The Federal Government is addressing these requirements. The DHS Biological Countermeasures Office budget request is $385 million in 2006, a $22 million increase over 2005. This program received an effective PART rating, demonstrating significant accomplishments for a new program. Within the Biological Countermeasures Office, new vaccine research funds will target specific vaccines that can be used to defend our food supply from the intentional or accidental introduction of foreign animal diseases into the country. These vaccines will help protect the Nation from the catastrophic economic consequences that a major disease outbreak would cause. Funds are also requested for a National Agrodefense Facility that will be able to analyze pathogens in large animals. The 2006 Budget also includes $59 million for the Department of Agriculture to complete a state-of-the-art animal disease research and diagnostic facility at Ames, Iowa. The Budget continues to invest in efforts to decrease the time between an attack and implementation of Federal, State and local response protocols. The Science and Technology Directorate will expand and enhance the BioWatch environmental monitoring program, which samples and analyzes air in over 30 metropolitan areas to continually check for dangerous biological agents. The program is designed to provide early warning of a large-scale biological weapon attack, allowing the distribution of life-saving treatment and preventative measures before the development of serious and widespread illnesses. The Administration maintains HHS’ investment in developing medical countermeasures to CBRN threats, investing nearly $1.8 billion, an increase of $56 million over 2005 and $1.7 billion over the level prior to September 11th (this includes funding for programs focused on chemical and radiological and nuclear countermeasures referenced below). HHS will continue to improve human health surveillance with $79 million dedicated to the BioSense program (collecting information from hospitals, emergency departments, and laboratories to identify ‘‘real-time’’ trends), increasing laboratory capacity, and augmenting the number and quality of border health and quarantine stations. The Food and Drug Administration and the U.S. Department of Agriculture will also conduct surveillance to ensure the security of the food supply. Information collected from these programs will be disseminated to the National Biosurveillance Integration Center at DHS. In addition, the Administration proposes to double the amount of spending on chemical agent R&D conducted by DHS, including $36 million in additional spending on non-traditional chemical agent threats, enhancing our ability to detect and counter these weapons. This funding level includes the creation of a stateof-the-art materials testing facility that will be housed with the Department of Defense chemical countermeasures programs. The National Institutes of Health will also devote $50 million to research chemical agent countermeasures. ANALYTICAL PERSPECTIVES To protect against a nuclear or radiological weapon entering the country, a new Domestic Nuclear Detection Office (DNDO) is being created in the Department of Homeland Security. The DNDO will be responsible for developing and deploying a comprehensive system to detect and report any attempt to import a nuclear explosive device or radiological material. This Office will have oversight of all research and development for detection, identification, and reporting of radiological and nuclear materials. It will also be responsible for establishing response protocols to ensure that the detection of a nuclear explosive device or radiological material leads to timely and effective action by military, law enforcement, emergency response, and other appropriate government assets. The Administration is requesting $262 million in DHS R&D funds for advanced detection devices to minimize the likelihood that a radiological or nuclear device could enter the United States; this more than doubles the amount provided in 2005. This R&D program will be integrated with our overseas non-proliferation and border security efforts to keep these devices out of the hands of terrorists and outside the borders of this country. The DNDO will also work with CBP on its pilot program to deploy next-generation radiation detectors. Finally, the Office will work with State and local grant recipients to best deploy their radiation detection assets to work in concert with Federal detection efforts. National Strategy Mission Area: Emergency Preparedness and Response The Emergency Preparedness and Response mission area covers agency efforts to prepare for and minimize the damage from major incidents and disasters, particularly terrorist attacks that endanger lives and property or disrupt government operations. The mission area encompasses a broad range of agency incident management activities, as well as grants and other assistance to States and localities. DHS maintains the largest share of funding in this category ($2.7 billion, or 45 percent, for 2006), mainly for preparedness grant assistance to State and local first responders. HHS, the second largest contributor ($2.2 billion, or 37 percent, in 2006), also assists States and localities to upgrade public health capacity. A total of 24 other agencies include emergency preparedness and response funding. A number maintain specialized response assets that may be called upon in select circumstances, and others report only funding for their agency’s internal preparedness capability. Excluding BioShield, in the President’s 2006 Budget, funding for emergency preparedness and response activities would increase by $0.4 billion (6 percent) over the 2005 level. The major requirements addressed in this mission area include: • Establishing measurable goals for national preparedness and ensuring that Federal funding supports these goals • Ensuring that Federal programs to train and equip States and localities meet national pre- 47 3. HOMELAND SECURITY FUNDING ANALYSIS Table 3–8. EMERGENCY PREPAREDNESS AND RESPONSE FUNDING (Budget authority, in millions of dollars) Agency 2004 Enacted 2004 Supplemental 2005 Enacted 2006 Request Department of Defense .......................................... Department of Energy ............................................ Department of Health and Human Services .......... Department of Homeland Security ......................... Other Agencies ....................................................... 333.3 107.6 2,145.3 3,049.0 367.3 ...................... ...................... ...................... ...................... ...................... 469.0 98.4 2,160.2 2,655.8 381.9 651.4 122.1 2,264.9 2,725.8 357.5 Total, Emergency Preparedness and Response ....................................................... Plus BioShield ................................................ 6,002.6 885.0 ...................... ...................... 5,765.2 2,508.0 6,121.6 .................... Total, Emergency Preparedness and Response including BioShield ................... 6,887.6 ...................... 8,273.2 6,121.6 paredness goals in a coordinated and complementary manner. • Encouraging standardization and interoperability of first responder equipment, especially for communications. • Building a national training, exercise, and evaluation system. • Implementing the National Incident Management System. • Preparing health care providers for a mass casualty event. • Augmenting America’s pharmaceutical and vaccine stockpiles. Many of the key elements of the national emergency response system are already in place. During 2004, separate Federal response plans were integrated into a single all-discipline National Response Plan. To ensure that Federal, State, and local investments translate into improvements in preparedness, we must continue to identify capability gaps, establish national preparedness goals, and improve response and recovery efforts at all levels of government. A related challenge is ensuring that investments in State and local preparedness are focused on new response capabilities, and not supplanting normal operating expenses. DHS is leading an interagency effort to better match Federal resources with achieving national preparedness goals. From 2001 through 2005, the Federal Government has allocated $18.2 billion in State and local terrorism preparedness grant funding from the Departments of Homeland Security, Health and Human Services, and Justice, increasing spending from an annual level of approximately $300 million in 2001 to $4.8 billion in the 2006 request. The funding growth has been directed to Federal assistance for State and local preparedness and response activities, including equipping and training first responders and preparing the public health infrastructure for a range of terrorist threats. The Federal Government has also taken steps to rationalize and simplify the distribution of State and local assistance; better target funds based on risks, threats, vulnerability and need; and develop and implement national preparedness goals. In addition, DHS’ new Office of Interoperability and Compatibility is developing a strategic plan to standardize public safety communications equipment and protocols. In 2005, DHS will begin to implement the National Response Plan and develop national preparedness goals. DHS will leverage the existing network of State and local responder training facilities by focusing more effort on ‘‘training the trainer.’’ DHS will organize 150 terrorism preparedness exercises during 2005, and provide grant funding to support approximately 400 exercises at the State and local level. The 2006 Budget continues to provide coordinated terrorism preparedness training and equipment for State and local responders across the various responder agencies. The 2006 request includes $3.6 billion for terrorism preparedness grants, training, and exercises to be administered by the Office of State and Local Government Coordination and Preparedness within DHS, and proposes a significant restructuring in the grant allocation process to better address threats and needs. The Budget also supports a range of Federal response capabilities, including providing $110 million for the Department of Energy’s Nuclear Emergency Support Team and other emergency response, management, and operations assets. The capabilities of these teams range from providing radiological assistance in support of State and local agencies to responding to major incidents worldwide. In 2005 and 2006 a new catastrophic incident response planning initiative will be undertaken. This planning effort will span across Federal agencies, as well as State and local governments. In addition to this planning initiative, the budget includes $80 million in the Departments of Homeland Security and Health and Human Services to strengthen the nation’s capabilities to respond to a mass casualty event. The Budget reflects ongoing investment for Project BioShield. BioShield is designed to stimulate the development of the next generation of countermeasures by allowing the Federal Government to buy critically needed vaccines and medications for biodefense as soon as experts agree they are safe and effective enough to be added to the Strategic National Stockpile. This pro- 48 ANALYTICAL PERSPECTIVES gram provides an incentive to manufacture these countermeasures. BioShield is a shared responsibility, joining the intelligence capabilities of DHS with the medical expertise of HHS. The Budget includes $600 million for the Strategic National Stockpile to maintain and augment the supply of vaccines and other countermeasures that can be made available within 12 hours in the event of a terrorist attack or other public health emergency. This now includes funding for storage and maintenance of products purchased through BioShield, and $50 million for the purchase of supplies under the medical surge capacity initiative. HHS has the lead role in preparing public health providers for catastrophic terrorism. For 2005, HHS will provide $483 million to continue improvements for hospital infrastructure and mutual aid through the Health Resources and Services Administration, and $797 million for States through the Centers for Disease Control and Prevention for upgrades to State and local public health capacity. This investment will bring the total assistance provided by HHS to States, local governments and health care providers since 2001 to more than $7 billion. Non-Federal Expenditures 4 State and local governments and private-sector firms also have devoted resources of their own to the task of defending against terrorist threats. Some of the additional spending has been of a one-time nature, such as investment in new security equipment and structures; some additional spending has been ongoing, such as hiring more personnel, and increasing overtime for existing security personnel. In many cases, own-source spending has supplemented the resources provided by the Federal government. Many governments and businesses are placing a high priority on, and providing additional resources for, security. On the other hand, many entities have not increased their spending. A survey conducted by the National Association of Counties in the spring of 2004 found that as a result of the homeland security process of intergovernmental planning and funding, three out of four counties believed they were better prepared to respond to terrorist threats. Moreover, almost 40 percent of the surveyed counties had appropriated their own funds to assist with homeland security. Ownsource resources supplemented funds provided by states 4 OMB does not collect detailed homeland security expenditure data from State, local, or private entities directly. and the Federal Government. However, the same survey revealed that 54 percent of counties had not used any of their own funds. 5 There is also a diversity of responses in the businesses community. In a survey conducted by the Conference Board in 2003, just over half of the companies reported that they had permanently increased security spending post-September 11, 2001. About 15 percent of the companies surveyed had increased their security spending by 20 percent or more. Large increases in spending were especially evident in critical industries, such as transportation, energy, financial services, media and telecommunications, information technology, and healthcare. However, about one-third of the surveyed companies reported that they had not increased their security spending after September 11th. 6 In light of the range of spending responses to the new security environment and the inherent difficulty of obtaining survey results that are representative of the entire universe of States, localities, and businesses, it is not surprising that estimates of non-Federal security spending also differ widely. Estimates by two private consulting firms for 2004 reveal that States and localities may have spent as little as $8 billion (according to International Horizons Unlimited) or as much as $15 billion (according to Deloitte Consulting). The business sector may have spent about $5 billion (International Horizons Unlimited) or as much as $46 billion (Deloitte Consulting). The estimates by International Horizons Unlimited were published in September 2003. They are on a Federal fiscal year basis. The Deloitte Consulting estimates were published in June 2002. They are on a fiscal year basis appropriate to the reporting entity. For State and local governments, both sets of estimates attempted to remove spending funded by Federal grants to avoid double counting spending that was reported by the Federal Government. Additional Tables The tables in the Federal expenditures section above present data based on the President’s policy for the 2006 Budget. The tables below present additional policy and baseline data, as directed by the Homeland Security Act of 2002. 5 Source: National Association of Counties, ‘‘Homeland Security Funding—2003 State Homeland Security Grants Programs I and II.’’ 6 Source: Conference Board, ‘‘Corporate Security Management’’ 2003 49 3. HOMELAND SECURITY FUNDING ANALYSIS Estimates by Agency: Table 3–9. DISCRETIONARY FEE-FUNDED HOMELAND SECURITY ACTIVITIES BY AGENCY (Budget authority, in millions of dollars) 2004 Enacted Agency 2004 Supplemental 2005 Enacted 2006 Request Department of Energy ............................................ Department of Homeland Security ......................... Department of Labor ............................................... Department of State ............................................... General Services Administration ............................ Social Security Administration ................................ Federal Communications Commission ................... Nuclear Regulatory Commission ............................ Securities and Exchange Commission ................... 1.2 2,335.0 14.9 649.0 72.8 143.4 1.0 66.8 5.0 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 1.2 2,875.0 17.6 763.3 58.6 159.4 1.6 59.2 5.0 1.5 4,688.0 14.2 866.0 72.9 177.5 3.5 61.0 5.0 Total, Discretionary Homeland Security FeeFunded Activities ......................................... 3,289.1 ...................... 3,941.0 5,889.5 Table 3–10. MANDATORY HOMELAND SECURITY FUNDING BY AGENCY (Budget authority, in millions of dollars) 2004 Enacted 2004 Supplemental Agriculture ....................................... Commerce ...................................... Education ........................................ Energy ............................................ Health and Human Services .......... Homeland Security ......................... Labor ............................................... 119.0 9.5 .................... 11.0 13.9 1,783.7 3.2 ...................... ...................... ...................... ...................... ...................... ...................... ...................... 135.0 8.4 2.7 11.0 14.2 2,051.2 2.6 137.0 8.6 .................... 11.0 15.9 2,125.5 4.0 Total, Homeland Security Mandatory Programs ....................................................... 1,940.2 ...................... 2,225.1 2,302.0 Agency Department Department Department Department Department Department Department of of of of of of of 2005 Enacted 2006 Request 50 ANALYTICAL PERSPECTIVES Table 3–11. BASELINE ESTIMATES—TOTAL HOMELAND SECURITY FUNDING BY AGENCY (Budget authority, in millions of dollars) Agency 2005 Enacted* Baseline 2006 2007 2008 2009 2010 Department of Agriculture .............................................................................................................................. Department of Commerce .............................................................................................................................. Department of Defense .................................................................................................................................. Department of Education ............................................................................................................................... Department of Energy .................................................................................................................................... Department of Health and Human Services ................................................................................................. Department of Homeland Security* ............................................................................................................... Department of Housing and Urban Development ......................................................................................... Department of the Interior .............................................................................................................................. Department of Justice .................................................................................................................................... Department of Labor ...................................................................................................................................... Department of State ....................................................................................................................................... Department of Transportation ........................................................................................................................ Department of the Treasury ........................................................................................................................... Department of Veterans Affairs ..................................................................................................................... Corps of Engineers ......................................................................................................................................... Environmental Protection Agency .................................................................................................................. Executive Office of the President .................................................................................................................. General Services Administration .................................................................................................................... National Aeronautics and Space Administration ........................................................................................... National Science Foundation ......................................................................................................................... Office of Personnel Management .................................................................................................................. Social Security Administration ........................................................................................................................ District of Columbia ........................................................................................................................................ Federal Communications Commission ........................................................................................................... Intelligence Community Management Account ............................................................................................. National Archives and Records Administration ............................................................................................. Nuclear Regulatory Commission .................................................................................................................... Postal Service ................................................................................................................................................. Securities and Exchange Commission .......................................................................................................... Smithsonian Institution .................................................................................................................................... United States Holocaust Memorial Museum ................................................................................................. Corporation for National and Community Service ......................................................................................... 601 167 8,566 25 1,562 4,229 24,887 2 65 2,679 55 824 182 102 281 89 107 30 65 218 342 3 160 15 2 72 17 59 503 5 75 8 17 617 172 8,865 22 1,595 4,323 25,714 2 68 2,778 56 840 190 107 291 91 109 31 66 223 349 3 163 15 ................ 73 17 62 513 5 79 8 17 632 177 9,137 23 1,618 4,423 26,169 2 69 2,879 57 859 197 110 301 93 113 31 67 226 357 3 166 16 ................ 75 18 64 524 5 82 8 17 651 185 9,423 23 1,655 4,522 26,903 2 71 2,976 59 876 206 115 312 95 117 32 68 232 364 3 170 16 ................ 77 18 66 534 5 87 8 19 668 188 9,722 23 1,690 4,624 27,663 2 73 3,079 61 894 214 118 324 97 119 32 70 237 371 3 173 16 ................ 78 18 68 546 5 90 9 19 686 194 10,032 24 1,728 4,730 28,456 3 76 3,190 62 914 223 124 336 99 124 33 71 241 379 3 177 17 ................ 80 19 71 558 6 94 9 19 Total, Homeland Security Budget Authority ............................................................................................. Less Department of Defense ..................................................................................................................... 46,014 –8,566 47,464 –8,865 48,518 –9,137 49,890 –9,423 51,294 –9,722 52,778 –10,032 Non-Defense Discretionary Homeland Security Budget Authority, excluding BioShield .................. Less Fee-Funded Homeland Security Programs ...................................................................................... Less Mandatory Homeland Security Programs ........................................................................................ 37,448 –3,942 –2,225 38,599 –4,052 –2,303 39,381 –4,140 –2,057 40,467 –4,228 –2,079 41,572 –4,318 –2,099 42,746 –4,412 –2,122 Net Non-Defense Discretionary Homeland Security Budget Authority excluding BioShield ............ Plus BioShield ............................................................................................................................................ 31,281 2,508 32,244 ................ 33,184 ................ 34,160 ................ 35,155 2,175 36,212 ................ Net Non-Defense Discretionary Homeland Security Budget Authority including BioShield ............. 33,789 32,244 33,184 34,160 37,330 36,212 Obligations Limitations Department of Transportation Obligations Limitation ................................................................................ 19 19 19 20 21 22 * FY 2005 Enacted estimates include supplemental funding, but baseline estimates assume that these are one-time events. 51 3. HOMELAND SECURITY FUNDING ANALYSIS Estimates by Budget Function: Table 3–12. HOMELAND SECURITY FUNDING BY BUDGET FUNCTION (budget authority, in millions of dollars) Agency 2004 Enacted 2004 Supplemental 2005 Enacted * 2006 Request National Defense .................................................... International Affairs ................................................. General Science Space and Technology .............. Energy ..................................................................... Natural Resources and the Environment ............... Agriculture ............................................................... Commerce and Housing Credit .............................. Transportation ......................................................... Community and Regional Development ................. Education, Training, Employment and Social Services .............................................................. Health ...................................................................... Medicare .................................................................. Income Security ...................................................... Social Security ........................................................ Veterans Benefits and Services ............................. Administration of Justice ......................................... General Government .............................................. 8,960 697 583 109 342 398 103 8,350 2,789 80 ...................... ...................... ...................... ...................... ...................... ...................... 11 ...................... 12,171 821 617 102 289 582 649 8,620 2,743 12,830 938 608 112 345 664 162 10,463 3,069 151 4,152 11 6 143 272 12,937 727 ...................... ...................... ...................... ...................... ...................... ...................... 16 ...................... 164 4,276 8 5 160 281 13,769 742 168 4,473 9 6 177 300 14,843 775 Total, Homeland Security Budget Authority ..... Less National Defense, DoD ............................. 40,730 –7,025 107 ...................... 45,999 –8,566 49,942 –9,513 Total, Homeland Security Budget Authority excluding BioShield ......................................... Less Fee-Funded Homeland Security Programs Less Mandatory Homeland Security Programs 33,705 –3,289 –1,941 107 ...................... ...................... 37,433 –3,942 –2,225 40,429 –5,888 –2,303 Net Discretionary, Homeland Security Budget Authority excluding BioShield ........................ Plus BioShield ..................................................... 28,475 885 107 ...................... 31,266 2,508 32,238 .................... Net Discretionary, Homeland Security Budget Authority including BioShield ......................... 29,360 107 33,774 32,238 * Excludes $16 million in supplemental appropriations provided to the Coast Guard in 2005. 52 ANALYTICAL PERSPECTIVES Table 3–13. BASELINE ESTIMATES—HOMELAND SECURITY FUNDING BY BUDGET FUNCTION (Budget authority, in millions of dollars) Budget Authority 2005 Enacted* Baseline 2006 2007 2008 2009 2010 National Defense ............................................................................................................................................ International Affairs ......................................................................................................................................... General Science Space and Technology ...................................................................................................... Energy ............................................................................................................................................................. Natural Resources and the Environment ...................................................................................................... Agriculture ....................................................................................................................................................... Commerce and Housing Credit ..................................................................................................................... Transportation ................................................................................................................................................. Community and Regional Development ........................................................................................................ Education, Training, Employment and Social Services ................................................................................ Health .............................................................................................................................................................. Medicare ......................................................................................................................................................... Income Security .............................................................................................................................................. Social Security ................................................................................................................................................ Veterans Benefits and Services ..................................................................................................................... Administration of Justice ................................................................................................................................ General Government ...................................................................................................................................... 12,171 821 617 102 289 582 649 8,636 2,743 163 4,276 8 5 160 281 13,769 742 12,555 837 630 106 296 598 662 8,907 2,800 164 4,371 8 6 163 291 14,307 763 12,914 856 643 97 305 612 676 9,204 2,858 169 4,471 9 6 166 301 14,454 777 13,291 873 656 100 313 630 694 9,480 2,918 178 4,572 9 6 170 312 14,897 791 13,681 891 670 102 319 646 709 9,766 2,981 183 4,676 9 6 173 324 15,353 805 14,087 911 683 107 331 664 726 10,063 3,044 189 4,782 10 7 177 336 15,840 821 Total, Homeland Security Budget Authority ............................................................................................. Less National Defense, DoD ..................................................................................................................... 46,014 –8,566 47,464 –8,865 48,518 –9,137 49,890 –9,423 51,294 –9,722 52,778 –10,032 Net Discretionary, Homeland Security Budget Authority, excluding BioShield .................................. Less Fee-Funded Homeland Security Programs ...................................................................................... Less Mandatory Homeland Security Programs ........................................................................................ 37,448 –3,942 –2,225 38,599 –4,052 –2,303 39,381 –4,140 –2,057 40,467 –4,228 –2,079 41,572 –4,318 –2,099 42,746 –4,412 –2,122 Net Discretionary, Homeland Security Budget Authority ....................................................................... Plus BioShield ............................................................................................................................................ 31,281 2,508 32,244 ................ 33,184 ................ 34,160 ................ 35,155 2,175 36,212 ................ Net Discretionary, Homeland Security Budget Authority, including BioShield ................................... 33,789 32,244 33,184 34,160 37,330 36,212 * FY 2005 Enacted estimates include supplemental funding, but baseline estimates assume that these are one-time events. Detailed Estimates by Budget Account: An appendix of account-level funding estimates, organized by National Strategy mission area, is available on the Analytical Perspectives CD ROM. 4. STRENGTHENING FEDERAL STATISTICS Federal statistical programs produce key information about a range of topics of interest to public and private decision makers, including the economy, the population, agriculture, crime, education, energy, the environment, health, science, and transportation. The ability of governments, businesses, and citizens to make appropriate decisions about budgets, employment, investments, taxes, and a host of other important matters depends critically on the ready availability of relevant, accurate, and timely Federal statistics. The Federal statistical community remains on alert for opportunities to strengthen these measures of our Nation’s performance. For example, during 2004, Federal statistical agencies launched the first new economic indicator survey in 40 years—the Quarterly Services Survey (Census Bureau); expanded regional economic data from 318 to 934 American communities (BEA); successfully adopted new collection and processing technologies that will greatly accelerate the release of data from the National Health Interview Survey (NCHS); and completed the first data collection on the cyberinfrastructure of academic and biomedical facilities (NSF’s SRS). For Federal statistical programs to effectively benefit such a wide range of users, the underlying data systems must be viewed as credible. In order to foster this credibility, Federal statistical programs seek to adhere to high quality standards and to maintain integrity and efficiency in the production of statistics. As the collectors and providers of these basic data, Federal statistical agencies act as data stewards—balancing public and private decision makers’ needs for information with legal and ethical obligations to minimize reporting burden, respect respondents’ privacy, and protect the confidentiality of the data provided to the Government. 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. Performance Standards Statistical programs maintain the quality of their data or information products as well as their credibility by setting high performance standards for their activities. The statistical agencies and statistical units represented on the Interagency Council on Statistical Policy (ICSP) have collaborated on developing an initial set of common performance standards for use under the Government Performance and Results Act and in completing the Administration’s Program Assessment Rating Tool (PART). Federal statistical agencies have agreed that there are six conceptual dimensions within two general areas of focus that are key to measuring and monitoring statistical programs. The first area of focus is Product Quality, encompassing the traditional dimensions of relevance, accuracy, and timeliness. The second area of focus is Program Performance, encompassing the dimensions of cost, dissemination, and mission achievement. Statistical agencies historically have focused on measuring performance in the area of product quality, especially the dimensions most amenable to quantitative measurement, specifically accuracy and timeliness. Relevance, also an accepted measure of quality, can be either a qualitative description of the usefulness of products or a quantitative measure such as a customer satisfaction score. Relevance is more difficult to measure, and the indicators that do exist are more varied. Program performance standards form the basis for evaluating effectiveness. They address questions such as: Are taxpayer dollars spent most effectively? Are products made available to those who need them? Are agencies meeting their mission requirements or making it possible for other agencies to meet their missions? The indicators available to measure program performance for statistical activities currently are less well developed. Product quality and program performance standards are designed to serve as indicators when answering specific questions in the Administration’s PART process. Chart 4–1 presents each principal Federal statistical agency’s assessment of the status of its current and planned use of indicators on the six dimensions. During the past year, four agencies (BTS, EIA, NCES, and SRS) have improved the status of their indicators. Use of the indicators may be for internal management, strategic planning, or annual performance reporting. The dimensions shown in the figure reflect an overall set of indicators for statistical activities but the specific measures vary among the individual programs depending on their unique characteristics and requirements. Annual performance reports and PARTs contain these specific measures as well as additional information about performance goals and targets and whether a program is meeting, or making measurable progress toward meeting, its performance goals. The examples below illustrate different ways agencies track their performance on each dimension. 53 54 ANALYTICAL PERSPECTIVES Chart 4-1. ICSP Statistical Quality and Program Performance Dimensions, 2006 Dimension BEA BJS BLS BTS Census EIA ERS NASS NCES NCHS ORES SOI SRS Product Quality Relevance Accuracy Timeliness Program Performance P Cost Dissemination Mission Achievement P P P P P P P Indicator Available P Indicator in development Description of Dimensions Product Quality Relevance: Qualitative or quantitative descriptions of the degree to which products and services are useful to users and responsive to users’ needs. Accuracy: Qualitative or quantitative measure of important features of correctness, validity, and reliability of data and information products measured as degree of closeness to target values. Timeliness: Qualitative or quantitative measure of the timing of information releases. Program Performance Cost: Quantitative measure of the dollar amount used to produce data products and services. Dissemination: Qualitative or quantitative information on the availability, accessibility, and distribution of products and services. Mission Achievement: Qualitative or quantitative information about the effect of, or satisfaction with, statistical programs. Key to Statistical Agencies BEA = Bureau of Economic Analysis, Department of Commerce BJS = Bureau of Justice Statistics, Department of Justice BLS = Bureau of Labor Statistics, Department of Labor BTS = Bureau of Transportation Statistics, Department of Transportation Census = Census Bureau, Department of Commerce EIA = Energy Information Administration, Department of Energy ERS = Economic Research Service, Department of Agriculture NASS = National Agricultural Statistics Service, Department of Agriculture NCES = National Center for Education Statistics, Department of Education NCHS = National Center for Health Statistics, Department of Health and Human Services ORES = Office of Research, Evaluation, and Statistics, Social Security Administration SOI = Statistics of Income, Internal Revenue Service, Department of the Treasury SRS = Division of Science Resources Statistics, National Science Foundation Product Quality: Statistical agencies agree that product quality encompasses many attributes, including (but not limited to) relevance, accuracy, and timeliness. The basic measures in this group relate to the quality of specific products, thereby providing actionable information to managers. These are ‘‘outcome-oriented’’ 4. STRENGTHENING FEDERAL STATISTICS measures and are key to the usability of information products. Statistical agencies or units establish targets and monitor how well targets are met. In some sense, relevance relates to ‘‘doing the right things,’’ while accuracy and timeliness relate to ‘‘doing things right.’’ Relevance: Qualitative or quantitative descriptions of the degree to which products and services are useful and responsive to users’ needs. Relevance of data products and analytic reports may be monitored through a professional review process and ongoing contacts with data users. Product relevance may be indicated by customer satisfaction with product content, information from customers about product use, demonstration of product improvements, comparability with other data series, agency responses to customer suggestions for improvement, new or customized products/services, frequency of use, or responses to data requests from users (including policy makers). Through a variety of professional review activities, agencies maintain the relevance, accuracy, and validity of their products, and encourage data users and other stakeholders to contribute to the agency’s data collection and dissemination programs. Striving for relevance requires monitoring to ensure that information systems anticipate change and evolve to appropriately measure our dynamic society and economy. Accuracy: Qualitative or quantitative measures of important features of correctness, validity, and reliability of data and information products measured as degree of closeness to target values. For statistical data, accuracy may be defined as the degree of closeness to the target value and measured as sampling error and various aspects of nonsampling error (e.g., response rates, size of revisions, coverage, edit performance). For analysis products, accuracy may be the quality of the reasoning, reasonableness of assumptions, and clarity of the exposition, typically measured and monitored through review processes. In addition, accuracy is assessed and improved by internal reviews, comparisons of data among different surveys, linkages of survey data to administrative records, redesigns of surveys, or expansions of sample sizes. Timeliness: Qualitative or quantitative measure of timing of information releases. Timeliness may be measured as time from the close of the reference period to the release of information, or customer satisfaction with timeliness. Timeliness may also be measured as how well agencies meet scheduled and publicized release dates, expressed as a percent of release dates met. Program Performance: Statistical agencies agree that program performance encompasses balancing the dimensions of cost, dissemination, and mission accomplishment for the agency as a whole; operating efficiently and effectively; ensuring that customers receive 55 the information they need; and serving the information needs of the Nation. Costs of products or programs may be used to develop efficiency measures. Dissemination involves making sure customers receive the information they need via the most appropriate mechanisms. Mission achievement means that the information program makes a difference. Hence, three key dimensions are being used to indicate program performance: cost (input), dissemination (output), and mission achievement (outcome). Cost: Quantitative measure of the dollar amount used to produce data products or services. The development and use of financial performance measures within the Federal Government is an established goal, and the intent of such measures is to determine the ‘‘true costs’’ of various programs or alternative modes of operation at the Federal level. Examples of cost data include full costs of products or programs, return on investment, dollar value of efficiencies, and ratios of cost to products distributed. Dissemination: Qualitative or quantitative information on the availability, accessibility, and distribution of products and services. Most agencies have goals to improve product accessibility, particularly through the Internet. Typical measures include: on-demand requests fulfilled, product downloads, degree of accessibility, customer satisfaction with ease of use, number of participants at user conferences, citations of agency data in the media, number of Internet user sessions, number of formats in which data are available, amount of technical support provided to data users, exhibits to inform the public about information products, issuance of newsletters describing products, usability testing of web sites, and assessing compliance with Section 508 of the Rehabilitation Act, which requires Federal agencies to make their electronic and information technology accessible to people with disabilities. Mission Achievement: Qualitative or quantitative information about the effect of, or satisfaction with, statistical programs. For Government statistical programs, this dimension responds to the question—have we achieved our objectives and met the expectations of our stakeholders? Under this dimension, statistical programs document their contributions to the goals and missions of parent departments and other agencies, the Administration, the Congress, and information users in the private sector and the general public. For statistical programs, this broad dimension involves meeting recognized societal information needs and also addresses the linkage between statistical outputs and programmatic outcomes. However, identifying this linkage is far from straightforward. It is frequently difficult to trace the effects of information products on the public 56 ANALYTICAL PERSPECTIVES good. Such products often are necessary intermediate inputs in the creation of high visibility information whose societal benefit is clearly recognized. For example, the economic statistics produced by a variety of agencies are directly used by the Bureau of Economic Analysis in the calculation of the Gross Domestic Product (GDP), which analysts universally use to assess changes in the level of domestic economic activity. Similarly, statistics from specific surveys are directly used by the Bureau of Labor Statistics in the calculation of the Consumer Price Index (CPI), which is widely used in diverse applications, such as indexing pensions for retirees. As a result, a number of statistical agencies can claim credit for contributing to the GDP and/or the CPI and to the many uses of these information products. In addition, the statistics produced by statistical agencies are used to track the performance of programs managed by their parent or other organizations related to topics such as crime, education, energy, the environment, health, science, and transportation. Moreover, beyond the direct and focused uses of statistical products and programs, the statistical agencies and their products serve a diverse and dispersed set of data users working on a broad range of applications. Users include government policy makers at the Federal, State, and local levels, business leaders, households, academic researchers, analysts at public policy institutes and trade groups, marketers and planners in the private sector, and many others. Information produced by statistical agencies often is combined with other information for use in the decisionmaking process. Thus, the relationship between program outputs and their beneficial uses and outcomes is often complex and difficult to track. Consequently, agencies use both qualitative and quantitative indicators to make this linkage as explicit as feasible. In the absence of preferred quantitative indicators, qualitative narratives can indicate how statistical agency products contribute to and evaluate progress toward important goals established for government or private programs. In particular, narratives can highlight how statistical agencies measure the Nation’s social and economic structure, and how the availability of the information influences changes in policies and programs. These narratives contribute to demonstrating mission accomplishment, particularly in response to questions in Section I of the PART, ‘‘program purpose and design.’’ Narratives may describe statistical information’s effects on measuring agency policy or change of policy, supporting research focused on policy issues, informing debate on policy issues, or providing in-house consulting support. In addition to narratives, quantitative measures may be used to reflect mission achievement. For example, customer satisfaction with the statistical agency or unit indicates if the agency or unit has met the expectations of its stakeholders. Of the 14 principal Federal statistical agencies that are members of the ICSP, six agencies have programs that have been assessed using the PART process. Most of these agencies’ programs have received PART summary ratings of Effective or Moderately Effective, as shown in Chart 4–2. While recognizing the strength of the Energy Information Administration’s purpose and management, EIA’s PART evaluation found that it lacks specific annual performance measures, baselines, and targets and should consider enhancing independent expert evaluation of its major program areas. EIA is correcting both of these shortcomings, which should bring its PART rating into line with those of its sister agencies. As additional ICSP agencies have an opportunity to undergo the PART process, the agencies plan to continue to use the results of the collaborative performance standards development effort to help maintain and extend their generally favorable assessments. Chart 4–2. Most Recent PART Summary Ratings for Statistical Programs Summary Rating Bureau of Economic Analysis Effective Bureau of Labor Statistics Effective Census Bureau Current Demographic Statistics Decennial Census Economic Census Intercensal Demographic Estimates Survey Sample Redesign Effective Moderately Effective Effective Moderately Effective Effective Energy Information Administration Results Not Demonstrated National Agricultural Statistics Service Moderately Effective National Center for Education Statistics Statistics Assessment Effective Effective Highlights of 2006 Program Budget Proposals The programs that provide essential statistical information for use by governments, businesses, researchers, and the public are carried out by some 70 agencies spread across every department and several independent agencies. Approximately 40 percent of the funding for these programs provides resources for twelve agencies or units that have statistical activities as their principal mission. (Please see Table 4–1.) The remaining funding supports work in 60-plus agencies or units that carry out statistical activities in conjunction with other missions such as providing services or enforcing regulations. More comprehensive budget and program information about the Federal statistical system will be available in OMB’s annual report, Statistical Programs of the United States Government, Fiscal Year 2006, when it is published later this year. The following highlights elaborate on the Administration’s 4. 57 STRENGTHENING FEDERAL STATISTICS Table 4–1. 2004–2006 BUDGET AUTHORITY FOR PRINCIPAL STATISTICAL AGENCIES (in millions of dollars) 2004 Actual Estimate 2005 1 2006 Bureau of Economic Analysis 2 .................................................................... 68 73 81 Bureau of Justice Statistics 3 ........................................................................ 32 34 63 Bureau of Labor Statistics ............................................................................ 518 529 543 Bureau of Transportation Statistics .............................................................. 30 30 33 Census ........................................................................................... Salaries and Expenses 4 ........................................................................... Periodic Censuses and Programs ............................................................ 629 213 416 765 216 549 897 240 657 Economic Research Service ......................................................................... 71 74 81 Bureau 4 Energy Information Administration ................................................................ 81 84 86 National Agricultural Statistics Service 5 ....................................................... 128 128 145 National Center for Education Statistics ....................................................... Statistics .................................................................................................... Assessment ............................................................................................... 187 92 95 185 91 94 208 91 117 National Center for Health Statistics 6 .......................................................... 90 109 109 Science Resources Statistics Division, NSF ................................................ 31 32 32 Statistics of Income Division, IRS ................................................................ 36 39 39 1 Reflects any recissions. estimate includes $2 million for a National Academy of Public Administration study of off-shoring. 3 The 2006 estimate includes funds for the Felony Arrestee Drug Use Reporting program (previously funded as the Arrestee Drug Abuse Monitoring program within the National Institute of Justice) as well as funds for management and administrative costs that were displayed separately in 2004 and 2005. 4 Includes Mandatory Appropriations of $20 million for each year for the Survey of Program Dynamics and collection of data related to the allocation to States of State Chidren’s Health Insurance Program funds. 5 Includes funds for the periodic Census of Agriculture of $25, $22, and $29 million in 2004, 2005, and 2006, respectively. The 2006 Budget includes an increase of $6.5 million due to cyclical activities including finalizing content, developing mail lists, and streamlining and upgrading processing systems in preparation for the 2007 Census of Agriculture. 6 All funds from the Public Health Service Evaluation Fund. Funds for 2004 are shown comparably with 2005 and 2006. Administrative costs for NCHS that previously were displayed as part of the NCHS budget line are now reflected in two consolidated CDC-wide budget lines for management and administrative costs. 2 2005 proposals to strengthen the programs of the principal Federal statistical agencies. Bureau of Economic Analysis: Funding is requested to: (1) make selected improvements to the timeliness and comprehensiveness of the Nation’s international statistics on multinational corporations and trade in services; (2) complete work to accelerate the release of gross state product, metropolitan personal income, and county-level personal income; (3) enhance the accuracy of BEA statistics by acquiring and incorporating real-time data into core BEA accounts; (4) improve data on international financial transactions by working with the Department of the Treasury and the Federal Reserve Board to incorporate newly developed estimates of derivatives and other financial instruments; and (5) produce up-to-date, annual estimates of business investment spending by industry in order to more accurately discern where high-tech and other investments are being made in the manufacturing and service sectors. Bureau of Justice Statistics: Funding is requested to provide for the maintenance of BJS’s core statistical programs, including: (1) the National Crime Victimization Survey, the Nation’s primary source of information on criminal victimization; (2) cybercrime statistics on the incidence, magnitude, and consequences of electronic and computer crime to households and businesses; (3) law enforcement data from over 3,000 agencies on the organization and administration of police and sheriffs’ departments; (4) nationally representative prosecution data on resources, policies, and practices of local prosecutors; (5) court and sentencing statistics, including Federal and State case processing data; (6) data on correctional populations and facilities from Federal, State, and local governments; and (7) the Felony Arrestee Drug Use Reporting program (previously funded as the Arrestee Drug Abuse Monitoring program within the National Institute of Justice). Bureau of Labor Statistics: Funding is requested to support program operations to measure the economy through producing, disseminating, and improving BLS 58 economic measures, including: (1) modernizing the computing systems for monthly processing of the Producer Price Index (PPI) and U.S. Import and Export Price Indexes (IPP), and producing new data outputs, such as indexes based on the North American Industry Classification System for the IPP; (2) maintaining continuous updating of the Consumer Price Index (CPI) by updating the expenditure and population weights biennially, the superlative index annually, outlet samples on a four-year cycle, and item samples in key categories on a two-year cycle; and (3) releasing the 2004–2014 Employment Projections and publishing the 2006–2007 edition of the Occupational Outlook Handbook. Bureau of Transportation Statistics: Funding is requested to: (1) enhance the Freight Data Program, a continuous source of data from shippers, carriers, and receivers, to replace the current Commodity Flow Survey; (2) move the Air Transportation Price Index, an input to GDP and CPI indices, from experimental to production mode; and (3) develop more timely and comprehensive local and long-distance travel data. Census Bureau: Funding is requested for the Census Bureau’s economic and demographic programs, and for a reengineered 2010 Census. For the Census Bureau’s economic and demographic programs, funding is requested to: (1) plan for the 2007 Economic Census, (2) plan and implement the organizational phase of the 2007 Census of Governments and plan for the employment and finance phases, (3) improve measurement of services by expanding key source data for critical quarterly and annual estimates of our Nation’s Gross Domestic Product, (4) support improved coverage and electronic reporting of trade statistics, (5) support the development of a database infrastructure to integrate State administrative data and Census Bureau data products in order to fill critical data gaps at the State and local levels, (6) continue efforts begun in 2003 to eliminate data gaps by measuring migration across U.S. borders, and (7) purchase furniture and relocate operations and employees to the new headquarters facility to avoid disruption of mission-critical operations necessary for the successful completion of Census Bureau surveys. For 2010 Census planning, funding is requested to continue to: (1) conduct planning, testing, and development activities to support a reengineered 2010 Census; (2) complete map feature accuracy within 7.6 meters of true GPS location for 700 of the Nation’s counties; and (3) continue to conduct the American Community Survey program to provide data on an ongoing basis rather than waiting for once-a-decade censuses. Economic Research Service: Funding is requested to support ongoing programs and to continue the development of an integrated and comprehensive data and analysis framework of the food system beyond the farmgate to provide a basis for understanding, monitoring, tracking, and identifying changes in the food supply and consumption patterns. ANALYTICAL PERSPECTIVES Energy Information Administration: Funding is requested to continue ongoing operations, with a focus on: (1) improving petroleum and natural gas data security, reliability, and quality; (2) conducting the commercial, manufacturing, and residential energy consumption surveys; (3) implementing the enhanced Voluntary Reporting of Greenhouse Gases program to support the President’s Climate Change Initiative; and (4) developing a program performance prototype to assess EIA’s data collection and operations costs at a more disaggregated level. National Agricultural Statistics Service: Funding is requested to: (1) continue restoration and modernization of the agricultural estimates program to ensure State, regional, and national level agricultural estimates of sufficient precision, quality, and detail to meet the needs of a broad customer base; (2) continue development and implementation of a locality-based agricultural county estimates/small area estimation program; and (3) continue preparations for the 2007 Census of Agriculture. National Center for Education Statistics: Funding is requested to: (1) support the ongoing data collection and analysis of the Early Childhood Longitudinal Study Birth and Kindergarten Cohorts, which provide data to inform child development practices and early education; (2) continue the Integrated Education Postsecondary Data System, which collects information on enrollment, completions, and finances from postsecondary institutions; (3) sustain the ongoing data collection efforts for the Beginning Postsecondary Students Longitudinal Study; (4) maintain U.S. participation in international assessments that compare educational achievement in the United States with that in other countries; and (5) continue the National Assessment of Educational Progress (NAEP) program, including funding to support the expansion of State NAEP to grade 12. National Center for Health Statistics: Funding is requested to: (1) increase timeliness by upgrading electronic systems for data collection and processing; (2) expand the content of surveys, particularly those addressing the health care delivery system; (3) redesign the sample for the National Health Interview Survey, NCHS’ largest population survey; and (4) work collaboratively with States and other agencies on upgrading the technology for collecting data from State birth and death certificates. Science Resources Statistics Division, NSF: Funding is requested to: (1) continue to implement the results of prior methodological, analytical, and planning activities directed toward improving the relevance, accuracy, timeliness, and accessibility of SRS products, including the suite of Research and Development surveys and the Survey of Graduate Students and Postdoctorates in Science and Engineering; and (2) lead a cross-agency effort to examine and revise current 4. STRENGTHENING FEDERAL STATISTICS taxonomies used for classifying academic fields of study, including the development of crosswalks between existing taxonomies and any potential new taxonomy, as well as strengthen methods to enhance the identification and description of cross-disciplinary and multi-disciplinary fields. Statistics of Income Division, IRS: Funding is requested to: (1) maintain and modernize core data collection systems, including several major statistical programs for the Department of the Treasury, the Congres- 59 sional Joint Committee on Taxation, the Bureau of Economic Analysis, and SOI’s many other customers; (2) implement a databank repository for SOI and IRS population file data to more efficiently build longitudinal databases and enable sub-national estimates; (3) examine means to more effectively mask individual records to minimize the possibility of identification in the Individual Public Use sample files; and (4) modernize and expedite dissemination of data and publications, including a reengineered Internet website. 5. RESEARCH AND DEVELOPMENT I. INTRODUCTION U.S. investments in science and technology in past decades have greatly enhanced the standard of living and quality of life we enjoy today and have generated significant economic growth in the United States. Advances have been possible only with the support of both public and private investment in research and development (R&D). The U.S. Government boasts the highest level of R&D investment in the world: $132 billion. However, unlike 40 years ago, when Federal R&D expenditures were double those of the private sector, industry R&D spending now exceeds Federal Government R&D spending. While the U.S. investment is, by a wide margin, the largest in the world, we also strive to make sure it is going to the highest priority and highest quality work. The President’s 2006 Budget maintains a strong focus on winning the war against terrorism, while moderating the growth in overall spending, and this focus is reflected in the R&D the Administration proposes for 2006. In addition, recognizing that fundamental research fuels future innovation and technology development, the Administration has maintained high levels of support for priority R&D areas such as nanotechnology, information technology, hydrogen energy, and space exploration. The Federal Government funds many types of R&D. First, the Government is the primary supporter of basic research, which is directed toward greater understanding of fundamental scientific phenomena. Basic research is the source of tomorrow’s discoveries and new capabilities, and this long-term research will fuel further gains in economic productivity, quality of life, and homeland and national security. The Government has an important role in supporting applied research, which is driven by more targeted scientific questions and specific needs, and development, which applies scientific knowledge and technology to specific needs. Together, II. these R&D activities are critical for ensuring that agencies effectively implement their missions. In addition to direct R&D investments, the Federal Government also helps stimulate private investment and provide incentives for private sources to continue to fuel the discovery and innovation of tomorrow. The Administration proposes to do this, for instance, by permanently extending the Research and Experimentation Tax Credit. The Administration continues to meet the President’s charge to improve the management, performance, and results of the Federal Government. By strengthening effective programs and addressing lower performers through reforms or reallocations to higher performers, we will increase the productivity of the Federal R&D portfolio and transcend the attention given to year-toyear marginal increases or decreases. Additionally, while it can be difficult to assess the outcomes of some research programs, many of which may not fully pay off for years, agencies can establish meaningful program goals and measure annual progress and performance in appropriate ways. Towards that end, the Administration continues to implement and improve investment criteria for R&D programs across the Government as part of the President’s Management Agenda. Further, the Government will coordinate interrelated and complementary R&D efforts among agencies, combining programs where appropriate to improve effectiveness and eliminate redundancy, to leverage these resources to the greatest effect. This chapter discusses how the Administration will improve the performance of R&D programs through investment principles and other means that encourage and reinforce quality research. Highlights of the coordination of multi-agency R&D priority areas are also included. The chapter concludes with details of R&D funding across the Federal Government. IMPROVING THE PERFORMANCE OF R&D PROGRAMS R&D is critically important for keeping our Nation economically competitive, and it will help solve the challenges we face in health, defense, energy, and the environment. Therefore, and consistent with the Government Performance and Results Act, every Federal R&D dollar must be invested as effectively as possible. The discussion below will focus on the use of R&D investment criteria and the effect on overall performance of research earmarks on the Federal R&D portfolio. R&D Investment Criteria The Administration is improving the effectiveness of the Federal Government’s investments in R&D by applying transparent investment criteria in analyses that inform recommendations for program funding and management. R&D performance assessment must be done with care. Research often leads scientists and engineers down unpredictable pathways with unpredictable results. This outcome can require special consideration when measuring an R&D program’s performance against its initial goals. 61 62 ANALYTICAL PERSPECTIVES With this in mind, the Administration is improving methods for setting priorities based on expected results, including applying specific criteria that programs or projects must meet to be started or continued, clear milestones for gauging progress, and improved metrics for assessing results. As directed by the President’s Management Agenda, the R&D Investment Criteria accommodate the wide range of R&D activities, from basic research to development and demonstration programs, by addressing three fundamental aspects of R&D: • Relevance—Programs must be able to articulate why they are important, relevant, and appropriate for Federal investment; • Quality—Programs must justify how funds will be allocated to ensure quality; and • Performance—Programs must be able to monitor and document how well the investments are performing. In addition, R&D projects and programs relevant to industry are expected to apply criteria to determine the appropriateness of the public investment, enable comparisons of proposed and demonstrated benefits, and provide meaningful decision points for completing or transitioning the activity to the private sector. As discussed throughout the 2006 Budget, the Office of Management and Budget (OMB) and the agencies are working on other initiatives as part of the President’s Management Agenda. For the Budget and Performance Integration initiative, the Administration developed the Program Assessment Rating Tool (PART) to consistently assess the effectiveness of programs. A section of the PART specifically addresses the assessment of R&D program management and performance and is aligned with the R&D Investment criteria. In the last three years, agencies have completed PART assessments of 84 R&D programs. The results of these PART assessments may be found on the web at http:/ /www.whitehouse.gov/omb/part/. Chart 5-1. Scores of R&D PART Assessments Cumulative number of R&D PARTs 100 84 Total 80 25 60 59 Total 16 31 40 20 20 9 6 2 15 17 2005 2006 0 Effective Moderately Effective Adequate Performance assessments help policy makers identify those programs that are the most effective and worthy of funding; however, the Administration does not allocate funding levels and initiate management reforms strictly by formula or based solely on PART results. For instance, funding may be reduced for ‘‘effective’’ programs that have achieved what they set out to do, and ‘‘ineffective’’ programs might receive more money if it is clear it would help them become more effective. The PART provides information that leads to more informed decisions. For example, as a result of the PART Ineffective Results Not Demonstrated review process, the Department of Veterans Affairs designed new performance measures that will enable its senior management to better assess the agency’s overall research direction and its contributions to the health of veterans and the general population. In another case, the PART informed a decision in the 2006 Budget to eliminate funds for the Department of Energy’s oil and gas R&D programs, which were determined to often duplicate private-sector R&D efforts and generate benefits primarily for the private sector. 63 5. RESEARCH AND DEVELOPMENT R&D agencies will continue to integrate the R&D Criteria more meaningfully into the budget formulation process in the coming year. Interagency R&D initiatives use the R&D Criteria in developing plans and reports, such as ‘‘A 21st Century Frontier for Discovery: The Physics of the Universe.’’ Based on lessons learned and other feedback from experts and stakeholders, the Administration will continue to improve the R&D Investment Criteria and their implementation to achieve more effective management of R&D programs and better-informed budget-allocation decisions. President’s Management Agenda Initiative Research and Development Investment Criteria FY 2005, Quarter 1 Status: RED, Progress: YELLOW The initiative’s red status score reflects the limited success many agencies have had in the Government-wide implementation of the initiative. The yellow progress score indicates that the initiative has momentum, as some agencies have made improvements this year, including the National Science Foundation and the Department of Energy. More R&D agencies are using the criteria to assess their programs, due to the improved alignment of the R&D Investment Criteria with the R&D PART for program-level assessments. All of the top 13 R&D agencies are using the R&D PART to assess their programs this year. Most of the major R&D agencies submitted 2006 Budget requests that, to varying degrees, observe the principles of the Investment Criteria. To achieve a yellow status score, half of the R&D programs assessed for each agency using the R&D PART must receive at least a Moderately Effective rating, which is proving to be a challenging requirement. Agencies must also integrate the R&D Criteria framework into their budget proposals, including using detailed criteria-based assessments to justify specific requests or allocation changes. Research Earmarks The Administration strongly supports awarding research funds based on merit review through a competitive process. Such a system generally ensures that the best research is supported. Research earmarks—in general the assignment of money during the legislative process for use only by a specific organization or project—are counter to a merit-based competitive selection process. Earmarks signal to potential investigators that there is an acceptable alternative to creating quality research proposals for merit-based consideration, including the use of political influence or appeals to parochial interests. Such an alternative is seldom the most effective use of taxpayer funds. Unfortunately, the practice of earmarking to colleges, universities and other entities for specific research projects has expanded dramatically in recent years. The American Association for the Advancement of Science (AAAS) recently estimated that R&D earmarks total $2.1 billion in 2005, an increase of nine percent over the Association’s 2004 estimate. Some argue that earmarks help spread the research money to states or institutions that would receive less research funding through other means. The Chronicle of Higher Education reports that this is not the main role earmarks play; often only a minor portion of academic earmark funding goes to the states with the smallest shares of Federal research funds. Meanwhile, earmarks help some rich institutions become richer. Some proponents of earmarking assert that earmarks provide a means of funding unique projects that would not be recognized by the conventional peer-review process. To address this concern, a number of research agencies have procedures and programs to reward ‘‘outof-the-box’’ thinking. For example, within the Department of Defense (DOD), the Defense Advanced Research Projects Agency seeks out high risk, high payoff scientific proposals, and program managers at the National Science Foundation (NSF) set aside a share of funding for higher-risk projects in which they see high potential. Often Congressional direction has little to do with an agency’s mission. In addition to earmarked funding noted above, the Congress also directed DOD to fund research on a wide range of diseases, including breast cancer, ovarian cancer, prostate cancer, diabetes, leukemia, and muscular dystrophy. Funding at DOD for such research totals about $900 million in 2005 alone, an increase of about $200 million in just one year. While research on these diseases is very important, it is generally not unique to the U.S. military and can be better carried out and coordinated within civil medical research agencies, without disruption to the military mission. At the same time, intrusion of earmarks into the peer-review processes of civilian medical research agencies would have a significant detrimental impact on funding the most important and promising research. The Administration will continue to work with the Congress, academic organizations, colleges and universities to discourage the practice of research earmarks and to achieve our common objectives. 64 ANALYTICAL PERSPECTIVES III. PRIORITIES FOR FEDERAL RESEARCH AND DEVELOPMENT The 2006 Budget requests $132 billion for Federal R&D funding, which targets key research investments within agencies such as NSF, the National Aeronautics and Space Administration, the Department of Commerce’s National Institute of Standards and Technology, and the National Institutes of Health (Table 5–2 provides details by agency). The ‘‘Federal Science and Technology’’ (FS&T) budget (shown in Table 5–3) highlights the creation of new knowledge and technologies more consistently and accurately than the traditional R&D data collection. The FS&T budget emphasizes research, does not count funding for defense development, testing, and evaluation, and totals less than half of Federal R&D spending. The 2006 Budget requests $61 billion for FS&T. Over the last year, the Office of Science and Technology Policy and OMB have worked with the Federal agencies and the science community to identify top priorities for Federal R&D. These are in areas critical to the Nation, such as information technologies, and in emerging fields, such as nanotechnology, that will provide new breakthroughs across many fields. Some priorities, such as hydrogen R&D, address newly recognized needs. The discussion below focuses on five multiagency priority areas and concludes with how the Federal Government stimulates private R&D investment. Multi-Agency R&D Priorities The 2006 Budget targets important research investments that must be coordinated across multiple agencies. Three of these multi-agency initiatives— nanotechnology, information technology R&D, and climate change science—are coordinated by three separate dedicated offices to ensure unified strategic planning and implementation. The Administration is strengthening interagency coordination for other priority areas—such as combating bioterrorism. The Administration will continue to analyze other areas of critical need that could benefit in the future from improved focus and coordination among agencies. Combating Terrorism R&D: Since September 2001, the Administration increased its focus on R&D that aids in securing the homeland. Research programs across the Federal Government are being coordinated to develop systems to help prevent future terrorist attacks, minimize our Nation’s vulnerability to terrorist acts, and respond and recover if an attack should occur. The President issued 12 Homeland Security Presidential Directives (HSPD) that call for, among other things, increased interagency coordination of R&D to defend against biological threats to our people, economy, agriculture, food and water supplies. For example, one HSPD, Defense of United States Agriculture and Food, establishes a national policy to provide protection against an attack on the agriculture and food systems. In 2004, multi-agency efforts made significant progress. For example, the Department of Homeland Security established both the National Biodefense Analysis and Countermeasures Center to study biological agents and the National Bioforensic Analysis Center to provide a world class forensics center. These centers join other DOD, U.S. Department of Agriculture, and National Institutes of Health facilities at Fort Detrick to create a National Interagency Biodefense Campus that will become a focal point for countermeasures research. Together, these agencies will establish research priorities to reduce the threat of biological terrorism. Networking and Information Technology R&D: The budget provides $2 billion for the multi-agency Networking and Information Technology Research and Development (NITRD) program, which focuses and coordinates agency research efforts in advanced computing systems, networks, software, and information-management technologies. The agencies involved in this program work together enabling more rapid advancement than they could achieve working on their own. These advances have an impact on virtually every sector of the economy. In 2004, agencies with responsibilities for high-end computing—ultra-powerful supercomputers, components and software—made significant progress in implementing the recommendations of the interagency HighEnd Computing Revitalization Task Force. For example, new supercomputing activities at both NASA and the Department of Energy (DOE) were begun and will be managed in accord with the Federal Plan for HighEnd Computing. To enable a better understanding of the potential scientific impact of high-end capability computing, the NITRD National Coordination Office will commission a National Academy of Sciences study that identifies and categorizes important scientific questions and technological problems for which an extraordinary advancement in our understanding is difficult or impossible without leading-edge scientific simulation capabilities. Nanotechnology R&D: The budget provides $1 billion for the multi-agency National Nanotechnology Initiative (NNI). The NNI focuses on R&D that creates materials, devices, and systems that exploit the fundamentally distinct properties of matter as it is manipulated at the atomic and molecular levels. The results of NNI-supported R&D could lead to breakthroughs in disease detection and treatment, manufacturing at the nanoscale level, environmental monitoring and protection, energy production and storage, and creating electronic devices that have even greater capabilities than those available today. Guided by the NNI, participating agencies will continue to focus on fundamental and applied research through investigator-led activities, multidisciplinary centers of excellence, education and training of nanotechnology workers, and infrastructure development, including user facilities and networks that are broadly available to researchers from across the sci- 65 5. RESEARCH AND DEVELOPMENT entific research community. For example, the 2006 Budget provides funding for DOE to complete construction on four new major nanoscale science research centers located around the country. In addition, agencies continue to maintain a focus on the responsible development of nanotechnology, with attention to the human and environmental health impacts, as well as ethical, legal, and other societal issues. Climate Change R&D: The 2006 Budget for the Climate Change Science Program (CCSP) continues to support the goals outlined in the CCSP Strategic Plan, which was released in July 2003. The Budget reflects the coordinated planning efforts of the 13 departments and agencies that participate in CCSP. Beginning in FY 2006, CCSP will formally track the expected actions, deliverables, and milestones for each of its programs in order to assess overall performance. Additional detail on individual agency activities will be provided in the Administration’s FY 2006 edition of Our Changing Planet. The Climate Change Technology Program (CCTP) continues to prioritize the portfolio of Federally funded climate change technology R&D consistent with the President’s National Climate Change Technology Initiative (NCCTI). In 2005, the CCTP will publish a draft Strategic Plan and solicit comments from the scientific community and the public. The CCTP will also identify within its portfolio a subset of NCCTI priority activities, defined as discrete R&D activities that address technological challenges, which, if solved, could advance technologies with the potential to dramatically reduce, avoid, or sequester greenhouse gas emissions. Hydrogen R&D: In 2004, the Hydrogen R&D Interagency Task Force, established by the Office of Science and Technology Policy, initiated a plan to coordinate agency efforts in key research areas, such as novel materials for fuel cells and hydrogen storage, inexpensive Table 5–1. and durable catalysts, and hydrogen production from alternative sources. In 2005, the task force will implement this plan and expand public outreach and collaboration with the private sector, state agencies, and other stakeholders. The U.S., through the Department of Energy, will continue to lead the International Partnership for the Hydrogen Economy, established in 2003 to coordinate hydrogen research among 15 nations representing two thirds of global energy consumption. DOE will continue the President’s Hydrogen Fuel Initiative to accelerate the worldwide availability and affordability of hydrogen-powered fuel cell vehicles. The initiative, which includes an 11-percent increase in targeted basic research investments in 2006, focuses on research to advance hydrogen production, storage, and infrastructure. The Initiative complements the Department’s FreedomCAR Partnership with the auto industry, which is aimed at developing viable hydrogen fuel cell vehicle technology. Stimulating Private Investment Along with direct spending on R&D, the Federal Government has sought to stimulate private R&D investment through incentives in the Internal Revenue Code. Current law provides a 20-percent tax credit for private research and experimentation expenditures above a certain base amount. The credit, which expired in June 2004, was extended again for another 18 months, through 2005, in the Working Families Tax Relief Act of 2004. The budget proposes to make the Research and Experimentation (R&E) tax credit permanent. The proposed extension will cost nearly $30 billion over the period from 2006 to 2010. In addition, a permanent tax provision lets companies deduct, up front, the costs of certain kinds of research and experimentation, rather than capitalize these costs. Also, equipment used for research benefits from relatively rapid tax depreciation allowance. Table 5–1 shows a forecast of the costs of the tax credit. PERMANENT EXTENSION OF THE RESEARCH AND EXPERIMENTATION TAX CREDIT (Revenue loss, dollar amounts in millions) 2005 Current Law ................................. 5,080 Proposed Extension .................... ............ Total ........................................ 5,080 2006 2007 2008 2009 2010 2006–10 2,100 2,097 910 4,601 390 5,944 180 6,889 50 3,630 7,669 27,200 4,197 5,511 6,334 7,069 7,719 30,830 66 ANALYTICAL PERSPECTIVES IV. FEDERAL R&D DATA Federal R&D Funding R&D is the collection of efforts directed towards gaining greater knowledge or understanding and applying knowledge toward the production of useful materials, devices, and methods. R&D investments can be characterized as basic research, applied research, development, R&D equipment, or R&D facilities, and OMB has used those or similar categories in its collection of R&D data since 1949. Basic research is defined as systematic study directed toward greater knowledge or understanding of the fundamental aspects of phenomena and of observable facts without specific applications towards processes or products in mind. Applied research is systematic study to gain knowledge or understanding necessary to determine the means by which a recognized and specific need may be met. Development is systematic application of knowledge toward the production of useful materials, devices, and systems or methods, including design, development, and Table 5–2. improvement of prototypes and new processes to meet specific requirements. Research and development equipment includes acquisition or design and production of movable equipment, such as spectrometers, microscopes, detectors, and other instruments. Research and development facilities include the acquisition, design, and construction of, or major repairs or alterations to, all physical facilities for use in R&D activities. Facilities include land, buildings, and fixed capital equipment, regardless of whether the facilities are to be used by the Government or by a private organization, and regardless of where title to the property may rest. This category includes such fixed facilities as reactors, wind tunnels, and particle accelerators. There are over twenty Federal agencies that fund R&D in the U.S. The nature of the R&D that these agencies fund depends on the mission of each agency and on the role of R&D in accomplishing it. Table 5–2 shows agency-by-agency spending on basic and applied research, development, and R&D equipment and facilities. FEDERAL RESEARCH AND DEVELOPMENT SPENDING (Budget authority, dollar amounts in millions) 2004 Actual 2005 Estimate 2006 Proposed By Agency Defense ...................................................................................................................... Health and Human Services ..................................................................................... NASA ......................................................................................................................... Energy ........................................................................................................................ National Science Foundation .................................................................................... Agriculture .................................................................................................................. Homeland Security .................................................................................................... Commerce ................................................................................................................. Transportation ............................................................................................................ Veterans Affairs ......................................................................................................... Interior ........................................................................................................................ Environmental Protection Agency ............................................................................. Other .......................................................................................................................... 65,462 28,047 10,574 8,779 4,160 2,222 1,053 1,137 661 866 627 661 1,089 70,422 28,752 10,990 8,629 4,082 2,415 1,185 1,134 748 784 615 572 1,243 70,839 28,807 11,527 8,528 4,194 2,039 1,467 1,013 808 786 582 569 1,145 132,304 Dollar Change: Percent Change: 2005 to 2006 2005 to 2006 417 1% 55 ........................ 537 5% –101 –1% 112 3% –376 –16% 282 24% –121 –11% 60 8% 2 ........................ –33 –5% –3 –1% –98 –8% Total ...................................................................................................................... 125,338 131,571 Basic Research Defense ...................................................................................................................... Health and Human Services ..................................................................................... NASA ......................................................................................................................... Energy ........................................................................................................................ National Science Foundation .................................................................................... Agriculture .................................................................................................................. Homeland Security .................................................................................................... Commerce ................................................................................................................. Transportation ............................................................................................................ Veterans Affairs ......................................................................................................... Interior ........................................................................................................................ Environmental Protection Agency ............................................................................. Other .......................................................................................................................... 733 1,358 14,780 2,473 2,847 3,524 829 68 43 20 347 37 113 149 1,513 15,124 2,368 2,887 3,432 851 85 58 38 315 36 66 155 1,319 –194 –13% 15,246 122 1% 2,199 –169 –7% 2,762 –125 –4% 3,480 48 1% 788 –63 –7% 112 27 32% 71 13 22% 41 3 8% 315 ...................... ........................ 30 –6 –17% 70 4 6% 175 20 13% Subtotal ................................................................................................................ 26,588 26,928 26,608 –320 1% –1% 67 5. RESEARCH AND DEVELOPMENT Table 5–2. FEDERAL RESEARCH AND DEVELOPMENT SPENDING—Continued (Budget authority, dollar amounts in millions) 2004 Actual 2005 Estimate 2006 Proposed Applied Research Defense ...................................................................................................................... Health and Human Services ..................................................................................... NASA ......................................................................................................................... Energy ........................................................................................................................ National Science Foundation .................................................................................... Agriculture .................................................................................................................. Homeland Security .................................................................................................... Commerce ................................................................................................................. Transportation ............................................................................................................ Veterans Affairs ......................................................................................................... Interior ........................................................................................................................ Environmental Protection Agency ............................................................................. Other .......................................................................................................................... 4,351 13,007 3,006 2,693 266 1,055 247 828 349 476 538 423 599 4,851 13,274 2,497 2,760 279 1,093 346 825 423 430 530 365 562 4,139 13,410 3,233 2,709 276 942 399 763 494 433 495 386 553 Subtotal ................................................................................................................ 27,838 28,235 28,232 Dollar Change: Percent Change: 2005 to 2006 2005 to 2006 –712 136 736 –51 –3 –151 53 –62 71 3 –35 21 –9 –15% 1% 29% –2% –1% –14% 15% –8% 17% 1% –7% 6% –2% –3 ........................ Development Defense ...................................................................................................................... 59,701 63,903 65,331 1,428 2% Health and Human Services ..................................................................................... 41 54 28 –26 –48% NASA ......................................................................................................................... 3,189 3,727 3,511 –216 –6% Energy ........................................................................................................................ 1,992 1,846 1,959 113 6% National Science Foundation .................................................................................... ................ .................... .................... ...................... ........................ Agriculture .................................................................................................................. 159 157 146 –11 –7% Homeland Security .................................................................................................... 481 599 746 147 25% Commerce ................................................................................................................. 152 149 90 –59 –40% Transportation ............................................................................................................ 279 269 254 –15 –6% Veterans Affairs ......................................................................................................... 43 39 38 –1 –3% Interior ........................................................................................................................ 49 46 54 8 17% Environmental Protection Agency ............................................................................. 125 141 113 –28 –20% Other .......................................................................................................................... 324 495 396 –99 –20% Subtotal ................................................................................................................ 66,535 71,425 72,666 1,241 2% Facilities and Equipment Defense ...................................................................................................................... 52 155 50 –105 –68% Health and Human Services ..................................................................................... 219 300 123 –177 –59% NASA ......................................................................................................................... 1,906 2,398 2,584 186 8% Energy ........................................................................................................................ 1,247 1,136 1,098 –38 –3% National Science Foundation .................................................................................... 370 371 438 67 18% Agriculture .................................................................................................................. 179 314 163 –151 –48% Homeland Security .................................................................................................... 257 155 210 55 35% Commerce ................................................................................................................. 114 102 89 –13 –13% Transportation ............................................................................................................ 13 18 19 1 ........................ Veterans Affairs ......................................................................................................... ................ .................... .................... ...................... N/A Interior ........................................................................................................................ 3 3 3 ...................... ........................ Environmental Protection Agency ............................................................................. ................ .................... .................... ...................... N/A Other .......................................................................................................................... 17 31 21 –10 –32% Subtotal ................................................................................................................ 4,377 4,983 4,798 –185 –4% 68 ANALYTICAL PERSPECTIVES Table 5–3. FEDERAL SCIENCE AND TECHNOLOGY BUDGET (Budget authority, dollar amounts in millions) 2004 Actual 2005 Estimate 2006 Proposed Dollar Change: 2005 to 2006 Percent Change: 2005 to 2006 By Agency National Institutes of Health ...................................................................................... 27,878 28,444 28,607 163 1% NASA ............................................................................................................................. Science ...................................................................................................................... Aeronautics ................................................................................................................ Exploration Systems .................................................................................................. 9,231 5,600 1,057 2,574 9,116 5,527 906 2,683 9,493 5,476 852 3,165 377 –51 –54 482 4% –1% –6% 18% National Science Foundation ..................................................................................... 5,578 5,473 5,605 132 2% Defense ......................................................................................................................... Basic Research ......................................................................................................... Applied Research ...................................................................................................... Energy 1 ......................................................................................................................... Science Programs ..................................................................................................... Energy Supply: Renewables ..................................................................................... Energy Supply: Electricity Transmission & Distribution ........................................... Energy Supply: Nuclear Energy ............................................................................... Energy Conservation 2 ............................................................................................... Fossil Energy ............................................................................................................. 5,709 1,358 4,351 5,494 3,484 357 81 292 607 673 6,363 1,513 4,850 5,635 3,600 380 101 386 596 572 5,458 1,319 4,139 5,357 3,463 354 84 390 576 491 –905 –194 –711 –278 –137 –26 –17 4 –20 –81 –14% –13% –15% –5% –4% –7% –17% 1% –3% –14% Agriculture .................................................................................................................... CSREES Research and Education 3 ........................................................................ Economic Research Service ..................................................................................... Agricultural Research Service 4 ................................................................................ Forest Service: Forest and Rangeland Research .................................................... 2,047 629 71 1,081 266 2,127 670 74 1,102 276 1,922 560 81 996 285 –205 –110 7 –106 9 –10% –16% 9% –10% 3% Interior (USGS) ............................................................................................................. 938 935 934 Commerce ..................................................................................................................... NOAA: Oceanic & Atmospheric Research ............................................................... NIST: Intramural Research and Facilities ................................................................ NIST: Advanced Technology Program ..................................................................... 965 393 401 171 992 858 404 361 451 485 137 .................... Environmental Protection Agency 5 .......................................................................... 826 780 792 Veterans Affairs 6 ......................................................................................................... 866 784 786 Transportation .............................................................................................................. Highway research 7 ................................................................................................... Federal Aviation Administration: Research, Engineering, and Development .......... 683 564 119 694 566 131 673 543 130 Education ...................................................................................................................... Special Education Research and Innovation ........................................................... National Institute on Disability and Rehabilitation Research ................................... Research, Development, and Dissemination 8 ......................................................... 350 78 107 165 355 83 108 164 345 –10 –3% 73 –10 –12% 108 .................... ...................... 164 .................... ...................... Total .......................................................................................................................... 60,565 61,696 1 Data 60,819 –1 ...................... –134 –43 34 –137 –14% –11% 8% –100% 12 2% 2 ...................... –21 –23 –1 –877 –3% –4% –1% –1% do not reflect actual transfers to Science Programs from other Department of Energy R&D programs to support the Small Business Innovation Research and the Small Business Technology Transfer programs. 2 Excludes weatherization and state grant programs. 3 Includes receipts and interest for Native American Endowment: $11 million in 2004; $14 million in 2005; $15 million in 2006. 4 Excludes buildings and facilities. 5 Includes the medical care and prosthetic research appropriation and VA medical care support transfer to research. 6 Science and Technology, plus Superfund transfer. 7 Includes research and development funding for the Federal Highway Administration, the Federal Motor Carrier Safety Administration, and the National Highway Traffic Safety Administration. 8 Does not include funding for Regional Educational Labs. 69 5. RESEARCH AND DEVELOPMENT Table 5–4. AGENCY DETAIL OF SELECTED INTERAGENCY R&D EFFORTS (Budget authority, dollar amounts in millions) 2004 Actual 2005 Estimate 2006 Proposed Dollar Change: Percent Change: 2005 to 2006 2005 to 2006 Networking and Information Technology R&D Defense 1 ................................................................................................................... National Science Foundation .................................................................................... Health and Human Services 2 ................................................................................... Energy ........................................................................................................................ Commerce ................................................................................................................. National Aeronautics and Space Administration ...................................................... Environmental Protection Agency ............................................................................. 241 773 542 343 47 258 2 277 795 573 383 58 192 4 294 803 551 355 61 57 6 17 8 –22 –28 3 –135 2 6% 1% –4% –7% 5% –70% 50% Total ...................................................................................................................... 2,206 2,282 2,127 –155 –7% National Nanotechnology Initiative National Science Foundation .................................................................................... Defense ...................................................................................................................... Energy ........................................................................................................................ Health and Human Services 3 ................................................................................... Commerce (NIST) ..................................................................................................... National Aeronautics and Space Administration ...................................................... Agriculture .................................................................................................................. Environmental Protection Agency ............................................................................. Justice ........................................................................................................................ Homeland Security .................................................................................................... 256 291 202 108 77 47 2 5 2 1 338 257 210 145 75 45 3 5 2 1 344 230 207 147 75 35 8 5 2 1 6 –27 –3 2 ...................... –10 5 ...................... ...................... ...................... 2% –11% –1% 1% ........................ –22% 167% ........................ ........................ ........................ Total ...................................................................................................................... 991 1,081 1,054 –27 –2% Climate Change Science Program National Aeronautics and Space Administration ...................................................... National Science Foundation .................................................................................... Commerce (NOAA) ................................................................................................... Energy ........................................................................................................................ Agriculture .................................................................................................................. National Institutes of Health ...................................................................................... Interior (USGS) .......................................................................................................... Environmental Protection Agency ............................................................................. Smithsonian ............................................................................................................... U.S. Agency for International Development ............................................................. Transportation ............................................................................................................ State ........................................................................................................................... 1,321 215 116 133 70 61 28 22 6 6 1 1 1,264 198 124 129 73 65 24 20 6 6 3 1 1,162 197 181 132 88 65 24 21 6 6 3 1 –102 –1 57 3 15 ...................... ...................... 1 ...................... ...................... ...................... ...................... –8% –1% 46% 2% 21% ........................ ........................ 5% ........................ ........................ N/A ........................ Total .................................................................................................................. 1,975 1,913 1,886 –27 –1% Subtotal, CCRI (included in CCSP total) ..................................................... 168 221 183 –38 –17% 1 In 2006, DOD will reassess which of its IT R&D programs are appropriate to count as part of the NITRD program, and any changes will be reported in subsequent NITRD publications. 2 Includes funds from offsetting collections for the Agency for Healthcare Research and Quality. 3 Includes funds from both the National Institutes of Health and National Institute of Occupational Safety and Health. 70 ANALYTICAL PERSPECTIVES V. ALLOCATION OF RESEARCH FUNDING Federal funds appropriated to Executive Branch agencies may be used in different ways, ranging from grants awarded to university researchers to supporting research at Federal laboratories. The Administration strongly supports the competitive, merit review process for funding research in most cases. However, there are appropriate roles for other modes of allocating research funding in some circumstances, such as funding research at specific facilities that have unique capabilities. In such cases, however, the proposed allocation should be reviewed by scientific or technological experts, as well as mangement and program experts. In order to better understand and characterize the methods agencies use to allocate their research funding, agencies reported how research funds are allocated by the following five categories: Research performed at congressional direction consists of intramural and extramural research programs where funded activities are awarded to a single performer or collection of performers with limited or no competitive selection or with competitive selection but outside of the agency’s primary mission, based on direction from the Congress in law, in report language, or by other direction. Inherently unique research is intramural and extramural research programs where funded activities are awarded to a single performer or team of performers without competitive selection. The award may be based on the provision of unique capabilities, concern for timeliness, or prior record of performance (e.g., facility operations support for a unique facility, such as an electronpositron linear collider; research grants for rapid-response studies to address an emergency). Merit-reviewed research with limited competitive selection is intramural and extramural research pro- grams where funded activities are competitively awarded from a pool of qualified applicants that are limited to organizations that were created to largely serve Federal missions and continue to receive most of their annual research revenue from Federal sources. The limited competition may be for reasons of stewardship, agency mission constraints, or retention of unique technical capabilities (e.g., funding set aside for researchers at laboratories or centers of DOD, NASA, EPA, NOAA, and NIH; Federally Funded Research and Development Centers; formula funds for USDA). Merit-reviewed research with competitive selection and internal (program) evaluation is intramural and extramural research programs where funded activities are competitively awarded following review for scientific or technical merit. The review is conducted by the program manager or other qualified individuals from within the agency program, without additional independent evaluation (e.g., merit-reviewed research at DOD). Merit-reviewed research with competitive selection and external (peer) evaluation is intramural and extramural research programs where funded activities are competitively awarded following review by a set of external scientific or technical reviewers (often called peers) for merit. The review is conducted by appropriately qualified scientists, engineers, or other technically-qualified individuals who are apart from the people or groups making the award decisions, and serves to inform the program manager or other qualified individual who makes the award (e.g., NSF’s single-investigator research; NASA’s research and analysis funds). Table 5–5 lists how Federal R&D agencies report allocating research funding among these categories. 71 5. RESEARCH AND DEVELOPMENT Table 5–5. ALLOCATION OF FEDERAL RESEARCH FUNDING, 2004 AND 2005 (Percent of Agency Research) Research Performed at Congressional Direction Inherently Unique Research Merit Reviewed Research with Limited Competitive Selection Merit Reviewed Research with Competitive Selection and Internal Evaluation Merit Reviewed Research with Competitive Selection and External Evaluation 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 Health & Human Services ................. Defense .............................................. Energy ................................................ NASA .................................................. National Science Foundation ............. Agriculture ........................................... Commerce .......................................... Veterans Affairs .................................. Interior ................................................. Transportation ..................................... Homeland Security ............................. Environmental Protection Agency ...... .................. 17% 5% 4% .................. 17% 6% .................. 7% 13% .................. 8% 1% 12% 4% 9% .................. 17% 6% .................. 7% 15% 24% .................. 1% 9% 23% 1% .................. 55% 41% .................. 30% 17% .................. 3% 1% 8% 23% 2% .................. 52% 44% .................. 30% 23% .................. 7% 12% 6% 51% 10% 6% 14% 15% .................. 33% 1% 30% 44% 12% 6% 52% 11% 6% 14% 14% .................. 33% 1% 23% 50% .................. 65% 4% 35% 21% .................. 18% .................. 27% 69% 48% 12% .................. 72% 4% 26% 21% .................. 18% .................. 27% 61% 36% 15% 86% 3% 18% 51% 73% 13% 22% 100% 2% .................. 22% 32% 86% 3% 17% 52% 73% 17% 18% 100% 2% .................. 16% 28% Research Funding (dollars in millions) .................................... Percentage of Federal Research 2,312 4% 2,427 4% 3,965 7% 4,101 7% 8,174 15% 8,414 15% 7,587 14% 7,888 14% 32,398 60% 32,549 59% By Agency 6. FEDERAL INVESTMENT Investment spending is spending that yields longterm benefits. Its purpose may be to improve the efficiency of internal Federal agency operations or to increase the Nation’s overall stock of capital for economic growth. The spending can be direct Federal spending or grants to State and local governments. It can be for physical capital, which yields a stream of services over a period of years, or for research and development or education and training, which are intangible but also increase income in the future or provide other longterm benefits. Most presentations in the Federal budget combine investment spending with spending for current use. PART I. This chapter focuses solely on Federal and federally financed investment. In this chapter, investment is discussed in the following sections: • a description of the size and composition of Federal investment spending; • a discussion of the performance of selected Federal investment programs; and • a presentation of trends in the stock of federally financed physical capital, research and development, and education. DESCRIPTION OF FEDERAL INVESTMENT For more than fifty years, the Federal budget has included a chapter on Federal investment—defined as those outlays that yield long-term benefits—separately from outlays for current use. In recent years the discussion of the composition of investment has displayed estimates of budget authority as well as outlays. The classification of spending between investment and current outlays is a matter of judgment. The budget has historically employed a relatively broad classification, encompassing physical investment, research, development, education, and training. The budget further classifies investments into those that are grants to State and local governments, such as grants for highways or education, and all other investments, called ‘‘direct Federal programs,’’ in this analysis. This ‘‘direct Federal’’ category consists primarily of spending for assets owned by the Federal Government, such as defense weapons systems and general purpose office buildings, but also includes grants to private organizations and individuals for investment, such as capital grants to Amtrak or higher education loans directly to individuals. Presentations for particular purposes could adopt different definitions of investment: • To suit the purposes of a traditional balance sheet, investment might include only those physical assets owned by the Federal Government, excluding capital financed through grants and intangible assets such as research and education. • Focusing on the role of investment in improving national productivity and enhancing economic growth would exclude items such as national defense assets, the direct benefits of which enhance national security rather than economic growth. • Concern with the efficiency of Federal operations would confine the coverage to investments that reduce costs or improve the effectiveness of inter- nal Federal agency operations, such as computer systems. • A ‘‘social investment’’ perspective might broaden the coverage of investment beyond what is included in this chapter to include programs such as childhood immunization, maternal health, certain nutrition programs, and substance abuse treatment, which are designed in part to prevent more costly health problems in future years. The relatively broad definition of investment used in this section provides consistency over time—historical figures on investment outlays back to 1940 can be found in the separate Historical Tables volume. Table 6–2 at the end of this section allows disaggregation of the data to focus on those investment outlays that best suit a particular purpose. In addition to this basic issue of definition, there are two technical problems in the classification of investment data involving the treatment of grants to State and local governments and the classification of spending that could be shown in more than one category. First, for some grants to State and local governments it is the recipient jurisdiction, not the Federal Government, that ultimately determines whether the money is used to finance investment or current purposes. This analysis classifies all of the outlays in the category where the recipient jurisdictions are expected to spend most of the money. Hence, the community development block grants are classified as physical investment, although some may be spent for current purposes. General purpose fiscal assistance is classified as current spending, although some may be spent by recipient jurisdictions on physical investment. Second, some spending could be classified in more than one category of investment. For example, outlays for construction of research facilities finance the acqui- 73 74 ANALYTICAL PERSPECTIVES sition of physical assets, but they also contribute to research and development. To avoid double counting, the outlays are classified in the category that is most commonly recognized as investment. Consequently, outlays for the conduct of research and development do not include outlays for research facilities, because these outlays are included in the category for physical investment. Similarly, spending for physical investment and research and development related to education and training is included in the categories of physical assets and the conduct of research and development. When direct loans and loan guarantees are used to fund investment, the subsidy value is included as investment. The subsidies are classified according to their program purpose, such as construction or education and training. For more information about the treatment of Federal credit programs, refer to Chapter 7, ‘‘Credit and Insurance’’, in this volume. This section presents spending for gross investment, without adjusting for depreciation. Composition of Federal Investment Outlays Major Federal Investment The composition of major Federal investment outlays is summarized in Table 6–1. They include major public physical investment, the conduct of research and development, and the conduct of education and training. Defense and nondefense investment outlays were $368.5 billion in 2004. They are estimated to increase to $396.5 billion in 2005 and are projected to decline slightly to $395.1 billion in 2006. Major Federal investment outlays will comprise an estimated 15 percent of total Federal outlays in 2006 and 3.1 percent of the Nation’s gross domestic product (GDP). Greater detail on Federal investment is available in Table 6–2 at the end of this section. That table includes both budget authority and outlays. Physical investment. Outlays for major public physical capital investment (hereafter referred to as physical investment outlays) are estimated to be $183.5 billion in 2006. Physical investment outlays are for construction and rehabilitation, the purchase of major equipment, and the purchase or sale of land and structures. More than three-fifths of these outlays are for direct physical investment by the Federal Government, with the remainder being grants to State and local governments for physical investment. Direct physical investment outlays by the Federal Government are primarily for national defense. Defense outlays for physical investment are estimated to be $88.9 billion 2006. Almost all of these outlays, or an estimated $81.3 billion, are for the procurement of weapons and other defense equipment, and the remainder is primarily for construction on military bases, family housing for military personnel, and Department of Energy defense facilities. Outlays for direct physical investment for nondefense purposes are estimated to be $30.2 billion in 2006. These outlays include $16.2 billion for construction and rehabilitation. This amount includes funds for water, power, and natural resources projects of the Corps of Engineers, the Bureau of Reclamation within the Department of the Interior, and the Tennessee Valley Authority; construction and rehabilitation of veterans hospitals and Indian Health Service hospitals and clinics; facilities for space and science programs; Postal Service facilities; and construction for embassy security. Outlays for the acquisition of major equipment are estimated to be $13.7 billion in 2006. The largest amounts are for the air traffic control system. Grants to State and local governments for physical investment are estimated to be $64.4 billion in 2006. More than two-thirds of these outlays, or $45.9 billion, are to assist States and localities with transportation infrastructure, primarily highways. Other major grants for physical investment fund sewage treatment plants, community and regional development, and public housing. Conduct of research and development. Outlays for the conduct of research and development are estimated to be $124.9 billion in 2006. These outlays are devoted to increasing basic scientific knowledge and promoting research and development. They increase the Nation’s security, improve the productivity of capital and labor for both public and private purposes, and enhance the quality of life. More than half of these outlays, an estimated $73.5 billion, are for national defense. Physical investment for research and development facilities and equipment is included in the physical investment category. Nondefense outlays for the conduct of research and development are estimated to be $51.4 billion in 2006. These are largely for the National Aeronautics and Space Administration, the National Science Foundation, the National Institutes of Health, and research for nuclear and non-nuclear energy programs. A more complete and detailed discussion of research and development funding appears in Chapter 5, ‘‘Research and Development’’ in this volume. Conduct of education and training. Outlays for the conduct of education and training are estimated to be $86.7 billion in 2006. These outlays add to the stock of human capital by developing a more skilled and productive labor force. Grants to State and local governments for this category are estimated to be $52.3 billion in 2006, three-fifths of the total. They include education programs for the disadvantaged and individuals with disabilities, other education programs, training programs in the Department of Labor, and Head Start. Direct Federal education and training outlays are estimated to be $34.3 billion in 2006. Programs in this category are primarily aid for higher education through student financial assistance, loan subsidies, the veterans GI bill, and health training programs. This category does not include outlays for education and training of Federal civilian and military employees. Outlays for education and training that are for physical investment and for research and development are in 6. 75 FEDERAL INVESTMENT Table 6–1. COMPOSITION OF FEDERAL INVESTMENT OUTLAYS (In billions of dollars) 2004 Actual Estimate 2005 2006 FEDERAL INVESTMENT Major public physical capital investment: Direct Federal: National defense ................................................................................................... Nondefense ........................................................................................................... 83.6 27.4 87.5 31.7 88.9 30.2 Subtotal, direct major public physical capital investment ............................... 111.0 119.1 119.1 Grants to State and local governments ................................................................... 59.4 61.9 64.4 Subtotal, major public physical capital investment .............................................. 170.4 181.1 183.5 Conduct of research and development: National defense ........................................................................................................ Nondefense ................................................................................................................ 65.3 48.0 71.4 51.1 73.5 51.4 Subtotal, conduct of research and development ................................................. 113.4 122.4 124.9 Conduct of education and training: Grants to State and local governments ................................................................... Direct Federal ............................................................................................................ 47.9 36.8 51.8 41.1 52.3 34.3 Subtotal, conduct of education and training ........................................................ 84.7 92.9 86.7 Total, major Federal investment outlays ..................................................... 368.5 396.5 395.1 Major Federal investment outlays: National defense ........................................................................................................ Nondefense ................................................................................................................ 149.0 219.5 158.8 237.6 162.4 232.7 MEMORANDUM Total, major Federal investment outlays .............................................................. 368.5 396.5 395.1 Miscellaneous physical investment: Commodity inventories .............................................................................................. Other physical investment (direct) ............................................................................ –1.4 2.8 0.2 3.3 –1.0 3.0 Total, miscellaneous physical investment ............................................................ 1.4 3.5 2.0 Total, Federal investment outlays, including miscellaneous physical investment ....... 369.8 399.9 397.1 the categories for physical investment and the conduct of research and development. Miscellaneous Physical Investment Outlays In addition to the categories of major Federal investment, several miscellaneous categories of investment outlays are shown at the bottom of Table 6–1. These items, all for physical investment, are generally unrelated to improving Government operations or enhancing economic activity. Outlays for commodity inventories are primarily for the purchase or sale of agricultural products pursuant to farm price support programs. Sales are estimated to exceed purchases by $1.0 billion in 2006. Outlays for other miscellaneous physical investment are estimated to be $3.0 billion in 2006. This category includes primarily conservation programs. These are entirely direct Federal outlays. Detailed Table on Investment Spending The following table provides data on budget authority as well as outlays for major Federal investment divided according to grants to State and local governments and direct Federal spending. Miscellaneous investment is not included because it is generally unrelated to improving Government operations or enhancing economic activity. 76 ANALYTICAL PERSPECTIVES Table 6–2. FEDERAL INVESTMENT BUDGET AUTHORITY AND OUTLAYS: GRANT AND DIRECT FEDERAL PROGRAMS (in millions of dollars) Budget Authority Description 2004 Actual 2005 Estimate Outlays 2006 Estimate 2004 Actual 2005 Estimate 2006 Estimate GRANTS TO STATE AND LOCAL GOVERNMENTS Major public physical investments: Construction and rehabilitation: Transportation: Highways ............................................................................................................................. Mass transportation ............................................................................................................ Air transportation ................................................................................................................ 34,231 7,813 3,649 34,078 8,450 3,697 33,573 8,517 2,531 30,188 7,567 2,958 32,014 8,183 3,042 34,360 8,284 3,264 Subtotal, transportation .................................................................................................. 45,693 46,225 44,621 40,713 43,239 45,908 Other construction and rehabilitation: Pollution control and abatement ........................................................................................ Community and regional development .............................................................................. Housing assistance ............................................................................................................. Other construction .............................................................................................................. 2,445 6,207 6,843 393 2,190 6,063 6,508 434 1,938 4,276 5,846 204 2,066 6,761 7,659 613 1,961 6,783 7,877 444 1,886 6,766 7,924 329 Subtotal, other construction and rehabilitation .............................................................. 15,888 15,195 12,264 17,099 17,065 16,905 Subtotal, construction and rehabilitation ............................................................................ 61,581 61,420 56,885 57,812 60,304 62,813 Other physical assets .................................................................................................................. 1,772 1,585 1,279 1,599 1,619 1,542 Subtotal, major public physical capital ................................................................................... 63,353 63,005 58,164 59,411 61,923 64,355 Conduct of research and development: Agriculture .................................................................................................................................... Other ............................................................................................................................................ 267 414 270 389 148 353 269 327 275 343 218 454 Subtotal, conduct of research and development ................................................................... 681 659 501 596 618 672 Conduct of education and training: Elementary, secondary, and vocational education ..................................................................... Higher education ......................................................................................................................... Research and general education aids ........................................................................................ Training and employment ............................................................................................................ Social services ............................................................................................................................. Agriculture .................................................................................................................................... Other ............................................................................................................................................ 36,609 510 728 3,476 9,936 444 260 37,175 506 801 3,509 10,120 451 281 37,191 33 738 4,232 9,541 437 249 32,194 499 714 4,064 9,746 424 234 36,298 615 822 3,378 10,002 426 261 36,840 515 822 3,655 9,795 410 272 Subtotal, conduct of education and training .......................................................................... 51,963 52,843 52,421 47,875 51,802 52,309 Subtotal, grants for investment .............................................................................................. 115,997 116,507 111,086 107,882 114,343 117,336 Major public physical investment: Construction and rehabilitation: National defense: Military construction and family housing ............................................................................ Atomic energy defense activities and other ...................................................................... 6,666 811 7,154 527 7,365 639 6,368 754 6,291 564 6,937 632 Subtotal, national defense ............................................................................................. 7,477 7,681 8,004 7,122 6,855 7,569 Nondefense: International affairs ............................................................................................................. General science, space, and technology .......................................................................... Water resources projects ................................................................................................... Other natural resources and environment ......................................................................... Energy ................................................................................................................................. Postal Service ..................................................................................................................... Transportation ..................................................................................................................... Veterans hospitals and other health facilities .................................................................... Federal Prison System ....................................................................................................... GSA real property activities ............................................................................................... Other construction .............................................................................................................. 1,464 1,706 3,061 1,117 1,537 638 51 1,288 161 1,747 2,672 1,471 2,034 3,249 1,025 1,492 1,065 194 1,912 25 1,616 2,576 1,591 2,214 2,753 888 1,475 847 101 1,531 –289 1,670 1,178 1,319 1,485 2,812 972 1,534 456 55 1,748 282 1,329 2,140 1,403 1,860 3,083 1,087 1,493 491 152 2,633 128 1,518 2,971 1,477 2,332 2,978 996 1,443 702 190 2,792 199 1,729 1,358 DIRECT FEDERAL PROGRAMS 6. 77 FEDERAL INVESTMENT Table 6–2. FEDERAL INVESTMENT BUDGET AUTHORITY AND OUTLAYS: GRANT AND DIRECT FEDERAL PROGRAMS—Continued (in millions of dollars) Budget Authority Description 2004 Actual 2005 Estimate Outlays 2006 Estimate 2004 Actual 2005 Estimate 2006 Estimate Subtotal, nondefense ..................................................................................................... 15,442 16,659 13,959 14,132 16,819 16,196 Subtotal, construction and rehabilitation ............................................................................ 22,919 24,340 21,963 21,254 23,674 23,765 Acquisition of major equipment: National defense: Department of Defense ...................................................................................................... Atomic energy defense activities ....................................................................................... 83,072 385 78,345 381 78,043 473 76,232 296 80,255 387 80,870 470 Subtotal, national defense ............................................................................................. 83,457 78,726 78,516 76,528 80,642 81,340 Nondefense: General science and basic research ................................................................................. Space flight, research, and supporting activities ............................................................... Postal Service ..................................................................................................................... Air transportation ................................................................................................................ Water transportation (Coast Guard) ................................................................................... Other transportation (railroads) .......................................................................................... Hospital and medical care for veterans ............................................................................. Law enforcement activities ................................................................................................. Department of the Treasury (fiscal operations) ................................................................. Department of Commerce (NOAA) .................................................................................... GSA general services funds .............................................................................................. Other ................................................................................................................................... 603 542 598 3,367 919 1,218 920 1,851 506 719 750 721 588 710 1,389 3,183 941 1,207 725 1,794 319 865 768 804 676 650 672 3,254 1,209 360 1,096 1,880 304 913 906 788 569 475 452 3,527 671 1,282 1,734 1,348 481 638 672 854 612 751 914 3,624 851 1,259 1,367 1,962 455 762 807 911 621 563 972 3,312 920 360 2,067 1,740 387 927 906 882 Subtotal, nondefense ..................................................................................................... 12,714 13,293 12,708 12,703 14,275 13,657 Subtotal, acquisition of major equipment .......................................................................... 96,171 92,019 91,224 89,231 94,917 94,997 Purchase or sale of land and structures: National defense ..................................................................................................................... Natural resources and environment ....................................................................................... General government ............................................................................................................... Other ........................................................................................................................................ –40 251 170 56 –38 187 161 59 –27 164 168 –13 –40 302 222 37 –38 328 224 36 –27 200 205 –13 Subtotal, purchase or sale of land and structures ............................................................ 437 369 292 521 550 365 Subtotal, major public physical investment ............................................................................ 119,527 116,728 113,479 111,006 119,141 119,127 Conduct of research and development: National defense: Defense military ...................................................................................................................... Atomic energy and other ........................................................................................................ 65,410 3,723 70,267 3,910 70,789 3,814 61,510 3,835 67,016 4,353 69,549 3,990 Subtotal, national defense .................................................................................................. 69,133 74,177 74,603 65,345 71,369 73,539 Nondefense: International affairs .................................................................................................................. General science, space, and technology: NASA .................................................................................................................................. National Science Foundation ............................................................................................. Department of Energy ........................................................................................................ 264 255 255 254 258 258 7,853 3,790 2,736 7,686 3,711 2,787 10,835 3,756 2,682 8,037 3,439 2,701 7,970 3,754 2,706 6,987 3,724 2,655 Subtotal, general science, space, and technology ....................................................... 14,643 14,439 17,528 14,431 14,688 13,624 Energy ..................................................................................................................................... Transportation: Department of Transportation ............................................................................................ NASA .................................................................................................................................. Other ................................................................................................................................... 1,373 1,225 1,352 1,387 1,463 1,498 479 1,056 12 564 620 906 852 16 ...................... 431 551 17 558 871 16 672 838 7 Subtotal, transportation .................................................................................................. 2,920 2,711 2,824 2,386 2,908 3,015 Health: National Institutes of Health ............................................................................................... All other health ................................................................................................................... 26,900 685 27,503 681 27,821 649 24,498 760 26,388 585 27,384 602 78 ANALYTICAL PERSPECTIVES Table 6–2. FEDERAL INVESTMENT BUDGET AUTHORITY AND OUTLAYS: GRANT AND DIRECT FEDERAL PROGRAMS—Continued (in millions of dollars) Budget Authority Description 2004 Actual 2005 Estimate Outlays 2006 Estimate 2004 Actual 2005 Estimate 2006 Estimate Subtotal, health .............................................................................................................. 27,585 28,184 28,470 25,258 26,973 27,986 Agriculture ............................................................................................................................... Natural resources and environment ....................................................................................... National Institute of Standards and Technology .................................................................... Hospital and medical care for veterans ................................................................................. All other research and development ...................................................................................... 1,468 2,084 397 866 1,425 1,601 2,033 416 784 1,666 1,346 1,971 342 786 1,811 1,425 1,574 493 850 1,021 1,460 1,494 406 792 1,739 1,330 1,589 472 777 1,938 Subtotal, nondefense .......................................................................................................... 51,388 51,834 55,078 47,438 50,460 50,731 Subtotal, conduct of research and development ................................................................... 120,521 126,011 129,681 112,783 121,829 124,270 Conduct of education and training: Elementary, secondary, and vocational education ..................................................................... Higher education ......................................................................................................................... Research and general education aids ........................................................................................ Training and employment ............................................................................................................ Health ........................................................................................................................................... Veterans education, training, and rehabilitation ......................................................................... General science and basic research .......................................................................................... National defense .......................................................................................................................... International affairs ...................................................................................................................... Other ............................................................................................................................................ 1,530 25,233 1,890 1,576 1,557 2,556 941 9 355 631 1,593 1,273 29,487 27,283 1,888 1,910 1,629 1,616 1,567 1,178 2,772 3,245 948 871 8 ...................... 384 458 675 543 1,691 25,201 1,883 1,552 1,858 2,707 878 11 441 558 1,904 1,627 28,892 22,461 1,997 1,949 1,571 1,646 1,504 1,404 3,084 3,240 969 948 8 ...................... 377 418 835 653 Subtotal, conduct of education and training .......................................................................... 36,278 40,951 38,377 36,780 41,141 34,346 Subtotal, direct Federal investment ........................................................................................ 276,326 283,690 281,537 260,569 282,111 277,743 Total, Federal investment ............................................................................................................. 392,323 400,197 392,623 368,451 396,454 395,079 PART II: PERFORMANCE OF FEDERAL INVESTMENT Introduction. In recent years there has been increased emphasis on improving the performance of Government programs. This emphasis began with the Performance and Results Act of 1993, which requires agencies to prepare strategic plans and annual performance plans, and then report on their actual performance annually. This Administration set out to ensure that agencies worked to improve their performance, not just report on it. Beginning in the 2004 Budget, the Administration began to assess every Federal program by a method known as the Program Assessment Rating Tool, or PART. The Administration set a target of assessing all Federal programs over five years. With this budget, the third year of using the PART, the Administration has assessed over 600 programs, about three-fifths of the Federal Budget. The PART system assesses each program in four components (purpose, planning, management, and results/ accountability) and gives a score for each of the components. The scores for each component are then weighted—results/accountability carries the greatest weight— and the program is given an overall score. A program is rated effective if it receives an overall score of 85 percent or more, moderately effective if the score is 70 to 84 percent, adequate if the score is 50 to 69 percent, and inadequate if the score is 49 percent or lower. The program receives a rating ‘‘Results Not Demonstrated’’ if it does not have a good long-term and annual performance measure or does not have data to report on its measures. Chapter 2 of this volume discusses the PART concepts in more detail. This section summarizes the results of the PART for direct investment programs, defined to include capital assets, research and development, and education and training. Because an entire program is assessed, not just the investment portion of the program, the assessments for some programs may cover more than just the investment spending. PART assessments of programs that are grants to State and local governments are not summarized in this chapter but are summarized in Chapter 8, ‘‘Aid to State and Local Governments’’, in this volume. This section summarizes 166 programs: • Programs for capital assets are those identified in the PART system as ‘‘capital assets and service acquisition’’ (60 programs); • Programs for research and development are essentially those identified in the PART system as ‘‘research and development’’ (84 programs); and 6. 79 FEDERAL INVESTMENT • Programs for education and training (22 programs) are primarily programs in the Department of Education that are not grants to State and local governments (e.g., Federal Pell grants to individuals). This category also includes programs in other agencies, such as the Montgomery GI Bill in the Department of Veterans Affairs, the Health Professions program in the Department of Health and Human Services, and the Job Corps program in the Department of Labor. Information on these and other programs assessed by PART is on the CD ROM that accompanies this volume. Table 6–3. Summary of ratings. Table 6–3 shows that the average weighted score for the 166 investment programs that have been rated by PART was 67 percent, which is a rating of ‘‘adequate’’. These programs had total spending of $184.6 billion in 2004. Of these programs: • 37 were rated effective ($35.8 billion); • 48 were rated moderately effective ($57.7 billion); • 28 were rated adequate ($50.6 billion); • 7 were rated ineffective ($7.4 billion); and • 46 were rated ‘‘results not demonstrated’’ ($33.2 billion); SUMMARY OF PART RATINGS AND SCORES FOR DIRECT FEDERAL INVESTMENT PROGRAMS (excludes grants to State and local governments for investment) Type of Investment Criteria Physical capital Research and development Education and training All investment programs Average Scores Purpose .............................................................................................. Planning .............................................................................................. Management ....................................................................................... Results/Accountability ........................................................................ Weighted Average 1 ........................................................................... Average Rating .................................................................................. 81% 75% 81% 48% 64% Adequate 92% 80% 86% 59% 73% Moderately effective 79% 75% 66% 37% 55% Adequate 86% 78% 82% 52% 67% Adequate Number of Programs Ratings 2 Effective .............................................................................................. Moderately effective ........................................................................... Adequate ............................................................................................ Ineffective ........................................................................................... Results not demonstrated .................................................................. 10 15 11 2 22 25 31 9 2 17 2 2 8 3 7 37 48 28 7 46 Total number of investment programs rated ................................ 60 84 22 166 In millions of dollars (2004) Effective .............................................................................................. Moderately effective ........................................................................... Adequate ............................................................................................ Ineffective ........................................................................................... Results not demonstrated .................................................................. $3,595 41,781 27,600 6,389 25,492 $31,782 14,179 945 78 3,407 $401 1,736 22,025 886 4,337 35,778 57,696 50,570 7,353 33,236 All investment programs that were rated in PART .......................... $104,857 $50,391 $29,385 $184,633 1 Weighted as follows: Purpose (20%), Planning (10%), Management (20%), Results/Accountability (50%). rating of effective indicates a score of 85 percent or more; moderately effective, 70–84 percent; adequate, 50–69 percent; and ineffective, 49 percent or less. 2 The Assessments of individual programs. The ratings of the ten physical capital and education and training investment programs with the largest funding are summarized here. Information on research and development is in Chapter 5, ‘‘Research and Development’’ in this volume. Capital Assets Department of Defense (DOD). Air Combat Program ($13.9 billion in 2004). Rating: Moderately Effective. This program consists of a number of individual aircraft and helicopter research, development and procurement programs that, taken together, comprise DOD’s invest- 80 ment in air combat capabilities. The PART analysis showed that the program purpose is clear owing to the unique military requirement for these systems. Department of Defense. Shipbuilding ($12.0 billion in 2004). Rating: Adequate. This program buys new ships and overhauls older ships for the Navy. The assessment shows that the program has a clear purpose, and the Navy has specific cost, schedule, and performance goals for each shipbuilding program. The program has experienced cost increases and schedule slips on some ship construction programs. Department of Defense. Missile Defense ($8.6 billion in 2004). Rating: Moderately Effective. This program consists of various systems and capabilities developed by the Missile Defense Agency (MDA) and military services. This program acquires and operates active defenses against short, medium, and long-range missiles in a global, multi-layered defensive system. The assessment found that: a) the Department of Defense has aggressively worked to fund operations and support costs fully, and has been successful in coordinating service and MDA budget responsibilities; b) the Department continues to fund only two years deployment costs per each ‘‘block’’ of missile defense deployments, even if significant portions of those deployments require four to five years of funding to fully implement. This policy continues to put at risk the completion of approved missile defense deployments; and c) MDA did not meet its testing goals in 2004 for the Ground Based Mid-Course Defense system, the main element of its first operational deployment. Tennessee Valley Authority. TVA Power ($7.7 billion in 2004). Rating: Moderately Effective. TVA is the fifth largest electric utility in the country, generating power at 48 coal-fired, hydropower, nuclear, and other power plants that it operates to meet the electricity needs of 8.3 million people (3 percent of the U. S. market). The PART assessment gave TVA mixed reviews. TVA does an excellent job generating power at its existing power plants. A decade ago TVA’s nuclear power plants posed serious technical and safety problems but it has overcome these problems and today its nuclear power plants set industry standards. However, TVA has a high level of debt compared to many of its competitors in the electricity industry. It also lacks a strategic plan, which makes it hard to assess TVA’s plans to spend funds on additional power plants and transmission lines. Department of Energy. Environmental Management ($7.1 billion in 2004). Rating: Adequate. This program protects human health and the environment by cleaning up waste and contamination resulting from more than 50 years of nuclear weapons production and energy research at 114 Department of Energy sites in the United States and its territories. Program managers will continue to work with Federal and State regulators to resolve outstanding issues with revised cleanup plans. The program has established annual cost and schedule performance measures. ANALYTICAL PERSPECTIVES General Services Administration. GSA’s Regional IT Solutions Program ($5.4 billion in 2004). Rating: Results Not Demonstrated. This program provides expert technical, acquisition, and information technology products and services to Federal clients. This assessment found that the program is useful to Federal agencies that do not have in-house expertise to acquire IT products or services. The assessment also found that the program does not have long-term outcome goals that relate to other Government agencies or the private sector. Department of Defense. Airlift Program ($5.1 billion in 2004). Rating: Moderately Effective. This program consists of a number of individual Air Force tactical and strategic airlift aircraft research, development and procurement programs that, taken together, comprise DOD’s investment in airlift capabilities. The analysis showed that this is a coherent program with a clear and basic long-term goal, namely to be able to move military forces and their equipment from the U.S. to anywhere in the world whenever required. DOD must aggressively examine possible trade-offs within the program that could lower the cost of meeting the airlift requirement without sacrificing military readiness or combat capabilities. Department of Housing and Urban Development. Project-Based Rental Assistance ($4.8 billion in 2004). Rating: Ineffective. This program provides funding to landlords who rent a certain number of affordable apartments to low-income families or individuals. Assistance is tied directly to the properties; tenants can generally not move without losing their assistance. The program receives low performance scores in part because there is confusion over program objectives, the program lacks strong financial accountability, and it produces poor results relative to alternative forms of housing assistance. Education Department of Education. Federal Pell Grants ($12.0 billion in 2004). Rating: Adequate. This program provides grant aid to nearly five million needy students to help them pay for an undergraduate education. The assessment found that the program helps ensure that low-income students can afford a college education. However, the Department of Education has only been minimally successful in achieving its long-term and annual performance goals for its main student aid programs. In addition, Pell grants, like other student aid, are prone to abuse, where students who under-report family income receive more aid than they should. The Department estimates that net overawards in the Pell program total more than $350 million annually. Department of Education. Federal Family Education Loan Program ($9.6 billion in 2004). Rating: Adequate. Under the Federal Family Education Loan (FFEL) Program, the Department encourages private lenders to make loans to undergraduate and graduate students by guaranteeing such loans in the case of default and providing lenders with financial subsidies that ensure 6. 81 FEDERAL INVESTMENT a minimum rate of return on all loans made. Overall, the assessment concluded that both this program and the William D. Ford Direct Student Loan program fulfill their purpose of ensuring that low- and middleincome students can afford the costs of postsecondary PART III: education. The program also has meaningful performance measures and outcome data on these measures. However, the Department has been minimally successful in achieving its long-term and annual performance goals for its main student aid programs. FEDERALLY FINANCED CAPITAL STOCKS Federal investment spending creates a ‘‘stock’’ of capital that is available in the future for productive use. Each year, Federal investment outlays add to this stock of capital. At the same time, however, wear and tear and obsolescence reduce it. This section presents very rough measures over time of three different kinds of capital stocks financed by the Federal Government: public physical capital, research and development (R&D), and education. Federal spending for physical assets adds to the Nation’s capital stock of tangible assets, such as roads, buildings, and aircraft carriers. These assets deliver a flow of services over their lifetime. The capital depreciates as the asset ages, wears out, is accidentally damaged, or becomes obsolete. Federal spending for the conduct of research and development adds to an ‘‘intangible’’ asset, the Nation’s stock of knowledge. Spending for education adds to the stock of human capital by providing skills that help make people more productive. Although financed by the Federal Government, the research and development or education can be carried out by Federal or State government laboratories, universities and other nonprofit organizations, local governments, or private industry. Research and development covers a wide range of activities, from the investigation of subatomic particles to the exploration of outer space; it can be ‘‘basic’’ research without particular applications in mind, or it can have a highly specific practical use. Similarly, education includes a wide variety of programs, assisting people of all ages beginning with pre-school education and extending through graduate studies and adult education. Like physical assets, the capital stocks of R&D and education provide services over a number of years and depreciate as they become outdated. For this analysis, physical and R&D capital stocks are estimated using the perpetual inventory method. Each year’s Federal outlays are treated as gross investment, adding to the capital stock; depreciation reduces the capital stock. Gross investment less depreciation is net investment. The estimates of the capital stock are equal to the sum of net investment in the current and prior years. A limitation of the perpetual inventory method is that the original investment spending may not accurately measure the current value of the asset created, even after adjusting for inflation, because the value of existing capital changes over time due to changing market conditions. However, alternative methods for measuring asset value, such as direct surveys of current market worth or indirect estimation based on an expected rate of return, are especially difficult to apply to assets that do not have a private market, such as highways or weapons systems. In contrast to physical and R&D stocks, the estimate of the education stock is based on the replacement cost method. Data on the total years of education of the U.S. population are combined with data on the current cost of education and the Federal share of education spending to yield the cost of replacing the Federal share of the Nation’s stock of education. It should be stressed that these estimates are rough approximations, and provide a basis only for making broad generalizations. Errors may arise from uncertainty about the useful lives and depreciation rates of different types of assets, incomplete data for historical outlays, and imprecision in the deflators used to express costs in constant dollars. The methods used to estimate capital stocks are discussed further in the technical note at the end of Chapter 13, ‘‘Stewardship,’’ in this volume. Additional detail about these methods appeared in a methodological note in Chapter 7, ‘‘Federal Investment Spending and Capital Budgeting,’’ in the Analytical Perspectives volume of the 2004 Budget. The Stock of Physical Capital This section presents data on stocks of physical capital assets and estimates of the depreciation of these assets. Trends. Table 6–4 shows the value of the net federally financed physical capital stock since 1960, in constant fiscal year 2000 dollars. The total stock grew at a 2.2 percent average annual rate from 1960 to 2004, with periods of faster growth during the late 1960s and the 1980s. The stock amounted to $2,197 billion in 2004 and is estimated to increase to $2,315 billion by 2006. In 2004, the national defense capital stock accounted for $661 billion, or 30 percent of the total, and nondefense stocks for $1,536 billion, or 70 percent of the total. 82 ANALYTICAL PERSPECTIVES Table 6–4. NET STOCK OF FEDERALLY FINANCED PHYSICAL CAPITAL (In billions of 2000 dollars) Nondefense Fiscal Year Five year intervals: 1960 .................................................... 1965 .................................................... 1970 .................................................... 1975 .................................................... 1980 .................................................... 1985 .................................................... 1990 .................................................... 1995 .................................................... Annual data: 2000 .................................................... 2001 .................................................... 2002 .................................................... 2003 .................................................... 2004 .................................................... 2005 estimate ..................................... 2006 estimate ..................................... Total National Defense Direct Federal Capital Total Nondefense Total Water and Power Capital Financed by Federal Grants Other Total Transportation Community and Regional Natural Resources Other 849 937 1,101 1,137 1,258 1,462 1,740 1,882 608 589 630 545 494 572 722 714 242 348 470 592 763 890 1,018 1,168 95 123 146 166 195 222 256 297 59 74 88 102 123 136 147 157 36 49 58 64 72 86 109 141 146 225 324 426 568 668 762 871 89 158 230 282 342 397 462 534 27 32 47 76 121 146 158 168 21 22 26 42 79 100 113 123 10 13 21 25 27 26 28 46 1,979 2,023 2,078 2,138 2,197 2,259 2,315 635 631 636 646 661 677 690 1,345 1,391 1,442 1,492 1,536 1,582 1,625 337 351 366 380 390 403 413 160 163 165 166 168 169 170 178 188 201 213 223 234 244 1,007 1,040 1,076 1,112 1,146 1,179 1,211 618 640 666 690 714 738 762 183 186 189 193 196 199 201 131 132 134 135 136 137 138 75 81 87 94 100 105 110 Real stocks of defense and nondefense capital show very different trends. Nondefense stocks have grown consistently since 1970, increasing from $470 billion in 1970 to $1,536 billion in 2004. With the investments proposed in the budget, nondefense stocks are estimated to grow to $1,625 billion in 2006. During the 1970s, the nondefense capital stock grew at an average annual rate of 5.0 percent. In the 1980s, however, the growth rate slowed to 2.9 percent annually, with growth continuing at about that rate since then. Real national defense stocks began in 1970 at a relatively high level, and declined steadily throughout the decade as depreciation from investment in the Vietnam era exceeded new investment in military construction and weapons procurement. Starting in the early 1980s, a large defense buildup began to increase the stock of defense capital. By 1987, the defense stock exceeded its earlier Vietnam-era peak. In the early 1990s, however, depreciation on the increased stocks and a slower pace of defense physical capital investment began to reduce the stock from its previous levels. The increased defense investment in the last few years has reversed this decline, increasing the stock from an estimated $661 billion in 2004 to $690 billion in 2006. Another trend in the Federal physical capital stocks is the shift from direct Federal assets to grant-financed assets. In 1960, 39 percent of federally financed nondefense capital was owned by the Federal Government, and 61 percent was owned by State and local governments but financed by Federal grants. Expansion in Federal grants for highways and other State and local capital, coupled with slower growth in direct Federal investment for water resources, for example, shifted the composition of the stock substantially. In 2004, 25 percent of the nondefense stock was owned by the Federal Government and 75 percent by State and local governments. The growth in the stock of physical capital financed by grants has come in several areas. The growth in the stock for transportation is largely grants for highways, including the Interstate Highway System. The growth in community and regional development stocks occurred largely following the enactment of the community development block grant in the early 1970s. The value of this capital stock has grown only slowly in the past few years. The growth in the natural resources area occurred primarily because of construction grants for sewage treatment facilities. The value of this federally financed stock has increased about 35 percent since the mid-1980s. The Stock of Research and Development Capital This section presents data on the stock of research and development capital, taking into account adjustments for its depreciation. Trends. As shown in Table 6–5, the R&D capital stock financed by Federal outlays is estimated to be $1,099 billion in 2004 in constant 2000 dollars. Roughly half is the stock of basic research knowledge; the remainder is the stock of applied research and development. The nondefense stock accounted for about three-fifths of the total federally financed R&D stock in 2004. Although investment in defense R&D has exceeded that of nondefense R&D in nearly every year since 1981, the nondefense R&D stock is actually the larger of the two, because of the different emphasis on basic research and applied research and development. Defense R&D spending is heavily concentrated in applied research and development, which depreciates much more quickly 6. 83 FEDERAL INVESTMENT than basic research. The stock of applied research and development is assumed to depreciate at a ten percent geometric rate, while basic research is assumed not to depreciate at all. The defense R&D stock rose slowly during the 1970s, as gross outlays for R&D trended down in constant dollars and the stock created in the 1960s depreciated. Increased defense R&D spending from 1980 through 1990 led to a more rapid growth of the R&D stock. Subsequently, real defense R&D outlays tapered off, depreciation grew, and, as a result, the real net defense R&D stock stabilized at around $420 billion. Renewed spending for defense R&D in recent years has begun Table 6–5. to increase the stock, and it is projected to increase to $531 billion in 2006. The growth of the nondefense R&D stock slowed from the 1970s to the 1980s, from an annual rate of 3.8 percent in the 1970s to a rate of 2.1 percent in the 1980s. Gross investment in real terms fell during much of the 1980s, and about three-fourths of new outlays went to replacing depreciated R&D. Since 1988, however, nondefense R&D outlays have been on an upward trend while depreciation has edged down. As a result, the net nondefense R&D capital stock has grown more rapidly. NET STOCK OF FEDERALLY FINANCED RESEARCH AND DEVELOPMENT 1 (In billions of 2000 dollars) National Defense Fiscal Year Total Five year intervals: 1970 .................................................................. 1975 .................................................................. 1980 .................................................................. 1985 .................................................................. 1990 .................................................................. 1995 .................................................................. Annual data: 2000 .................................................................. 2001 .................................................................. 2002 .................................................................. 2003 .................................................................. 2004 .................................................................. 2005 estimate .................................................. 2006 estimate .................................................. 1 Excludes Basic Research Nondefense Applied Research and Development Total Basic Research Total Federal Applied Research and Development Total Basic Research Applied Research and Development 261 276 279 321 403 423 16 21 25 30 36 43 245 256 255 291 367 380 215 262 311 339 382 461 67 97 131 174 229 294 148 165 179 165 154 167 475 538 590 659 785 884 82 118 156 204 265 336 393 421 434 455 520 547 423 421 435 454 479 506 531 48 50 52 54 55 56 57 375 371 383 401 424 449 473 543 563 579 598 620 643 665 368 386 405 424 446 468 489 175 177 175 174 174 175 176 966 984 1,014 1,052 1,099 1,149 1,196 416 436 457 478 501 524 547 549 548 557 575 598 624 649 stock of physical capital for research and development, which is included in Table 6–4. The Stock of Education Capital This section presents estimates of the stock of education capital financed by the Federal Government. As shown in Table 6–6, the federally financed education stock is estimated at $1,309 billion in 2004 in constant 2000 dollars. The vast majority of the Nation’s education stock is financed by State and local governments, and by students and their families themselves. This federally financed portion of the stock represents about 3 percent of the Nation’s total education stock. 1 Nearly three-quarters is for elementary and secondary education, while the remaining one quarter is for higher education. The federally financed education stock has grown steadily in the last few decades, with an average annual growth rate of 5.3 percent from 1970 to 2004. The expansion of the education stock is projected to continue under this budget, with the stock rising to $1,428 billion in 2006. 1 For estimates of the total education stock, see table 13–4 in Chapter 13, ‘‘Stewardship.’’ 84 ANALYTICAL PERSPECTIVES Table 6–6. NET STOCK OF FEDERALLY FINANCED EDUCATION CAPITAL (In billions of 2000 dollars) Fiscal Year Five year intervals: 1960 ............................................................................... 1965 ............................................................................... 1970 ............................................................................... 1975 ............................................................................... 1980 ............................................................................... 1985 ............................................................................... 1990 ............................................................................... 1995 ............................................................................... Annual data: 2000 ............................................................................... 2001 ............................................................................... 2002 ............................................................................... 2003 ............................................................................... 2004 ............................................................................... 2005 estimate ................................................................ 2006 estimate ................................................................ Total Education Stock Elementary and Secondary Education Higher Education 70 98 225 324 458 565 745 853 51 71 176 260 356 421 550 619 20 27 49 64 102 144 195 234 1,120 1,169 1,210 1,263 1,309 1,364 1,428 819 844 873 915 953 997 1,049 302 325 336 348 355 368 379 7. CREDIT AND INSURANCE Federal credit programs offer direct loans and loan guarantees for a wide range of activities, primarily housing, education, business and community development, and exports. At the end of 2004, there were $219 billion in Federal direct loans outstanding and $1,231 billion in loan guarantees. Through its insurance programs, the Federal Government insures bank, thrift, and credit union deposits, guarantees private definedbenefit pensions, and insures against other risks such as natural disasters, all up to certain limits. The Federal Government also enhances credit availability for targeted sectors indirectly through Government-Sponsored Enterprises (GSEs)—privately owned companies and cooperatives that operate under Federal charters. GSEs increase liquidity by guaranteeing and securitizing loans, as well as by providing direct loans. In return for serving social purposes, GSEs enjoy many privileges which differ across GSEs. In general, GSEs can borrow from Treasury in amounts ranging up to $4 billion at Treasury’s discretion, GSEs’ corporate earnings are exempt from State and local income taxation, GSE securities are exempt from SEC registration, and banks and thrifts are allowed to hold GSE securities in unlimited amounts and use them to collateralize public deposits. These privileges leave many people with the impression that GSE securities are risk-free. GSEs, however, are not part of the Federal Government, and their securities are not federally guaranteed. By law, GSE securities carry a disclaimer of any U.S. obligation. I. This chapter discusses the roles and risks of these diverse programs in the context of evolving financial markets and assesses their effectiveness and efficiency. • The first section analyzes the roles of Federal credit and insurance programs. Federal programs play useful roles when market imperfections prevent the private market from efficiently providing credit and insurance. Financial evolution has partly corrected many imperfections and generally weakened the justification for Federal intervention. The roles of Federal programs, however, may still be critical in some areas. • The second section examines how credit and insurance programs were gauged by the Program Assessment Rating Tool (PART) and discusses special features of credit programs that may need to be considered in interpreting and refining this tool. • The third section discusses Federal credit programs and GSEs in four sectors: housing, education, business and community development, and exports. The discussions focus on program objectives, recent developments, performance, and future plans for each program. • The final section reviews Federal deposit insurance, pension guarantees, disaster insurance, and insurance against terrorism and other security-related risks in a context similar to that for credit programs. FEDERAL PROGRAMS IN CHANGING FINANCIAL MARKETS The Federal Role In most cases, private lending and insurance companies efficiently meet societal demands by allocating resources to the most productive uses. Market imperfections, however, can cause inadequate provision of credit or insurance in some sectors. Federal credit and insurance programs improve economic efficiency if they effectively fill the gaps created by market imperfections. On the other hand, Federal credit and insurance programs that have little to do with correcting market imperfections may be ineffective, or can even be counter-productive; they may simply do what the private sector would have done in their absence, or interfere with what the private sector would have done better. Federal credit and insurance programs also help disadvantaged groups. This role alone, however, may not be enough to justify credit and insurance programs. For the purpose of helping disadvantaged groups, direct subsidies are generally more effective and less distortionary. Market imperfections that can justify Federal intervention include insufficient information, limited ability to secure resources, imperfect competition, and externalities. Insufficient Information. Financial intermediaries promote economic growth by allocating credit to the most productive uses. This critical function, however, may not be performed effectively when there is little objective information about borrowers. Some groups of borrowers, such as start-up businesses, start-up farmers, and students, have limited incomes and credit histories. Many creditworthy borrowers belonging to these groups may fail to obtain credit or be forced to pay excessively high interest. Government intervention, such as loan guarantees, can reduce this inefficiency by enabling these borrowers to obtain credit more easily and cheaply and also by providing opportunities for lenders to learn more about those borrowers. Limited Ability to Secure Resources. The ability of private entities to absorb losses is more limited than 85 86 that of the Federal Government, which has general taxing authority. For some events potentially involving a very large loss concentrated in a short time period, therefore, Government insurance commanding more resources can be more credible and effective. Such events include massive bank failures and some natural and man-made disasters that can threaten the solvency of private insurers. Private entities also face some liquidity constraints. Small lenders operating in a local market, for example, may have limited access to capital and occasionally be forced to pass up good lending opportunities. Imperfect competition. Competition is imperfect in some markets because of barriers to entry, economies of scale, and foreign government intervention. If the lack of competition forces some borrowers to pay excessively high interest on loans, Government credit programs aiming to increase the availability of credit and lower the borrowing cost in those markets may improve economic efficiency. Externalities. Decisions at the individual level are not socially optimal when individuals do not capture the full benefit (positive externalities) or bear the full cost (negative externalities) of their activities. Examples of positive and negative externalities are education and pollution. The general public benefits from the high productivity and good citizenship of a well-educated person and suffers from pollution. Without Government intervention, people will engage less than socially optimal in activities that generate positive externalities and more in activities that generate negative externalities. Federal programs can address externalities by influencing individuals’ incentives. Effects of Changing Financial Markets Financial markets have become much more efficient, thanks to technological advances and financial services deregulation. By facilitating the gathering and processing of information and lowering transaction costs, technological advances have significantly contributed to improving the screening of credit and insurance applicants, enhancing liquidity, refining risk management, and spurring competition. Deregulation, represented by the Riegle-Neal Interstate Banking and Branching Act of 1997 and the Financial Services Modernization Act of 1999, has increased competition and prompted consolidation by removing geographic and industry barriers. These changes have reduced market imperfections, and hence weakened the role of Federal credit and insurance programs. The private market now has more information and better technology to process it, has better means to secure resources, and is more competitive. As a result, the private market is more willing and able to serve the populations traditionally targeted by Federal programs. The benefits of technological advances and deregulation, however, have been uneven across sectors and populations. To remain effective, therefore, Federal credit and insurance programs need to focus more narrowly on those sectors that have been ANALYTICAL PERSPECTIVES less affected by financial evolution and those populations that still have difficulty in obtaining credit from private lenders. The Federal Government also needs to pay more attention to new challenges introduced by financial evolution and other economic developments. Even those changes that are beneficial overall often bring new risks and challenges. The Federal role of alleviating the information problem is generally not as important as it once was. Nowadays, lenders and insurers have easy access to large databases, powerful computing devices, and sophisticated analytical models. This advancement in communication and information processing technology enables lenders to evaluate the risk of borrowers more objectively and accurately. As a result, creditworthy borrowers are less likely to be turned down, while highrisk borrowers are less likely to be approved for credit. The improvement, however, may be uneven across sectors. The prevalence of credit scoring (an automated process that converts relevant borrower characteristics into a numerical score indicating creditworthiness) is a good sign that the information problem is not serious. Credit scoring is widely applied to home mortgages and consumer loans, but for small business loans and agricultural loans, its application is largely limited to small loans. Credit scoring is still difficult to apply to some borrowers with unique characteristics that are difficult to standardize. Financial evolution has also alleviated resource constraints faced by private entities. Advanced financial instruments have enabled lenders and insurers to manage risks more effectively and secure needed funds more easily. Thus, it is less likely that a large potential loss discourages an insurer from offering an actuarially fair contract or that the lack of liquid funds prevents a lender from lending to creditworthy borrowers. Financial derivatives, such as options, swaps, and futures, have improved the market’s ability to manage and share various types of risk such as price risk, interest rate risk, credit risk, and even catastrophe-related risk. An insurer can distribute the risk of a natural or manmade catastrophe among a large number of investors through catastrophe-related derivatives. The extent of risk sharing in this way, however, is still limited because of the small size of the market for those products. Securitization (pooling a certain type of asset and selling shares of the asset pool to investors) facilitates fund raising and risk management. By securitizing loans, even a lender with limited access to capital can make a large amount of loans while limiting its exposure to credit and interest risk. Imperfect competition is much less likely in general, thanks to financial deregulation and improved communication technology. Financial deregulation removed geographic and industry barriers to competition. As a result, major financial holding companies offer both banking and insurance products nationwide. Internet-based financial services have lowered the cost of financial transactions and reduced the importance of physical location. These developments have been particularly 87 7. CREDIT AND INSURANCE more beneficial to small and geographically isolated customers, as lower transaction costs make it easier to offer good prices to small customers. In addition, there are more financing alternatives for both commercial and individual borrowers that used to rely heavily on banks. Many commercial firms borrow directly in capital markets, bypassing financial intermediaries; the use of commercial paper (short-term financing instruments issued by corporations) has been particularly notable. Venture capital has become a much more important financing source for small businesses. Finance companies have gained market shares both in business and consumer financing. Problems related to externalities may persist because the price mechanisms that drive the private market ignore the value of externalities. Externalities, however, are a general market failure, rather than a financial market failure. Thus, credit and insurance programs are not necessarily the best means to address externalities, and their effectiveness should be compared with other forms of Government intervention, such as tax incentives and grants. In particular, if a credit program was initially intended to address multiple problems including externalities, and those other problems have been alleviated, then there may be a better way to address the remaining externalities. Overall, the financial market has become more efficient and safer. Financial evolution and other economic II. developments, however, are often accompanied by new risks. In addition, security-related risks unexpectedly emerged in recent years, prompting Government intervention. Federal agencies need to be vigilant to identify and manage new risks to the Budget. For example, financial derivatives enable their users either to decrease or to increase risk exposure. If some beneficiaries of Federal programs use financial derivatives to take more risk, the costs of Federal programs, especially insurance programs, can rise sharply. The sheer size of some financial institutions has also created a new risk. While well-diversified institutions are generally safer, even a single failure of a large private institution or a GSE, such as Fannie Mae, Freddie Mac, and Federal Home Loan Banks could shake the entire financial market. A more visible risk today is the Pension Benefit Guaranty Corporation (PBGC) of the Department of Labor. PBGC is facing serious financial challenges due to unfavorable economic conditions in recent years and to flaws in program structure. The September 11 attacks have increased securityrelated risks. The Federal Government had to intervene, due to the reluctance of private insurers to offer sufficient coverage. Managing insurance programs covering security-related risks is challenging because security-related events, such as terrorism and war, are highly uncertain in terms of both the frequency of occurrence and the magnitude of potential loss. PERFORMANCE OF CREDIT AND INSURANCE PROGRAMS The Program Assessment Rating Tool (PART) produces an assessment of the performance of federal programs designed to be consistent across programs. This section analyzes the PART score for credit and insurance programs as a group to identify the strengths and weaknesses of credit and insurance programs. PART Scores The PART classifies performance into four categories (program purpose and design, strategic planning, program management, and program results) and assigns a numerical score (0 to 100 percent) to each category. The overall rating (effective, moderately effective, adequate, ineffective, or results not demonstrated) is determined based on the numerical scores and some other factors. There are 23 credit programs (defined as those involving repayment obligations) and 3 insurance programs among 607 programs that have been rated by the PART. For the group as a whole, credit and insurance programs have fairly similar PART scores to those for other programs (see Table ‘‘Summary of PART Scores’’). When appropriately weighted, higher scores for credit and insurance programs in two categories are roughly offset by lower scores in the other two categories. The overall ratings for credit and insurance programs, however, are more clustered around the middle; the rating of ‘‘adequate’’ is much more common for credit and insurance programs (48 percent, compared with 25 percent for other programs), while the ratings of ‘‘effective’’ (4 percent, compared with 15 percent for other programs) and ‘‘results not demonstrated’’ SUMMARY OF PART SCORES Purpose and Design Strategic Planning Program Management Program Results Credit and Insurance Programs Average ......................................................... Standard Deviation ........................................ 0.773 0.207 0681 0.222 0.853 0.215 0.541 0.165 Other Programs (all others excluding credit and insurance programs) Average ......................................................... Standard Deviation ........................................ 0.865 0185 0.723 0.246 0.805 0.185 0.463 0.269 88 (15 percent, compared with 30 percent for other programs) are rarer. The clustering around the middle suggests that most credit and insurance programs make useful contributions, but need to improve their effectiveness. Across categories, credit and insurance programs show some similarities to other types of programs. For most programs that have been rated by the PART, the scores are relatively high for program purpose and design and for program management, while the scores are low for program results. This general pattern holds for credit and insurance programs. Relative to other programs, however, credit and insurance programs scored low in program purpose and design and high in program results. The PART indicates that most credit and insurance programs have clear purposes. Many credit and insurance programs, however, fail to score high in program design. Some are duplicative of other federal programs or private sources, and some have flawed designs limiting their effectiveness and efficiency. Flawed designs are generally correctable. If some programs have become redundant or duplicative of the private sector’s activities due to financial evolution, however, those programs need to be reviewed carefully. They may need to be refocused on activities that have been affected less by financial evolution, or to be discontinued. In the program management category, while most credit and insurance programs are strong in basic financial and accounting practices, such as spending funds for intended purposes, some programs show weaknesses in more sophisticated financial management, such as cost control. Overall, credit and insurance programs are somewhat better in financial management than other programs. Given that these programs deal with highly complex financial problems, however, credit and insurance programs may still need to make significant improvements and show superior performance in financial management. Program results, the most important category of performance, are a weak area for credit and insurance programs, as well as for some other programs assessed by the PART. A particularly troubling indication from detailed analyses is that many credit and insurance programs show deficiencies in program effectiveness and achieving results. Based on this finding, the managers of credit and insurance programs need to place much more emphasis on results-driven management. Common Features Credit programs share many features that distinguish them from other programs. For example, the cost is uncertain because of various risks, such as default risk, prepayment risk, and interest rate risk. Most credit programs are also intended to address imperfections in financial markets. These common features are discussed in relation to the four areas of the PART. Although this section focuses on credit programs, much of the discussion also applies to insurance programs. For example, the cost is uncertain for insurance pro- ANALYTICAL PERSPECTIVES grams, too, because insured events occur unexpectedly. Financial market imperfections are also the main justification for insurance programs. Understanding common features should help to interpret PART results and to devise adequate steps to improve performance. Program purpose and design. Program purposes vary widely across credit programs. They include increasing homeownership, increasing the number of college graduates, promoting entrepreneurship, and promoting exports. The private market serves some of these distinctive purposes better now than it did in the past. Thus, changes in financial markets may have significantly affected the usefulness of some credit programs. Examining the effect of financial evolution may be a critical part of achieving effective reforms. Credit programs share many critical elements of design. They try to correct imperfections in financial markets by making credit available to those borrowers who would not be able to obtain credit at reasonable cost without government assistance. To target the right borrowers, the program design needs to takes into account various factors, such as borrowers’ incentives, accessibility, the state of financial markets, and general economic conditions. Credit programs also need to deal with many complexities, such as screening borrowers, servicing loans, and collecting defaulted loans. Given these complexities, most credit programs may benefit from the private sector’s expertise. To be effective, however, partnership with the private sector should be designed such that the private partner’s profit is closely tied to its contribution to increasing the program’s effectiveness and efficiency. Private lenders are generally better at screening borrowers, but their incentive to screen borrowers effectively evaporates if the Government provides a 100-percent loan guarantee. Strategic planning. Credit programs operate in rapidly changing financial markets. Thus, an important aspect of strategic planning for credit programs is to adapt to changes in financial markets. To achieve maximum efficiency, program managers need to adapt their programs quickly to new developments. For example, private lenders are more willing to serve many customers to whom they did not want to lend in the past. Thus, some Federal credit programs may find themselves serving a narrower pool of riskier customers and need to adjust their policies and cost estimates accordingly. Quickly adopting new technologies is also important, because financial institutions are increasingly applying advanced technologies to risk management. Falling behind, Federal credit and insurance programs can be left with much riskier customers as private entities attract better-risk customers away from Federal programs. Program management. Credit programs face some unique challenges. To assess how credit programs manage the challenges, the PART adds two extra items for credit programs; one item addresses managing risks and the other addresses estimating the program’s cost and risk. Credit programs share similar risks as does the lending business. To manage those risks effectively, 89 7. CREDIT AND INSURANCE program managers need to monitor the credit quality of loans and practice tight financial management. For credit programs, accurately estimating the program cost is a critical element of effective management. The cashflow is uncertain for credit programs; some loans default, while some others are prepaid. Thus, the program cost must be estimated based on the expected default, prepayment, and recovery rates. An inaccurate estimation would result in inadequate budgeting and incorrect program evaluation. Some other management issues are more important, though not unique, for credit programs than they are for other programs. Data collection, for example, is critical for effective risk management and accurate cost estimation. Effective risk management requires accurate and timely information on loan performance. The key ingredients of predicting loan performance are loan performance histories and detailed data on borrower and lender characteristics. Program Results. The main difficulty in evaluating program performance is measuring the net outcome of the program (improvement in the intended outcome net of what would have occurred in the absence of the program). Suppose that an education program is intended to increase the number of college graduates. Although it is straightforward to measure the number of college graduates who were assisted by the program, it is difficult to tell how many of those would not have obtained a college degree without the program’s assist- ance. Credit programs face an additional difficulty of estimating the program cost accurately. In evaluating programs, the outcome must be weighed against the cost. In the above example, the ultimate measure of effectiveness is not the net number of college graduates produced by the program but the net number per Federal dollar spent on the program. Thus, an inaccurate cost estimation would lead to incorrect program evaluation; an underestimation (overestimation) of the cost would make the program appear unduly effective (ineffective). Results for credit programs need to be interpreted in conjunction with the accuracy of cost estimation. The net outcome of a credit program can change quickly because it depends on the state of financial markets, which are very dynamic. The net outcome can decrease, as private entities become more willing to serve those customers whom they were reluctant to serve in the past, or it can increase if financial markets fail to function smoothly due to some temporary disturbances. Thus, the effect of financial evolution needs to be analyzed carefully. A sub-par performance by a credit program could be related to financial market developments; the program might have failed to adapt to rapid changes in financial markets, or its function might have become obsolete due to financial evolution. The program should be restructured in the former case, and discontinued in the latter case. PART Cross-Cut for Credit Programs As one of the world’s largest lenders, with a portfolio of nearly $1.5 trillion in direct loans and loan guarantees, the Federal Government has a great interest in efficient risk management. This need is even stronger when considered in the context of the Government’s target borrower population: those whose risk profiles prevent them from obtaining private credit on reasonable terms. Given the higher default probability and the substantial portfolio size, lax management can result in a large increase in the cost to the Government. Thus, the Government must adopt effective risk management techniques to keep defaults in check and increase recoveries when defaults do occur. At the same time, the Government must ensure that it is effectively serving its intended borrowers. A number of credit program PART scores indicate that many agencies lack the data, processes, or overall understanding of the credit lifecycle (origination, loan servicing/lender monitoring, liquidation, and debt collection) to achieve these dual, and occasionally conflicting, goals. Over the next year, OMB will conduct a PART cross-cut examining the major credit agencies’ programs. This effort will be supported by a Credit Council comprised of OMB and agency representatives. The Council will identify agency and private sector best practices that can be implemented across the major credit agencies, leading to higher program and management efficiencies, budgetary savings, and improved PART scores. III. CREDIT IN FOUR SECTORS Housing Credit Programs and GSEs The Federal Government makes direct loans, provides loan guarantees, and enhances liquidity in the housing market to promote homeownership among low- and moderate-income people and to help finance rental housing for low-income people. While direct loans are largely limited to low-income borrowers, loan guarantees are offered to a much larger segment of the population, including moderate-income borrowers. Increased liquidity achieved through GSEs benefits virtually all borrowers in the housing market. 90 Federal Housing Administration In June 2002, the President issued America’s Homeownership Challenge to increase first-time minority homeowners by 5.5 million through 2010. During the first two and a quarter years since the goal was announced, over 1.9 million minority families have become homeowners. HUD’s Federal Housing Administration (FHA) accounted for over 400,000 of these first-time minority homebuyers through its insurance funds, mainly the Mutual Mortgage Insurance Fund. FHA mortgage insurance provides access to homeownership for people who lack the traditional financial resources or credit history to qualify for a home mortgage in the conventional marketplace. In 2004, FHA insured $107 billion in mortgages for almost 900 thousand households. Over 70 percent of these were people buying their first homes, many of whom were minorities. For 2006, FHA is proposing two new mortgage programs that reduce the biggest barriers to homeownership—the down payment and impaired credit. The Zero Down mortgage allows first-time buyers with a strong credit record to finance 100 percent of the purchase price and closing costs. For borrowers with limited or weak credit histories, Payment Incentives initially charges a higher insurance premium, but reduces the borrower’s premiums once they have established a history of regular payments, thereby demonstrating their creditworthiness. The program was evaluated under the PART. The assessment found that the program is meeting its statutory objective to serve underserved borrowers while maintaining an adequate capital reserve. In 2004, 73 percent of FHA-insured loans were to first-time homeowners, and 37 percent were to minority homebuyers. However, the program lacks quantifiable annual and long-term performance goals which measure FHA’s ability to achieve its statutory mission. In addition, the program’s credit model does not accurately predict losses to the insurance fund, nor can FHA demonstrate its ability to reduce fraud in the program. In response to these findings, in 2006 FHA will establish performance goals for the percentage of FHA Single Family endorsements for first-time and minority homeowners, and performance goals for fraud detection and prevention. FHA will also continue development of a credit model that more accurately and reliably predicts claims costs. VA Housing Program The Department of Veterans Affairs (VA) assists veterans, members of the Selected Reserve, and active duty personnel to purchase homes as recognition of their service to the Nation. The program substitutes the Federal guarantee for the borrower’s down payment. In 2004, VA provided $35 billion in guarantees to assist 270,571 borrowers. Since the main purpose of this program is to help veterans, lending terms are more favorable than loans without a VA guarantee. In particular, VA guarantees ANALYTICAL PERSPECTIVES zero down payment loans. VA provided 109,493 zero down payment loans in 2004. To help veterans retain their homes and avoid the expense and damage to their credit resulting from foreclosure, VA plans aggressive intervention to reduce the likelihood of foreclosures when loans are referred to VA after missing three payments. VA was successful in 44 percent of its 2004 interventions, and its goal is to achieve at least a 47 percent success rate in 2006. Rural Housing Service The U.S. Department of Agriculture’s Rural Housing Service (RHS) offers direct and guaranteed loans and grants to help very low- to moderate-income rural residents buy and maintain adequate, affordable housing. The single family guaranteed loan program guarantees up to 90 percent of a private loan for low- to moderateincome (115 percent of median income or less) rural residents. The programs’ emphasis is on reducing the number of rural residents living in substandard housing. In 2004, over $4.5 billion in assistance was provided by RHS for homeownership loans and loan guarantees; $3.23 billion of guarantees went to 34,800 households, of which 30 percent went to very low- and low-income families (with income 80 percent or less than median area income). For the section 502 guaranteed loan program, the 2005 appropriation bill increased the guarantee fee on new loans to 2.0 percent. This was coupled with language that would allow the guarantee fee to be financed as part of the loan. The ability to finance the guarantee fee is more in line with the housing industry, including HUD and VA, and will allow more lower-income rural Americans to realize the dream of home ownership. The guarantee fee for refinance loans remains 0.5 percent. The guarantee fees are expected to remain at the same rate in 2006. Funding in 2006 stands at $3 billion for purchase loans, and $225 million for refinance loans. RHS programs differ from other Federal housing loan guarantee programs. RHS programs are means-tested and more accessible to low-income, rural residents. In addition, the RHS section 502 direct loans offer extraordinary assistance to lower-income homeowners by reducing the interest rate down to as low as 1 percent for such borrowers. The section 502 direct program helps the ‘‘on the cusp’’ borrower obtain a mortgage, and requires graduation to private credit as the borrower’s income and equity in their home increases over time. The interest rate depends on the borrower’s income. Each loan is reviewed annually to determine the interest rate that should be charged on the loan in that year based on the borrower’s projected annual income. The direct program cost is balanced between interest subsidy and defaults. For 2006, RHS expects to provide $1.0 billion in loans with a subsidy cost of 11.39 percent. RHS also offers multifamily rental housing loans, and loans and grants for farm labor housing. Direct loans are provided to private, public, and non-profit borrowers 91 7. CREDIT AND INSURANCE to construct, rehabilitate, and repair multi-family rental housing for very low- and low-income residents, either through general occupancy properties or elderly and handicapped housing. To help achieve affordable rents, the interest rate is subsidized to a level between 1 and 2 percent. Many very low- and low-income residents’ rents are further reduced to 30 percent of their adjusted income through rental assistance grants. During 2006, $641 million for Section 521 rental assistance will be directed primarily to continue existing commitments. RHS recently received a contracted study that addressed the preservation issues surrounding the over 40-year old program. A long-term initiative has been shaped to address the revitalization of the 17,400-property portfolio. During 2006, $214 million will be directed to begin the revitalization initiative, primarily to transition existing residents in properties leaving the program. The $27 million loan program level for the direct rural rental housing will be used to address repair and rehabilitation needs of preservation worthy properties. Additionally, the farm labor housing combined grant and loan level will provide $56 million in 2006 for new construction as well as repair and rehabilitation. RHS also guarantees multifamily rental housing loans. RHS expects to be able to guarantee $200 million in loans for 2006, which is double the amount from 2005. Housing GSEs Fannie Mae and Freddie Mac were chartered by Congress to increase the liquidity of mortgages and to promote access to mortgage credit for groups that historically have been underserved by private markets. Fannie Mae and Freddie Mac do not participate directly in the origination of mortgages. They carry out their chartered mission primarily by purchasing residential mortgages or guaranteeing mortgage-backed securities (MBS) consisting of residential mortgages. The guaranteed MBS are held by investors, mortgage lenders, and increasingly by Fannie Mae and Freddie Mac themselves. Fannie Mae and Freddie Mac finance their acquisition of loans and MBS assets by issuing debt; both also charge fees to mortgage originators who exchange a pool of loans for MBS issued and guaranteed by one of the enterprises. As Government-Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac have a unique status among private financial institutions. They are publicly held companies but were granted certain privileges to facilitate their chartered mission, including exemption from most state and local taxes and registration requirements with the Securities and Exchange Commission (SEC). Also, their debt and MBS may be held without limit by federally chartered depository institutions. Regulatory oversight of Fannie Mae and Freddie Mac is shared among multiple agencies across the Government. The Office of Federal Housing Enterprise Oversight (OFHEO), an independent agency in the Depart- ment of Housing and Urban Development (HUD), is the primary safety and soundness regulator of Fannie Mae and Freddie Mac. HUD is responsible for the establishment and enforcement of affordable housing goals for the enterprises, ensuring their compliance with fair housing laws and their charters, and reviewing new activities and programs in consultation with OFHEO. The Treasury Department has discretionary authority to approve or disapprove the issuance of the GSEs’ debt, and the SEC now regulates Fannie Mae under the Securities Exchange Act of 1934. Freddie Mac has not yet registered under the 1934 Act, but has publicly committed to do so when able. The Federal Home Loan Bank System (FHLBS) was established by Congress to provide liquidity to home mortgage lenders who are members of the individual Banks. The System comprises 12 separate, regional Federal Home Loan Banks (FHLBs, or Banks), each of which is a member-owned cooperative. The Banks issue debt for which the Banks are jointly and severally liable, and use the proceeds principally to make advances (secured loans) to their members. Member institutions primarily secure advances with residential mortgages and other housing-related assets. Like Fannie Mae and Freddie Mac, the Banks have been granted special privileges as part of their Government charter, including exemption of their corporate earnings from Federal income tax and from State and local taxes. In addition, the Secretary of the Treasury has authority to purchase up to $4 billion of these entities’ debt securities. In recent years, some FHLBs have begun to purchase mortgages from their members. At the end of 2003, the 12 FHLBs held about $115 billion of mortgages, equivalent to 7 percent of the combined total of $1.5 trillion held by Fannie Mae and Freddie Mac. In addition, as of 2003, the FHLBs held about $774 billion in debt, while Fannie Mae held $976 billion, and Freddie Mac held $757 billion. The Federal Housing Finance Board (FHFB) regulates the mission and the safety and soundness of the FHLBs. As it does with respect to Fannie Mae and Freddie Mac, the Treasury Department has discretionary authority over the issuance of FHLB debt. The FHFB recently required that the FHLBs register with the SEC, and registration is expected for most if not all of the FHLBs later this year. GSE Borrowing Advantage Their unique status enables all three housing GSEs to borrow at rates lower than investors would ordinarily accept, theoretically to pay higher prices to originating lenders for mortgages, and in the case of the FHLBs to make low-cost advances to member institutions. Although the prospectus for each GSE security clearly states that it is not backed by the U.S. Government, the misperception exists among many investors that the Government backs the GSEs. In 2004 the Congressional Budget Office estimated the implicit Federal subsidy to the three housing GSEs was $23 billion during the previous year. A Federal Reserve study suggests 92 ANALYTICAL PERSPECTIVES that over one-half of the implicit subsidy to Fannie Mae and Freddie Mac accrues to the GSEs’ shareholders. Risk As with all financial institutions, risk is inherent in the way the housing GSEs conduct their business. By assuming and managing some of the risks arising from mortgage lending, the GSEs generate some benefits for consumers and significant profits for their owners. However, the mix of benefits and risks varies depending on how the GSEs conduct their businesses. Credit Risk. By issuing and guaranteeing securities based on pools of mortgages they purchase from lenders, Fannie Mae and Freddie Mac assume some portion of credit risk, which enhances liquidity to the mortgage market and thereby reduces the cost of credit to borrowers. Fannie Mae and Freddie Mac control their credit risk by using underwriting standards to evaluate the mortgages they purchase for securitization. Their risk is further limited by statutory provisions that require private mortgage insurance or equivalent protection on high loan-to-value ratio mortgages. Credit losses for the enterprises, as a percentage of the face value of mortgages they purchased, averaged 5.4 basis points for a fifteen-year period ending in 2002 and have been declining. Viewed in isolation, Fannie Mae and Freddie Mac’s assumption of credit risk arising from guarantees of MBS held by other investors benefits the market and homebuyers while incurring a risk that is easily managed and well-understood. Interest Rate Risk. A more challenging form of risk arises from the effect that interest rate movements can have on portfolios of mortgages and mortgage-backed securities. Interest rate risk arises from the changing market values of the GSEs’ interest-sensitive assets and liabilities. Interest rate movements can cause the interest margins between their mortgage and other assets and their liabilities to grow or shrink, potentially changing the mark-to-market value of their equity capital and estimated future earnings dramatically in a short period. Historically, the FHLBs assumed interest rate risk by issuing debt and using the proceeds to make loans, often of comparable maturities, to member institutions to support their mortgage lending and other investments; this risk is somewhat mitigated since they often require prepayment penalties on advances to member institutions. Much more recently, however, some of the Banks have created mortgage purchase programs that assume interest rate risk for pools of mortgages. Fannie Mae, and more recently Freddie Mac, have built large portfolios of mortgages and repurchased MBS. However, by choosing to borrow substantially in order to build large retained portfolios of mortgages and mortgage-backed securities, they assume a different, more challenging set of risks and increase the complexity of their operations. Their ability to repurchase large volumes of their own MBS is driven by their ability to finance these mortgages with lower-cost debt than other investors, thanks to market misperceptions of a unique status for the enterprises that allow them to borrow at lower rates. Federal Reserve economists have found no evidence that these repurchases provide any additional benefit to borrowers. They clearly provide an opportunity for the GSEs to increase their earnings, however. Chart 7-1. Total Mortgages, 1990-2003 Fannie Mae Billions of dollars Freddie Mac Billions of dollars 2,500 2000 MBS Outstanding Retained Portfolio MBS Outstanding Retained Portfolio 1,500 1,000 500 0 1990 1992 1994 1996 1998 2000 2002 1990 1992 1994 1996 1998 2000 2002 7. CREDIT AND INSURANCE At the end of 2003, Fannie Mae’s retained portfolio as a percentage of its MBS outstanding (held by others) was 69.4 percent, or almost $900 billion; Freddie Mac’s retained portfolio as a percentage of MBS outstanding was 78.1 percent, or over $600 billion. In periods of declining interest rates, mortgage refinancings increase, so higher-yielding mortgages prepay, exposing holders of these mortgages or securities based on them to the risk of having to reinvest these funds at lower rates. As Federal Reserve Chairman Greenspan has noted, Fannie Mae and Freddie Mac have chosen not to offset the interest rate risk arising from their portfolio operations by increasing capital but to attempt to manage that risk by issuing callable debt and by purchasing derivative financial instruments, such as interest rate swaps and options on swaps. For example, they might hedge fixed-rate mortgages, which drop in value when interest rates increase, using derivative instruments that increase in value under the same scenario. The techniques necessary to manage interest rate risk and its potential effect on earnings are complex, and their management becomes increasingly difficult with increases in the size and complexity of the portfolio to be managed. Chairman Greenspan has also noted that the sophistication of the operations required to hedge prepayment risk with little capital places an enormous burden on these institutions. Like other financial institutions, the housing GSEs attempt to limit their interest rate exposure and the effect of interest rate movements on their earnings. Chairman Greenspan has suggested statutory limits on the dollar amount of the debt held by Fannie Mae and Freddie Mac relative to the dollar amounts of mortgages securitized and held by other investors, and limiting the ability of the FHLBs to hold mortgages and mortgage-backed securities directly, as additional ways to manage the interest rate risk of the GSEs. Operations risk. Recent events reinforced concerns over the risks posed by the GSEs and their existing regulatory framework. These events have illustrated how the burden of managing interest rate risk mixed with management deficiencies can lead to operational failings. In 2003, Freddie Mac reported that it had understated its earnings by $5 billion over three years, and eventually acknowledged substantial issues with accounting, management practices, and internal controls. OFHEO subsequently assessed substantial financial penalties on the company, and its senior management was replaced. A year-long investigation into the accounting, internal controls, and management practices at Fannie Mae by OFHEO led to findings of inappropriate accounting procedures and practices, internal control deficiencies, and questionable management oversight. The SEC concurred in the finding of inappropriate accounting practices and directed that Fannie restate its earnings for 2001–2004. These findings led Fannie Mae to replace its Chairman and CEO, and its CFO. The Enterprise estimated it would be forced to recognize $9 billion in losses, reducing its capital below the regulatory minimum requirement. During the 93 same period, two of the twelve FHLBs entered into written agreements with FHFB that required review of operational practices and controls, announcing that their accounting practices needed revision and, in one instance, that earnings required restatement. These developments now reveal some of the ways that the assumption of large-scale interest rate risk complicates the operational challenges facing the GSEs. The techniques necessary to manage interest rate risk and its potential effect on earnings are complex, and their management becomes increasingly difficult with increases in the size and complexity of the portfolio to be managed. While other large financial institutions may face similar challenges, the management of interest rate risk and operations risk is a particular challenge for the GSEs, given their size, regulatory structure, and the lack of full market discipline. The rules governing accounting for derivatives likewise are complex. Interpreting and applying the accounting rules have posed challenges to companies that use derivatives. Out of concern that firms were using inconsistent methods to account for the use of derivatives to hedge interest rate risk and the potential that their use could obscure a company’s true position or misrepresent earnings, in 1998 the Financial Accounting Standards Board (FASB) promulgated the rule known as FAS 133; it became effective in 2000. In part, this rule requires companies, with narrow exceptions, to reflect on their balance sheets the amount that derivatives rise or fall in value, even if derivatives contracts are still open and gains or losses are not yet locked in. In 2004, OFHEO found, and the SEC concurred, that Fannie did not adequately document its hedges and routinely violated FAS 133 in a number of ways. For example, Fannie Mae, in its treatment of hedges when it changed financial strategies and, with no new testing or proof of effectiveness, took derivatives that were initially paired with one liability, and paired them with another. The SEC also found that Fannie Mae failed to comply in material respects with FAS 133. At OFHEO’s behest, Fannie Mae agreed to cease all hedge accounting that did not conform with FAS 133 by the first quarter of CY 2005, and to ensure going forward that all hedge accounting complies with this requirement. Fannie Mae has already stated that this correction will reduce its capital and its earnings by $9 billion from 2001 through mid-2004. This leaves Fannie Mae below the minimum regulatory capital requirement and subjects it to further regulatory actions. This follows upon the events of 2003, when Freddie Mac discovered substantial accounting and internal control issues, including issues with the application of FAS 133, leading to replacement of senior management and restatement of its financial statements over the 2000–2003 timeframe. The SEC and the Department of Justice have continued to investigate both Fannie Mae and Freddie Mac. During the same period, the FHFB announced a written agreement with the FHLB of Chicago which re- 94 sulted in a review of the Bank’s accounting practices, changes to certain accounting methods under FAS 133, and subsequently, a delay in the Bank’s issuance of its third quarter 2004 financial statements. The failure of Fannie Mae and Freddie Mac and, to a lesser extent, the FHLBs to account for the use of derivatives and hedges consistent with Generally Accepted Accounting Principles (GAAP) prompted their regulators to investigate for the presence of control deficiencies and weaknesses in corporate governance, which they have identified. Fannie Mae and Freddie Mac were cited within a nine-month period for serious and systemic operational control deficiencies that contributed in part to the need for massive earnings restatements. The cited deficiencies included management cultures that stressed earnings stability at the expense of other considerations, ineffective processes for developing accounting policies, and absence of independent internal controls for review of certain transactions. These developments highlight the risks inherent in the GSEs’ operations, risks that because of their size and relationships with other institutions could have far-reaching effects should one of them falter. Systemic Risk. The risks undertaken by the GSEs, if not properly managed, may pose a threat to their solvency. Under some circumstances, they also may threaten the stability or solvency of other financial institutions and the economy. Current Federal law explicitly exempts the securities of the GSEs from the statutory limitation on commercial banks’ investment in the ‘‘investment securities’’ of individual firms. In a February 2003 study conducted by OFHEO utilizing FDIC data, over 2,000 commercial banks held at least 51 percent of their capital in the form of debt issued by Fannie Mae; and almost 1,000 commercial banks held at least 51 percent of their capital in the form of debt issued by Freddie Mac. Should a financial crisis affecting the GSEs and other financial actors develop, the market’s misperception of Government backing of GSE securities could affect its course and resolution. A September 2004 Federal Reserve Bank of Atlanta study indicated concern that severe stress to one of the GSEs might contribute to weakness in other financial institutions that hold significant GSE obligations, especially if the path to resolution of the crisis and the potential for Government intervention are misunderstood. The potential for systemic risk arising from the GSEs’ size and their central role in mortgage markets combined with the difficulty of managing the risks inherent in a large mortgage portfolio raise fundamental questions about the value they add through their support for mortgage lending and reduced costs to borrowers relative to the risks their current operations pose. Some research by Federal Reserve economists suggests that GSE securitization activities have a relatively small effect on mortgage interest rates—just a few dollars a month on an average mortgage—and that their practice of holding mortgages in portfolio has almost no effect on mortgage costs. Instead of being leaders in increas- ANALYTICAL PERSPECTIVES ing historically underserved groups’ access to credit, the GSEs have actually trailed the market averages in a number of dimensions. The Administration has sought to narrow the gap by lessening the risks posed by the GSEs and increasing the benefits they offer to the public. Enhancing Safety and Soundness Events of the past year reinforced concerns over the risks posed by the GSEs and highlighted the need for meaningful GSE reform. A strengthened regulator would have the in-house expertise to monitor accounting methodology and to detect any problems, as well as the authority and expertise to monitor regulatory standards for the development and implementation of systems and controls. A strong regulator would also hold the authority to place a failing entity into receivership similar to that held by the other financial safety and soundness regulators. The Administration intends that any proposed new regulatory framework for the GSEs follows the principles for regulation of financial institutions established by the international Basel Committee, principles accepted throughout the world as requirements for firstclass regulation. As described in the President’s FY 2005 Budget, these principles involve increasing market discipline, strengthening supervision, and ensuring appropriate capital requirements. Market Discipline. Chief among the factors that guide a company in its decision-making is the discipline imposed by the market. Investors can discipline the GSEs to the extent that they have adequate information about their risks and financial condition. Current market discipline is hindered by a misperception that the Federal Government would back GSE securities in the event of a GSE default, and because GSE investors do not enjoy the same level of disclosure, or oversight of disclosures, as investors in other public companies. Ironically, at the times when investors would most benefit from detailed information about the enterprises’ finances, they are left without adequate information for months or years. The Administration in 2002 called upon the three housing GSEs to register voluntarily their equity securities under the 1934 Securities Exchange Act. In June 2004, the FHFB adopted a final rule that will require each FHLB to register a class of its stock by June 30, 2005, leading to improved disclosures. Fannie Mae voluntarily registered and began filing disclosures with the SEC in 2003. However, because of its recent accounting problems, Fannie Mae is no longer able to provide these disclosures. Freddie Mac does not anticipate being in compliance with SEC standards before the second quarter of 2006. Since the GSEs are not subject to the same market discipline as other public companies, market discipline by itself is not always sufficient to ensure safety and soundness. Supervision. An effective financial regulator must possess authorities commensurate with its responsibilities and capabilities. The Administration determined 95 7. CREDIT AND INSURANCE that the safety and soundness regulators of the housing GSEs lack sufficient powers and stature to meet their responsibilities. The President’s 2005 Budget reflected, therefore, that both OFHEO, regulator of Fannie Mae and Freddie Mac, and the FHFB, regulator of the FHLBS, should be replaced with a new, consolidated regulatory regime, empowered with expanded enforcement authority, receivership authority, and access to its funding independent of the annual appropriations process. A new regulator, like other Federal regulators of financial institutions, must have full authority together with accountability for the prudential supervision of the enterprises, which includes the authority to approve new activities of the enterprises. It would have authority to review their ongoing business activities and reject new ones if they would be inconsistent with their charter or prudential operations or incompatible with the public interest. HUD would continue to be consulted on new activities in order to ensure that the GSEs are in compliance with their charters and that the GSEs carry out their public mission. Currently, the means by which the failure of a GSE could be resolved differs between Fannie Mae and Freddie Mac, on the one hand, and the FHLBs, on the other. In the case of a failed FHLB, the FHFB has power to liquidate such institution, subject to certain limitations relating to the whole number of Banks in the system. OFHEO, on the other hand, lacks the power to place an entity into bankruptcy or receivership. The Federal banking regulators have broad powers to place a failed institution into receivership, and to conduct the orderly wind-down of a failed bank in such a way that systemic disruption is minimized. Giving such uniform powers to a Federal regulator of GSEs could likewise help prevent dislocation in financial markets in the event of the insolvency of such an institution. Further, such powers would address any misperception that the GSEs are backed by the Government. By providing clarity to the markets that the GSEs (and their creditors) are subject to the same business risks as are other corporate entities, an even greater level of market discipline might be brought to bear on the GSEs’ operations. In general, this type of market discipline has proven very effective in ensuring that businesses operate in a prudential, and safe and sound manner. Capital requirements. Because neither investors nor regulators can predict all possible errors by a company or unexpected economic changes, requirements that ensure that the GSEs hold capital adequate to cushion such shocks are essential. Capital requirements must be set with an eye to both known risks and unknown or unquantifiable risks. Losses from unknown risks can well exceed losses from measured risks, as shown by the rapid depletion of capital in 1998 for the highly leveraged hedge fund, Long-Term Capital Management. For this reason, it is essential that the new regulator of the housing GSEs have unambiguous authority to adjust both risk-based and minimum capital requirements. Affordable Housing Mission One of the public purposes of the GSEs is to promote access to mortgage credit for low- and moderate income families. By law, HUD establishes annual affordable housing goals for Fannie Mae and Freddie Mac. In 2004, HUD established the affordable housing goals for Fannie Mae and Freddie Mac for 2005 through 2008. The low and moderate income goal will increase from 50 percent (of the minimum share of housing units financed by a GSE’s mortgage purchases in a particular year) in 2004 to 56 percent by 2008; the underserved areas goal will increase from 36 percent in 2004 to 39 percent by 2008; and the special affordable housing goal will increase from 20 percent in 2004 to 27 percent by 2008. The table below shows how Fannie Mae and Freddie Mac have trailed the marketplace in lending to firsttime minority homebuyers in the 2001–2003 timeframe. It is likely that, as a result of these new, higher goals, they will need to improve their efforts to reach out to low-income and minority first-time homebuyers. PERCENTAGE OF FANNIE MAE AND FREDDIE MAC LOANS TO FIRST-TIME MINORITY HOMEBUYERS COMPARED TO THE FULL MARKETPLACE, 2001–2003 AVERAGES 1 Fannie Mac All Race/Ethnicity Groups ............. African American and Hispanic .... All Minorities .................................. 25.7% 4.7% 7.5% Freddie Mac 26.1% 3.5% 6.1% Both GSEs 25.9% 4.2% 6.9% Full Market 2 39.1% 9.0% 12.3% Source: Department of Housing and Urban Development. first-time homebuyer definition for the market analysis is homebuyers who have never owned a home. The definition for the GSEs is purchasers who have not owned a home within the past three years. The percentages show first-time homebuyer mortgages by race/ethnicity category as a share of all home purchase mortgages purchased by the GSE or originated in the market. 2 ‘‘Market’’ means conventional, conforming home purchase loans. 1 The With their growth as a share of the mortgage marketplace, Fannie Mae and Freddie Mac have faced increased market competition in the acquisition of mortgages and MBS; the increase in affordable housing goals and subgoals may mean that Fannie Mae and Freddie Mac must be more innovative or aggressive in purchasing loans that meet the goals classifications. They can do this in part by using a larger portion of the subsidy they enjoy as a result of their Government ties to support purchases of goals-qualifying loans. Part of the Administration’s proposal for a strengthened regulatory framework would provide HUD with the authority to penalize Fannie Mae and Freedie Mac if they fail to reach the affordable housing goals. Current law does not permit the Secretary of HUD to impose timely and appropriate penalties for a GSE’s failure to reach a goal. The FHLBs address their affordable housing obligations in a different fashion. For instance, by statute, 96 ANALYTICAL PERSPECTIVES each FHLB is assessed ten percent of its net income for support of affordable housing. This assessment enables each FHLB member to provide subsidized and other low-cost funding to create affordable rental and homeownership opportunities, and support for commercial and economic development activities that benefit low- and moderate-income neighborhoods. With their large subsidy, and with their substantial market share, the GSEs should lead the market in creating homeownership opportunities for less advantaged Americans. However, HUD has conducted analyses showing that private lenders operating without the benefits and subsidies enjoyed by the GSEs contribute more to affordable housing than do Fannie Mae and Freddie Mac. One purpose of a stronger regulatory approach is to ensure that all three housing GSEs fulfill their charter obligations. Education Credit Programs and GSEs The Federal Government guarantees loans through intermediary agencies and makes direct loans to students to encourage post-secondary education. The Student Loan Marketing Association (Sallie Mae), created in 1972 as a GSE to develop the secondary market for guaranteed student loans, has now been privatized. Student Loans The Department of Education helps finance student loans through two major programs: the Federal Family Education Loan (FFEL) program and the William D. Ford Federal Direct Student Loan (Direct Loan) program. Eligible institutions of higher education may participate in one or both programs. Loans are available to students regardless of income. However, borrowers with low family incomes are eligible for loans with additional interest subsidies. For low-income borrowers, the Federal Government subsidizes loan interest costs while borrowers are in school, during a six-month grace period after graduation, and during certain deferment periods. In 2006, over 9 million borrowers will receive over 15.1 million loans totaling over $95 billion. Of this amount, more than $62 billion is for new loans, and the remainder reflects the consolidation of existing loans. Loan levels have risen dramatically over the past 10 years as a result of rising educational costs and an increase in eligible borrowers. The FFEL program provides loans through an administrative structure involving over 3,500 lenders, 35 State and private guaranty agencies, roughly 50 participants in the secondary market, and approximately 6,000 participating schools. Under FFEL, banks and other eligible lenders loan private capital to students and parents, guaranty agencies insure the loans, and the Federal Government reinsures the loans against borrower default. In 2006, FFEL lenders will make over 11.5 million loans totaling over $72 billion in principal, roughly a third of which involve consolidations of existing loans. Lenders bear two percent of the default risk, and the Federal Government is responsible for the re- mainder. The Department also makes administrative payments to guaranty agencies and, at certain times, pays interest subsidies on behalf of borrowers to lenders. The William D. Ford Direct Student Loan program was authorized by the Student Loan Reform Act of 1993. Under the Direct Loan program, the Federal Government provides loan capital directly to more than 1,100 schools, which then disburse loan funds to students. In 2006, the Direct Loan program will generate almost 3.6 million loans with a total value of nearly $23 billion, including over $7 billion in consolidations of existing loans. The program offers a variety of flexible repayment plans including income-contingent repayment, under which annual repayment amounts vary based on the income of the borrower and payments can be made over 25 years with any residual balances forgiven. The Administration is strongly committed to the lender-based FFEL program and expects it to continue as the primary source of loans to students in the years ahead. In addition, the Administration will continue to maintain a DL program to ensure that no eligible student is denied access to student loans in the event a student or school cannot find a suitable lender. However, problems in the structures of the current student loan programs prevent them from meeting current policy and program objectives. Specifically, the Federal Government assumes almost all of the risk for the loans, while federal subsidies to intermediaries lenders and guaranty agencies are set high enough to allow the less efficient ones to generate a profit. These problems lead to unnecessary costs for taxpayers and prevent the program from achieving the efficiencies the market is designed to provide. The 2006 Budget proposes a package of reforms to both the FFEL and DL loan programs to achieve significant cost savings and improve effectiveness. These reforms will link subsidy payments for lenders and guaranty agencies more closely to their costs and will modify interest rates for borrowers who are no longer in school and have just consolidated their loans. The Budget achieves $34 billion in savings over ten years by cutting unnecessary subsidies and payments to lenders, state guaranty agencies, and loan consolidators, and by placing a larger share of the loan risks on lenders. These savings will be used to increase the Pell Grant maximum award, pay off the current $4 billion Pell shortfall, and improve benefits to students in school by increasing loan limits for first year students and extending the current favorable interest rate framework. Sallie Mae The Student Loan Marketing Association (Sallie Mae) was created as a shareholder-owned government sponsored enterprise (GSE) by the Education Amendments of 1972 to expand funds available for student loans by providing liquidity to lenders engaged in the Federal Family Education Loan Program (FFELP), formerly the 7. CREDIT AND INSURANCE guaranteed student loan program (GSLP). Sallie Mae was reorganized in 1997 pursuant to the authority granted by the Student Loan Marketing Association Reorganization Act of 1996. Under the Reorganization Act, the GSE became a wholly owned subsidiary of SLM Corporation and was required to be wound down and liquidated by January 30, 2008. On June 30, 2004, the SLM Corporation first purchased FFELP student loans through non-GSE affiliates and, as a result, the GSE was required by statute to terminate purchases of FFELP student loans. Accordingly, the GSE is no longer a source of liquidity for SLM Corporation for the purchase of student loans, and the GSE-related financing activities have primarily been limited to refinancing the remainder of its assets through non-GSE sources. As of September 2004, the Company had substantially completed the wind-down of the GSE and, on November 1, 2004, SLM Corporation sent notices to the Secretary of Education and the Secretary of the Treasury that it intended to wind-down and dissolve the GSE on December 31, 2004 or as soon as practicable thereafter, three years in advance of the statutory deadline. The dissolution was completed on December 29, 2004. All GSE debt that remains outstanding upon completion of these wind-down activities will be defeased through the creation of a fully collateralized trust. The collateral, consisting of cash and financial instruments backed by the full faith and credit of the U.S. government, will generate cash flows that provide for the interest and principal obligations of the defeased debt. Business and Rural Development Credit Programs and GSEs The Federal Government guarantees small business loans to promote entrepreneurship. The Government also offers direct loans and loan guarantees to farmers who may have difficulty obtaining credit elsewhere and to rural communities that need to develop and maintain infrastructure. Two GSEs, the Farm Credit System and the Federal Agricultural Mortgage Corporation, increase liquidity in the agricultural lending market. Small Business Administration The Small Business Administration (SBA) helps entrepreneurs start, sustain, and grow small businesses. As a ‘‘gap lender’’ SBA works to supplement market lending and provide access to credit where private lenders are reluctant to do so without a Government guarantee. Additionally, SBA assists home- and businessowners cover the uninsured costs of recovery from disasters. The 2006 Budget requests $307 million, including administrative funds, for SBA to leverage more than $25 billion in financing for small businesses and disaster victims. The 7(a) General Business Loan program will support $16.5 billion in guaranteed loans while the 504 Certified Development Company program will support $5.5 billion in guaranteed loans. SBA will supplement the capital of Small Business Investment Companies 97 (SBICs) with $3 billion in long-term loans for venture capital investments in small businesses. To continue to serve the needs of small businesses, SBA will focus program management in three areas: 1) Targeting economic assistance to the neediest small businesses SBA seeks to target assistance more effectively to credit-worthy borrowers who would not be well-served by the commercial markets in the absence of a Government guarantee to cover defaults. SBA is actively encouraging financial institutions to increase lending to start-up firms, low-income entrepreneurs, and borrowers in search of financing below $150,000. Preliminary evidence shows that SBA’s outreach for the 7(a) program has been successful. Average loan size has decreased from $258,000 in 2000 to $167,000 in 2004, while the number of small businesses served has grown from 43,748 to 81,133 during the same time period. 2) Improving program and risk management Improving management by measuring and mitigating risks in SBA’s $57 billion business loan portfolio is one of the agency’s greatest challenges. As the agency delegates more responsibility to the private sector to administer SBA guaranteed loans, oversight functions become increasingly important. SBA established the Office of Lender Oversight, which is responsible for evaluating individual SBA lenders. This office has made progress in employing a variety of analytical techniques to ensure sound financial management by SBA and to hold lending partners accountable for performance. These techniques include financial performance analysis, industry concentration analysis, portfolio performance analysis, selected credit reviews, and credit scoring to compare lenders’ performance. The oversight program is also developing on-site safety and soundness examinations and off-site monitoring of SBLCs and compliance reviews of SBA lenders. In addition, the office will develop incentives for lenders to minimize defaults and to adopt sound performance measures. Improving risk management also means improving SBA’s ability to estimate more accurately the cost of subsidizing small businesses. During 2003 and 2004, SBA followed through on its commitment to improve its accuracy in estimating the cost of its major credit programs by developing loan-level credit and reestimate models for the Section 504, Disaster, 7(a), and Secondary Market Guarantee programs. The 2006 Budget reflects net upward reestimates of the lifetime expected taxpayer costs for outstanding loans—of $408 million for the 7(a) program, $123 million for the Section 504 program, $267 million for Disaster Loans, and $922 million for SBIC Participating Securities. A net downward reestimate of $60 million is also reflected for the SBIC Debentures program. The 2006 upward trend in reestimates generally reflects technical corrections to credit subsidy models (e.g., the 7(a) subsidy model failed to account for purchased interest on defaulted loans), higher interest rates and the agency’s shift from 98 the traditional approach (based on historical account activity) to the balances approach for performing reestimates. In adopting the balances approach, SBA uncovered that its historical records did not reconcile to the credit programs’ asset and liability balances currently recorded with Treasury. SBA is working to improve its financial record keeping to mitigate future accounting discrepancies. Total budgetary cost increases over the past 3 years totaled $4.0 billion ($3.1 billion in reestimates and $0.9 billion for interest on the reestimates) for existing SBAguaranteed loans and $1.7 billion ($1.1 billion for reestimates and the remainder for interest on reestimates) for existing direct loans. While most of these budgetary cost increases related to the weak performance of the SBIC Participating Securities program and Disaster Loan asset sales, the agency’s two largest business programs also generated significant budgetary cost increases for taxpayers. Over the three-year period, the net budgetary cost increase was $636 million for outstanding 7(a) guarantees ($330 million in reestimates) and $180 million ($87 million in reestimates) for outstanding Section 504 guarantees. The 2006 Budget supports $3 billion in guaranteed venture capital investments for small businesses through the SBIC Debentures program, which provides credit financing to small business investment companies. However, the 2006 budget does not support new guaranteed investments for the Participating Securities program. Over ten years of operations, the Participating Securities program has realized and projected losses of approximately $2.2 billion out of $6.2 billion in disbursements. These losses reflect a structurally flawed program in which the Federal Government contributes up to two-thirds of investment capital but only receives up to ten percent of profits. Further, as the Program Assessment Rating Tool (PART) analysis revealed, SBICs do not have incentives to repay capital expeditiously, extending the Government’s risk exposure. Rather than make new investments through this program, SBA will continue to improve efforts to monitor and mitigate risk in approximately $9 billion in commitments in the program’s portfolio. The program had already ceased making new guaranteed investments on October 1, 2004 because sufficient borrower fees to cover the program’s costs were not enacted. 3) Operating more efficiently To operate more efficiently, SBA is piloting an automated loan origination system for the Disaster Loan program. As a result, loan-processing costs, times, and errors will decrease, while Government responsiveness to the needs of disaster victims will increase. SBA is also transforming the way that staff perform loan management functions in both the 7(a) and 504 programs. In 2004, SBA implemented new procedures for Section 504 loan processing. Results have been positive with the average loan processing time reduced from four weeks to only a few days. In 2005, SBA will streamline its 7(a) loan origination functions. Similarly, SBA is ANALYTICAL PERSPECTIVES also centralizing its loan liquidation functions for the Section 504 program and requiring intermediaries to assume increased liquidation responsibilities. USDA Rural Infrastructure and Business Development Programs USDA provides grants, loans, and loan guarantees to communities for constructing facilities such as health-care clinics, day-care centers, and water and wastewater systems. Direct loans are available at lower interest rates for the poorest communities. These programs have very low default rates. The cost associated with them is due primarily to subsidized interest rates that are below the prevailing Treasury rates. The program level for the Water and Wastewater (W&W) treatment facility loan and grant program in the 2006 President’s Budget is $1.5 billion. These funds are available to communities of 10,000 or fewer residents. The program finances W&W facilities through direct or guaranteed loans and grants. Applicant communities must be unable to finance their needs through their own resources or with commercial credit. Priority is given based on their median household income, poverty levels, and size of service population as determined by USDA. The community typically receives a grant/ loan combination. The grant is usually for 35–45 percent of the project cost (it can be up to 75 percent). Loans are for 40 years with interest rates based on a three-tiered structure (poverty, intermediate, and market) depending on community income. The community facility programs are targeted to rural communities with fewer than 20,000 residents and have a program level of $527 million in 2006. USDA also provides grants, direct loans, and loan guarantees to assist rural businesses, including cooperatives, to increase employment and diversify the rural economy. In 2006, USDA proposes to provide $899 million in loan guarantees to rural businesses (these loans serve communities of 50,000 or less). USDA also provides loans through the Intermediary Relending Program (IRP), which provides loan funds at a 1 percent interest rate to an intermediary such as a State or local government agency that, in turn, provides funds for economic and community development projects in rural areas. In 2006, USDA expects to retain or create over 74,784 jobs through its business programs, which will be achieved primarily through the Business and Industry guarantee and the IRP loan programs. Electric and Telecommunications Loans USDA’s Rural Utilities Service (RUS) programs provide loans for rural electrification, telecommunications, distance learning, telemedicine, and broadband, and also provide grants for distance learning and telemedicine. See the Budget Appendix for more information on these programs. Providing funding and services to needy areas is of concern to USDA. Many rural cooperatives provide service to areas where there are high poverty rates. Based on PART findings, USDA is reviewing its current 7. CREDIT AND INSURANCE method of issuing telecommunications loans, ‘‘first in; first out’’, to determine if it allows for adequate support for areas with the highest priority needs. In addition, to ensure the electric and telecommunications programs’ focus on rural areas, USDA will require recertification of rural status for each electric and telecommunications borrower on the first loan request received in or after FY 2006 and on the first loan request received after each subsequent Census. Legislation will be sought to allow for the rescission of loans that are more than ten years old. The Budget includes $2.5 billion in direct electric loans, $670 million in direct telecommunications loans, $359 million in broadband loans and $25 million in DLT grants. The budget proposes blocking the mandatory broadband funding and providing discretionary funding. The demand for loans to rural electric cooperatives has been increasing and is expected to increase further as borrowers replace many of the 40-year-old electric plants. RUS electric borrowers are expected to upgrade 225 rural electric systems, which will benefit over 3.4 million customers. The telecommunications borrowers are expected to fund over 50 telecommunication systems for advanced telecommunications services, which will provide broadband and high-speed Internet access and benefit over 300 thousand rural customers. DLT grants are expected to support the provision of distance learning facilities to 150 schools, libraries, and rural education centers and also to provide telemedicine equipment to 150 rural health care providers, benefiting millions of residents in rural America. The Administration proposes to establish the process and terms to implement a dissolution of the Rural Telephone Bank (RTB). Dissolution will allow the RTB to close as the demand for loans has been fulfilled through other sources. In addition, the stock holders will obtain a cash payout for their stock while removing this cumbersome program from the Government. This proposal avoids the privatization of a bank that will either fail or need continued Government support to remain in operation. Loans to Farmers The Farm Service Agency (FSA) assists low-income family farmers in starting and maintaining viable farming operations. Emphasis is placed on aiding beginning and socially disadvantaged farmers. FSA offers operating loans and ownership loans, both of which may be either direct or guaranteed loans. Operating loans provide credit to farmers and ranchers for annual production expenses and purchases of livestock, machinery, and equipment. Farm ownership loans assist producers in acquiring and developing their farming or ranching operations. As a condition of eligibility for direct loans, borrowers must be unable to obtain private credit at reasonable rates and terms. As FSA is the ‘‘lender of last resort,’’ default rates on FSA direct loans are generally higher than those on private-sector loans. However, in recent years the loss rate has decreased to 3.6 percent in 2004, compared to 4.7 percent in 2003. 99 FSA guaranteed farm loans are made to more creditworthy borrowers who have access to private credit markets. Because the private loan originators must retain 10 percent of the risk, they exercise care in examining the repayment ability of borrowers. As a result, losses on guaranteed farm loans remain low with default rates of 0.69 percent in 2004, as compared to 0.71 percent in 2003. The subsidy rates for these programs have been fluctuating over the past several years. These fluctuations are mainly due to the interest component of the subsidy rate. In 2004, FSA provided loans and loan guarantees to approximately 26,000 family farmers totaling $3.1 billion. The number of loans provided by these programs has fluctuated over the past several years. The average size for farm ownership loans has been increasing. The majority of assistance provided in the operating loan program is to existing FSA farm borrowers. In the farm ownership program, new customers receive the bulk of the benefits furnished. The demand for FSA direct and guaranteed loans continues to be high due to crop/livestock price decreases and some regional production problems. In 2006, USDA’s FSA proposes to make $3.8 billion in direct and guaranteed loans through discretionary programs. A PART evaluation conducted in 2004 showed that the FSA’s direct loan program functions well in general. To improve program effectiveness further, FSA is conducting an in-depth review of its direct and guaranteed loan portfolios to assess program performance, including the effectiveness of targeted assistance and the ability of borrowers to graduate to private credit. The results of this review will assist FSA in improving the delivery of its services and the economic viability of farmers and ranchers. The Farm Credit System and Farmer Mac The Farm Credit System (FCS or System) and the Federal Agricultural Mortgage Corporation (FarmerMac) are Government-Sponsored Enterprises (GSEs) that enhance credit availability for the agricultural sector. The FCS provides production, equipment, and mortgage lending to farmers and ranchers, aquatic producers, their cooperatives, related businesses, and rural homeowners, while Farmer Mac provides a secondary market for agricultural real estate and rural housing mortgages. The Farm Credit System During 2004, the financial condition of the System’s banks and associations continued a 15-year trend of improving financial health and performance. As of September 30, 2004, capital increased 11.1 percent for the year and stood at $18.0 billion. These capital numbers exclude $2.1 billion of restricted capital held by the Farm Credit System Insurance Corporation (FCSIC). Loan volume has increased since 1989 to $94.9 billion in September 2004. The rate of asset growth for the preceding three-year period (2001-2003) has been averaging 7.4 percent. However, the rate of capital accumulation has been greater, resulting in total capital (in- 100 cluding restricted capital) equaling 16.2 percent of total assets at year-end 2003, compared to 15.3 percent at year-end 2000. Nonperforming loans decreased significantly to 0.88 percent of total loans in September 2004, compared to 1.38 percent in September 2003. Competitive pressures, higher balances of lower yielding investments, and a low interest rate environment have narrowed the FCS’s year-to-date net interest margin to 2.52 percent for September 2004 from 2.62 percent in 2003. The current interest rate environment and strong competition in the lending markets are likely to continue placing pressure on the net interest margin. Consolidation continues to affect the structure of the FCS. In January 1995, there were nine banks and 232 associations; by September 2004, there were five banks and 97 associations. The FCSIC ensures the timely payment of principal and interest on FCS obligations. FCSIC manages the Insurance Fund which supplements the System’s capital and supports the joint and several liability of the System banks. On September 30, 2004 the Insurance Fund’s net assets totaled $1.9 billion, of which $40 million was allocated to the Allocated Insurance Reserve Accounts (AIRAs) held for the System banks and the Financial Assistance Corporation’s stockholders. Not including the AIRAs, the Insurance Fund was at 2.01 percent of adjusted insured debt obligations of the System banks, slightly above the statutory minimum of 2 percent. Improvement in the FCS’s financial condition is also reflected in the examinations by the Farm Credit Administration (FCA), its regulator. Each of the System institutions is rated under the FCA Financial Institution Rating System (FIRS) for capital, asset quality, management, earnings, liquidity, and sensitivity. At the beginning of 1995, 197 institutions carried the best FIRS ratings of 1 or 2, 36 were rated 3, one institution was rated 4, no institutions were rated 5, and 26 institutions were under enforcement action. In September 2004, all 102 banks and associations had ratings of 1 or 2, and no institution was under an enforcement action. Over the past 12 months, the System’s loans outstanding have grown by $3.6 billion, or 3.9 percent, while over the past five years they have grown $25.2 billion, or 36.2 percent. The volume of lending secured by farmland increased 51.5 percent, while farm-operating loans have increased 34.7 percent since 1999. Agricultural producers represented the largest borrower group, with $76.9 billion including loans to rural homeowners and leases, or 81.1 percent of the dollar amount of loans outstanding. International loans (export financing) represent 3.0 percent of the System’s loan portfolio. Loans to young, beginning, and small farmers and ranchers represented 12.9, 18.7, and 31.8 percent, respectively, of the total dollar volume outstanding in 2003, which is slightly higher than in 2002. These percentages cannot be summed given significant overlap in these categories. Providing credit and related services to young, beginning, and small farmers and ranch- ANALYTICAL PERSPECTIVES ers is a legislated mandate and a high priority for the System. The System, while continuing to record strong earnings and capital growth, remains exposed to a variety of risks, including concentration risk, possible changes to government programs, the volatility of agricultural exports and commodity prices, animal and plant diseases, and concerns about future off-farm employment prospects, given the trends in job outsourcing and global competition. Farmer Mac Farmer Mac was established in 1987 to facilitate a secondary market for farm real estate and rural housing loans. Since the Agricultural Credit Act of 1987, there have been several amendments to Farmer Mac’s chartering statute. Perhaps the most significant amending legislation for Farmer Mac was the Farm Credit System Reform Act of 1996 that transformed Farmer Mac from a guarantor of securities backed by loan pools into a direct purchaser of mortgages, enabling it to form pools to securitize. The 1996 Act increased Farmer Mac’s ability to provide liquidity to agricultural mortgage lenders. Since the passage of the 1996 Act, Farmer Mac’s program activities and business have increased significantly. Farmer Mac continues to meet core capital and regulatory risk-based capital requirements. Farmer Mac’s total program activity (loans purchased and guaranteed, and AgVantage bonds purchased) as of September 30, 2004, totaled $5.5 billion. That volume represents 1.8 percent reduction from program activity at September 30, 2003. Of total program activity, $2.2 billion were on-balance sheet loans and agricultural mortgagebacked securities and $3.3 billion were off-balance sheet obligations. Total assets were $3.8 billion at the close of the calendar third quarter, with non-program investments accounting for $1.4 billion of those assets. Farmer Mac’s net income to common stockholders for the first three quarters of 2004 was $18.4 million, a decrease of $1.74 million, or 8.7 percent from the same period in 2003. International Credit Programs Seven Federal agencies—the Department of Agriculture (USDA), the Department of Defense, the Department of State, the Department of the Treasury, the Agency for International Development (USAID), the Export-Import Bank, and the Overseas Private Investment Corporation (OPIC)—provide direct loans, loan guarantees, and insurance to a variety of foreign private and sovereign borrowers. These programs are intended to level the playing field for U.S. exporters, deliver robust support for U.S. manufactured goods, stabilize international financial markets, and promote sustainable development. Leveling the Playing Field Federal export credit programs counter subsidies that foreign governments, largely in Europe and Japan, provide their exporters, usually through export credit agen- 7. CREDIT AND INSURANCE cies (ECAs). The U.S. Government has worked since the 1970’s to constrain official credit support through a multilateral agreement in the Organization for Economic Cooperation and Development (OECD). This agreement has significantly constrained direct interest rate subsidies and tied-aid grants. Further negotiations resulted in a multilateral agreement that standardized the fees for sovereign lending across all ECAs beginning in April 1999. Fees for non-sovereign lending, however, continue to vary widely across ECAs and markets, thereby providing implicit subsidies. The Export-Import Bank attempts to strategically ‘‘level the playing field’’ and to fill gaps in the availability of private export credit. The Export-Import Bank provides export credits, in the form of direct loans or loan guarantees, to U.S. exporters who meet basic eligibility criteria and who request the Bank’s assistance. USDA’s ‘‘GSM’’ programs similarly help to level the playing field. Like programs of other agricultural exporting nations, GSM programs guarantee payment from countries and entities that want to import U.S. agricultural products but cannot easily obtain credit. The U.S. has been negotiating in the OECD the terms of agricultural export financing, the outcome of which could affect the GSM programs. Stabilizing International Financial Markets In today’s global economy, the health and prosperity of the American economy depend importantly on the stability of the global financial system and the economic health of our major trading partners. The United States can contribute to orderly exchange arrangements and a stable system of exchange rates by providing resources on a multilateral basis through the IMF (discussed in other sections of the Budget), and through financial support provided by the Exchange Stabilization Fund (ESF). The ESF may provide ‘‘bridge loans’’ to other countries in times of short-term liquidity problems and financial crises. In the past, ‘‘bridge loans’’ from ESF provided dollars to a country over a short period before the disbursement of an IMF loan to the country. Also, a package of up to $20 billion of medium-term ESF financial support was made available to Mexico during its crisis in 1995. Such support was essential in helping to stabilize Mexican and global financial markets. Mexico paid back its borrowings under this package ahead of schedule in 1997, and the United States earned almost $600 million more in interest than it would have without the lending. There was zero subsidy cost for the United States as defined under credit reform, as the medium-term credit carried interest rates reflecting an appropriate country risk premium. The United States also expressed a willingness to provide ESF support in response to the financial crises affecting some countries such as South Korea in 1997 and Brazil in 1998. It did not prove necessary to provide an ESF credit facility for Korea, but the United States agreed to guarantee through the ESF up to $5 billion of a $13.2 billion Bank for International Settle- 101 ments (BIS) credit facility for Brazil. In the event, the ESF guaranteed $3.3 billion in BIS credits to Brazil and earned $140.3 million in commissions. Such support helped to provide the international confidence needed by these countries to begin the stabilization process. Using Credit to Promote Sustainable Development Credit is an important tool in U.S. bilateral assistance to promote sustainable development. USAID’s Development Credit Authority (DCA) allows USAID to use a variety of credit tools to support its development activities abroad. This unit encompasses newer DCA activities, such as municipal bond guarantees for local governments in developing countries, as well as USAID’s traditional microenterprise and urban environmental credit programs. DCA provides non-sovereign loans and loan guarantees in targeted cases where credit serves more effectively than traditional grant mechanisms to achieve sustainable development. DCA is intended to mobilize host country private capital to finance sustainable development in line with USAID’s strategic objectives. Through the use of partial loan guarantees and risk sharing with the private sector, DCA stimulates private-sector lending for financially viable development projects, thereby leveraging hostcountry capital and strengthening sub-national capital markets in the developing world. While there is clear demand for DCA’s facilities in some emerging economies, the utilization rate for these facilities is still very low. OPIC also supports a mix of development, employment, and export goals by promoting U.S. direct investment in developing countries. OPIC pursues these goals through political risk insurance, direct loans, and guarantee products, which provide finance, as well as associated skills and technology transfers. These programs are intended to create more efficient financial markets, eventually encouraging the private sector to supplant OPIC finance in developing countries. OPIC has also created a number of investment funds that provide equity to local companies with strong development potential. Ongoing Coordination International credit programs are coordinated through two groups to ensure consistency in policy design and credit implementation. The Trade Promotion Coordinating Committee (TPCC) works within the Administration to develop a National Export Strategy to make the delivery of trade promotion support more effective and convenient for U.S. exporters. The Interagency Country Risk Assessment System (ICRAS) standardizes the way in which agencies budget for the cost associated with the risk of international lending. The cost of lending by the agencies is governed by proprietary U.S. government ratings, which correspond to a set of default estimates over a given maturity. The methodology establishes assumptions about default risks in international lending using averages 102 ANALYTICAL PERSPECTIVES of international sovereign bond market data. The strength of this method is its link to the market and an annual update that adjusts the default estimates to reflect the most recent risks observed in the market. For 2006, OMB updated the default estimates using the default estimate methodology introduced in FY 2003 and the most recent market data. The 2003 default estimate methodology implemented a significant revision that uses more sophisticated financial analyses and comprehensive market data, and better isolates the expected cost of default implicit in interest rates charged by private investors to sovereign borrowers. All else being equal, this change expands the level of international lending an agency can support with a given appropriation. For example, the Export-Import Bank will be able to provide generally higher lending levels using lower appropriations in 2006. Adapting to Changing Market Conditions Overall, officially supported finance and transfers account for a tiny fraction of international capital flows. Furthermore, the private sector is continuously adapting its size and role in emerging markets finance to IV. changing market conditions. In response, the Administration is working to adapt international lending at Export-Import Bank and OPIC to dynamic private sector finance. The Export-Import Bank, for example, is developing a sharper focus on lending that would otherwise not occur without Federal assistance. Measures under development include reducing risks, collecting fees from program users, and improving the focus on exporters who truly cannot access private export finance. OPIC in the past has focused relatively narrowly on providing financing and insurance services to large U.S. companies investing abroad. As a result, OPIC did not devote significant resources to its mission of promoting development through mobilizing private capital. In 2003, OPIC implemented new development performance measures and goals that reflect the mandate to revitalize its core development mission. These changes at the Export-Import Bank and at OPIC will place more emphasis on correcting market imperfections as the private sector’s ability to bear emerging market risks becomes larger, more sophisticated, and more efficient. INSURANCE PROGRAMS Deposit Insurance Current Industry and Insurance Fund Conditions Federal deposit insurance promotes stability in the U.S. financial system. Prior to the establishment of Federal deposit insurance, failures of some depository institutions often caused depositors to lose confidence in the banking system and rush to withdraw deposits. Such sudden withdrawals caused serious disruption to the economy. In 1933, in the midst of the Depression, the system of Federal deposit insurance was established to protect small depositors and prevent bank failures from causing widespread disruption in financial markets. The federal deposit insurance system came under serious strain in the late 1980s and early 1990s when over 2,500 banks and thrifts failed. The Federal Government responded with a series of reforms designed to improve the safety and soundness of the banking system. These reforms, combined with more favorable economic conditions, helped to restore the health of depository institutions and the deposit insurance system. The Federal Deposit Insurance Corporation (FDIC) insures deposits in banks and savings associations (thrifts) through separate insurance funds: the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF). The National Credit Union Administration (NCUA) administers the insurance fund for most credit unions (certain credit unions are privately insured and not covered by the fund). FDIC and NCUA insure deposits up to $100,000 per account. FDIC insures $3.6 trillion of deposits at 7,660 commercial banks and 1,365 savings institutions. NCUA insures about 9,113 credit unions with $495 billion in insured shares. The bank industry continues to earn record profits. In the quarter ending September 30, 2004, banks reported record-high earnings for the sixth time in the last seven quarters. In fiscal year 2004, industry net income totaled $122 billion, an increase of 7 percent over fiscal year 2003. The quality of loans continues to improve as net charge-offs fell to a four-year low. Despite the improving trends, some risks remain. Rising interest rates, for example, might cause stresses in certain real-estate markets and strains on banks in some regions. Only four BIF members and one SAIF member with a combined $175 million dollars in assets failed during fiscal year 2004. In comparison, in the last five years, assets associated with BIF failures have averaged $857 million per year, while failures associated with SAIF averaged $455 million. At the height of the banking crisis in 1989, failed assets rose to over $150 billion in one year. The FDIC currently classifies 95 institutions with $25 billion in assets as ‘‘problem institutions,’’ compared to 116 institutions with $30 billion in assets a year ago. In fiscal year 2004, the reserve ratio (ratio of insurance reserves to insured deposits) of BIF stayed above the 1.25-percent statutory target. As of September 30, 2004, BIF had estimated reserves of $34 billion, or 1.32 percent of insured deposits. Factors that helped BIF stay above the statutory target in fiscal year 2004 include fewer bank failures, slow growth of insured deposits, and increases in unrealized gains on securities available for sale. The SAIF reserve ratio also remained above the designated reserve ratio throughout the year. 103 7. CREDIT AND INSURANCE As of September 30, 2004, SAIF had reserves of $12.5 billion, or 1.33 percent of insured deposits. Through June 30, 2005, the FDIC will continue to maintain deposit insurance premiums in a range from zero for the healthiest institutions to 27 cents per $100 of assessable deposits for the riskiest institutions. In May, the FDIC will set assessment rates for July through December of this year. Due to the strong financial condition of the industry and the insurance funds, less than 10 percent of banks and thrifts paid insurance premiums in 2004. During 2004, 22 Federally insured credit unions with $120 million in assets failed (including assisted mergers). In comparison, in 2003, 8 Federally insured credit unions with $25 million in assets failed. The National Credit Union Share Insurance Fund (NCUSIF) ended fiscal year 2004 with assets of $6.3 billion and an equity ratio of 1.28 percent, below the NCUA-set target ratio of 1.30 percent. Each insured credit union is required to deposit and maintain an amount equal to 1 percent of its member share accounts in the fund. Premiums were waived during 2004 because the ratio stayed above 1.25 percent. As the Fund’s equity ratio did not exceed 1.30 percent, NCUA did not provide a dividend to credit unions in fiscal year 2004. The Federal banking regulators (the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the Federal Reserve) are planning a rulemaking that would implement the new Basel Capital Accord (Basel II). The original Basel Capital Accord is an international agreement establishing a uniform capital standard across nations. It adopted a risk-based capital requirement that applies differing risk weights to a few broad categories of assets. Basel II proposes several ways to improve the risk-based capital requirement, including refining risk categories and applying sophisticated models calculating the risk of various assets. U.S. regulators are considering implementing the modelbased capital requirement for the largest banks (about 20) that have complex financial structures and expertise to apply sophisticated models. The new capital requirement would be a major change because those banks hold the overwhelming majority of U.S. banking assets. As a result of consolidation, fewer large banks control an increasingly substantial share of banking assets. Thus, the failure of even one of these large institutions could strain the insurance fund. Banks are increasingly using sophisticated financial instruments such as assetbacked securities and financial derivatives, which could have unforeseen effects on risk levels. Whether or not these new instruments add to risk, they do complicate the work of regulators who must gauge each institution’s financial health and the potential for deposit insurance losses that a troubled institution may represent. Federal Deposit Insurance Reform While the deposit insurance system is in good condition, the Administration supports reforms to make improvements in the operation and fairness of the deposit insurance system for banks and thrifts. In 2003, the Treasury Department and federal banking regulatory agencies submitted to Congress a proposal that would accomplish this objective. Specifically, the proposal would merge the BIF and the SAIF. A single merged fund would be stronger and better diversified than either fund alone and would prevent the possibility that institutions posing similar risks would again pay significantly different premiums for the same product. Under the current system, the FDIC is required to maintain a ratio of insurance fund reserves to total insured deposits of 1.25 percent. If insurance fund reserves fall below the 1.25 ratio, the FDIC must charge either sufficient premiums to restore the reserve ratio to 1.25 percent within one year, or no less than 23 basis points if the reserve ratio remains below 1.25 percent for more than one year. The Administration’s proposal would give the FDIC authority to adjust the ratio periodically within prescribed upper and lower bounds and greater discretion in determining how quickly it restores the ratio to target levels. This flexibility would help reduce potential pro-cyclical effects by stabilizing industry costs over time and avoiding sharp premium increases when the economy may be under stress. Finally, the FDIC has been prohibited since 1996 from charging premiums to ‘‘well-capitalized’’ and well-run institutions as long as insurance fund reserves equal or exceed 1.25 percent of insured deposits. Therefore, less than 10 percent of banks and thrifts pay insurance premiums, allowing a large number of financial institutions to increase their insured deposits rapidly without any contribution to the insurance fund. The Administration proposal would repeal this prohibition to ensure that institutions with rapidly increasing insured deposits or greater risks appropriately compensate the insurance fund. Pension Guarantees The Pension Benefit Guaranty Corporation (PBGC) insures most defined-benefit pension plans sponsored by private employers. PBGC pays the benefits guaranteed by law when a company with an underfunded pension plan becomes insolvent. PBGC’s exposure to claims relates to the underfunding of pension plans, that is, to any amount by which vested future benefits exceed plan assets. In the near term, its loss exposure results from financially distressed firms with underfunded plans. In the longer term, additional loss exposure results from the possibility that currently healthy firms become distressed and currently well-funded plans become underfunded due to inadequate contributions or poor investment results. PBGC monitors troubled companies with underfunded plans and acts, in bankruptcies, to protect its beneficiaries and the future of the program. Such pro- 104 tections include, where necessary, initiating plan termination. Under its Early Warning Program, PBGC negotiates settlements with companies that reduce losses in the event the plan terminates. PBGC’s single-employer program suffered record annual losses from underfunded plan terminations in 2001 through 2004. As a result of these record losses, the program’s deficit at FY 2004 year-end stood at $23.3 billion, compared to $11.2 billion a year earlier and a $9.7 billion surplus at FY 2000 year-end. Large underfunded terminations include: in FY 2002, LTV, a steel company, with a claim of nearly $2 billion, which was PBGC’s largest to date; in FY 2003, Bethlehem Steel, with a claim of about $3.6 billion, National Steel, and US Airways’ Pilots Plan; and in FY 2004, Kaiser Aluminum’s Salaried Plan, Pillowtex, and Weirton Steel. More important in FY 2004 than claims for completed terminations was the increase in claims for ‘‘probable’’ terminations to $16.9 billion from $5.2 billion in FY 2003. Additional risk and exposure may remain for the future because of economic uncertainties and significant underfunding in single-employer pension plans, which exceed an estimated $450 billion at fiscal year-end, compared to $350 billion at the end of FY 2003 and $50 billion at the end of December 2000. PBGC’s exposure to ‘‘reasonably possible’’ terminations, the amount of unfunded vested benefits in pension plans sponsored by companies at greater risk of default, stood at $96 billion at the end of December 2003, up from $82 billion a year earlier. The smaller multiemployer program guarantees pension benefits of certain unionized plans offered by several employers in an industry. It ended 2003 with its first deficit in over 20 years, of about $261 million. The deficit fell to $236 million in 2004. However, estimated underfunding in multiemployer plans approximated $150 billion at year-end, up from over $100 billion at the end of FY 2003. With assets of $39 billion, the agency can meet its obligations for a number of years into the future, but, with $62 billion of liabilities in the single-employer program, it is clear that the financial integrity of the federal pension insurance program is at risk. Looking to the long term, to avoid benefit reductions, strengthen PBGC, and help stabilize the defined-benefit pension system, the 2006 Budget proposes legislative reforms to: • Require employers to fully fund their plans by making up their funding shortfall over a reasonable period of time and give companies added flexibility to contribute more in good economic times. • Require that funding be based on a more accurate measure of liabilities and establish appropriate funding targets based on a plan’s risk of termination. • Update the variable-rate premium to reflect the new funding targets and provide for the PBGC Board to reexamine it periodically to cover the ANALYTICAL PERSPECTIVES cost of expected claims and to improve PBGC’s financial position; and adjust the flat-rate premium to reflect the growth in worker wages. • Require employers to forego benefit increases if the sponsor is financially weak or has a significantly underfunded pension plan. • Require plans to provide timely information on the true financial health of pension plans to workers and make such information publicly available to other stakeholders. The Administration’s comprehensive reforms will strengthen funding for workers’ defined-benefit pensions; provide more accurate information about pension liabilities and plan underfunding; and ensure PBGC’s continued ability to safeguard pension benefits for 44 million Americans. Disaster Insurance Flood Insurance The Federal Government provides flood insurance through the National Flood Insurance Program (NFIP), which is administered by the Emergency Preparedness and Response Directorate of the Department of Homeland Security (DHS). Flood insurance is available to homeowners and businesses in communities that have adopted and enforced appropriate flood plain management measures. Coverage is limited to buildings and their contents. By 2005, the program is projected to have approximately 4.9 million policies from more than 19,000 communities with $828 billion of insurance in force. Prior to the creation of the program in 1968, many factors made it cost prohibitive for private insurance companies alone to make affordable flood insurance available. In response, the NFIP was established to make insurance coverage widely available. The NFIP requires building standards and other mitigation efforts to reduce losses, and operates a flood hazard mapping program to quantify the geographic risk of flooding. These efforts have made substantial progress. The number of policies in the program has grown significantly over time. The number of enrolled policies grew from 2.4 to 4.3 million between 1990 and 2002, and by about 85,000 policies in 2004, bringing the policy total to 4.5 million. DHS is using three strategies to increase the number of flood insurance policies in force: lender compliance, program simplification, and expanded marketing. DHS is educating financial regulators about the mandatory flood insurance requirement for properties that are located in flood plains and have mortgages from federally regulated lenders. The NFIP also has a multi-pronged strategy for reducing future flood damage. The NFIP offers mitigation insurance to allow flood victims to rebuild to code, thereby reducing future flood damage costs. Further, through the Community Rating System, DHS adjusts premium rates to encourage community and State mitigation activities beyond those required by the NFIP. 7. CREDIT AND INSURANCE Despite these efforts, the program faces financial challenges. The program’s financing account, which is a cash fund, has sometimes had expenses greater than its revenue, preventing it from building sufficient longterm reserves. This is mostly because a large portion of the policyholders pay subsidized premiums. DHS charges subsidized premiums for properties built before a community adopted the NFIP building standards. Properties built subsequently are charged actuarially fair rates. The creators of the NFIP assumed that eventually the NFIP would become self-sustaining as older properties left the program. The share of subsidized properties in the program has fallen, but remains substantial; it was 70 percent in 1978 and is 28 percent today. Until the mid-1980s, Congress appropriated funds periodically to support subsidized premiums. However, the program has not received appropriations since 1986. During the 1990s, FEMA, which is now part of DHS, relied on Treasury borrowing to help finance its loss expenses (the NFIP may borrow up to $1.5 billion). As of October 31, 2002, the NFIP had repaid all of its outstanding debt. Although the program is generally well run, it receives some criticism about the low participation rate and the inclusion of subsidized properties, especially those that are repetitively flooded. The program has identified approximately 11,000 properties for mitigation action. To the extent they are available; funds will come from the Hazard Mitigation Grant Program, the Predisaster Mitigation Grant Program, and the Flood Mitigation Grant Program. The Flood Insurance Reform Act of 2004 defines the criteria that qualify these repetitively-damaged properties for special mitigation. The legislation also extended the NFIP’s authority through September 30, 2008. An additional problem is the fairly low participation rate. Currently, less than half of the eligible properties in identified flood plains participate in this program. In comparison, the participation rate for private wind and hurricane insurance is nearly 90 percent in at-risk areas. Given that flood damage causes roughly $6 billion in property damage annually, DHS is in the process of evaluating its incentive structure to attract more participation in the program, while not encouraging misuse of the program. Crop Insurance Subsidized Federal crop insurance administered by USDA’s Risk Management Agency (RMA) plays an important role in assisting farmers to manage yield and revenue shortfalls due to bad weather or other natural disasters. RMA continues to evaluate and, provide new products so that the Government can further reduce the need for ad-hoc disaster assistance payments to the agriculture community in bad years. The USDA crop insurance program is a cooperative effort between the Federal Government and the private insurance industry. Private insurance companies sell and service crop insurance policies. These companies rely on reinsurance provided by the Federal Govern- 105 ment and also by the commercial reinsurance market to manage their individual risk portfolio. The Federal Government reimburses private companies for the administrative expenses associated with providing crop insurance and reinsures the private companies for excess insurance losses on all policies. The Federal Government also subsidizes premiums for farmers. The Agricultural Risk Protection Act of 2000 (ARPA) increased premium subsidy levels to encourage farmers to purchase higher and more effective levels of coverage. RMA renegotiated the Standard Reinsurance Agreement (SRA) in 2004. The SRA contains the operational and financial risk sharing terms between the Federal Government and the private companies. The ARPA allowed these terms to be renegotiated once between the 2001 and 2005 reinsurance years. RMA utilized this opportunity to strengthen the document to address such issues as company oversight and quality control. As a result of these negotiations, company administrative expense reimbursements were reduced by approximately 3 percent, and a 5 percent net book quota share was introduced to better balance profit potential between the companies and the Federal Government. The new SRA is expected to generate annual program cost savings of approximately $36 million. In addition to these changes, the 2006 Budget includes a legislative proposal that would require any farmer that receives a Federal commodity payment for his/her crop to buy crop insurance at a minimum coverage level of 50/100. This proposal is intended to ensure farmers have adequate protection in the event of a natural disaster without resorting to ad hoc disaster assistance. Additionally, the Administration’s proposal will lower the imputed premium on Catastrophic Crop Insurance (CAT) by 25 percent and charge an administrative fee on CAT equal to the greater of $100 or 25 percent of the (restated) imputed CAT premium, subject to a maximum fee of $5,000. The proposal will also reduce premium subsidies by 5 percentage points on policies with a coverage level of 70 percent or below (75 percent for Group Risk Protection (GRP)) and by 2 percentage point on policies with a coverage level of 75 percent or above (80 percent for GRP). Plus the proposal reduces the A&O reimbursement on all buyup coverage by 2 percentage points and increases the net book quota share to 22 percent, but provides a ceding commision to the companies of 2 percent. These changes are expected to be in effect in 2007 and will save $140 million a year. There are various types of insurance programs. The most basic type of coverage is CAT, which compensates the farmer for losses in excess of 50 percent of the individual’s average yield at 55 percent of the expected market price. The CAT premium is entirely subsidized, and farmers pay only an administrative fee. Commercial insurance companies deliver the product to the producer in all states. Additional coverage is available to producers who wish to insure crops above the CAT coverage level. Premium rates for additional coverage depend on the level of coverage selected and vary from 106 ANALYTICAL PERSPECTIVES crop to crop and county to county. The additional levels of insurance coverage are more attractive to farmers due to availability of optional units, other policy provisions not available with CAT coverage, and the ability to obtain a level of protection that permits them to use crop insurance as loan collateral and to achieve greater financial security. Private companies sell and service the catastrophic portion of the crop insurance program, and also provide higher levels of coverage, which are also federally subsidized. Approximately 82 percent of eligible acres participated in one or more crop insurance programs in 2004. For producers purchasing the additional levels of insurance, there are a wide range of yield- and revenuebased insurance products available through the Federal crop insurance program. Revenue insurance programs protect against loss of revenue stemming from low prices, poor yields, or a combination of both. These programs extend traditional multi-peril crop insurance protection by adding price variability to production history. Indemnities are due when any combination of yield and price results in revenue that is less than the revenue guarantee. The price component common to these plans uses the commodity futures market for price discovery. Revenue products have gained wide acceptance among producers and have played an integral role in providing more effective risk management options for the nation’s agricultural producers. In crop year 2004, these revenue products accounted for over 52 percent of all policies earning premium, 59 percent of net insured acres, and 55 percent of total program liability. USDA also continues to expand coverage. In 2004, a sugar beet stage removal pilot program was introduced. In addition, approval was given to a pilot program of crop insurance for Silage Sorghum in two states and to make Adjusted Gross Revenue-Lite available in five additional states, both effective for the 2005 crop year. USDA also expanded the availability of the Livestock Risk Protection plan of insurance to additional states and for additional types of livestock. Further, RMA has issued 4 contracts for development of new risk management tools for pasture, rangeland and forage. ARPA directed FCIC to establish the development of a pasture, rangeland and forage program as one of its highest research and development priorities. RMA continues to pursue a number of avenues to increase program participation among underserved states and commodities. For more information and additional crop insurance program details, please reference RMA’s web site: (www.rma.usda.gov). Insurance against Security-Related Risks The Federal Government offers terrorism risk insurance and Airline War Risk Insurance on a temporary basis, and has created the smallpox injury compensation program. After the September 11 attacks, private insurers became reluctant to insure against securityrelated risks such as terrorism and war. Those events are so uncertain in terms of both the frequency of occur- rence and the magnitude of potential loss that private insurers have difficulty estimating the expected loss. Furthermore, terrorism can produce a large loss that could wipe out private insurers’ capital. These uncertainties make the private sector reluctant to provide security-related insurance. Thus, it is necessary for the smooth functioning of our economy that the Federal Government insure against some security-related risks until the private sector learns enough to be comfortable about estimating those risks. Terrorism Risk Insurance On November 26, 2002, President Bush signed into law the Terrorism Risk Insurance Act of 2002. The Act was designed to address disruptions in economic activity caused by the withdrawal of many insurance companies from the marketplace for terrorism risk insurance in the aftermath of the terrorist attacks of September 11, 2001. Their withdrawal in the face of great uncertainty as to their risk exposure to future terrorist attacks led to a moratorium in construction projects, increased business costs for the insurance that was available, and substantial shifting of risk from reinsurers to primary insurers, and from insurers to policyholders (e.g., investors, businesses, and property owners). Ultimately, these costs were borne by American workers and communities through decreased development and economic activity. The Act established a temporary Federal program that provides for a system of shared public and private compensation for insured commercial property and casualty losses arising from acts of terrorism. The program is administered by the Treasury Department and is scheduled to sunset on December 31, 2005. Under the Act, insurance companies included under the program must make available to their policyholders during the first two years of the program coverage for losses from acts of terrorism (as defined by the Act), and Treasury was required to determine whether to extend this requirement into the third and final year of the program. On June 18, 2004, the Secretary of the Treasury announced his decision to extend the ‘‘make available’’ requirement through the third and final year. The Act also requires as a condition for Federal payment that insurance companies disclose to policyholders the premium charged for terrorism risk insurance and the Federal share of compensation under the program. In the event of a terrorist attack on private businesses and others covered by this program, insurance companies will cover 100 percent of the insured losses up to each insurance company’s deductible as specified in the Act. Insured losses above that amount would then be shared between the insurance company and the Treasury, with Treasury covering 90 percent of the losses above the insurance company’s deductible. However, neither the Treasury nor any insurer would be liable for any amount exceeding the statutory annual cap of $100 billion in aggregate insured losses. At that point, the Act explains that Congress will determine 7. CREDIT AND INSURANCE the procedures and source of any further payments. The Act also provides authority for the Treasury to recoup Federal payments via surcharges on policyholders. Certain recoupment is mandatory, based on insurance marketplace aggregate annual retention amounts specified in the enabling statute. In other circumstances, the Act authorizes optional recoupment. Treasury has created a separate Terrorism Risk Insurance Program office to implement the Act, which has included setting up an infrastructure to handle potential claims under the Act. In order to be ready to make payments under the Act, Treasury has: 1) finalized all of the regulations necessary for the submission and payment of potential claims under the Act; 2) contracted with a claims management contractor and an auditor to assist with the processing and verification of potential claims; and 3) established a web-based claims facility. The Act also requires Treasury to conduct a study on the effectiveness of the program and to report the results to the Congress by June 30, 2005. Treasury has been conducting a comprehensive survey of insurers, reinsurers, and policyholders as part of that study. Airline War Risk Insurance After the September 11, 2001 attacks, private insurers cancelled third-party liability war risk coverage for airlines and dramatically increased the cost of other war risk insurance. In response, the Department of Transportation (DOT) provided a short-term reimbursement to airlines for the increased cost of aviation hull and passenger liability war risk insurance under the authority provided in P.L. 107–42. Due to the extended disruption in the marketplace, DOT also offered airlines third-party liability war risk insurance coverage at subsidized rates to replace coverage initially withdrawn by private insurers. Under Presidential Determination No. 01–29, the President delegated the authority to extend the duration of aviation insurance to the Secretary of Transportation. Starting in 2001, insurance coverage was initially provided in 60-day increments, but Presidential Determination Nos. 2004–9 and 2005–15 subsequently extended the allowable period of insurance up to one year. The Homeland Security Act of 2002 included airline war risk insurance legislation. This law mandated an extended term for third-party war risk coverage and expanded the scope of coverage to include war risk hull, passenger and crew, and property liability insurance. Under the law, the Secretary of Transportation was directed to extend insurance policies until August 31, 107 2003. In addition, the law also limited the total premium for the three types of insurance to twice the premium rate charged for the third-party liability insurance as of June 19, 2002. The 2003 Department of Defense supplemental appropriation (P.L. 108–11), the Century of Aviation Reauthorization Act (P.L. 108–176, Vision 100), and the Consolidated Appropriations Act of 2005 (P.L. 108–447) ultimately extended the mandatory provision of insurance through August 31, 2005. Consequently, in December 2004, the President issued Presidential Determination 2005–15, authorizing the continued provision of insurance now in force through August 31, 2005, and the DOT issued policies to conform to that date. The basic authority of the insurance program extends through March 30, 2008 Currently 75 air carriers are insured by DOT. Coverage for individual carriers ranges from $80 million to $4 billion per carrier with the median insurance coverage at approximately $1.8 billion per occurrence. Premiums collected by the Government are deposited into the Aviation Insurance Revolving Fund. In 2004, the fund collected approximately $180 million in premiums for insurance provided by DOT. In 2005, it is anticipated that $109 million in premiums will be collected by DOT for the provision of insurance. At the end of 2004, the balance of the Aviation Insurance Revolving Fund available for future claim payments was $401 million. The Federal Government would pay any claims by the airlines that exceed the balance in the aviation insurance revolving fund. Smallpox Injury Compensation The Administration has taken steps to insure the immediate mobilization of emergency response personnel in the event of a smallpox attack. The Smallpox Injury Compensation Program, set up under the Smallpox Emergency Personnel Protection Act of 2003, encourages vaccination of designated emergency personnel by providing benefits and/or compensation to certain persons harmed as a direct result of receiving smallpox countermeasures, including the smallpox vaccine. Only persons receiving the smallpox vaccine under the Department of Health and Human Services Declaration Regarding the Administration of Smallpox Countermeasures are eligible for benefits. Also, the Homeland Security Act of 2002 provided medical liability protection to doctors, drug manufacturers, and hospitals that administer smallpox vaccine and other countermeasures during an emergency declaration. 108 ANALYTICAL PERSPECTIVES Chart 7-2. Face Value of Federal Credit Outstanding Dollars in trillions 1.6 1.4 1.2 Loan Guarantees 1.0 0.8 0.6 0.4 Direct Loans 0.2 0 1970 1975 1980 1985 1990 1995 2000 2005 109 7. CREDIT AND INSURANCE Table 7–1. ESTIMATED FUTURE COST OF OUTSTANDING FEDERAL CREDIT PROGRAMS (in billions of dollars) Outstanding 2003 Estimated Future Costs of 2003 Outstanding 1 Outstanding 2004 Estimated Future Costs of 2004 Outstanding 1 102 10 107 8 44 32 13 9 11 11 7 5 3 12 11 3 3 4 7 4 3 1 1 ...................... 43 32 13 8 9 11 7 4 3 13 10 3 3 3 5 5 3 4 1 2 Total Direct Loans ..................................................................... 249 47 250 47 Guaranteed Loans: 2 FHA Mutual Mortgage Insurance Fund ......................................... VA Mortgage .................................................................................. Federal Family Education Loan Program ..................................... FHA General/Special Risk Insurance Fund .................................. Government National Mortgage Association (GNMA) 3 ................ Small Business ............................................................................... Export-Import Bank ........................................................................ International Assistance ................................................................. Farm Service Agency and Rural Housing .................................... Commodity Credit Corporation ...................................................... Air Transportation Stabilization Program ...................................... Other Guaranteed Loan Programs ................................................ 407 323 213 89 .................... 53 34 19 24 4 2 16 2 5 15 4 * 2 3 2 1 * 1 1 384 351 245 91 .................... 57 36 21 24 4 2 17 1 4 23 4 * 2 2 2 1 * 1 3 Total Guaranteed Loans ........................................................... 1,184 36 1,232 43 Total Federal Credit ............................................................ 1,907 83 1,935 90 Program Direct Loans: 2 Federal Student Loan Programs ................................................... Farm Service Agency (excl. CCC), Rural Development, Rural Housing ...................................................................................... Rural Utilities Service and Rural Telephone Bank ....................... Housing and Urban Development ................................................. Agency for International Development .......................................... Public Law 480 .............................................................................. Export-Import Bank ........................................................................ Commodity Credit Corporation ...................................................... Federal Communications Commission .......................................... Disaster Assistance ........................................................................ Other Direct Loan Programs ......................................................... *$500 million or less. loan future costs are the financing account allowance for subsidy cost and the liquidating account allowance for estimated uncollectible principal and interest. Loan guarantee future costs are estimated liabilities for loan guarantees. 2 Excludes loans and guarantees by deposit insurance agencies and programs not included under credit reform, such as CCC commodity price supports. Defaulted guaranteed loans which become loans receivable are accounted for as direct loans. 3 GNMA outstandings are excluded from the totals because they are secondary guarantees on loans guaranteed by FHA, VA and RHS. 1 Direct 110 ANALYTICAL PERSPECTIVES Table 7–2. REESTIMATES OF CREDIT SUBSIDIES ON LOANS DISBURSED BETWEEN 1992–2004 1 (Budget authority and outlays, in millions of dollars) Program 1994 1995 1996 1997 1998 1999 2000 2001 2002 –72 ............ ............ ............ –1 ............ * 1 2 ............ ............ ............ ............ ............ 28 ............ ............ ............ ............ ............ 61 ............ 152 ............ 1 ............ ............ 84 2 ............ ............ ............ ............ ............ –37 ............ 46 ............ ............ ............ –37 –38 –31 ............ ............ ............ ............ ............ 84 10 –73 1 ............ 8 –1 ............ 23 ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ –39 –9 71 –1 –6 5 ............ ............ 331 ............ ............ ............ ............ ............ ............ ............ ............ * ............ ............ ............ ............ –656 ............ ............ ............ ............ ............ –17 –1 19 ............ ............ 37 –23 ............ Commerce: Fisheries finance ................................................................................................ ............ ............ ............ ............ ............ ............ ............ –19 2003 2004 2005 DIRECT LOANS: Agriculture: Agriculture credit insurance fund ....................................................................... Farm storage facility loans ................................................................................. Apple loans ......................................................................................................... Emergency boll weevil loan ............................................................................... Agricultural conservation .................................................................................... Distance learning and telemedicine ................................................................... Rural electrification and telecommunications loans .......................................... Rural telephone bank 1 ....................................................................................... Rural housing insurance fund 2 .......................................................................... Rural economic development loans ................................................................... Rural development loan program ...................................................................... Rural community advancement program 2 ........................................................ P.L. 480 .............................................................................................................. P.L. 480 Title I food for progress credits .......................................................... 921 10 –701 –147 –1 –7 –8 7 –2 1 ............ * ............ 1 * ............ ............ ............ ............ ............ 1 –1 –1 ............ –42 101 265 ............ ............ –3 –7 ............ –29 –435 –64 ............ –1 –1 ............ ............ –1 –3 ............ ............ 3 –1 –84 –1 65 –348 33 –43 ............ –112 –44 ............ –3 ............ 1 Defense: Military housing improvement fund .................................................................... ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ * Education: Federal direct student loan program: 3 Volume reestimate ......................................................................................... ............ ............ ............ ............ ............ 22 ............ Other technical reestimate ............................................................................. ............ ............ 3 –83 172 –383 –2,158 College housing and academic facilities loans ................................................. ............ ............ ............ ............ ............ ............ ............ Homeland Security: Disaster assistance ............................................................................................ ............ ............ ............ ............ ............ ............ –6 ............ 43 ............ –14 560 ............ 3,678 1,999 683 –1 ............ ............ ............ ............ * 5 Interior: Bureau of Reclamation loans ............................................................................. ............ ............ ............ ............ ............ ............ 3 3 –9 –14 ............ Bureau of Indian Affairs direct loans ................................................................. ............ ............ ............ ............ ............ 1 5 –1 –1 2 * Assistance to American Samoa ......................................................................... ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ * –15 * * State: Repatriation Loans ............................................................................................. ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ –2 Transportation: High priority corridor loans ................................................................................. Alameda corridor loan ........................................................................................ Transportation infrastructure finance and innovation ........................................ Railroad rehabilitation and improvement program ............................................ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ 47 –1 ............ –3 ............ ............ ............ ............ ............ –58 ............ ............ ............ ............ ............ ............ ............ ............ Treasury: Community development financial institutions fund .......................................... ............ ............ ............ ............ ............ ............ 36 ............ ............ ............ ............ –7 –6 ............ ............ ............ ............ ............ ............ –12 ............ ............ –4 ............ 3 ............ ............ –5 –9 1 ............ ............ * –1 * Veterans Affairs: Veterans housing benefit program fund ............................................................ –39 30 76 –72 465 –111 –52 –107 –697 Native American veteran housing ...................................................................... ............ ............ ............ ............ ............ ............ ............ ............ ............ Vocational Rehabilitation Loans ......................................................................... ............ ............ ............ ............ ............ ............ ............ ............ ............ 17 –3 * –178 * * 986 * * Environmental Protection Agency: Abatement, control and compliance .................................................................. ............ ............ ............ ............ ............ ............ ............ International Assistance Programs: Foreign military financing ................................................................................... U.S. Agency for International Development: Micro and small enterprise development ...................................................... Overseas Private Investment Corporation: OPIC direct loans ........................................................................................... Debt reduction .................................................................................................... ............ ............ ............ 13 4 1 152 3 –1 * –3 * –166 119 –397 –64 –41 ............ ............ ............ ............ ............ ............ ............ ............ * ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ 36 –4 ............ –4 * * ............ –21 –47 3 –104 Small Business Administration: Business loans ................................................................................................... ............ ............ ............ ............ ............ ............ ............ Disaster loans ..................................................................................................... ............ ............ ............ ............ –193 246 –398 1 –282 –2 –14 1 266 Other Independent Agencies: Export-Import Bank direct loans ........................................................................ –28 –16 37 ............ ............ ............ –177 Federal Communications Commission spectrum auction ................................. ............ ............ ............ ............ 4,592 980 –1,501 157 –804 117 92 –640 346 –305 380 111 732 205 40 –36 –33 –22 25 ............ 589 195 LOAN GUARANTEES Agriculture: Agriculture credit insurance fund ....................................................................... 5 14 12 –51 96 ............ –31 111 7. CREDIT AND INSURANCE Table 7–2. REESTIMATES OF CREDIT SUBSIDIES ON LOANS DISBURSED BETWEEN 1992–2004 1—Continued (Budget authority and outlays, in millions of dollars) Program 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Agriculture resource conservation demonstration project ................................. ............ ............ ............ ............ ............ ............ ............ 2 ............ 1 –1 * Commodity Credit Corporation export guarantees ............................................ 3 103 –426 343 ............ ............ ............ –1,410 ............ –13 –230 –205 Rural development insurance fund .................................................................... 49 ............ ............ –3 ............ ............ ............ ............ ............ ............ ............ ............ Rural housing insurance fund ............................................................................ 2 10 7 –10 ............ 109 ............ 152 –56 32 50 ............ Rural community advancement program 2 ........................................................ ............ ............ ............ –10 ............ 41 ............ 63 17 91 15 ............ Commerce: Fisheries finance ................................................................................................ ............ ............ ............ ............ –2 ............ ............ –3 –1 Emergency steel guaranteed loans ................................................................... ............ ............ ............ ............ ............ ............ ............ ............ ............ Emergency oil and gas guaranteed loans ........................................................ ............ ............ ............ ............ ............ ............ ............ * * * * * 1 3 * Defense: Military housing improvement fund .................................................................... ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ –3 Defense export loan guarantee ......................................................................... ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ –1 –5 Education: Federal family education loan program: 3 Volume reestimate ......................................................................................... ............ ............ Other technical reestimate ............................................................................. 97 421 535 99 ............ 60 ............ ............ –13 –140 –60 –42 ............ 277 ............ 667 –3,484 ............ –2,483 –3,278 Health and Human Services: Heath center loan guarantees ........................................................................... ............ ............ ............ ............ ............ ............ 3 ............ * Health education assistance loans .................................................................... ............ ............ ............ ............ ............ ............ ............ ............ ............ Housing and Urban Development: Indian housing loan guarantee .......................................................................... Title VI Indian guarantees .................................................................................. Community development loan guarantees ........................................................ FHA-mutual mortgage insurance ....................................................................... FHA-general and special risk ............................................................................. ............ ............ ............ ............ –175 ............ ............ ............ ............ ............ 31 ............ ............ ............ –14 Transportation: Maritime guaranteed loans (title XI) .................................................................. ............ ............ ............ ............ ............ –71 30 –15 Minority business resource center ..................................................................... ............ ............ ............ ............ ............ ............ ............ ............ –447 167 334 –706 38 492 229 ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ –2 –1 –7 ............ –14 ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ –770 Other Independent Agencies: Export-Import Bank guarantees ......................................................................... –11 –59 Total ............................................................................................................... –616 995 257 –16 –279 –545 13 ............ ............ ............ 727 –832 5,642 –235 –528 –191 –1,520 1 –33 –4 4 –10 1,980 507 –2 –2 * 187 27 1 ............ –16 * 4 * –199 292 –184 –1,515 –462 –1 –163 113 ............ –1 ............ ............ ............ ............ ............ –4 –15 ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ Small Business Administration: Business loans ................................................................................................... ............ ............ –420 1,321 * 1 19 5,947 352 Treasury: Air transportation stabilization program ............................................................. ............ ............ ............ ............ ............ ............ ............ ............ ............ International Assistance Programs: U.S. Agency for International Development: Development credit authority ......................................................................... Micro and small enterprise development ...................................................... Urban and environmental credit .................................................................... Loan Guarantees to Israel ............................................................................. Overseas Private Investment Corporation: OPIC guaranteed loans ................................................................................. * ............ –5 –37 ............ ............ ............ ............ ............ –6 * –1 ............ ............ ............ ............ ............ ............ ............ –1 ............ ............ ............ ............ ............ ............ ............ ............ ............ –340 ............ 3,789 ............ 2,413 –1,308 1,100 –110 –25 743 79 ............ –217 –403 77 Interior: Bureau of Indian Affairs guaranteed loans ....................................................... ............ ............ ............ Veterans Affairs: Veterans housing benefit fund program ............................................................ 3 50 * 1 2 48 –76 –3 –2 –2 –111 5 77 60 –213 –226 304 1,750 1,034 –417 –2,042 –1,133 –655 4,518 –3,641 –6,427 –1,832 –142 3,469 5,349 * $500,000 or less. 1Excludes interest on reestimates. Additional information on credit reform subsidy rates is contained in the Federal Credit Supplement. 2Includes rural water and waste disposal, rural community facilities, and rural business and industry programs. 3Volume reestimates in mandatory loan guarantee programs represent a change in volume of loans disbursed in the prior years. These estimates are the result of guarantee programs where data from loan issuers on actual disbursements of loans are not received until after the close of the fiscal year. 112 ANALYTICAL PERSPECTIVES Table 7–3. DIRECT LOAN SUBSIDY RATES, BUDGET AUTHORITY, AND LOAN LEVELS, 2004-2006 (in millions of dollars) 2004 Actual Agency and Program Subsidy Subsidy budget rate 1 authority 2005 Enacted Subsidy Subsidy budget rate 1 authority Loan levels 2006 Proposed Subsidy Subsidy budget rate 1 authority Loan levels Loan levels Agriculture: Agricultural credit insurance fund .................................................................................... Farm storage facility loans .............................................................................................. Rural community advancement program ........................................................................ Rural electrification and telecommunications loans ........................................................ Rural telephone bank ....................................................................................................... Distance learning, telemedicine, and broadband program ............................................. Farm labor ........................................................................................................................ Rural housing insurance fund .......................................................................................... Rural development loan fund .......................................................................................... Rural economic development loans ................................................................................ Public law 480 title I ........................................................................................................ 13.32 1.22 1.88 –1.60 –4.32 2.09 42.73 12.25 43.27 18.76 58.08 117 1 27 –70 –7 13 15 185 17 3 23 881 63 1,395 4,345 170 633 36 1,509 40 15 39 7.40 –2.44 7.50 –1.28 –1.83 2.07 47.06 14.68 46.38 18.79 55.98 70 –2 107 –44 –3 13 18 193 16 5 27 Commerce: Fisheries finance .............................................................................................................. –6.31 –4 64 –6.01 –11 185 –5.02 –2 24 Defense—Military: Defense family housing improvement fund ..................................................................... 33.73 56 166 33.95 71 209 25.34 145 572 Education: College housing and academic facilities loans ............................................................... .............. .............. 55 .............. .............. 70 .............. .............. Loans for short-term training ........................................................................................... .............. .............. .............. .............. .............. .............. –1.56 –1 Federal direct student loan program ............................................................................... –0.61 –135 21,979 –0.53 –131 24,480 –3.51 –861 50 85 24,530 Homeland Security: Disaster assistance direct loans ...................................................................................... .............. .............. .............. –2.60 –1 Housing and Urban Development: FHA-mutual mortgage insurance ..................................................................................... .............. .............. .............. .............. .............. FHA-general and special risk .......................................................................................... .............. .............. 50 .............. .............. State: Repatriation loans ............................................................................................................ 70.75 1 1 Loan for renovation of UN Headquarters ....................................................................... .............. .............. .............. 25 –0.19 .............. 25 50 .............. .............. 50 .............. .............. 50 50 1 6 1 64.99 1 1 1,200 .............. .............. .............. Transportation: Federal-aid highways ....................................................................................................... .............. .............. .............. 5.94 142 Railroad rehabilitation and improvement program .......................................................... .............. .............. 263 .............. .............. 2,400 6.18 149 2,400 250 .............. .............. .............. Treasury: Community development financial institutions fund ........................................................ Veterans Affairs: Vocational rehabilitation and employment administration ............................................... Housing ............................................................................................................................. 34.37 2 5 1.33 .............. 0.83 1 3 127 69.73 0.47 955 7.14 67 937 83 –1.34 –1 67 1,425 6.09 79 1,300 3,440 –0.18 –6 3,189 175 .............. .............. .............. 596 2.68 8 328 38 44.59 19 42 1,314 12.55 136 1,085 34 43.02 15 34 25 19.97 5 25 48 55.40 24 43 36.52 2 1.14 .............. –2.71 –25 5 .............. .............. .............. 4 941 1.59 .............. –2.61 –44 4 1,696 International Assistance Programs: Debt restructuring ............................................................................................................. .............. Overseas Private Investment Corporation ...................................................................... 3.03 28 .............. .............. 6 198 10.67 338 .............. .............. .............. .............. 19 178 10.27 19 185 Small Business Administration: Disaster loans .................................................................................................................. Business loans ................................................................................................................. 11.72 9.55 79 2 668 23 12.86 10.25 514 1 Export-Import Bank of the United States: Export-Import Bank loans ................................................................................................ 11.40 22 193 34.00 17 50 34.00 17 50 Total ............................................................................................................................. N/A 382 32,921 N/A 1,343 42,223 N/A –148 37,582 N/A = Not applicable. 1 Additional information on credit subsidy rates is contained in the Federal Credit Supplement. 3,982 14.64 83 810 10 .............. .............. .............. 113 7. CREDIT AND INSURANCE Table 7–4. LOAN GUARANTEE SUBSIDY RATES, BUDGET AUTHORITY, AND LOAN LEVELS, 2004–2006 (in millions of dollars) 2004 Actual Agency and Program Agriculture: Agricultural credit insurance fund .................................................................................... Commodity Credit Corporation export loans ................................................................... Rural community advancement program ........................................................................ Rural electrification and telecommunications loans ........................................................ Distance learning, telemedicine, and broadband program ............................................. Rural housing insurance fund .......................................................................................... Rural business investment ............................................................................................... Renewable energy ........................................................................................................... Defense—Military: Arms initiative ................................................................................................................... Subsidy Subsidy budget rate 1 authority 3.10 10.58 3.75 .............. .............. 1.68 .............. .............. 75 457 46 .............. .............. 54 .............. .............. 3.00 .............. 2005 Enacted Subsidy Subsidy budget rate 1 authority Loan levels 2006 Proposed Loan levels Subsidy Subsidy budget rate 1 authority Loan levels 2,402 2.91 80 2,763 2.66 76 2,866 4,318 6.83 309 4,528 8.93 393 4,396 1,217 3.36 29 885 3.74 44 1,184 .............. 0.01 .............. 1,100 .............. .............. .............. .............. .............. .............. .............. 3.82 1 30 3,333 1.09 37 3,381 1.33 52 3,881 .............. 8.05 .............. 60 .............. .............. .............. .............. 1.87 11 615 1.75 5 286 28 20.00 1 5 Education: Loans for short-term training ........................................................................................... .............. .............. .............. .............. .............. .............. Federal family education loans ........................................................................................ 11.40 9,602 84,219 11.96 10,111 84,548 5.71 8.22 11 6,556 198 79,754 Health and Human Services: Health education assistance loans .................................................................................. Health resources and services ........................................................................................ 16.48 12.58 Housing and Urban Development: Indian housing loan guarantee fund ................................................................................ Native Hawaiian Housing Loan Guarantee Fund ........................................................... Native American housing block grant ............................................................................. Community development loan guarantees ...................................................................... FHA-mutual mortgage insurance ..................................................................................... FHA-general and special risk .......................................................................................... 2.73 2.73 10.56 2.30 –2.47 –1.00 Interior: Indian guaranteed loans .................................................................................................. 6.13 25 2 4 84 Transportation: Minority business resource center program .................................................................... 2.53 .............. 8 Federal-aid highways ....................................................................................................... .............. .............. .............. Maritime guaranteed loan (title XI) .................................................................................. 7.65 13 174 Treasury: Air transportation stabilization program ........................................................................... –8.93 –3 Veterans Affairs: Housing ............................................................................................................................. 0.54 200 1 46 .............. .............. .............. .............. .............. .............. 13 5.35 1 17 5.40 1 17 5 197 1 40 2 17 6 287 –2,660 107,699 –276 29,000 5 4.10 2.58 2.58 10.32 2.30 –1.82 –0.51 6.76 5 145 2.42 3 99 1 37 2.42 1 35 2 18 12.26 5 38 6 275 .............. .............. .............. –2,121 185,000 –1.70 2 –1,867 185,000 –180 35,000 –0.98 –341 35,000 5 2.08 .............. 4.68 9 27.54 39 85 4.75 6 119 18 1.85 1 18 200 3.67 7 200 140 .............. .............. .............. 30 .............. .............. .............. .............. .............. .............. 35,613 –0.28 –125 44,206 –0.22 –105 47,208 International Assistance Programs: Loan guarantees to Israel ................................................................................................ .............. .............. 1,750 .............. .............. 3,000 .............. .............. 2,360 Microenterprise and small enterprise development ........................................................ .............. 1 .............. .............. .............. .............. .............. .............. .............. Development credit authority ........................................................................................... 3.11 10 351 4.31 21 487 3.90 21 539 Overseas Private Investment Corporation ...................................................................... 0.27 –96 1,647 –3.42 –45 1,300 –4.38 –62 1,400 Small Business Administration: General business loans ................................................................................................... 0.38 91 Export-Import Bank of the United States: Export-Import Bank loans ................................................................................................ 1.88 172 23,972 .............. .............. 34,253 .............. .............. 37,000 13,128 288 13,761 291 13,761 0.08 .............. 20 0.08 .............. 50 Presidio Trust: Presidio Trust ................................................................................................................... .............. .............. .............. Total ............................................................................................................................. 2.80 2.91 N/A 7,732 309,549 N/A 8,484 415,870 N/A 5,100 415,444 –0.27 –405 146,066 –0.23 –368 200,000 –0.23 –368 200,000 ADDENDUM: SECONDARY GUARANTEED LOAN COMMITMENT LIMITATIONS GNMA: Guarantees of mortgage-backed securities .................................................................... N/A = Not applicable. 1 Additional information on credit subsidy rates is contained in the Federal Credit Supplement. 2 Rate includes effects of legislative proposals. For more details, see the Federal Credit Supplement. 114 ANALYTICAL PERSPECTIVES Table 7–5. SUMMARY OF FEDERAL DIRECT LOANS AND LOAN GUARANTEES (In billions of dollars) Actual 1997 1998 1999 2000 Estimate 2002 2002 2003 2004 2005 2006 Direct Loans: Obligations .............................................................. Disbursements ........................................................ New subsidy budget authority1 .............................. Reestimated subsidy budget authority2 ................. Total subsidy budget authority ............................... 33.6 32.2 * ................ 2.4 28.8 28.7 –0.8 7.3 6.5 38.4 37.7 1.6 1.0 2.6 37.1 35.5 –0.4 –4.4 –4.8 39.1 37.1 0.3 –1.8 –1.5 43.7 39.6 * 0.5 0.5 45.4 39.7 0.7 2.9 3.5 42.0 38.7 0.4 2.6 3.0 56.0 47.9 1.3 4 5.1 47.6 44.2 –0.1 ................ –0.1 Loan Guarantees: Commitments .......................................................... Lender disbursements ............................................ New subsidy budget authority1 .............................. Reestimated subsidy budget authority2 ................. Total subsidy budget authority ............................... 282.3 254.7 * ................ 3.6 348.4 337.9 3.3 –0.7 2.6 415.9 388.2 * 4.3 4.3 298.1 286.3 3.6 0.3 3.9 418.0 366.7 2.3 –7.1 –4.8 482.6 446.2 2.9 –2.4 0.5 561.8 247.2 3.8 –3.5 0.3 450.2 429.0 7.3 2.0 9.3 494.4 468.0 8.1 2.9 11.0 489.1 459.0 4.7 ................ 4.7 * $500 million or less. 1 Prior to 1998 new and reestimated subsidy budget authority were not reported separately. 2 Includes interest on reestimate. 115 7. CREDIT AND INSURANCE Table 7–6. DIRECT LOAN WRITE-OFFS AND GUARANTEED LOAN TERMINATIONS FOR DEFAULTS In millions of dollars Agency and Program As a percentage of outstanding loans 1 2004 actual 2005 estimate 2006 estimate 2004 actual 2005 estimate 2006 estimate Agriculture: Agricultural credit insurance fund ................................................................................................................... Commodity Credit Corporation fund ............................................................................................................... Rural community advancement program ....................................................................................................... Rural telephone bank ...................................................................................................................................... Rural development insurance fund ................................................................................................................. Rural housing insurance fund ......................................................................................................................... P.L.480 ............................................................................................................................................................ Debt reduction (P.L.480) ................................................................................................................................. 147 18 13 ................. 2 121 934 154 129 .............. 11 3 1 126 .............. 11 126 .............. 14 3 1 121 .............. .............. 1.69 0.16 0.16 ................. 0.08 0.44 9.11 22.48 1.59 .............. 0.12 0.30 0.04 0.47 .............. 1.85 1.65 .............. 0.14 0.31 0.05 0.46 .............. .............. Commerce: Economic development revolving fund ........................................................................................................... 2 1 1 8.33 7.14 10.00 Education: Student financial assistance ........................................................................................................................... Perkins loan assets ......................................................................................................................................... Federal direct student loan program .............................................................................................................. 6 ................. 256 7 .............. 350 7 51 396 1.84 ................. 0.24 2.16 .............. 0.31 2.16 .............. 0.39 Homeland Security: Disaster assistance direct loan program ........................................................................................................ 13 127 .............. 9.09 81.93 .............. Housing and Urban Development: Revolving fund (liquidating programs) ............................................................................................................ Guarantees of mortgage-backed securities ................................................................................................... ................. 99 1 30 1 28 ................. 79.83 16.66 50.84 25.00 45.16 Interior: Indian direct loan ............................................................................................................................................ 11 2 2 22.44 6.25 7.69 Labor: Pension Benefit Guaranty Corporation ........................................................................................................... 10 31 90 100 100 100 Transportation: Railroad rehabilitation and improvement ........................................................................................................ 2 4 6 0.54 0.65 1.03 Treasury: Community development financial institutions fund ....................................................................................... ................. 1 .............. ................. 1.58 .............. Veterans Affairs: Veterans housing benefit program ................................................................................................................. 13 8 8 0.72 0.39 0.28 International Assistance Programs: Military debt reduction ..................................................................................................................................... Debt reduction (AID) ....................................................................................................................................... Overseas Private Investment Corporation ..................................................................................................... ................. 8 ................. 11 7 8 .............. .............. 8 ................. 3.37 ................. 4.34 0.93 1.40 .............. .............. 1.34 Small Business Administration: Disaster loans ................................................................................................................................................. Business loans ................................................................................................................................................ 53 6 44 9 61 6 1.53 1.80 0.73 3.22 0.89 2.69 Other Independent Agencies: Export-Import Bank ......................................................................................................................................... Debt reduction (ExIm Bank) ........................................................................................................................... Spectrum auction program ............................................................................................................................. Tennessee Valley Authority ............................................................................................................................ 27 5 50 ................. 67 121 .............. 1 71 .............. 3,422 .............. 0.24 0.45 0.97 ................. 0.65 11.04 .............. 1.40 0.76 .............. 88.76 .............. Total, direct loan writeoffs ...................................................................................................................... 1,950 1,111 4,423 0.65 0.28 1.49 Agriculture: Agricultural credit insurance fund ................................................................................................................... Commodity Credit Corporation export loans .................................................................................................. Rural community advancement program ....................................................................................................... Rural electrification and telecommunications loans ....................................................................................... Rural housing insurance fund ......................................................................................................................... 94 130 119 ................. 122 83 160 147 6 134 83 160 174 6 146 0.74 1.97 2.16 ................. 0.72 0.63 1.83 2.94 0.38 0.80 0.63 1.82 3.57 0.39 0.86 Commerce: Emergency steel guaranteed loan program ................................................................................................... ................. 12 8 ................. 7.69 6.89 DIRECT LOAN WRITEOFFS GUARANTEED LOAN TERMINATIONS FOR DEFAULT 116 ANALYTICAL PERSPECTIVES Table 7–6. DIRECT LOAN WRITE-OFFS AND GUARANTEED LOAN TERMINATIONS FOR DEFAULTS—Continued In millions of dollars Agency and Program 2004 actual As a percentage of outstanding loans 1 2005 estimate 2006 estimate 2004 actual 2005 estimate 2006 estimate Defense—Military: Family housing improvement fund ................................................................................................................. ................. 4 4 ................. 1.65 1.70 Education: Federal family education loan ........................................................................................................................ 3,679 4,992 5,837 1.28 1.55 1.67 Health and Human Services: Health education assistance loans ................................................................................................................. 58 41 40 2.32 1.69 1.69 Housing and Urban Development: Indian housing loan guarantee ....................................................................................................................... Title VI Indian Federal guarantees program .................................................................................................. FHA—Mutual mortgage insurance ................................................................................................................. FHA—General and special risk ...................................................................................................................... Guarantees of mortgage-backed securities ................................................................................................... ................. ................. 7,390 1,790 260 1 1 6,056 2,052 70 4 2 5,484 1,731 600 ................. ................. 1.43 1.57 0.04 0.67 1.06 1.21 1.84 0.01 2.48 1.85 1.01 1.50 0.09 Interior: Indian guaranteed loan ................................................................................................................................... 1 1 1 0.26 0.24 0.23 Transportation: Maritime guaranteed loan (Title XI) ............................................................................................................... ................. 50 35 ................. 1.41 1.06 Treasury: Air transportation stabilization program .......................................................................................................... ................. 923 8 ................. 54.19 1.19 Veterans Affairs: Veterans housing benefit program ................................................................................................................. 1,374 2,763 2,816 0.38 0.69 0.64 International Assistance Programs: Foreign military financing ................................................................................................................................ Micro and small enterprise development ....................................................................................................... Urban and environmental credit program ...................................................................................................... Development credit authority .......................................................................................................................... Overseas Private Investment Corporation ..................................................................................................... ................. 3 34 ................. 78 3 1 22 2 57 10 1 26 3 58 ................. 6.00 1.78 ................. 1.77 0.09 1.31 1.19 0.87 1.43 0.38 2.00 1.52 0.90 1.39 Small Business Administration: General business loans .................................................................................................................................. Pollution control equipment ............................................................................................................................ 1,378 ................. 1,308 1 1,272 .............. 2.04 ................. 1.66 16.66 1.43 .............. Other Independent Agencies: Export-Import Bank ......................................................................................................................................... 360 440 494 0.81 0.93 0.99 Total, guaranteed loan terminations for default .................................................................................. 16,870 19,330 19,003 0.80 0.89 0.82 Total, direct loan writeoffs and guaranteed loan terminations .......................................................... 18,820 20,441 23,426 0.79 0.83 0.89 Agriculture: Agricultural credit insurance fund ................................................................................................................... ................. 1 1 ................. 5.88 5.88 Education: Federal family education loan ........................................................................................................................ 286 259 233 1.38 1.19 1.02 Health and Human Services: Health education assistance loans ................................................................................................................. 24 24 24 2.54 2.56 2.59 Housing and Urban Development: FHA—Mutual mortgage insurance ................................................................................................................. FHA—General and special risk ...................................................................................................................... 1 310 .............. 383 .............. 6 0.10 7.01 .............. 7.56 .............. 0.10 Interior: Indian guaranteed loan ................................................................................................................................... 10 1 1 40.00 7.14 9.09 Treasury: Air transportation stabilization program .......................................................................................................... ................. .............. 617 ................. .............. 66.27 Veterans Affairs: Veterans housing benefit program ................................................................................................................. 83 120 148 5.87 6.14 6.26 ADDENDUM: WRITEOFFS OF DEFAULTED GUARANTEED LOANS THAT RESULT IN LOANS RECEIVABLE 117 7. CREDIT AND INSURANCE Table 7–6. DIRECT LOAN WRITE-OFFS AND GUARANTEED LOAN TERMINATIONS FOR DEFAULTS—Continued In millions of dollars Agency and Program 2004 actual As a percentage of outstanding loans 1 2005 estimate 2006 estimate 2004 actual 2005 estimate 2006 estimate International Assistance Programs: Overseas Private Investment Corporation ..................................................................................................... ................. 29 3 ................. 12.18 1.18 Small Business Administration: General business loans .................................................................................................................................. 249 262 280 7.51 6.30 5.90 Total, writeoffs of loans receivable ....................................................................................................... 963 1,079 1,313 2.42 2.46 2.75 1 For direct loans and loan guarantees, outstanding loans equal start-of-year outstanding balance plus new disbursements. For loans receivable, outstanding loans equal start-ofyear outstanding balance plus terminations for default resulting in loans receivable. 118 ANALYTICAL PERSPECTIVES Table 7–7. APPROPRIATIONS ACTS LIMITATIONS ON CREDIT LOAN LEVELS 1 (in millions of dollars) Agency and Program 2004 Enacted 2005 Enacted 2006 Proposed DIRECT LOAN OBLIGATIONS Agriculture: P.L. 480 direct credit ............................................................................................................................................................................... 39 48 43 Commerce: Fisheries finance ...................................................................................................................................................................................... 64 185 24 Education: Historically black college and university capital financing ...................................................................................................................... Loans for short-term training ................................................................................................................................................................... 229 ..................... 229 ..................... 162 85 Homeland Security: Disaster Assistance Direct Loan Financing Account .............................................................................................................................. 25 25 25 Housing and Urban Development: FHA-general and special risk .................................................................................................................................................................. FHA-mutual mortgage insurance ............................................................................................................................................................. 50 50 50 50 50 50 State: Repatriation loans .................................................................................................................................................................................... Loan for renovation of UN Headquarters ............................................................................................................................................... 1 ..................... 1 1,200 1 ...................... Transportation: Transportation infrastructure finance and innovation program ............................................................................................................... Transportation infrastructure finance and innovation program line of credit ......................................................................................... 2,200 200 2,200 200 2,200 200 Treasury: Community development financial institutions fund ................................................................................................................................ 11 11 ...................... Veterans Affairs: Native American and transitional housing .............................................................................................................................................. Vocational rehabilitation ........................................................................................................................................................................... ..................... 3 50 4 30 4 International Assistance Programs: Military debt reduction .............................................................................................................................................................................. 31 ..................... ...................... Small Business Administration: Business loans ......................................................................................................................................................................................... 23 10 ...................... Total, limitations on direct loan obligations .................................................................................................................................. 2,926 4,263 2,874 Agriculture: Agricultural credit insurance fund ............................................................................................................................................................ Rural business investment program guarantee ...................................................................................................................................... 2,402 ..................... 2,763 60 2,866 ...................... Defense—Military: Arms initiative ........................................................................................................................................................................................... 4 28 5 Education: Loans for short-term training ................................................................................................................................................................... ..................... ..................... 198 Health and Human Services: Health education assistance loans .......................................................................................................................................................... 150 ..................... ...................... Housing and Urban Development: Indian housing loan guarantee fund ....................................................................................................................................................... Title VI Indian Federal guarantees .......................................................................................................................................................... Native Hawaiian Housing Loan Guarantee Fund ................................................................................................................................... Community development loan guarantees .............................................................................................................................................. FHA-general and special risk .................................................................................................................................................................. FHA-mutual mortgage insurance ............................................................................................................................................................. 197 17 40 275 29,000 185,000 145 18 37 275 35,000 185,000 99 38 35 ...................... 35,000 185,000 Interior: Indian loans .............................................................................................................................................................................................. 84 85 119 Transportation: Minority business resource center .......................................................................................................................................................... Transportation infrastructure finance and innovation program loan guarantee ..................................................................................... Maritime guaranteed loan (title XI) .......................................................................................................................................................... 18 200 174 18 200 140 18 200 ...................... International Assistance Programs: Loan guarantees to Israel ....................................................................................................................................................................... Development credit authority ................................................................................................................................................................... 3,000 ..................... 3,000 ..................... ...................... 700 LOAN GUARANTEE COMMITMENTS 119 7. CREDIT AND INSURANCE Table 7–7. APPROPRIATIONS ACTS LIMITATIONS ON CREDIT LOAN LEVELS 1—Continued (in millions of dollars) Agency and Program 2004 Enacted 2005 Enacted 2006 Proposed Small Business Administration: General business loans ........................................................................................................................................................................... 23,972 34,253 37,000 Total, limitations on loan guarantee commitments ...................................................................................................................... 244,533 261,022 261,278 Housing and Urban Development: Guarantees of mortgage-backed securities ............................................................................................................................................ 200,000 200,000 200,000 Total, limitations on secondary guaranteed loan commitments ................................................................................................ 200,000 200,000 200,000 ADDENDUM: SECONDARY GUARANTEED LOAN COMMITMENT LIMITATIONS 1 Data represents loan level limitations enacted or proposed to be enacted in appropriation acts. For information on actual and estimated loan levels supportable by new subsidy budget authority requested, see Tables 7–3 and 7–4. 120 ANALYTICAL PERSPECTIVES Table 7–8. FACE VALUE OF GOVERNMENT-SPONSORED ENTERPRISE LENDING 1 (In billions of dollars) Outstanding 2003 2004 Fannie Mae 2 ...................................................................................... Freddie Mac 3 ..................................................................................... Federal Home Loan Banks 4 ............................................................. Sallie Mae 5 ........................................................................................ Farm Credit System ........................................................................... N/A 1,393 N/A ................ 86 N/A N/A N/A ................ 87 Total ............................................................................................... N/A N/A Government Sponsored Enterprises N/A = Not available. 1 Net of purchases of federally guaranteed loans. 2 Financial data for Fannie Mae is not presented here because Fannie Mae announced in December 2004 that it would have to restate financial results for fiscal years 2001–2004. 3 2003 figure derived from Freddie Mac 2003 Annual Report. While financial data for 2003 is presented here, Freddie Mac announced on November 1, 2004 that it would report full-year audited results for 2004 by March 31, 2005. 4 Financial data for the Federal Home Loan Banks are not presented here because the Federal Home Loan Banks announced through their Office of Finance in December 2004 that the consolidated financial statements of the Federal Home Loan Banks for 2002 and 2003, and the first two quarters of 2004 will need to be restated. 5 The face value and Federal costs of Federal Family Education Loans in the Student Loan Marketing Association’s portfolio are included in the totals for that program under guaranteed loans in table 7–1. 121 7. CREDIT AND INSURANCE Table 7–9 LENDING AND BORROWING BY GOVERNMENT-SPONSORED ENTERPRISES (GSEs) (In millions of dollars) Enterprise 2004 LENDING Student Loan Marketing Association Net change ........................................................................................................... Outstandings ........................................................................................................ Federal National Mortgage Association: 1 Portfolio programs: Net change ...................................................................................................... Outstandings .................................................................................................... Mortgage-backed securities: Net change ........................................................................................................... Outstandings ........................................................................................................ Federal Home Loan Mortgage Corporation:2 Portfolio programs: Net change ...................................................................................................... Outstandings .................................................................................................... Mortgage-backed securities: Net change ...................................................................................................... Outstandings .................................................................................................... Farm Credit System: Agricultural credit bank: Net change ...................................................................................................... Outstandings .................................................................................................... Farm credit banks: Net change ...................................................................................................... Outstandings .................................................................................................... Federal Agricultural Mortgage Corporation: Net change ...................................................................................................... Outstandings .................................................................................................... Federal Home Loan Banks:3 Net change ........................................................................................................... Outstandings ........................................................................................................ Less guaranteed loans purchased by: Student Loan Marketing Association: Net change ...................................................................................................... Outstandings .................................................................................................... Federal National Mortgage Association: 1 Net change ...................................................................................................... Outstandings .................................................................................................... Other: Net change 4 .................................................................................................... Outstandings 4 .................................................................................................. –27,787 136 N/A N/A N/A N/A N/A N/A N/A N/A (193) 23,270 2,409 60,762 (451) 5,549 N/A N/A (27,787) 136 N/A N/A N/A N/A BORROWING Student Loan Marketing Association: Net Change .......................................................................................................... Outstandings ........................................................................................................ Federal National Mortgage Association:1 Portfolio programs: Net Change ..................................................................................................... Outstandings .................................................................................................... Mortgage-backed securities: Net Change ..................................................................................................... Outstandings .................................................................................................... Federal Home Loan Mortgage Corporation:2 Portfolio programs: Net Change ..................................................................................................... Outstandings .................................................................................................... Mortgage-backed securities: Net Change ..................................................................................................... Outstandings .................................................................................................... Farm Credit System: Agricultural credit bank: Net Change ..................................................................................................... (24,763) 2,058 N/A N/A N/A N/A N/A N/A N/A N/A 175 122 ANALYTICAL PERSPECTIVES Table 7–9 LENDING AND BORROWING BY GOVERNMENT-SPONSORED ENTERPRISES (GSEs)—Continued (In millions of dollars) Enterprise Outstandings .................................................................................................... Farm credit banks: Net Change ..................................................................................................... Outstandings .................................................................................................... Federal Agricultural Mortgage Corporation: Net Change ..................................................................................................... Outstandings .................................................................................................... Federal Home Loan Banks:3 Net Change .......................................................................................................... Outstandings ........................................................................................................ 2004 26,626 3,763 71,812 (414) 3,424 N/A N/A DEDUCTIONS Less borrowing from other GSEs:4 Net Change .......................................................................................................... Outstandings ........................................................................................................ Less purchase of Federal debt securities:4 Net Change .......................................................................................................... Outstandings ........................................................................................................ Less borrowing to purchase loans guaranteed by: Student Loan Marketing Association: Net Change ..................................................................................................... Outstandings .................................................................................................... Federal National Mortgage Association: 1 Net Change ..................................................................................................... Outstandings .................................................................................................... Other: 4 Net Change ..................................................................................................... Outstandings .................................................................................................... N/A N/A N/A N/A (27,787) 136 N/A N/A N/A N/A N/A = Not available. The estimates of borrowing and lending were developed by the GSEs based on certain assumptions that are subject to periodic review and revision and do not represent official GSE forecasts of future activity, nor are they reviewed by the President. The data for all years include programs of mortgage-backed securities. In cases where a GSE owns securities issued by the same GSE, including mortgage-backed securities, the borrowing and lending data for that GSE are adjusted to remove double-counting. 1 Financial data for Fannie Mae is not presented here because Fannie Mae announced in December 2004 that it would have to restate financial results for fiscal years 2001–2004. 2 Financial data for Freddie Mac is not presented here because Freddie Mac announced on November 1, 2004 that it would report full-year audited results for 2004 by March 31, 2005. 3 Financial data for the Federal Home Loan Banks are not presented here because the Federal Home Loan Banks announced through their Office of Finance in December 2004 that the consolidated financial statements of the Federal Home Loan Banks for 2002 and 2003, and the first two quarters of 2004 will need to be restated. 4 Totals and subtotals have not been calculated because a substantial portion of the total is subject to the above-described restatements. 8. AID TO STATE AND LOCAL GOVERNMENTS 1 State and local governments have a vital constitutional responsibility to provide government services. They have the major role in providing domestic public services, such as public education, law enforcement, roads, water supply, and sewage treatment. The Federal Government contributes to that role by promoting a healthy economy. It also provides grants, loans, and tax subsidies to State and local governments. Federal grants help State and local governments finance programs covering most areas of domestic public spending, including income support, infrastructure, education, and social services. Federal grant outlays were $406.3 billion in 2004 and are estimated to be $425.8 billion in 2005 and $435.7 billion in 2006. Grant outlays to State and local governments for individuals, such as Medicaid payments, are estimated to be 65 percent of total grants in 2006; grant outlays for physical capital investment, 15 percent; and grant outlays for all other purposes, largely education, training, and social services, 20 percent. Some tax expenditures also constitute Federal aid to State and local governments. Tax expenditures stem from special exclusions, exemptions, deductions, credits, deferrals, or tax rates in the Federal tax laws. The deductibility of State and local personal income and property taxes from gross income for Federal income tax purposes and the exclusion of interest on State and local public purpose bonds from Federal taxation comprise the two largest tax expenditures benefiting State and local governments. These provisions, on an outlay equivalent basis, are estimated to be $98.5 billion in 2006. Chapter 19, ‘‘Tax Expenditures,’’ of this volume provides a detailed discussion of the measurement and definition of tax expenditures and a complete list of the estimated costs of specific tax expenditures. As discussed in that chapter, there are generally inter- actions among tax expenditure provisions, so that the total cost estimates only approximate the aggregate effect of these provisions. Tax expenditures that especially aid State and local governments are displayed separately at the end of Table 19–5 in that chapter, and also at the ends of Tables 19–1 and 19–2. This chapter also includes information on the performance of selected grant programs based on the Program Assessment Rating Tool. An Appendix to this chapter includes State-by-State estimates of major grant programs. Table 8–1. FEDERAL GRANT OUTLAYS BY AGENCY (In billions of dollars) Estimate 2004 Actual 2005 2006 Department of Agriculture .................................................. Department of Commerce ................................................. Department of Education ................................................... Department of Energy ........................................................ Department of Health and Human Services ..................... Department of Homeland Security .................................... Department of Housing and Urban Development ............ Department of the Interior ................................................. Department of Justice ........................................................ Department of Labor .......................................................... Department of Transportation ............................................ Department of the Treasury .............................................. Department of Veterans Affairs ......................................... Environmental Protection Agency ...................................... Other agencies ................................................................... 23.7 0.6 35.6 0.3 236.6 5.9 32.7 3.4 4.7 8.4 41.3 5.4 0.5 4.0 3.3 25.5 0.7 39.7 0.2 251.0 8.4 33.5 4.2 3.1 7.7 43.9 0.5 0.5 3.7 3.3 25.7 0.6 40.1 0.3 256.6 9.1 34.8 4.1 3.8 7.1 46.8 0.4 0.3 3.8 2.2 Total ............................................................................... 406.3 425.8 435.7 Agency Table 8–1 shows the distribution of grants by agency. Grant outlays by the Department of Health and Human Services are estimated to be $256.6 billion in 2006, almost 60 percent of total grant outlays. HIGHLIGHTS OF THE FEDERAL AID PROGRAM Several proposals in this budget affect Federal aid to State and local governments and the important relationships between the levels of government. Through the use of grants, the Federal Government shares with State and local governments the cost and, ultimately, the benefits of a better educated, healthier, and safer citizenry. The Administration intends to work with State and local governments to make the Federal system more efficient and effective and to improve the design, administration, and financial management of Federal grant programs. In programs where the Federal Government and State and local governments partner in the provision of services, State and local government involvement is critical to improving the performance of Federal programs. To date, the Administration has rated the effectiveness of about three fifths of all Federal programs using the Program Assessment Rating Tool (PART). On average, grant programs received lower ratings than other types of programs, which suggests the need for strengthening partnerships and accountability for achieving program outcomes. 1 Federal aid to State and local governments is defined as the provision of resources by the Federal Government to support a State or local program of governmental service to the public. The three primary forms of aid are grants, loan subsidies, and tax expenditures. 123 124 In support of the Administration’s initiative to identify and eliminate improper payments, managers of several programs jointly administered by the Federal Government and the States, including Medicaid and the School Lunch program, are developing methodologies to estimate the extent of improper payments, identify the causes and remedy them. The passage of the Improper Payments Information Act (IPIA) of 2002 codified the goals of the President’s initiative to enhance the accuracy and integrity of Federal payments. The IPIA, and subsequent OMB implementing guidance, establish a framework for agencies to (i) review every Federal program, activity, and dollar to assess risk of significant improper payments; (ii) develop a statistically-valid estimate to measure the extent of improper payments in risk susceptible Federal programs; (iii) initiate process and internal control improvements to enhance the accuracy and integrity of payments; and (iv) report and assess progress on an annual basis. In 2004, all agencies began to develop and implement plans to comply with these expanded reporting requirements. As these efforts continue in 2005 and beyond, the Federal government is strengthening its position to make significant strides in identifying and eliminating improper payments. In addition, under the auspices of the Federal Financial Assistance Management Improvement Act of 1999 (PL 106–107) and the Administration’s Line of Business Grant Management Initiative, Federal grant making agencies have continued to work individually and collectively to improve and streamline the efficiency of grant programs and to achieve the vision of a Governmentwide solution that supports end-to-end grants management activities. The goals are to promote grantee access, customer service, and agency financial and technical stewardship. Particularly, in 2004, the Federal Government has realized its objectives to: • Establish a simple, unified ‘‘storefront’’ for all customers to find and apply for grants (called FIND and APPLY). FIND posted more than 1,500 funding opportunities in 2004 and received more than 200,000 hits per day; • Establish a single location in the Code of Federal Regulations (Title 2 CFR) to place all the Government-wide and agency guidance regarding grant management; • Create a grants governance committee that will ensure the continued streamlining effort. Highlights of grants to State and local governments are presented below. For additional information on grants, see Table 8–4 in this chapter, and discussions in the main budget volume. Homeland Security This budget requests $5.6 billion in budget authority for 2006 for grants to State and local governments in the Department of Homeland Security (DHS). An effective response to a major terrorist incident or natural disaster depends on adequate preparation. The Federal response to the hurricanes of 2004 dem- ANALYTICAL PERSPECTIVES onstrated the value of proactive and aggressive response measures. This Budget continues to build on these capabilities and supports critical preparedness, response, and recovery efforts at all levels of government. In 2004, the Federal Government developed the National Response Plan (NRP), a comprehensive approach to domestic management of emergencies. DHS also led the development of a National Incident Management System (NIMS). Released in July, 2004, NIMS establishes a standard framework for Federal, State, tribal, and local governments to respond to incidents and emergencies. The Budget requests $15 million to support the implementation of NIMS through the support of the NIMS Integration Center at the Department of Homeland Security. Education Grant outlays for elementary, secondary, and vocational education are estimated to be $36.9 billion in 2006. Leaving no child behind. At the center of the President’s commitment to education is his promise to ‘‘leave no child behind.’’ When President Bush launched his No Child Left Behind initiative, he said, ‘‘The Federal role in education is not to serve the system. It is to serve the children.’’ No Child Left Behind (NCLB) is making a difference for every child, in every public school. It is no longer acceptable for any child to slip through the cracks or fail to receive the challenging education he or she deserves. Schools are held accountable for ensuring that all children, including those who are disadvantaged or have a disability, become proficient in reading and math. Parents receive detailed information about the performance of their schools. Students who attend low-performing schools have the option to attend a better public school or, if their schools do not improve, to receive tutoring funded by the school district. The largest program that assists elementary and secondary education is Title I Grants to Local Educational Agencies. This Budget requests funding of $13.3 billion for this program in 2006. Strengthening performance and accountability: reforming special education. On December 3, 2004, the President signed into law the Individuals with Disabilities Education Improvement Act of 2004 (IDEA). The reauthorized IDEA makes several adjustments to align special education to NCLB’s accountability systems. Together, these landmark laws provide the framework for high hopes and expectations that all students, including the 6.9 million children with disabilities, can succeed in school. This law is fully consistent with the Administration’s principles for IDEA reauthorization, and with the 2002 recommendations of the President’s Commission on Excellence in Special Education. Over the next year, the Administration will provide guidance and technical assistance to States, schools, and parents so that they can be partners with the Department of Education in implementing the myriad reg- 8. 125 AID TO STATE AND LOCAL GOVERNMENTS ulatory and paperwork changes required by the law, many of which will take effect in July 2005. The President’s 2006 Budget complements the law and provides program levels of $12.2 billion for all IDEA programs, including $83 million for special education research, studies, and evaluations funded under the Institute for Education Sciences, and $11.1 billion for IDEA Grants to States. These increases, along with the law’s local flexibility provisions, will improve the State and local special education systems, and produce real benefits for students served by IDEA. Training and Employment Training workers for the jobs of the 21st century. In April 2004 the President proposed significant reforms to the Department of Labor’s (DOL) job training programs to double the number of workers trained and give workers more choice about their training and career paths. This Budget builds on that proposal by: • Giving Governors more flexibility. The President’s proposal would merge the four major Department of Labor (DOL) Federal job training and employment grant programs into a single grant program. The 2006 Budget requests $3.9 billion in budget authority for this program. In addition, Governors would be able to supplement this consolidated grant with their State’s resources from a ‘‘menu’’ of several other Federal job training and employment programs. • Eliminating unnecessary overhead. In exchange for more flexibility, the proposal would place strict limits on overhead costs. This would free resources to allow more workers to be trained. • Giving workers more choice. The President’s proposal would give workers greater control over their training through the use of personal innovation training accounts. • Demanding greater accountability. The proposal would establish increasingly rigorous performance standards each year, leading to a goal in the tenth year that States place in employment 100 percent of the workers trained with grant resources. To ensure that individuals are placed in high-quality jobs, States would also be required to show improvements in earnings and job retention. States’ performance would be ranked and published each year. These reforms, along with the President’s $250 million Community College job training initiative, will train 400,000 workers annually—twice as many as are trained under the current system. Social Services Head Start. The Budget provides $6.9 billion in budget authority for Head Start in 2006, including $45 million to support State implementation of a demonstration authority to promote better coordination of existing programs, to improve services for families and children, and to achieve better results with the resources already being used. Independent living education and training vouchers. This Budget requests $60 million for the foster care independent living program to help older foster care youth transition to adulthood and self-sufficiency after leaving foster care. This program provides vouchers of up to $5,000 for education or vocational training to help youth leaving foster care to develop skills and lead independent and productive lives. Child welfare program option. This Budget seeks legislation to introduce an option for all States to choose an alternative system for foster care that will better meet the needs of the child welfare population. Flexible financing will allow States to design programs with a stronger emphasis on prevention and family support and increased flexibility in services provided and populations served. Income Support Food and nutrition assistance. As part of its diverse array of programs, the United States Department of Agriculture (USDA) delivers programs that help those in need. The Special Supplemental Nutrition Program for Women, Infants, and Children, more commonly known as the WIC program, serves the nutritional needs of low-income pregnant and post-partum women, infants, and children up to their fifth birthday. This Budget provides $5.5 billion in budget authority in 2006 for WIC services, full funding for all those estimated to be eligible and seeking services. On July 30, 2004, President Bush signed the Child Nutrition and WIC Reauthorization Act of 2004. This law makes many important improvements to the National School Lunch Program that affect the 29 million children participating in the program on an average school day. The Administration is implementing these changes, which will increase access to nutrition for vulnerable children, help States and schools fight childhood obesity and improve the integrity of the school meals programs. Grant outlays for child nutrition programs are estimated to be $12.3 billion in 2006. Housing assistance. Grant outlays for housing assistance are estimated to be $29.2 billion in 2006. Ending Chronic Homelessness. The Administration remains committed to the goal of ending chronic homelessness. Chronically homeless individuals who have disabling conditions and live on the streets and in shelters for long periods comprise less than 10 percent of the homeless population, yet they consume over half of emergency homeless services. Housing this population will free Federal, State, and local emergency resources for families and individuals who need shorterterm assistance. In 2004, the Federal Collaborative Initiative to End Chronic Homelessness, through the Department of Housing and Urban Development (HUD), the Department of Health and Human Services (HHS), and the Department of Veteran Affairs (VA), funded 11 grantees across the country. Building on the success of this ini- 126 tiative, in 2006, the Samaritan Housing Initiative provides up to $200 million through HUD in new housing subsidies paired with case management and supportive services in outlays is the specifically targeted to this population. Across the country, 46 States and 170 localities, along with the private sector, have joined the Federal effort to move chronically homeless individuals from the streets to permanent supportive housing, and to prevent additional individuals from becoming chronically homeless. The Budget provides more resources than ever for permanent supportive housing for homeless individuals who have been on the streets or in shelters for long periods. The 2006 budget includes $1.4 billion for Homeless Assistance Grants, $200 million more than in 2005. Altogether, the Administration requests $4 billion in 2006 for Federal housing and social programs for the homeless, an 8.5 percent increase. Housing vouchers. The Housing Choice Voucher program provides two million low-income families with subsidies to help them afford a decent place to live. Participants contribute 30 percent of their income towards rent; the Government pays the rest. In the past, funds have been appropriated for a specific number of units each year. These funds were then given to public housing agencies (PHAs) based on the number of vouchers they were awarded. HUD is concerned that voucher costs have increased at a rate of more than double the average increase in the private rental market for the past several years. This rate of increase, combined with an extremely complex set of laws and rules that govern the program, has limited its effectiveness. The Administration proposes to simplify the program and give more flexibility to PHAs to administer the program to better address local needs. Building on changes in the 2005 Consolidated Appropriations Act, the Administration proposes expanding the ‘‘dollarbased’’ approach. PHAs would continue to receive a set dollar amount as in 2005, but they would have the freedom to adjust the program to the unique and changing needs of their community, including the ability to set their own subsidy levels based on local market conditions. These changes would provide a more efficient and effective program to help low-income families more easily obtain decent, safe, and affordable housing. Other income security. The Administration continues to pursue its plan to reauthorize the Temporary Assistance for Needy Families (TANF) program, which provides grants to States for programs that assist needy families with children. TANF grants also promote work and the formation of married-parent families in order to reduce dependence on government benefits. The Administration’s plan maintains funding, strengthens work requirements, supports healthy marriages and family formation, and increases State flexibility. Outlays for TANF are estimated to be $18.2 billion in 2006. Health ANALYTICAL PERSPECTIVES Medicaid and State Children’s Health Insurance Program (SCHIP). Funding for Medicaid, a health care program for low-income individuals, is projected to be $338 billion ($193 billion in outlays is the Federal share) in 2006. Within that amount, Medicaid covers over 46 million children and adults. Long term care services for the disabled and elderly account for over 30 percent of Medicaid expenditures. SCHIP makes available approximately $40 billion over ten years for States to provide health care coverage to targeted low-income, uninsured children. Since the beginning of the Administration, enrollment in SCHIP has grown by over one million children to a total of approximately 5.8 million in 2003. The following proposals are intended to enhance coverage under both Medicaid and SCHIP: Cover the Kids. Despite the availability of health care coverage through Medicaid and SCHIP, millions of children eligible for these programs have not enrolled. The 2006 Budget proposes Cover the Kids, a national outreach campaign that will provide $1 billion in grants over two years. By combining the resources of the Federal government, States, schools, and community organizations, Cover the Kids aims to enroll as many Medicaid- and SCHIP-eligible children as possible. New Freedom Initiative. The Budget includes almost $3 billion in demonstrations and proposals that promote home- and community-based care options for people with disabilities. These policies are part of the President’s New Freedom Initiative, which is a nationwide effort to integrate people with disabilities more fully into society. Transitional Medical Assistance (TMA). TMA provides Medicaid coverage for former welfare recipients after they enter the workforce. This Budget proposes to extend TMA for one year with certain statutory modifications, including State options to eliminate TMA reporting requirements and provide 12 months of continuous eligibility regardless of changes in families’ financial status. In addition, this Budget proposes a waiver of the TMA requirement for States that currently provide health benefits for families at 185 percent of the Federal poverty level, which is the statutorily mandated income eligibility level. These changes will allow for consistent enrollment of TMA beneficiaries while easing the administrative burden on States. Medicare premium assistance. The Administration proposes to continue Medicare Part B premium assistance for Medicare beneficiaries between 120 and 135 percent of the Federal poverty level for one year. In 2005, these premiums will be $78.20 per month. States receive 100 percent Federal funding for these benefits. Vaccines for children (VFC). VFC provides all recommended childhood vaccines, free of charge, to four categories of eligible children: Medicaid beneficiaries, American Indians/Alaskan Natives, the uninsured, and the underinsured (those without coverage for a particular vaccine). The Administration proposes to improve vaccine access by allowing underinsured children 8. 127 AID TO STATE AND LOCAL GOVERNMENTS to receive VFC-funded vaccines at State and local health clinics, rather than only at federally qualified health centers and rural health centers. Health Insurance Portability and Accountability Act (HIPAA). Since enacted in 1996, HIPAA has increased the continuity, portability, and accessibility of health insurance. To ensure that Medicaid and SCHIP beneficiaries receive the benefits of HIPAA coverage, the Administration proposes two legislative changes. Under this proposal, eligibility for a Medicaid/SCHIP Employer-Sponsored Insurance (ESI) Program would be a qualifying event, which would allow families to enroll in ESI immediately through special enrollment. This proposal also would require SCHIP programs to issue certificates of creditable coverage, which promote portable health coverage by verifying the period of time an individual was covered by a specific health insurance policy. State Purchasing Pools. To help low-income individuals purchase coverage with the health insurance tax credit, the Administration proposes providing $4.0 billion in grants to States to establish purchasing pools. By combining the purchasing power of individuals and families, these pools would offer tax-credit recipients an additional affordable health insurance option and would make it easier and faster to shop for coverage. This will ensure communities have access to capital to finance their wastewater infrastructure needs. Additionally, the program will meet its long-term revolving level target of $3.4 billion. The revolving level is the amount of loans available annually over the long term after Federal capitalization ends and an indicator of the CWSRF’s financial stability. The Environmental Protection Agency (EPA) has made the protection of drinking water a priority since enactment of the initial Safe Drinking Water Act (SDWA) in 1974, and continues to work to improve its drinking water programs. Statistics show that drinking water quality is improving, and the Centers for Disease Control and Prevention recently estimated that 31 drinking water-related waterborne disease outbreaks occurred in 2001–2002, down from 39 outbreaks in 1999–2000. The 1996 SDWA amendments created the Drinking Water State Revolving Fund (DWSRF) which, like the CWSRF, provides grants to States to help capitalize revolving loan funds. Communities use these funds to finance drinking water systems and infrastructure improvements, including compliance with regulatory drinking water requirements. This Budget provides $850 million to fund the DWSRF in 2006. Health Centers. Health Centers deliver high-quality, affordable primary and preventive health care to nearly 14 million patients, regardless of ability to pay at 3,740 sites across the United States annually. In 2006, Health Centers will serve an estimated 16 percent of the Nation’s population at or below 200 percent of Federal Poverty Line. The Budget will complete the President’s commitment to create 1,200 new or expanded health center sites to serve an additional 6.1 million people by 2006. Almost 2.4 million additional individuals will receive health care in 2006 through 570 new or expanded sites in rural areas and underserved urban neighborhoods. The President has established a new goal to create a health center in every poor county that lacks a health center and can support one. The Budget includes $26 million to fund 40 new health center sites in highpoverty counties. Faith-based and community programs will be encouraged to compete for these grants. This Budget includes $2.8 billion in budget authority for State and local assistance programs, including Project Safe Neighborhoods, the DNA Initiative, USA Freedom Corps, State and Local Anti-Terrorism Training, and the Regional Information Sharing System (RISS). These and other programs funded within Department of Justice (DOJ) enhance the capability of State and local governments to reduce crime in our communities, as well as our vulnerability to terrorism. Today crime, including violent crime, is at a 30-year low. The Project Safe Neighborhoods (PSN) initiative, announced by the President and the Attorney General in 2001, is a comprehensive strategy that brings together Federal, State, and local agencies to continue the record reduction in the violent crime in our communities. Working with the DOJ, each community tailors the program to target problems associated with the criminal misuse of firearms and to build on local capacities. Since 2001, the Administration has dedicated $1.3 billion in Federal resources to PSN, including grants to State and local task forces through the Office of Justice Programs, increased Federal prosecutors within U.S. Attorneys Offices, and additional agent and training resources within the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). For 2006, this Budget requests $363 million for PSN, an increase of $138 million and 61 percent over the 2005 enacted level. The program increase will: • Provide $74 million in grant assistance for State and local prosecution of criminal misuse of firearms. • Increase funding for States to update criminal history records, which are needed to deter illegal fire- Natural Resources and Environment The Clean Water State Revolving Fund (CWSRF) provides grants to States to capitalize their municipal wastewater State revolving funds. States provide matching funds and then make loans to communities at below-market rates for wastewater infrastructure projects such as sewer rehabilitation and treatment plant expansion. Loan repayments and interest are recycled back into the program. This Budget funds the CWSRF at $730 million. Due to significant additional funds provided by Congress in 2004 and 2005, at this funding level, the total capitalization provided between fiscal years 2004–2011 will remain the same as committed to in the 2004 Budget. Administration of Justice 128 ANALYTICAL PERSPECTIVES arms purchases, by $34 million, which is more than double the 2005 enacted level. • Augment Project ChildSafe, which distributes gun locks to prevent misuse of guns by children and youth, by $29 million over the 2005 enacted level. Transportation Grants support State and local programs for highways, mass transit, and airports. Grant outlays to State and local governments for transportation are estimated to be $46.8 billion in 2006. • To ease gridlock, this Budget proposes a funding level of $283.9 billion over six years. This marks a 35-percent increase over the Transportation Equity Act for the 21st Century (TEA–21) six-year spending totals. This figure reflects the emerging consensus in Congress that was developed in a conference committee in 2004, and the Administration looks forward to working with the Congress to complete action on legislation to improve the surface transportation system. • This Budget requests $231 million for the National Highway Traffic Safety Administration (NHTSA) safety operations and research programs and $465 million for grants to States for targeted highway safety programs for 2006, which is $23 million more than enacted for 2005. Funding increases are also directed toward improving the Fatalities Analysis Reporting System, Department of Transportation’s (DOT) database used to measure and analyze trends in vehicle fatalities. current duplicative set of Federal community and economic development programs with a more consolidated approach that focuses resources on the creation of jobs and opportunities, encourages private sector investment, and includes rigorous accountability measures and incentives. The Strengthening America’s Communities Grant Program is a targeted, results-oriented approach that will encourage innovation and economic opportunity. By streamlining the delivery of Federal economic development programs, taxpayers will see administrative savings. The President’s Budget includes $3.7 billion in budget authority for 2006 for the Strengthening America’s Communities Grant Program to provide economically distressed communities with a source of funding for planning, infrastructure development, and business financing to achieve long-term economic stability and growth. Our changing economy presents challenges for certain communities where traditional industries, such as manufacturing, do not employ as many workers as they did a generation ago. The President has proposed a new Opportunity Zone Initiative that will help these local economies adapt and diversify by targeting Federal resources and encouraging new and existing businesses to invest in these areas. The Commerce Department will have the lead role in managing this initiative. These efforts, combined with the President’s tax relief packages and initiatives to increase homeownership and reduce regulatory burdens, will help more communities participate in our growing national prosperity. Community and Regional Development Other Functions Enhancing economic development and trade. The President’s 2006 Budget proposes a new economic development program within the Department of Commerce, the Strengthening America’s Communities Grant Program. The President’s proposal replaces the Discussions of these and other Federal aid programs can be found in the main budget volume and elsewhere. As noted earlier, a detailed listing of budget authority and outlays for all grants to State and local governments is in Table 8–4 in this chapter. PERFORMANCE OF GRANTS TO STATE AND LOCAL GOVERNMENTS The Administration is committed to measuring and improving the performance of Government programs. The Congress mandated in the Government Performance and Results Act of 1993 that performance plans be developed and that the agencies report annual progress against these plans. In addition, this Administration began in the 2004 Budget to assess every Federal program over a five year period in an assessment strategy known as the Program Assessment Rating Tool, or PART. With this budget, the third year of using the PART, the Administration has evaluated about three-fifths of the programs of the Federal Government. The PART system assesses each program on four components (purpose, planning, management, and results/accountability) and gives a score for each of the components. The scores for each component are then weighted—results/accountability carries the greatest weight—and the program is given an overall score. A program is rated effective if it receives an overall score of 85 percent or more, moderately effective if the score is 70 to 84 percent, adequate if the score is 50 to 69 percent, and inadequate if the score is 49 percent or lower. The program is given a rating ‘‘Results Not Demonstrated’’ if the program does not have a good performance measure or does not have data for that measure. Chapter 2 of this volume discusses the PART in more detail. As shown in Table 8–2, 159 of the programs that have been assessed are primarily grants to State and local governments. Of these 159, 72 programs, or 45 percent of all grant programs assessed, received a rating of ‘‘Results Not Demonstrated’’. This is higher than for all programs, in which 29 percent were given this rating. The higher percent of grants that have this rating might be explained in part because of the breadth of purpose of some grants, lack of agreement among grantees and Federal parties on the purpose 8. 129 AID TO STATE AND LOCAL GOVERNMENTS and performance measures, and therefore lack of focused planning to achieve common goals. Table 8–2 also shows that the average weighted score for the 159 grant programs that have been rated by PART was 51 percent, which is a rating of ‘‘adequate’’. These programs had total spending of $154.2 billion in 2004. Of these 159 programs: • 3 were rated effective ($9.9 billion); • 25 were rated moderately effective ($67.4 billion); Table 8–2. • 46 were rated adequate ($24.5 billion); and • 13 were rated ineffective ($9.8 billion). • 72 were rated ‘‘results not demonstrated’’ ($42.5 billion); If the 72 programs rated ‘‘Results Not Demonstrated’’ are excluded, the average score for the remaining 87 programs was 61 percent, higher than the rating for all 159 grants but still a rating of ‘‘adequate’’. SUMMARY OF PART RATINGS AND SCORES FOR GRANTS TO STATE AND LOCAL GOVERNMENTS Average Scores Components All grant programs (159 programs) Purpose .............................................................................................. Planning .............................................................................................. Management ....................................................................................... Results/Accountability ........................................................................ Weighted average 1 ............................................................................ Average rating .................................................................................... Programs excluding grants rated ‘‘results not demonstrated’’ (87 programs) 83% 59% 71% 29% 51% Adequate 84% 75% 77% 43% 61% Adequate Number of grants programs 2004 Program Level (in millions) Effective .............................................................................................. Moderately effective ........................................................................... Adequate ............................................................................................ Ineffective ........................................................................................... Results not demonstrated .................................................................. 3 25 46 13 72 $9.9 67.4 24.5 9.8 42.5 Total number of grant programs rated .............................................. 159 $154.2 Rating 2 1 Weighted as follows: Purpose (20%), Planning (10%), Management (20%), Results/Accountability (50%). rating of effective indicates a score of 85 percent or more; moderately effective, 70–84 percent; adequate, 50–69 percent; and ineffective, 49 percent or less. 2 The The ratings of the largest five of these 159 grant programs are summarized here. More complete summaries of these and other programs are in the enclosed Analytical Perspectives CD ROM. • Department of Transportation: Highway Infrastructure ($32.7 billion in 2004). Rating: Moderately Effective. This program provides financial and technical assistance to States to construct and maintain a national system of roads and bridges. The assessment found that the program has been generally successful in improving highway safety and maintaining mobility, but that it should also take steps to improve oversight of State management of Federal highway dollars. • Department of Housing and Urban Development (HUD): Housing Vouchers ($14.4 billion in 2004). Rating: Moderately Effective. This program provides assistance to extremely low-income households so they can afford to go out on their own and rent apartments in the private market. This program received a relatively high score in com- parison with other HUD programs because it is a potentially cost-effective alternative to other forms of housing assistance. However, some of the Public Housing Authorities (PHAs) that administer the vouchers are poor managers. The Administration is proposing reforms to allow PHAs greater flexibility in the use of funds and to lessen administrative burdens • Department of Education: IDEA Grants to States ($10.1 billion in 2004). Rating: Results Not Demonstrated. The Individuals with Disabilities Education Act (IDEA) grants to States program provides funds for special education and related services to students aged 3–21 with disabilities. While IDEA funding grew from $6.3 billion in 2001 to $10.6 billion in 2004, there is no evidence that this funding has further improved educational outcomes for children with disabilities. • Department of Health and Human Services: Head Start ($6.8 billion in 2004). Rating: Results Not Demonstrated. This program provides grants to 130 ANALYTICAL PERSPECTIVES local public, non-profit, and for-profit programs to help low-income children prepare for school and improve their overall development. The current program design is flawed because it does not hold individual grantees responsible for effectively preparing children for school. • Department of Agriculture: National School Lunch ($6.6 billion for 2004). Rating: Results Not Demonstrated. This program provides funds to States for lunches served to children in schools. This program is generally well designed and has a clear purpose, however, a large proportion of children certified for free and reduced price meal benefits are from households with incomes above the program’s eligibility thresholds. While the assessment was based largely on existing measures, these measures do not adequately demonstrate results. USDA is taking steps to improve the program’s performance measures. Block Grants. One of the most common tools used by the Federal Government is the block grant, particularly in the social services area where States and localities are the service providers. Block grants are embraced for their flexibility to meet local needs and criticized because accountability for results can be difficult when funds are allocated based on formulas and population counts rather than achievements or needs. In addition, block grants pose performance measurement challenges precisely because they can be used for a wide range of activities. The obstacles to measuring and achieving results through block grants are reflected in PART scores: they receive the second lowest average score of the seven PART types, 8 percent of block grant programs assessed to date were rated ineffective, and 45 percent were rated ‘‘results not demonstrated.’’ Nonetheless, the PART shows that some Federal block grant programs are achieving results better than others, effectively combining the flexibility that localities need with the results that taxpayers deserve. In the coming year, the Administration will apply the lessons learned from the effective block grants to several of those performing inadequately. This project will identify the methods used to manage highly rated block grant programs and adapt and implement those practices in large, low-scoring programs. Each of the programs targeted for improvement will develop an action plan and implementation timeline that will be tracked quarterly. The targeted programs will be re-analyzed through the PART in one to two years to assess whether implementing the block grant ‘‘best practices’’ results in improved performance. HISTORICAL PERSPECTIVES In recent decades, Federal aid to State and local governments has become a major factor in the financing of certain government functions. The rudiments of the present system date back to the Civil War. The Morrill Act, passed in 1862, established the land grant colleges and instituted certain federally-required standards for States that received the grants, as is characteristic of the present grant programs. Federal aid was later initiated for agriculture, highways, vocational education and rehabilitation, forestry, and public health. In the depression years, Federal aid was extended to meet in- come security and other social welfare needs. However, Federal grants did not become a significant factor in Federal Government expenditures until after World War II. Table 8–3 displays trends in Federal grants to State and local governments since 1960. Section A shows Federal grants by function. Functions with a substantial amount of grants are shown separately. Grants for the national defense, energy, social security, and the veterans benefits and services functions are combined in the ‘‘other functions’’ line in the table. 8. 131 AID TO STATE AND LOCAL GOVERNMENTS Table 8–3. TRENDS IN FEDERAL GRANTS TO STATE AND LOCAL GOVERNMENTS (Outlays; in billions of dollars) Actual 1960 1965 1970 A. Distribution of grants by function: Natural resources and environment .............................................................................. 0.1 0.2 Agriculture ...................................................................................................................... 0.2 0.5 Transportation ................................................................................................................ 3.0 4.1 Community and regional development ......................................................................... 0.1 0.6 Education, training, employment, and social services ................................................. 0.5 1.1 Health ............................................................................................................................. 0.2 0.6 Income security .............................................................................................................. 2.6 3.5 Administration of Justice ............................................................................................... ............ ............ General government ...................................................................................................... 0.2 0.2 Other .............................................................................................................................. 0.0 0.1 1975 1980 1985 Estimate 1990 1995 2000 2004 2005 2006 0.4 0.6 4.6 1.8 6.4 3.8 5.8 0.0 0.5 0.1 2.4 0.4 5.9 2.8 12.1 8.8 9.4 0.7 7.1 0.2 5.4 0.6 13.0 6.5 21.9 15.8 18.5 0.5 8.6 0.7 4.1 2.4 17.0 5.2 17.1 24.5 27.9 0.1 6.8 0.8 3.7 1.3 19.2 5.0 21.8 43.9 36.8 0.6 2.3 0.8 4.0 0.8 25.8 7.2 30.9 93.6 58.4 1.2 2.3 0.8 4.6 0.7 32.2 8.7 36.7 124.8 68.7 5.3 2.1 0.9 6.0 1.0 41.5 12.6 54.2 189.9 86.0 5.1 9.0 1.1 6.1 1.0 43.9 14.9 58.0 203.3 89.3 3.6 4.5 1.2 6.1 0.7 46.8 15.6 57.6 208.9 91.3 4.5 3.4 1.0 Total ........................................................................................................................... 7.0 10.9 24.1 49.8 91.4 105.9 135.3 225.0 284.7 406.3 425.8 435.7 B. Distribution of grants by BEA category: Discretionary .................................................................................................................. Mandatory ...................................................................................................................... N/A N/A 2.9 8.0 10.2 13.9 21.0 28.8 53.3 38.1 55.5 50.4 63.3 72.0 94.0 131.0 116.7 168.0 164.6 241.7 172.9 252.9 176.7 259.0 Total ........................................................................................................................... 7.0 10.9 24.1 49.8 91.4 105.9 135.3 225.0 284.7 406.3 425.8 435.7 C. Composition: Current dollars: Payments for individuals 1 ......................................................................................... Physical capital 1 ....................................................................................................... Other grants .............................................................................................................. 2.5 3.3 1.2 3.7 5.0 2.2 8.7 7.1 8.3 16.8 10.9 22.2 32.6 22.6 36.2 50.1 24.9 30.9 77.3 27.2 30.9 144.4 39.6 41.0 182.6 48.7 53.4 262.2 59.4 84.7 278.3 61.9 85.6 284.9 64.4 86.4 Total ...................................................................................................................... 7.0 10.9 24.1 49.8 91.4 105.9 135.3 225.0 284.7 406.3 425.8 435.7 Percentage of total grants: Payments for individuals 1 ......................................................................................... Physical capital 1 ....................................................................................................... Other grants .............................................................................................................. 35.3% 47.3% 17.4% 34.1% 45.7% 20.2% 36.2% 29.3% 34.5% 33.6% 21.9% 44.5% 35.7% 24.7% 39.6% 47.3% 23.5% 29.2% 57.1% 20.1% 22.8% 64.2% 17.6% 18.2% 64.1% 17.1% 18.8% 64.5% 14.6% 20.9% 65.4% 14.5% 20.1% 65.4% 14.8% 19.8% Total ...................................................................................................................... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Constant (FY 2000) dollars: Payments for individuals 1 ......................................................................................... Physical capital 1 ....................................................................................................... Other grants .............................................................................................................. 12.0 17.0 10.0 16.9 24.2 15.6 33.5 27.2 44.6 48.0 26.0 83.8 63.9 38.9 89.9 75.0 34.2 53.9 96.6 32.6 42.9 157.6 43.3 47.0 182.6 48.7 53.4 242.8 54.7 74.3 250.6 54.9 72.3 251.0 55.4 70.9 Total ...................................................................................................................... 39.0 56.7 105.3 157.7 192.6 163.1 172.1 247.9 284.7 371.7 377.9 377.3 D. Total grants as a percent of: Federal outlays: Total ........................................................................................................................... Domestic programs 2 ................................................................................................. State and local expenditures ........................................................................................ Gross domestic product ................................................................................................ 7.6% 18.0% 14.8% 1.4% 9.2% 18.3% 15.5% 1.6% 12.3% 23.2% 20.1% 2.4% 15.0% 21.7% 24.0% 3.2% 15.5% 22.2% 27.4% 3.4% 11.2% 18.2% 22.0% 2.6% 10.8% 17.1% 18.9% 2.4% 14.8% 21.6% 22.8% 3.1% 15.9% 22.0% 22.1% 2.9% 17.7% 23.9% 25.0% 3.5% 17.2% 22.8% N/A 3.5% 17.0% 22.5% N/A 3.4% E. As a share of total State and local gross investments: Federal capital grants .................................................................................................... State and local own-source financing ........................................................................... 24.6% 75.4% 25.5% 74.5% 25.4% 74.6% 26.0% 74.0% 35.4% 64.6% 30.2% 69.8% 21.9% 78.1% 26.0% 74.0% 21.9% 78.1% 21.9% 78.1% N/A N/A N/A N/A Total ........................................................................................................................... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% N/A N/A N/A: Not available. * 50 million or less. 1 Grants that are both payments for individuals and capital investment are shown under capital investment. 2 Excludes national defense, international affairs, net interest, and undistributed offsetting receipts Federal grants for transportation increased to $3.0 billion, or 43 percent of all Federal grants, in 1960 after initiation of aid to States to build the Interstate Highway System in the late 1950s. By 1970 there had been significant increases in the relative amounts for education, training, employment, social services, and health (largely Medicaid). In the early and mid-1970s, major new grants were created for natural resources and environment (con- struction of sewage treatment plants), community and regional development (community development block grants), and general government (general revenue sharing). Since the late 1970s changes in the relative amounts among functions reflect steady growth of grants for health (Medicaid) and income security. The functions with the largest amount of grants are health; income security; education, training, employment, and social 132 ANALYTICAL PERSPECTIVES services; and transportation, with combined estimated grant outlays of $371.5 billion, or more than 90 percent of total grant outlays in 2004. The increase in total outlays for grants overall since 1990 has been driven by increases in grants for health, which have increased more than four-fold from $43.9 billion in 1990 to $189.8 billion in 2004. The income security; education, training, employment, and social services; and transportation functions also increased substantially, but at a slower rate than the increase for health. Section B of the Table shows the distribution of grants divided into mandatory and discretionary spending. Funding required for grant programs classified as mandatory is determined in authorizing legislation. Funding levels for mandatory programs can only be changed by changing eligibility criteria or benefit formulas established in law and are usually not limited by the annual appropriations process. Outlays for mandatory grant programs were $241.7 billion in 2004. The three largest mandatory grant programs are Medicaid, with outlays of $192.7 billion in 2006, Temporary Assistance for Needy Families, $18.2 billion, and child nutrition programs, $12.5 billion. The funding level for discretionary grant programs is determined annually through appropriations acts. Outlays for discretionary grant programs were $164.6 billion in 2004. Table 8–4 at the end of this chapter identifies discretionary and mandatory grant programs separately. For more information on the Budget Enforcement Act and these categories, see Chapter 26, ‘‘The Budget System and Concepts’’ in this volume. Section C of Table 8–3 shows the composition of grants divided into three major categories: payments for individuals, grants for physical capital, and other grants. 2 Grant outlays for payments for individuals, which are mainly entitlement programs in which the Federal Government and the States share the costs, have grown significantly as a percent of total grants. They increased from 57 percent of the total in 1990 to 65 percent of the total in 2004. These grants are distributed through State or local governments to provide cash or in-kind benefits that constitute income transfers to individuals or families. The major grant in this category is Medicaid. Temporary Assistance for Needy Families, Food Stamps administration, child nutrition programs, and housing assistance are also large grants in this category. Grants for physical capital assist States and localities with construction and other physical capital activities. The major capital grants are for highways, but there are also grants for airports, mass transit, sewage treatment plant construction, community development, and other facilities. Grants for physical capital were almost half of total grants in 1960, shortly after grants began for construction of the Interstate Highway System. The relative share of these outlays has declined, as payments for individuals have grown. In 2004, grants for physical capital were $59.4 billion, 15 percent of total grants. The other grants are primarily for education, training, employment, and social services. These grants were 20 percent of total grants in 2004. Section C of Table 8–3 also shows these three categories in constant dollars. In constant 2000 dollars, total grants increased from $172.1 billion in 1990 to an estimated $371.7 billion in 2004, an average increase of 5.7 percent per year. During this same period, grants for payments to individuals increased an average of 6.8 percent per year; grants for physical capital an average of 3.8 percent per year, and other grants an average of 4.0 percent per year. In contrast to these increases, outlays for total grants in constant 2000 dollars decreased during the 1980s, from $192.6 billion in 1980 to $172.1 billion in 1990. Section D of this table shows grants as a percentage of Federal outlays, State and local expenditures, and gross domestic product. Grants have increased as a percentage of total Federal outlays from 11 percent in 1990 to 18 percent in 2004. Grants as a percentage of domestic programs were 24 percent in 2004. As a percentage of total State and local expenditures, grants have increased from 19 percent in 1990 to 25 percent in 2004. Section E shows the relative contribution of physical capital grants in assisting States and localities with gross investment. Federal capital grants are estimated to be 22 percent of State and local gross investment in 2004. OTHER INFORMATION ON FEDERAL AID TO STATE AND LOCAL GOVERNMENTS Additional information regarding aid to State and local governments can be found elsewhere in this budget and in other documents. Major public physical capital investment programs providing Federal grants to State and local governments are identified in Chapter 6, ‘‘Federal Investment.’’ Data for summary and detailed grants to State and local governments can be found in many sections of 2 Certain housing grants are classified in the budget as both payments for individuals and physical capital spending. In the text and tables in this section, these grants are included in the category for physical capital spending. a separate budget volume entitled Historical Tables. Section 12 of that document is devoted exclusively to grants to State and local governments. Additional information on grants can be found in Section 6 (Composition of Federal Government Outlays); Section 9 (Federal Government Outlays for Investment: Major Physical Capital, Research and Development, and Education and Training); Section 11 (Federal Government Payments 8. 133 AID TO STATE AND LOCAL GOVERNMENTS for Individuals); and Section 15 (Total (Federal and State and Local) Government Finances). In addition to these sources, a number of other sources of information are available that use slightly different concepts of grants, provide State-by-State information, provide information on how to apply for Federal aid, or display information about audits. The Bureau of the Census in the Department of Commerce provides data on public finances, including Federal aid to State and local governments. The Survey of Current Business, published monthly by the Bureau of Economic Analysis in the Department of Commerce, provides data on the national income and product accounts (NIPA), a broad statistical concept encompassing the entire economy. These accounts include data on Federal grants to State and local governments. Data using the NIPA concepts appear in this volume in Chapter 14, ‘‘National Income and Product Accounts.’’ Federal Aid to States, a report prepared by the Bureau of the Census, shows Federal spending by State for grants for the most recently completed fiscal year. The Consolidated Federal Funds Report is an annual document that shows the distribution of Federal spending by State and county areas and by local govern- mental jurisdictions. It is prepared by the Bureau of the Census. The Federal Assistance Awards Data System (FAADS) provides computerized information about current grant funding. Data on all direct assistance awards are provided quarterly by the Bureau of the Census to the States and to the Congress. The Catalog of Federal Domestic Assistance is a primary reference source for communities wishing to apply for grants and other domestic assistance. The Catalog is prepared by the General Services Administration with data collected by the Office of Management and Budget. It contains a detailed listing of grant and other assistance programs; discussions of eligibility criteria, application procedures, and estimated obligations; and related information. The Catalog is available on the Internet at http://www.cfda.gov. The Federal Audit Clearinghouse maintains an online database (http://harvester.census.gov/sac) that provides access to summary information about audits conducted under OMB Circular A-133, ‘‘Audits to States, Local Governments, and Non-Profit Organizations.’’ Information is available for each audited entity, including the amount of Federal money expended by program and whether there were audit findings. DETAILED FEDERAL AID TABLE Table 8–4, ‘‘Federal Grants to State and Local Governments-Budget Authority and Outlays,’’ provides detailed budget authority and outlay data for grants, in- cluding proposed legislation. This table displays discretionary and mandatory grant programs separately. 134 ANALYTICAL PERSPECTIVES Table 8–4. FEDERAL GRANTS TO STATE AND LOCAL GOVERNMENTS—BUDGET AUTHORITY AND OUTLAYS (in millions of dollars) Budget Authority Function, Category, Agency and Program 2004 Actual 2005 Estimate Outlays 2006 Estimate 2004 Actual 2005 Estimate 2006 Estimate ENERGY Discretionary: Department of Energy: Energy Programs: Energy conservation ........................................................................................................... 271 273 271 270 239 263 Mandatory: Tennessee Valley Authority: Tennessee Valley Authority fund ....................................................................................... 338 369 381 338 369 381 Total, energy ................................................................................................................. 609 642 652 608 608 644 9 9 5 .................... .................... ...................... ...................... 1 70 96 ...................... 42 9 1 106 7 1 96 NATURAL RESOURCES AND ENVIRONMENT Discretionary: Department of Agriculture: Natural Resources Conservation Service: Watershed rehabilitation program ...................................................................................... Resource conservation and development .......................................................................... Watershed and flood prevention operations ...................................................................... Forest Service: State and private forestry ................................................................................................... Management of national forest lands for subsistence uses ............................................. Department of Commerce: National Oceanic and Atmospheric Administration: Operations, research, and facilities .................................................................................... Pacific coastal salmon recovery ......................................................................................... Procurement, acquisition and construction ........................................................................ Department of the Interior: Office of Surface Mining Reclamation and Enforcement: Regulation and technology ................................................................................................. Abandoned mine reclamation fund .................................................................................... Bureau of Reclamation: Bureau of Reclamation loan subsidy ................................................................................. United States Fish and Wildlife Service: State and tribal wildlife grants ........................................................................................... Federal aid in wildlife restoration ....................................................................................... Cooperative endangered species conservation fund ........................................................ Landowner incentive program ............................................................................................ National Park Service: Urban park and recreation fund ......................................................................................... National recreation and preservation ................................................................................. Land acquisition and State assistance .............................................................................. Historic preservation fund ................................................................................................... Environmental Protection Agency: State and tribal assistance grants ..................................................................................... Hazardous substance superfund ........................................................................................ Leaking underground storage tank trust fund ................................................................... Total, discretionary ........................................................................................................... 342 6 342 6 209 5 277 6 322 6 333 5 106 85 105 108 88 90 90 90 8 62 83 52 57 83 80 43 89 8 57 173 58 168 59 168 55 177 57 192 58 166 21 ...................... 3 21 ...................... 69 69 74 .................... ...................... ...................... 82 80 80 30 22 40 38 13 69 4 61 68 13 ...................... 89 90 32 34 .................... ...................... ...................... 60 61 37 94 92 2 74 72 66 10 64 95 70 26 60 114 72 13 45 107 71 .................... 3,877 103 66 3,575 64 59 2,961 60 60 3,905 51 62 3,592 40 59 3,723 52 60 5,408 5,080 4,014 5,139 5,092 5,069 278 421 372 4 1 8 2 8 2 222 35 318 214 36 342 235 37 346 Mandatory: Department of the Interior: Bureau of Land Management: Miscellaneous permanent payment accounts .................................................................... 279 428 369 Minerals Management Service: National forests fund, Payment to States .......................................................................... 4 8 8 Leases of lands acquired for flood control, navigation, and allied purposes .................. 1 2 2 United States Fish and Wildlife Service: Federal aid in wildlife restoration ....................................................................................... 223 250 250 Cooperative endangered species conservation fund ........................................................ 35 36 37 Sport fish restoration .......................................................................................................... 345 339 361 Departmental Management: Everglades watershed protection ....................................................................................... .................... ...................... ...................... Everglades restoration account .......................................................................................... .................... ...................... ...................... 6 ...................... ...................... 1 1 1 8. 135 AID TO STATE AND LOCAL GOVERNMENTS Table 8–4. FEDERAL GRANTS TO STATE AND LOCAL GOVERNMENTS—BUDGET AUTHORITY AND OUTLAYS—Continued (in millions of dollars) Budget Authority Function, Category, Agency and Program 2004 Actual 2005 Estimate Outlays 2006 Estimate 2004 Actual 2005 Estimate 2006 Estimate Department of the Treasury: Financial Management Service: Payment to terrestrial wildlife habitat restoration trust fund ............................................. 5 5 5 5 5 5 Total, mandatory ............................................................................................................... 892 1,068 1,032 870 1,029 1,006 Total, natural resources and environment ............................................................... 6,300 6,148 5,046 6,009 6,121 6,075 AGRICULTURE Discretionary: Department of Agriculture: Cooperative State Research, Education, and Extension Service: Extension activities ............................................................................................................. Outreach for socially disadvantaged farmers .................................................................... Research and education activities ..................................................................................... Integrated activities ............................................................................................................. Agricultural Marketing Service: Payments to States and possessions ............................................................................... Farm Service Agency: State mediation grants ....................................................................................................... 444 6 241 23 451 6 242 24 437 6 139 8 421 4 242 22 423 6 241 23 410 6 183 27 3 10 1 1 7 8 4 4 4 4 4 4 Total, discretionary ........................................................................................................... 721 737 595 694 704 638 Mandatory: Department of Agriculture: Office of the Secretary: Fund for rural America ....................................................................................................... .................... ...................... ...................... Farm Service Agency: Commodity Credit Corporation fund .................................................................................. 294 250 84 7 7 ...................... 294 250 84 Total, mandatory ............................................................................................................... 294 250 84 301 257 84 Total, agriculture .......................................................................................................... 1,015 987 679 995 961 722 COMMERCE AND HOUSING CREDIT Mandatory: Department of Commerce: National Oceanic and Atmospheric Administration: Promote and develop fishery products and research pertaining to American fisheries .. 18 13 1 23 21 8 TRANSPORTATION Discretionary: Department of Homeland Security: Border and Transportation Security: Surface transportation security ........................................................................................... Department of Transportation: Federal Aviation Administration: Grants-in-aid for airports .................................................................................................... Grants-in-aid for airports (Airport and airway trust fund) .................................................. Federal Highway Administration: State infrastructure banks .................................................................................................. Appalachian development highway system ....................................................................... Appalachian development highway system (Highway trust fund) .................................... Federal-aid highways .......................................................................................................... Miscellaneous appropriations ............................................................................................. Miscellaneous highway trust funds .................................................................................... Federal Motor Carrier Safety Administration: National motor carrier safety program ............................................................................... Motor carrier safety ............................................................................................................ Motor Carrier Safety Grants ............................................................................................... National Highway Traffic Safety Administration: Highway traffic safety grants .............................................................................................. Federal Railroad Administration: Alaska railroad rehabilitation .............................................................................................. Federal Transit Administration: Job access and reverse commute grants ......................................................................... 173 ...................... ...................... 173 ...................... ...................... 2 ...................... ...................... .................... .................... ...................... ...................... 2,958 .................... ...................... ...................... 124 79 ...................... .................... ...................... ...................... .................... ...................... ...................... 3 –2 ...................... 50 34 ...................... 5 91 45 29,791 134 256 1 3,041 1 3,263 3 180 7 31,457 260 276 1 163 7 34,070 195 237 172 172 ...................... .................... ...................... ...................... .................... 73 ...................... .................... 66 ...................... .................... ...................... 232 .................... ...................... 65 213 448 194 227 322 25 ...................... 20 37 15 104 ...................... ...................... 81 113 82 25 211 136 ANALYTICAL PERSPECTIVES Table 8–4. FEDERAL GRANTS TO STATE AND LOCAL GOVERNMENTS—BUDGET AUTHORITY AND OUTLAYS—Continued (in millions of dollars) Budget Authority Function, Category, Agency and Program Outlays 2004 Actual 2005 Estimate Interstate transfer grants-transit ......................................................................................... Washington Metropolitan Area Transit Authority ............................................................... Formula grants .................................................................................................................... Capital investment grants ................................................................................................... Transit planning and research ........................................................................................... Major capital investments grants ....................................................................................... Discretionary grants (Highway trust fund, mass transit account) ..................................... Formula Grants and Research ........................................................................................... Pipeline and Hazardous Materials Safety Administration: Pipeline safety .................................................................................................................... .................... .................... 4,740 3,189 17 .................... .................... .................... ...................... ...................... ...................... ...................... ...................... 1,452 ...................... 7,056 19 19 19 15 19 19 Total, discretionary ........................................................................................................... 8,831 9,119 9,338 41,459 43,857 46,737 3,647 3,697 2,531 .................... ...................... ...................... 34,239 34,150 33,763 .................... ...................... ...................... 12 13 13 12 13 14 Total, mandatory ............................................................................................................... 37,898 37,860 36,307 12 13 14 Total, transportation .................................................................................................... 46,729 46,979 45,645 41,471 43,870 46,751 716 664 452 797 792 741 48 44 25 41 39 51 –40 .................... ...................... –33 Mandatory: Department of Transportation: Federal Aviation Administration: Grants-in-aid for airports (Airport and airway trust fund) .................................................. Federal Highway Administration: Federal-aid highways .......................................................................................................... Pipeline and Hazardous Materials Safety Administration: Emergency preparedness grants ....................................................................................... COMMUNITY AND REGIONAL DEVELOPMENT Discretionary: Department of Agriculture: Rural Development: Rural community advancement program ........................................................................... Rural Utilities Service: Distance learning, telemedicine, and broadband program ............................................... Rural Housing Service: Rural community grants ..................................................................................................... Department of Commerce: Economic Development Administration: Economic development assistance programs ................................................................... Economic Development Challenge: Strengthening America’s communities grant program ...................................................... Department of Homeland Security: Departmental Management: State and local programs ................................................................................................... Firefighter assistance grants .............................................................................................. Emergency Preparedness and Response: Operating Expenses ........................................................................................................... Mitigation grants ................................................................................................................. Disaster Relief .................................................................................................................... Department of Housing and Urban Development: Community Planning and Development: Community development fund ............................................................................................ Urban development action grants ...................................................................................... Community development loan guarantees subsidy ........................................................... Brownfields redevelopment ................................................................................................ Empowerment zones/enterprise communities ................................................................... Office of Lead Hazard Control and Healthy Homes: Lead hazard reduction ........................................................................................................ Department of the Interior: Bureau of Indian Affairs: Operation of Indian programs ............................................................................................ Indian guaranteed loan subsidy ......................................................................................... Appalachian Regional Commission ............................................................................................ Delta Regional Authority ............................................................................................................. Denali Commission ...................................................................................................................... .................... ...................... 278 2,870 715 2004 Actual ...................... .................... ...................... 12 ...................... 4,724 ...................... 2,789 ...................... 10 1,562 .................... ...................... 161 7,077 .................... 254 ...................... .................... ...................... 2,950 746 2006 Estimate 337 2005 Estimate 2006 Estimate 3 ...................... 4 3 3,380 2,328 3,686 2,513 94 71 174 578 96 103 733 2,701 361 325 3,710 .................... ...................... 74 2,665 500 1,535 508 2,584 551 3,116 702 .................... ...................... ...................... .................... ...................... ...................... 3,411 7,261 1,819 387 23 3,037 169 91 4,534 118 59 4,523 4,933 4,853 ...................... –30 ...................... ...................... 7 7 ...................... 25 24 ...................... 15 10 ...................... 5,388 5,373 5,351 1 ...................... ...................... 7 8 7 10 13 14 48 50 50 174 167 119 113 134 139 146 8 59 5 58 148 9 59 4 66 148 6 59 4 3 245 5 68 12 16 126 7 70 13 24 152 7 81 11 32 8. 137 AID TO STATE AND LOCAL GOVERNMENTS Table 8–4. FEDERAL GRANTS TO STATE AND LOCAL GOVERNMENTS—BUDGET AUTHORITY AND OUTLAYS—Continued (in millions of dollars) Budget Authority Function, Category, Agency and Program Total, discretionary ........................................................................................................... 2004 Actual 2005 Estimate Outlays 2006 Estimate 13,549 17,155 Mandatory: Department of Agriculture: Rural Housing Service: Rural community grants ..................................................................................................... .................... Department of Housing and Urban Development: Community Planning and Development: Community development loan guarantees subsidy ........................................................... 26 30 9,470 2004 Actual 2005 Estimate 14,939 15,520 10 .................... ...................... 33 2 ...................... 12,578 2006 Estimate 26 2 ...................... Total, mandatory ............................................................................................................... 26 32 10 26 2 33 Total, community and regional development ........................................................... 13,575 17,187 9,480 12,604 14,941 15,553 19 20 ...................... 7 ...................... ...................... 36 20 36 26 26 14 .................... ...................... ...................... 1,222 1,236 1,233 .................... ...................... ...................... .................... ...................... ...................... 13,800 14,797 16,384 6,041 5,473 5,190 155 1,228 1 51 12,417 6,542 EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES Discretionary: Department of Commerce: National Telecommunications and Information Administration: Public telecommunications facilities, planning and construction ....................................... Information infrastructure grants ........................................................................................ Department of Education: Office of Elementary and Secondary Education: Reading excellence ............................................................................................................ Impact aid ........................................................................................................................... Chicago litigation settlement .............................................................................................. Education reform ................................................................................................................ Education for the disadvantaged ....................................................................................... School improvement programs .......................................................................................... Office of Indian Education: Indian education ................................................................................................................. Office of Innovation and Improvement: Innovation and improvement .............................................................................................. Office of Safe and Drug-Free Schools: Safe schools and citizenship education ............................................................................ Office of English Language Acquisition: English language acquisition .............................................................................................. Office of Special Education and Rehabilitative Services: Special education ............................................................................................................... Rehabilitation services and disability research .................................................................. American Printing House for the Blind .............................................................................. Office of Vocational and Adult Education: Vocational and adult education .......................................................................................... Office of Postsecondary Education: Higher education ................................................................................................................. Federal Student Aid: Student financial assistance ............................................................................................... Institute of Education Sciences: Institute of education sciences ........................................................................................... Department of Health and Human Services: Administration for Children and Families: Promoting safe and stable families ................................................................................... Children and families services programs .......................................................................... Administration on Aging: Aging services programs .................................................................................................... Department of the Interior: Bureau of Indian Affairs: Operation of Indian programs ............................................................................................ Department of Labor: Employment and Training Administration: Training and employment services .................................................................................... Community service employment for older Americans ....................................................... State unemployment insurance and employment service operations .............................. Unemployment trust fund ................................................................................................... Corporation for National and Community Service: Domestic volunteer service programs, operating expenses ............................................. National and community service programs, operating expenses ..................................... 64 ...................... 1,321 1,249 1 ...................... 103 ...................... 14,524 14,768 6,636 5,750 116 115 116 111 123 115 621 550 1,120 4 450 576 815 820 270 13 462 746 610 617 635 536 759 573 11,194 129 17 11,456 135 17 11,122 83 17 9,465 159 18 9,884 203 21 11,095 101 17 2,060 1,974 992 1,909 1,963 1,886 427 414 ...................... 417 520 430 66 66 ...................... 65 69 52 .................... 25 57 43 38 28 400 8,420 399 8,653 407 8,031 420 8,326 393 8,519 401 8,285 1,354 1,370 1,351 1,320 1,345 1,360 119 129 116 110 91 85 3,476 97 142 1,059 3,509 97 141 1,061 4,232 97 68 256 3,883 98 163 1,110 3,372 98 143 1,065 3,655 97 78 298 150 280 150 276 120 301 82 207 82 255 96 220 138 ANALYTICAL PERSPECTIVES Table 8–4. FEDERAL GRANTS TO STATE AND LOCAL GOVERNMENTS—BUDGET AUTHORITY AND OUTLAYS—Continued (in millions of dollars) Budget Authority Function, Category, Agency and Program Corporation for Public Broadcasting: Corporation for Public Broadcasting .................................................................................. District of Columbia: District of Columbia General and Special Payments: Federal payment for resident tuition support .................................................................... Federal payment for school improvement ......................................................................... National Endowment for the Arts: National Endowment for the Arts: grants and administration ........................................... Institute of Museum and Library Services: Office of Museum and Library Services: grants and administration ................................ Total, discretionary ........................................................................................................... 2004 Actual 2005 Estimate Outlays 2006 Estimate 2004 Actual 2005 Estimate 2006 Estimate 437 466 390 437 466 390 17 40 26 40 33 42 17 40 26 40 33 42 40 41 41 37 39 41 250 269 250 196 279 363 53,425 54,342 52,954 49,636 53,416 52,870 Mandatory: Department of Education: Office of Special Education and Rehabilitative Services: Rehabilitation services and disability research .................................................................. 2,584 2,636 2,720 2,453 2,583 2,684 Department of Health and Human Services: Administration for Children and Families: Social services block grant ................................................................................................ 1,700 1,700 1,700 1,752 1,764 1,762 Department of Labor: Employment and Training Administration: Welfare to work jobs .......................................................................................................... .................... ...................... ...................... 181 6 ...................... Federal unemployment benefits and allowances .............................................................. 259 259 259 179 245 257 Foreign labor certification processing ................................................................................ .................... ...................... 3 .................... ...................... 3 Total, mandatory ............................................................................................................... 4,543 4,595 4,682 4,565 4,598 4,706 Total, education, training, employment, and social services ................................ 57,968 58,937 57,636 54,201 58,014 57,576 44 45 43 44 45 1 .................... 1 1 HEALTH Discretionary: Department of Agriculture: Food Safety and Inspection Service: Salaries and expenses ....................................................................................................... 43 Department of Health and Human Services: Food and Drug Administration: Salaries and expenses ....................................................................................................... .................... Health Resources and Services Administration: Health resources and services ........................................................................................... 3,300 Centers for Disease Control and Prevention: Disease control, research, and training ............................................................................. 2,461 Substance Abuse and Mental Health Services Administration: Substance abuse and mental health services .................................................................. 2,318 Departmental Management: General departmental management ................................................................................... 1,621 Department of Labor: Occupational Safety and Health Administration: Salaries and expenses ....................................................................................................... 102 Mine Safety and Health Administration: Salaries and expenses ....................................................................................................... 8 Total, discretionary ........................................................................................................... 9,853 1 3,222 3,132 2,807 2,741 2,599 2,798 2,535 2,291 2,789 2,928 2,353 2,315 2,241 2,297 2,332 1,760 1,589 1,497 1,232 1,177 101 92 102 101 92 8 8 8 8 8 10,287 9,717 8,989 9,213 9,182 Mandatory: Department of Health and Human Services: Health Resources and Services Administration: Health resources and services ........................................................................................... Centers for Medicare and Medicaid Services: Grants to States for medicaid ............................................................................................ State children’s health insurance fund .............................................................................. State grants and demonstrations ....................................................................................... 182,753 3,175 142 182,420 4,082 393 215,627 4,082 1,294 176,231 4,607 48 188,497 5,343 200 192,718 6,233 799 Total, mandatory ............................................................................................................... 186,095 186,895 221,003 180,894 194,040 199,750 25 ...................... ...................... 8 ...................... ...................... 8. 139 AID TO STATE AND LOCAL GOVERNMENTS Table 8–4. FEDERAL GRANTS TO STATE AND LOCAL GOVERNMENTS—BUDGET AUTHORITY AND OUTLAYS—Continued (in millions of dollars) Budget Authority Function, Category, Agency and Program Total, health .................................................................................................................. INCOME SECURITY Discretionary: Department of Agriculture: Food and Nutrition Service: Food donations programs .................................................................................................. Commodity assistance program ......................................................................................... Special supplemental nutrition program for women, infants, and children (WIC) ........... Department of Health and Human Services: Administration for Children and Families: Low income home energy assistance ............................................................................... Refugee and entrant assistance ........................................................................................ Payments to States for the child care and development block grant .............................. Department of Homeland Security: Emergency Preparedness and Response: Emergency food and shelter .............................................................................................. Department of Housing and Urban Development: Public and Indian Housing Programs: Public housing operating fund ........................................................................................... Drug elimination grants for low-income housing ............................................................... Revitalization of severely distressed public housing (HOPE VI) ...................................... Native Hawaiian Housing Block Grant .............................................................................. Tenant based rental assistance ......................................................................................... Project-based rental assistance ......................................................................................... Public housing capital fund ................................................................................................ Native American housing block grant ................................................................................ Housing certificate fund ...................................................................................................... Community Planning and Development: Homeless assistance grants .............................................................................................. Home investment partnership program .............................................................................. Housing opportunities for persons with AIDS ................................................................... Rural housing and economic development ....................................................................... Housing Programs: Homeownership and opportunity for people everywhere grants (HOPE grants) ............. Housing for persons with disabilities ................................................................................. Housing for the elderly ....................................................................................................... Department of Labor: Employment and Training Administration: Unemployment trust fund ................................................................................................... Social Security Administration: Supplemental security income program ............................................................................. Total, discretionary ........................................................................................................... 2004 Actual 2005 Estimate 195,948 Outlays 2006 Estimate 197,182 2004 Actual 230,720 .................... ...................... ...................... 164 193 193 4,712 5,235 5,510 2005 Estimate 189,883 2006 Estimate 203,253 208,932 3 ...................... ...................... 170 186 194 4,860 5,087 5,465 1,889 281 2,080 2,182 301 2,076 2,000 369 2,076 1,891 425 2,131 2,115 399 2,092 2,026 419 2,076 152 153 153 152 153 153 3,579 2,438 3,407 3,434 3,600 3,403 .................... –5 ...................... 46 17 ...................... 149 143 –143 596 590 567 .................... ...................... 9 .................... ...................... 1 .................... 10,600 15,845 .................... 10,600 15,845 .................... 346 388 .................... 208 464 2,696 2,579 2,327 3,414 3,502 3,507 650 601 583 675 717 727 13,136 2,609 ...................... 14,667 4,230 87 1,260 2,006 295 25 1,241 1,440 1,900 1,941 282 268 24 ...................... 1,232 1,597 254 23 1,300 1,650 261 25 1,431 1,700 262 25 .................... ...................... ...................... 249 238 120 773 741 741 2 2 1,096 2 255 875 2 258 875 2,619 2,674 2,633 2,650 2,666 2,639 3 3 3 3 3 3 36,718 36,554 39,863 39,323 40,533 42,129 1,123 722 1,122 846 1,129 822 4,519 12,283 Mandatory: Department of Agriculture: Agricultural Marketing Service: Funds for strengthening markets, income, and supply (section 32) ................................ Food and Nutrition Service: Food stamp program .......................................................................................................... Child nutrition programs ..................................................................................................... Department of Health and Human Services: Administration for Children and Families: Payments to States for child support enforcement and family support programs .......... Contingency fund ................................................................................................................ Payments to States for foster care and adoption assistance .......................................... Child care entitlement to States ........................................................................................ Temporary assistance for needy families .......................................................................... 4,277 11,250 4,438 11,632 4,204 11,035 4,410 11,990 4,506 12,303 4,413 1,958 6,814 2,732 17,209 4,074 3,272 3,815 2,000 ...................... .................... 6,806 6,580 6,340 2,717 2,717 2,695 17,649 17,148 17,725 3,934 30 6,474 2,718 18,099 4,031 45 6,561 2,718 18,164 Total, mandatory ............................................................................................................... 49,776 50,038 47,641 46,660 48,784 49,150 Total, income security ................................................................................................. 86,494 86,592 87,504 85,983 89,317 91,279 140 ANALYTICAL PERSPECTIVES Table 8–4. FEDERAL GRANTS TO STATE AND LOCAL GOVERNMENTS—BUDGET AUTHORITY AND OUTLAYS—Continued (in millions of dollars) Budget Authority Function, Category, Agency and Program 2004 Actual 2005 Estimate Outlays 2006 Estimate 2004 Actual 2005 Estimate 2006 Estimate SOCIAL SECURITY Discretionary: Social Security Administration: Federal disability insurance trust fund ............................................................................... 4 4 4 4 4 4 Mandatory: Social Security Administration: Federal disability insurance trust fund ............................................................................... 3 30 52 3 17 41 Total, social security ................................................................................................... 7 34 56 7 21 45 VETERANS BENEFITS AND SERVICES Discretionary: Department of Veterans Affairs: Medical Programs: Medical services ................................................................................................................. Medical facilities .................................................................................................................. 439 101 488 114 264 12 439 15 488 17 264 2 Total, veterans benefits and services ....................................................................... 540 602 276 454 505 266 ADMINISTRATION OF JUSTICE Discretionary: Department of Health and Human Services: Administration for Children and Families: Violent crime reduction programs ...................................................................................... .................... ...................... ...................... 1 2 ...................... Department of Homeland Security: Departmental Management: State and local programs ................................................................................................... 497 400 400 46 212 355 Department of Housing and Urban Development: Fair Housing and Equal Opportunity: Fair housing activities ......................................................................................................... 48 46 39 47 44 42 Department of Justice: Legal Activities and U.S. Marshals: Assets forfeiture fund ......................................................................................................... .................... 21 21 .................... 21 21 Office of Justice Programs: Justice assistance ............................................................................................................... 135 150 970 291 108 1,434 State and local law enforcement assistance ..................................................................... 1,282 1,151 ...................... 2,329 1,049 455 Juvenile justice programs ................................................................................................... 297 331 ...................... 283 221 136 Community oriented policing services ............................................................................... 742 499 22 947 575 489 Violence Against Women Office ........................................................................................ 366 372 352 39 263 353 Equal Employment Opportunity Commission: Salaries and expenses ....................................................................................................... 33 31 31 33 31 33 Federal Drug Control Programs: High-intensity drug trafficking areas program .................................................................... 195 226 ...................... 191 222 136 State Justice Institute: State Justice Institute: salaries and expenses .................................................................. 2 3 ...................... 2 ...................... ...................... Total, discretionary ........................................................................................................... 3,597 3,230 1,835 4,209 2,748 3,454 275 289 293 267 277 287 621 540 614 533 541 643 75 75 75 75 75 75 Total, mandatory ............................................................................................................... 971 904 982 875 893 1,005 Total, administration of justice .................................................................................. 4,568 4,134 2,817 5,084 3,641 4,459 Mandatory: Department of Justice: Legal Activities and U.S. Marshals: Assets forfeiture fund ......................................................................................................... Office of Justice Programs: Crime victims fund .............................................................................................................. Department of the Treasury: Departmental Offices: Treasury forfeiture fund ...................................................................................................... 8. 141 AID TO STATE AND LOCAL GOVERNMENTS Table 8–4. FEDERAL GRANTS TO STATE AND LOCAL GOVERNMENTS—BUDGET AUTHORITY AND OUTLAYS—Continued (in millions of dollars) Budget Authority Function, Category, Agency and Program 2004 Actual 2005 Estimate Outlays 2006 Estimate 2004 Actual GENERAL GOVERNMENT Discretionary: Department of Health and Human Services: Administration for Children and Families: Disabled voter services ...................................................................................................... .................... ...................... ...................... Department of the Interior: United States Fish and Wildlife Service: National wildlife refuge fund ............................................................................................... 14 14 14 Departmental Management: Payments in lieu of taxes .................................................................................................. 225 227 200 Insular Affairs: Assistance to territories ...................................................................................................... 48 48 46 Trust Territory of the Pacific Islands ................................................................................. .................... ...................... ...................... District of Columbia: District of Columbia Courts: Federal payment to the District of Columbia courts ......................................................... 167 189 222 Defender services in District of Columbia courts .............................................................. 33 38 45 Federal payment for family court act ................................................................................. .................... ...................... ...................... District of Columbia General and Special Payments: Federal support for economic development and management reforms in the District ... 108 69 13 Election Assistance Commission: Election reform programs ................................................................................................... 1,491 ...................... ...................... Total, discretionary ........................................................................................................... Mandatory: Department of Agriculture: Forest Service: Forest Service permanent appropriations .......................................................................... Department of Energy: Energy Programs: Payments to States under Federal Power Act .................................................................. Department of Homeland Security: Border and Transportation Security: Refunds, transfers, and expenses of operation, Puerto Rico .......................................... Department of the Interior: Bureau of Land Management: Miscellaneous permanent payment accounts .................................................................... Minerals Management Service: Mineral leasing and associated payments ........................................................................ United States Fish and Wildlife Service: National wildlife refuge fund ............................................................................................... Insular Affairs: Assistance to territories ...................................................................................................... Payments to the United States territories, fiscal assistance ............................................ Department of the Treasury: Financial Management Service: Temporary State fiscal assistance fund ............................................................................ Alcohol and Tobacco Tax and Trade Bureau: Internal revenue collections for Puerto Rico ..................................................................... Corps of Engineers-Civil Works: Permanent appropriations .................................................................................................. 2005 Estimate 2006 Estimate 3 8 4 14 14 14 225 227 200 49 4 54 3 58 2 136 186 217 39 37 45 12 ...................... ...................... 108 69 13 1,283 1,038 ...................... 2,086 585 540 1,873 1,636 553 410 413 410 397 413 410 3 3 3 3 3 3 85 89 98 79 89 98 5 ...................... 5 5 5 ...................... 1,164 1,817 1,788 1,164 1,817 1,788 7 6 7 7 7 7 28 114 28 115 28 115 22 113 22 115 29 115 5,000 ...................... ...................... 5,000 ...................... ...................... 336 404 359 336 404 359 9 9 9 9 9 9 Total, mandatory ............................................................................................................... 7,161 2,889 2,817 7,135 2,884 2,818 Total, general government .......................................................................................... 9,247 3,474 3,357 9,008 4,520 3,371 Total, Grants ............................................................................................................. Discretionary .......................................................................................................... Mandatory .............................................................................................................. 423,018 135,003 288,015 422,911 137,968 284,943 443,869 128,877 314,992 406,330 164,628 241,702 425,793 172,886 252,907 435,681 176,685 258,996 142 ANALYTICAL PERSPECTIVES Table 8–5. Summary of Programs by Agency, Bureau, and Program (obligations in millions of dollars) Agency, Bureau, and Program FY 2004 (actual) Estimated FY 2005 obligations from: Previous authority New authority Department of Agriculture, Food and Nutrition Service National School Lunch Program (10.555) ...................................................................................................................... 6,633 126 6,841 Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (10.557) ...................................... 5,038 5 5,237 Child and Adult Care Food Program (10.558) .............................................................................................................. 2,056 .................. 2,066 State Administrative Matching Grants for Food Stamp Program (10.561) ................................................................... 2,310 .................. 2,402 Department of Education, Office of Elementary and Secondary Education Title I Grants to Local Educational Agencies (84.010) ................................................................................................. 12,342 .................. 12,740 Improving Teacher Quality State Grants (84.336) ......................................................................................................... 2,930 .................. 2,917 Department of Education, Office of Special Education and Rehabilitative Services Special Education—Grants to States (84.027) .............................................................................................................. 10,068 .................. 10,590 Rehabilitation Services—Vocational Rehabilitation Grants to States (84.126) ............................................................. 2,584 .................. 2,636 Department of Health and Human Services, Centers for Medicare and Medicaid Services State Children’s Health Insurance Program (93.767) .................................................................................................... 3,175 .................. 4,082 Grants to States for Medicaid (93.778) ......................................................................................................................... 184,382 .................. 188,535 Department of Health and Human Services, Administration for Children and Families Temporary Assistance for Needy Families (TANF)—Family Assistance Grants (93.558) ........................................... 17,183 .................. 17,100 Child Support Enforcement—Federal Share of State and Local Administrative Costs and Incentives (93.563) ....... 3,994 .................. 4,056 Child Care and Development Block Grant (93.575) ...................................................................................................... 2,087 .................. 2,083 Child Care and Development Fund—Mandatory (93.596a) .......................................................................................... 1,235 .................. 1,235 Child Care and Development Fund—Matching (93.596b) ............................................................................................ 1,496 .................. 1,482 Head Start (93.600) ........................................................................................................................................................ 6,774 .................. 6,843 Foster Care—Title IV–E (93.658) ................................................................................................................................... 4,714 .................. 4,627 Department of Homeland Security, Departmental Management State Homeland Security Grant Program (97.067) ....................................................................................................... 2,207 .................. 1,664 Department of Housing and Urban Development, Public and Indian Housing Programs Public Housing Operating Fund (14.850) ...................................................................................................................... 3,581 3 2,438 Section 8 Moderate Rehabilitation (14.856) .................................................................................................................. 135 2 225 Housing Choice Vouchers (14.871) ............................................................................................................................... 14,511 245 14,507 Public Housing Capital Fund (14.872) ........................................................................................................................... 3,111 287 2,579 Department of Housing and Urban Development, Community Planning and Development HOME Investment Partnerships Program (14.239) ....................................................................................................... 2,006 .................. 1,900 Department of Transportation, Federal Aviation Administration Airport Improvement Program (20.106a) ....................................................................................................................... 3,498 .................. 3,472 Airport Improvement Program—Emergency Response Fund (20.106b) ...................................................................... 1 * .................. Airport Improvement Program—Emergency Assistance to Airports (20.106c) ............................................................. .................. .................. 25 Department of Transportation, Federal Highway Administration Highway Planning and Construction (20.205) ............................................................................................................... 30,280 29,557 10,886 Department of Transportation, Federal Transit Administration Federal Transit Formula Grants and Research (Section 5307) (20.507) ..................................................................... 3,836 .................. 6,012 Total .................................................................................................................................................................................... * $500,000 or less 332,169 30,225 319,181 FY 2006 (estimated) Total 6,967 5,241 2,066 2,402 7,314 5,576 2,174 2,481 12,740 2,917 13,342 2,917 10,590 2,636 11,098 2,720 4,082 188,535 4,082 215,571 17,100 4,056 2,083 1,235 1,482 6,843 4,627 17,100 4,174 2,083 1,235 1,482 6,888 4,645 1,664 1,240 2,441 227 14,752 2,866 3,407 205 15,845 2,327 1,900 1,941 3,472 3,000 * .................. 25 .................. 40,444 35,065 6,012 6,863 349,406 374,776 8. 143 AID TO STATE AND LOCAL GOVERNMENTS Table 8–6. Summary of Programs by State (obligations in millions of dollars) Programs distributed State or Territory All programs FY 2004 (actual) FY 2006 (estimated) FY 2006 Percentage of distributed total Estimated FY 2005 obligations from: FY 2004 (actual) Previous authority Alabama ..................................................................................................................... 4,868 4,868 531 Alaska ......................................................................................................................... 1,560 1,560 148 Arizona ....................................................................................................................... 6,053 6,053 431 Arkansas ..................................................................................................................... 3,497 3,497 366 California .................................................................................................................... 40,688 40,688 2,580 Colorado ..................................................................................................................... 3,236 3,236 283 Connecticut ................................................................................................................. 3,877 3,877 320 Delaware .................................................................................................................... 869 869 120 District of Columbia ................................................................................................... 1,679 1,679 142 Florida ......................................................................................................................... 14,656 14,656 1,157 Georgia ....................................................................................................................... 9,322 9,322 1,078 Hawaii ......................................................................................................................... 1,386 1,386 229 Idaho ........................................................................................................................... 1,369 1,369 193 Illinois .......................................................................................................................... 12,166 12,166 952 Indiana ........................................................................................................................ 5,633 5,633 503 Iowa ............................................................................................................................ 2,761 2,761 294 Kansas ........................................................................................................................ 2,458 2,458 317 Kentucky ..................................................................................................................... 5,180 5,180 401 Louisiana .................................................................................................................... 6,119 6,119 583 Maine .......................................................................................................................... 2,093 2,093 121 Maryland ..................................................................................................................... 5,024 5,024 440 Massachusetts ............................................................................................................ 8,222 8,222 1,078 Michigan ..................................................................................................................... 9,731 9,731 787 Minnesota ................................................................................................................... 5,005 5,005 414 Mississippi .................................................................................................................. 4,261 4,261 334 Missouri ...................................................................................................................... 6,550 6,550 517 Montana ...................................................................................................................... 1,171 1,171 196 Nebraska .................................................................................................................... 1,790 1,790 188 Nevada ....................................................................................................................... 1,521 1,521 196 New Hampshire ......................................................................................................... 1,228 1,228 135 New Jersey ................................................................................................................ 8,524 8,524 774 New Mexico ............................................................................................................... 3,053 3,053 245 New York ................................................................................................................... 36,463 36,463 1,526 North Carolina ............................................................................................................ 9,111 9,111 633 North Dakota .............................................................................................................. 874 874 160 Ohio ............................................................................................................................ 12,792 12,792 1,129 Oklahoma ................................................................................................................... 3,777 3,777 412 Oregon ........................................................................................................................ 3,455 3,455 274 Pennsylvania .............................................................................................................. 14,617 14,617 1,538 Rhode Island .............................................................................................................. 1,686 1,686 143 South Carolina ........................................................................................................... 4,766 4,766 392 South Dakota ............................................................................................................. 962 962 201 Tennessee .................................................................................................................. 7,763 7,763 744 Texas .......................................................................................................................... 20,980 20,980 1,726 Utah ............................................................................................................................ 1,975 1,975 231 Vermont ...................................................................................................................... 1,002 1,002 142 Virginia ........................................................................................................................ 5,073 5,073 713 Washington ................................................................................................................. 5,848 5,848 460 West Virginia .............................................................................................................. 2,682 2,682 371 Wisconsin ................................................................................................................... 5,103 5,103 507 Wyoming ..................................................................................................................... 693 693 148 American Samoa ....................................................................................................... 55 55 1 Guam .......................................................................................................................... 121 121 1 Northern Mariana Islands .......................................................................................... 57 57 * Puerto Rico ................................................................................................................ 2,313 2,313 27 Freely Associated States ........................................................................................... ...................... .................... .................... Virgin Islands ............................................................................................................. 130 130 23 Indian Tribes .............................................................................................................. 683 683 * New authority Total 4,436 1,405 6,178 3,408 38,513 2,973 3,593 760 1,475 14,203 8,006 1,160 1,233 10,712 5,614 2,565 2,243 4,735 5,479 1,944 4,631 7,769 9,104 4,710 4,142 6,437 970 1,638 1,427 1,101 7,903 2,798 37,341 8,866 719 12,210 3,476 3,372 14,439 1,545 4,302 805 7,023 20,271 1,848 841 4,695 5,518 2,353 4,550 544 49 131 55 2,376 7 116 701 4,966 1,552 6,609 3,774 41,093 3,255 3,913 880 1,617 15,360 9,085 1,389 1,425 11,664 6,117 2,859 2,560 5,136 6,062 2,065 5,070 8,846 9,891 5,125 4,476 6,954 1,166 1,826 1,624 1,237 8,677 3,043 38,868 9,500 879 13,339 3,887 3,646 15,977 1,688 4,694 1,005 7,767 21,997 2,080 983 5,408 5,979 2,724 5,057 692 51 132 55 2,403 7 139 701 5,020 1,554 7,102 4,070 41,053 3,379 4,054 911 1,664 15,955 9,475 1,391 1,497 12,239 6,476 2,972 2,650 5,363 6,383 2,095 5,286 9,014 10,167 5,364 4,649 7,437 1,211 1,920 1,651 1,252 8,887 3,122 40,154 10,213 875 14,129 3,950 3,705 16,465 1,750 4,786 1,024 7,966 22,972 2,169 992 5,590 5,903 2,750 5,059 696 46 131 48 2,500 7 133 720 1.43 0.44 2.03 1.16 11.73 0.97 1.16 0.26 0.48 4.56 2.71 0.40 0.43 3.50 1.85 0.85 0.76 1.53 1.82 0.60 1.51 2.58 2.90 1.53 1.33 2.12 0.35 0.55 0.47 0.36 2.54 0.89 11.47 2.92 0.25 4.04 1.13 1.06 4.70 0.50 1.37 0.29 2.28 6.56 0.62 0.28 1.60 1.69 0.79 1.45 0.20 0.01 0.04 0.01 0.71 * 0.04 0.21 Total, distributed by State .................................................................................. 328,532 328,532 27,555 311,417 338,972 349,994 100.00 MEMORANDUM: Undistributed .......................................................................................................... 3,637 3,637 2,669 7,764 10,433 24,782 N/A Total, including undistributed ................................................................................ 332,169 332,169 30,225 319,181 349,406 374,776 N/A * $500,000 or less or 0.005 percent or less. Department of Agriculture, Food and Nutrition Service Table 8–7. 12–3539–0–1–605 National School Lunch Program (10.555) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... DOD/AF/USMC/Navy ...................................................................... 127,226 18,293 143,895 74,373 892,272 66,229 54,357 14,134 14,397 376,648 261,885 28,001 30,546 255,714 118,015 55,782 56,285 111,633 156,763 19,940 83,998 91,712 167,524 83,472 113,322 121,694 15,946 35,914 38,065 13,544 131,050 57,136 429,700 205,617 11,252 193,723 93,504 63,794 198,589 19,438 118,039 17,558 139,614 741,731 52,134 8,849 124,205 108,928 42,497 87,785 8,566 ...................... 4,340 ...................... 111,077 ...................... 4,138 ...................... 12,665 5,328 2,419 348 2,735 1,414 16,960 1,259 1,033 269 274 7,160 4,978 532 581 4,861 2,243 1,060 1,070 2,122 2,980 379 1,597 1,743 3,185 1,587 2,154 2,313 303 683 724 257 2,491 1,086 8,168 3,909 214 3,683 1,777 1,213 3,775 370 2,244 334 2,654 14,100 991 168 2,361 2,071 808 1,669 163 ........................ 83 ........................ 2,112 ........................ 79 ........................ ........................ 101 131,476 18,904 148,702 76,857 922,078 68,441 56,173 14,606 14,878 389,230 270,633 28,936 31,566 264,256 121,957 57,645 58,165 115,362 162,000 20,606 86,804 94,776 173,120 86,260 117,108 125,759 16,479 37,114 39,337 13,996 135,428 59,045 444,054 212,486 11,628 200,194 96,628 65,925 205,223 20,087 121,982 18,145 144,278 766,509 53,876 9,145 128,354 112,567 43,917 90,717 8,852 ...................... 4,485 ...................... 114,788 ...................... 4,276 ...................... ...................... 5,506 133,895 19,252 151,437 78,271 939,038 69,700 57,206 14,875 15,152 396,390 275,611 29,468 32,147 269,117 124,200 58,705 59,235 117,484 164,980 20,985 88,401 96,519 176,305 87,847 119,262 128,072 16,782 37,797 40,061 14,253 137,919 60,131 452,222 216,395 11,842 203,877 98,405 67,138 208,998 20,457 124,226 18,479 146,932 780,609 54,867 9,313 130,715 114,638 44,725 92,386 9,015 ...................... 4,568 ...................... 116,900 ...................... 4,355 ...................... ...................... 5,607 140,567 20,211 158,984 82,172 985,842 73,174 60,057 15,616 15,907 416,144 289,347 30,937 33,749 282,529 130,390 61,631 62,187 123,339 173,202 22,031 92,806 101,329 185,091 92,225 125,205 134,455 17,618 39,680 42,057 14,964 144,792 63,127 474,760 227,179 12,432 214,037 103,309 70,484 219,414 21,476 130,417 19,399 154,254 819,511 57,601 9,777 137,229 120,351 46,953 96,990 9,464 ...................... 4,795 ...................... 122,725 ...................... 4,572 ...................... ...................... 5,887 1.92 0.28 2.17 1.12 13.48 1.00 0.82 0.21 0.22 5.69 3.96 0.42 0.46 3.86 1.78 0.84 0.85 1.69 2.37 0.30 1.27 1.39 2.53 1.26 1.71 1.84 0.24 0.54 0.57 0.20 1.98 0.86 6.49 3.11 0.17 2.93 1.41 0.96 3.00 0.29 1.78 0.27 2.11 11.20 0.79 0.13 1.88 1.65 0.64 1.33 0.13 .................... 0.07 .................... 1.68 .................... 0.06 .................... .................... 0.08 Total ................................................................................................ 6,632,836 125,847 6,841,319 6,967,166 7,314,381 1 100.00 1 Excludes undistributed obligations. 144 Department of Agriculture, Food and Nutrition Service Table 8–8. 12–3510–0–1–605 Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (10.557) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... Farmers’ Market Nutrition Program 1 .............................................. 79,648 21,718 100,030 56,639 860,358 50,301 34,712 10,469 13,133 235,383 154,950 29,352 20,183 180,400 75,117 39,093 39,548 72,697 92,667 12,265 63,049 66,842 127,139 66,884 63,064 78,025 14,068 23,396 27,439 10,123 91,066 37,619 332,847 136,662 9,078 153,669 50,407 64,026 136,033 14,345 63,067 12,796 100,127 480,574 35,125 11,401 77,826 106,230 32,094 64,460 6,627 6,145 6,343 ...................... 176,815 ...................... 5,565 47,426 32,585 27,952 15 4 19 11 167 10 7 2 3 45 30 6 4 35 14 8 8 14 18 2 12 13 25 13 12 15 3 5 5 2 18 7 64 26 2 30 10 12 26 3 12 2 19 93 7 2 15 20 6 12 1 1 1 ........................ 34 ........................ 1 9 ........................ 3,684 83,337 22,724 104,662 59,262 900,203 52,630 36,320 10,954 13,741 246,284 162,126 30,711 21,118 188,754 78,596 40,903 41,379 76,064 96,958 12,833 65,969 69,937 133,027 69,981 65,985 81,638 14,719 24,479 28,710 10,592 95,283 39,361 348,261 142,991 9,498 160,785 52,741 66,991 142,333 15,009 65,988 13,389 104,764 502,830 36,752 11,929 81,430 111,150 33,580 67,445 6,934 6,430 6,637 ...................... 185,003 ...................... 5,823 49,622 29,165 ...................... 83,352 22,728 104,681 59,273 900,370 52,640 36,327 10,956 13,744 246,329 162,156 30,717 21,122 188,789 78,610 40,911 41,387 76,078 96,976 12,835 65,981 69,950 133,052 69,994 65,997 81,653 14,722 24,484 28,715 10,594 95,301 39,368 348,325 143,017 9,500 160,815 52,751 67,003 142,359 15,012 66,000 13,391 104,783 502,923 36,759 11,931 81,445 111,170 33,586 67,457 6,935 6,431 6,638 ...................... 185,037 ...................... 5,824 49,631 29,165 3,684 88,716 24,191 111,419 63,088 958,308 56,028 38,664 11,661 14,628 262,182 172,592 32,694 22,481 200,939 83,669 43,544 44,051 80,974 103,217 13,661 70,227 74,452 141,614 74,499 70,244 86,908 15,670 26,060 30,563 11,276 101,434 41,902 370,743 152,221 10,112 171,165 56,146 71,316 151,521 15,978 70,247 14,253 111,527 535,289 39,124 12,699 86,687 118,325 35,748 71,799 7,382 6,845 7,065 ...................... 196,946 ...................... 6,199 52,826 32,000 ...................... 1.60 0.44 2.01 1.14 17.29 1.01 0.70 0.21 0.26 4.73 3.11 0.59 0.41 3.62 1.51 0.79 0.79 1.46 1.86 0.25 1.27 1.34 2.55 1.34 1.27 1.57 0.28 0.47 0.55 0.20 1.83 0.76 6.69 2.75 0.18 3.09 1.01 1.29 2.73 0.29 1.27 0.26 2.01 9.66 0.71 0.23 1.56 2.13 0.64 1.30 0.13 0.12 0.13 .................... 3.55 .................... 0.11 0.95 .................... .................... Total ................................................................................................ 5,037,602 4,644 5,236,720 5,241,364 5,575,719 2 100.00 1 The Farmers’ Market Nutrition Program is funded at $20 million in the Commodity Assistance Program account in FY 2005 and FY 2006. undistributed obligations. 2 Excludes 145 Department of Agriculture, Food and Nutrition Service Table 8–9. 12–3539–0–1–605 Child and Adult Care Food Program (10.558) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... 32,785 6,876 42,104 23,428 232,699 19,602 9,870 8,525 3,121 99,946 70,993 4,648 4,395 91,681 28,532 18,384 28,900 23,675 51,246 9,457 31,999 42,156 48,595 55,948 25,598 35,296 8,645 22,108 4,015 2,634 43,021 34,094 136,673 73,019 8,940 57,444 46,242 21,721 49,741 6,409 22,405 6,086 38,604 159,436 19,948 3,861 26,978 36,864 14,565 33,660 4,553 ...................... 39 ...................... 19,353 ...................... 557 ...................... 103,622 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 34,702 7,278 44,566 24,798 246,301 20,748 10,447 9,023 3,303 105,789 75,143 4,920 4,652 97,041 30,200 19,459 30,590 25,059 54,242 10,010 33,870 44,621 51,436 59,219 27,095 37,359 9,150 23,400 4,250 2,788 45,536 36,087 144,663 77,288 9,463 60,802 48,945 22,991 52,649 6,784 23,715 6,442 40,861 168,757 21,114 4,087 28,555 39,019 15,417 35,628 4,819 ...................... 41 ...................... 20,484 ...................... 590 ...................... ...................... 34,702 7,278 44,566 24,798 246,301 20,748 10,447 9,023 3,303 105,789 75,143 4,920 4,652 97,041 30,200 19,459 30,590 25,059 54,242 10,010 33,870 44,621 51,436 59,219 27,095 37,359 9,150 23,400 4,250 2,788 45,536 36,087 144,663 77,288 9,463 60,802 48,945 22,991 52,649 6,784 23,715 6,442 40,861 168,757 21,114 4,087 28,555 39,019 15,417 35,628 4,819 ...................... 41 ...................... 20,484 ...................... 590 ...................... ...................... 36,517 7,659 46,897 26,095 259,186 21,833 10,994 9,495 3,476 111,324 79,075 5,177 4,895 102,118 31,780 20,477 32,190 26,370 57,080 10,534 35,642 46,955 54,127 62,317 28,512 39,314 9,629 24,625 4,472 2,934 47,918 37,975 152,232 81,331 9,958 63,983 51,506 24,194 55,403 7,139 24,956 6,779 42,999 177,586 22,219 4,301 30,049 41,061 16,223 37,492 5,071 ...................... 43 ...................... 21,556 ...................... 620 ...................... ...................... 1.68 0.35 2.16 1.20 11.92 1.00 0.51 0.44 0.16 5.12 3.64 0.24 0.23 4.70 1.46 0.94 1.48 1.21 2.63 0.48 1.64 2.16 2.49 2.87 1.31 1.81 0.44 1.13 0.21 0.13 2.20 1.75 7.00 3.74 0.46 2.94 2.37 1.11 2.55 0.33 1.15 0.31 1.98 8.17 1.02 0.20 1.38 1.89 0.75 1.72 0.23 .................... * .................... 0.99 .................... 0.03 .................... .................... Total ................................................................................................ 2,055,696 ........................ 2,066,196 2,066,196 2,174,293 1 100.00 * $500 or less or 0.005 percent or less. 1 Excludes undistributed obligations. 146 Department of Agriculture, Food and Nutrition Service Table 8–10. 12–3505–0–1–605 State Administrative Matching Grants for Food Stamp Program (10.561) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... 30,754 7,665 30,742 24,964 377,619 24,359 17,994 6,825 10,233 77,776 60,718 10,439 8,563 85,166 38,927 15,806 15,132 27,996 42,871 9,547 34,491 32,542 84,531 35,640 24,821 33,575 6,295 14,720 11,645 5,151 81,582 19,258 252,142 60,391 5,482 105,536 32,897 37,347 125,890 6,565 18,521 5,891 33,610 158,542 18,426 5,973 68,690 44,051 14,381 30,899 3,634 ...................... 2,439 ...................... ...................... ...................... 3,816 ...................... ¥33,103 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 31,522 7,857 31,510 25,588 387,048 24,967 18,444 6,995 10,489 79,719 62,234 10,700 8,777 87,293 39,899 16,200 15,510 28,695 43,942 9,786 35,352 33,355 86,643 36,530 25,441 34,414 6,453 15,087 11,936 5,280 83,620 19,739 258,438 61,900 5,619 108,172 33,718 38,280 129,034 6,729 18,984 6,038 34,449 162,502 18,886 6,122 70,406 45,151 14,740 31,671 3,725 ...................... 2,500 ...................... ...................... ...................... 3,911 ...................... ...................... 31,522 7,857 31,510 25,588 387,048 24,967 18,444 6,995 10,489 79,719 62,234 10,700 8,777 87,293 39,899 16,200 15,510 28,695 43,942 9,786 35,352 33,355 86,643 36,530 25,441 34,414 6,453 15,087 11,936 5,280 83,620 19,739 258,438 61,900 5,619 108,172 33,718 38,280 129,034 6,729 18,984 6,038 34,449 162,502 18,886 6,122 70,406 45,151 14,740 31,671 3,725 ...................... 2,500 ...................... ...................... ...................... 3,911 ...................... ...................... 32,559 8,115 32,546 26,429 399,784 25,788 19,050 7,225 10,834 82,341 64,281 11,052 9,065 90,164 41,211 16,733 16,020 29,639 45,387 10,108 36,515 34,452 89,492 37,731 26,278 35,545 6,665 15,584 12,328 5,453 86,370 20,388 266,938 63,936 5,803 111,730 34,827 39,539 133,278 6,950 19,608 6,236 35,582 167,846 19,507 6,324 72,722 46,636 15,225 32,712 3,847 ...................... 2,582 ...................... ...................... ...................... 4,040 ...................... ...................... 1.31 0.33 1.31 1.07 16.11 1.04 0.77 0.29 0.44 3.32 2.59 0.45 0.37 3.63 1.66 0.67 0.65 1.19 1.83 0.41 1.47 1.39 3.61 1.52 1.06 1.43 0.27 0.63 0.50 0.22 3.48 0.82 10.76 2.58 0.23 4.50 1.40 1.59 5.37 0.28 0.79 0.25 1.43 6.77 0.79 0.25 2.93 1.88 0.61 1.32 0.16 .................... 0.10 .................... .................... .................... 0.16 .................... .................... Total ................................................................................................ 2,310,367 ........................ 2,402,000 2,402,000 2,481,000 1 100.00 1 Excludes undistributed obligations. 147 Department of Education, Office of Elementary and Secondary Education Table 8–11. 91–0900–0–1–501 Title I Grants to Local Educational Agencies (84.010) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... 187,083 32,502 229,883 118,717 1,765,538 114,691 109,085 32,225 49,372 574,724 381,941 43,294 41,593 523,252 167,431 64,685 81,995 171,224 267,601 45,160 163,739 234,039 416,587 105,428 160,730 185,417 40,527 48,242 64,007 29,264 266,434 114,717 1,241,954 271,257 30,257 400,078 141,060 131,498 432,704 45,773 165,457 34,602 199,727 1,110,706 50,780 27,919 195,589 170,680 94,828 160,676 29,788 7,716 6,750 3,463 449,160 ...................... 10,368 90,093 8,300 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 194,434 33,703 248,135 124,322 1,782,922 123,665 107,594 33,817 49,954 609,443 401,779 47,518 42,115 538,448 172,071 63,983 80,341 185,539 277,777 48,790 171,796 230,405 434,040 108,893 167,439 196,279 41,625 50,867 67,770 32,310 271,609 109,295 1,232,206 287,345 32,136 385,984 140,047 124,284 476,974 47,986 178,282 36,167 203,229 1,173,904 55,430 29,144 216,198 176,327 103,025 162,951 30,640 8,462 7,546 3,660 467,838 ...................... 11,371 91,322 8,436 194,434 33,703 248,135 124,322 1,782,922 123,665 107,594 33,817 49,954 609,443 401,779 47,518 42,115 538,448 172,071 63,983 80,341 185,539 277,777 48,790 171,796 230,405 434,040 108,893 167,439 196,279 41,625 50,867 67,770 32,310 271,609 109,295 1,232,206 287,345 32,136 385,984 140,047 124,284 476,974 47,986 178,282 36,167 203,229 1,173,904 55,430 29,144 216,198 176,327 103,025 162,951 30,640 8,462 7,546 3,660 467,838 ...................... 11,371 91,322 8,436 202,510 35,472 259,425 128,638 1,865,502 128,769 109,335 35,703 53,073 644,906 418,947 50,217 43,849 565,117 177,667 65,227 81,844 193,094 291,204 50,848 181,074 236,124 449,565 111,522 173,358 203,930 43,248 52,765 71,686 34,014 278,531 112,482 1,292,886 300,766 33,884 398,431 144,199 127,248 497,707 50,190 186,045 38,255 212,517 1,232,413 57,646 30,718 226,007 182,792 106,969 168,643 32,313 8,879 7,918 3,840 536,146 ...................... 11,931 95,819 8,500 1.52 0.27 1.95 0.96 13.99 0.97 0.82 0.27 0.40 4.84 3.14 0.38 0.33 4.24 1.33 0.49 0.61 1.45 2.18 0.38 1.36 1.77 3.37 0.84 1.30 1.53 0.32 0.40 0.54 0.26 2.09 0.84 9.70 2.26 0.25 2.99 1.08 0.95 3.73 0.38 1.40 0.29 1.59 9.24 0.43 0.23 1.69 1.37 0.80 1.26 0.24 0.07 0.06 0.03 4.02 .................... 0.09 0.72 .................... Total ................................................................................................ 12,342,309 ........................ 1 12,739,571 1 12,739,571 13,342,309 2 100.00 1 Amounts 2 Excludes reflect program level, not budget authority. undistributed obligations. 148 Department of Education, Office of Elementary and Secondary Education Table 8–12. 91–1000–0–1–501 Improving Teacher Quality State Grants (84.336) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... 46,771 13,962 48,198 28,585 341,332 32,642 26,868 13,962 13,962 134,559 77,740 13,962 13,962 118,017 48,431 22,015 22,582 44,492 65,679 13,962 41,811 51,936 109,363 37,902 42,509 49,749 13,962 14,239 15,136 13,962 65,483 23,943 233,276 65,057 13,962 105,387 34,205 28,550 113,486 13,962 36,901 13,962 50,062 242,257 18,739 13,962 52,577 47,659 23,827 46,014 13,962 3,474 5,127 1,636 96,838 ...................... 4,341 14,577 14,651 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 46,549 13,895 47,919 28,446 339,525 32,483 26,757 13,895 13,895 133,871 77,338 13,895 13,895 117,504 48,215 21,924 22,487 44,307 65,403 13,895 41,631 51,726 108,973 37,755 42,331 49,527 13,895 14,172 15,050 13,895 65,202 23,823 232,363 64,712 13,895 104,961 34,037 28,412 113,062 13,895 36,716 13,895 49,814 241,052 18,650 13,895 52,325 47,438 23,743 45,834 13,895 3,456 5,105 1,628 96,331 ...................... 4,322 14,510 14,583 46,549 13,895 47,919 28,446 339,525 32,483 26,757 13,895 13,895 133,871 77,338 13,895 13,895 117,504 48,215 21,924 22,487 44,307 65,403 13,895 41,631 51,726 108,973 37,755 42,331 49,527 13,895 14,172 15,050 13,895 65,202 23,823 232,363 64,712 13,895 104,961 34,037 28,412 113,062 13,895 36,716 13,895 49,814 241,052 18,650 13,895 52,325 47,438 23,743 45,834 13,895 3,456 5,105 1,628 96,331 ...................... 4,322 14,510 14,583 46,549 13,895 47,919 28,446 339,525 32,483 26,757 13,895 13,895 133,871 77,338 13,895 13,895 117,504 48,215 21,924 22,487 44,307 65,403 13,895 41,631 51,726 108,973 37,755 42,331 49,527 13,895 14,172 15,050 13,895 65,202 23,823 232,363 64,712 13,895 104,961 34,037 28,412 113,062 13,895 36,716 13,895 49,814 241,052 18,650 13,895 52,325 47,438 23,743 45,834 13,895 3,456 5,105 1,628 96,331 ...................... 4,322 14,510 14,583 1.60 0.48 1.65 0.98 11.70 1.12 0.92 0.48 0.48 4.61 2.66 0.48 0.48 4.05 1.66 0.76 0.77 1.53 2.25 0.48 1.43 1.78 3.76 1.30 1.46 1.71 0.48 0.49 0.52 0.48 2.25 0.82 8.01 2.23 0.48 3.62 1.17 0.98 3.90 0.48 1.27 0.48 1.72 8.31 0.64 0.48 1.80 1.63 0.82 1.58 0.48 0.12 0.18 0.06 3.32 .................... 0.15 0.50 .................... Total ................................................................................................ 2,930,126 ........................ 1 2,916,605 1 2,916,605 2,916,605 2 100.00 1 Amounts 2 Excludes reflect program level, not budget authority. undistributed obligations. 149 Department of Education, Office of Special Education and Rehabilitative Services Table 8–13. 91–0300–0–1–501 Special Education—Grants to States (84.027) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... 160,386 30,463 152,382 98,750 1,072,637 129,058 117,261 27,920 14,038 551,219 267,886 35,212 47,389 446,658 225,537 107,669 94,250 137,697 163,815 48,258 176,590 250,351 353,313 167,415 104,964 200,334 32,189 65,854 57,306 41,854 318,780 80,379 669,506 271,197 22,670 386,053 130,456 113,748 376,739 38,567 154,478 27,006 205,686 834,470 93,688 21,859 246,109 195,226 66,978 183,608 22,932 5,935 13,160 4,510 93,148 ...................... 8,364 81,617 22,579 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 167,865 32,499 162,563 103,546 1,132,573 137,681 122,729 29,785 14,976 581,254 285,784 36,854 50,109 467,485 236,054 112,690 98,645 145,703 174,760 50,509 184,824 262,025 369,788 175,222 109,859 209,676 33,928 68,924 61,135 43,805 333,645 84,127 700,725 288,837 24,185 404,055 136,539 119,052 394,307 40,365 161,682 28,811 215,277 889,556 98,468 23,319 259,999 204,329 70,101 192,169 24,464 6,125 13,580 4,654 99,371 6,579 8,631 83,546 10,000 167,865 32,499 162,563 103,546 1,132,573 137,681 122,729 29,785 14,976 581,254 285,784 36,854 50,109 467,485 236,054 112,690 98,645 145,703 174,760 50,509 184,824 262,025 369,788 175,222 109,859 209,676 33,928 68,924 61,135 43,805 333,645 84,127 700,725 288,837 24,185 404,055 136,539 119,052 394,307 40,365 161,682 28,811 215,277 889,556 98,468 23,319 259,999 204,329 70,101 192,169 24,464 6,125 13,580 4,654 99,371 6,579 8,631 83,546 10,000 175,112 34,545 172,800 108,906 1,192,554 146,351 128,028 31,661 15,919 610,553 303,780 38,709 52,765 487,668 246,245 117,555 102,904 152,961 185,250 52,689 193,392 273,338 385,753 182,787 114,602 218,728 35,621 71,900 64,985 45,697 348,049 87,760 730,978 303,763 25,708 421,499 142,434 124,192 411,330 42,108 168,662 30,625 224,571 936,850 103,653 24,787 273,145 213,151 73,128 200,466 26,004 6,250 13,857 4,749 105,629 6,579 8,807 85,253 10,000 1.58 0.31 1.56 0.98 10.76 1.32 1.15 0.29 0.14 5.51 2.74 0.35 0.48 4.40 2.22 1.06 0.93 1.38 1.67 0.48 1.74 2.47 3.48 1.65 1.03 1.97 0.32 0.65 0.59 0.41 3.14 0.79 6.59 2.74 0.23 3.80 1.28 1.12 3.71 0.38 1.52 0.28 2.03 8.45 0.93 0.22 2.46 1.92 0.66 1.81 0.23 0.06 0.12 0.04 0.95 0.06 0.08 0.77 .................... Total ................................................................................................ 10,068,106 ........................ 1 10,589,746 1 10,589,746 11,097,746 2 100.00 1 Amounts 2 Excludes reflect program levels, not budget authority. undistributed obligations. 150 Department of Education, Office of Special Education and Rehabilitative Services Table 8–14. 91–0301–0–1–506 Rehabilitation Services—Vocational Rehabilitation Grants to States (84.126) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... 54,054 8,602 48,460 33,685 247,893 26,165 18,762 8,614 12,091 125,909 76,060 10,212 13,831 94,794 60,435 27,272 24,992 48,352 44,123 14,644 38,306 45,203 88,505 40,635 39,128 56,706 10,227 16,460 12,920 10,120 51,532 21,478 135,187 81,859 8,511 111,423 38,443 31,182 115,424 9,730 45,035 8,651 60,634 190,424 23,887 8,614 59,270 45,222 24,381 51,504 7,399 739 1,700 960 61,124 ...................... 1,889 30,800 ...................... ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 53,746 8,679 50,162 33,647 248,655 31,944 18,765 8,679 11,795 139,316 77,939 10,447 14,120 94,851 61,488 29,757 25,388 48,157 54,249 14,485 37,913 43,238 88,861 40,247 39,012 56,696 10,436 16,464 15,581 9,800 52,365 21,645 135,117 82,554 8,679 110,929 39,104 31,884 114,523 9,895 46,250 8,679 60,699 193,029 24,527 8,679 58,599 44,933 24,070 51,867 8,679 868 2,611 1,000 66,280 ...................... 1,861 32,000 ...................... 53,746 8,679 50,162 33,647 248,655 31,944 18,765 8,679 11,795 139,316 77,939 10,447 14,120 94,851 61,488 29,757 25,388 48,157 54,249 14,485 37,913 43,238 88,861 40,247 39,012 56,696 10,436 16,464 15,581 9,800 52,365 21,645 135,117 82,554 8,679 110,929 39,104 31,884 114,523 9,895 46,250 8,679 60,699 193,029 24,527 8,679 58,599 44,933 24,070 51,867 8,679 868 2,611 1,000 66,280 ...................... 1,861 32,000 ...................... 54,409 8,957 52,642 34,285 259,966 32,548 19,238 8,957 11,898 145,570 81,909 10,749 14,602 100,013 63,749 30,428 25,966 49,003 54,442 14,385 37,563 43,959 91,954 41,739 39,560 58,690 10,456 16,870 16,595 10,173 52,405 21,362 141,341 86,186 8,957 114,494 39,002 33,265 117,718 9,972 47,450 8,957 62,257 201,770 25,154 8,957 59,719 46,564 24,014 52,854 8,957 891 2,704 1,055 67,984 ...................... 1,903 33,024 ...................... 2.00 0.33 1.94 1.26 9.56 1.20 0.71 0.33 0.44 5.35 3.01 0.40 0.54 3.68 2.34 1.12 0.95 1.80 2.00 0.53 1.38 1.62 3.38 1.53 1.45 2.16 0.38 0.62 0.61 0.37 1.93 0.79 5.20 3.17 0.33 4.21 1.43 1.22 4.33 0.37 1.74 0.33 2.29 7.42 0.92 0.33 2.20 1.71 0.88 1.94 0.33 0.03 0.10 0.04 2.50 .................... 0.07 1.21 .................... Total ................................................................................................ 2,584,162 ........................ 1 2,635,845 1 2,635,845 2,720,192 2 100.00 1 Amounts 2 Excludes reflect program level, not budget authority. undistributed obligations. 151 Department of Health and Human Services, Centers for Medicare and Medicaid Services Table 8–15. 75–0515–0–1–551 State Children’s Health Insurance Program (93.767) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... 51,973 7,430 87,709 34,154 548,808 37,915 24,361 8,686 7,202 171,991 96,977 9,648 16,795 132,153 53,710 21,368 24,444 37,984 61,291 9,689 33,648 46,201 95,696 30,626 37,673 43,425 11,326 15,414 30,436 8,904 69,346 32,789 227,517 81,748 5,437 114,614 44,622 40,709 100,846 7,319 43,402 6,152 58,354 311,504 24,694 3,813 53,438 50,326 18,551 43,825 5,481 397 1,158 364 30,297 ...................... 860 ...................... ...................... ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 68,041 9,020 106,473 48,662 667,444 57,951 36,561 9,046 9,635 249,247 130,915 12,404 20,748 164,936 73,422 28,266 28,479 54,061 77,478 12,462 48,349 59,401 111,346 38,615 48,165 53,958 12,284 17,096 40,387 9,273 84,735 42,157 270,142 110,255 6,385 125,842 57,371 47,255 130,964 9,355 54,306 7,887 78,905 449,972 31,699 4,903 76,255 64,705 24,423 51,870 6,364 510 1,488 468 38,953 ...................... 1,106 ...................... ...................... 68,041 9,020 106,473 48,662 667,444 57,951 36,561 9,046 9,635 249,247 130,915 12,404 20,748 164,936 73,422 28,266 28,479 54,061 77,478 12,462 48,349 59,401 111,346 38,615 48,165 53,958 12,284 17,096 40,387 9,273 84,735 42,157 270,142 110,255 6,385 125,842 57,371 47,255 130,964 9,355 54,306 7,887 78,905 449,972 31,699 4,903 76,255 64,705 24,423 51,870 6,364 510 1,488 468 38,953 ...................... 1,106 ...................... ...................... 68,041 9,020 106,473 48,662 667,444 57,951 36,561 9,046 9,635 249,247 130,915 12,404 20,748 164,936 73,422 28,266 28,479 54,061 77,478 12,462 48,349 59,401 111,346 38,615 48,165 53,958 12,284 17,096 40,387 9,273 84,735 42,157 270,142 110,255 6,385 125,842 57,371 47,255 130,964 9,355 54,306 7,887 78,905 449,972 31,699 4,903 76,255 64,705 24,423 51,870 6,364 510 1,488 468 38,953 ...................... 1,106 ...................... ...................... 1.67 0.22 2.61 1.19 16.35 1.42 0.90 0.22 0.24 6.11 3.21 0.30 0.51 4.04 1.80 0.69 0.70 1.32 1.90 0.31 1.18 1.46 2.73 0.95 1.18 1.32 0.30 0.42 0.99 0.23 2.08 1.03 6.62 2.70 0.16 3.08 1.41 1.16 3.21 0.23 1.33 0.19 1.93 11.02 0.78 0.12 1.87 1.58 0.60 1.27 0.16 0.01 0.04 0.01 0.95 .................... 0.03 .................... .................... Total ................................................................................................ 3,175,200 ........................ 4,082,400 4,082,400 4,082,400 1 100.00 1 Excludes undistributed obligations. 152 Department of Health and Human Services, Centers for Medicare and Medicaid Services Table 8–16. 75–0512–0–1–551 Grants to States for Medicaid (93.778) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... Survey & Certification ..................................................................... Fraud Control Units ......................................................................... Vaccines For Children ..................................................................... Medicare Part B Transfer ............................................................... Medicare Part D .............................................................................. Incurred Not Reported .................................................................... Adjustments ..................................................................................... 2,709,016 653,930 3,716,585 2,165,347 20,226,317 1,542,064 2,109,574 442,843 919,116 8,196,029 5,129,463 633,438 735,561 6,115,306 3,221,866 1,542,219 1,250,974 3,122,433 3,731,377 1,457,560 2,678,469 4,738,636 5,193,069 2,906,166 2,716,890 4,020,441 533,728 967,629 650,528 660,723 4,561,848 1,932,576 23,457,121 5,576,409 370,889 7,511,293 2,055,734 1,844,212 8,456,730 1,043,194 3,002,491 432,369 5,229,794 10,812,996 1,000,545 557,405 2,335,066 3,036,685 1,640,815 2,828,633 265,033 3,947 6,745 2,382 219,397 ...................... 7,076 ...................... ...................... 168,752 131,500 1,052,030 168,240 ...................... ...................... ¥17,153 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 2,697,722 645,185 4,179,879 2,344,999 19,507,114 1,482,810 2,081,199 456,106 903,761 8,404,176 4,590,816 614,819 760,884 5,355,001 3,570,656 1,616,856 1,342,034 3,020,952 3,542,163 1,433,866 2,607,623 5,280,988 5,159,780 2,982,264 2,833,807 4,345,386 557,623 995,974 694,375 692,589 4,481,915 1,859,639 25,642,056 5,859,591 375,695 7,805,898 2,077,405 1,991,033 9,433,359 1,043,417 2,910,750 461,206 4,998,339 11,367,334 1,061,913 546,219 2,457,090 3,127,085 1,580,553 2,694,359 258,001 3,950 6,961 2,380 219,600 ...................... 6,920 ...................... ...................... 247,420 149,400 1,634,850 190,000 72,800 ...................... ¥733,538 2,697,722 645,185 4,179,879 2,344,999 19,507,114 1,482,810 2,081,199 456,106 903,761 8,404,176 4,590,816 614,819 760,884 5,355,001 3,570,656 1,616,856 1,342,034 3,020,952 3,542,163 1,433,866 2,607,623 5,280,988 5,159,780 2,982,264 2,833,807 4,345,386 557,623 995,974 694,375 692,589 4,481,915 1,859,639 25,642,056 5,859,591 375,695 7,805,898 2,077,405 1,991,033 9,433,359 1,043,417 2,910,750 461,206 4,998,339 11,367,334 1,061,913 546,219 2,457,090 3,127,085 1,580,553 2,694,359 258,001 3,950 6,961 2,380 219,600 ...................... 6,920 ...................... ...................... 247,420 149,400 1,634,850 190,000 72,800 ...................... ¥733,538 2,755,670 707,126 4,639,981 2,651,630 18,957,149 1,564,516 2,178,051 481,587 924,455 8,936,165 4,958,941 622,968 846,211 5,787,508 3,862,291 1,718,623 1,427,217 3,230,402 3,842,520 1,459,864 2,765,030 5,355,052 5,381,974 3,193,272 3,004,820 4,778,898 594,002 1,076,176 739,606 710,446 4,576,345 1,936,059 26,504,617 6,474,673 374,386 8,569,309 2,130,003 2,014,350 9,897,025 1,099,032 2,963,772 490,948 5,229,594 12,059,751 1,144,821 556,556 2,607,021 3,007,009 1,650,846 2,686,870 262,416 3,950 6,690 2,380 219,600 ...................... 6,920 ...................... ...................... 251,900 161,600 1,502,333 ...................... 99,100 22,910,109 ¥4,981,327 1.28 0.33 2.15 1.23 8.79 0.73 1.01 0.22 0.43 4.15 2.30 0.29 0.39 2.68 1.79 0.80 0.66 1.50 1.78 0.68 1.28 2.48 2.50 1.48 1.39 2.22 0.28 0.50 0.34 0.33 2.12 0.90 12.30 3.00 0.17 3.98 0.99 0.93 4.59 0.51 1.37 0.23 2.43 5.59 0.53 0.26 1.21 1.39 0.77 1.25 0.12 * * * 0.10 .................... * .................... .................... 0.12 0.07 0.70 .................... 0.05 10.63 ¥2.31 Total ................................................................................................ 184,382,051 ........................ 188,535,007 188,535,007 215,570,809 1 100.00 * $500 or less or 0.005 percent or less. 1 Excludes undistributed obligations. 153 Department of Health and Human Services, Administration for Children and Families Table 8–17. 75–1552–0–1–609 Temporary Assistance for Needy Families (TANF)—Family Assistance Grants (93.558) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... Tribal New Program ........................................................................ Employment Achieve Bonus ........................................................... Family Formation Match ................................................................. Territories Matching Fund ............................................................... 106,437 63,445 230,168 65,758 3,694,716 149,626 266,788 32,683 118,161 632,955 368,025 97,984 35,508 585,057 215,691 136,014 101,124 184,372 179,902 80,685 254,098 466,632 785,845 280,561 98,382 227,904 45,984 60,644 47,282 64,183 416,075 116,184 2,467,931 338,350 27,720 756,083 150,624 169,035 724,142 94,256 103,759 22,027 222,665 538,965 87,831 49,192 166,199 389,495 114,000 325,994 19,378 ...................... 2,334 ...................... 70,970 ...................... 2,875 122,999 ...................... 7,558 ...................... ...................... ...................... ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 104,408 60,265 226,131 62,951 3,687,671 149,626 266,788 32,291 92,610 622,746 368,025 98,905 33,911 585,057 206,799 131,525 101,931 181,288 180,999 78,121 229,098 459,371 775,353 267,161 95,803 217,052 43,707 57,769 47,710 38,521 404,035 117,131 2,442,931 338,350 26,400 727,968 147,594 166,799 719,499 95,022 99,968 21,280 213,089 538,965 84,314 47,353 158,285 388,732 110,176 315,133 18,501 ...................... 3,993 ...................... 71,035 ...................... 2,847 122,999 ...................... 7,633 100,000 100,000 6,000 104,408 60,265 226,131 62,951 3,687,671 149,626 266,788 32,291 92,610 622,746 368,025 98,905 33,911 585,057 206,799 131,525 101,931 181,288 180,999 78,121 229,098 459,371 775,353 267,161 95,803 217,052 43,707 57,769 47,710 38,521 404,035 117,131 2,442,931 338,350 26,400 727,968 147,594 166,799 719,499 95,022 99,968 21,280 213,089 538,965 84,314 47,353 158,285 388,732 110,176 315,133 18,501 ...................... 3,993 ...................... 71,035 ...................... 2,847 122,999 ...................... 7,633 100,000 100,000 6,000 104,408 60,265 226,131 62,951 3,687,671 149,626 266,788 32,291 92,610 622,746 368,025 98,905 33,911 585,057 206,799 131,525 101,931 181,288 180,999 78,121 229,098 459,371 775,353 267,161 95,803 217,052 43,707 57,769 47,710 38,521 404,035 117,131 2,442,931 338,350 26,400 727,968 147,594 166,799 719,499 95,022 99,968 21,280 213,089 538,965 84,314 47,353 158,285 388,732 110,176 315,133 18,501 ...................... 3,993 ...................... 71,035 ...................... 2,847 122,999 ...................... 7,633 100,000 100,000 6,000 0.61 0.35 1.32 0.37 21.57 0.88 1.56 0.19 0.54 3.64 2.15 0.58 0.20 3.42 1.21 0.77 0.60 1.06 1.06 0.46 1.34 2.69 4.53 1.56 0.56 1.27 0.26 0.34 0.28 0.23 2.36 0.68 14.29 1.98 0.15 4.26 0.86 0.98 4.21 0.56 0.58 0.12 1.25 3.15 0.49 0.28 0.93 2.27 0.64 1.84 0.11 .................... 0.02 .................... 0.42 .................... 0.02 0.72 .................... 0.04 0.58 0.58 0.04 Total ................................................................................................ 1 17,183,255 ........................ 1 17,099,625 17,099,625 1 17,099,625 2 100.00 1 State levels include State Family Assistance Grants and Supplemental Population Grants. FY 2004 also includes High Performance bonuses and Illegitimacy bonuses. 2 Excludes undistributed obligations. 154 Department of Health and Human Services, Administration for Children and Families Table 8–18. 75–1501–0–1–609 Child Support Enforcement—Federal Share of State and Local Administrative Costs and Incentives (93.563) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... 45,470 14,734 44,404 28,485 740,807 57,658 44,231 17,080 17,135 187,723 87,095 7,831 27,642 128,926 39,855 32,013 43,879 40,139 40,603 11,546 74,947 102,103 209,889 94,483 34,950 45,941 11,131 30,582 27,292 32,828 123,226 68,676 211,802 78,273 37,503 202,004 31,837 69,363 152,904 6,593 32,663 44,469 56,793 184,466 34,184 36,064 52,295 78,431 20,874 82,056 7,465 ...................... 6,732 ...................... 28,979 ...................... 12,133 13,000 ...................... ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 46,079 14,931 44,998 28,867 750,721 58,430 44,823 17,309 17,365 190,236 88,260 7,935 28,012 130,651 40,388 32,442 44,466 40,676 41,147 11,701 75,950 103,469 212,697 95,747 35,417 46,556 11,280 30,991 27,657 33,268 124,875 69,595 214,636 79,321 38,005 204,707 32,263 70,291 154,950 6,681 33,100 45,064 57,553 186,934 34,642 36,547 52,995 79,481 21,153 83,154 7,564 ...................... 6,823 ...................... 29,367 ...................... 12,295 22,000 ...................... 46,079 14,931 44,998 28,867 750,721 58,430 44,823 17,309 17,365 190,236 88,260 7,935 28,012 130,651 40,388 32,442 44,466 40,676 41,147 11,701 75,950 103,469 212,697 95,747 35,417 46,556 11,280 30,991 27,657 33,268 124,875 69,595 214,636 79,321 38,005 204,707 32,263 70,291 154,950 6,681 33,100 45,064 57,553 186,934 34,642 36,547 52,995 79,481 21,153 83,154 7,564 ...................... 6,823 ...................... 29,367 ...................... 12,295 22,000 ...................... 47,322 15,334 46,212 29,645 770,976 60,006 46,033 17,776 17,833 195,368 90,642 8,149 28,767 134,176 41,478 33,317 45,666 41,773 42,257 12,016 77,999 106,261 218,436 98,330 36,373 47,812 11,585 31,827 28,403 34,165 128,244 71,473 220,426 81,461 39,031 210,230 33,133 72,187 159,131 6,861 33,993 46,280 59,106 191,978 35,577 37,533 54,425 81,625 21,724 85,398 7,769 ...................... 7,007 ...................... 30,160 ...................... 12,627 30,500 ...................... 1.13 0.37 1.11 0.71 18.47 1.44 1.10 0.43 0.43 4.68 2.17 0.20 0.69 3.21 0.99 0.80 1.09 1.00 1.01 0.29 1.87 2.55 5.23 2.36 0.87 1.15 0.28 0.76 0.68 0.82 3.07 1.71 5.28 1.95 0.94 5.04 0.79 1.73 3.81 0.16 0.81 1.11 1.42 4.60 0.85 0.90 1.30 1.96 0.52 2.05 0.19 .................... 0.17 .................... 0.72 .................... 0.30 0.73 .................... Total ................................................................................................ 3,994,187 ........................ 4,056,465 4,056,465 4,173,816 1 100.00 1 Excludes undistributed obligations. 155 Department of Health and Human Services, Administration for Children and Families Table 8–19. 75–1515–0–1–609 Child Care and Development Block Grant (93.575) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... Technical Assistance ....................................................................... Research Set-Aside ........................................................................ Child Care Aware ............................................................................ 41,348 4,238 47,827 24,828 236,074 23,901 14,833 4,406 3,420 113,432 74,026 8,540 11,282 78,796 40,675 18,452 18,816 34,866 48,318 7,274 28,257 26,969 59,304 25,791 33,350 39,718 5,850 11,786 12,666 4,953 38,635 18,662 112,927 64,051 4,128 69,473 30,891 22,511 63,998 5,558 36,762 5,935 45,807 206,707 21,301 3,160 40,722 34,113 13,656 30,504 3,074 2,752 3,937 1,723 42,538 ...................... 2,025 41,746 ...................... 5,218 9,806 994 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 41,574 4,059 49,265 25,161 229,313 23,440 14,528 4,605 3,279 113,701 74,993 8,440 11,593 78,276 41,626 18,473 19,030 36,066 48,102 6,964 27,004 26,245 59,474 25,914 33,165 39,484 5,878 12,008 13,304 4,892 37,391 18,814 109,665 65,039 4,027 68,800 31,773 22,331 62,848 5,964 37,591 5,875 45,486 210,972 22,446 2,994 40,274 33,571 14,289 30,374 2,886 2,515 4,191 1,594 41,463 ...................... 2,115 41,658 ...................... 5,207 9,920 992 41,574 4,059 49,265 25,161 229,313 23,440 14,528 4,605 3,279 113,701 74,993 8,440 11,593 78,276 41,626 18,473 19,030 36,066 48,102 6,964 27,004 26,245 59,474 25,914 33,165 39,484 5,878 12,008 13,304 4,892 37,391 18,814 109,665 65,039 4,027 68,800 31,773 22,331 62,848 5,964 37,591 5,875 45,486 210,972 22,446 2,994 40,274 33,571 14,289 30,374 2,886 2,515 4,191 1,594 41,463 ...................... 2,115 41,658 ...................... 5,207 9,920 992 41,574 4,059 49,264 25,160 229,313 23,440 14,528 4,605 3,279 113,700 74,992 8,440 11,593 78,276 41,625 18,472 19,029 36,065 48,102 6,964 27,004 26,244 59,473 25,914 33,165 39,484 5,878 12,008 13,304 4,892 37,390 18,814 109,664 65,039 4,027 68,799 31,772 22,331 62,847 5,964 37,591 5,875 45,485 210,972 22,446 2,994 40,273 33,570 14,289 30,374 2,885 2,515 4,191 1,594 41,463 ...................... 2,115 41,658 ...................... 5,207 9,920 1,000 2.00 0.19 2.37 1.21 11.01 1.13 0.70 0.22 0.16 5.46 3.60 0.41 0.56 3.76 2.00 0.89 0.91 1.73 2.31 0.33 1.30 1.26 2.86 1.24 1.59 1.90 0.28 0.58 0.64 0.23 1.80 0.90 5.26 3.12 0.19 3.30 1.53 1.07 3.02 0.29 1.80 0.28 2.18 10.13 1.08 0.14 1.93 1.61 0.69 1.46 0.14 0.12 0.20 0.08 1.99 .................... 0.10 2.00 .................... 0.25 0.48 0.05 Total ................................................................................................ 2,087,310 ........................ 2,082,921 2,082,921 2,082,910 1 100.00 1 Excludes undistributed obligations. 156 Department of Health and Human Services, Administration for Children and Families Table 8–20. 75–1550–0–1–609 Child Care and Development Fund—Mandatory (93.596a) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... Technical Assistance ....................................................................... 16,442 3,545 19,827 5,300 85,593 10,174 18,738 5,179 4,567 43,027 36,548 4,972 2,868 56,874 26,182 8,508 9,812 16,702 13,865 3,019 23,301 44,973 32,082 23,368 6,293 24,669 3,191 10,595 2,580 4,582 26,374 8,308 101,981 69,639 2,506 70,125 24,910 19,409 55,337 6,634 9,867 1,711 37,702 59,844 12,592 3,945 21,329 41,883 8,727 24,511 2,815 ...................... ...................... ...................... ...................... ...................... ...................... 54,340 ...................... 3,532 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 16,442 3,545 19,827 5,300 85,593 10,174 18,738 5,179 4,567 43,027 36,548 4,972 2,868 56,874 26,182 8,508 9,812 16,702 13,865 3,019 23,301 44,973 32,082 23,368 6,293 24,669 3,191 10,595 2,580 4,582 26,374 8,308 101,981 69,639 2,506 70,125 24,910 19,409 55,337 6,634 9,867 1,711 37,702 59,844 12,592 3,945 21,329 41,883 8,727 24,511 2,815 ...................... ...................... ...................... ...................... ...................... ...................... 54,340 ...................... 3,532 16,442 3,545 19,827 5,300 85,593 10,174 18,738 5,179 4,567 43,027 36,548 4,972 2,868 56,874 26,182 8,508 9,812 16,702 13,865 3,019 23,301 44,973 32,082 23,368 6,293 24,669 3,191 10,595 2,580 4,582 26,374 8,308 101,981 69,639 2,506 70,125 24,910 19,409 55,337 6,634 9,867 1,711 37,702 59,844 12,592 3,945 21,329 41,883 8,727 24,511 2,815 ...................... ...................... ...................... ...................... ...................... ...................... 54,340 ...................... 3,532 16,442 3,545 19,827 5,300 85,593 10,174 18,738 5,179 4,567 43,027 36,548 4,972 2,868 56,874 26,182 8,508 9,812 16,702 13,865 3,019 23,301 44,973 32,082 23,368 6,293 24,669 3,191 10,595 2,580 4,582 26,374 8,308 101,981 69,639 2,506 70,125 24,910 19,409 55,337 6,634 9,867 1,711 37,702 59,844 12,592 3,945 21,329 41,883 8,727 24,511 2,815 ...................... ...................... ...................... ...................... ...................... ...................... 54,340 ...................... 3,532 1.33 0.29 1.60 0.43 6.93 0.82 1.52 0.42 0.37 3.48 2.96 0.40 0.23 4.60 2.12 0.69 0.79 1.35 1.12 0.24 1.89 3.64 2.60 1.89 0.51 2.00 0.26 0.86 0.21 0.37 2.13 0.67 8.25 5.64 0.20 5.68 2.02 1.57 4.48 0.54 0.80 0.14 3.05 4.84 1.02 0.32 1.73 3.39 0.71 1.98 0.23 .................... .................... .................... .................... .................... .................... 4.40 .................... 0.29 Total ................................................................................................ 1,235,397 ........................ 1,235,397 1,235,397 1,235,397 1 100.00 1 Excludes undistributed obligations. 157 Department of Health and Human Services, Administration for Children and Families Table 8–21. 75–1550–0–1–609 Child Care and Development Fund—Matching (93.596b) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... Technical Assistance ....................................................................... 22,396 3,813 30,922 13,850 197,098 23,738 17,916 3,898 2,442 79,292 47,295 6,139 7,537 67,507 32,829 14,062 13,986 19,084 23,785 5,409 28,306 29,996 51,750 25,128 15,621 28,316 4,222 8,904 12,096 6,139 44,038 10,116 95,027 43,143 2,884 58,831 17,611 17,416 57,451 4,870 20,022 3,893 28,934 126,722 12,569 2,708 36,138 30,420 7,801 26,729 2,350 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 3,260 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 22,358 3,807 30,537 13,665 194,510 23,435 17,711 3,845 2,409 78,288 46,689 6,058 7,438 66,611 32,397 13,866 13,962 18,815 23,785 5,340 27,931 29,583 51,750 24,784 15,411 27,930 4,163 8,784 11,949 6,055 43,455 9,979 93,739 42,592 2,843 58,044 17,581 17,186 56,664 4,802 19,747 3,839 28,550 125,093 14,787 2,669 36,138 30,360 7,695 26,364 2,350 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 3,260 22,358 3,807 30,537 13,665 194,510 23,435 17,711 3,845 2,409 78,288 46,689 6,058 7,438 66,611 32,397 13,866 13,962 18,815 23,785 5,340 27,931 29,583 51,750 24,784 15,411 27,930 4,163 8,784 11,949 6,055 43,455 9,979 93,739 42,592 2,843 58,044 17,581 17,186 56,664 4,802 19,747 3,839 28,550 125,093 14,787 2,669 36,138 30,360 7,695 26,364 2,350 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 3,260 22,358 3,807 30,537 13,665 194,510 23,435 17,711 3,845 2,409 78,288 46,689 6,058 7,438 66,611 32,397 13,866 13,962 18,815 23,785 5,340 27,931 29,583 51,750 24,784 15,411 27,930 4,163 8,784 11,949 6,055 43,455 9,979 93,739 42,592 2,843 58,044 17,581 17,186 56,664 4,802 19,747 3,839 28,550 125,093 14,787 2,669 36,138 30,360 7,695 26,364 2,350 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 3,260 1.51 0.26 2.06 0.92 13.13 1.58 1.20 0.26 0.16 5.28 3.15 0.41 0.50 4.50 2.19 0.94 0.94 1.27 1.61 0.36 1.89 2.00 3.49 1.67 1.04 1.89 0.28 0.59 0.81 0.41 2.93 0.67 6.33 2.87 0.19 3.92 1.19 1.16 3.82 0.32 1.33 0.26 1.93 8.44 1.00 0.18 2.44 2.05 0.52 1.78 0.16 .................... .................... .................... .................... .................... .................... .................... .................... 0.22 Total ................................................................................................ 1 1,496,409 ........................ 1,481,603 1,481,603 1,481,603 2 100.00 1 Includes 2 Excludes reappropriated funds from prior years. undistributed obligations. 158 Department of Health and Human Services, Administration for Children and Families Table 8–22. 75–1536–0–1–506 Head Start (93.600) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... Other Pacific .................................................................................... Migrant Program .............................................................................. Secretary’s Reserve ........................................................................ Unallocated Expansion .................................................................... State Demonstration ........................................................................ Technical Assistance ....................................................................... Research, Development & Education ............................................ Program Support ............................................................................. 105,500 12,353 102,023 63,808 823,696 67,676 51,401 12,771 24,865 260,307 166,837 22,665 22,411 267,111 95,093 51,050 50,433 106,799 144,497 27,344 77,277 107,299 232,215 71,119 160,121 117,837 20,747 35,709 23,698 13,257 127,761 51,790 430,086 139,360 17,009 244,102 80,249 58,893 226,002 21,802 81,718 18,644 118,217 474,092 37,399 13,429 98,142 100,193 50,152 89,784 12,252 ...................... ...................... ...................... 246,792 ...................... 7,919 186,704 ...................... 7,262 264,621 ...................... ...................... ...................... 172,371 20,000 39,246 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 106,555 12,476 103,043 64,447 831,931 68,353 51,915 12,899 25,114 262,910 168,505 22,892 22,635 269,783 96,044 51,560 50,937 107,867 145,942 27,617 78,050 108,372 234,537 71,831 161,722 119,015 20,954 36,066 23,953 13,390 129,039 52,308 434,387 140,753 17,179 246,543 81,052 59,481 228,262 22,020 82,565 18,830 119,399 478,833 37,773 13,563 99,124 101,195 50,654 90,682 12,375 ...................... ...................... ...................... 249,260 ...................... 7,998 188,571 ...................... 7,334 267,267 1,528 ...................... ...................... 174,078 20,000 39,746 106,555 12,476 103,043 64,447 831,931 68,353 51,915 12,899 25,114 262,910 168,505 22,892 22,635 269,783 96,044 51,560 50,937 107,867 145,942 27,617 78,050 108,372 234,537 71,831 161,722 119,015 20,954 36,066 23,953 13,390 129,039 52,308 434,387 140,753 17,179 246,543 81,052 59,481 228,262 22,020 82,565 18,830 119,399 478,833 37,773 13,563 99,124 101,195 50,654 90,682 12,375 ...................... ...................... ...................... 249,260 ...................... 7,998 188,571 ...................... 7,334 267,267 1,528 ...................... ...................... 174,078 20,000 39,746 106,555 12,476 103,043 64,447 831,931 68,353 51,915 12,899 25,114 262,910 168,505 22,892 22,635 269,783 96,044 51,560 50,937 107,867 145,942 27,617 78,050 108,372 234,537 71,831 161,722 119,015 20,954 36,066 23,953 13,390 129,039 52,308 434,387 140,753 17,179 246,543 81,052 59,481 228,262 22,020 82,565 18,830 119,399 478,833 37,773 13,563 99,124 101,195 50,654 90,682 12,375 ...................... ...................... ...................... 249,260 ...................... 7,998 188,571 ...................... 7,334 267,267 1,550 68,431 45,000 105,647 20,000 39,746 1.55 0.18 1.50 0.94 12.08 0.99 0.75 0.19 0.36 3.82 2.45 0.33 0.33 3.92 1.39 0.75 0.74 1.57 2.12 0.40 1.13 1.57 3.40 1.04 2.35 1.73 0.30 0.52 0.35 0.19 1.87 0.76 6.31 2.04 0.25 3.58 1.18 0.86 3.31 0.32 1.20 0.27 1.73 6.95 0.55 0.20 1.44 1.47 0.74 1.32 0.18 .................... .................... .................... 3.62 .................... 0.12 2.74 .................... 0.11 3.88 0.02 0.99 0.65 1.53 0.29 0.58 Total ................................................................................................ 6,773,910 ........................ 6,843,114 6,843,114 6,888,136 1 100.00 1 Excludes undistributed obligations. 159 Department of Health and Human Services, Administration for Children and Families Table 8–23. 75–1545–0–1–506 Foster Care—Title IV–E (93.658) (obligations in thousands of dollars) Estimated FY 2005 obligations from: FY 2004 Actual State or Territory Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... Technical Assistance ....................................................................... New Program Option ...................................................................... 19,221 13,485 58,857 38,467 1,302,629 60,970 76,171 6,430 16,153 131,023 55,318 19,529 7,848 281,928 38,113 24,274 35,104 48,933 68,624 7,515 111,762 71,389 121,710 64,412 3,178 59,218 8,728 19,003 16,580 14,857 60,375 21,603 492,406 65,132 10,983 205,767 17,335 38,167 448,039 13,236 17,095 5,662 35,099 153,905 21,684 11,028 84,761 73,521 27,335 95,438 2,295 ...................... ...................... ...................... 6,930 ...................... ...................... ...................... ...................... 5,065 ...................... ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 18,834 13,214 57,674 37,693 1,276,435 59,744 74,639 6,301 15,828 128,388 54,205 19,136 7,690 276,259 37,346 23,786 34,398 47,949 67,244 7,364 109,514 69,953 119,263 63,117 3,114 58,027 8,552 18,621 16,247 14,558 59,161 21,168 482,504 63,822 10,763 201,629 16,986 37,400 439,029 12,970 16,751 5,548 34,393 150,810 21,248 10,807 83,056 72,042 26,785 93,519 2,249 ...................... ...................... ...................... 6,790 ...................... ...................... ...................... ...................... 12,477 ...................... 18,834 13,214 57,674 37,693 1,276,435 59,744 74,639 6,301 15,828 128,388 54,205 19,136 7,690 276,259 37,346 23,786 34,398 47,949 67,244 7,364 109,514 69,953 119,263 63,117 3,114 58,027 8,552 18,621 16,247 14,558 59,161 21,168 482,504 63,822 10,763 201,629 16,986 37,400 439,029 12,970 16,751 5,548 34,393 150,810 21,248 10,807 83,056 72,042 26,785 93,519 2,249 ...................... ...................... ...................... 6,790 ...................... ...................... ...................... ...................... 12,477 ...................... 18,748 13,154 57,411 37,521 1,270,617 59,471 74,299 6,272 15,756 127,803 53,958 19,049 7,655 274,999 37,176 23,678 34,241 47,731 66,937 7,330 109,015 69,634 118,719 62,829 3,100 57,762 8,513 18,536 16,173 14,492 58,891 21,072 480,304 63,531 10,713 200,710 16,909 37,229 437,027 12,910 16,675 5,523 34,237 150,123 21,151 10,757 82,678 71,714 26,663 93,092 2,239 ...................... ...................... ...................... 6,759 ...................... ...................... ...................... ...................... 15,514 36,000 0.40 0.28 1.24 0.81 27.35 1.28 1.60 0.14 0.34 2.75 1.16 0.41 0.16 5.92 0.80 0.51 0.74 1.03 1.44 0.16 2.35 1.50 2.56 1.35 0.07 1.24 0.18 0.40 0.35 0.31 1.27 0.45 10.34 1.37 0.23 4.32 0.36 0.80 9.41 0.28 0.36 0.12 0.74 3.23 0.46 0.23 1.78 1.54 0.57 2.00 0.05 .................... .................... .................... 0.15 .................... .................... .................... .................... 0.33 0.78 Total ................................................................................................ 1 4,714,290 ........................ 4,627,000 2 4,627,000 4,645,000 3 100.00 1 Reflects grant adjustments made after the end of the fiscal year. a lapse of $268.5 million. 3 Excludes undistributed obligations. 2 Assumes 160 Department of Homeland Security, Departmental Management Table 8–24. 70–0560–0–1–453 State Homeland Security Grant Program (97.067) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... 36,853 19,465 41,243 28,815 175,457 36,944 32,211 20,206 19,136 92,182 55,288 22,186 22,621 73,571 44,422 29,841 28,842 35,073 36,836 22,409 41,251 45,639 62,032 39,267 29,547 42,221 20,668 24,376 26,387 22,321 55,424 24,946 103,243 54,203 19,421 68,235 32,362 32,487 72,371 21,392 35,138 19,996 42,786 115,110 27,033 19,342 49,556 44,015 24,705 41,173 18,809 5,776 6,217 5,830 34,014 ...................... 6,009 ...................... ...................... ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 28,153 14,879 31,708 21,561 134,343 28,081 24,080 14,984 14,144 70,399 41,585 16,675 16,805 54,593 33,331 22,291 21,784 26,419 28,138 16,609 30,812 34,361 46,490 29,548 22,081 31,698 15,318 18,507 19,930 16,776 41,458 18,499 77,268 41,130 14,376 51,691 24,403 24,329 53,870 16,074 26,284 14,809 32,605 88,727 20,308 14,326 38,185 33,336 18,289 30,925 13,934 4,279 4,706 4,333 25,169 100 4,612 ...................... ...................... 28,153 14,879 31,708 21,561 134,343 28,081 24,080 14,984 14,144 70,399 41,585 16,675 16,805 54,593 33,331 22,291 21,784 26,419 28,138 16,609 30,812 34,361 46,490 29,548 22,081 31,698 15,318 18,507 19,930 16,776 41,458 18,499 77,268 41,130 14,376 51,691 24,403 24,329 53,870 16,074 26,284 14,809 32,605 88,727 20,308 14,326 38,185 33,336 18,289 30,925 13,934 4,279 4,706 4,333 25,169 100 4,612 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 1,240,000 .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... Total ................................................................................................ 2,206,903 ........................ 1,664,108 1,664,108 1 1,240,000 .................... 1 FY 2006 State allocations to be determined by the Secretary of Homeland Security. 161 Department of Housing and Urban Development, Public and Indian Housing Programs Table 8–25. 86–0163–0–1–604 Public Housing Operating Fund (14.850) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... Other (DOJ Anti-Drug) .................................................................... Other (Bonus Funds) ...................................................................... 114,280 8,165 17,025 26,591 115,964 17,843 52,403 9,878 50,351 94,139 118,969 11,218 1,109 257,384 42,621 5,534 15,997 50,955 65,589 9,023 73,061 103,529 50,224 40,869 27,205 37,311 4,235 11,289 15,892 6,522 162,979 8,992 842,771 100,181 1,969 166,035 25,891 16,502 254,569 20,302 30,904 2,169 93,196 120,730 4,335 2,556 65,549 36,253 16,935 18,808 1,219 ...................... 3,600 ...................... 100,493 ...................... 18,930 ...................... ...................... 9,941 ...................... 83 6 12 19 84 13 38 7 37 69 87 8 1 187 31 4 12 37 48 7 53 75 37 30 20 27 3 8 12 5 119 7 611 73 1 121 19 12 185 15 23 2 68 88 3 2 48 26 12 14 1 ........................ 3 ........................ 73 ........................ 14 ........................ ........................ ........................ ........................ 77,460 5,534 11,540 18,024 78,601 12,094 35,519 6,695 34,128 63,808 80,638 7,604 752 174,457 28,889 3,751 10,843 34,538 44,457 6,116 49,521 70,173 34,042 27,701 18,440 25,290 2,871 7,652 10,772 4,421 110,468 6,095 571,234 67,903 1,335 112,540 17,549 11,185 172,549 13,761 20,947 1,470 63,169 81,832 2,938 1,732 44,430 24,573 11,479 12,748 826 ...................... 2,440 ...................... 68,115 ...................... 12,831 ...................... ...................... 7,936 9,920 77,543 5,540 11,552 18,043 78,685 12,107 35,557 6,702 34,165 63,877 80,725 7,612 753 174,644 28,920 3,755 10,855 34,575 44,505 6,123 49,574 70,248 34,079 27,731 18,460 25,317 2,874 7,660 10,784 4,426 110,587 6,102 571,845 67,976 1,336 112,661 17,568 11,197 172,734 13,776 20,970 1,472 63,237 81,920 2,941 1,734 44,478 24,599 11,491 12,762 827 ...................... 2,443 ...................... 68,188 ...................... 12,845 ...................... ...................... 7,936 9,920 108,418 7,768 16,197 25,297 110,322 16,975 49,853 9,397 47,901 89,559 113,181 10,672 1,055 244,861 40,547 5,265 15,219 48,476 62,398 8,584 69,506 98,492 47,780 38,881 25,881 35,496 4,029 10,740 15,119 6,205 155,050 8,555 801,767 95,307 1,873 157,957 24,631 15,699 242,485 19,314 29,400 2,063 88,662 114,856 4,124 2,432 62,360 34,489 16,111 17,893 1,160 ...................... 3,425 ...................... 95,604 ...................... 18,009 ...................... ...................... ...................... 10,000 3.18 0.23 0.48 0.74 3.24 0.50 1.46 0.28 1.41 2.63 3.32 0.31 0.03 7.19 1.19 0.15 0.45 1.42 1.83 0.25 2.04 2.89 1.40 1.14 0.76 1.04 0.12 0.32 0.44 0.18 4.55 0.25 23.53 2.80 0.05 4.64 0.72 0.46 7.12 0.57 0.86 0.06 2.60 3.37 0.12 0.07 1.83 1.01 0.47 0.53 0.03 .................... 0.10 .................... 2.81 .................... 0.53 .................... .................... .................... 0.29 Total ................................................................................................ 3,580,984 2,600 1 2,438,336 2,440,936 3,407,300 2 100.00 1 FY 2005 Appropriation provides funding on calendar year basis. undistributed obligations. 2 Excludes 162 Department of Housing and Urban Development, Public and Indian Housing Programs Table 8–26. 86–0303–0–1–604 Section 8 Moderate Rehabilitation (14.856) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... 219 ...................... 644 213 6,964 7,481 4,619 319 ...................... 19,384 2,963 182 ...................... 4,172 614 173 ...................... 81 1,802 1,887 3,224 6,115 2,837 1,079 284 386 1,237 795 1,225 583 10,640 34 13,233 1,053 1,035 9,286 1,657 882 2,352 1,791 3,839 613 2,430 4,063 1,480 245 3,052 137 1,054 744 965 ...................... ...................... ...................... 4,736 ...................... ...................... ...................... ...................... 22 4 22 14 440 34 43 4 15 101 58 13 5 108 29 14 8 23 27 11 47 116 43 33 13 31 5 9 15 10 86 11 245 46 5 76 19 30 72 9 19 4 26 139 10 5 45 51 9 21 2 ........................ 5 1 23 ........................ 1 ........................ ........................ 813 ...................... 1,081 371 11,058 9,296 5,376 92 8,419 27,880 3,428 195 ...................... 11,774 795 346 160 834 2,489 2,385 7,598 12,648 4,069 542 505 860 1,795 1,273 4,911 689 14,693 56 24,404 1,454 1,397 7,918 3,974 3,064 6,237 630 5,950 790 2,895 6,637 3,631 511 6,050 1,458 952 806 1,162 ...................... ...................... ...................... 8,833 ...................... ...................... ...................... ...................... 835 4 1,103 385 11,498 9,330 5,419 96 8,434 27,981 3,486 208 5 11,882 824 360 168 857 2,516 2,396 7,645 12,764 4,112 575 518 891 1,800 1,282 4,926 699 14,779 67 24,649 1,500 1,402 7,994 3,993 3,094 6,309 639 5,969 794 2,921 6,776 3,641 516 6,095 1,509 961 827 1,164 ...................... 5 1 8,856 ...................... 1 ...................... ...................... 742 ...................... 986 339 10,086 8,478 4,903 83 7,678 25,428 3,127 178 ...................... 10,738 725 315 146 761 2,270 2,175 6,929 11,536 3,711 495 460 784 1,637 1,161 4,479 629 13,400 51 22,257 1,326 1,274 7,222 3,625 2,795 5,688 575 5,426 721 2,641 6,054 3,312 466 5,518 1,330 868 735 1,060 ...................... ...................... ...................... 8,056 ...................... ...................... ...................... ...................... 1 0.36 .................... 0.48 0.17 4.91 4.13 2.39 0.04 3.74 12.38 1.52 0.09 .................... 5.23 0.35 0.15 0.07 0.37 1.11 1.06 3.37 5.62 1.81 0.24 0.22 0.38 0.80 0.57 2.18 0.31 6.52 0.02 10.84 0.65 0.62 3.52 1.77 1.36 2.77 0.28 2.64 0.35 1.29 2.95 1.61 0.23 2.69 0.65 0.42 0.36 0.52 .................... .................... .................... 3.92 .................... .................... .................... .................... Total ................................................................................................ 1 134,803 2,277 225,184 227,461 205,379 2 100.00 1 This program was funded in the Housing Certificate Fund (86X0319) in FY 2004. undistributed obligations. 2 Excludes 163 Department of Housing and Urban Development, Public and Indian Housing Programs Table 8–27. 86–0302–0–1–604 Housing Choice Vouchers (14.871) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total 1 0.93 Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... 137,937 26,368 139,589 89,116 2,825,645 212,355 273,074 27,980 93,430 629,605 371,106 84,193 33,491 692,123 183,063 88,843 54,039 149,518 173,379 66,518 297,793 741,076 273,429 210,280 83,644 200,555 27,487 55,395 93,479 66,369 545,177 68,931 1,560,457 295,345 29,493 479,983 121,596 191,436 459,779 57,001 121,082 25,420 164,425 891,576 64,369 34,118 287,985 325,366 58,285 135,360 9,974 ...................... 30,760 2,775 142,444 ...................... 7,338 ...................... ...................... 2,312 441 2,346 1,495 47,396 3,678 4,646 474 1,563 10,859 6,259 1,412 560 11,651 3,073 1,489 904 2,503 2,931 1,145 5,037 12,502 4,623 3,537 1,404 3,362 481 940 1,585 1,120 9,300 1,154 26,332 4,959 511 8,187 2,062 3,218 7,733 984 2,090 436 2,792 14,986 1,102 575 4,870 5,446 993 2,277 183 ........................ 515 46 2,463 ........................ 123 ........................ ........................ 134,961 27,732 145,606 91,614 2,773,778 212,017 288,560 30,673 93,001 615,593 349,527 92,607 32,367 691,617 198,424 87,562 54,524 151,247 178,095 66,157 336,013 741,847 277,637 208,298 86,089 200,681 26,238 55,584 90,919 64,546 558,436 69,018 1,496,743 304,186 28,173 473,748 121,296 189,299 493,186 62,601 116,709 25,605 159,896 894,047 62,069 34,183 289,925 322,124 59,486 134,046 10,002 ...................... 32,959 2,187 156,291 ...................... 7,626 ...................... ...................... 137,272 28,173 147,952 93,109 2,821,174 215,695 293,207 31,147 94,564 626,452 355,786 94,019 32,927 703,268 201,498 89,051 55,428 153,750 181,026 67,302 341,050 754,350 282,259 211,834 87,493 204,044 26,718 56,524 92,504 65,667 567,736 70,172 1,523,075 309,145 28,684 481,934 123,358 192,516 500,919 63,585 118,799 26,041 162,688 909,033 63,171 34,758 294,795 327,571 60,479 136,324 10,185 ...................... 33,473 2,233 158,754 ...................... 7,749 ...................... ...................... 147,407 30,290 159,033 100,063 3,029,570 231,568 315,171 33,502 101,577 672,362 381,760 101,147 35,351 755,397 216,723 95,636 59,552 165,195 194,519 72,258 366,999 810,259 303,240 227,507 94,027 219,188 28,657 60,710 99,304 70,499 609,933 75,383 1,634,770 332,237 30,771 517,436 132,482 206,755 538,667 68,374 127,472 27,967 174,642 976,494 67,793 37,335 316,661 351,830 64,971 146,408 10,924 ...................... 35,998 2,388 170,704 ...................... 8,330 ...................... ...................... 0.19 1.00 0.63 19.12 1.46 1.99 0.21 0.64 4.24 2.41 0.64 0.22 4.77 1.37 0.60 0.38 1.04 1.23 0.46 2.32 5.11 1.91 1.44 0.59 1.38 0.18 0.38 0.63 0.44 3.85 0.48 10.32 2.10 0.19 3.27 0.84 1.30 3.40 0.43 0.80 0.18 1.10 6.16 0.43 0.24 2.00 2.22 0.41 0.92 0.07 .................... 0.23 0.02 1.08 .................... 0.05 .................... .................... Total ................................................................................................ 1 14,511,353 245,065 14,507,355 14,752,421 15,845,194 2 100.00 1 This program was funded in the Housing Certificate Fund (86X0319) in FY 2004. undistributed obligations. 2 Excludes 164 Department of Housing and Urban Development, Public and Indian Housing Programs Table 8–28. 86–0304–0–1–604 Public Housing Capital Fund (14.872) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... 91,546 3,556 13,625 29,979 126,574 18,805 43,342 6,563 31,977 82,667 110,282 17,302 1,756 229,683 37,863 8,221 17,571 63,561 68,969 7,641 61,901 86,196 65,627 44,368 30,592 49,251 4,133 13,370 8,767 7,459 118,300 10,898 518,188 72,231 3,211 135,466 25,306 16,222 225,454 19,876 27,885 3,259 90,940 125,727 4,418 2,939 55,388 40,827 13,737 26,633 1,723 ...................... 1,408 ...................... 179,455 ...................... 8,123 ...................... ...................... 8,440 328 1,256 2,764 11,669 1,734 3,996 605 2,948 7,621 10,167 1,595 162 21,175 3,491 758 1,620 5,860 6,358 704 5,707 7,947 6,050 4,090 2,820 4,541 381 1,233 808 688 10,906 1,005 47,772 6,659 296 12,489 2,333 1,496 20,785 1,832 2,571 300 8,384 11,591 407 271 5,106 3,764 1,266 2,455 159 ........................ 130 ........................ 16,544 ........................ 749 ........................ ........................ 75,903 2,948 11,297 24,856 104,945 15,592 35,936 5,442 26,513 68,541 91,437 14,345 1,456 190,435 31,393 6,816 14,569 52,700 57,184 6,335 51,323 71,467 54,413 36,786 25,364 40,835 3,427 11,085 7,269 6,184 98,085 9,036 429,641 59,888 2,662 112,318 20,982 13,450 186,929 16,480 23,120 2,702 75,400 104,243 3,663 2,437 45,923 33,851 11,390 22,082 1,429 ...................... 1,167 ...................... 148,790 ...................... 6,735 ...................... ...................... 84,343 3,276 12,553 27,620 116,614 17,325 39,932 6,047 29,461 76,162 101,604 15,941 1,618 211,610 34,884 7,574 16,188 58,560 63,542 7,040 57,030 79,414 60,463 40,877 28,185 45,376 3,808 12,318 8,077 6,872 108,991 10,040 477,413 66,547 2,958 124,807 23,315 14,946 207,714 18,312 25,691 3,003 83,784 115,834 4,070 2,708 51,030 37,614 12,656 24,537 1,587 ...................... 1,297 ...................... 165,334 ...................... 7,484 ...................... ...................... 68,487 2,660 10,193 22,428 94,692 14,068 32,425 4,910 23,922 61,844 82,503 12,944 1,314 171,829 28,326 6,150 13,145 47,551 51,597 5,716 46,309 64,484 49,096 33,192 22,886 36,845 3,092 10,002 6,559 5,580 88,502 8,153 387,663 54,037 2,402 101,344 18,932 12,136 168,665 14,869 20,861 2,438 68,033 94,058 3,305 2,199 41,436 30,543 10,277 19,924 1,289 ...................... 1,053 ...................... 134,253 ...................... 6,077 ...................... ...................... 2.94 0.11 0.44 0.96 4.07 0.60 1.39 0.21 1.03 2.66 3.55 0.56 0.06 7.38 1.22 0.26 0.56 2.04 2.22 0.25 1.99 2.77 2.11 1.43 0.98 1.58 0.13 0.43 0.28 0.24 3.80 0.35 16.66 2.32 0.10 4.35 0.81 0.52 7.25 0.64 0.90 0.10 2.92 4.04 0.14 0.09 1.78 1.31 0.44 0.86 0.06 .................... 0.05 .................... 5.77 .................... 0.26 .................... .................... Total ................................................................................................ 1 3,110,761 286,785 2,579,200 1 2,865,985 1 2,327,200 2 100.00 1 Includes Technical Assistance, Emergency/Disaster, and Resident Opportunities and Self-Sufficiency (ROSS) funding. FY 2004 also includes Neighborhood Networks funding. 2 Excludes undistributed obligations. 165 Department of Housing and Urban Development, Community Planning and Development Table 8–29. 86–0205–0–1–604 HOME Investment Partnerships Program (14.239) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... Technical Assistance and Housing Counseling 1 ........................... 27,499 4,307 28,548 17,294 281,698 24,462 22,290 5,255 9,675 88,165 46,524 8,330 7,514 82,326 33,036 16,463 14,912 27,039 33,792 9,077 27,864 51,243 55,808 24,672 18,708 33,652 6,710 10,026 12,952 7,054 53,059 11,857 217,698 44,190 3,877 72,978 22,180 23,850 82,212 10,121 21,534 4,711 33,861 129,636 10,291 4,592 37,506 37,385 14,072 30,937 3,650 ...................... ...................... ...................... 35,002 ...................... ...................... ...................... ...................... 63,503 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 25,868 4,184 26,613 16,328 266,520 22,855 21,295 5,088 9,220 82,937 44,160 7,832 7,057 77,508 31,171 15,438 13,886 25,487 31,906 8,609 26,065 48,900 52,668 23,348 17,575 31,684 6,330 9,339 12,252 6,655 50,417 11,231 207,164 41,507 3,696 68,637 20,927 22,326 77,375 9,720 20,436 4,385 31,778 121,892 9,601 4,343 35,105 35,284 13,388 29,261 3,586 ...................... ...................... ...................... 33,722 ...................... ...................... ...................... ...................... 65,121 25,868 4,184 26,613 16,328 266,520 22,855 21,295 5,088 9,220 82,937 44,160 7,832 7,057 77,508 31,171 15,438 13,886 25,487 31,906 8,609 26,065 48,900 52,668 23,348 17,575 31,684 6,330 9,339 12,252 6,655 50,417 11,231 207,164 41,507 3,696 68,637 20,927 22,326 77,375 9,720 20,436 4,385 31,778 121,892 9,601 4,343 35,105 35,284 13,388 29,261 3,586 ...................... ...................... ...................... 33,722 ...................... ...................... ...................... ...................... 65,121 27,165 4,394 27,947 17,146 279,880 24,001 22,362 5,343 9,682 87,094 46,374 8,225 7,411 81,393 32,733 16,212 14,582 26,765 33,505 9,041 27,372 51,351 55,308 24,518 18,456 33,272 6,647 9,807 12,866 6,989 52,944 11,794 217,548 43,588 3,881 72,077 21,976 23,445 81,253 10,207 21,460 4,605 33,371 128,002 10,082 4,561 36,865 37,053 14,059 30,728 3,766 ...................... ...................... ...................... 35,412 ...................... ...................... ...................... ...................... 14,482 1.40 0.23 1.44 0.88 14.42 1.24 1.15 0.28 0.50 4.49 2.39 0.42 0.38 4.19 1.69 0.84 0.75 1.38 1.73 0.47 1.41 2.65 2.85 1.26 0.95 1.71 0.34 0.51 0.66 0.36 2.73 0.61 11.21 2.25 0.20 3.71 1.13 1.21 4.19 0.53 1.11 0.24 1.72 6.59 0.52 0.23 1.90 1.91 0.72 1.58 0.19 .................... .................... .................... 1.82 .................... .................... .................... .................... 0.75 Total ................................................................................................ 2,005,597 ........................ 1,899,680 1,899,680 1,941,000 2 100.00 1 FY 2004 and FY 2005 include Housing Counseling. For FY 2006, a separate account is proposed for funding Housing Counseling. undistributed obligations. 2 Excludes 166 Department of Transportation, Federal Aviation Administration Table 8–30. 69–8106–0–7–402 Airport Improvement Program (20.106a) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... Small Community Air Service Program .......................................... Airport Technology Research ......................................................... 55,895 222,144 87,936 38,600 243,908 65,265 9,474 5,486 386 186,024 92,010 54,909 31,235 109,830 62,234 35,703 28,773 83,046 63,062 27,892 29,741 38,437 104,388 66,728 43,395 121,486 32,625 26,089 61,531 18,434 48,620 15,390 138,813 91,487 22,782 84,509 39,666 38,773 112,181 12,209 41,546 20,149 66,470 222,320 28,843 4,009 74,389 84,743 34,275 52,412 46,842 9,826 9,464 29,845 31,681 ...................... 4,996 ...................... 65,305 19,882 ...................... ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 55,420 220,257 87,189 38,272 241,837 64,711 9,394 5,440 382 184,443 91,228 54,442 30,970 108,897 61,706 35,400 28,528 82,340 62,526 27,655 29,488 38,110 103,501 66,161 43,027 120,454 32,347 25,867 61,008 18,277 48,207 15,259 137,634 90,709 22,588 83,791 39,329 38,444 111,228 12,105 41,193 19,978 65,905 220,431 28,598 3,975 73,757 84,023 33,984 51,967 46,444 9,742 9,384 29,591 31,412 ...................... 4,953 ...................... 68,252 19,840 ...................... 55,420 220,257 87,189 38,272 241,837 64,711 9,394 5,440 382 184,443 91,228 54,442 30,970 108,897 61,706 35,400 28,528 82,340 62,526 27,655 29,488 38,110 103,501 66,161 43,027 120,454 32,347 25,867 61,008 18,277 48,207 15,259 137,634 90,709 22,588 83,791 39,329 38,444 111,228 12,105 41,193 19,978 65,905 220,431 28,598 3,975 73,757 84,023 33,984 51,967 46,444 9,742 9,384 29,591 31,412 ...................... 4,953 ...................... 68,252 19,840 ...................... 47,497 188,766 74,723 32,800 207,261 55,459 8,051 4,662 327 158,073 78,185 46,658 26,542 93,328 52,884 30,339 24,449 70,568 53,587 23,701 25,272 32,661 88,703 56,702 36,875 103,233 27,722 22,169 52,286 15,664 41,315 13,077 117,956 77,740 19,359 71,811 33,706 32,948 95,326 10,374 35,304 17,122 56,482 188,915 24,509 3,407 63,212 72,010 29,125 44,537 39,804 8,349 8,042 25,360 26,921 ...................... 4,245 ...................... 82,397 ...................... 17,500 1.63 6.47 2.56 1.12 7.10 1.90 0.28 0.16 0.01 5.42 2.68 1.60 0.91 3.20 1.81 1.04 0.84 2.42 1.84 0.81 0.87 1.12 3.04 1.94 1.26 3.54 0.95 0.76 1.79 0.54 1.42 0.45 4.04 2.66 0.66 2.46 1.16 1.13 3.27 0.36 1.21 0.59 1.94 6.48 0.84 0.12 2.17 2.47 1.00 1.53 1.36 0.29 0.28 0.87 0.92 .................... 0.15 .................... .................... .................... 0.60 Total ................................................................................................ 3,498,093 ........................ 3,472,000 3,472,000 3,000,000 1 100.00 1 Excludes undistributed obligations. 167 Department of Transportation, Federal Aviation Administration Table 8–31. 69–8106–0–7–402 Airport Improvement Program—Emergency Response Fund (20.106b) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... 575 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 32 ...................... ...................... ¥491 589 ...................... ...................... ...................... ...................... ...................... ¥20 ...................... ¥21 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ¥4 ...................... ...................... ¥30 ...................... ...................... ...................... ...................... ...................... ¥47 ...................... ...................... ...................... ...................... ¥88 ...................... ...................... 613 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 112 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 112 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... Total ................................................................................................ 1,108 112 ...................... 112 ...................... .................... 168 Department of Transportation, Federal Aviation Administration Table 8–32. 69–8106–0–7–402 Airport Improvement Program—Emergency Assistance to Airports (20.106c) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 1,523 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 23,143 ...................... ...................... ...................... ...................... ...................... ...................... ...................... 35 ...................... ...................... ...................... ...................... ...................... ...................... 21 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 15 ...................... ...................... ...................... ...................... 88 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 32 ...................... ...................... ...................... ...................... ...................... 143 ...................... ...................... ...................... ...................... 1,523 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 23,143 ...................... ...................... ...................... ...................... ...................... ...................... ...................... 35 ...................... ...................... ...................... ...................... ...................... ...................... 21 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 15 ...................... ...................... ...................... ...................... 88 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 32 ...................... ...................... ...................... ...................... ...................... 143 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... Total ................................................................................................ ...................... ........................ 25,000 25,000 ...................... .................... 169 Department of Transportation, Federal Highway Administration Table 8–33. 69–8083–0–7–401 Highway Planning and Construction (20.205) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... 556,546 356,663 489,792 358,318 2,513,459 368,131 418,100 133,508 124,261 1,299,973 1,023,184 180,508 218,071 990,907 664,627 364,329 380,119 502,705 463,338 159,423 522,912 563,833 878,988 416,954 344,857 653,150 285,912 240,846 203,078 158,455 738,616 247,519 1,515,961 807,531 200,745 916,131 476,262 308,007 1,369,294 175,417 501,467 216,544 578,167 2,377,527 235,734 149,465 683,434 565,284 299,317 559,950 191,174 8,003 8,463 3,199 73,499 ...................... 12,586 ...................... 1,226,243 517,626 146,372 424,144 360,245 2,503,375 275,932 310,146 119,127 136,788 1,130,987 1,056,708 225,469 191,429 914,181 493,915 290,517 313,683 390,162 570,956 118,558 427,178 1,055,195 773,219 404,914 327,771 506,451 194,417 184,955 193,273 133,273 750,808 242,192 1,442,924 617,820 159,339 1,104,708 405,313 268,220 1,505,793 139,977 385,397 199,508 729,639 1,684,704 228,782 141,064 700,516 449,004 368,163 500,374 147,653 1,346 ........................ ........................ 5,644 ........................ 21,909 ........................ 2,665,632 134,261 203,074 136,371 66,710 564,577 112,920 107,224 5,680 ¥10,808 447,598 165,956 ¥53,364 49,053 217,882 250,753 77,454 58,497 127,492 ¥49,360 32,718 114,907 ¥435,326 216,805 41,477 81,709 176,131 60,020 53,622 62,790 23,945 143,734 56,830 239,125 194,794 39,125 107,307 126,160 84,257 167,357 32,941 96,813 25,273 69,270 746,630 28,524 ¥519 124,145 124,109 16,282 111,051 47,590 2,754 13,172 3,293 96,935 ...................... 4,408 ...................... 5,144,294 651,887 349,446 560,515 426,955 3,067,952 388,852 417,370 124,807 125,980 1,578,585 1,222,664 172,105 240,482 1,132,063 744,668 367,971 372,180 517,654 521,596 151,276 542,085 619,869 990,024 446,391 409,480 682,582 254,437 238,577 256,063 157,218 894,542 299,022 1,682,049 812,614 198,464 1,212,015 531,473 352,477 1,673,150 172,918 482,210 224,781 798,909 2,431,334 257,306 140,545 824,661 573,113 384,445 611,425 195,243 4,100 13,172 3,293 102,579 ...................... 26,317 ...................... 7,809,926 621,042 321,357 568,558 408,933 3,077,532 413,968 431,604 132,989 128,969 1,542,259 1,168,648 167,281 234,435 1,119,075 788,757 380,309 377,411 521,514 506,005 161,011 551,889 620,567 997,105 454,773 402,045 717,855 273,362 255,513 236,829 159,711 898,298 296,461 1,650,655 852,405 203,081 1,151,410 530,903 369,549 1,586,159 180,208 506,068 220,687 737,121 2,531,233 260,753 144,749 817,890 574,925 340,090 606,377 208,627 3,906 14,349 3,587 114,101 ...................... 19,531 ...................... 2,500,490 1.91 0.99 1.75 1.26 9.45 1.27 1.33 0.41 0.40 4.74 3.59 0.51 0.72 3.44 2.42 1.17 1.16 1.60 1.55 0.49 1.69 1.91 3.06 1.40 1.23 2.20 0.84 0.78 0.73 0.49 2.76 0.91 5.07 2.62 0.62 3.54 1.63 1.13 4.87 0.55 1.55 0.68 2.26 7.77 0.80 0.44 2.51 1.77 1.04 1.86 0.64 0.01 0.04 0.01 0.35 .................... 0.06 .................... .................... Total ................................................................................................ 30,280,486 29,557,395 10,886,422 40,443,817 35,064,919 1 100.00 1 Excludes undistributed obligations. 170 Department of Transportation, Federal Transit Administration Table 8–34. 69–8303–0–7–401 Federal Transit Formula Grants and Research (Section 5307) (20.507) (obligations in thousands of dollars) Estimated FY 2005 obligations from: State or Territory FY 2004 Actual Previous authority New authority Total FY 2006 (estimated) FY 2006 Percentage of distributed total Alabama ........................................................................................... Alaska .............................................................................................. Arizona ............................................................................................. Arkansas .......................................................................................... California .......................................................................................... Colorado .......................................................................................... Connecticut ...................................................................................... Delaware .......................................................................................... District of Columbia ......................................................................... Florida .............................................................................................. Georgia ............................................................................................ Hawaii .............................................................................................. Idaho ................................................................................................ Illinois ............................................................................................... Indiana ............................................................................................. Iowa ................................................................................................. Kansas ............................................................................................. Kentucky .......................................................................................... Louisiana ......................................................................................... Maine ............................................................................................... Maryland .......................................................................................... Massachusetts ................................................................................. Michigan .......................................................................................... Minnesota ........................................................................................ Mississippi ....................................................................................... Missouri ........................................................................................... Montana ........................................................................................... Nebraska ......................................................................................... Nevada ............................................................................................ New Hampshire ............................................................................... New Jersey ...................................................................................... New Mexico ..................................................................................... New York ......................................................................................... North Carolina ................................................................................. North Dakota ................................................................................... Ohio ................................................................................................. Oklahoma ........................................................................................ Oregon ............................................................................................. Pennsylvania ................................................................................... Rhode Island ................................................................................... South Carolina ................................................................................. South Dakota ................................................................................... Tennessee ....................................................................................... Texas ............................................................................................... Utah ................................................................................................. Vermont ........................................................................................... Virginia ............................................................................................. Washington ...................................................................................... West Virginia ................................................................................... Wisconsin ........................................................................................ Wyoming .......................................................................................... American Samoa ............................................................................. Guam ............................................................................................... Northern Mariana Islands ................................................................ Puerto Rico ...................................................................................... Freely Associated States ................................................................ Virgin Islands ................................................................................... Indian Tribes .................................................................................... Undistributed .................................................................................... Alaska Railroad ............................................................................... Over the Road Bus ......................................................................... National Research ........................................................................... 10,091 2,114 100,856 8,580 752,267 48,339 8,995 2,674 106,790 172,163 88,252 20,950 5,180 217,557 37,860 13,582 5,985 18,633 15,456 6,081 22,483 136,668 60,222 45,786 2,146 43,892 839 6,824 43,628 3,530 274,736 15,016 524,584 23,597 2,352 113,486 11,470 54,966 205,079 9,368 10,532 1,953 29,760 206,194 32,533 1,639 76,625 124,314 4,363 30,425 711 ...................... ...................... ...................... 58,595 ...................... ...................... ...................... 12,564 2,916 ...................... ...................... ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 35,518 14,150 70,755 21,829 1,147,648 68,503 61,971 10,407 92,455 241,359 166,556 40,055 11,962 345,311 64,095 27,771 22,323 40,506 53,144 9,841 99,862 174,055 112,260 69,627 19,774 85,876 7,729 16,621 35,572 10,400 363,868 19,529 870,415 76,986 6,808 146,499 32,340 56,786 260,857 13,177 32,113 6,828 55,558 339,664 40,009 4,420 117,391 139,405 14,411 69,252 4,162 379 1,016 586 99,839 ...................... 767 ...................... ...................... 4,811 6,894 49,352 35,518 14,150 70,755 21,829 1,147,648 68,503 61,971 10,407 92,455 241,359 166,556 40,055 11,962 345,311 64,095 27,771 22,323 40,506 53,144 9,841 99,862 174,055 112,260 69,627 19,774 85,876 7,729 16,621 35,572 10,400 363,868 19,529 870,415 76,986 6,808 146,499 32,340 56,786 260,857 13,177 32,113 6,828 55,558 339,664 40,009 4,420 117,391 139,405 14,411 69,252 4,162 379 1,016 586 99,839 ...................... 767 ...................... ...................... 4,811 6,894 49,352 41,589 16,569 82,849 25,560 1,287,902 80,212 72,563 12,186 108,258 282,614 184,263 46,901 14,007 398,552 75,051 32,518 26,139 47,430 62,227 11,524 116,931 203,806 131,449 81,528 23,154 96,860 9,050 19,462 41,652 12,178 414,820 22,867 1,001,204 90,145 7,971 171,540 37,868 66,492 300,465 15,429 37,602 7,995 65,054 354,807 46,848 5,176 132,477 163,234 16,875 81,089 4,874 443 1,189 686 110,318 ...................... 898 ...................... ...................... 4,850 6,950 47,792 0.61 0.24 1.21 0.37 18.77 1.17 1.06 0.18 1.58 4.12 2.68 0.68 0.20 5.81 1.09 0.47 0.38 0.69 0.91 0.17 1.70 2.97 1.92 1.19 0.34 1.41 0.13 0.28 0.61 0.18 6.04 0.33 14.59 1.31 0.12 2.50 0.55 0.97 4.38 0.22 0.55 0.12 0.95 5.17 0.68 0.08 1.93 2.38 0.25 1.18 0.07 0.01 0.02 0.01 1.61 .................... 0.01 .................... .................... 0.07 0.10 0.70 Total ................................................................................................ 1 3,836,198 ........................ 6,012,057 2 6,012,057 2 6,862,942 3 100.00 1 Activity funded under Federal Transit Urbanized Area—Formula Grants (Section 5307). Includes Federal Highway transfers. Grants and Research is a consolidated account structure proposed in the Administration’s Surface Transportation Authorization proposal (SAFETEA). Amounts include Fixed Guideway Modernization (CFDA 20.500) new obligations of $1.2 billion for FY 2005 and $1.3 billion for FY 2006. Also includes Elderly and Persons with Disabilities (CFDA 20.513), Job Access and Reverse Commute (CFDA 20.516), and New Freedom Initiative. 3 Excludes undistributed obligations. 2 Formula 171 9. INTEGRATING SERVICES WITH INFORMATION TECHNOLOGY This year the President is proposing to spend about $65 billion for Information Technology (IT) and associated support services to deliver results for the American people, providing timely and accurate information to the citizens and government decision makers while ensuring security and privacy. The three major efforts underway will continue this fiscal year to ensure the Federal government’s investment in Information Technology returns benefits which far outweigh the costs. These efforts are: • Managing for Results • Expanding the Use of Electronic Government • Integrating the Federal Enterprise Architecture MANAGEMENT FOR RESULTS Departments and agencies are focused on: • Making it easier for citizens to obtain service and interact with the Federal government; • Improving government efficiency and effectiveness; • Improving government’s responsiveness to citizens; and • Making better purchasing decisions. With these goals in mind, the Federal departments and agencies are fulfilling the goals of the ClingerCohen Act of 1996. This Act also requires the Director of the Office of Management and Budget (OMB) to submit an annual report to the Congress on the results we are achieving from Federal IT spending. This Budget chapter and Table 9–1, ‘‘Effectiveness of Agency’s IT Management and E-Gov Processes,’’ included on the CD-ROM, fulfill the statutory reporting requirement. The Administration continues its oversight of agencies’ IT planning and portfolio activities. Our goal is to be the best manager, innovator and user of information, services and information systems in the world. There are great opportunities to apply existing and emerging business best practices to government to achieve increases in productivity and delivery of services and information. Agencies are continuing to establish program performance metrics, identify benefits achieved by their IT investments and show results in the agency’s overall program performance. Work continues in the operational analysis of cost, schedule and performance. Performance of Government.—The measure of success rests in the results we achieve and the satisfaction of our customers. The ultimate success is determined by measuring distinct, quantitative, citizen-centered, performance results which are tied to the overall agencies’ mission goals and outcomes. Each IT investment must have specific performance targets tied to a specific significant beneficial impact for our citizens. The IT projects represented by these investments must be monitored by the agencies and they must continually assess whether or not the projects are accomplishing their intended outcomes on-time while staying within their approved budgets. Departments’ or agencies’ IT business cases for any planned and/or operational system critical to the mission of the agency must be evaluated. Each business case must have a clearly defined vision and outcomes, including security linked to the department’s or agency’s mission through their enterprise architecture. The business cases are scored on specific criteria, including whether: • the expected benefits outweigh estimated costs; • the likelihood the agency will succeed; • cyber-security, planned or in place, as appropriate; • the acquisition strategy helps manage project risks; and • project management teams and plans are qualified and complete. The Federal departments and agencies continue to improve in their efforts to guarantee the success and results for the taxpayer. The Administration continues to monitor the performance of its IT projects. With the release of the Fiscal Year 2005 President’s Budget, there were 621 major projects representing about $22 billion on the ‘‘Management Watch List,’’ i.e., those project justifications needing improvement in performance measurement, earned value management or system security. Agencies were directed to remediate the shortfalls identified prior to expending funds before the start of the fiscal year. The agencies have worked to remediate the weaknesses or have put measures in place to monitor the progress of the project. If a project is still on the ‘‘Management Watch List,’’ agencies must describe their plans to manage or mitigate risk before undertaking or continuing that project. For example, the Department of Defense (DOD) successfully addressed deficiencies for 106 of its 107 business cases on the ’’Management Watch List,’’ and developed a remediation plan and schedule for the remaining program. This year, less than a third (342 of 1,087 projects valued at $15 billion) are on the ‘‘Management Watch List.’’ These projects still need to address performance, security or other related issues before obligating funding in Fiscal Year 2006. The Report on Information Technology (IT) Spending for the Federal Government (Exhibit 53) located at 173 174 ANALYTICAL PERSPECTIVES www.whitehouse.gov/OMB, provides details of the Administration’s proposed 2006 IT investments. Related documents on IT security and Electronic Government (E-Government) will also be available at www.whitehouse.gov/OMB and will be published by March 1, 2005. Since the Administration’s guidance was unchanged from Fiscal Year 2005 to Fiscal Year 2006, investments were studied for trends and duplications across government entities. At about $65 billion, the Fiscal Year 2006 Federal IT portfolio represents a 9 percent increase over Fiscal Year 2005 President’s Budget (see July 2004, Update to the Report on Information Technology (IT) Spending for the Federal Government (Exhibit 53) located at www.whitehouse.gov/OMB.) The following represents the highlights: Major IT Investments ................................ Rated Unacceptable ............................. Well Planned and Managed ................. FY 2005 FY 2006 1,130 54 385 1,087 16 682 % Change –4 –70 78 (Value in millions) Major IT Investments ................................ Rated Unacceptable ............................. Well Planned and Managed ................. $32,341 $1,109 $8,478 $40,979 $1,497 $24,761 27 35 292 In addition to analyzing business cases for major acquisitions, the Administration identifies overlapping or duplicative IT investments. When there is duplication across Federal agencies, the Administration brings together the appropriate agencies and helps them to consider broad-based approaches to promote inter-agency data sharing and cooperation in building common solutions, rather than maintaining separate investments. These inter-agency taskforces focus on the agency Lines of Business (LoB) rather than a specific technology or investment. In Fiscal Year 2004, there was significant progress made on five LoB efforts. These are: • Case Management • Federal Health Architecture • Financial Management • Human Resources Management • Grants Management The Case Management LoB is the business and technology foundation upon which new solutions for the Department of Justice and other agencies will be built. It will also provide a blueprint for sharing information and best practices across the Federal government. The goal of this LoB is to improve effectiveness and efficiency of law enforcement, investigation, and civil and criminal litigation case management business processes. Federal Health Architecture (FHA) is focused on improving the efficiency, standardization, reliability, and availability of comprehensive health information solutions through a common framework. FHA is working within the Office of the National Coordinator for Health Information Technology in the Department of Health and Human Services to improve the safety and health of citizens by providing easier access to health-related information and services. Cross-agency teams analyzed opportunities for integration and consolidation in the areas of Financial Management, Human Resources Management, and Grants Management. They have recommended the establishment of government-wide service providers in the areas of Financial Management and Human Resources Management. The Grants Management team is developing plans for the consolidation of Grants Management activities across the government. The analysis showed savings of more than $5 billion can be expected over a 10 year timeframe through the consolidation of Financial Management and Human Resources Management systems and the standardization and optimization of associated business processes and functions. To realize these benefits, the Administration asked agencies with the skills and capabilities to function as government-wide service providers in the areas of Human Resources Management and/or Financial Management to submit business cases for doing so as part of the Fiscal Year 2006 budget process. The business cases were evaluated using a due diligence checklist developed in conjunction with third-party industry groups. This checklist assessed potential service providers’ abilities in terms of past performance, current capabilities, and ability to operate a customer-focused organization. On the basis of the review, the following agencies were designated as eligible to enter into competitions to become cross-agency service providers: Financial Management • Department of the Interior (National Business Center) • General Services Administration • Department of Transportation • Treasury/Bureau of Public Debt Human Resources Management • Department of the Interior (National Business Center) • Department of Agriculture (National Finance Center) • Department of Treasury • Department of Health and Human Services • Department of Defense Rather than expend significant effort and resources modernizing existing systems, agencies will select, through a competitive process, beginning in Fiscal Year 2005, a government-wide service provider for Human Resources Management and/or Financial Management services. Upon migration to common, government-wide solutions, agencies will shut down existing systems— which will not only save money but also make available resources for agencies to better focus on achieving their missions. This Administration continues to leverage government buying power while reducing redundant purchases through the SmartBUY program. SmartBUY is a Federal government-wide enterprise software licensing initiative managed by the General Services Admin- 9. INTEGRATING SERVICES WITH INFORMATION TECHNOLOGY istration (GSA) to streamline the acquisition process and provide the best priced, standards-compliant IT. The SmartBUY initiative includes commercial off-theshelf software generally acquired using license agreements with terms and prices that vary based on volume, including the following types of software licenses: Office Automation; Network Management; Antivirus; Database; Business Modeling Tools; and Open Source Software Support. Since the Administration announced the SmartBUY program in June 2003, the program has completed agreements with four software vendors and plans to negotiate agreements with the remaining top software vendors to the Federal government. Based on these agreements already in place, the Federal government expects to reduce its annual software licenses expenses by $21.5 million annually. The Administration estimates when all agencies make joint use of these best priced software licenses, the Federal government could save in excess of $100 million per year. As part of its management responsibilities, OMB continued using one of the key authorities established in Section 5113, ‘‘Enforcement of Accountability’’ of the Clinger-Cohen Act. Under this authority, the Director is required to evaluate information resources management practices of the executive agencies with respect to IT investments. Accordingly, OMB has taken several steps to assist the SmartBUY program in leveraging government buying power and reducing redundant purchases. The following actions were taken: • Issued M–03–14 ‘‘Reducing Cost & Improving Quality in Federal Purchases of Commercial Software,’’ (06/02/03) requesting agencies to assist and support the SmartBUY initiative by providing information on existing agreements, developing migration strategies, and taking steps to integrate agency common desktop and server software licenses with the initiative. • Required, as part of the Fiscal Year 2005 budget process, in Fiscal Year 2004, agencies to review all commercial software acquisitions for possible inclusion into the SmartBUY program. • Issued M–04–08 ‘‘Maximizing Use of SmartBUY and Avoiding Duplication of Agency Activities with the President’s 24 E-Gov Initiatives,’’ (02/25/04) to all senior procurement officers and Chief Information Officers (CIOs) directing agencies to postpone all further purchase requirements for a category of software once GSA has notified the agencies that it expects to award a SmartBUY contract within 30 days for that category of software. • Established a formal waiver process for agencies with compelling procurement needs, ensuring compliance with SmartBUY and promoting negotiating leverage with software vendors. • Issued M–04–16 ‘‘Software Acquisition,’’ (07/01/ 04), reminding agencies of policies and procedures covering acquisition of software to support agency operations. This directive requires that all agency IT investment decisions be made consistent with the agency’s enterprise architecture and the Fed- 175 eral Enterprise Architecture, must consider the total cost of ownership of IT investments, and coordinated, where applicable, with the SmartBUY program. Other management guidance provided to Federal departments and agencies is included on Table 9–2, ‘‘Management Guidance,’’ and is available at www.whitehouse.gov/OMB/memoranda. Government IT Workforce.—Qualified Federal IT Project Managers with skilled interdisciplinary teams are the first line of defense against the cost overruns, schedule slippages, poor performance, and weakened security which threaten agencies’ ability to deliver efficient and effective services to citizens. OMB issued M–04–19 ‘‘Information Technology (IT) Project Manager (PM) Qualification Guidance’’ (07/19/04) requiring agencies to submit, by July 30, 2004, a plan to implement the Chief Information Officer Council (CIOC) guidance on the qualifications of Federal IT project managers. The CIOC made great strides in the development of this guidance to further ensure the quality of our IT process. Agencies were asked to submit plans for meeting the CIOC guidance and to identify the required PM Level for each investment requested for their Fiscal Year 2006 IT budget requests. Agencies were also required to confirm whether the assigned project manager’s qualifications for major IT investments had been validated against the CIOC guidance. A review of the top tier of Agencies’ IT requests indicates all agencies directly or indirectly addressed IT project management qualification standards in accordance with CIOC guidance. According to the submissions for the fourth quarter of Fiscal Year 2004 President’s Management Agenda (PMA) scorecard reporting, over 75 percent of the project managers of major IT investments have been validated against CIOC guidance, and plans are in place across government to ensure remaining project managers are trained and validated by the end of the calendar year. The Office of Personnel Management (OPM) and the CIO Council have conducted two annual governmentwide IT workforce assessments in 2003 and 2004. The surveys revealed five critical jobs: IT Project Management, IT Security/Information Assurance, Customer Support, System Analysis, and Applications Software Management. Using these standardized assessments provides an efficient and effective government-wide view of competency and skill gaps assuring our critical systems are sufficiently staffed to provide for security, reliability and efficiency. Agencies have received the results of the Fall Fiscal Year 2004 survey and are participating in a specialized job activity target-setting exercise to provide a more defined skill gap analysis government-wide, and to apply to agency-specific workforce assessment and planning. A Spring assessment based on CIO’s judgment revealed maintaining a cadre of qualified IT Project Managers, IT Security Specialists and IT Architects could best be managed through training programs. 176 The E-Government Act of 2002 requires the assessment and reporting of current training offerings and the oversight of development of curricula, training methods, and training priorities to meet projected personnel needs. In July 2004, OPM published its report on the ‘‘Establishment of a Government Information Technology Training Program.’’ The training report establishes a common IT training framework and identifies a baseline of current government-wide IT training. The report reviewed and assessed the adequacy of existing government-wide IT training programs with the Clinger-Cohen Act core competencies as the basis for evaluation. This report also served as a baseline for OPM to track IT and Information Resources Management (IRM) training availability and adequacy across government in its ongoing responsibility to identify where gaps in IT and IRM training do not satisfy personnel needs. OPM also recommended a government-wide IT training framework using the IT Workforce Development Roadmap as a foundation to link existing IT and IRM training programs. The framework supports the OPM requirement to assist agencies in establishing and operating IT training programs. Agency use of this framework will enable their workforce to obtain governmentwide competencies and skills that improve the ability of the government to achieve agency missions and program goals. This framework fosters the development of highly skilled Federal IT workers who are better able to deliver essential services to the American people in the increasingly technical E-Government environment. However, skill gaps remain in the IT Workforce. The CIO Council will work in conjunction with OPM to develop guidelines for assisting departments and agencies in identifying the skill gaps in their workforce. OMB asked agencies to report their use of training plans as well as their integration of IT plans in overall human capital planning. Most agencies have shown progress in identifying IT and the needs of the IT workforce as part of their overall human capital planning. Most indicate coordination and cooperation between their agencies’ Chief Human Capital and Chief Information Officers and staffs to improve IT project management skills. Most agencies refer to their human capital planning efforts as a way to ensure the Federal government has sufficient highly qualified IT professionals to deliver services to citizens, businesses, and government entities, effectively and in direct alignment with the mission of the agency. A number of agencies discussed the importance of the government-wide survey data in relation to agency succession planning. Agencies also referred to OPM’s report as the basis for selecting training in filling current workforce gaps, especially in the IT project management arena. The Administration’s goal during Fiscal Year 2005 is to have no more than 50 percent of the agencies with IT skill gaps within their workforce. On January 15, 2004, OPM published proposed regulations to implement an Information Technology Exchange Program. OPM has completed analysis of com- ANALYTICAL PERSPECTIVES ments received from the public on the proposed IT Exchange Program Regulations. In accordance with Executive Order 12866 ‘‘Regulatory Planning and Review’’ (01/11/96), the final regulation is being provided to OMB for concurrence prior to publication in the Federal Register. The IT Exchange Program can improve the skills of Federal IT managers by exposing them to cutting-edge management and technical trends in the private sector. The Program can improve the government’s capability to apply advances in IT to enhance governmental functions and services, achieve more efficient performance, increase access to government information, and increase citizen participation in government. Securing Government Systems.—Over the last four years the Federal government has improved the identification and resolution of long-standing, serious, and pervasive IT security problems. Agencies report both quarterly and annually on their efforts to address IT security weaknesses against key IT security performance measures. For example, the Department of Labor and the Department of Transportation have excelled this year in protecting their information technology assets. Both agencies have increased the number of certified and accredited systems, with Labor moving from 58 percent to 96 percent accredited, and Transportation improving from 33 percent to 98 percent. Agency Inspectors General have approved the quality of these certification and accreditation processes as well as the effectiveness of agency remediation plans. By focusing on cyber-security, the Department of Labor and the Department of Transportation have taken great steps to protect the integrity of their agencies. The overall security status and progress in percentage of systems*, from Fiscal Year 2002 to Fiscal Year 2004, is as follows: FY 2002 FY 2003 FY 2004 Effective Security and Privacy Controls (C&A) .................................................... ‘‘Built in’’ with Security Costs ................... Tested with Contingency Plans ................ 47% 62% 35% 62% 77% 48% 77% 85% 57% *Total Systems reported .................... 7,957 7,998 8,623 The number of agencies where the Inspector General has verified the process exists to remediate IT security weaknesses (POA&M): FY 2002 ....................................... FY 2003 ....................................... FY 2004 ....................................... N/A (was not required in until FY 2003) 12 18 While notable progress in resolving IT security weaknesses has been made, challenges remain and new threats and vulnerabilities continue to materialize. Agencies continue to improve the security of the information and systems supporting the Federal government’s missions. To address these challenges, the Administration works with agencies, Inspectors General, the Congress and the Government Accountability Office (GAO) to assure appropriate cost-effective IT security 9. INTEGRATING SERVICES WITH INFORMATION TECHNOLOGY programs, policies, and procedures are in place to protect government systems. OMB issued M–04–25 ‘‘FY 2004 Reporting Instructions for the Federal Information Security Management Act’’ (08/23/04) providing updated instructions for the agency reporting under the Federal Information Security Management Act of 2002 (FISMA). Agencies were directed to transmit their Fiscal Year 2004 reports on the effectiveness of their security programs to OMB by October 6, 2004. Additional information and detail concerning the Federal government’s IT security program and agency IT security performance can be found in OMB’s Annual Report to Congress on IT Security. The next such report will be issued by March 1, 2005 and will be made available on OMB’s website. Additionally, the Administration intends to focus on the implementation of a security LoB to reduce costs and increase security effectiveness across government. Working with agencies, the Administration will analyze commonly used IT security processes and controls in an effort to identify the extent to which consolidation opportunities exist. Protecting Privacy.—The Administration continues to work with departments and agencies to assure that privacy issues are addressed across boundaries providing a uniform and systematic process to protect citizen information. One method is through the Privacy Impact Assessment (PIA) process. The PIA is a description of business processes, data flows and technologies in the context of applicable privacy principles. Agencies have been conducting PIAs since the last budget cycle, submitting them to OMB as necessary and making them publicly available. The CIO Council has released 177 a Security and Privacy Profile to be used in conjunction with the Federal Enterprise Architecture and the agency’s specific enterprise architecture to ensure privacy and security are properly addressed within the planned IT investment. Because of the visibility of the PIA’s and the work done, OMB did not request reporting on this activity this year. The Administration plans for greater transparency on the part of the government agencies as it relates to information collection and will continue to use the PIA effort to provide this service. Making Government Accessible to All.—Information technology is increasing access to Federal information and services. The Federal government continues to ensure electronic information technology is accessible to people with disabilities as required by Section 508 of the Rehabilitation Act of 1973. The creation of the Buy Accessible Wizard, a web-based application developed by GSA, helps agencies to determine relevance, applicability, and compliance to Section 508 when managing electronic and information technology products and services. The application helps Federal program managers to consistently and correctly apply the Federal Acquisition Regulation to their market research. Agencies have also established inventories of the types of information available on their websites, as well as priorities and schedules for posting content. The inventories and schedules help ensure agency information products are adequately categorized and preserved so citizens can easily retrieve them when searching. These practices improve the quality and timeliness of the Federal government’s information resources. SUCCESSFUL USES OF ELECTRONIC GOVERNMENT E-Government continues to seek to leverage information technologies to make government services available to the citizen while ensuring security of those systems, the privacy of the citizen information and the prudent use of taxpayer money. E-Government is about providing direct and measurable results supporting departments’ and agencies’ mission and goals. For departments and agencies, the benefits must far outweigh the cost of implementation. In the coming months, the Presidential E-Government initiatives graduate from development and implementation phases to mature service offerings supported by service fees. Increased agency adoption and customer utilization will become the primary measures of success. The expanded availability of government information and the utilization of an increased percentage of transactions between the Federal government and citizens will be measured, where appropriate. Examples of how the tenets of E-Government are helping to deliver services to the citizen and make the government more effective include: In Fiscal Year 2003, the Department of Labor (DOL) fully deployed the Safety and Health Information Management System (SHIMS) which manages employee in- jury reports and worker compensation claims and produces management reports and data to help guide intervention activities. Previously, claim forms were manually written and mailed which resulted in a two week response. With SHIMS, DOL electronically receives the claim within 24 hours and provides a response within two days. The cost savings are attributed to the implementation of the SHIMS in DOL. The system demonstrates a reduction in workers’ compensation costs through quicker claims processing and the ability to identify persons able to return to work. As a result of this effort, DOL saved over $3.23 million from FY 2003 to FY 2004 in workers’ compensation costs. Fourteen Federal agencies have agreed to implement SHIMS with six agencies working towards a January 2005 implementation target. DOL’s successful project management performance in attaining Federal goals is a major factor in agencies seeking to partner for use of SHIMS. The Department of Transportation’s (DOT) Federal Motor Carrier Safety Administration implemented t
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