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ANALYTICAL PERSPECTIVES BUDGET OF THE UNITED STATES GOVERNMENT Fiscal Year 2008 THE BUDGET DOCUMENTS Budget of the United States Government, Fiscal Year 2008 contains the Budget Message of the President, information on the President’s priorities, and budget overviews organized by agency. Analytical Perspectives, Budget of the United States Government, Fiscal Year 2008 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; 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 detailed tables, including tables showing the budget by agency and account and by function, subfunction, and program. propriation accounts than any of the other budget documents. It includes for each agency: the proposed text of appropriations language; budget schedules for each account; 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 Historical Tables, Budget of the United States Government, Fiscal Year 2008 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 2008 or 2012. To the extent feasible, the data have been adjusted to provide consistency with the 2008 Budget and to provide comparability over time. 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 in fully indexed PDF format along with the software required for viewing the documents. The CD-ROM has many of the budget tables 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 these documents use the following address: Appendix, Budget of the United States Government, Fiscal Year 2008 contains detailed information on the various appropriations and funds that constitute the budget and is designed primarily for the use of the Appropriations Committees. The Appendix contains more detailed financial information on individual programs and ap- 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. www.budget.gov/budget 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. 3. At the time of this writing, only two of the appropriations bills for 2007 had been enacted; therefore, the programs provided for in the remaining 2007 appropriations bills were operating under a continuing resolution (P.L. 109–289, Division B, as amended). For these programs, references to 2007 spending in the text and tables reflect the levels provided by the continuing resolution. U.S. GOVERNMENT PRINTING OFFICE WASHINGTON 2007 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC 20402-0001 ISBN 978-0-16-077507-9 TABLE OF CONTENTS Page List of Charts and Tables ............................................................................................. v Introduction 1. Introduction ....................................................................................................... 3 Performance and Management Assessments 2. Budget and Performance Integration .............................................................. 9 Crosscutting Programs 3. Homeland Security Funding Analysis ............................................................. 19 4. Strengthening Federal Statistics ..................................................................... 37 5. Research and Development .............................................................................. 45 6. Federal Investment ........................................................................................... 55 7. Credit and Insurance ........................................................................................ 67 8. Aid to State and Local Governments ............................................................... 101 9. Integrating Services with Information Technology ........................................ 153 10. Federal Drug Control Funding ......................................................................... 159 11. California-Federal Bay-Delta Program Budget Crosscut (CALFED) ............ 161 Economic Assumptions and Analyses 12. Economic Assumptions ...................................................................................... 165 13. Stewardship ....................................................................................................... 175 14. National Income and Product Accounts .......................................................... 203 Budget Reform Proposals 15. Budget Reform Proposals .................................................................................. 211 Federal Borrowing and Debt 16. Federal Borrowing and Debt ............................................................................ 223 i ii TABLE OF CONTENTS—Continued Page Federal Receipts and Collections 17. Federal Receipts ................................................................................................ 239 18. User Charges and Other Collections ............................................................... 271 19. Tax Expenditures .............................................................................................. 285 Dimensions of the Budget 20. Comparison of Actual to Estimated Totals ..................................................... 331 21. Outlays to the Public, Gross and Net .............................................................. 339 22. Trust Funds and Federal Funds ...................................................................... 341 23. Off-Budget Federal Entities and Non-Budgetary Activities .......................... 357 24. Federal Employment and Compensation ........................................................ 361 Current Services Estimates 25. Current Services Estimates .............................................................................. 371 The Budget System and Concepts 26. The Budget System and Concepts ................................................................... 391 Detailed Functional Tables 27. Budget Authority and Outlays by Function, Category, and Program .......... CD–ROM Federal Programs by Agency and Account 28. Federal Programs by Agency and Account ...................................................... 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. 5–2. 7–1. 7–2. 13–1. 13–2. 13–3. 13–4. 13–5. 13–6. 13–7. 13–8. 13–9. 13–10. 17–1. 20–1. 24–1. 24–2. 26–1. Program Ratings are Improving ........................................................................................................ ICSP Statistical Quality and Program Performance Dimensions ................................................... Most Recent PART Summary Ratings for Statistical Programs ..................................................... Research in the American Competitiveness Initiative ..................................................................... Scores of R&D PART Assessments .................................................................................................... Fannie Mae and Freddie Mac Combined Retained Mortgage Portfolios Year-End 2005 ............. Face Value of Federal Credit Outstanding ....................................................................................... The Financial Condition of the Federal Government and the Nation ............................................ Net Federal Liabilities ........................................................................................................................ Health Care Cost Alternatives ........................................................................................................... Effect of Entitlement Savings ............................................................................................................ Alternative Receipts Projections ........................................................................................................ Alternative Productivity Assumptions .............................................................................................. Alternative Fertility Assumptions ..................................................................................................... Alternative Immigration Assumptions .............................................................................................. Alternative Mortality Assumptions ................................................................................................... Sources of the Gross Tax Gap ............................................................................................................ Major Provisions of the Tax Code Under the 2001, 2003, 2004 and 2006 Enacted Tax Relief .... Illustrative Range of Budget Outcomes ............................................................................................ Post Cold War End Strength and Spending ..................................................................................... DoD Direct Compensation Costs ........................................................................................................ Relationship of Budget Authority to Outlays for 2008 .................................................................... 15 38 40 45 47 74 87 177 180 185 186 186 187 187 188 188 194 240 337 362 363 402 LIST OF TABLES Page 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 ............. 20 21 22 23 25 26 28 29 32 32 33 34 35 CD–ROM v vi ANALYTICAL PERSPECTIVES LIST OF TABLES—Continued Page Strengthening Federal Statistics: 4–1. 2006–2008 Budget Authority for Principal Statistical Agencies ........................................... Research and Development: 5–1. Federal Research and Development ........................................................................................ 5–2. Federal Science and Technology Budget ................................................................................. 5–3. Agency Detail of Selected Interagency R&D Efforts .............................................................. 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 ..................................................................................................... Largest Ten Claims Against the PBGC’s Single-Employer Insurance Program, 1975–2006 .............................................................................................................................. 7–1. Estimated Future Cost of Outstanding Federal Credit Programs ........................................ 7–2. Reestimates of Credit Subsidies on Loans Disbursed Between 1992–2006 ......................... 7–3. Direct Loan Subsidy Rates, Budget Authority, and Loan Levels, 2006–2008 ..................... 7–4. Loan Guarantee Subsidy Rates, Budget Authority, and Loan Levels, 2006–2008 .............. 7–5. Summary of Federal Direct Loans and Loan Guarantees ..................................................... 7–6. Direct Loan Writeoffs and Guaranteed Loan Terminations for Defaults ............................. 7–7. Appropriations Acts Limitations on Credit Loan Levels ....................................................... 7–8. Face Value of Government-Sponsored 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. School Breakfast Program ........................................................................................................ 8–8. National School Lunch Program .............................................................................................. 8–9. Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) ......... 8–10. Child and Adult Care Food Program ....................................................................................... 8–11. State Administrative Matching Grants for Food Stamp Program ........................................ 8–12. Title I Grants to Local Educational Agencies ......................................................................... 8–13. Improving Teacher Quality State Grants ............................................................................... 8–14. Special Education—Grants to States ...................................................................................... 8–15. Rehabilitation Services—Vocational Rehabilitation Grants to States .................................. 8–16. State Children’s Health Insurance Program .......................................................................... 8–17. Grants to States for Medicaid .................................................................................................. 8–18. Temporary Assistance for Needy Families (TANF)—Family Assistance Grants ................ 8–19. Child Support Enforcement—Federal Share of State and Local Administrative Costs and Incentives ........................................................................................................................ 8–20. Low Income Home Energy Assistance Program ..................................................................... 43 51 53 54 57 58 61 64 65 66 69 83 87 89 91 92 93 94 96 98 99 CD–ROM CD–ROM 101 105 107 110 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 vii LIST OF CHARTS AND TABLES LIST OF TABLES—Continued Page 8–21. Child Care and Development Block Grant ............................................................................. 8–22. Child Care and Development Fund—Mandatory ................................................................... 8–23. Child Care and Development Fund—Matching ...................................................................... 8–24. Head Start ................................................................................................................................. 8–25. Foster Care—Title IV–E ........................................................................................................... 8–26. Adoption Assistance .................................................................................................................. 8–27. Social Services Block Grant ..................................................................................................... 8–28. Homeland Security Grant Program ......................................................................................... 8–29. Disaster Grants—Public Assistance (Presidentially Declared Disasters) ............................ 8–30. Public Housing Operating Fund .............................................................................................. 8–31. Section 8 Housing Choice Vouchers ........................................................................................ 8–32. Public Housing Capital Fund ................................................................................................... 8–33. Community Development Block Grants .................................................................................. 8–34. Mineral Leasing and Associated Payments ............................................................................ 8–35. Airport Improvement Program ................................................................................................ 8–36. Highway Planning and Construction ...................................................................................... 8–37. Capital Investment Grants—Fixed Guideway Modernization .............................................. 8–38. 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. Agencies with IT Investments on the Management Watch List ........................................... 9–4. Status of the Presidential E-Government Initiatives ............................................................. 9–5. Lines of Business (LoB) Update ............................................................................................... Federal Drug Control Funding: 10–1. Federal Drug Control Funding, FY 2006–2008 ...................................................................... California-Federal Bay-Delta Program Budget Crosscut (CALFED): Text Table: CALFED-Related Federal Funding Budget Crosscut ..................................................... CALFED FY 1998–2008 Budget Crosscut Methodology ........................................................ CALFED Federal Agency Funding—Summary by Category and Agency Breakout ........... CALFED Project Descriptions .................................................................................................. CALFED Fiscal Years 2005–2006 Federal Funding .............................................................. CALFED Fiscal Years 2007–2008 Funding Under New and Old Authority ........................ CALFED State Agency Funding .............................................................................................. Department of the Interior Certification of Budget Numbers ............................................... Economic Assumptions and Analyses Economic Assumptions: 12–1. Economic Assumptions ............................................................................................................. 12–2. Comparison of Economic Assumptions .................................................................................... 12–3. Comparison of Economic Assumptions in the 2007 and 2008 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 ................................................................................................... 13–3. Benefits in Excess of Future Taxes and Premiums—Actuarial Present Values ................. 13–4. Sources of the Tax Gap from Income Underreporting ........................................................... 13–5. National Wealth ........................................................................................................................ 13–6. Trends in National Wealth ....................................................................................................... 13–7. Economic and Social Indicators ............................................................................................... 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 CD–ROM CD–ROM CD–ROM CD–ROM CD–ROM 159 161 CD–ROM CD–ROM CD–ROM CD–ROM CD–ROM CD–ROM CD–ROM 168 170 171 171 173 181 184 192 194 196 197 198 viii ANALYTICAL PERSPECTIVES LIST OF TABLES—Continued Page National Income and Product Accounts: 14–1. Federal Transactions in the National Income and Product Accounts, 1997–2008 .............. 14–2. Relationship of the Budget to the Federal Sector, NIPA’s .................................................... Budget Reform Proposals Budget Reform Proposals: 15–1. Mandatory Proposals Subject to PAYGO ................................................................................ 15–2. Discretionary Caps and Adjustments ...................................................................................... 15–3. Program Integrity Base and Cap Adjustments ...................................................................... 15–4. Direct Savings Estimated from 2008 Program Integrity Funding ........................................ 15–5. Transportation Category for Highways and Mass Transit Spending ................................... 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 2008–2012 Projected Revenue Effect ............. 19–4. Present Value of Selected Tax Expenditures for Activity in Calendar Year 2006 .............. Appendix A: Treasury Review of the Tax Expenditure Presentation ...................................................... Appendix Tables: 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 Expendixture Estimates ..................................................................................... Appendix B: Performance Measures and the Economic Effects of Tax Expenditures ............................ Dimensions of the Budget Comparison of Actual to Estimated Totals: 20–1. Comparison of Actual 2006 Receipts with the Initial Current Services Estimates ............. 20–2. Comparison of Actual 2006 Outlays with the Initial Current Services Estimates ............. 20–3. Comparison of the Actual 2006 Deficit with the Initial Current Services Estimate ........... 205 207 211 213 214 215 216 223 225 228 230 234 235 239 239 266 269 271 274 276 281 282 287 291 296 299 313 322 323 323 324 331 332 333 ix LIST OF CHARTS AND TABLES LIST OF TABLES—Continued Page 20–4. Comparison of Actual and Estimated Outlays for Mandatory and Related Programs Under Current Law ............................................................................................................... 20–5. Reconciliation of Final Amounts for 2006 ............................................................................... 20–6. Comparison of Estimated and Actual 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, Gross and Net: 21–1. Total Outlays, Gross and Net of Offsetting Collections and Receipts from the Public, by Agency, 2006–2008 ................................................................................................................ 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 ............................................................. 22–3. Relationship of Total Federal Fund and Trust Fund Receipts to Unified Budget Receipts, Fiscal Year 2006 ........................................................................................................ 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: Text Table: Overseas Staffing Under Chief of Mission Authority ......................................................... 24–1. Federal Civilian 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 Services Estimates Current Services Estimates: 25–1. Baseline Category Totals .......................................................................................................... 25–2. Impact of Budget Policy ............................................................................................................ 25–3. Alternative Baseline Assumptions ........................................................................................... 25–4. Summary of Economic Assumptions ....................................................................................... 25–5. Beneficiary Projections for Major Benefit Programs .............................................................. 25–6. Impact of Regulations, Expiring Authorizations, and Other Assumptions in the Baseline 25–7. Baseline Receipts by Source ..................................................................................................... 25–8. Change in Baseline Outlay Estimates by Category ............................................................... 25–9. Current Services Outlays by Function .................................................................................... 25–10. Current Services Outlays by Agency ....................................................................................... 25–11. Current Services Budget Authority by Function .................................................................... 25–12. Current Services Budget Authority by Agency ....................................................................... 25–13. Current Services Budget Authority by Function, Category and Program ........................... 25–14. Current Services Outlays by Function, Category and Program ............................................ The Budget System and Concepts The Budget System and Concepts: 26–1. Totals for the Budget and the Federal Government .............................................................. Detailed Functional Tables Detailed Functional Tables: 27–1. Budget Authority and Outlays by Function, Category and Program ................................... Federal Programs by Agency and Account Federal Programs by Agency and Account: 28–1. Federal Programs by Agency and Account ............................................................................. 334 335 336 337 339 342 343 344 346 353 358 363 364 365 366 367 371 372 374 374 375 376 382 383 384 385 386 387 CD–ROM CD–ROM 395 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. This 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, the 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 Analytical Perspectives 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. Increased 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, ‘‘Budget and Performance Integration,’’ and is discussed in many other chapters, especially those in the section, ‘‘Crosscutting Programs.’’ One-page summaries of each program assessment are available at www.ExpectMore.gov. Again this year, several large tables are included as part of the Budget on the enclosed Analytical Perspectives CD–ROM. 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 of the subsequent chapters briefly and highlights the emphasis on performance in a crosscutting context. Performance and Management Assessments 2. Budget and Performance Integration. This chapter summarizes the performance and management assessments that have been completed to date using the Program Assessment Rating Tool (PART). One-page summaries of the program evaluations, as well as detail on each of the assessments www.ExpectMore.gov. can be found at Crosscutting Programs 3. Homeland Security Funding 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 the related 2008 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. Also included in this chapter is 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, risks, and performance of Federal credit and insurance programs and Government-sponsored enterprises (GSEs). 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 chapter presents crosscutting information on Federal grants to State and local governments, including highlights of Administration proposals. This chapter also includes material on the PART assessments related to grants. An Appendix to this chapter includes State-by-State spending estimates of major grant programs. 9. Integrating Services with Information Technology. This chapter presents a crosscutting look at investments in information technology (IT). It 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. Five detailed tables: ‘‘Table 9–1. Effectiveness of Agency’s IT Management and E-Gov Proc- 3 4 ANALYTICAL PERSPECTIVES esses,’’ ‘‘Table 9–2. Management Guidance,’’ ‘‘Table 9–3. Agencies with IT Investments on the Management Watch List,’’ ‘‘Table 9–4. Status of Presidential E-Government Initiatives,’’ and ‘‘Table 9–5. Lines of Business (LoB) Update’’ are on the enclosed Analytical Perspectives CD–ROM. 10. Federal Drug Control Funding. This chapter 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 and State funding for the California-Federal Bay-Delta Program, in fulfillment of the reporting requirements for this program. Detailed tables on funding and project descriptions are on the enclosed Analytical Perspectives CD–ROM. Federal Receipts and Collections Economic Assumptions and Analyses Dimensions of the Budget 12. Economic Assumptions. This chapter reviews recent economic developments; presents the Administration’s assessment of the economic situation and outlook, including the 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 costs, productivity, and demographics; actuarial estimates for the shortfalls in Social Security and Medicare; a discussion of tax compliance; 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. 20. Comparison of Actual to Estimated Totals. This chapter compares the actual receipts, outlays, and deficit for 2006 with the estimates for that year published two years ago in the 2006 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, Gross and Net. This chapter provides information on outlays gross and net of offsetting collections and offsetting receipts by agency. Outlays are a measure of Government spending. Offsetting collections and offsetting receipts are netted against gross 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. 23. Off-Budget Federal Entities and Non-Budgetary Activities. This chapter discusses 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, personnel compensation and benefits, overseas staffing, and the full compensation of military personnel. Budget Reform Proposals 15. Budget Reform Proposals. This chapter includes a brief description of the Administration’s budget reform agenda for addressing the need for responsible budgeting and other reforms. Federal Borrowing and Debt 16. Federal Borrowing and Debt. This chapter analyzes Federal borrowing and debt and explains the budget estimates. It includes sections on special topics such as the trends in debt, agency debt, investment by Government accounts, and the debt limit. 17. Federal Receipts. This chapter 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 chapter 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. 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 25–13. Current Services Budget Authority by Function, Category, and Program’’ and ‘‘Table 25–14. Current Services Outlays by Function, Category, and 5 1. INTRODUCTION Program,’’ are on the enclosed Analytical Perspectives CD–ROM. Budget System and Concepts 26. The Budget System and Concepts. This chapter includes 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’’. PERFORMANCE AND MANAGEMENT ASSESSMENTS 7 2. BUDGET AND PERFORMANCE INTEGRATION I. INTRODUCTION Good Government—a government fiscally responsible to the people—must have as one of its core purposes the achievement of results for the taxpayers. Taxpayers expect the Federal Government to implement programs that will ensure the Nation’s security and provide critical services. Taxpayers want their money spent wisely and used to gain maximum benefit. Taxpayers have the right to hold the Federal Government accountable for its actions. To exercise this right, the taxpayers must have clear, candid, and up-to-date information about each program’s successes and failures. For the second straight year, the Administration is providing this type of information to all Americans on ExpectMore.gov, a user-friendly government website that describes which programs are performing, which ones are not, and in both situations, what is being done to improve them. (Greater detail about ExpectMore.gov will be provided in a subsequent section.) The Administration is making the Federal Government increasingly effective by making program budget decisions based on program performance. The objective of the President’s Budget and Performance Integration (BPI) Initiative is to ensure that Federal dollars produce the greatest results. Under the BPI Initiative, agencies and OMB identify which programs work well, which are deficient, and what can be done to improve performance of each program. In some cases, the Administration may find it necessary to reallocate funding from less effective programs to more effective ones. The final decisions about the scope of programs and the size of program budgets are ultimately made jointly by the Congress and the President. The BPI Initiative provides information on program performance to help the Executive and Legislative branches make better, more informed decisions. Information about program performance is now readily available and accessible to the public on ExpectMore.gov. The BPI Initiative measures a program’s success in two principal ways: • Improved Program Performance: The initiative requires each agency to identify opportunities to improve program management and design, and then develop and implement clear, aggressive plans to get more for tax dollars every year. Agencies have ready access to program performance information by using the results of the Program Assessment Rating Tool (PART) assessments of each program, program evaluations, investigations, audits, and analyses from a variety of sources. • Greater Investment in Successful Programs: Overall, there are now more program-funding needs and thus fewer resources to be allocated to each funded program. These scarce resources need to be allocated to programs that benefit the Nation most effectively and efficiently. Though performance is not the only factor used to decide the size of a program’s budget, Congress and the President can utilize information about a program’s effectiveness and efficiency in decision-making so that taxpayer dollars are invested in programs that provide the greatest return to the Nation. If poor performing programs are unable to demonstrate improved results, then their resources may be reallocated to programs that can demonstrate greater success and returns to the taxpayer. Currently, the BPI Initiative is showing great progress toward the first goal. Programs are becoming more efficient and more effective through implementation of meaningful improvement plans. Many programs are demonstrating improved results. For example: • The Social Security Administration increased agency productivity by 13.1 percent since 2001 through increased use of information technology and improved business processes. SSA would have required $800 million more in 2006 to process the same work if productivity improvements had not been realized. • In 2005, the Bureau of Prisons reduced the construction cost per bed in high security facilities, saving an estimated $54 million. • The Federal Transit Administration implemented its plan to process Formula Grants faster. In the past, the highest reported processing time for processing grants was 90 days. FTA now expects to process such grants within only 36 days. Agencies are identifying additional actions to improve the performance of each of their programs. All agencies, regardless of whether their programs perform poorly or well, strive for increased program performance each year. Progress toward the second goal of improving resource allocation has been slow, but this year, the administration had greater success. We have been successful in terminating some low-performing programs and better at targeting resources to well-performing programs. In 2006, seven programs were terminated, saving $230 million. Four programs were reduced, saving $300 million. Though no decision is based purely on performance, overall, high performing programs received larger funding increases than those that did not perform as well. 9 10 ANALYTICAL PERSPECTIVES II. HOW THE BUDGET AND PERFORMANCE INTEGRATION INITIATIVE WORKS Several aspects of the Budget Performance Integration (BPI) Initiative are designed to maximize program performance. They include: • Assessment of performance with the PART (Program Assessment Rating Tool); • Publishing a Scorecard to hold agencies accountable for managing for results, addressing PART findings, and implementing follow-up actions; • Broadcasting results to the public on ExpectMore.gov; and • Facilitating program improvement through interagency collaboration and cooperation. Comprehensive Assessment with the Program Assessment Rating Tool (PART) How do we ensure that Federal programs are improving every year? First, we assess their current performance. In order to improve a program’s outcomes, it is critical to have a good understanding of how the program is currently performing. To date, we have assessed the performance of nearly 1,000 programs, comprising 96 percent of all Federal programs, using the PART. History of the PART The Federal Government spends trillions of dollars on programs annually, but until the advent of the PART, there was not a uniform basis for assessing how well these programs actually work. For example, were the billions of taxpayer dollars the Federal Government spent on foster care actually preventing the maltreatment and abuse of children? Are Federal efforts to reduce air pollution successful? Previous administrations from President Johnson to President Clinton and Congress have grappled with this problem. Each prior administration has tried to come up with means by which government programs are measured for results. The most significant advance in bringing accountability to government programs was the Government Performance and Results Act of 1993 (GPRA). This law requires Federal agencies to identify both annual and long-term goals and collect and report performance data. For the first time, agencies were required to explicitly identify measures and goals for judging the performance of each of their programs and to collect information on an annual basis in order to determine if they were meeting those goals. This Administration built upon GPRA requirements by creating the PART (Program Assessment Rating Tools), an objective, evidence-based and easy-to-understand questionnaire about program design, planning, management, and performance. Objectivity is paramount to a PART rating. For example, when the development of the PART began in 2002, the first draft included a question relating to whether a particular program served an appropriate federal role. Because many people believed that the answer to that question would vary depending on the reviewer’s philosophical outlook, the question was removed. Public and private sector entities have reviewed the PART. Private sector reviewers have praised the PART assessment process for its transparency and objectivity and have also raised concerns that OMB has striven to address. For instance, some reviewers found assessments of different programs lack consistency in the answers to the same questions. OMB now audits all draft assessments to correct any obvious inconsistencies. Reviewers also found that agencies did not always agree with the final assessment of their programs. Agencies can now appeal to a high level subcommittee of the President’s Management Council to dispute answers with which they disagree. To address concerns that OMB and agencies were not doing enough to involve Congress in the assessment process, agencies are now required to brief and consult their Congressional appropriators, authorizers, and overseers before the annual assessments begin. The accompanying timeline provides a history of the development of the PART. 11 2. BUDGET AND PERFORMANCE INTEGRATION *NAPA = National Academy of Public Administration PCIE = President's Council on Integrity and Efficiency PMAC = Performance Measurement Advisory Council April 2002 Draft PART Tested on 67 Programs Public Input Requested May 2002 External Review of PART NAPA/PCIE/PMAC* July 2002 PMC Approves Final PART/First List of Programs to be Assessed* Aug. 2002 PART Assessments Conducted with Agencies** Sept. 2002 First Congressional Hearing Held PMAC Met Nov. 2002 First Interagency Review Panel Conducted Consistency Audit & Appeals Review Feb. 2003 Published First Set of PARTs June 2003 Established Annual OMB Consistency Check Jan. 2004 GAO Conducted Latest Review of PART July 2005 PART received Harvard's Innovations in American Government Award Online Tool - PARTWeb Launched Aug. 2005 Established Formal Annual Appeals Process Feb. 2006 Online Tool - ExpectMore.gov Launched Established Annual Consultation with Congress PMC = President's Management Council **20% of Programs Assessed in each Spring/Summer 2002 - 2006 12 ANALYTICAL PERSPECTIVES What is the PART and How is it Used? The PART helps assess the management and performance of individual programs. With the PART, agencies and OMB evaluate a program’s purpose, design, planning, management, results, and accountability to determine its overall effectiveness. Agencies then identify and complete follow-up actions to improve program results. To reflect the fact that Federal programs deliver goods and services using different mechanisms, the PART is customized by program type. The seven PART types are: Direct Federal, Competitive Grant, Block/Formula Grant, Research and Development, Capital Assets and Service Acquisition, Credit, and Regulatory. The PART types apply to both discretionary and mandatory programs. ExpectMore.gov also classifies each program by its specific program area (such as environment, transportation, education, etc.) to facilitate comparison so we can accelerate the improved performance of programs with similar missions. Each PART includes 25 basic questions and there are additional questions tailored to the different program types. The questions are divided into four sections. The first section of questions gauges whether a program has a clear purpose and is well designed to achieve its objectives. The second section evaluates strategic planning, and weighs whether the agency establishes outcome-oriented annual and long-term goals for its programs. The third section rates the management of an agency’s program, including the quality of efforts to improve efficiency. The fourth section assesses the results 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 combined and 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.’’ This rating suggests that not enough information and data are available to make an informed determination about whether a program is achieving results. 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 funding decrease may be proposed for a program rated ‘‘Effective’’ if it is not a priority or has completed its mission. However, most of the time, an ‘‘Effective’’ rating is an indication that the program is using its funding well and that major changes are not needed. Publish a Scorecard To Hold Agencies Accountable Agencies are achieving greater results with the help of the habits and disciplines established through the BPI Initiative. These agencies recognize that the PART can be a useful tool to drive improvement in the performance of their programs. Agency success is judged by clear, Government-wide goals or standards for Budget and Performance Integration. Agencies have developed and are implementing detailed, aggressive action plans to achieve these goals. Most importantly, agencies are held publicly accountable for adopting these disciplines. To meet the Standards for Success for the BPI Initiative, an agency must: • Demonstrate that senior agency managers meet at least quarterly to examine reports that integrate financial and performance information that covers all major responsibilities of the Department; • Have strategic plans that contain a limited number of outcome-oriented goals and objectives. Annual budget and performance documents incorporate measures identified in the PART and focus on the information used in the senior management report described in the first criterion; • Report the full cost of achieving performance goals accurately in budget and performance documents and accurately estimate the marginal cost of changing performance goals; 13 2. BUDGET AND PERFORMANCE INTEGRATION • Have at least one efficiency measure for all PARTed programs; • Use PART evaluations to direct program improvements and hold managers accountable for those improvements, and PART findings and performance information are used consistently to justify funding requests, management actions, and legislative proposals; and • Have less than 10 percent of agency programs receive a Results Not Demonstrated rating for two years in a row. Each quarter, agencies receive two ratings. First, they are rated on their status in achieving the overall goals for each initiative. They are then given a green, yellow or red rating to clearly announce their performance. Green status is for success in achieving each of the criteria listed earlier; yellow is for an intermediate level of performance; and red is for unsatisfactory performance. Second, agency progress toward reaching the Budget and Performance Integration standards is assessed separately. This is reviewed on a case-by-case basis against the work plan and related time lines established for each agency. Progress is also given a color rating. Green is given when implementation is proceeding according to plans agreed upon with the agencies; Yellow for when some slippage or other issues require adjustment by the agency in order to achieve the initiative objectives on a timely basis; and Red when the Initiative is in serious jeopardy. In this case, it is unlikely to realize objectives absent significant management intervention. As of December 31, 2006, fifteen agencies achieved green status on the Budget and Performance Integration Initiative Scorecard. The agencies at green are: 1. Department of Agriculture 2. Department of Commerce 3. Department of Education 4. Department of Energy 5. Department of Justice 6. Department of Labor 7. Department of Transportation 8. Department of State 9. General Services Administration 10. National Aeronautics and Space Administration 11. National Science Foundation 12. Small Business Administration 13. Smithsonian 14. Social Security Administration 15. U.S. Agency for International Development The Scorecard is an effective accountability tool to ensure agencies manage the performance of their pro- grams. Although a scorecard rating is not directly linked to any specific consequences, it is quickly understood at the highest levels of the Administration as an indicator of an agency’s strength or weakness. The Government-wide scorecard reporting on individual agency progress is published quarterly at www.results.gov/agenda/scorecard.html. Broadcast Results on ExpectMore.gov ExpectMore.gov provides Americans with candid information about which programs work, which do not, and what all programs are doing to get better every year. Up until the launch of ExpectMore.gov last year, Americans had limited access to information on how well the Federal Government performed. Now, every American can see for themselves how their government is performing. In many cases, the Federal Government performs well. In some cases, it performs better than the private sector. ExpectMore.gov contains PART summaries for all programs that have been assessed to date. The site provides the program information that a concerned citizen would need to assess a program’s performance. Each assessment includes a brief description of the program’s purpose, its overall rating, some highlights about its performance and the steps it will take to improve in the future. For individuals interested in more information, the site also provides links to the detailed program assessment, as well as that program’s website and the assessment summaries of other similar programs. The detailed PART assessment includes the answer to each PART question with an explanation and supporting evidence. It also includes the performance measures for the program along with current performance information. In addition, there is an update on the status of follow-up actions to improve program performance. A visitor to the site may find, at least initially, programs are not performing as well as they should or program improvement plans are not sufficiently ambitious. We expect this site to help change that. The website has a variety of benefits, including: • Increased public attention to performance; • Greater scrutiny of agency action (or inaction) to improve program results: —Improvement plans will be transparent —Statements about goals and achievements will be clearer; and • Demand for better quality and more timely performance data. 14 ANALYTICAL PERSPECTIVES Implement Inter-Agency Program Improvement The Administration continues to look for new ways to improve the performance of programs with similar purposes or designs by using the PART to analyze performance across agencies (i.e., cross-cutting analysis) and State and local levels. 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, State, and local levels so that all entities work toward the same goal. Only topics that are expected to yield meaningful results are selected for crosscutting analyses. This past year the Administration completed cross-cutting analysis of the government’s math and science programs as part of the ACC (Academic Competitiveness Council). Academic Competitiveness Council. The ACC set out to identify all Federal education programs with a science, technology, engineering, and math focus; clarify the goals of these programs; identify the extent to III. which the programs have undergone independent, external evaluation based on sound, scientific principles and have quantitative evidence of achieving their goals; and identify better ways to measure and evaluate these programs and efficiently integrate and coordinate Federal spending on Science, Technology, Engineering, and Mathematics (STEM) education programs. The ACC first identified 109 STEM education programs funded in 2006 for a total of $3.13 billion. Within that total, elementary and secondary programs received approximately $640 million (20 percent of the total), postsecondary programs, including graduate and postdoctoral programs, nearly $2.4 billion (76 percent) and informal education and outreach programs close to $103 million (4 percent). The group agreed on common goals for the programs, but found that few had been rigorously evaluated and determined to be effective. These programs, like many managed by the Federal Government, must do more to gather and report evidence of what activities are most effective at achieving common goals. RESULTS As mentioned above, the BPI Initiative measures its success according to two measures: • Improved Program Performance; and • Greater Investment in Successful Programs There has been greater success in achieving the goals of the first measure. The BPI Initiative has caused agencies to think more systematically about how they measure and improve program performance. Though there are many factors that impact program performance, it is clear that the BPI Initiative has framed the discussion around results. Agencies have developed ways to measure their efficiency so they can figure out how to achieve more with Americans’ tax dollars. This marks the fifth year that the PART was used to (1) assess program performance, (2) take steps to improve program performance, and (3) help link performance to budget decisions. To date, the Administration has assessed nearly 1000 programs, representing approximately 96 percent of the Federal budget. Over the next year, the Administration will use the PART to assess the performance and management of most of the remaining Federal programs. 15 2. BUDGET AND PERFORMANCE INTEGRATION 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 ‘‘Ade- quate’’. This increase came from both re-assessments and newly PARTed programs. The chart below shows the percentage of programs by ratings category. Chart 2-1. Program Ratings are Improving Cumulative Program Results by Ratings Category 100% 6% 11% 15% 15% 17% 26% 29% 30% 24% 26% 80% 15% 20% 60% 26% 28% 5% 50% 28% 5% 38% 40% 4% 29% 4% 24% 20% 3% 22% 0% 2002 (234) 2003 (407) 2004 (607) 2005 (793) 2006 (977) Effective Adequate Ineffective Results not Demonstrated Moderately Effective These results demonstrate that the BPI Initiative has been very successful in focusing Agencies’ attention on program performance. For example, approximately: • 14 percent of programs improved their performance rating overall; • 80 percent of programs have acceptable performance measures; • 74 percent have achieved their long-term goals and 80 percent have achieved their annual goals; and • 90 percent of programs have efficiency measures and about half of them have achieved their efficiency targets. Unfortunately, there has not been a similar level of accomplishment in the second measure: Greater Investment in Successful Programs. Though congressional use of performance information has been limited, most in IV. the Congress are aware of the PART. This topic was discussed extensively in a Government Accountability Office (GAO) report issued last year. GAO recommends that OMB select PART reassessments and crosscutting reviews based on factors that include the relative priorities, costs, and risks associated with clusters of related programs, and reflect congressional input. Additionally, GAO recommended OMB solicit congressional views on the performance issues and program areas most in need of review; the most useful performance data and the presentation of those data. As mentioned above, OMB is using the PART to improve the performance of similar programs in areas that are expected to yield meaningful results. OMB and agencies are also actively soliciting the views of the Congress in PART assessments, on improvement plans, and oversight efforts. NEXT STEPS The BPI Initiative has identified several activities to improve its effectiveness over the coming year: Ensure Plans are Aggressive and Result in Improved Performance.—Rigorous follow-up on recommendations from the PART will accelerate improvements in the performance of Federal programs. This will ensure that the hard work done through the PART produces performance and management improvements. Additionally, implementation of these plans must be tracked and reported. Expand Cross-Cutting Analyses.—Use the PART to facilitate cross-cutting analysis where there is a higher return than approaching programs individually. The goal of these efforts is to increase efficiency and save dollars, building on the success of previous cross-cutting analyses. Congressional guidance will be a factor in 16 choosing topics for the next group of cross-cutting analyses. Maximize ExpectMore.gov Impact.—The Federal Government should be accountable to the public for its performance. This web-based tool provides candid information on how programs are performing and what they are doing to improve. The BPI Initiative will work to increase the reach and impact of this valuable information to improve program performance and accountability for results. ANALYTICAL PERSPECTIVES Note.—A table with summary information for all programs that have been reviewed using the Program Assessment Rating Tool (PART) is available at: www.whitehouse.gov/omb/budget/fy2008/sheets/ part.pdf. This table provides program ratings, section scores, funding levels, and other information. Additionally, a complete data file and data model of all assessments on ExpectMore.gov is available at: www.whitehouse.gov/omb/expectmore/whatsnew.htm. This is a comma-separated values file that academics and researchers can use to analyze performance data. CROSSCUTTING PROGRAMS 17 3. HOMELAND SECURITY FUNDING ANALYSIS Since the terrorist attacks of September 11, 2001, the Federal Government, with State, local and private sector partners, has engaged in a broad, determined effort to thwart terrorism, identify and pursue terrorists abroad and implement 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 chemical, biological, radiological, and nuclear (CBRN) weapons; enhance the security of our borders, transportation modes and critical infrastructure; and strengthen America’s preparedness and response capabilities in our cities and local communities. 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—involve every level of government as well as the private sector and individual citizens. Since September 11th, homeland security has continued to be a major policy focus for all levels of government, and one of the President’s highest priorities. Underscoring 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. This analysis covers the homeland security funding and activities of all Federal agencies, not only those carried out by the Department of Homeland Security (DHS), but also addresses State, local, and private sector expenditures. Since not all activities carried out by DHS constitute homeland security funding (e.g., response to natural disasters, Coast Guard search and rescue activities), DHS estimates in this section do not represent the entire DHS budget. tion in this chapter is augmented by a detailed appendix of account-level funding estimates, which is available on the Analytical Perspectives CD–ROM. To compile this data, agencies report information using standardized definitions for homeland security. 2 The data provided by the agencies are developed at the ‘‘activity level,’’ which is a set of like programs or projects, at a level of detail sufficient to consolidate the information to determine 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 homeland security-related activities from host programs and refine their characterizations. 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. 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. Informa- Total funding for homeland security has grown significantly since the attacks of September 11, 2001. For 2008, the President’s Budget includes $61.1 billion of gross budget authority for homeland security activities, a $4.7 billion (8.4 percent) increase over the 2007 estimated level. 3 Not including the Department of Defense’s (DOD) funding, the gross non-defense 2008 request for homeland spending is $43.6 billion, or a $3.8 billion (9.5 percent) increase over the 2007 estimated level. Excluding mandatory spending, fees, and the DOD’s homeland security budget, the 2008 Budget proposes a net, non-Defense discretionary increase of $3.4 billion (10.3 percent) over the 2007 level (see Table 3–1). The 2008 Budget proposes homeland security funding for a total of 31 agencies. Of those, five agencies— the Departments of Homeland Security, Defense, Health and Human Services (HHS), Justice (DOJ) and Energy (DOE)—account for approximately 93 percent of total Government-wide homeland security funding in 2008. 1 All data in the Federal expenditures section are based on the President’s policy for the 2008 Budget. Additional policy and baseline data is presented in the ‘‘Additional Tables’’ section. Due to rounding, data in this section may not add to totals in other Budget volumes. 2 Federal homeland security activities are currently defined by OMB in Circular A-11 as, ‘‘activities that focus on combating and protecting against terrorism, and that occur within the United States and its territories (this includes Critical Infrastructure Protection (CIP) and Continuity of Operations (COOP) data), or outside of the United States and its territories if they support domestically-based systems or activities (e.g., visa processing or pre-screening high-risk cargo at overseas ports). Such activities include efforts to detect, deter, protect against, and, if needed, respond to terrorist attacks.’’ 3 Aside from DHS and DOD, all other agencies’ 2007 funding is at the estimated fullyear Continuing Resolution levels. Further, the FY07 gross homeland security funding excludes supplemental and emergency funding received in 2007 ($1.7 billion) and the Department of Commerce’s mandatory borrowing authority for emergency communications interoperability grants ($1 billion). Data Collection Methodology and Adjustments 19 20 ANALYTICAL PERSPECTIVES Table 3–1. HOMELAND SECURITY FUNDING BY AGENCY (Budget authority, in millions of dollars) 2006 Actual 2006 Supplemental/ Emergency 2007 Enacted/CR 2007 Supplemental/ Emergency 1 Department of Agriculture ....................................................................................................................... Department of Commerce 3 ..................................................................................................................... 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 ............................................................................................................. Securities and Exchange Commission ................................................................................................... Smithsonian Institution ............................................................................................................................ United States Holocaust Memorial Museum .......................................................................................... Corporation for National and Community Service ................................................................................. 597.4 181.1 16,479.3 24.7 1,702.1 4,351.8 25,154.9 1.9 59.5 2,995.4 48.3 1,107.9 181.0 113.5 297.8 72.0 129.4 20.8 98.6 212.6 344.2 2.7 176.4 13.5 2.3 56.0 18.2 79.3 5.0 83.7 7.8 20.4 ........................ ........................ 1,030.5 ........................ ........................ 0.1 1,416.1 ........................ ........................ 30.3 ........................ ........................ ........................ 1.3 ........................ ........................ ........................ ........................ 0.1 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 522.5 194.1 16,538.3 24.0 1,696.6 4,313.2 26,872.2 1.9 46.8 3,089.3 49.4 1,239.6 178.6 108.8 243.6 43.0 132.9 20.8 73.7 199.2 344.2 2.8 194.0 8.0 2.3 56.0 18.2 66.0 14.3 80.6 7.8 20.4 ........................ ........................ ........................ ........................ ........................ ........................ 1,816.4 ........................ ........................ 96.0 ........................ ........................ ........................ 3.0 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 718.5 217.7 17,461.2 23.2 1,833.9 4,424.1 29,666.5 3.4 48.4 3,330.5 51.8 1,405.7 200.0 118.0 270.0 42.0 152.4 20.8 42.3 193.9 375.4 2.3 217.1 3.0 3.6 58.0 18.1 68.9 18.3 92.8 8.4 14.9 Total, Homeland Security Budget Authority ...................................................................................... Less Department of Defense .............................................................................................................. 54,639.4 –16,479.3 2,478.4 –1,030.5 56,403.0 –16,538.3 1,915.4 ........................ 61,104.9 –17,461.2 Non-Defense Homeland Security Budget Authority, excluding Mandatory Interoperability Communications Grants 4 ................................................................................................................ Less Fee-Funded Homeland Security Programs ............................................................................... Less Mandatory Homeland Security Programs ................................................................................. 38,160.1 –3,512.9 –2,256.9 1,447.9 ........................ ........................ 39,864.7 –4,396.4 –2,487.7 1,915.4 ........................ ........................ 43,643.7 –4,986.2 –2,291.0 Net Non-Defense Discretionary Homeland Security Budget Authority, excluding Mandatory Interoperability Communications Grants 4 ..................................................................................... Plus Mandatory Interoperability Communications Grants .................................................................. 32,390.3 .................... 1,447.9 ........................ 32,980.6 1,000.0 1,915.4 ........................ 36,366.5 .................... Net Non-Defense, Discretionary Homeland Security Budget Authority, including Mandatory Interoperability Communications Grants 4 ..................................................................................... 32,390.3 1,447.9 33,980.6 1,915.4 36,366.5 Obligations Limitations Department of Transportation Obligations Limitation ............................................................................. 121.0 ........................ 121.0 ........................ 121.3 Budget Authority 2008 Request 2 1 The 2007 supplemental and emergency funding levels for the Departments of Homeland Security (DHS), Justice (DOJ), and Treasury include both enacted and requested supplemental funding. In the 2007 Global War on Terror (GWOT) supplemental request, DHS, DOJ, and Treasury request $120 million, $96 million, and $3 million, respectively, for additional 2007 budget authority. 2 The 2008 request levels for DHS and DOJ does not include additional budget authorities for 2008 requested in the 2007 GWOT supplemental request. Specifically, DHS and DOJ request $225 million and $85 million, respectively, in additional budget authority for 2008 to be provided in the 2007 GWOT supplemental appropriation bill. 3 DOC’s 2007 gross Continuing Resolution full-year estimate for homeland security excludes $1 billion in mandatory borrowing authority to provide Federal grants to public safety agencies for communications interoperability purposes. Although technically scored in 2007, this funding will be made available from proceeds of the Federal Communications Commission’s 2008 auction of returned television spectrum. 4 The Deficit Reduction Act of 2005 appropriated $1 billion from anticipated spectrum auction receipts for the Department of Commerce, in consultation with the Department of Homeland Security, to make grants to public safety agencies for communications interoperability purposes. 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 with many challenges. There is a wide range of potential threats and risks from terrorism. To optimize limited 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 21 3. HOMELAND SECURITY FUNDING ANALYSIS represents a partnership between the Federal government and its State and local counterparts, 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. The National Strategy is a dynamic document being implemented through a robust interagency planning and coordination process. 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 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 changing risks and threats— such as the biological agents most likely to be used by a terrorist group or the highest-risk critical infrastructure targets—in order to develop benchmarks that suit the needs of the moment and at the same time align to long-term goals. For example, a major interagency effort currently occurring at the Federal level is the development of the National Implementation Table 3–2. Plan for the Global War on Terrorism and attendant performance measures that address homeland security. Funding presented in this report is analyzed in the context of major ‘‘mission areas.’’ Activities in many of the mission areas are closely related and certain capabilities highlighted by a single mission area also enhance capabilities captured by other mission areas. 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 also address agents that represent catastrophic threats. However, for the purposes of segmenting Federal homeland security funding by mission areas, discussions of cross-cutting activities have also been separated by mission areas. Furthermore, there are a small number of notable cross-cutting activities that are not specifically highlighted in any of the mission areas. For example, although pandemic influenza preparedness is considered an essential homeland security activity, it does not necessarily fit into a single mission area, and general biodefense and preparedness activities of the Federal government encompass it. Nevertheless, the preparations we are making for pandemic influenza have a direct impact on our ability to defend against and respond to terrorist Weapons of Mass Destruction (WMD) threats. The following table summarizes funding levels by the National Strategy’s mission areas; more detailed analyses are provided in subsequent mission-specific analysis sections. HOMELAND SECURITY FUNDING BY NATIONAL STRATEGY MISSION AREA (Budget authority, in millions of dollars) 2006 Actual 2006 Supplemental 2007 Enacted/CR 2007 Supplemental/ Emergency Intelligence and Warning ........................................ Border and Transportation Security ....................... Domestic Counterterrorism ..................................... Protecting Critical Infrastructure and Key Assets .. Defending Against Catastrophic Threats ............... Emergency Preparedness and Response ............. Other ........................................................................ 443.0 18,042.3 4,535.6 17,933.2 8,573.7 4,992.3 119.3 6.3 1,335.8 89.8 862.4 122.4 61.6 ...................... 500.3 19,528.1 4,980.3 17,919.7 8,460.6 4,935.9 78.1 13.0 1,816.4 83.0 3.0 ....................... ....................... ....................... 647.9 22,403.8 4,889.4 19,096.1 8,828.9 5,022.0 216.8 Total, Homeland Security Budget Authority ..... Plus Mandatory Interoperability Communications Grants .................................................... 54,639.4 2,478.4 56,403.0 1,915.4 61,104.9 .................... ...................... 1,000.0 ....................... .................... Total Homeland Security Budget Authority plus Mandatory Interoperability Communications Grants ....................................................... 54,639.4 2,478.4 57,403.0 1,915.4 61,104.9 Agency 2008 Request 22 ANALYTICAL PERSPECTIVES National Strategy Mission Area: Intelligence and Warning The intelligence and warning mission area covers activities to detect terrorist threats and disseminate terrorist-threat information. This 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, and the public at large. It does not Table 3–3. include most foreign intelligence collection—although the resulting intelligence may inform homeland security activities—nor does it fully capture classified intelligence activities. In 2008, funding for intelligence and warning is distributed between DHS (60 percent), primarily in the Office of Intelligence and Analysis (I&A); DOJ (27 percent), primarily in the Federal Bureau of Investigation (FBI); and other Intelligence Community members (9 percent). The 2008 funding for intelligence and warning activities is 29.5 percent above the 2007 level. INTELLIGENCE AND WARNING FUNDING (Budget authority, in millions of dollars) Agency 2006 Actual 2006 Supplemental 2007 Enacted/CR 2007 Supplemental/ Emergency Department of Agriculture ....................................... Department of Commerce ...................................... Department of Homeland Security ......................... Department of Justice ............................................. Department of the Treasury ................................... Intelligence Community Management Account ...... 5.2 .................... 337.7 41.7 2.4 56.0 ...................... ...................... ...................... 5.0 1.3 ...................... 5.2 1.8 380.1 54.8 2.4 56.0 ....................... ....................... ....................... 10.0 3.0 ....................... 22.3 1.8 388.4 173.8 3.6 58.0 Total, Intelligence and Warning .......................... 443.0 6.3 500.3 13.0 647.9 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 information sharing and warning mechanisms, such as the Homeland Security Advisory System, to allow Federal, State, local, and private authorities to take action to prevent attacks and protect potential targets. As established by the Intelligence Reform and Terrorism Prevention Act (IRTPA) of 2004, the Director of National Intelligence (DNI) ensures that this office is setting collection and analysis priorities that are consistent with the National Intelligence Strategy. This strategy calls for the integration of both the domestic and foreign dimensions of U.S. intelligence so that there are no gaps in our understanding of threats to the homeland. In accordance with the IRTPA’s requirements for the Information Sharing Environment (ISE), the DNI is also ensuring that information sharing takes place in an environment where access to terrorism information is matched to the roles, responsibilities, and missions of all the organizations across the intelligence community. These changes 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. The DNI, in conjunction with the Homeland Security Council (HSC) and relevant Federal agencies, has established the ISE Implementation Plan and ISE Privacy 2008 Request Guidelines in accordance with a Presidential directive in December, 2005, which outlined new guidelines and protocols for improving information sharing between Federal, State, local, and foreign governments and the private sector. The President has extended work on the ISE for another two years and fully supports the plan going forward to complete the ISE mandate as outlined in IRTPA. The 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. NCTC serves as the primary organization in the U.S. Government for analyzing and integrating all intelligence pertaining to terrorism and counterterrorism (except purely domestic terrorism) and the central and shared knowledge bank on known and suspected terrorists and international terror groups. It also ensures 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 with coordinating counterterrorism operational planning on a global basis and developing strategic, operational plans for the Global War on Terrorism. The NCTC, with guidance from the National Security Council and the HSC, has created the first National Implementation Plan for the Global War on Terrorism, which will further consolidate the U.S. Government’s efforts on the Global War on Terrorism. The DNI and the NCTC work to utilize the unique assets and capabilities of other Government agencies 23 3. HOMELAND SECURITY FUNDING ANALYSIS and interagency groups—some of which are reorganizing to improve these capabilities and better interface with the new intelligence structure. As such, the NCTC allocates requirements to the agencies with the assets and capabilities to address them. In addition, NCTC has formed a new core staff of analysts drawn from multiple intelligence agencies. This variety ensures that NCTC can access the Intelligence Community’s full breadth of knowledge and complement the activities of individual agencies. Despite the addition of this new permanent planning staff, NCTC will not undertake direct operations but will continue to leave mission execution with the appropriate agencies. This separation ensures that agencies’ chains of command remain intact and prevent potentially excessive micromanagement of counterterrorism missions. Taken together, the creation of the NCTC and recent legislation and executive orders will ensure counterterrorism intelligence and warning assets are better allocated and more tightly coordinated, leading to improved intelligence for homeland security. The 2008 budget request for the FBI supports improvements in its national security investigations and intelligence analysis, as well as technical and tactical support programs. Many of the improvements are targeted at FBI’s National Security Branch, which integrates the Intelligence Directorate, Counterterrorism Division and Counterintelligence Division. Over the past five years, the FBI has developed its intelligence capabilities and improved its ability to protect the American people from threats to national security. It has built on its established capacity to collect information and enhanced its ability to analyze, disseminate and utilize intelligence. The President’s 2008 Budget supports the FBI’s priorities and its continuing transformation by providing the resources needed to enhance its national security capabilities and improve supporting information technology and infrastructure. These initiatives will increase the number of agents and specialists working national security cases; enhance intelligence collection, systems, and training; improve IT systems that reduce paperwork and facilitate information sharing; and upgrade biometric identification systems to improve the identification of terrorists. Table 3–4. As a result of the Department of Homeland Security’s 2006 re-organization (Second Stage Review), a new Office of Intelligence and Analysis was established to strengthen intelligence functions and information sharing within DHS. I&A gathers information to analyze terrorist threats to critical infrastructure, transportation systems, or other targets inside the homeland. Led by the DHS Chief Intelligence Officer reporting directly to the Secretary, this office not only relies on personnel from the former Information Analysis and Infrastructure Protection Directorate, but also draws on the expertise of other DHS components with information collection and analytical capabilities. For example, improved coordination and information sharing between border agents, air marshals, and intelligence analysts deepens the Department’s understanding of terrorist threats. By maintaining and expanding its partnership with the NCTC, DHS will better coordinate its activities with other members within the Intelligence Community and the DNI. I&A also serves as the focal point for disseminating homeland security information to State and local entities. For example, I&A is connected to homeland security directors of States, counties, and territories through the Homeland Security Information Network (HSIN) and it is deploying the Homeland Security Data Network (HSDN) to them as well. All fifty States and major urban areas are connected to HSIN, and HSIN is being rolled out to major counties as well. Furthermore, in recognition of the limitations of virtual interactions through electronic communications networks, beginning in late 2006, I&A has begun deploying liaisons and intelligence analysts to State and Local Intelligence Fusion Centers across the nation to improve the flow and quality of homeland security information to State, local and private sector partners and ensure a more accurate situational awareness for DHS and its Federal partners. National Strategy Mission Area: Border and Transportation Security This mission area covers activities to protect border and transportation systems, such as screening airport passengers, detecting dangerous materials at ports BORDER AND TRANSPORTATION SECURITY FUNDING (Budget authority, in millions of dollars) 2006 Actual 2006 Supplemental 2007 Enacted/CR 2007 Supplemental/ Emergency Agriculture ....................................... Commerce ...................................... Energy ............................................ Homeland Security ......................... Justice ............................................. State ............................................... Transportation ................................. 205.6 .................... .................... 16,732.1 30.4 1,056.6 17.7 ...................... ...................... ...................... 1,335.8 ...................... ...................... ...................... 210.2 1.5 .................... 18,086.3 25.4 1,188.3 16.4 ....................... ....................... ....................... 1,816.4 ....................... ....................... ....................... 221.7 1.6 7.1 20,812.8 4.6 1,346.0 10.0 Total, Border and Transportation Security ....... 18,042.3 1,335.8 19,528.1 1,816.4 22,403.8 Agency Department Department Department Department Department Department Department of of of of of of of 2008 Request 24 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 ($20.9 billion, or 93 percent, in 2008) is in DHS, largely for the U.S. Customs and Border Protection (CBP), the Transportation Security Administration (TSA), and the U.S Coast Guard. Other DHS bureaus and other Federal Departments, such as the Departments of State and Justice, also play significant roles. The President’s 2008 request would increase funding for border and transportation security activities by 6.7 percent over the 2007 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 layered 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 allowed for unification of the Federal Government’s major border and transportation security resources, which 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. The 2008 Budget provides approximately $8.8 billion for the Border Patrol (an increase of 36 percent over 2007) including funding for 3,000 new agents. The President has committed to doubling the size of the Border Patrol to over 18,000 agents before he leaves office. At the start of the President’s Administration, there were 9,096 Border Patrol agents. This Budget will bring the total number of agents to 17,819, and the next one will meet the President’s goal. To gain control of our borders, the Budget also continues funding for fencing technology and other infrastructure along the border. For example, in September of 2006, DHS awarded a contract to implement the technological and infrastructure component of its Secure Border Initiative effort, SBInet. SBInet will concentrate on using proven technology to significantly improve the availability of information and tools to Border Patrol agents so they can better detect, identify, classify and confront illegal border activity by those who pose a threat to the United States. The Budget includes $1 billion for this priority. This investment will support smarter and more secure borders. The Administration has effectively ended the practice of ‘‘catch and release’’ along the northern and southern borders. Non-Mexican illegal aliens apprehended at the border are now detained and then returned to their home countries as quickly as possible and all non-criminal Mexicans apprehended for crossing the border illegally are returned to Mexico immediately. The 2008 Budget includes $2.2 billion in detention and removal resources to continue this success and supports a total ANALYTICAL PERSPECTIVES of 28,450 detention beds across the country to house illegal aliens apprehended by DHS. To improve coordination and provide assistance to State and local law enforcement officials, the Budget will expand a successful Federal, State and local partnership—the 287(g) program, which provides State/local law enforcement officials with guidance and training in immigration law, subject to the direction of the Secretary of Homeland Security. The 2008 Budget includes an increase of $26 million for the 287(g) program and the Law Enforcement Support Center, including the training of 250 State and local law enforcement officers, detention beds for apprehended illegal aliens, and personnel to assist State and local law enforcement when they encounter aliens. The Budget also includes an increase of $29 million to identify criminal aliens in Federal, State, and local prison facilities and remove those aliens from the United States, $13 million for investigating smuggling and border criminal activity and $5 million for identifying, apprehending, prosecuting and removing aliens involved in gang activities. Key to the Federal Government’s screening of international visitors is the US-VISIT program, which is designed to expedite the clearance of legitimate travelers while identifying and denying clearance to those who may intend harm. US-VISIT currently collects two digital fingerprints and a digital photograph of all foreign visitors entering the United States. The ability to screen foreign visitors against criminal and terrorist databases as well as confirming the identity of travelers has improved border security. However, in the future, to improve accuracy in the identification of visitors, first-time visitors to the United States will be enrolled in the program by submitting ten fingerprints, allowing for improved accuracy in identifying foreign visitors and preventing the entry of known terrorists and criminals to the United States. DHS, in conjunction with the Departments of State and Justice, will implement this multiyear project to improve screening, and the 2008 Budget includes $462 million for US-VISIT, of which $228 million is for 10-print deployment and interoperability with the FBI’s fingerprint system, the Integrated Automated Fingerprint Identification System. In the area of aviation security, the Administration continues to enhance the multiple levels of security implemented in the wake of the September 11th attacks. The Transportation Security Administration has made significant improvements in aviation security since September 11th by implementing a layered, risk-based security approach. These advances include hardened cockpit doors, a greatly expanded Federal Air Marshals program, arming some pilots through the Federal Flight Deck Officers program, offering voluntary self defense training to crew members, and screening 100 percent of passenger and checked baggage. TSA will further strengthen these efforts in 2008 by requesting $4 billion for aviation screening operations. TSA will also commit $729 million to the purchase, installation, and maintenance of baggage screening devices, including inline systems that will increase baggage throughput up to 25 3. HOMELAND SECURITY FUNDING ANALYSIS 250 percent. The Budget also provides more than $82 million for emerging technology at passenger checkpoints. This technology will enhance the detection of prohibited items, especially firearms and explosives, through the use of additional sensors such as whole body imaging, liquid bottle scanners, automated explosive sampling, and cast and prosthesis scanners. Safeguarding 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 major seaport could slow the movement of goods and be economically devastating to the nation. 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 2008, the Coast Guard will continue to ensure compliance with MTSA port and vessel security standards and regulations. The 2008 Budget provides nearly $3 billion for port security across DHS, primarily for Coast Guard port security activities such as Maritime Safety and Security Teams and harbor patrols. In addition, the Coast Guard’s 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. In 2007, Congress passed P.L. 109–347, the SAFE Port Act, which requires enhanced screening of cargo bound for the Unites States, among other port security measures. In addition, port operators are eligible for grants to fund security enhancements under DHS’ Infrastructure Protection Program (IPP) which falls under the Infrastructure Protection mission area. The State Department Bureau of Consular Affairs is the second largest contributor to border and transportation security. The State Border Security program includes visa, passport, American Citizen Services and International Adoption programs. In 2008, the State Department will continue working with interagency partners to enable the transition of the US-VISIT program to a ten fingerprint system. For visitors that require a visa, the Department of State collects the visitor’s biometric and biographic data, which is then checked against watch lists, thereby improving the abil- Table 3–5. ity to make a visa determination. When the visitor arrives in the United States, US-VISIT procedures allow DHS to determine whether the person applying for entry is the same person who was issued the visa by the Department of State. This and additional watch list checks improve the ability of DHS to make admissibility decisions. In addition, the Department of State will also lead the implementation of the Western Hemisphere Travel Initiative in 2008, which mandates that all persons travelling internationally within the Western Hemisphere travel with a passport or other authorized document by 2009. Under this initiative, United States citizens and foreign visitors traveling to and from the Caribbean, Bermuda, Panama, Canada or Mexico will be required to have a passport or standardized travel card that establishes the bearer’s identity and nationality to enter or re-enter the United States. The initiative will improve security at our borders by standardizing entry and exit information and increasing the ability of Government agencies to work together. National Strategy Counterterrorism Mission Area: 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 counterterrorism mission are law enforcement organizations: within DOJ (largely the FBI) and DHS (largely ICE), which account for 53.3 and 45 percent of total funding for 2008, respectively. 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; and • Improving law enforcement cooperation and information sharing to enhance domestic counterterrorism efforts across all levels of government. DOMESTIC COUNTERRORISM FUNDING (Budget authority, in millions of dollars) Agency 2006 Actual Domestic 2006 Supplemental 2007 Enacted/CR 2007 Supplemental/ Emergency 2008 Request Department of Homeland Security ......................... Department of Interior ............................................. Department of Justice ............................................. Department of Transportation ................................. Department of the Treasury ................................... Social Security Administration ................................ 2,127.0 0.3 2,325.3 21.0 60.7 1.4 65.0 ...................... 24.8 ...................... ...................... ...................... 2,482.8 0.3 2,418.2 20.0 57.6 1.4 ....................... ....................... 83.0 ....................... ....................... ....................... 2,201.0 0.3 2,604.0 21.0 61.7 1.4 Total, Domestic Counterterrorism ...................... 4,535.6 89.8 4,980.3 83.0 4,889.4 26 ANALYTICAL PERSPECTIVES The President’s 2008 Budget supports the FBI’s top strategic priority: to protect the United States from terrorist attacks. FBI continues to build its counterterrorism capabilities post-September 11th. Over the past six years, FBI has shifted resources to counterterrorism from lower priority programs, hired and trained additional field investigators, enhanced science and technology capabilities, and strengthened headquarters oversight of the counterterrorism program. In addition, FBI has integrated its counterterrorism, counterintelligence, and intelligence functions by establishing the National Security Branch to oversee all three programs. More recently, the FBI has created a Weapons of Mass Destruction Directorate to coordinate all investigative and analytical efforts directed at WMD issues. Overall, FBI resources in the domestic counterterrorism category have increased from $0.9 billion in 2002 to $2 billion in 2008. Among the largest 2008 initiatives for enhancing counterterrorism capabilities are $38 million to improve FBI’s data intercept and access program, $26 million to fund additional counterterrorism agents, and $19 million to expand the WMD Directorate. Within DHS, ICE focuses on a broad array of national security, financial, and smuggling violations, including illegal arms exports, financial crimes, commercial fraud, and human trafficking. The 2008 Budget provides $2 billion for these enforcement activities. 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 for two reasons: (1) the diversity of infrastructure and (2) the high level of private ownership (85 percent) of the Nation’s key assets. DOD continues to Table 3–6. report the largest share of funding in this category for 2008 ($12 billion, or 62.8 percent), which includes programs focusing on physical security and improving the military’s ability to prevent or mitigate the consequences of attacks against departmental personnel and facilities. Nevertheless, DHS has overall responsibility for prioritizing and executing infrastructure protection activities at the national level and accounts for $3 billion (16 percent) of 2008 funding. In addition, a total of 25 other agencies report funding to protect their own assets and work with States, localities, and the private sector to reduce vulnerabilities in their areas of expertise. The President’s 2008 request increases funding for activities to protect critical infrastructure and key assets by $1.2 billion (6.6 percent) over the 2007 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 an accurate assessment of America’s critical infrastructure and key assets and prioritizing protective action based on risk; • Enabling effective partnerships to protect critical infrastructure; and • Reducing threats and vulnerabilities in cyberspace. Homeland Security Policy Directive 7 (HSPD-7), signed in December 2003, established a national policy to protect critical infrastructure and key resources from attack, to ensure the delivery of essential goods and services, and to maintain public safety and security. Under HSPD-7, DHS is responsible for coordinating Federal critical infrastructure programs and working closely with State and local governments and the private sector to align protection efforts. To provide the overall framework to integrate various critical infrastructure protection activities, DHS developed the Na- PROTECTING CRITICAL INFRASTRUCTURE AND KEY ASSETS FUNDING (Budget authority, in millions of dollars) 2006 Actual 2006 Supplemental 2007 Enacted/CR 2007 Supplemental/ Emergency 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 ................................ Other Agencies ....................................................... 90.7 11,150.5 1,520.6 181.7 2,698.3 541.1 131.9 262.5 212.6 317.2 174.6 651.7 ...................... 862.3 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 0.1 31.1 11,254.0 1,515.1 184.8 2,779.6 531.2 131.9 208.3 199.2 317.2 191.9 575.4 ....................... ....................... ....................... ....................... ....................... 3.0 ....................... ....................... ....................... ....................... ....................... ....................... 64.0 11,966.2 1,607.1 180.2 3,035.5 494.3 166.1 221.9 193.9 350.4 215.0 601.6 Total, Protecting Critical Infrastructure and Key Assets ................................................................. 17,933.2 862.4 17,919.7 3.0 19,096.1 Agency 2008 Request 3. HOMELAND SECURITY FUNDING ANALYSIS tional Infrastructure Protection Plan (NIPP). The plan’s risk-management approach provides the framework for government and industry to work together on common protective goals, while focusing resources where they are needed the most. Recognizing that each infrastructure sector possesses it own unique characteristics, HSPD-7 also designated sector-specific agencies to coordinate infrastructure protection efforts within each sector. This approach enables agencies to rely on specialized expertise and long-standing relationships with industry in conducting infrastructure protection activities. There are 17 critical infrastructure sectors and 9 sector-specific agencies, including DHS. In December of 2006, DHS received the first set of sector-specific plans that address how each critical infrastructure sector will work together to collect infrastructure information, prioritize assets and protective programs, and develop metrics to inform future initiatives. Although these efforts aimed at protecting critical infrastructure and key assets nationwide are in motion, the Administration has also been focusing on a select number of high-priority areas in parallel with NIPP implementation. For example, the 2008 Budget provides $25 million to DHS to focus on chemical security regulation enforcement activities, such as requiring security vulnerability assessments and facility security plans and inspecting chemical facilities for compliance. The budget for the Environmental Protection Agency includes $22 million in 2008 to begin testing the last of its pilot systems for the Water Security Initiative. The program develops pilot systems for cost effective, early warning of disease, pest, or poisonous agents in drinking water systems and offers subsequent consequence management. The Department of Agriculture also has completed extensive physical security assessments to make sure that agricultural physical security issues throughout the United States are in line with the latest best practices. Many other departments and agencies have critical infrastructure protection programs underway that support the mission of the NIPP and will benefit from the NIPP process. DHS recently reorganized and combined its preparedness and response functions to fulfill requirements of the 2007 Homeland Security Appropriations Act. DHS also created the National Protection and Programs Directorate (NPPD), which includes offices that were omitted from the transfer to FEMA by statute. These offices, which focus on physical and cyber infrastructure protection, communications, as well as other major security initiatives, will be part of the newly created NPPD. The Office of Infrastructure Protection (IP), located within this new directorate, is responsible for managing and prioritizing infrastructure protection at the national level. The Office operates the national asset database, which aggregates infrastructure data from across the nation. The database supports DHS in developing a risk-based strategy for protection and can be used to identify critical infrastructure under certain sce- 27 narios. IP also conducts site visits and assessments each year, and has used this information to develop site security guidelines for nuclear power plants and chemical facilities. The 2008 Budget provides $240 million for these activities. In conjunction with funding for the Office of Infrastructure Protection, the Administration supports the Infrastructure Protection Program, which consists of five grant programs funding security enhancement projects in and around transportation assets and other critical infrastructure sites. Awarded through the Office of Grant Programs, IPP grants supplement State and local infrastructure security efforts, especially detection and prevention 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 established the National Cyber Security Division (NCSD) in 2003—in response to the President’s National Strategy to Secure Cyberspace—in order to identify, analyze and reduce cyber threats and vulnerabilities, coordinate incident response, and provide technical assistance. NCSD, now part of NPPD, works collaboratively with public, private, and international entities to secure cyberspace and America’s cyber assets. NCSD has also established the U.S. Computer Emergency Response Team (US-CERT), which operates a cyber watch, warning, and incident response center. US-CERT supports a watch and warning capability responsible for tracking incident and trend data, ranking associated severity, and generating real-time alerts. NCSD also operates a Control Systems Security Program. Today, many critical infrastructures such as pipelines, water and pumping stations, and pharmaceutical production are run by computerized control systems. These systems make our critical infrastructure assets more automated, more productive, more efficient, and more innovative, but they also may expose those physical assets to cyber-related threats. NCSD works to address these weaknesses and enhance control systems security. To evaluate readiness and response programs such as the National Response Plan, NCSD has conducted national cyber exercises such as Cyber Storm with public and private sector entities. These exercises test our capabilities and improve our ability to respond to an incident. To support these critical preparedness activities, the Budget includes $98 million for the NCSD in 2008. National Strategy Mission Area: Defending Against Catastrophic Threats The defending against catastrophic threats mission area covers activities including research, development, and deployment of technologies, systems, and medical measures to detect and counter the threat of chemical, biological, radiological, and nuclear weapons. The agencies with the most significant resources to help develop and field technologies to counter CBRN threats are: 28 ANALYTICAL PERSPECTIVES (1) DOD ($5 billion, or 57.6 percent, of the 2008 total); (2) HHS, largely for research at the National Institutes of Health (NIH) ($1.9 billion, or 22.1 percent, of the 2008 total); and (3) DHS ($1.3 billion, or 14.5 percent, Table 3–7. of the 2008 total). The President’s 2008 request would increase funding for activities to defend against catastrophic threats by $368 million (4 percent) over the 2007 level. DEFENDING AGAINST CATASTROPHIC THREATS FUNDING (Budget authority, in millions of dollars) Agency 2006 Actual 2006 Supplemental 2007 Enacted/CR 2007 Supplemental/ Emergency 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 ............................................. Department of the Treasury ................................... National Science Foundation .................................. Nuclear Regulatory Commission ............................ 238.3 80.6 4,988.5 62.1 1,806.0 1,306.1 37.4 .................... 27.0 27.8 ...................... ...................... 122.0 ...................... ...................... ...................... 0.5 ...................... ...................... ...................... 226.0 88.7 4,889.8 62.1 1,848.5 1,255.1 40.0 .................... 27.0 23.4 ....................... ....................... ....................... ....................... ....................... ....................... ....................... ....................... ....................... ....................... 343.5 90.7 5,007.9 63.2 1,954.2 1,276.7 43.9 1.8 25.0 21.9 8,573.7 122.4 8,460.6 ....................... 8,828.9 Total, Defending Against Catastrophic Threats The major requirements addressed in this mission area include: • Preventing terrorist use of CBRN weapons through detection systems and procedures, and improving decontamination techniques; and • Developing countermeasures, such as vaccines and other drugs to protect the public from the threat of a CBRN attack or other public health emergency. To protect against a nuclear or radiological weapon entering the country, the Domestic Nuclear Detection Office (DNDO) was created in 2005 within DHS to coordinate the Nation’s nuclear detection efforts. DNDO, together with the Departments of State, Energy, Defense, and Justice, is responsible for developing and deploying a comprehensive system to detect and report any attempt to import a nuclear explosive device or radiological material into the United States. DNDO is also 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 2008 Budget includes $562 million for DNDO, a 17 percent increase from the 2007 level. In 2008, DNDO will invest $100 million in transformational research and development aimed at enhancing our ability to detect, identify, and attribute nuclear and radiological materials. This research looks beyond current capabilities and seeks to find new scientific tools and methodologies that may prove useful in broad efforts to focus the Nation’s resources toward countering the threat of nuclear and radiological devices. DNDO’s budget also includes $178 million for the deployment of both fixed and mobile radiation portal monitors at strategic points of entry throughout the 2008 Request country. An additional $30 million will be used to improve the detection of radiological and nuclear materials in and around the Nation’s major urban areas under a program called Securing the Cities. Together with overseas non-proliferation efforts led by the Department of State, and overseas detection capabilities managed by the Department of Energy, these programs seek to create a seamless approach toward preventing terrorists anywhere in the world from acquiring, transporting, or introducing these materials into the United States. To counter the threat of CBRN weapons, the Budget continues to invest in efforts to decrease the time between an attack and implementation of Federal, State and local response protocols. 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. DHS will therefore continue to support efforts such as 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, thereby allowing the distribution of life-saving treatment and preventative measures before the development of serious and widespread illnesses. Beginning in 2008, DHS bio-defense programs such as BioWatch and biosurveillance will be consolidated in the newly established Office of Health Affairs. However, on-going research and development into next-generation bio-sensors that are able to better detect biological pathogens will continue in DHS’s Science and Technology Directorate. A key element in defending against catastrophic threats is developing and maintaining adequate countermeasures for a CBRN attack. This not only means 29 3. HOMELAND SECURITY FUNDING ANALYSIS 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. The Budget continues HHS’s investment in developing medical countermeasures to CBRN threats with $1.9 billion in funding, which is more than $1.8 billion over the level prior to September 11th (this includes funding for programs focused on chemical and radiological and nuclear countermeasures referenced below). For 2008, the Budget includes nearly $190 million for the advanced development of medical countermeasures against threats of bioterrorism. Large investments in basic research of medical countermeasures at HHS have helped create multiple promising products to protect the public against the threat of a terrorist attack. These investments will accelerate the development of these products to help Project BioShield acquire them more quickly for inclusion in the Strategic National Stockpile. HHS will also continue to improve human health surveillance with $88 million dedicated to biosurveilance activities, including the BioSense program (allowing local, State, and national public health authorities to monitor ‘‘real-time’’ trends in data from hospitals, emergency departments, and laboratories to identify and characterize potential human health threats), increasing laboratory capacity, and augmenting the number and quality of border health and quarantine stations. The Food and Drug Administration and the 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. DOD defends the nation against catastrophic threats by undertaking long-term research on chemical and biological threats and by developing strategies to counter the risk of such attacks. DOD’s efforts in maritime defense and interdiction provide early detection and response to possible CBRN threats. DOD also conducts anti-terrorism planning to defend against a potential Table 3–8. CBRN or other terrorist attack against a military base or installment. Finally, the U.S. Northern Command, the military command responsible for DOD’s homeland defense activities, is included in this category. 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. Response to natural disasters, including catastrophic natural events such as Hurricane Katrina, does not directly fall within the definition of a homeland security activity for funding purposes, as defined by Section 889 of the Homeland Security Act of 2002. However, in preparing for terrorism-related threats, many of the activities within this mission area also support preparedness for catastrophic natural disasters. Additionally, lessons learned from the response to Hurricane Katrina will help to revise and strengthen catastrophic response planning. HHS, the largest participant in this mission area ($2.3 billion, or 48.4 percent, in 2008), assists States, localities and hospitals to upgrade public health capacity and maintains a national stockpile of medicines and vaccines for use following an event. DHS maintains the second largest share of funding in this category ($1.5 billion, or 30.7 percent, for 2008), mainly for preparedness grant assistance to State and local first responders. A total of 23 other agencies include emergency preparedness and response funding. A number of agencies maintain specialized response assets that may be called upon in select circumstances, and others report only funding for their agency’s internal preparedness capability. The major requirements addressed in this mission area include: EMERGENCY PREPAREDNESS AND RESPONSE FUNDING (Budget authority, in millions of dollars) Agency 2006 Actual 2006 Supplemental 2007 Enacted/CR 2007 Supplemental/ Emergency 2008 Request Department of Defense .......................................... Department of Energy ............................................ Department of Health and Human Services .......... Department of Homeland Security ......................... Other Agencies ....................................................... 340.4 119.4 2,364.2 1,842.9 325.4 46.2 ...................... 0.1 15.3 ...................... 394.5 119.4 2,279.9 1,821.6 320.5 ....................... ....................... ....................... ....................... ....................... 487.1 156.3 2,289.7 1,755.6 333.3 Total, Emergency Preparedness and Response ... Plus Mandatory Communications Interoperability Grants .................................................. 4,992.3 61.6 4,935.9 ....................... 5,022.0 .................... ...................... 1,000.0 ....................... .................... Total, Emergency Preparedness and Response, including Mandatory Communications Interoperability Grants ........................... 4,992.3 61.6 5,935.9 ....................... 5,022.0 30 • 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 preparedness 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; and • 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-hazards National Response Plan. The National Incident Management System was simultaneously developed to integrate a standardized Incident Command System throughout Federal, State and local response agencies and organizations. Additionally, the release of a unified National Preparedness Goal will provide a new framework for guiding Federal, State, and local investments. In order to ensure that these investments translate into improvements in preparedness, we must continue to identify capability gaps 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 building and enhancing response capabilities, and not simply supplanting normal operating expenses. DHS is leading an interagency effort to better match Federal resources with achieving national preparedness goals. From 2001 through 2007, the Federal Government has allocated over $16 billion in State and local terrorism preparedness funding from the Departments of Homeland Security, Health and Human Services, and Justice, increasing spending from an annual level of approximately $350 million in 2001 to $2.9 billion in the 2008 request. The funding growth has been directed to Federal programs and grant assistance which support State and local preparedness and response activities, including equipping, training and exercising first responders, and preparing the public health infrastructure, for a range of terrorist threats. The Federal Government has taken steps to rationalize and simplify the distribution of State and local assistance; better target funds based on risk and effectiveness; and develop and implement the seven national priorities and 37 target capabilities identified in the National Preparedness Goal. The 2008 Budget provides over $100 million for DHS programs which train and exercise first responders in preparation for catastrophic events including the Na- ANALYTICAL PERSPECTIVES tional Exercise Program and the Center for Domestic Preparedness. In addition to these programs, DHS will provide grant funding to State and local agencies to support approximately 1,200 all-hazards preparedness exercises annually in 2007 and in 2008. The 2008 Budget also provides grants which support coordinated terrorism preparedness training and equipment for State and local responders across the various responder agencies. The 2008 request includes over $1.5 billion for terrorism preparedness grants to be administered by the Office of Grant Programs within DHS, and proposes to continue current progress on the grant allocation process to better address threats and needs. In addition, to supplement assistance for public safety communications projects available through the DHS grants, the Department of Commerce, in consultation with DHS, will be awarding $1 billion in additional grants for first responder communications interoperability to qualified applicants from anticipated spectrum auction receipts. The full outlay and impact of these funds will begin to be realized in FY 2008. The Budget also supports a range of Federal response capabilities, including providing $110 million for the Department of Energy’s Nuclear Emergency Support Team, $20 million within DHS for the Federal Emergency Management Agency’s Urban Search and Rescue teams, $53 million for the National Disaster Medical System, 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 order to ensure that the nation is prepared for dealing with a biological attack, including pandemic influenza, the Administration continues to make significant investments in medical countermeasures through Project BioShield. 4 While the stockpiling of medical countermeasures is the primary goal, BioShield is also 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 that they are safe and effective enough to be added to the Strategic National Stockpile. As a result, this program also provides an incentive for the development and manufacturing of advanced countermeasures, ensuring that new and improved countermeasures will be available in the future. The Budget includes $581 million to maintain and augment this 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 includes funding for storage and maintenance of products purchased through BioShield. Finally, HHS has the lead role in preparing public health providers for catastrophic terrorism. In addition to providing additional funding to expand HHS’s public health and medical response capabilities, including disaster medical assistance, the 2008 Budget also provides 4 BioShield is a shared responsibility, joining the intelligence capabilities of DHS with the medical expertise of HHS. 31 3. HOMELAND SECURITY FUNDING ANALYSIS nearly $414 million to continue improvements for hospital infrastructure and $698 million 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 over $9 billion. Non-Federal Expenditures 5 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 infrastructure; some additional spending has been ongoing, such as hiring more personnel, and increasing overtime for existing security personnel. In many cases, ownsource spending has supplemented the resources provided by the Federal Government. Many governments and businesses continue to place a high priority on and provide additional resources for security. On the other hand, many entities have not increased their spending. A 2004 survey conducted by the National Association of Counties 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. Own-source resources 5 OMB does not collect detailed homeland security expenditure data from State, local, or private entities directly. supplemented funds provided by States and the Federal Government. However, the same survey revealed that 54 percent of counties had not used any of their own funds. 6 There is also a diversity of responses in the businesses community. A 2003 survey conducted by the Conference Board showed that 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 onethird of the surveyed companies reported that they had not increased their security spending after September 11th. 7 Given the difficulty of obtaining survey results that are representative of the entire universe of States, localities, and businesses, it is expected that there will be a wide range of estimates on non-Federal security spending for critical infrastructure protection. Additional Tables The tables in the Federal expenditures section above present data based on the President’s policy for the 2008 Budget. The tables below present additional policy and baseline data, as directed by the Homeland Security Act of 2002. 6 Source: National Association of Counties, ‘‘Homeland Security Funding—2003 State Homeland Security Grants Programs I and II.’’ 7 Source: Conference Board, ‘‘Corporate Security Management’’ 2003. 32 ANALYTICAL PERSPECTIVES Estimates by Agency: Table 3–9. DISCRETIONARY FEE-FUNDED HOMELAND SECURITY ACTIVITIES BY AGENCY (Budget authority, in millions of dollars) Agency 2006 Actual 2006 Supplemental 2007 Enacted/CR 2007 Supplemental/ Emergency Department of Energy ............................................ Department of Homeland Security ......................... Department of State ............................................... General Services Administration ............................ Social Security Administration 1 .............................. Federal Communications Commission ................... Nuclear Regulatory Commission ............................ Securities and Exchange Commission ................... 1.9 2,422.0 815.0 91.8 175.0 2.3 .................... 5.0 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 1.9 2,885.0 1,166.7 66.9 193.3 2.3 66.0 14.3 ....................... ....................... ....................... ....................... ....................... ....................... ....................... ....................... 3.3 3,319.0 1,323.1 34.3 215.7 3.6 68.9 18.3 Total, Discretionary Homeland Security FeeFunded Activities .............................................. 3,512.9 ...................... 4,396.4 ....................... 4,986.2 2008 Request 1 Social Security physical and computer security measures are financed by amounts from the Social Security trust funds and payroll taxes. Table 3–10. MANDATORY HOMELAND SECURITY FUNDING BY AGENCY (Budget authority, in millions of dollars) Agency Department Department Department Department Department Department of of of of of of 2006 Actual 2006 Supplemental 2007 Enacted/CR 2007 Supplemental/ Emergency 2008 Request Agriculture ............................................ Commerce ............................................ Energy .................................................. Health and Human Services ............... Homeland Security .............................. Labor .................................................... 177.4 14.1 12.0 16.6 2,032.8 3.9 ...................... ...................... ...................... ...................... ...................... ...................... 182.0 16.3 12.0 15.9 2,257.5 3.9 ....................... ....................... ....................... ....................... ....................... ....................... 194.5 18.3 13.0 14.3 2,042.2 8.8 Total, Homeland Security Mandatory Programs .... Plus Mandatory Communications Interoperability Grants .................................................................. 2,256.9 ...................... 2,487.7 ....................... 2,291.0 .................... ...................... 1,000.0 ....................... .................... Total, Homeland Security Mandatory Programs including Mandatory Communications Interoperability Grants .................................................. 2,256.9 ...................... 3,487.7 ....................... 2,291.0 33 3. HOMELAND SECURITY FUNDING ANALYSIS Table 3–11. BASELINE ESTIMATES—TOTAL HOMELAND SECURITY FUNDING BY AGENCY (Budget authority, in millions of dollars) Agency 2007 Enacted/ CR 1 Baseline 2008 2009 2010 2011 2012 Department of Agriculture .............................................................................................................................. Department of Commerce 2 ............................................................................................................................ 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 .................................................................................................................... Securities and Exchange Commission .......................................................................................................... Smithsonian Institution .................................................................................................................................... United States Holocaust Memorial Museum ................................................................................................. Corporation for National and Community Service ......................................................................................... 523 193 16,538 24 1,695 4,313 28,572 2 45 3,090 49 1,239 179 109 245 43 133 20 74 199 344 3 194 8 2 56 18 66 14 80 8 20 545 200 17,064 25 1,738 4,422 29,562 2 46 3,210 54 1,268 187 113 252 44 137 20 75 203 352 3 217 8 2 57 18 69 18 84 8 20 559 205 17,569 25 1,777 4,532 30,549 2 48 3,327 51 1,299 193 116 259 45 141 21 78 208 360 3 186 8 2 59 19 71 18 88 8 21 574 210 18,077 26 1,817 4,640 31,508 2 50 3,446 52 1,327 202 120 268 46 145 21 79 213 368 3 190 9 2 60 19 74 19 92 8 21 587 215 18,591 26 1,856 4,752 32,480 2 53 3,566 52 1,354 210 123 276 47 148 22 80 217 376 3 192 9 2 61 20 75 19 96 9 21 602 222 19,110 27 1,896 4,853 33,466 3 55 3,694 53 1,380 219 127 282 48 153 23 81 222 384 3 196 9 2 62 20 78 20 100 9 22 Total, Homeland Security Budget Authority ............................................................................................. Less Department of Defense ..................................................................................................................... 58,098 –16,538 60,023 –17,064 61,847 –17,569 63,688 –18,077 65,540 –18,591 67,421 –19,110 Non-Defense Homeland Security Budget Authority, excluding Mandatory Interoperability Communications Grants and BioShield 3 ............................................................................................. Less Fee-Funded Homeland Security Programs ...................................................................................... Less Mandatory Homeland Security Programs ........................................................................................ 41,560 –4,397 –2,489 42,959 –4,833 –2,290 44,278 –4,909 –2,426 45,611 –5,020 –2,531 46,949 –5,124 –2,631 48,311 –5,228 –2,735 Net Non-Defense, Discretionary Homeland Security Budget Authority, excluding Mandatory Interoperability Communications Grants and Bioshield 3 .................................................................. Plus Mandatory Communications Interoperability Grants ......................................................................... Plus BioShield ............................................................................................................................................ 34,674 1,000 ................ 35,836 ................ ................ 36,943 ................ 2,175 38,060 ................ ................ 39,194 ................ ................ 40,348 ................ ................ Net Non-Defense, Discretionary Homeland Security Budget Authority, including Mandatory Interoperability Communications Grants and BioShield 3 .................................................................. 35,674 35,836 39,118 38,060 39,194 40,348 Obligations Limitations Department of Transportation Obligations Limitation ................................................................................ 121 124 126 130 133 135 1 2007 levels include enacted supplemental appropriations ($1,696 million in DHS) but exclude GWOT supplemental requests in DHS, DOJ, and Treasury totaling $219 million. 2007 gross Continuing Resolution full-year estimate for homeland security excludes $1 billion in mandatory borrowing authority to provide Federal grants to public safety agencies for communications interoperability purposes. Although technically scored in 2007, this funding will be made available from proceeds of the Federal Communications Commission’s 2008 auction of returned television spectrum. 3 The Deficit Reduction Act of 2005 appropriated $1 billion from anticipated spectrum auction receipts for the Department of Commerce, in consultation with the Department of Homeland Security, to make grants to public safety agencies for communications interoperability purposes. 2 DOC’s 34 ANALYTICAL PERSPECTIVES Estimates by Budget Function: Table 3–12. HOMELAND SECURITY FUNDING BY BUDGET FUNCTION (budget authority, in millions of dollars) Agency 2006 Actual 1 2007 Enacted/ CR 2 2008 Request 3 National Defense ........................................................................................................... International Affairs ........................................................................................................ General Science Space and Technology ..................................................................... Energy ............................................................................................................................ Natural Resources and the Environment ...................................................................... Agriculture ...................................................................................................................... Commerce and Housing Credit4 ................................................................................... 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 ..................................................................................................... 22,056 1,107 616 124 288 581 149 8,186 2,212 177 4,393 12 8 175 299 15,917 816 20,463 1,239 602 106 264 506 154 9,161 2,257 174 4,317 15 8 193 245 17,792 821 21,359 1,406 635 122 292 679 180 9,453 2,010 179 4,451 14 14 216 270 18,941 890 Total, Homeland Security Budget Authority ............................................................ Less National Defense, DoD .................................................................................... 57,116 –17,508 58,317 –16,538 61,111 –17,465 Non-Defense Homeland Security Budget Authority, excluding Mandatory Interoperability Communications Grants 4 ........................................................... Less Fee-Funded Homeland Security Programs ..................................................... Less Mandatory Homeland Security Programs ........................................................ 39,608 –3,509 –2,257 41,779 –4,317 –2,489 43,646 –4,899 –2,290 Net Non-Defense, Discretionary Homeland Security Budget Authority, excluding Mandatory Interoperability Communications Grants 4 ..................... Plus Mandatory Interoperability Communications Grants ........................................ 33,842 ................ 34,973 1,000 36,457 ................ Net Non-Defense, Discretionary Homeland Security Budget Authority, including Mandatory Interoperability Communications Grants 4 ...................... 33,842 35,973 36,457 1 2006 actual levels include enacted supplemental appropriations. 2007, only DOD and DHS have enacted appropriations; all other agencies’ funding levels are based on their fullyear CR rates. 2007 funding levels also include enacted supplemental appropriations ($1,696 million) and requested 2007 supplemental budget authority ($219 million) in the GWOT supplemental request. 3 DOC’s 2007 gross Continuing Resolution full-year estimate for homeland security excludes $1 billion in mandatory borrowing authority to provide Federal grants to public safety agencies for communications interoperability purposes. Although technically scored in 2007, this funding will be made available from proceeds of the Federal Communications Commission’s 2008 auction of returned television spectrum. 4 The Deficit Reduction Act of 2005 appropriated $1 billion from anticipated spectrum auction receipts for the Department of Commerce, in consultation with the Department of Homeland Security, to make grants to public safety agencies for communications interoperability purposes. 2 For 35 3. HOMELAND SECURITY FUNDING ANALYSIS Table 3–13. BASELINE ESTIMATES—HOMELAND SECURITY FUNDING BY BUDGET FUNCTION (Budget authority, in millions of dollars) Budget Authority 2007 Enacted/ CR1 Baseline 2008 2009 2010 2011 2012 National Defense ............................................................................................................................................ International Affairs ......................................................................................................................................... General Science Space and Technology ...................................................................................................... Energy ............................................................................................................................................................. Natural Resources and the Environment ...................................................................................................... Agriculture ....................................................................................................................................................... Commerce and Housing Credit 2 ................................................................................................................... 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 ...................................................................................................................................... 20,264 1,239 602 106 264 506 154 9,161 2,257 174 4,317 15 8 193 245 17,775 818 20,897 1,268 616 111 271 528 164 9,537 2,312 179 4,425 16 13 216 252 18,379 839 21,508 1,299 630 112 279 541 167 9,832 2,367 186 4,536 16 8 185 259 19,057 865 22,120 1,327 644 116 287 555 172 10,132 2,418 192 4,644 17 8 189 268 19,712 887 22,738 1,354 657 117 295 568 175 10,438 2,469 197 4,755 18 8 191 276 20,375 909 23,364 1,380 672 121 304 583 181 10,745 2,523 204 4,855 19 9 195 282 21,053 931 Total, Homeland Security Budget Authority ............................................................................................. Less National Defense, DoD ..................................................................................................................... 58,098 –16,538 60,023 –17,064 61,847 –17,569 63,688 –18,077 65,540 –18,591 67,421 –19,110 Non-Defense, Discretionary Homeland Security Budget Authority, excluding Mandatory Interoperability Communications Grants and Bioshield 3 .................................................................. Less Fee-Funded Homeland Security Programs ...................................................................................... Less Mandatory Homeland Security Programs ........................................................................................ 41,560 –4,397 –2,489 42,959 –4,833 –2,290 44,278 –4,909 –2,426 45,611 –5,020 –2,531 46,949 –5,124 –2,631 48,311 –5,228 –2,735 Net Non-Defense, Discretionary Homeland Security Budget Authority, excluding Mandatory Interoperability Communications Grants and Bioshield 3 .................................................................. Plus Mandatory Communications Interoperability Grants ......................................................................... Plus BioShield ............................................................................................................................................ 34,674 1,000 ................ 35,836 ................ ................ 36,943 ................ 2,175 38,060 ................ ................ 39,194 ................ ................ 40,348 ................ ................ Net Non-Defense, Discretionary Homeland Security Budget Authority, including Mandatory Interoperability Communications Grants and BioShield 3 .................................................................. 35,674 35,836 39,118 38,060 39,194 40,348 Obligations Limitations Department of Transportation Obligations Limitation ................................................................................ 199 203 208 213 217 222 1 2007 levels include enacted supplemental appropriations ($1,696 million in DHS) but exclude GWOT supplemental requests in DHS, DOJ, and Treasury totaling $219 million. 2007 gross full-year CR estimate for homeland security excludes $1 billion in mandatory borrowing authority to provide Federal grants to public safety agencies for communications interoperability purposes. Although technically scored in 2007, this funding will be made available from proceeds of the Federal Communications Commission’s 2008 auction of returned television spectrum. 3 The Deficit Reduction Act of 2005 appropriated $1 billion from anticipated spectrum auction receipts for the Department of Commerce, in consultation with the Department of Homeland Security, to make grants to public safety agencies for communications interoperability purposes. 2 DOC’s 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 to inform public and private decision makers about a range of topics of interest, 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 2006, Federal statistical agencies improved their measures of the knowledge economy by releasing a preliminary Research and Development Satellite Account that estimates the effect of investment in research and development on U.S. economic growth (BEA and NSF); published, for the first time, estimates of households experiencing identity theft victimization and its consequences (BJS); developed procedures to ease the reporting burden of the 2007 Economic Census by enhanced electronic reporting, and to collect product data from all 350 service industries, up from 80 in the last census (Census Bureau); published data on the labor force status of persons who evacuated their homes due to Hurricane Katrina (BLS); developed and tested quality improvements to the Commodity Flow Survey, the most comprehensive source of nationwide data on the transportation of goods (BTS and Census Bureau); introduced new interactive web-based tools to facilitate access to, and use of, health statistics information (NCHS); expanded internet data collection systems to securely process energy survey data more quickly and obtain better quality data (EIA); provided Internet access to forecasts of current year farm income (ERS); offered podcasts of farm broadcast news stories (NASS); and continued the modernization and reengineering of the decennial census to improve its accuracy and usefulness while containing costs (Census Bureau). For Federal statistical programs to effectively benefit their 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 data. As the collectors and providers of these basic statistics, the responsible 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 use to assess their performance and presents highlights of their 2008 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 dimensions of accuracy and timeliness that are most amenable to quantitative measurement. Rel- evance, 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. With the exception of cost indicators, where three agencies (ERS, NCES, and NCHS) are still planning their 37 38 ANALYTICAL PERSPECTIVES Chart 4-1. ICSP Statistical Quality and Program Performance Dimensions 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 Indicator Available P P P Indicator Planned 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 = Science Resources Statistics Division, National Science Foundation measures, the ICSP agencies have now developed performance measures for all six dimensions. Use of the indicators may be for internal management, strategic planning, or annual performance reporting. The dimensions shown in the chart 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 provide these specific measures, as well as additional information about performance goals and targets and whether a program is meeting, or making measurable progress toward meet- ing, its performance goals. The examples below illustrate different ways agencies track their performance on each dimension. 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’’ 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, 4. STRENGTHENING FEDERAL STATISTICS 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 or 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 and validity of their products, and encourage data users and other stakeholders to contribute to the agencies’ 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 the information they need; and serving the information needs of the Nation. Costs of products or programs may be used to develop efficiency measures. Dissemina- 39 tion 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 to produce data products or services. The development and use of financial performance measures within the Federal Government is an established goal; 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; it 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 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 pro- 40 ANALYTICAL PERSPECTIVES duced 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, statistics produced by Federal 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, the statistical agencies and their programs 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 decision-making 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 or units that are members of the ICSP, eleven agencies have programs that have been assessed using the PART process. All but one 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, in 2004 EIA received an initial rating of ‘‘Results Not Demonstrated’’ for two key reasons, both of which have since been rectified. At the time of the evaluation, EIA had recently adopted new performance measures and lacked the necessary historical baselines and future targets; these now exist for all measures. EIA was also critiqued for having no recurring independent evaluation of its entire program. EIA recruited an energy expert from the Massachusetts Institute of Technology to select and lead a team to conduct such an evaluation, and the team completed its report in 2006. EIA management will evaluate the team’s recommendations as part of its strategic planning process in 2007. 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 Justice Statistics Criminal Justice Statistics Program National Criminal History Improvement Program Effective Moderately Effective Bureau of Labor Statistics Effective Bureau of Transportation Statistics Moderately Effective Census Bureau Current Demographic Statistics Decennial Census Intercensal Demographic Estimates Survey Sample Redesign Economic Census Current Economic Statistics /Census of Governments Effective Moderately Effective Moderately Effective Effective Effective Moderately Effective Economic Research Service Effective Energy Information Administration Results Not Demonstrated National Agricultural Statistics Service Moderately Effective National Center for Education Statistics Statistics Assessment Effective Effective National Center for Health Statistics Moderately Effective Science Resources Statistics Division, NSF NSF’s Infrastructure and Instrumentation component Effective 4. 41 STRENGTHENING FEDERAL STATISTICS Highlights of 2008 Program Budget Proposals The programs that provide essential statistical information for use by governments, businesses, researchers, and the public are carried out by more than 70 agencies spread across every department and several independent agencies. Approximately 40 percent of the funding for these programs provides resources for 13 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 2008, when it is published later this year. The following highlights elaborate on the Administration’s proposals to strengthen the programs of the principal Federal statistical agencies. Bureau of Economic Analysis: Funding is requested to: (1) extend the prototype Research & Development satellite account, funded by the National Science Foundation in 2006 and 2007, with annual updates and extensions to BEA’s Gross Domestic Product and other estimates between 2008 and 2012, and full incorporation into the economic accounts in 2013; (2) complete BEA’s five-year program to improve the accuracy and timeliness of the Nation’s economic accounts by addressing data gaps and measurement problems, expanding integration with other accounts, and improving consistency with international standards; and (3) continue to improve the accuracy of statistics on services, profits, compensation, international trade in services, and off-shoring. Bureau of Justice Statistics: Funding is requested to provide for BJS’s core statistical programs and for two initiatives: (1) a redesign of the National Crime Victimization Survey based on anticipated recommendations from the Committee on National Statistics of the National Research Council; and (2) development of a national recidivism statistical series, which will provide baseline data, as well as representative data every 3 years, on the rates of rearrest, reconviction, and reincarceration among released State and Federal prisoners to provide a quantitative basis for evaluating the effectiveness of reentry programs, post-custody surveillance, and State policies related to parole revocation. Bureau of Labor Statistics: Funding is requested to support the production, dissemination, and improvement of BLS economic measures, including: (1) the introduction of continuous updating to the housing and geographic area samples in the Consumer Price Index (CPI), which will improve the accuracy and timeliness of the CPI; (2) the continuation of efforts to modernize the computing systems for monthly processing of the Producer Price Index (PPI) and U.S. Import and Export Price Indexes (IPP); and (3) the publication, for the first time, of local area Employment Cost Index (ECI) and Employer Costs for Employee Compensation (ECEC) series as deemed feasible as a result of testing completed in 2007. Bureau of Transportation Statistics: Funding is requested to: (1) conduct the Commodity Flow Survey, a major national benchmark survey of shippers; (2) release monthly statistics on the commodities and mode of transportation used in trading with our largest partners; (3) produce a core set of economic data and indicators, including the Government Transportation Financial Statistics Report, multi-factor productivity measures, the State Transit Expenditure Survey, and the Air Travel Price Index; (4) produce and release the National Transportation Atlas Data Base, a compendium of national geospatial transportation data; and (5) conduct the biennial Census of Ferry Operations in the U.S. Census Bureau: Funding is requested for the Census Bureau’s ongoing economic and demographic programs and for a re-engineered 2010 Census. For the Census Bureau’s economic and demographic programs, funding is requested to: (1) collect and process economic census returns for the 2007 Economic Census; (2) create the universe frame and develop organizational information for the 2007 Census of Governments, as well as collect and process data for the employment phase, and collect and process data from States and other sources for the finance phase; (3) undertake an initiative to close the current gap in service sector coverage; and (4) continue reengineering the Survey of Income and Program Participation. For the 2010 Census program, funding is requested to continue to: (1) conduct planning, testing, and development activities to support a re-engineered 2010 Census, including the 2008 Census Dress Rehearsal and early operations for the 2010 Census; (2) improve the accuracy of map feature locations for the remaining 367 counties of the total of 3,232 counties; and (3) continue to conduct the American Community Survey to provide socio-economic data on an ongoing basis rather than only once-a-decade. Economic Research Service: Funding is requested to: (1) strengthen and enhance the ERS market analysis and outlook program to provide timely analysis of global agricultural product markets; and (2) strengthen ERS’s research and modeling capacity in the area of bio-energy with particular emphasis given to the changing economics of livestock feeding and the role of ethanol byproducts. Energy Information Administration: Funding is requested to continue ongoing operations to: (1) maintain critical energy data coverage, analysis, and forecasting; (2) improve data reliability and statistical accuracy through redesigning key petroleum and natural 42 gas surveys; (3) initiate monthly ethanol and biofuels data collections on a national and regional basis as mandated in Section 1508 of the Energy Policy Act of 2005; (4) strengthen global oil and gas data and modeling capabilities; and (5) improve the ability to assess and forecast supply, demand, and technology trends affecting U.S. and world energy markets. National Agricultural Statistics Service: Funding is requested to support printing, postage and handling of questionnaire packages, logging returned questionnaires, capturing reported data, and conducting telephone and personal follow-up interviews with nonrespondents for the quinquennial Census of Agriculture via questionnaires that are scheduled to be mailed to the Nation’s agricultural producers in December 2007. National Center for Education Statistics: Funding is requested to: (1) conduct the National Assessment of Educational Progress, including 12th grade reading and mathematics assessments in 2009; (2) plan for a new high school longitudinal study that will begin with a cohort of 9th graders in 2009 and follow them through postsecondary education and into the workforce; (3) analyze data from international studies such as the 2007 Trends in International Mathematics and Science Study and plan for new international assessments; (4) undertake a pilot study on the development of postsecondary unit records, an essential restructuring of several components of the Integrated Postsecondary Education Data System; (5) carry out the 2007–08 Schools and Staffing Survey to obtain information on public and private schools, principals, and teachers; and (6) conduct the Beginning Postsecondary Student Longitudinal Survey, which provides information on the progress of postsecondary students, as well as the 2008 National Postsecondary Student Aid Survey. National Center for Health Statistics: Funding is requested to: (1) continue data collection, analysis, and dissemination for key national health data systems, including the National Vital Statistics System, National Health Interview Survey, National Health and Nutrition Examination Survey, and National Health Care Survey; (2) continue gains in timeliness by implementing systems improvements in data collection and processing; (3) continue efforts to develop survey data ANALYTICAL PERSPECTIVES that address the health care delivery system; and (4) work collaboratively with States and other agencies on upgrading the technology for collecting data from State birth and death certificates. Office of Research, Evaluation, and Statistics, SSA: Funding is requested to: (1) continue strategic planning to modernize ORES’s processes for developing and disseminating data from the Social Security Administration’s major administrative data files for statistical purposes; (2) support outside surveys and linkage of SSA administrative data to surveys; (3) create a new public use file of administrative data on earnings histories and benefits for a sample of Social Security numbers; and 4) evaluate the analytic validity of a synthetic data file based on data from the 1990–1993 and 1996 Survey of Income and Program Participation (SIPP) panels matched to SSA and IRS administrative data. Science Resources Statistics Division, NSF: Funding is requested to: (1) implement ongoing programs on the science and engineering enterprise; (2) continue to implement redesign and improvement activities for a broad range of surveys, particularly the suite of research and development (R&D) surveys; (3) support the NSF/SBE initiative on the Science of Science and Innovation Policy to develop the data, tools, and knowledge needed for a new science of science policy by enhancing the comparability, scope and availability of international data; and (4) develop data on innovation and R&D conducted or funded by nonprofit organizations. Statistics of Income Division, IRS: Funding is requested to: (1) maintain and modernize tax data collection systems, including developing interfaces with modern electronic tax return filing systems; (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 enhancement of products and features on the www.irs.gov/ taxstats website. 4. 43 STRENGTHENING FEDERAL STATISTICS Table 4–1. 2006–2008 BUDGET AUTHORITY FOR PRINCIPAL STATISTICAL AGENCIES1 (In millions of dollars) 2006 Actual Bureau of Economic Analysis ...................................................................... Bureau of Justice Statistics 2 75 Estimate 2007 2008 75 81 ........................................................................ 50 50 62 Bureau of Labor Statistics ............................................................................ 537 537 573 Bureau of Transportation Statistics .............................................................. 27 27 27 Census Bureau 3 ........................................................................................... Salaries and Expenses 3 ........................................................................... Periodic Censuses and Programs ............................................................ 822 216 606 817 210 607 1250 223 1027 Economic Research Service 4 ....................................................................... 75 75 83 Energy Information Administration ................................................................ 85 85 105 National Agricultural Statistics Service 5 ....................................................... 139 140 168 National Center for Education Statistics ....................................................... Statistics .................................................................................................... Assessment ............................................................................................... National Assessment Governing Board ................................................... 183 90 88 5 183 90 88 5 236 119 111 6 National Center for Health Statistics 6 .......................................................... 109 109 110 Office of Research, Evaluation, and Statistics, SSA ................................... 16 18 15 Science Resources Statistics Division, NSF ................................................ 33 33 37 Statistics of Income Division, IRS ................................................................ 38 41 41 1 Reflects any recissions. funds for management and administrative costs of $11, $11, and $17 million in 2006, 2007, 2008, respectively that were previously displayed separately. 3 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 Children’s Health Insurance Program funds. 4 2007 funding assumes the reallocation of $350,000 provided in 2006 for a comprehensive report on the economic development and current status of the sheep industry in the United States. Funding for that purpose will not be needed in 2007. 5 Includes funds for the periodic Census of Agriculture of $29, $29, and $54 million in 2006, 2007, and 2008, respectively. The FY 2008 Budget includes an increase of $24.7 million due to cyclical activities. 6 All funds from the Public Health Service Evaluation Fund. 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 Includes 5. RESEARCH AND DEVELOPMENT The U.S. economy is the largest in the world, and has been growing faster than any other G-7 industrialized nation. In large measure, the U.S. economy owes its strength to its willingness to build innovation capacity through the creation and growth of a world-class science and technology research enterprise and a highquality scientific and technical education infrastructure. The relationship between support for science and economic growth is well documented. Investments in basic research lead to knowledge breakthroughs that fuel innovation, drive productivity, grow the economy, and improve our understanding of the world. Economists estimate that as much as half of post-World War II economic growth is directly due to technological progress fueled by research and development (R&D). I. Economic payoffs from research come in the form of process and product innovations that reduce the costs of production, lower product prices, and result in new and better products and services. Consumers ultimately benefit from less expensive, higher quality and more useful products and services, and of course, from earnings accruing to innovative companies. Today’s transforming technologies and most popular consumer items have deep roots in basic and applied research. To sustain the Nation’s economic competitiveness, the President, in last year’s State of the Union address, called for a long-term vision to strengthen Federal support for the Nation’s innovation enterprise in an integrated package of investments and policies called the American Competitiveness Initiative (ACI). THE AMERICAN COMPETITIVENESS INITIATIVE The President’s 2008 Budget maintains a strong commitment, through the ACI, to invest in basic research areas that advance knowledge and technologies used by scientists in nearly every field. Through the ACI, the President plans to double, over 10 years, investment in innovation-enabling research at three Federal agencies—the National Science Foundation (NSF), the Department of Energy’s (DOE’s) Office of Science, and the Department of Commerce’s National Institute of Science and Technology (NIST) laboratories. In 2008, the second year of the American Competitiveness Initiative, President Bush proposes $11.4 billion total for NSF, DOE’s Office of Science, and NIST laboratories, an overall funding increase of $764 million, or 7.2 percent, above his 2007 Budget of $10.7 billion. To reach doubling within ten years, overall annual increases will average roughly seven percent. 45 46 ANALYTICAL PERSPECTIVES Research Agencies in the American Competitiveness Initiative The National Science Foundation is the primary source of support for academic research in the physical sciences, funding basic research in areas such as nanotechnology, advanced networking and information technology, physics, chemistry, materials science, mathematics, and engineering. It also is well regarded for funding nearly all of its research through a competitive, peer-reviewed process. The increase in NSF funding will support many more researchers, students, post-doctoral fellows and technicians contributing to the innovation enterprise. The Department of Energy’s Office of Science supports grants and infrastructure for a wide range of basic research related to economically significant innovations including nanotechnology, biotechnology, high-end computing and advanced networking, and energy technologies. The 2008 Budget increases funding for both research and cutting edge facilities in these critical mission areas, such as an expansion in the number of bio-energy research centers, major growth in the United States’ contribution to the international fusion energy project known as ITER, expanded supercomputing facilities and related research, and design or construction activities for worldleading next generation light sources. The Department of Commerce’s National Institute of Standards and Technology invests in technological innovation through research and standards development. These investments will improve nanotechnology manufacturing capabilities; expand NIST’s neutron facility to aid in characterizing novel materials in high-growth research fields; construct new, high-performance laboratories at NIST’s Boulder, Colorado facility; and improve our understanding of quantum information science that has the potential to dramatically improve computer processing speeds and enable more secure communications. II. 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, every Federal R&D dollar must be invested as effectively as possible. R&D Investment Criteria The Administration continues to improve 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. With this in mind, the Administration is improving methods for setting priorities based on expected results, and is asking agencies to apply specific criteria that programs or projects must meet to be started or continued and supply 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 develop- ment 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 part of the President’s Management Agenda’s Budget and Performance Integration initiative, the Administration uses 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 five years, agencies completed 977 PART assessments, of which 121 were for R&D programs. The results of these PART assessments may be found on the web at www.expectmore.gov. 47 5. RESEARCH AND DEVELOPMENT 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. While programs rated Effective are typically favored for additional funding over related programs that do not perform as well, PART ratings do not automatically relate to specific funding levels. For instance, a program rated Effective that has achieved what it set out to do may have its funding reduced. On the other hand, a program rated Ineffective might receive more money to correct a deficiency that would help it become more effective. The PART provides information that leads to more informed decisions. Chart 5-2. Scores of R&D PART Assessments Cumulative Number of R&D PARTs 121 Total 125 35 102 Total 100 29 49 75 41 50 21 16 25 3 3 13 13 0 2007 Effective Moderately Effective 2008 Adequate Research Earmarks President Bush has called on Congress to reform the earmark process, proposing a series of reforms that include full disclosure for each earmark and cutting the number and cost of all earmarks by at least half. Consistent with this effort, the Administration is continuing its strong support for awarding research funds based on merit review through a competitive process refereed by scientists themselves. Such a system has the best prospects for ensuring that the top research is supported. Research earmarks—in general the assignment of money during the legislative process for use by a specific organization or project—are counter to a meritbased competitive selection process. Earmarks signal to potential investigators that there is an acceptable alternative to creating quality research proposals for merit-based consideration. Such an alternative can be an ineffective use of taxpayer funds. Unfortunately, the practice of earmarking funds to colleges, universities, and other entities for specific research projects has expanded dramatically in recent years. Some argue that earmarks help spread the research money to states or institutions that would receive less research funding through other means. The Ineffective Results Not Demonstrated Chronicle of Higher Education has reported 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. 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, the Defense Advanced Research Projects Agency, within the Department of Defense (DOD), seeks out high-risk, high-payoff scientific proposals, the National Institutes of Health has established a similarly focused ‘‘Pioneer Award,’’ and program managers at the NSF set aside a share of funding for higher-risk projects in which they see high potential. Earmarks that are outside of an agency’s mission can detract from an efficient and effective Federal effort on behalf of taxpayers. For instance, the Congress directed DOD to fund research on a wide range of diseases including diabetes, neurofibromatosis (a genetic disorder of the nervous system), and childhood cancer. Congressional adds in DOD’s budget for medical research projects totals about $500 million in 2007 alone. 48 ANALYTICAL PERSPECTIVES While research on these diseases is very important, these diseases are generally not unique to the U.S. military and the research can be better selected, 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. Earmarks that divert funding from a merit-based process undermine America’s research productivity. The Administration commends Congress for taking measures to protect NSF and the National Institutes of Health from this practice, which is an approach that should be followed throughout the R&D programs. III. PRIORITIES FOR FEDERAL RESEARCH AND DEVELOPMENT The 2008 Budget requests $143 billion for Federal R&D funding, and targets key research investments within agencies, in particular, the three ACI agencies: NSF, the DOE’s Office of Science, and the NIST laboratories. (Table 5–1 provides details by agency). Multi-Agency R&D Priorities The 2008 Budget continues to target important research investments that must be coordinated across multiple agencies. 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: A robust R&D effort continues to be a key asset in advancing technologies in support of the President’s national strategy for homeland security. Though there have been numerous achievements over the past four years, many challenges remain. A number of these challenges are being addressed through multi-agency research efforts that are coordinated through the National Science and Technology Council (NSTC) and other inter-agency forums. In 2006, key multi-agency R&D efforts made significant progress towards improving the Nation’s counterterrorism capability. Using the 2006 Administration R&D budget priorities memorandum as a guide, agencies, for example: • improved radiation portal monitors with the ability to discern threatening sources of radiation from non-threatening sources; • advanced technology to meet new international electronic passport standards that enables biometric screening of individuals entering the country; • developed standards for technologies that enable the detection and interception of nuclear and radioactive material before it enters the U.S.; • developed and established standard methodologies and practices for the sampling and detection of biological agents; and • developed rapid diagnostics and next generation vaccines. The 2008 Budget provides continued support for these and many other R&D related to combating terrorism, including: pursuing stand-off detection and imaging capabilities to locate and identify nuclear threat materials at a distance; advancing cargo screening capabilities to recognize and expedite safe cargo while securing the borders against other entries; improving the capabilities and implementation planning of biometric systems; initiating the 2008–2012 R&D plan for high-consequence foreign animal diseases; and focusing on critical medical countermeasures that do not have a pre-existing market to stimulate their development. Networking and Information Technology R&D: The Budget provides $3 billion for the multi-agency Networking and Information Technology Research and Development (NITRD) Program, which plans and coordinates agency research efforts in high-end computing systems, cyber security, large-scale networking, software development, high-confidence systems, information management, and other information technologies. The agencies involved in this program coordinate efforts to accelerate research advancement in information technology, upon which every economic sector now depends. In 2006, agencies participating in high-end computing R&D continued to make significant progress in implementing the recommendations contained in the Federal Plan for High-End Computing. The 2008 Budget continues the path toward the development of petascale systems for science by both DOE and NSF. Relevant agencies will continue to conduct research in highly scalable systems software and applications to ensure that Federal investments in high-end computing achieve maximal impact. Participating agencies also completed and published the Federal Plan for Cyber Security and Information Assurance R&D in 2006, and are now undertaking the development of the roadmap for addressing any identified R&D gaps as recommended in the Plan. In 2007, participating agencies will undertake the development of a Federal Plan for Advanced Networking R&D, analogous to the recent Plans for HighEnd Computing and for Cyber Security and Information Assurance R&D. The Federal Plan for Advanced Networking R&D will provide a strategy for addressing current and future networking needs of the Federal government in support of science and national security missions, and provide a process for developing a more detailed roadmap to guide future multi-agency investments in advancing networking R&D. Reports and general information about NITRD are available at www.nitrd.gov/. 5. RESEARCH AND DEVELOPMENT 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 are already leading 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. Research opportunities cover a similarly broad spectrum. Advances that will be foundational for all aspects of nanotechnology R&D in particular include: instrumentation for characterizing nanoscale materials in the laboratory, in the body, and in the environment; and computational research to model and predict properties at the nanoscale, for designing novel materials, and for determining their behavior under various conditions and environments. Guided by the NNI, participating agencies will continue to support discovery, development and application of nanotechnology through investigator-led fundamental and applied research; multidisciplinary centers of excellence; education and training of nanotechnology researchers, teachers, workers, and the public; and infrastructure development, including user facilities and networks that are broadly available to support research and innovation. 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. Reports and general information about the NNI are available at www.nano.gov/. Climate Change R&D: The 2008 Budget for the Climate Change Science Program (CCSP) continues to support the implementation of the CCSP Strategic Plan, which was released in July 2003. The 13 departments and agencies that participate in the CCSP coordinate preparation of the budget and program implementation. During 2008, the CCSP will continue research into important scientific uncertainties and preparation of a series of Synthesis and Assessment reports. Working within the overarching priorities defined in the Strategic Plan, the CCSP’s interagency coordination and integration efforts will give particular emphasis in 2008 to the following activities: abrupt climate change; integrated Earth system analysis; coping with drought through research and regional partnerships; integration of water cycle observations, research and modeling; carbon cycle research integration; aerosol forcing and interactions with clouds and non-carbon dioxide trace gases; impacts of climate variability and change on ecosystem productivity and biodiversity; and interactions on land use/land cover change and climate. The program expects to receive input from the National Research Council under the terms of a continuing advisory agreement. This advice will include findings and recommendations on the process for evaluating progress toward the five goals in the CCSP Strategic 49 Plan, and a preliminary assessment of progress made toward the program’s goals. The CCSP will continue to track 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 2008 edition of Our Changing Planet. Reports and general information about the CCSP are available on the program’s website: www.climatescience.gov/. The Climate Change Technology Program (CCTP) continues to provide strategic direction, planning, and analysis to help coordinate and prioritize activities within 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 published a Vision and Framework for Strategy and Planning and released a draft Strategic Plan for review by the scientific community and the public. In 2006, the CCTP addressed the nearly 300 comments received and published a final Strategic Plan. The CCTP has also identified 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. In 2008, CCTP’s focus will be on implementing the Strategic Plan, which lays out a series of next steps. Reports and general information about the CCTP are available on the program’s website: www.climatetechnology.gov/. The CCSP and CCTP will continue to coordinate implementation of relevant climate change provisions in the 2005 Energy Policy Act as appropriate. Ocean Research: The 2008 Budget supports ocean and coastal research as outlined in the recently released report Charting the Course for Ocean Science in the United States for the Next Decade: An Ocean Research Priorities Plan and Implementation Strategy. Developed by the National Science and Technology Council’s Joint Subcommittee on Ocean Science and Technology, plan implementation will deploy key components of an ocean observing system that can better and more accurately describe actual conditions, enhance our understanding and capability to forecast ocean processes and phenomena, and provide scientific support for ecosystem-based management. These three overarching goals represent tremendous potential for ocean science, as well as for maintaining U.S. leadership in ocean technology and enhancing U.S. competitiveness. These goals are supported by 20 separate national ocean research priorities, established with extensive community input and oriented around the most compelling issues of interaction between society and the ocean. The Joint Subcommittee on Ocean Science and Technology will coordinate this multi-agency research into key aspects of the oceans, coasts and Great Lakes and work closely with the other coordinating bodies of the President’s Ocean Action Plan. Hydrogen R&D: In 2006, the Hydrogen R&D Interagency Task Force led coordination among nine agen- 50 ANALYTICAL PERSPECTIVES cies in hydrogen-related manufacturing and innovation, safety, codes and standards, and fundamental research on fuel cells, hydrogen production, and hydrogen storage. The Task Force improved and updated its web portal (www.hydrogen.gov) for hydrogen and fuel cell information. Additionally, the Task Force works with the International Partnership for the Hydrogen Economy, which coordinates hydrogen research among 15 nations representing two thirds of global energy consumption. DOE will continue to lead the President’s Hydrogen Fuel Initiative to accelerate the worldwide availability and affordability of hydrogen-powered fuel cell vehicles and the infrastructure to support them. The initiative focuses on research to advance hydrogen production, storage, conversion, and infrastructure technologies. The 2008 Budget completes the President’s five-year, $1.2 billion commitment announced in his 2003 State of the Union address, but work will continue on the many technical challenges that remain. Biomass R&D: The Biomass R&D Act of 2000 established the Biomass R&D Board to guide interagency coordination and bring coherence to Federal strategic planning on biomass-related issues. Since 2002, the Departments of Agriculture and Energy have been preparing joint annual reports on a subset of coordinated biomass activities. In 2006, the Board began preparation of an interagency coordination and planning docu- ment that will be reviewed by the National Academy of Sciences. In addition to assessing the goals and plans for interagency biomass research, the Academy will be tasked with considering economic and other impacts of increased biomass utilization under various energy price and policy scenarios. Additional information on the Biomass R&D Board is available online at www.biomass.govtools.us. 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. A long-standing credit, which had provided a 20-percent tax credit for private research and experimentation expenditures above a certain base amount, was extended for two years through the end of 2007 and enhanced through the Tax Relief and Health Care Act of 2006. The Administration proposes making the enhanced Research and Experimentation tax credit permanent starting in 2008. The proposed extension will cost $42 billion over the period from 2008 to 2012. 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. 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 the Office of Management and Budget has used those or similar categories in its collection of R&D data since 1949. Basic research is systematic study directed toward a fuller knowledge or understanding of the fundamental aspects of phenomena and of observable facts without specific applications towards processes or products in mind. Basic research, however, may include activities with broad applications 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 or understanding, directed toward the production of useful materials, devices, and systems or methods, including design, development, and 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, research satellites, detectors, and other instruments. At a minimum, this cat- egory should include programs devoted to the purchase or construction of R&D equipment. 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 5–1 shows agency-by-agency spending on basic and applied research, development, and R&D equipment and facilities. The ‘‘Federal Science and Technology’’ (FS&T) budget (shown in Table 5–2) highlights the creation of new knowledge and technologies more consistently and accurately than the overall R&D data. 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 2008 Budget requests $61 billion for FS&T. 51 5. RESEARCH AND DEVELOPMENT Table 5–1. FEDERAL RESEARCH AND DEVELOPMENT (Budget authority, dollar amounts in millions) 2006 Actual 2007 Estimate 2008 Proposed Dollar Change: Percent Change: 2007 to 2008 2007 to 2008 By Agency Defense ...................................................................................................................... Health and Human Services ..................................................................................... NASA ......................................................................................................................... Energy ........................................................................................................................ National Science Foundation .................................................................................... Agriculture .................................................................................................................. Commerce ................................................................................................................. Homeland Security .................................................................................................... Veteran Affairs ........................................................................................................... Transportation ............................................................................................................ Interior ........................................................................................................................ Environmental Protection Agency ............................................................................. Other .......................................................................................................................... 73,723 28,531 11,317 8,596 4,227 2,438 1,090 1,455 824 820 639 622 1,250 77,881 28,743 11,613 8,389 4,232 2,316 920 1,079 818 752 636 567 1,223 78,862 29,027 12,428 9,224 4,880 2,010 1,088 1,068 822 812 621 562 1,251 981 284 815 835 648 –306 168 –11 4 60 –15 –5 28 1% 1% 7% 10% 15% –13% 18% –1% 0% 8% –2% –1% 2% Total .......................................................................................................................... 135,532 139,169 142,655 3,486 3% Basic Research Defense ...................................................................................................................... 1,457 1,565 1,428 –137 –9% Health and Human Services ..................................................................................... 15,546 15,545 15,615 70 0% NASA ......................................................................................................................... 2,299 2,259 2,226 –33 –1% Energy ........................................................................................................................ 2,930 2,957 3,409 452 15% National Science Foundation .................................................................................... 3,520 3,499 3,993 494 14% Agriculture .................................................................................................................. 853 799 771 –28 –4% Commerce ................................................................................................................. 118 118 164 46 39% Homeland Security .................................................................................................... 85 105 132 27 26% Veteran Affairs ........................................................................................................... 343 328 330 2 1% Transportation ............................................................................................................ ................ .................... .................... ...................... N/A Interior ........................................................................................................................ 42 42 39 –3 –7% Environmental Protection Agency ............................................................................. 105 94 94 ...................... ........................ Other .......................................................................................................................... 158 163 170 7 4% Subtotal ................................................................................................................ 27,456 27,474 28,371 897 3% Applied Research Defense ...................................................................................................................... Health and Human Services ..................................................................................... NASA ......................................................................................................................... Energy ........................................................................................................................ National Science Foundation .................................................................................... Agriculture .................................................................................................................. Commerce ................................................................................................................. Homeland Security .................................................................................................... Veteran Affairs ........................................................................................................... Transportation ............................................................................................................ Interior ........................................................................................................................ Environmental Protection Agency ............................................................................. Other .......................................................................................................................... 4,948 12,827 1,680 2,700 286 1,149 729 662 435 497 546 400 590 5,330 12,964 1,010 2,707 281 1,117 617 518 442 501 534 369 549 4,357 13,237 1,127 2,869 380 984 696 533 444 541 525 364 581 –973 273 117 162 99 –133 79 15 2 40 –9 –5 32 –18% 2% 12% 6% 35% –12% 13% 3% 0% 8% –2% –1% 6% Subtotal ................................................................................................................ 27,449 26,939 26,638 –301 –1% Development Defense ...................................................................................................................... 67,154 70,926 72,873 1,947 3% Health and Human Services ..................................................................................... 22 22 22 ...................... ........................ NASA ......................................................................................................................... 5,141 6,451 6,707 256 4% Energy ........................................................................................................................ 1,939 1,843 1,891 48 3% National Science Foundation .................................................................................... ................ .................... .................... ...................... N/A Agriculture .................................................................................................................. 164 158 156 –2 –1% Commerce ................................................................................................................. 93 55 72 17 31% Homeland Security .................................................................................................... 659 325 269 –56 –17% Veteran Affairs ........................................................................................................... 46 48 48 ...................... ........................ Transportation ............................................................................................................ 305 232 252 20 9% Interior ........................................................................................................................ 46 53 55 2 4% Environmental Protection Agency ............................................................................. 117 104 104 ...................... ........................ Other .......................................................................................................................... 464 455 454 –1 0% Subtotal ................................................................................................................ 76,150 80,672 82,903 2,231 3% Facilities and Equipment Defense ...................................................................................................................... Health and Human Services ..................................................................................... 164 136 60 212 204 153 144 –59 240% –28% 52 ANALYTICAL PERSPECTIVES Table 5–1. FEDERAL RESEARCH AND DEVELOPMENT—Continued (Budget authority, dollar amounts in millions) 2006 Actual 2007 Estimate 2008 Proposed Dollar Change: Percent Change: 2007 to 2008 2007 to 2008 NASA ......................................................................................................................... 2,197 1,893 2,368 475 Energy ........................................................................................................................ 1,027 882 1,055 173 National Science Foundation .................................................................................... 421 452 507 55 Agriculture .................................................................................................................. 272 242 99 –143 Commerce ................................................................................................................. 150 130 156 26 Homeland Security .................................................................................................... 49 131 134 3 Veteran Affairs ........................................................................................................... ................ .................... .................... ...................... Transportation ............................................................................................................ 18 19 19 ...................... Interior ........................................................................................................................ 5 7 2 –5 Environmental Protection Agency ............................................................................. ................ .................... .................... ...................... Other .......................................................................................................................... 38 56 46 –10 Subtotal ................................................................................................................ 4,477 4,084 4,743 659 25% 20% 12% –59% 20% 2% N/A N/A –71% N/A –18% 16% 53 5. RESEARCH AND DEVELOPMENT Table 5–2. FEDERAL SCIENCE AND TECHNOLOGY BUDGET (Budget authority, dollar amounts in millions) 2006 Actual 2007 Estimate 1 2008 Proposed Dollar Change: 2007 to 2008 Percent Change: 2007 to 2008 By Agency National Institutes of Health 2 .......................................................................................................................................... NASA 3 ................................................................................................................................................................................. Science ............................................................................................................................................................................ Aeronautics ...................................................................................................................................................................... Exploration Systems 4 ..................................................................................................................................................... Innovative Partnerships ................................................................................................................................................... Energy 5 ............................................................................................................................................................................... Science Programs ........................................................................................................................................................... Electricity Transmission & Distribution ........................................................................................................................... Nuclear Energy ................................................................................................................................................................ Energy Efficiency and Renewable Energy Resources 6 ................................................................................................ Fossil Energy R&D 7 ....................................................................................................................................................... National Science Foundation ........................................................................................................................................... Defense ............................................................................................................................................................................... Basic Research ............................................................................................................................................................... Applied Research ............................................................................................................................................................ Agriculture .......................................................................................................................................................................... CSREES Research and Education 8 .............................................................................................................................. Economic Research Service ........................................................................................................................................... Agricultural Research Service 9 ...................................................................................................................................... Forest Service: Forest and Rangeland Research ......................................................................................................... Interior (USGS) ................................................................................................................................................................... Commerce ........................................................................................................................................................................... NOAA: Oceanic & Atmospheric Research ..................................................................................................................... NIST Intramural Research and Facilities ....................................................................................................................... Veterans Affairs 10 ............................................................................................................................................................. Environmental Protection Agency 11 ............................................................................................................................... Transportation .................................................................................................................................................................... Highway research: Federal Highway Administration ..................................................................................................... Federal Aviation Administration: Research, Engineering, and Development ............................................................... Education ............................................................................................................................................................................ Special Education Research and Innovation ................................................................................................................. National Institute on Disability and Rehabilitation Research ......................................................................................... Research, Development, and Dissemination 12 ............................................................................................................. 28,242 7,670 5,110 893 1,452 215 5,625 3,596 136 416 896 581 5,581 6,405 1,457 4,948 2,170 675 75 1,141 279 965 939 369 570 769 761 563 426 137 342 72 107 163 28,269 7,173 5,330 724 921 198 6,186 4,102 96 560 963 465 6,020 6,895 1,565 5,330 1,921 569 83 1,001 268 945 869 338 531 765 816 598 468 130 342 72 107 163 28,700 7,124 5,516 554 856 198 6,906 4,398 86 811 1,047 564 6,429 5,785 1,428 4,357 1,934 566 83 1,022 263 975 944 358 586 822 781 570 430 140 342 72 107 163 431 –49 186 –170 –65 ................ 720 296 –10 251 84 99 409 –1,110 –137 –973 13 –3 ................ 21 –5 30 75 20 55 57 –35 –28 –38 10 ................ ................ ................ ................ 2% –1% 3% –23% –7% ................ 12% 7% –10% 45% 9% 21% 7% –16% –9% –18% 1% –1% ................ 2% –2% 3% 9% 6% 10% 7% –4% –5% –8% 8% ................ ................ ................ ................ Total ................................................................................................................................................................................ 60,032 60,799 61,312 513 1% 1 The amounts included as 2007 Estimates in this table reflect the 2007 Budget levels, with the exception of the numbers for the Department of Defense, which are the enacted levels. 2 In 2006, the Department of Health and Human Services allocated an additional $18 million to NIH for Pandemic Influenza research from the Department of Defense Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006. 3 Due to recent changes in NASA’s approach to budgeting overhead costs, 2008 funding levels are not comparable to 2006 and 2007 levels. 4 Includes Exploration Technology Development, the Human Research Program, and the Lunar Precursor Robotic Program. 5 Data 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. 6 In 2006, Congress merged the Energy Supply and Energy Conservation accounts. The amount reported under the new Energy Efficiency and Renewable Energy Resources line within this account reflects a combination of the former Energy Conservation line item (excluding Weatherization and State grants) and the Renewables line item. 7 Excludes funding for the Alaska Natural Gas Pipeline project. 8 Includes the appropriation of earnings from the Native American Endowment Fund, but not the appropriation to the Endowment’s principal. 9 Excludes building and facilities. Excludes $6 million transfer to the account in 2006. 10 Includes the medical care and prosthetic research appropriation and VA medical care support transfer to research. 11 Science and Technology, plus superfund transfer. 12 Does not include funding for Regional Educational Labs. 54 ANALYTICAL PERSPECTIVES Table 5–3. AGENCY DETAIL OF SELECTED INTERAGENCY R&D EFFORTS (Budget authority, dollar amounts in millions) 2006 Actual 2007 Estimate 1 2008 Proposed Dollar Change: Percent Change: 2007 to 2008 2007 to 2008 Networking and Information Technology R&D 2 Defense ...................................................................................................................... National Science Foundation .................................................................................... Health and Human Services 3 ................................................................................... Energy ........................................................................................................................ National Aeronautics and Space Administration ...................................................... Commerce ................................................................................................................. Environmental Protection Agency ............................................................................. National Archives and Records Administration ........................................................ 1,106 812 486 282 78 64 6 4 1,046 904 541 389 82 73 6 4 1,027 –19 994 90 463 –78 404 15 85 3 73 ...................... 6 ...................... 5 1 Total ...................................................................................................................... 2,838 3,045 3,057 National Nanotechnology Initiative National Science Foundation .................................................................................... 360 Defense ...................................................................................................................... 424 Energy ........................................................................................................................ 231 Health and Human Services 4 ................................................................................... 196 Commerce (NIST) ..................................................................................................... 78 National Aeronautics and Space Administration ...................................................... 50 Environmental Protection Agency ............................................................................. 5 Agriculture .................................................................................................................. 6 Transportation ............................................................................................................ 1 Justice ........................................................................................................................ ................ Homeland Security .................................................................................................... 2 373 417 293 175 89 25 9 7 1 1 1 Total ...................................................................................................................... 1,353 Climate Change Science Program National Aeronautics and Space Administration 5 .................................................... National Science Foundation .................................................................................... Commerce (NOAA) ................................................................................................... Energy ........................................................................................................................ Agriculture .................................................................................................................. National Institutes of Health ...................................................................................... Interior (USGS) .......................................................................................................... Environmental Protection Agency ............................................................................. Smithsonian ............................................................................................................... Transportation ............................................................................................................ U.S. Agency for International Development 6 ........................................................... 1,045 197 157 130 61 50 27 19 6 1 13 Total ...................................................................................................................... 1,706 1 The 1,391 –2% 10% –14% 4% 4% N/A N/A 25% 12 0% 390 17 375 –42 332 39 208 33 97 8 24 –1 10 1 8 1 1 ...................... 1 ...................... 1 ...................... 5% –10% 13% 19% 9% –4% 11% 14% N/A N/A N/A 56 4% 981 871 –110 205 208 3 173 174 1 126 130 4 60 59 –1 57 50 –7 26 27 1 18 18 ...................... 6 6 ...................... 1 1 ...................... 14 .................... N/A –11% 1% 1% 3% –2% –12% 4% N/A N/A N/A N/A 1,667 1,447 1,544 –123 –7% amounts included as 2007 Estimates in these tables reflect the 2007 Budget levels, with the exception of the numbers for the Department of Defense and the Department of Homeland Security, which are the enacted levels. 2 DHS NITRD funding information is not yet available. 3 Includes funds from offsetting collections for the Agency for Healthcare Research and Quality. 4 Includes funds from both the National Institutes of Health and National Institute of Occupational Safety and Health. 5 Beginning with the 2007 Estimate, NASA is no longer counting its Ground Network and Research Range within its CCSP totals. 6 USAID CCSP funding information for 2008 is not yet available. 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- 55 56 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 $430.4 billion in 2006. They are estimated to increase to $434.9 billion in 2007 and are projected to decline to $430.1 billion in 2008. Major Federal investment outlays will comprise an estimated 15 percent of total Federal outlays in 2008 and 3.0 percent of the Nation’s gross domestic product. 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 $221.1 billion in 2008. Physical investment outlays are for construction and rehabilitation, the purchase of major equipment, and the purchase or sale of land and structures. Approximately two-thirds 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 $117.6 billion in 2008. Almost all of these outlays, or an estimated $107.8 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 $31.6 billion in 2008. These outlays include $18.3 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; construction for the administration of justice programs (largely in the Department of Homeland Security), construction of office buildings by the General Services Administration, and construction for embassy security. Outlays for the acquisition of major equipment are estimated to be $13.4 billion in 2008. The largest amounts are for the air traffic control system; law enforcement activities, largely in the Department of Homeland Security and the Federal Bureau of Investigation; and information systems in the Department of Veterans Affairs. Grants to State and local governments for physical investment are estimated to be $71.8 billion in 2008. More than two-thirds of these outlays, or $51.6 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 $127.0 billion in 2008. 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 $72.9 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 $54.1 billion in 2008. 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 $82.1 billion in 2008. 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 $53.6 billion in 2008, more than 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 $28.5 billion in 2008. Programs in this category are primarily aid for higher education through student financial assistance, loan subsidies, the 6. 57 FEDERAL INVESTMENT Table 6–1. COMPOSITION OF FEDERAL INVESTMENT OUTLAYS (In billions of dollars) 2006 Actual Estimate 2007 2008 Major public physical capital investment: Direct Federal: National defense ................................................................................................... Nondefense ........................................................................................................... 97.3 29.0 113.3 32.5 117.6 31.6 Subtotal, direct major public physical capital investment ............................... 126.3 145.8 149.2 Grants to State and local governments ................................................................... 64.1 69.2 71.8 Subtotal, major public physical capital investment .............................................. 190.4 215.0 221.1 Conduct of research and development: National defense ........................................................................................................ Nondefense ................................................................................................................ 73.0 49.8 75.5 52.7 72.9 54.1 Subtotal, conduct of research and development ................................................. 122.8 128.1 127.0 Conduct of education and training: Grants to State and local governments ................................................................... Direct Federal ............................................................................................................ 56.2 61.0 57.3 34.5 53.6 28.5 Subtotal, conduct of education and training ........................................................ 117.2 91.8 82.1 Total, major Federal investment outlays ..................................................... 430.4 434.9 430.1 Major Federal investment outlays: National defense ........................................................................................................ Nondefense ................................................................................................................ 170.3 260.1 188.7 246.2 190.6 239.5 Total, major Federal investment outlays .............................................................. 430.4 434.9 430.1 Miscellaneous physical investment: Commodity inventories .............................................................................................. Other physical investment (direct) ............................................................................ –1.0 3.1 –0.2 3.2 0.2 3.4 Total, miscellaneous physical investment ............................................................ 2.1 3.0 3.6 Total, Federal investment outlays, including miscellaneous physical investment ....... 432.5 437.9 433.7 MEMORANDUM veterans GI bill, and health training programs. The decline in spending from 2006 to 2007 reflects a significant decrease in estimates of Federal subsidies due to reduced student loan consolidation activity. 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 the categories for physical investment and the conduct of research and development. Outlays for commodity inventories are primarily for the purchase or sale of agricultural products pursuant to farm price support programs. Purchases are estimated to exceed sales by $0.2 billion in 2008. Outlays for other miscellaneous physical investment are estimated to be $3.4 billion in 2008. This category includes primarily conservation programs. These are entirely direct Federal outlays. Miscellaneous Physical Investment 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. 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. Detailed Table on Investment Spending 58 ANALYTICAL PERSPECTIVES Table 6–2. FEDERAL INVESTMENT BUDGET AUTHORITY AND OUTLAYS: GRANT AND DIRECT FEDERAL PROGRAMS (In millions of dollars) Budget Authority Description 2006 Actual 2007 Estimate Outlays 2008 Estimate 2006 Actual 2007 Estimate 2008 Estimate GRANTS TO STATE AND LOCAL GOVERNMENTS Major public physical investments: Construction and rehabilitation: Transportation: Highways ............................................................................................................................. Mass transportation ............................................................................................................ Air transportation ................................................................................................................ 36,357 9,768 3,070 37,555 8,738 4,267 39,943 9,273 2,750 33,975 8,430 3,841 34,914 10,048 3,821 37,621 10,276 3,711 Subtotal, transportation .................................................................................................. 49,195 50,560 51,966 46,246 48,783 51,608 Other construction and rehabilitation: Pollution control and abatement ........................................................................................ Community and regional development .............................................................................. Housing assistance ............................................................................................................. Other construction .............................................................................................................. 1,878 22,054 6,169 579 1,961 5,173 6,127 311 1,748 3,535 5,525 289 1,740 6,310 7,750 553 1,685 9,147 7,566 533 1,546 9,231 7,563 379 Subtotal, other construction and rehabilitation .............................................................. 30,680 13,572 11,097 16,353 18,931 18,719 Subtotal, construction and rehabilitation ............................................................................ 79,875 64,132 63,063 62,599 67,714 70,327 Other physical assets .................................................................................................................. 1,423 1,372 1,299 1,515 1,494 1,507 Subtotal, major public physical capital ................................................................................... 81,298 65,504 64,362 64,114 69,208 71,834 Conduct of research and development: Agriculture .................................................................................................................................... Other ............................................................................................................................................ 266 169 275 165 229 164 270 171 284 130 276 130 Subtotal, conduct of research and development ................................................................... 435 440 393 441 414 406 Conduct of education and training: Elementary, secondary, and vocational education ..................................................................... Higher education ......................................................................................................................... Research and general education aids ........................................................................................ Training and employment ............................................................................................................ Social services ............................................................................................................................. Agriculture .................................................................................................................................... Other ............................................................................................................................................ 38,295 501 764 4,965 10,109 456 1,700 36,230 500 784 5,157 10,239 456 2,216 36,936 337 694 4,803 9,567 436 1,997 37,984 540 727 4,801 10,015 423 1,682 38,258 582 813 4,749 10,255 443 2,189 35,467 510 710 4,543 9,873 496 1,979 Subtotal, conduct of education and training .......................................................................... 56,790 55,582 54,770 56,172 57,289 53,578 Subtotal, grants for investment .............................................................................................. 138,523 121,526 119,525 120,727 126,911 125,818 DIRECT FEDERAL PROGRAMS Major public physical investment: Construction and rehabilitation: National defense: Military construction and family housing ............................................................................ Atomic energy defense activities and other ...................................................................... 9,500 668 9,407 628 11,527 489 6,439 654 8,870 577 9,426 504 Subtotal, national defense ............................................................................................. 10,168 10,035 12,016 7,093 9,447 9,930 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 .................................................................... Administration of justice ..................................................................................................... GSA real property activities ............................................................................................... 1,357 2,114 4,815 1,144 1,387 950 130 2,867 821 1,911 924 1,941 2,823 860 1,245 1,288 136 1,343 1,658 949 1,492 2,285 2,746 884 1,275 1,214 64 2,006 1,518 1,420 1,585 2,183 3,161 982 1,354 737 91 1,946 467 1,484 1,542 2,879 4,289 990 1,215 793 218 1,844 1,397 1,476 1,228 3,261 3,000 956 1,352 1,122 123 1,937 1,799 1,839 6. 59 FEDERAL INVESTMENT Table 6–2. FEDERAL INVESTMENT BUDGET AUTHORITY AND OUTLAYS: GRANT AND DIRECT FEDERAL PROGRAMS—Continued (In millions of dollars) Budget Authority Description 2006 Actual 2007 Estimate Outlays 2008 Estimate 2006 Actual 2007 Estimate 2008 Estimate Other construction .............................................................................................................. 1,938 1,776 1,342 1,991 1,966 1,680 Subtotal, nondefense ..................................................................................................... 19,434 14,943 16,246 15,981 18,609 18,297 Subtotal, construction and rehabilitation ............................................................................ 29,602 24,978 28,262 23,074 28,056 28,227 Acquisition of major equipment: National defense: Department of Defense ...................................................................................................... Atomic energy defense activities ....................................................................................... 105,370 510 126,244 490 137,220 383 89,796 444 103,508 344 107,398 354 Subtotal, national defense ............................................................................................. 105,880 126,734 137,603 90,240 103,852 107,752 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 ................................................................................................................................... 604 360 1,339 3,310 1,340 1,293 1,132 1,802 237 944 763 2,038 637 290 1,782 3,333 1,264 1,114 236 1,902 251 935 816 1,767 926 492 1,442 860 892 900 770 2,054 331 890 833 2,544 578 291 1,430 2,615 882 1,257 784 1,448 261 1,000 719 1,473 608 543 1,017 2,737 1,094 1,188 633 1,891 214 875 824 1,952 890 405 1,294 1,817 1,115 900 604 1,939 278 900 865 2,425 Subtotal, nondefense ..................................................................................................... 15,162 14,327 12,934 12,738 13,576 13,432 Subtotal, acquisition of major equipment .......................................................................... 121,042 141,061 150,537 102,978 117,428 121,184 Purchase or sale of land and structures: National defense ..................................................................................................................... Natural resources and environment ....................................................................................... General government ............................................................................................................... Other ........................................................................................................................................ –65 97 168 42 –39 115 164 160 –37 –323 156 25 –65 145 162 18 –39 129 164 25 –37 –301 156 2 Subtotal, purchase or sale of land and structures ............................................................ 242 400 –179 260 279 –180 Subtotal, major public physical investment ............................................................................ 150,886 166,439 178,620 126,312 145,763 149,231 Conduct of research and development: National defense: Defense military ...................................................................................................................... Atomic energy and other ........................................................................................................ 73,559 3,917 77,821 3,608 78,243 3,645 69,323 3,720 71,755 3,726 69,856 3,079 Subtotal, national defense .................................................................................................. 77,476 81,429 81,888 73,043 75,481 72,935 Nondefense: International affairs .................................................................................................................. General science, space, and technology: NASA .................................................................................................................................. National Science Foundation ............................................................................................. Department of Energy ........................................................................................................ 255 255 255 258 258 258 8,227 3,806 2,914 9,131 3,780 2,943 9,330 4,373 3,394 6,807 3,707 2,966 8,438 3,943 3,013 9,445 3,894 3,192 Subtotal, general science, space, and technology ....................................................... 15,202 16,109 17,352 13,738 15,652 16,789 Energy ..................................................................................................................................... Transportation: Department of Transportation ............................................................................................ NASA .................................................................................................................................. Other ................................................................................................................................... 1,219 1,364 1,409 1,156 1,241 1,409 792 893 17 729 589 17 788 730 18 563 722 20 576 736 13 499 669 13 Subtotal, transportation .................................................................................................. 2,921 2,699 2,945 2,461 2,566 2,590 Health: National Institutes of Health ............................................................................................... 27,524 27,641 27,956 26,695 26,974 27,580 60 ANALYTICAL PERSPECTIVES Table 6–2. FEDERAL INVESTMENT BUDGET AUTHORITY AND OUTLAYS: GRANT AND DIRECT FEDERAL PROGRAMS—Continued (In millions of dollars) Budget Authority Description 2006 Actual 2007 Estimate Outlays 2008 Estimate 2006 Actual 2007 Estimate 2008 Estimate All other health ................................................................................................................... 694 676 671 653 659 670 Subtotal, health .............................................................................................................. 28,218 28,317 28,627 27,348 27,633 28,250 Agriculture ............................................................................................................................... Natural resources and environment ....................................................................................... National Institute of Standards and Technology .................................................................... Hospital and medical care for veterans ................................................................................. All other research and development ...................................................................................... 1,588 2,106 366 824 1,919 1,485 1,922 319 818 1,547 1,397 1,947 398 822 1,728 1,509 1,513 398 799 1,545 1,511 1,613 378 809 2,084 1,458 1,674 409 799 1,701 Subtotal, nondefense .......................................................................................................... 53,144 53,216 55,216 49,311 52,246 53,670 Subtotal, conduct of research and development ................................................................... 130,620 134,645 137,104 122,354 127,727 126,605 Conduct of education and training: Elementary, secondary, and vocational education ..................................................................... 1,355 1,326 1,080 Higher education ......................................................................................................................... 57,017 24,128 20,691 Research and general education aids ........................................................................................ 1,993 1,933 2,173 Training and employment ............................................................................................................ 359 359 364 Health ........................................................................................................................................... 1,353 1,351 994 Veterans education, training, and rehabilitation ......................................................................... 3,338 2,842 3,332 General science and basic research .......................................................................................... 889 886 945 National defense .......................................................................................................................... .................... ...................... ...................... International affairs ...................................................................................................................... 485 474 515 Other ............................................................................................................................................ 655 555 611 1,656 1,634 1,343 50,716 23,441 17,841 1,902 2,050 2,057 469 549 534 1,334 1,311 1,222 2,980 3,321 3,316 902 909 992 5 ...................... ...................... 448 462 499 595 826 672 Subtotal, conduct of education and training .......................................................................... 67,444 33,854 30,705 61,007 34,503 28,476 Subtotal, direct Federal investment ........................................................................................ 348,950 334,938 346,429 309,673 307,993 304,312 Total, Federal investment ............................................................................................................. 487,473 456,464 465,954 430,400 434,904 430,130 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 Government 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 fifth year of using the PART, the Administration has assessed nearly 1,000 programs, approximately 96 percent of the Federal budget. The PART 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 per- cent 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 may receive 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 244 programs: • Programs for capital assets are essentially those identified in the PART system as ‘‘capital assets and service acquisition’’ (92 programs); 6. 61 FEDERAL INVESTMENT • Programs for research and development are essentially those identified in the PART system as ‘‘research and development’’ (121 programs); and • Programs for education and training (31 programs) are primarily programs in the Department of Education (e.g., Federal Pell Grants) that are not grants to State and local governments. 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. Table 6–3. Information on these and other programs assessed by PART is at www.ExpectMore.gov. Summary of ratings. Table 6–3 shows that the average rating for the 244 investment programs that have been rated by PART was ‘‘Moderately Effective’’. Of these programs: • 57 were rated Effective; • 83 were rated Moderately Effective; • 55 were rated Adequate; • 8 were rated Ineffective; and • 41 were rated ‘‘Results Not Demonstrated’’. 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 .................................................................................. 84% 80% 83% 56% 69% Adequate 92% 83% 87% 60% 74% Moderately effective 80% 74% 72% 35% 55% Adequate 88% 81% 84% 55% 70% Moderately effective Number of Programs Ratings 2 Effective .............................................................................................. Moderately effective ........................................................................... Adequate ............................................................................................ Ineffective ........................................................................................... Results not demonstrated .................................................................. 20 31 20 2 19 35 49 21 3 13 2 3 14 3 9 57 83 55 8 41 Total number of investment programs rated .................................... 92 121 31 244 1 Weighted as follows: Purpose (20 percent), Planning (10 percent), Management (20 percent), Results/Accountability (50 percent). 2 The 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. Assessments of individual programs. The ratings of ten of the largest physical capital and education and training investment programs are summarized here. Information on research and development is in Chapter 5, ‘‘Research and Development’’ in this volume. Capital Assets Department of Defense. Air Force Acquisition Systems. ($31.8 billion in 2006). Rating: Moderately Effective. This program acquires the equipment and other materiel needed by the Air Force to enable it to fulfill its mission of defeating enemy forces and protecting American troops. The Air Force acquisition system delivers equipment that generally meets its required performance goals and fulfills the warfighters’ needs. The acquisition system does not include control mechanisms to effectively limit factors which contribute to cost and schedule overruns. While the acquisition system already includes a limited number of specific performance measures, additional measures would help to better determine how well the acquisition system is performing. Department of Defense. Marine Corps/Expeditionary Warfare. ($14.0 billion in 2006). Rating: Moderately Effective. Expeditionary warfare is the temporary use of Marine Corps force in foreign countries. The expeditionary warfare program consists of specific investment 62 programs for aviation assets, amphibious ships, weapons systems, equipment, vehicles, ammunition, and research and development. The Department of Defense (DoD) has articulated a limited number of long-term performance measures for the expeditionary warfare program in response to an earlier assessment. DoD has identified goals related to Joint and Coalition Proficiency, Operational Reach, Force Projection, Sustainability, and Operational and Organizational Adaptability for the expeditionary warfare capability. Department of Defense. Navy Shipbuilding ($13.4 billion in 2006). Rating: Adequate.This program buys new ships and overhauls existing ships. New ships are built at six privately-owned shipyards. Overhauls of existing ships are performed at both privately-owned and publicly-owned shipyards. The Navy currently has 281 ships in the fleet. The Navy has specific cost, schedule, and performance goals for each shipbuilding program. The Navy conducts periodic reviews of programs at major milestones of development and uses a structured reporting regime to help monitor the status of ship cost, schedule, and performance. The Navy has experienced cost increases and schedule slips on some ship construction programs, although overall performance is adequate. Department of Defense (DoD). Air Combat Program ($13.4 billion in 2006). Rating: Moderately Effective. The purpose of this program is to enable DoD to successfully wage war in the air by developing and producing a variety of tactical fighter and strike aircraft. DoD’s management of the overall air combat program is currently based on the extensive system of regulations governing how individual acquisition programs are managed. Through these regulations DoD tracks the progress of individual programs and can hold managers accountable for their programs. DoD’s individual programs within the overall air combat program are delivering aircraft at targeted rates, but in several cases, such as the F/A–22, at greater cost than projected. Department of Defense. Future Combat Systems/ Modularity Land Warfare ($9.7 billion in 2006). Rating: Moderately Effective. The Army’s complementary transformation initiatives, Modularity and the Future Combat Systems, are designed to provide regional combatant commanders and soldiers with a lighter, faster, more survivable and rapidly deployable force with which to fight and win the United States’ current and future land conflicts. Although the Future Combat Systems program is currently on schedule and on cost, the program’s long schedule, significant cost, and technological complexity put Future Combat Systems at substantial risk of cost and schedule overruns as the program moves from research and development to acquisition. Tennessee Valley Authority. Tennessee Valley Authority Power ($9.3 billion in 2006). Rating: Moderately Effective. The Tennessee Valley Authority (TVA) is the Nation’s largest public power company. Through 158 ANALYTICAL PERSPECTIVES locally owned distributors, TVA provides power to nearly 8.5 million residents of the Tennessee Valley. Some of TVA’s former performance measures such as cents/ KWH are no longer tracked. It is unclear how some of the new efficiency measures tracked by TVA relate to program performance. The Tennessee Valley Authority committed to a debt reduction plan that will reduce its total debt $3 billion - $5 billion over a ten to twelve year period. TVA has since increased that debt reduction total to $7.8 billion by 2016. Department of Energy. Environmental Management ($7.9 billion in 2006). Rating: Adequate. This program protects human health and the environment by cleaning up millions of gallons of radioactive waste, thousands of tons of spent nuclear fuel and special nuclear material, along with huge quantities of contaminated soil and water. Managers are implementing reforms that are improving program performance. For example, the program is renegotiating cleanup contracts to include performance incentives. The program is also reorganizing operations to focus on risk reduction. The program needs to develop annual cost and schedule performance measures. The Department of Energy Inspector General and the Government Accountability Office have identified better performance measures as critical to assessing program achievements. Department of Defense. Missile Defense ($7.7 billion in 2006). Rating: Adequate. The mission of the Missile Defense Agency (MDA) is to defend the United States, deployed forces, and allies from ballistic missile attack. MDA is researching, developing and fielding a global, integrated and multi-layered Ballistic Missile Defense System (BMDS), comprising multiple sensors, interceptors and battle management capabilities. MDA’s strategic planning, resource allocation and management oversight activities are properly aligned to accomplish stated mission objectives. MDA budget requests and human resource management activities are explicitly tied to appropriate performance goals. MDA leaders regularly review and evaluate a wide array of performance data to inform and guide their decisionmaking. Education Department of Education. Federal Pell Grants ($17.3 billion in 2006). Rating: Adequate. This program helps ensure access to postsecondary education for undergraduate students by providing need-based grants that, in combination with other sources of student aid, help meet education costs. The program also promotes lifelong learning by encouraging low-income adults to return to school. The program has meaningful performance measures and outcome data on these measures such as the degree to which Pell Grants are targeted to low-income students. New measures such as enrollment and graduation rates among low-income and minority students have also been added. The program has met its current 6. 63 FEDERAL INVESTMENT long-term performance goals and new measures will help track other key program goals. Department of Education. Federal Family Education Loan Program ($17.3 billion (subsidy cost) in 2006). Rating: Adequate. This program provides default insurance and interest subsidies to encourage private lenders to make postsecondary education loans to undergraduate and graduate students. The program also provides interest subsidies for eligible low-income students to cover interest accrued while in school. PART III: 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 middle-income students can afford the costs of postsecondary education. The two programs combined provide over $70 billion a year in new loans to students. While the PART found that the program had meaningful performance measures and outcome data, it also found that it could be more cost efficient. 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 reduces 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 R&D 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 R&D or education can be carried out by Federal or State government laboratories, universities and other nonprofit organizations, local governments, or private industry. R&D 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 2006, with periods of faster growth during the late 1960s and the 1980s. The stock amounted to $2,315 billion in 2006 and is estimated to increase to $2,454 billion by 2008. In 2006, the national defense capital stock accounted for $700 billion, or 30 percent of the total, and nondefense stocks for $1,615 billion, or 70 percent of the total. 64 ANALYTICAL PERSPECTIVES Table 6–4. NET STOCK OF FEDERALLY FINANCED PHYSICAL CAPITAL (In billions of 2000 dollars) Nondefense Fiscal Year 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 Five year intervals: 1960 .................................................... 1965 .................................................... 1970 .................................................... 1975 .................................................... 1980 .................................................... 1985 .................................................... 1990 .................................................... 1995 .................................................... 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 Annual data: 2000 .................................................... 2001 .................................................... 2002 .................................................... 2003 .................................................... 2004 .................................................... 2005 .................................................... 2006 .................................................... 2007 estimate ..................................... 2008 estimate ..................................... 1,979 2,023 2,078 2,138 2,198 2,256 2,315 2,387 2,454 635 631 636 646 662 680 700 729 756 1,345 1,391 1,442 1,492 1,536 1,576 1,615 1,658 1,697 337 351 366 380 391 400 410 421 431 160 163 165 166 168 168 169 171 172 178 188 201 213 223 232 240 250 259 1,007 1,040 1,076 1,112 1,146 1,176 1,205 1,236 1,267 618 640 666 690 714 736 758 781 804 183 186 189 193 196 198 200 203 207 131 132 134 135 136 137 138 139 139 75 81 87 94 100 105 109 114 117 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 $1,615 billion in 2006. With the investments proposed in the budget, nondefense stocks are estimated to grow to $1,697 billion in 2008. 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 a low of $631 billion in 2001 to $756 billion in 2008. 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 2006, 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 40 percent since the mid-1980s. The Stock of Research and Development Capital This section presents data on the stock of research and development (R&D) 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 $1,142 billion in 2006 in constant 2000 dollars. Roughly half is the stock of basic research knowledge; the remainder is the stock of applied research and development. 6. 65 FEDERAL INVESTMENT The nondefense stock accounted for about three-fifths of the total federally financed R&D stock in 2006. 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 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 Table 6–5. 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 to increase the stock, and it is projected to increase to $468 billion in 2008. 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 Basic Research Nondefense Applied Research and Development Total Basic Research Total Federal Applied Research and Development Total Basic Research Applied Research and Development Five year intervals: 1970 .................................................................. 1975 .................................................................. 1980 .................................................................. 1985 .................................................................. 1990 .................................................................. 1995 .................................................................. 261 276 279 321 403 423 16 21 25 30 36 43 245 255 255 291 367 380 215 262 311 339 382 461 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 Annual data: 2000 .................................................................. 2001 .................................................................. 2002 .................................................................. 2003 .................................................................. 2004 .................................................................. 2005 .................................................................. 2006 .................................................................. 2007 estimate .................................................. 2008 estimate .................................................. 423 421 420 423 431 442 452 462 468 48 50 52 53 54 56 57 58 59 375 371 368 370 376 386 395 404 409 542 563 587 613 639 665 690 716 742 368 386 406 428 449 471 493 513 535 175 177 181 186 190 194 197 203 207 966 984 1,007 1,036 1,070 1,107 1,142 1,178 1,210 416 436 458 481 504 527 549 572 594 549 548 549 555 566 580 593 606 616 1 Excludes 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 $1,451 billion in 2006 in constant 2000 dollars. The vast majority of the Nation’s education stock is financed by State and local govern- ments, 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 remainder is for higher education. 1 For estimates of the total education stock, see table 13–5 in Chapter 13, ‘‘Stewardship.’’ 66 ANALYTICAL PERSPECTIVES The federally financed education stock has grown steadily in the last few decades, with an average annual growth rate of 5.2 percent from 1970 to 2006. Table 6–6. The expansion of the education stock is projected to continue under this budget, with the stock rising to $1,557 billion in 2008. NET STOCK OF FEDERALLY FINANCED EDUCATION CAPITAL (In billions of 2000 dollars) Fiscal Year Total Education Stock Elementary and Secondary Education Higher Education Five year intervals: 1960 ............................................................................... 1965 ............................................................................... 1970 ............................................................................... 1975 ............................................................................... 1980 ............................................................................... 1985 ............................................................................... 1990 ............................................................................... 1995 ............................................................................... 71 102 234 349 482 577 736 880 51 74 184 282 379 434 549 643 20 28 50 67 103 143 188 237 Annual data: 2000 ............................................................................... 2001 ............................................................................... 2002 ............................................................................... 2003 ............................................................................... 2004 ............................................................................... 2005 ............................................................................... 2006 ............................................................................... 2007 estimate ................................................................ 2008 estimate ................................................................ 1,133 1,184 1,227 1,267 1,328 1,383 1,451 1,505 1,557 825 859 890 924 961 1,013 1,057 1,099 1,141 308 325 336 343 367 370 394 406 415 7. CREDIT AND INSURANCE Federal credit and insurance programs are alternatives to direct spending programs as means of achieving a variety of policy objectives. Federal credit programs offer direct loans and loan guarantees to support a wide range of activities including housing, education, business and community development, and exports. At the end of 2006, there were $251 billion in Federal direct loans outstanding and $1,120 billion in loan guarantees. Through its insurance programs, the Federal Government insures bank, thrift, and credit union deposits, guarantees private defined-benefit pensions, and insures against other risks such as natural disasters. The Federal Government also permits certain privately owned companies, called Government-Sponsored Enterprises (GSEs), to operate under Federal charters for the purpose of enhancing credit availability for targeted sectors. GSEs increase liquidity by guaranteeing and securitizing loans, as well as by providing direct loans. In return for advancing certain social goals and possibly improving economic efficiency, GSEs enjoy various special privileges, such as possible borrowing from Treasury at Treasury’s discretion, exemption from State and local income taxation, and favorable regulatory treatments of their securities. These privileges may leave observers with the impression that GSE securities are risk-free. GSEs, however, are not part of the Federal Government, and GSE securities are not federally I. guaranteed. By law, GSE securities carry a disclaimer of any U.S. obligation. This chapter discusses the roles of these diverse programs and assesses their effectiveness and efficiency. • The first section emphasizes the roles of Federal credit and insurance programs in addressing market imperfections that may prevent the private market from efficiently providing credit and insurance. Federal programs are more useful where market imperfections remain serious even though the continued evolution and deepening of financial markets may have in part corrected many of the imperfections. • The second section interprets the results of the Program Assessment Rating Tool (PART) for credit and insurance programs in relation to their distinguishing features. • The third section discusses individual credit programs and GSEs intended to support four sectors: housing, education, business and community development, and exports. The discussion focuses on program objectives, recent developments, performance, and future plans for each program. • In a similar format, the final section reviews Federal deposit insurance, pension guarantees, disaster insurance, and insurance against terrorism and other security-related risks. FEDERAL PROGRAMS IN CHANGING FINANCIAL MARKETS The Federal Role In most cases, private lending and insurance companies efficiently meet economic demands by allocating resources to their 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 do not effectively address market imperfections can be unnecessary, 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; to help disadvantaged groups, direct subsidies are generally more effective and less distortionary. Relevant market imperfections include insufficient information, limited ability to secure resources, imperfect competition, and externalities. Although these imperfec- tions can cause inefficiencies, the presence of a market imperfection does not mean that Government intervention will be always effective. To be effective, a credit or insurance program should be carefully designed to reduce inefficiencies in the targeted area without causing inefficiencies elsewhere. Insufficient Information. Financial intermediaries may fail to allocate credit to the most deserving borrowers if there is little objective information about some of the borrowers. Some groups of borrowers, such as start-up businesses and some families, 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. For very irregular events, such as natural and man-made disasters, there may not be sufficient information to estimate the probability and magnitude of the loss. This pricing difficulty may prevent insurers from covering those risks at reasonable premiums. Limited Ability to Secure Resources. The ability of private entities to absorb losses is more limited than 67 68 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. Imperfect Competition. Competition can be imperfect in some markets because of barriers to entry or economies of scale. Imperfect competition may result in higher prices of credit and insurance in those markets. 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. Education, for example, generates positive externalities because the general public benefits from the high productivity and good citizenship of a well-educated person. Pollution, from which other people suffer, is clearly a negative externality. Without Government intervention, people will engage less than socially optimal in activities that generate positive externalities and more in activities that generate negative externalities. Effects of Changing Financial Markets Financial markets have become much more efficient through 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 efficiency-improving consolidation by removing geographic and industry barriers. These changes have reduced market imperfections. The private market now has more information and better technology to process it; it has better means to secure resources; and it is more competitive. As a result, the private market is more willing and able to serve a portion of the population 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 less affected by financial evolution and those populations that still have difficulty in obtaining credit or insurance 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. ANALYTICAL PERSPECTIVES The need for the Federal government to address the information problem has diminished steadily over the years. 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 risk more objectively and accurately. Also, potential borrowers tend to have access to a much wider array of possible local, national, and global lenders. As a result, most borrowers can easily obtain credit at a fair interest rate reflecting their risk. The improvement, however, may be uneven across sectors. Credit scoring (an automated process that converts relevant borrower characteristics into a numerical score indicating creditworthiness), for example, is considered as a breakthrough in borrower screening. While credit scoring is widely applied to home mortgages and consumer loans, it is applied to a limited extent for small business loans and agricultural loans due to the difficulty of standardizing unique characteristics of small businesses and farmers. It is also possible that banking consolidation adversely affects those borrowers with unique characteristics; small, local banks could serve those borrowers better if they had more borrower-specific information gained through long-term relations. With technological advances such as computer simulation, pricing catastrophe risks has become easier, but it remains much more difficult than pricing more regular events such as automobile accidents. It is still difficult for insurers to estimate with confidence the probability of a major natural disaster occurring. The difficulty may be greater for man-made disasters that lack scientific bases. Financial evolution has also improved private insurers’ ability to deal with catastrophic losses. Using financial derivatives such as options, swaps, and futures, private entities can 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 man-made catastrophe among a large number of investors through catastrophe-related derivatives. However, the market for catastrophe-related derivatives is still small, and it has not eliminated the difficulty of absorbing catastrophic losses yet. To address this difficulty, reinsurance may be preferred to direct provision of insurance because it involves less intervention. Imperfect competition is much less likely to justify Federal involvement than was the case only a few years ago due to financial deregulation and improved communication and financing 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 further lowered the cost of financial transactions and reduced the importance of physical location. These developments have been especially beneficial to small and geographically isolated customers who could not afford to bear large transactions costs and otherwise had limited access to 69 7. CREDIT AND INSURANCE financial services. In addition, there are more financing alternatives for both commercial and individual borrowers that used to rely heavily on banks. Venture capital, for example, has become a much more important financing source for small businesses. Finance companies have also become a prominent player both in business and consumer financing. Problems related to externalities may persist because the price mechanisms that drive the private market by definition 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, there may be a better way to address any 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. Federal agencies need to be vigilant to identify and manage new risks to the economy and 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 the Federal Home Loan Banks, could shake the entire financial market. A more visible risk to the Budget today is posed by the Pension Benefit Guaranty Corporation (PBGC). PBGC has a large shortfall in assets and projected earnings relative to the claims it is already obligated to pay due to unfavorable developments in recent years and to flaws in program structure that the Administration proposes to remedy. PERFORMANCE OF CREDIT AND INSURANCE PROGRAMS The Program Assessment Rating Tool (PART) has evaluated 977 Federal programs, including 34 credit programs and seven insurance programs. The PART evaluates programs in four areas (program purpose and design, strategic planning, program management, and program results) and assigns a numerical score (0 to 100) to each category. The overall rating (effective, moderately effective, adequate, ineffective, or results not demonstrated) is determined based on the numerical scores and the availability of reliable data. The ratings for credit and insurance programs are clustered around the middle; 78 percent of credit and insurance programs (compared with 58 percent for other programs) are rated ‘‘adequate’’ or ‘‘moderately effective,’’ while only seven percent (17 percent for other programs) are rated ‘‘effective.’’ These results suggest that most credit and insurance programs meet basic standards, but need to improve. In individual categories, credit and insurance programs have scored noticeably low in program purpose and design and high in program results relative to other programs. Some key features distinguish credit and insurance programs from other programs. Credit and insurance programs are intended to address imperfections in financial markets. They also face various risks, such as uncertain default rates and erratic claim rates. Interpreting PART results in relation to these features should help to identify fundamental problems and to devise effective solutions. Program Purpose and Design. To be effective, credit and insurance programs should serve those who deserve to be served but are left out by the private market due to market imperfections. Extending credit to those who are not creditworthy, for example, would result in economic inefficiencies and large budget costs. Lending to those who can obtain credit at a reasonable rate in the private market would be unnecessary and might interfere with the market mechanism. To achieve intended outcomes without causing unintended consequences, therefore, credit and insurance programs need to be carefully designed; they should target the SUMMARY OF PART SCORES Purpose and Design Strategic Planning Program Management Program Results Credit and Insurance Programs Average ......................................................... Standard Deviation ........................................ 78.5 19.9 74.2 24.0 86.0 18.4 55.7 19.0 All Others Excluding Credit and Insurance Programs Average ......................................................... Standard Deviation ........................................ 87.1 18.4 75.0 24.6 82.2 17.9 48.2 26.6 70 ANALYTICAL PERSPECTIVES intended beneficiaries, and all parties in the transaction should face the correct incentives. The PART indicates that most credit and insurance programs have clear purposes (not necessarily economically justifiable purposes) and address specific needs. 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 offer inadequate incentive structures. Strategic Planning. Financial markets have been evolving to serve target populations of Federal programs better and increasingly apply advanced technologies to risk assessments. Credit and insurance programs need to adapt to these new developments quickly. Falling behind, Federal programs can be left with many beneficiaries who do not really need Government help and with those who post greater risk as private entities attract better-risk beneficiaries away from Federal programs. In subcategories of strategic planning, while most credit and insurance programs effectively execute shortterm strategies, they are less effective in pursuing longterm goals that may be more critical in adapting to new developments. Other weaknesses are found in conducting stringent performance evaluation and tying budgets to performance outcomes. Program Management. Risk management is a critical element of credit and insurance programs. The cashflow is uncertain both for credit and insurance programs. The default rate and the claim rate can turn out to be significantly different than expected. Credit programs also face prepayment and interest rate risks. These risks must be carefully managed to ensure the program cost stays within a reasonable range. Credit and insurance programs show strengths in basic financial and accounting practices, such as spending funds for intended purposes and controlling routine III. costs. However, some weaknesses are found in areas that are more critical for effective risk management, such as collecting timely information and using sophisticated financial tools. 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 assistance. Credit and insurance 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 estimate would lead to incorrect program evaluation—an underestimation (overestimation) of the cost would make the program appear unduly effective (ineffective). Results for credit and insurance programs need to be interpreted in conjunction with the accuracy of cost estimation. Program results, the most important category of performance, are generally weak for credit and insurance programs despite a higher average score than that of other programs. Many credit and insurance programs have difficulty in achieving performance goals and lack objective evidences of program effectiveness. These problems may partly result from the difficulty of measuring net outcomes. With reliable outcome measures, it should be easier to set achievable goals and demonstrate effectiveness. CREDIT IN FOUR SECTORS Housing Credit Programs and GSEs Through housing credit programs, the Federal Government promotes homeownership among various target groups, including low-income people, minorities, veterans, and rural residents. Housing GSEs increase liquidity in the mortgage market. Federal Housing Administration In June 2002, the President issued America’s Homeownership Challenge to increase the number of firsttime minority homeowners by 5.5 million through 2010. During the first three and a quarter years since the goal was announced, nearly 2.5 million minority families have become homeowners. Through 2006, the Department of Housing and Urban Development’s (HUD’s) Federal Housing Administration (FHA) helped almost 542,000 of these first-time minority homebuyers through its loan insurance funds, mainly the Mutual Mortgage Insurance (MMI) Fund. FHA mortgage insurance guarantees mortgage loans that provide 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 2006, FHA endorsed purchase and refinance mortgages for more than 425,000 households. For purchase mortgages, over 79 percent were for first-time homebuyers and about 31 percent were for minority buyers. FHA also endorsed over 76,000 home equity conversion mortgages for elderly homeowners. While FHA has been a primary mortgage source for first-time and minority buyers since the 1930s, its loan volume has fallen precipitously in the past four years. This is due in part to lower interest rates that have made uninsured mortgages affordable for more families. Moreover, private lenders—aided by automated underwriting tools that allow them to measure risks more 7. CREDIT AND INSURANCE accurately—have expanded lending to people who previously would have had no option but FHA—those with few resources to pay for downpayments and/or weaker credit histories that the private sector considered too risky. The development of new products and underwriting approaches has allowed private lenders to offer loans to more homebuyers. While this is a positive development when the private sector is offering favorable terms, some borrowers either end up paying too much or receiving unfair terms. As private lenders have expanded their underwriting to cover more borrowers, FHA’s business has changed. First, the percentage of FHA-insured mortgages with initial loan-to-value (LTV) ratios of 95 percent or higher has increased substantially, from 62.7 percent in 1995 to 78 percent in 2006. Second, the percentage of FHA loans with downpayment assistance from seller-financed nonprofit organizations has grown rapidly, from 0.3 percent in 1998 to nearly 33 percent in 2006. Recent studies show that these loans are riskier than those made to borrowers who received downpayment assistance from other sources. In 2006, FHA’s cumulative default claim rate for its core business is projected to have risen from approximately 10 percent to 12 percent. The FHA single-family mortgage program was assessed in 2005 using the PART. The assessment found that the program was meeting its statutory objective to serve underserved borrowers while maintaining an adequate capital reserve. However, the program lacked quantifiable annual and long-term performance goals that would measure FHA’s ability to achieve its statutory mission. In addition, both the PART and subsequent reports by the General Accountability Office and the Inspector General noted that the program’s credit model does not accurately predict losses to the insurance fund, and that despite FHA efforts to deter fraud in the program, it has not demonstrated that these steps have reduced such fraud. In response to these findings, FHA measured its 2006 performance against new goals, such as the percentage of FHA Single Family loans for first-time and minority homeowners, and exceeded its goals. FHA has also improved the accuracy of its annual actuarial review claim and prepayment estimates. In 2007, it will continue to develop performance goals for fraud detection and prevention. Proposals for Program Reform In order to enable FHA to fulfill its mission in today’s changing marketplace, the Administration has introduced legislation that will give FHA the ability to respond to current challenges to homeownership among its traditional target borrowers: low and moderate-income first-time homebuyers. FHA has already taken steps, within its current authority, to streamline its paperwork requirements and remove impediments to its use by lenders and buyers. However, additional reforms will enable it to expand homeownership opportunities to its target borrowers on an actuarially sound basis. 71 To remove two large barriers to homeownership— having limited savings for a downpayment or impaired credit—the Administration again proposes new FHA mortgage products. These products will replace the current flat premium structure with one that varies with the risk of default as indicated by the percentage of downpayment to the loan amount or borrower credit quality. This will create more opportunities for potential homeowners who may face limited mortgage options. For example, first-time buyers with a strong credit record but little savings could finance a higher percent of the purchase than FHA currently allows. Alternatively, a borrower with a poor credit history could qualify for more favorable terms by accumulating savings for a larger downpayment. This flexible premium structure, which is tiered riskbased pricing, is a way to more fairly price the FHA guarantee to individual borrowers. It creates incentives (lower premium payments) for borrowers to take steps to improve their credit or save more for a downpayment. At the same time it eliminates the current incentive for higher risk borrowers to use FHA because they are undercharged relative to the risk they pose. FHA proposes to base its mortgage insurance premiums upon a borrower’s consumer credit score from Fair, Isaac, and Company (FICO), and on the amount and source of downpayment (e.g., the borrower’s own resources, relatives, employer, non-profit organization or public agency). Mortgage insurance premiums will be based on FHA’s historical experience with similar borrowers. This change will decrease premiums for many of FHA’s traditional borrowers, thereby increasing their access to homeownership. This price structure has many advantages. First, FHA will reflect a borrower’s risk via the mortgage insurance premium, not through a higher interest rate as done in the subprime market. With mortgage insurance, borrowers will pay a market rate of interest, and, as a result, will incur lower monthly payments and lower total costs than if they paid a higher mortgage interest rate throughout the life of the loan. Second, by using this pricing structure, FHA will promote price transparency. Each borrower will know why they are paying the premium that they are being charged and will know how to lower their borrowing costs—i.e., by raising their FICO score or their downpayment. Third, risk-based pricing will allow FHA to review the performance of its programs annually in conjunction with the preparation of its credit subsidy estimates and adjust its premiums as necessary to assure the financial soundness of the MMI Fund. A reformed FHA will adhere to sound management practices that include a new framework of standards and incentives tied to principles of good credit program management. Further, the proposed reforms will better enable FHA to meet its objective of serving first-time and low-income home buyers by managing its risks more effectively. 72 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 2006, VA provided $23.5 billion in guarantees to assist 135,151 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 zero downpayment loans. VA provided 90,399 zero downpayment loans in 2006. To help veterans retain their homes and avoid the expense and damage to their credit resulting from foreclosure, VA intervenes aggressively to reduce the likelihood of foreclosures when loans are referred to VA after missing three payments. VA’s successful actions resulted in 54 percent of such delinquent loans avoiding foreclosure 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. In 2006, nearly $4.3 billion in assistance was provided by RHS for homeownership loans and loan guarantees; $3.07 billion in guarantees went to more than 31,000 households, of which 30 percent went to very low and low-income families (with income 80 percent or less than median area income). Additionally in 2006, Hurricane Supplemental loans and guarantees totaling $260 million allowed nearly 2,500 households to obtain homes. In addition, $19 million of low-interest loans and grants was used to repair more than 2,300 homes of families in need. In addition, RHS granted moratoriums on payments, and sheltered survivors in its inventory properties to provide relief. Historically, RHS has offered both direct and guaranteed homeownership loans. Beginning in 2008, RHS will only offer guaranteed loans. The budget provides no funding for the 502 direct single family housing loan program. The direction of Rural Development’s singlefamily housing mortgage assistance over the last two decades has been towards guaranteed loans. The singlefamily housing guaranteed loan program was newly authorized in 1990 at $100 million and has grown into a $3 billion plus loan program annually, equaling that of the Veterans Affairs (VA) guaranteed housing loan program. Meanwhile the single-family direct loan program has been stagnant at approximately a $1 billion loan level. Solely utilizing guarantees for single-family housing mortgage is consistent with the other Federal homeownership programs. In fact, there are no Federal single family direct loan home ownership programs for ANALYTICAL PERSPECTIVES urban areas. Furthermore, financial markets have become more efficient and increased the reach of mortgage credit to lower credit qualities and incomes. While some rural areas remain isolated from broad credit availability, these areas are shrinking as broadband internet access and correspondent lending grow. Therefore, relying on the private banking industry to provide this service, with a guarantee from the Federal government, is a more efficient way to deliver that assistance. To replace the loss of assistance to the very lowto low-income rural borrowers still seeking assistance for mortgage credit, the Administration expects to propose legislation to authorize a subsidized guaranteed single-family housing program. For the already established 502 guarantee programs in 2008, RHS will increase the guarantee fee on new loans to 3 percent from 2 percent. This allows the loans to be less costly for the Government without a significant additional burden to the borrowers, given that they can finance the fee as part of the loan. The guarantee fee for refinance loans remains 0.5 percent. Funding in 2008 is requested at an increased amount of $4.8 billion for purchase loans to compensate for no funding for direct loans. RHS also offers multifamily housing loans and guarantees to provide rural rental housing, including farm labor housing. The farm labor housing combined grant and loan level will provide $18 million in 2008 for new construction as well as repair and rehabilitation. RHS also expects to be able to guarantee $200 million in multifamily housing construction loans for 2008. RHS will continue to propose funding and legislative changes to address the preservation issues surrounding the over 40-year old program. A long-term initiative has been developed to revitalize the 17,000-property portfolio. During 2008, $28 million will be directed to the revitalization initiative, primarily to assist existing residents in properties leaving the program. No funds are requested for the direct rural rental housing program because fixing the current portfolio is the first priority. RHS partnered with its multifamily program borrowers and made available all the vacant units in the loan portfolio to house evacuees from Hurricanes Katrina and Rita. Costs were covered by an emergency allotment of rental assistance for a six-month period. Multifamily Programs instituted a number of waivers designed to ease the regulatory burden for housing evacuees on an emergency basis. RHS housed over 3,000 families in RHS-financed housing Government-Sponsored Enterprises in the Housing Market Homeownership has long been recognized as an important part of the American economy and part of the American dream. However, it has not always been within reach for the average American. During the Great Depression, housing markets were in turmoil. A typical mortgage required a downpayment of around 50 percent and a balloon payment of principal within a few years. Limitations in financial and communication technology 7. CREDIT AND INSURANCE and restrictions on financial institutions made it difficult for surplus funds in one part of the country to be shifted to other parts of the country to finance residential housing. Starting in 1932, the Congress responded by creating a series of entities and programs that together promoted the development of long-term, amortizing mortgages and facilitated the movement of capital to support housing finance. A key element of this response was the creation of the Federal Housing Administration in 1934. Another element was the establishment of several entities designed to develop secondary mortgage markets and to facilitate the movement of capital into housing finance. These entities, known today as Government-Sponsored Enterprises (GSEs), were chartered by the Congress with a public mission, and endowed with certain benefits that give them competitive advantages when compared with fully private companies. The Federal Home Loan Bank System, created in 1932, is comprised of twelve individual banks with shared liabilities. Together they lend money to financial institutions—mainly banks and thrifts—that are involved in mortgage financing to varying degrees, and they also finance some mortgages on their own balance sheets. The Federal National Mortgage Association, or Fannie Mae, created in 1938, and the Federal Home Loan Mortgage Corporation, or Freddie Mac, created in 1970, were established to support the stability and liquidity of a secondary market for residential mortgage loans. Together these three GSEs currently are involved, in one form or another, with nearly one half of the $10-plus trillion residential mortgages outstanding in the U.S. today. Their market share peaked at 54 percent in 2003, after which management and internal control problems started to surface. As with other financial institutions, the Congress also established regulatory regimes to ensure the safety and soundness of the housing GSEs. The Office of Federal Housing Enterprise Oversight (OFHEO), established in 1992 as an independent agency within the Department of Housing and Urban Development, oversees Fannie Mae and Freddie Mac. The Federal Housing Finance Board (FHFB), established in 1989, oversees the Federal Home Loan Bank system. Numerous reports and studies have pointed to various shortcomings with the current regulatory structure for the housing GSEs. The Administration is proposing to strengthen this structure and combine OFHEO and FHFB into a new regulator. Mission The mission of the housing GSEs is to support certain aspects of the U.S. mortgage market. Fannie Mae and Freddie Mac’s mission is to promote affordable housing, respond to private capital markets, and provide liquidity and stability to the secondary mortgage market. Currently, they engage in two major lines of business. 1. Credit Guarantee Business—Fannie Mae and Freddie Mac guarantee the timely payment of principal and interest on mortgage-backed securities (MBS). They create MBS by either buying 73 and pooling whole mortgages or by entering into swap arrangements with mortgage originators. Over time these MBS held by the public have averaged about one-quarter of the U.S. mortgage market. 2. Mortgage Investment Business—Fannie Mae and Freddie Mac manage retained mortgage portfolios composed of their own MBS, MBS issued by others, and whole mortgages. As of June 30, 2006, these retained mortgages totaled $1.4 trillion. Given Fannie Mae and Freddie Mac’s serious accounting, internal control, risk management, and systems problems, the growth of these portfolios is temporarily constrained through consent agreements with OFHEO. The mission of the Federal Home Loan Bank System is broadly defined as housing finance, and the System also has specific requirements to support affordable housing. The Federal Home Loan Banks have not grown mortgage asset portfolios as large as Fannie Mae or Freddie Mac. Their principal business remains lending to regulated depository institutions and insurance companies engaged in residential mortgage finance to varying degrees. Risks That GSEs Face and Cause Like other financial institutions, the GSEs face a full range of risks, including market (interest rate) risk, credit risk, and operational risk. Several of the Federal Home Loan Banks and Fannie Mae have faced serious market risks due to inadequate hedging. More recently, Fannie Mae and Freddie Mac have faced serious operational risk. Due to earnings manipulation, poor accounting systems, lack of proper controls, lack of proper risk management, and misapplication of accounting principles, earnings at Fannie Mae were misstated by $6.3 billion through June of 2004, and at Freddie Mac by $5.0 billion through December of 2002. The GSEs also pose risks to the financial system. Systemic risk is the risk that unanticipated problems at a financial institution or group of institutions could lead to problems more widely in the financial system or economy—the risk that a small problem could multiply to a point where it could jeopardize the country’s economic well-being. The particular systemic risk posed by the GSEs is the risk that a miscalculation, failure of controls, or other unexpected event at one company could unsettle not only the mortgage and mortgage finance markets but other vital parts of the financial system and economy. To understand this risk, one must understand the interdependencies among the GSEs and other market participants in the financial system and the lack of market discipline imposed on the GSEs because investors perceive that the GSEs are implicitly backed by the U.S. Government. The GSEs are among the largest borrowers in the world. As of September 2006 their combined debt and guaranteed MBS totaled $5.2 trillion, higher than the total publicly held debt of the United States. The inves- 74 ANALYTICAL PERSPECTIVES tors in GSE debt include thousands of banks, institutional investors such as insurance companies, pension funds, and foreign governments, and millions of individuals through mutual funds and 401k investments. Based on the prices paid by these investors, they act as if the Federal Government guarantees GSE debt. In fact, there is no such guarantee or Federal backing of GSE debt. Because investors act as if there is an ‘‘implicit guarantee’’ by the Federal Government to back GSE debt, investors on average lend their money to the GSEs at interest rates roughly 30 to 40 basis points less ($300–$400 less per year for every $100,000 borrowed) than to other highly rated privately held companies. In addition, investors do not demand the same financial disclosures as for other privately owned companies. Neither Fannie Mae nor Freddie Mac currently file quarterly earnings reports with the Securities and Exchange Commission, though Fannie Mae is required to and Freddie Mac volunteered to. Yet there has been no significant impact on the pricing of GSE debt securities. This lack of market discipline facilitates the growth of the GSE asset portfolios, thereby increasing systemic risk. Retained Asset Portfolios Have Significantly Grown While Achieving Little for the GSEs’ Housing Mission Fannie Mae and Freddie Mac have used their funding advantage to amass large retained asset portfolios. Together these GSEs have more than $1.5 trillion in debt outstanding, almost entirely for the purpose of funding these portfolios. From 1990 through 2005, the GSEs’ competitive funding advantage enabled them to increase their portfolios of mortgage assets ten-fold, which far exceeds the growth of the overall mortgage market. Due to the risks associated with the portfolios, the Administration is proposing that the new regulatory structure empower the regulator to address and mitigate these risks. As chart 7–1 shows, almost 54 percent of Fannie Mae and Freddie Mac’s combined retained mortgage portfolio at the end of 2005 was comprised of holdings of their own guaranteed MBS, which could easily be sold. Chart 7-1. Fannie Mae and Freddie Mac Combined Retained Mortgage Portfolios Year-End 2005 Mortgage Revenue Bonds 2.1% Whole Mortgages 21.9% MBS-Others 22.1% MBS – Fannie Mae and Freddie Mac 53.9% Source: Office of Federal Housing Enterprise Oversight. The function of these portfolio holdings is largely to increase profits, not facilitate affordable housing. In 1992, the Congress broadened Fannie Mae and Freddie Mac’s mission to include promoting affordable housing. To measure this performance, the Congress mandated that HUD establish three affordable housing goal targets that Fannie Mae and Freddie Mac must meet each year. HUD has also implemented home purchase subgoals to encourage homeownership opportunities for first-time homeowners and minority homeowners. Given that Fannie Mae and Freddie Mac have a mission to help more families achieve homeownership as well as to expand rental opportunities, their retained portfolios should be tied to that mission. However, currently only about 30 percent of Fannie Mae and Freddie Mac’s retained portfolio holdings would be eligible to qualify for any of the affordable housing goals. About half of the MBS issued by others and whole loans qualify toward their affordable housing goals. Their performance under the housing goals over time indicate that Fannie 7. CREDIT AND INSURANCE Mae and Freddie Mac should be doing more to help mission-targeted families achieve homeownership or acquire affordable rental housing. Debt Issuance Subject to Treasury Approval Fannie Mae and Freddie Mac fund their portfolios by issuing debt, and the U.S. Department of the Treasury has the responsibility to review and approve these GSEs’ debt-issuances. The Treasury Department’s debt approval authority is contained in Fannie Mae’s and Freddie Mac’s Charter Acts, and the Department has approved Fannie Mae and Freddie Mac’s debt on a regular basis. Treasury is developing a more formalized approach to their debt approval authority. As part of that approach, Treasury is developing new debt approval procedures to enhance the clarity, transparency, standardization, and documentation of Fannie Mae’s and Freddie Mac’s debt issuances. Thin Capital Cushions Need Reform The risks of the GSEs’ large portfolios are exacerbated because they are not required to hold cushions of capital against potential losses comparable to the capital requirements for other large financial institutions. Where commercial banks that are part of a financial holding company must hold a 5 percent capitalto-total assets cushion, Fannie Mae and Freddie Mac’s requirement is half that, while FHLB’s is 4 percent. The risk-based capital requirements for the GSEs also differ dramatically from those applicable to commercial banks. This highlights an important shortcoming of the statutory framework governing Federal oversight of the GSEs. The minimum capital and risk-based capital rules for the GSEs were written into law in 1992. Much has changed since then with regard to financial risk analysis, risk modeling, and capital requirements for comparable financial institutions. The reforms proposed by the Administration would repeal the statutory riskbased capital stress test, and would provide the new GSE regulator with the authority and flexibility to establish new risk-based capital requirements for the GSEs to help ensure that they operate with sufficient capital and reserves to support the risks that arise in the operations and management of each enterprise. A world-class regulator needs the flexibility and authority to change both the risk-based and minimum capital requirements without undue restriction in response to changing conditions. Although the GSEs’ mortgage investments are of relatively low default risk, other types of risk in the GSEs’ asset portfolios are substantial. Mortgage portfolios carry considerable interest-rate risk, partly because of the risk that homeowners may prepay their mortgages through refinancing or home sales. This risk can be mitigated—for example, through purchase of interestrate hedges—but the GSEs protect themselves against only some of the interest rate risk of their portfolios. Moreover, hedges are imperfect because predicting interest-rate movements and mortgage refinancing activity is difficult. As GSE asset portfolios have grown in size, the GSEs’ participation in the market for hedging 75 instruments has become dominant enough to cause interest rate spikes in the event that a GSE needs to make large and sudden adjustments to its hedging position. New Activities and Technological Development Require Oversight Over the last decade, Fannie Mae and Freddie Mac have begun engaging in a wide range of new activities that were not anticipated when their charters were written. To address these changes, HUD developed a new activity review initiative under its general regulatory authority. HUD has reviewed a number of business initiatives at Fannie Mae and Freddie Mac, including international activities; partnership offices; senior housing; skilled nursing facilities; employer assisted housing plans; third party real-estate-owned programs; Commercial Mortgage-Backed Securities (CMBS); Asset-Backed Securities (ABS); multifamily variablerate bond certificates; and whole loan REMICs. HUD concluded that some of these activities were not authorized. For example, HUD’s review of the GSEs’ Commercial MBS programs resulted in OFHEO seeking Freddie Mac’s divestiture of certain CMBS holdings, and HUD ordered Fannie Mae to end its third party Real-EstateOwned program based on its review. In 2007, HUD will complete a Financial Activities Review that will provide a baseline of information on Fannie Mae’s and Freddie Mac’s business and program activities. As part of this review, HUD will examine specific transactions to determine whether they are consistent with Fannie Mae’s and Freddie Mac’s charter authorities. The Administration proposes to move this authority to the new regulator. Because of their enormous presence in the secondary market, Fannie Mae and Freddie Mac are able to exert significant leverage in the primary mortgage market. First, their unparalleled size in the residential mortgage market gives the GSEs a unique level of access to market information. The applicability of that information to the management of mortgage risk gives them a competitive edge in the development of new technology that can change relationships between primary market participants as well as the distribution of economic returns between the primary and secondary markets. Second, their funding advantage enables the GSEs to borrow at reduced rates in order to make investments in new areas at below-market prices, thus discouraging competition while gaining experience in those areas. Through the development and delivery of new technology to the industry and by leveraging their funding advantage, there is potential for the GSEs to expand their business beyond the limitations of their Charter Acts, which prohibits both Fannie Mae and Freddie Mac from originating mortgages. Loan origination is the central function of the primary mortgage market, and the GSEs’ charter acts clearly restrict them to the secondary mortgage market. However, technological advancements have blurred the line that defines where 76 ANALYTICAL PERSPECTIVES the primary market ends and the secondary market begins. A new level of clarity is required to establish the permissible activities under the Enterprises’ charter acts, including the development of intellectual property. New Regulatory Authority The Administration continues to support broad reform of the GSE supervisory system. In particular, the Administration supports establishing a new regulator for all three of the housing GSEs that would combine safety and soundness authority with oversight of their respective housing missions. The new regulator must have enhanced powers comparable to those of other world-class financial regulators, including, among others, the ability to put a GSE into receivership should it fail, authority to establish and adjust appropriate capital standards, and new product authority. A new regulator must also have clear authority to address and mitigate the risks posed by the GSEs’ retained portfolios. Finally, a new regulatory structure must ensure that the GSEs are adhering to their affordable housing mission. Education Credit Programs The Federal Government guarantees loans through intermediary agencies and makes direct loans to students to encourage postsecondary education enrollment. The Student Loan Marketing Association (Sallie Mae), created in 1972 as a GSE to develop the secondary market for guaranteed student loans, was privatized in 2004. 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. The FFEL program provides loans through an administrative structure involving over 3,600 lenders, 35 State and private guaranty agencies, and over 5,000 participating schools. In the FFEL program, 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. Lenders bear three percent of the default risk, and the Federal Government is responsible for the remainder. 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 Gov- ernment provides loan capital directly to nearly 1,100 schools, which then disburse loan funds to students. 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. In 2006, the Congress passed reconciliation legislation reducing excess subsidies in the FFEL program and helping to make both programs more effective. The reforms included a reduction in the percentage of Federal guarantee provided against default in recognition of the strong repayment record for student loans today and an elimination of unnecessary and costly loan subsidy provisions that allowed some loan holders to have exorbitant financial returns on loans funded through tax-exempt securities. In recognition of the fact that federal subsidies remain higher than necessary to ensure that loans are available to students in this profitable and competitive market, the 2008 Budget proposes to reduce interest subsidies paid to FFEL lenders by 50 basis points. The 2008 Budget also proposes to reduce default insurance from 97 percent to 95 percent, and increase the origination fee lenders pay on consolidation loans. To rationalize federal subsidies to guaranty agencies, the Administration proposes to shift the basis of account maintenance fee payments from the balance of loans guaranteed to a cost-per-unit formula, and reduce the amount guaranty agencies can retain on the defaulted loans they collect. These savings will be used to provide significant benefits to students such as raising the Pell Grant maximum award to $5,400, increasing Academic Competitiveness Grant awards by 50 percent, and offering higher loan limits. 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 helps home and business-owners, as well as renters, cover the uninsured costs of recovery from disasters through its direct loan program. The 2008 Budget requests $464 million, including administrative funds, for SBA to leverage more than $29 billion in financing for small businesses and disaster victims. The 7(a) General Business Loan program will support $17.5 billion in guaranteed loans while the 504 7. CREDIT AND INSURANCE Certified Development Company program will support $7.5 billion in guaranteed loans for fixed-asset financing. SBA will supplement the capital of Small Business Investment Companies (SBICs) with $3 billion in longterm, guaranteed loans for venture capital investments in small businesses. At the end of 2006, the outstanding balance of business loans totaled $67 billion. 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. SBA’s outreach for the 7(a) program has been successful: Average loan size has decreased from about $230,000 in 2001 to $152,000 in 2006, while the annual number of new loans has grown from 43,000 to over 90,000 during the same time period. During the past few years, SBA has implemented several initiatives to streamline operations by increasingly delegating responsibilities to lenders and centralizing operations while managing and mitigating risk. In 2003, SBA implemented a state-of-the-art Lender Loan Monitoring System (LLMS) under the newly formed Office of Lender Oversight. This office uses LLMS to evaluate individual SBA lenders by tracking the expected risk of SBA guaranteed loans in their portfolios relative to expected performance of those loans. The office employs a variety of analytical techniques to ensure sound financial management by SBA and to hold lending partners accountable for performance. These techniques include portfolio performance analysis, selected lender risk reviews, credit scoring to compare lenders’ performance, and industry concentration analysis. Starting in FY 2004, SBA began consolidating its loan making, servicing and liquidating functions from 69 District Offices into several combined centers. Consolidation has reduced costs, increased timeliness of processing, and standardized how loans are handled. In 2006, SBA completed the elimination of its several billion dollar backlog of loan liquidations resulting from defaulted guarantees. In 2007, SBA is working with contractor support to identify additional processes that could be reengineered to reduce costs, improve quality, and expedite processing. To address major challenges in making and disbursing loans resulting from the 2005 Gulf Coast hurricanes, SBA initiated the Accelerated Disaster Response Initiative to identify and implement process improvements to quicken the delivery of disaster assistance. As a result of customer feedback and analysis of best business practices, SBA piloted a case management approach. Using case management, in which a team of SBA staff work with a borrower from initial application through loan disbursement, SBA can better serve disaster applicants and monitor the processing of loans. SBA has also implemented numerous productivity metrics to track the status of loans in processing and 77 identify areas that require management intervention or additional resources. By 2008, SBA expects to implement an Internetbased loan application system that will facilitate the collection of data from disaster victims and speed processing. This investment complements investments that SBA made through 2006 in the Disaster Credit Management System. The Budget proposes to build upon the success of the zero-subsidy 7(a) program by making the Microloan program self-financing through modest increases to the interest rate paid by program intermediaries. The Administration is also proposing authorizing legislation to enable the secondary market guarantee (SMG) program to charge nominal fees on lenders seeking to pool loans; fees are expected to be less than or comparable to fees in other secondary market programs and will help stabilize the program from the need to make frequent administrative changes. 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 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 this Budget is $1.5 billion. These funds are available to communities of 10,000 or fewer residents. The Budget reflects a significant change in the method for determining the interest rate charged on such loans, from a three-tiered structure (poverty, intermediate, and market) depending on community income to an interest rate that is 60 percent of the market rate not to exceed five percent. This change is expected to reduce the loan repayment costs substantially for most communities, at a lower loan to grant ratio. The Community Facility Program is targeted to rural communities with fewer than 20,000 residents. It will have a program level of $512 million in 2008. USDA also provides grants, direct loans, and loan guarantees to assist rural businesses, including cooperatives, and to increase employment and diversify the rural economy. In 2008, USDA proposes to provide $1 billion in loan guarantees to rural businesses that serve communities of 50,000 or less. USDA also provides rural business loans through the Intermediary Relending Program (IRP), which provides loan funds at a one 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. Overall, USDA expects to retain or create 38,795 jobs in 2008 through its Business and Industry guarantee and the IRP loan programs. 78 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 (DLT). The Budget includes $4.1 billion in direct electric loans for distribution, transmission, and modification of existing generation facilities, $690 million in direct telecommunications loans, $300 million in broadband loans, and $25 million in DLT grants. Since 1992, RUS electric loans have been used primarily to finance transmission, distribution, and upgrades to generation facilities. During this time, generation has been deregulated and has become a more commercial operation. With the increased needs for all aspects of electricity provision and to ensure adequate funding for rural areas, RUS loans will continue to focus on transmission, distribution, and upgrading generation facilities. Construction of new generation facilities should be financed through the commercial market. The Rural Telephone Bank successfully dissolved in FY2006. All stock was redeemed during 2006. Loans approved in prior years, but not disbursed are still available for borrowers. 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 2.9 percent in 2006, compared to 3.1 percent in 2005. 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 0.4 percent in 2006, as compared to 0.45 percent in 2005. 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 2006, FSA provided loans and loan guarantees to approximately 27,730 family farmers totaling $3.15 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 increas- ANALYTICAL PERSPECTIVES ing. 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. In 2008, FSA proposes to make $3.4 billion in direct and guaranteed loans through discretionary programs. FSA uses the Farm Business Plan (FBP) to perform financial planning, analysis, and management of the loan portfolio. Several enhancements of the web equity FBP were put into service in 2006. These include a youth loan credit action and availability of additional reports. In 2007, the FBP will be modified to enable credit reports to be ordered on applicants to expedite application processing. FSA is continuing its comprehensive project to streamline all farm loan program regulations, handbooks, and information collections. This is a major effort to streamline the program and reduce the burden for both applicants and the Agency, resulting in an improvement in loan processing efficiencies. 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 The financial condition of the System’s banks and associations remain sound. The ratio of capital to assets decreased to 15.7 percent as of September 30, 2006 from 16.8 percent for the same period ended in 2005 as asset growth outpaced capital growth. As of September 30, 2006, capital consisted of $2.2 billion in restricted capital held by the Farm Credit System Insurance Corporation (FCSIC) and $22.0 billion of unrestricted capital—a record level. Nonperforming loans decreased, and earnings increased, although rising short-term interest rates and competitive conditions compressed interest margins. The examinations by the Farm Credit Administration (FCA), the System’s Federal regulator, also show the strong financial condition of FCS institutions. As of September 2006, all FCS institutions had one of the top two examination ratings (1 or 2 in a 1–5 scale). Assets grew at a brisk pace (9.5 percent annual rate) over the past four years, while the number of FCS institutions decreased due to consolidation. In September 2002, there were seven banks and 104 associations; by September 2006, there were five banks and 96 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 the joint and several liability of the System banks. As of September 30, 2006, the assets in the 79 7. CREDIT AND INSURANCE Insurance Fund totaled $2.243 billion. Of that amount $40 million was allocated to the Allocated Insurance Reserve Accounts (AIRAs). As of September 30, 2006, the Insurance Fund as a percentage of adjusted insured debt was 1.78 percent in the unallocated Insurance Fund and 1.81 percent including the AIRAs. This was below the Secure Base target of 2 percent. During 2006, growth in System debt outpaced the capitalization of the Insurance Fund that occurs through investment earnings and the accrual of premiums. Over the 12 month period, ending September 30, 2006, the System’s loans outstanding grew by $12.6 billion, or 12.3 percent, while over the past three years they grew by $24.6 billion, or 26.9 percent. As required by law, borrowers are also stockholder owners of System banks and associations. As of September 30, 2006, the System had 459,635 stockholders. Loans to young, beginning, and small farmers and ranchers represented 12.3, 19.4, and 29.2 percent, respectively, of the total dollar volume of farm loans outstanding at the end of 2005. The percentage of loans to beginning farmers increased in 2005, while percentages to young and small farmers were slightly lower. Young, beginning, and small farmers are not mutually exclusive groups, and thus, cannot be added across categories. Providing credit and related services to young, beginning, and small farmers and ranchers is a legislative 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 associated with its portfolio concentration on agriculture and rural America. While this sector is currently healthy, it is subject to risk due to rapidly rising farm real estate prices, volatile commodity prices and input costs, uncertainty regarding changes in government farm policy and trade agreements, weather-related catastrophes, animal and plant diseases, and offfarm employment opportunities. Farmer Mac Farmer Mac was established in 1988 to facilitate a secondary market for farm real estate and rural housing loans. The Farm Credit System Reform Act of 1996 expanded Farmer Mac’s role from a guarantor of securities backed by loan pools to a direct purchaser of mortgages, enabling it to form pools to securitize. This change increased Farmer Mac’s ability to provide liquidity to agricultural mortgage lenders. Farmer Mac continues to meet core capital and regulatory risk-based capital requirements. Farmer Mac’s total program activity (loans purchased and guaranteed, AgVantage bond assets, and real estate owned) as of September 30, 2006, totaled $7.1 billion. That volume represents an increase of 38 percent from program activity at September 30, 2005. Of total program activity, $2.1 billion were on-balance sheet loans and agricultural mortgage-backed securities, and $5.0 billion were off-balance sheet obligations. Total assets were $4.9 billion at the close of the third quarter, with nonprogram investments accounting for $2.7 billion of those assets. Farmer Mac’s net income for first three quarters of 2006 was $23.9 million, a decrease of 39 percent from restated amounts for the same period in 2005. In November 2006, Farmer Mac restated its financial results for 2005 and other periods to remove the impact of accounting for derivatives as hedges against interest rate movements. As a result, there could be significant fluctuation in net income in future periods. However, Farmer Mac does not expect the accounting change to impact its ability to carry out its business plans or have any effect on its business model. 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 agencies (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 ‘‘level the playing field’’ strategically 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 Export Credit Guarantee Programs (also known as 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. 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 80 ANALYTICAL PERSPECTIVES a stable system of exchange rates through the International Monetary Fund 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. A loan or credit may not be made for more than six months in any 12-month period unless the President gives the Congress a written statement that unique or emergency circumstances require the loan or credit be for more than six months. 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. DCA provides non-sovereign 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 host-country 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 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. Self-Sufficient Export-Import Bank The Budget estimates that the Bank’s export credit support will total $18.7 billion, and will be funded entirely by receipts collected from the Bank’s customers. The Bank estimates it will collect $146 million in 2008 in excess of expected losses on transactions authorized in 2008 and prior years. These amounts will be used to: (1) cover the estimated costs for that portion of new authorizations where fees are insufficient to cover expected losses; and (2) to cover administrative expenses. IV. INSURANCE PROGRAMS Deposit Insurance 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. Since its creation, the system has undergone a series of reforms, most recently in 2006. While the deposit insurance system for banks and thrifts today is generally sound and well managed, inherent weaknesses in the system prompted the Administration to propose, and the Congress to enact, the Deposit Insurance Reform Act (part of the Deficit Re- duction Act of 2005) in February 2006. This package of reforms had several effects: it consolidated the Federal Deposit Insurance Corporation’s (FDIC) insurance funds (the Bank Insurance Fund and Savings Association Insurance Fund) into a new Deposit Insurance Fund, set new parameters on how the consolidated fund would be managed, adjusted the way that premiums for deposit insurance were calculated to ensure that all banks would pay premiums for Federal insurance on their insured deposits, and allowed for an increase of the coverage limits for Federal deposit insurance. These new authorities allow the FDIC to better manage the Deposit Insurance Fund and help avoid strain on financial institutions by spreading the cost of deposit insurance over time instead of having a potential for sharp premium increases when the economy may be under stress. The FDIC issued several new regulations during 2006 to implement the reforms in 2007. 7. CREDIT AND INSURANCE The FDIC insures deposits in banks and savings associations (thrifts). The National Credit Union Administration (NCUA) insures deposits (shares) in most credit unions (certain credit unions are privately insured). FDIC and NCUA insure deposits up to $100,000 per account. Under the Deposit Insurance Reform Act of 2005, the deposit insurance ceiling for retirement accounts will be increased to $250,000. In addition, beginning in 2010, and every five years thereafter, FDIC and NCUA will have the authority to increase deposit insurance coverage limits for retirement and non-retirement accounts based on inflation if the Boards of the FDIC and NCUA determine such an increase is warranted. As of September 30, 2006, FDIC insured $4.1 trillion of deposits at 8,743 commercial banks and thrifts, and NCUA insured $529 billion of deposits (shares) at 8,462 credit unions. Current Industry Conditions The banking and thrift sector has been in the midst of a sustained run of record profits and strong balance sheets. During calendar year 2006, insured banks and thrifts continued to report record-high net earnings, with the industry’s two highest-ever quarterly profits reported in the second and third quarters of 2006. In 2005 and 2006, no banks or thrifts failed—the longest period without a failure in the 73-year history of the FDIC. As of September 30, 2006, the FDIC classified 47 institutions with $4 billion in assets as ‘‘problem institutions’’ (institutions with the highest risk ratings), a historical low both in the number of institutions and dollar-value of assets thus classified. Despite these strong fundamentals, some risks remain. In particular, the residential real estate market has been showing signs of significant weakness in recent months, with several regional markets experiencing slower sales and stagnant or even falling property prices. According to the National Association of Realtors, U.S. median house prices stayed essentially flat during the second half of 2006, after four and half years when growth rates nationwide exceeded five percent. In addition, after the steady series of interest rate hikes by the Federal Reserve in 2005 and 2006, higher short-term interest rates are beginning to squeeze the interest margins of many banks (The interest margin is the difference between the interest rates the banks charge for loans and the interest rates that they pay to depositors). This tightening has begun to erode the proceeds from banks’ core business. Not only are higher interest rates squeezing banks, they are also squeezing borrowers. During the past few years, banks have issued an increasing number of non-traditional mortgages, i.e., loans that have adjustable payment terms that allow borrowers to have lower initial payments, while their overall debt burden stays constant or even increases. Studies have suggested that in the first half of 2006, as many as 30 percent of mortgages issued nationally were non-traditional. Federal regulators, including the Federal Reserve, Office of the Comptroller of the Cur- 81 rency (OCC), Office of Thrift Supervision (OTS), and FDIC, and industry analysts have been vocal in highlighting the spread of non-traditional lending products, and warned lenders and borrowers about the additional risks these products can pose if not properly managed. The regulators have raised these issues in testimony before Congress and in a variety of public forums, including guidance issued to the industry. The Office of the Comptroller of the Currency has reported that, as competition in lending has intensified, banks have been easing their standards for extending loans to individuals and businesses. This has led to concerns about maintaining credit quality in the nation’s lending markets. Separate, but related concerns have arisen in the area of ‘‘subprime’’ lending—loans to consumers with poor credit histories or who belong to groups that may not have previously had access to financing. This segment of the market has seen substantial growth in recent years, providing greater opportunity to these borrowers, but loans to subprime borrowers historically have higher rates of default. Although lenders charge higher rates of interest to subprime borrowers to compensate for the risk of default, with increased competition the spread (or additional interest charged) on subprime lending has fallen and may not fully cover the potential risk. In order to address some of these potential problems, especially in non-traditional mortgages and easing lending standards, during 2006 the Federal banking regulators (the Board of Governors of the Federal Reserve System, the FDIC, the OCC, and the OTS) issued guidance to banks and thrifts on managing exposure to non-traditional mortgages, and on the appropriate disclosure to consumers of clear and balanced information about the risks of these products. The regulators also issued guidance on commercial real estate which sought to mitigate potential problems with rising concentrations of lending in commercial real estate, an issue of regulatory concern in a number of smaller and midsized community banks. Also worthy of note is the increasing consolidation of the U.S. banking industry in recent years. As banks have merged or been acquired, the largest institutions have accounted for a growing share of total assets— whereas in 1984 depository institutions with over $10 billion in assets accounted for 42 percent of total assets in the industry, by 2004 the share of those institutions had risen to 73 percent. This has enabled larger banks and other institutions to diversify more effectively and obtain financing from the capital markets, but it has also meant that the failure of a single large insured institution could put a significant strain on the resources of the Federal deposit insurance funds. Recent Changes to Federal Deposit Insurance Funds Under the Deposit Insurance Reform Act of 2005, the FDIC’s Bank Insurance Fund (BIF) and its Savings Association Insurance Fund (SAIF) were merged into the new Deposit Insurance Fund (DIF) in June 2006. 82 At the end of September 2006, the DIF reserve ratio (ratio of insurance reserves to insured deposits) stood at 1.22 percent—$1.2 billion below the level that would meet the target reserve ratio. Under new authority provided by the passage of the Deposit Insurance Reform Act, the FDIC Board voted to establish a new set of premiums for the industry to recapitalize the DIF. The new premiums range from a minimum of five basis points (five cents per $100 of assessable deposits) up to as high as 43 basis points based on the assessed risk of an institution. The Deposit Insurance Reform Act of 2005 provided depository institutions that had paid deposit insurance premiums prior to 1996 (the last year the FDIC collected premiums) with $4.7 billion in credits toward premiums, most of which will likely be used by 2009. Taking these credits into consideration, the FDIC is expected to collect approximately $1.5 billion in new revenue during fiscal 2007 and 2008 combined. The National Credit Union Share Insurance Fund (NCUSIF), the Federal fund for credit unions that is analogous to the DIF for banks and thrifts, ended fiscal year 2006 with assets of $6.7 billion and an equity ratio of 1.29 percent, approaching the NCUA-set target ratio of 1.30 percent. Over the past five years, the NCUSIF’s equity ratio has gradually risen from about 1.27 percent, reflecting strong performance (and therefore few losses due to failures) in the credit union industry. Current Regulatory Issues A number of major regulatory initiatives are currently underway in the banking sector, which are likely to have a significant impact on the banking sector as a whole and, by extension, on the Federal deposit insurance system. For example, the Federal banking regulators (the Federal Reserve, FDIC, OCC and OTS) continue to work on a rulemaking that would implement the ‘‘International Convergence of Capital Measurement and Capital Standards: A Revised Framework’’ (‘‘Basel II’’). Since equity capital serves as a cushion against potential losses, banks with riskier asset portfolios should hold more equity capital. The original Basel Capital Accord (Basel I) adopted in 1989 is an international accord among financial regulators establishing a uniform capital standard for banks across nations. Under Basel I, bank assets are grouped into a small number of broad risk categories. A bank’s regulatory capital requirement is tied to the amount of its asset holdings in each risk category. During 2006, the Federal banking regulators proposed two separate but related rulemakings to implement the Revised Basel Capital Accord: the ‘‘Basel II’’ framework and an intermediate ‘‘Basel 1A’’ framework. In the proposed Basel II rule, U.S. regulators are considering requiring the ten or so largest banks (including those that have major international operations, complex financial structures and expertise) to use an advanced internal ratings-based approach to calculate ANALYTICAL PERSPECTIVES their credit risk capital requirements. The Basel II rulemaking would allow for greater sensitivity to risk in the portfolios banks hold. Rather than grouping assets into broad risk categories, capital requirements would be tied to banks’ internal assessments of the likelihood and severity of default losses from the assets they hold. The rules are also intended to allow capital requirements to more accurately account for the benefits or risk-mitigation activities undertaken by banks. The rulemaking would also require banks to hold capital to cover operational risk, which is not covered under the existing (Basel I) requirements. Implementation of the Basel II standard in Europe is scheduled to begin during 2007, more than a year before U.S. implementation would likely begin, and this delay has led to concerns about a competitive imbalance between U.S. and foreign banks. There are also concerns about competitive imbalance between U.S. banks, and for that reason, banks other than the ten largest U.S. banks would be able to choose between adopting the ‘‘Basel II’’ standard, the current ‘‘Basel I’’ system, and an alternative ‘‘Basel 1A’’ standard. The ‘‘Basel 1A’’ standard is intended to be more risksensitive than Basel I, but easier to implement than Basel II. The ‘‘Basel 1A’’ standard would provide additional risk-sensitivity through use of external credit ratings, and internal risk measures for some types of assets (i.e., loan-to-value ratios for mortgages). This new standard would allow banks to potentially lower their capital requirements and provide small- and mid-sized banks a means to stay competitive with the larger Basel II banks. The regulators are proposing to make the Basel 1A standard optional for banks, meaning that no small or medium-sized bank would be required to change its capital regime. The proposed text of both rules has been released for public comment, and regulators hope to finalize these rules in the near future. Pension Guarantees The Pension Benefit Guaranty Corporation (PBGC) insures pension benefits of workers and retirees in covered defined-benefit pension plans sponsored by private-sector employers. PBGC pays benefits, up to a guaranteed level, when a company with an underfunded pension plan meets the legal criteria to transfer its obligations to the pension insurance program. PBGC’s claims exposure is the amount by which qualified benefits exceed assets in insured plans. In the near term, the risk of loss stems from financially distressed firms with underfunded plans. In the longer term, loss exposure results from the possibility that healthy firms become distressed and well-funded plans become underfunded due to inadequate contributions, poor investment results, or increased liabilities. PBGC monitors companies with underfunded plans and acts to protect the interests of the pension insurance program’s stakeholders where possible. Under its Early Warning Program, PBGC works with companies to strengthen plan funding or otherwise protect the in- 83 7. CREDIT AND INSURANCE surance program from avoidable losses. However, PBGC’s authority to prevent undue risks to the insurance program is limited. As a result of a flawed pension funding system and exposure to losses from financially troubled plan sponsors, PBGC’s single-employer program incurred sub- stantial losses from underfunded plan terminations in 2001 through 2006. The table below shows the ten largest plan termination losses in PBGC’s history. Nine of the ten have come in the past five years. The program’s deficit at 2006 year-end stood at $18.1 billion 1 compared to a $9.7 billion surplus at 2000 year-end. LARGEST TEN CLAIMS AGAINST THE PBGC’S SINGLE-EMPLOYER INSURANCE PROGRAM, 1975–2006 Top 10 Firms 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Fiscal Years of Plan Terminations Percent of Total Claims (1975–2005) Claims (by firm) United Airlines .................. Bethlehem Steel ............... US Airways ...................... LTV Steel * ....................... National Steel ................... Pan American Air ............ Weirton Steel ................... Trans World Airlines ........ Kaiser Aluminum .............. Kemper Insurance ............ 2005 2003 2003, 2005 2002, 2003, 2004 2003 1991, 1992 2004 2001 2004 2005 $7,484,348,482 3,654,380,116 2,690,222,805 2,136,698,831 1,275,628,286 841,082,434 690,181,783 668,377,105 600,009,879 568,417,151 22.90% 11.20% 8.20% 6.50% 3.90% 2.60% 2.10% 2.00% 1.80% 1.70% Top Ten Total .............................. All Other Total ............................. .............................. .............................. 20,609,346,871 12,017,433,400 63.20% 36.80% TOTAL ..................................... .............................. $32,626,780,271 100.00% Due to rounding, percentages may not add up to 100 percent. Data in this table have been calculated on a firm basis and include all plans of each firm. Values and distributions are subject to change as PBGC completes its reviews and establishes termination dates. * Does not include 1986 termination of a Republic Steel plan sponsored by LTV. Sources: PBGC Fiscal Year Closing File (9/30/06), PBGC Case Administration System, and PBGC Participant System (PRISM). In February 2005 the Administration proposed comprehensive reforms to address structural flaws in the statutory plan funding requirements and in the design of the insurance program. The proposal sought to strengthen funding for workers’ defined-benefit pensions; provide more accurate information about pension liabilities and plan underfunding; and enable PBGC to meet its obligations to participants in terminated pension plans. Many of the President’s reforms were incorporated into the Deficit Reduction Act (DRA) of 2005, enacted in February 2006, and the Pension Protection Act of 2006 (PPA), enacted in August 2006. The legislation made significant structural changes to the retirement system. But while the PBGC has sufficient liquidity to meet its obligations for a number of years, neither the single-employer nor multiemployer program has the resources to satisfy fully the agency’s long-term obligations to plan participants. Further reforms are needed to address the $19 billion gap that still exists between PBGC’s liabilities and its assets. The Budget reproposes non-enacted premium reforms from the Administration’s comprehensive pension reform proposal that were not included in the DRA or the PPA, including: • Authorizing PBGC’s Board of Directors to set the variable premium rate. • Extending the variable rate premium to a plan’s non-vested as well as its vested liabilities. These reforms will improve PBGC’s financial condition and safeguard the future benefits of American workers. The Administration is committed to pension reform that will ultimately restore the PBGC to solvency. 1 The 2006 year-end single-employer program deficit of $18.1 billion was less than the $22.8 billion deficit at the end of 2005. The improvement in PBGC’s financial condition was driven primarily by the airline relief provisions in the Pension Protection Act of 2006, which resulted in large plans previously classified as probable terminations being changed from the probable classification to the reasonably possible classification in FY 2006. This credit was partially offset by $3.1 billion in financial losses. Disaster Insurance Flood Insurance The Federal Government provides flood insurance through the National Flood Insurance Program (NFIP), which is administered by the Federal Emergency Management Agency 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 84 the end of 2006, the program had over 5.3 million policies in more than 20,200 communities with over $1 trillion 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 affordable 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. However, structures built prior to flood mapping and NFIP floodplain management requirements, which make up 26 percent of the total policies in force, pay less than fully actuarial rates. 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 floodplains and have mortgages from federally regulated lenders. These strategies have resulted in policy growth of nearly 14 percent in 2006 with nearly 660,000 new policies. The most significant participation increases were in vulnerable coastal states, such as Mississippi (58 percent, 25,371 policy increase), Texas (30 percent, 140,834 policy increase), Louisiana (25 percent, 98,096 policy increase), and Florida (11 percent, 208,716 policy increase). However, the program has also seen significant growth within some in-land states such as Idaho (24 percent, 1,357 policy increase), based on greater awareness of the need for flood insurance protection. DHS also has a multi-pronged strategy for reducing future flood damage. The NFIP offers flood mitigation assistance grants to assist flood victims to rebuild to current building codes, including base flood elevations, thereby reducing future flood damage costs. In addition, two grant programs targeted toward repetitive and severe repetitive loss properties not only help owners of high-risk property, but also reduce the disproportionate drain on the National Flood Insurance Fund these properties cause through acquisition, relocation, or elevation. As a result of the 2005 hurricane season, the number of repetitive and severe repetitive loss properties increased significantly, and the Budget proposes to expand the severe repetitive loss grant program to mitigate the future impact of these high-risk properties. DHS is working to ensure that all of the flood mitigation grant programs are closely integrated, resulting in better coordination and communication with State and local governments. Further, through the Community Rating System, DHS adjusts premium rates to encourage community and State mitigation activities beyond those required by the NFIP. These efforts, in addition to the minimum NFIP requirements for floodplain management, save over $1 billion annually in avoided flood damages. ANALYTICAL PERSPECTIVES The program’s reserve account, which is a cash fund, has sometimes had expenses greater than its revenue, forcing the NFIP to borrow funds from the Treasury in order to meet claims obligations. However, since the program began in 1968 until 2005, the program has repaid all borrowed funds with interest. However, hurricanes Katrina, Rita, and Wilma generated more flood insurance claims than the cumulative number of claims from 1968 to 2004. These three storms resulted in over 234,000 claims with total claims payments expected to be approximately $21 billion. As a result, the Administration and the Congress have increased the borrowing authority to $20.8 billion to date in order to make certain that all claims could be paid. The catastrophic nature of the 2005 hurricane season has also triggered an examination of the program, and the Administration has worked with the Congress to improve the program, based on the following principles: protecting the NFIP’s integrity by covering existing commitments; phasing out subsidized premiums in order to charge fair and actuarially sound premiums; increasing program participation incentives and improving enforcement of mandatory participation in the program; increasing risk awareness by educating property owners; and reducing future risks by implementing and enhancing mitigation measures. Although flood insurance reform was not achieved in 2006, the Administration looks forward to continuing to work with the Congress to enact program reforms that further mitigate the impact of flood damages and losses. Crop Insurance Subsidized Federal crop insurance administered by USDA’s Risk Management Agency (RMA) assists farmers in managing yield and revenue shortfalls due to bad weather or other natural disasters. The 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 Government and also by the commercial reinsurance market to manage their individual risk portfolio. The Federal Government reimburses private companies for a portion of 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 Budget includes a proposal to implement a participation fee in the Federal crop insurance program. The proposed participation fee would initially be used to fund modernization of the existing information technology (IT) system and would supplement the annual appropriation provided by the Congress. Subsequently, the fee would be shifted to maintenance and would be expected to reduce the annual appropriation. The participation fee would be charged to insurance companies participating in the Federal crop insurance program; based on a rate of about one-half cent per dollar of premium sold, the fee is expected to be sufficient 85 7. CREDIT AND INSURANCE to generate about $15 million annually beginning in 2009. The existing IT system is nearing the end of its useful life and recent years have seen increases in ‘‘down-time’’ resulting from system failures. Over the years, numerous changes have occurred in the Federal crop insurance program; the development of revenue and livestock insurance, for example, has greatly expanded the program and taxed the IT system due to new requirements, such as daily pricing, which were not envisioned when the existing IT system was designed. These new requirements contribute to increased maintenance costs and limit RMA’s ability to comply with Congressional mandates pertaining to data reconciliation with the Farm Service Agency. The participation fee will alleviate these problems. There are various types of insurance programs. The most basic type of coverage is catastrophic coverage (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. Higher levels of coverage, called buy-up coverage, are also available. A premium is charged for buy-up coverage. The premium is determined by the level of coverage selected and varies from crop to crop and county to county. For the 10 principal crops, which account for about 80 percent of total liability, the most recent data shows that over 75 percent of eligible acres participated in the crop insurance program. RMA offers both yield and revenue-based insurance products. 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 or yield crop insurance by adding price variability to production history. USDA is continuously trying to develop new products or expand existing products in order to cover more types of crops. In 2006, a Livestock Risk Protection for Lamb pilot was introduced, and Adjusted Gross Revenue-Lite was made available in five additional States. In addition, two new Group Risk Protection risk management tools for pasture, rangeland, and forage protection were approved for the 2007 crop year. These innovative pilot programs are based on vegetation greenness and rainfall indices and were developed to provide livestock producers the ability to purchase insurance protection for losses of forage produced for grazing or harvested for hay. RMA also expanded the Group Risk Income Protection plans for cotton, wheat, and grain sorghum for the 2007 crop year. And, it is expected that the Livestock Gross Margin pilot program will be expanded to include cattle in 2007. RMA is also making substantial improvements to the Florida Fruit Tree pilot program to enhance coverage and make it more effective for loss due to hurricane. RMA continues to pursue a number of avenues to increase program participation among underserved States and commodities by working on declining yield issues and looking at discount programs for good experienced producers who pose less risk. For more information and additional crop insurance program details, please reference RMA’s web site: (www.rma.usda.gov). Insurance Against Security-Related Risks Terrorism Risk Insurance On November 26, 2002, President Bush signed into law the Terrorism Risk Insurance Act of 2002 (TRIA). 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 on many new construction projects, increasing business costs for the insurance that was available, and substantially shifting 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, three-year Federal program that provided a system of shared public and private compensation for insured commercial property and casualty losses arising from acts of terrorism (as defined by the Act). Under the Act, insurance companies offering commercial property and casualty insurance policies were required to make available to their policyholders coverage for losses from acts of terrorism. In the event of a terrorist attack on private businesses and others covered by this program, the Federal Government would initially cover 90 percent of the insured losses above each insurance company’s deductible (as specified in the Act). The Act also provided authority for the Department of the Treasury to recoup any Federal payments via surcharges on policyholders in future years. In December 2005, the Congress passed and the President signed the Terrorism Risk Insurance Extension Act, which extended the program for two years, through December 31, 2007, and substantially narrowed the scope of the program. The 2005 Act significantly reduced taxpayers’ exposure by excluding certain lines of insurance from Federal coverage: commercial automobile, burglary and theft, surety, professional liability, and farm owners multiple peril insurance were removed from the program altogether. In addition, the 2005 Act increased insurers’ deductibles from 15 percent of direct earned premiums for calendar year 2005 to 17.5 percent in 2006 and 20 percent in 2007. The extension also decreased the Federal co-payment for insured losses above the insurers’ deductibles from 90 percent of insured losses in calendar year 2005 and 2006 to 85 percent of insured losses in 2007. The new legislation also increased the trigger amount for Federal payments, from the original $5 million in aggregate insured losses from an act of terrorism to 86 $50 million in calendar year 2006 and $100 million in calendar year 2007. TRIA imposes a cap of $100 billion on total insurer losses from terrorist attacks that the Federal program would cover. Under the statute, the Congress would determine the procedures to govern any payments for losses beyond $100 billion in separate legislation. In addition to the reforms to the scope of the program, the 2005 Act required the President’s Working Group on Financial Markets (PWG) to conduct a study on the availability and affordability of terrorism risk coverage under the program and to report the results to the Congress by September 30, 2006. The PWG report found that the program had achieved its goals of supporting the insurance industry post September 11, 2001 and that the market for terrorism risk insurance (in terms of availability and affordability) has improved since September 11, 2001. The TRIA program was never intended to be permanent, but rather was intended to help stabilize the insurance industry during a time of significant transition. It has been successful in providing a temporary transition to allow for greater market development. 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 addition to a number of short term responses, the Congress also passed the Homeland Security Act of 2002 (P.L. 107–296.) Among other provisions, this Act required the Secretary to provide additional war risk insurance coverage to air carriers insured for Third-Party War Risk Liability as of June 19, 2002, as authorized under existing law. The Continuing Appropriations Act for FY 2007, as amended (P.L. 109–383) further extended the requirement to provide insurance coverage through the duration of the resolution, February 15, 2007, and the program is expected to be continued through at least August 31, 2007. Acting on behalf of the Secretary, the FAA insurance policies made available under this Act cover: (i) hull losses at agreed value; (ii) death, injury, or property loss to passengers or crew, the limit being the ANALYTICAL PERSPECTIVES same as that of the air carrier’s commercial coverage before September 11, 2001; and (iii) third party liability, the limit generally being twice that of such coverage. The Secretary is also authorized to limit an air carrier’s third party liability to $100 million, when the Secretary certifies that the loss is from an act of terrorism. This program provides airlines with financial protection from war risk occurrences, and thus allows airlines to meet the basic requirement for ‘‘adequate liability coverage’’ found in most aircraft leases and in government regulation. Without such coverage, many airlines might be grounded. Currently, aviation war risk insurance coverage is generally available from private insurers, but premiums are significantly higher in the private market. Private insurance is also available for third-party liability and for occurrences involving weapons of mass destruction, albeit to a lesser extent. Currently 75 air carriers are insured by the Department of Transportation. 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 for these policies are deposited into the Aviation Insurance Revolving Fund. In 2006, the Fund earned approximately $169 million in premiums for insurance provided by DOT, and it is anticipated that an additional $99 million in premiums will be earned in 2007. At the end of 2006, the balance in the Aviation Insurance Revolving Fund available for payment of future claims was $742 million. Although no claims have been paid by the Fund since 2001, the balance in the Fund would be inadequate to meet either the coverage limits of the largest policies in force ($4 billion) or to meet a series of large claims in succession. The Federal Government would pay any claims by the airlines that exceed the balance in the Aviation Insurance Revolving Fund. The Administration does not support a straight extension of this program, which crowds out private sector mechanisms for managing risk. The Administration is committed to working with the Congress to reform this program, and to ensure that air carriers more equitably share in the risks associated with this program. 87 7. CREDIT AND INSURANCE Chart 7-2. Face Value of Federal Credit Outstanding Dollars in trillions 1.4 1.2 Loan Guarantees 1.0 0.8 0.6 0.4 Direct Loans 0.2 0 1970 TABLE 7–1. 1975 1980 1985 1990 1995 2000 2005 ESTIMATED FUTURE COST OF OUTSTANDING FEDERAL CREDIT PROGRAMS (In billions of dollars) Program Direct Loans: 2 Federal Student Loans ....................................................................... Farm Service Agency (excl. CCC), Rural Development, Rural Housing .......................................................................................... Rural Utilities Service and Rural Telephone Bank ........................... Housing and Urban Development ..................................................... Export-Import Bank ............................................................................. Public Law 480 ................................................................................... Agency for International Development .............................................. Commodity Credit Corporation .......................................................... Disaster Assistance ............................................................................ VA Mortgage ...................................................................................... Other Direct Loan Programs .............................................................. Total Direct Loans .............................................................................. Guaranteed Loans: 2 FHA Mutual Mortgage Insurance Fund ............................................. VA Mortgage ...................................................................................... Federal Student Loans ....................................................................... FHA General/Special Risk Insurance Fund ...................................... Small Business 3 ................................................................................. Export-Import Bank ............................................................................. International Assistance ..................................................................... Farm Service Agency (excl. CCC), Rural Development, Rural Housing .......................................................................................... Commodity Credit Corporation .......................................................... Maritime Administration ...................................................................... Air Transportation Stabilization Program ........................................... Government National Mortgage Association (GNMA) 3 .................... Other Guaranteed Loan Programs .................................................... Outstanding 2005 Estimated Future Costs of 2005 Outstanding 1 Outstanding 2006 Estimated Future Costs of 2006 Outstanding 1 113 11 116 16 43 34 12 10 9 8 3 4 1 11 9 2 2 5 4 3 1 1 ........................ 3 43 38 11 7 8 7 2 7 1 12 10 2 3 2 4 3 1 2 ........................ 4 247 41 251 47 336 206 289 90 73 36 22 2 3 31 3 2 2 2 317 211 325 98 67 36 22 3 3 52 1 2 2 2 30 2 3 1 ........................ 8 1 ........................ ........................ 1 * 1 31 3 3 ........................ ........................ 6 ........................ ........................ ........................ ........................ * 1 88 ANALYTICAL PERSPECTIVES TABLE 7–1. ESTIMATED FUTURE COST OF OUTSTANDING FEDERAL CREDIT PROGRAMS— Continued (In billions of dollars) Program Outstanding 2005 Estimated Future Costs of 2005 Outstanding 1 Outstanding 2006 Estimated Future Costs of 2006 Outstanding 1 Total Guaranteed Loans .................................................................... 1,096 48 1,120 66 Total Federal Credit ......................................................................... 1,343 89 1,371 113 * $500 million or less. 1 Direct 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 data are excluded from the totals because they are secondary guarantees on loans guaranteed by FHA, VA and RHS. Certain SBA data are excluded from the totals because they are secondary guarantees on SBA’s own guaranteed loans. 89 7. CREDIT AND INSURANCE Table 7–2. REESTIMATES OF CREDIT SUBSIDIES ON LOANS DISBURSED BETWEEN 1992–2006 1 (Budget authority and outlays, in millions of dollars) Program 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Agriculture: Agriculture credit insurance fund ................................. Farm storage facility loans ........................................... Apple loans ................................................................... Emergency boll weevil loan ......................................... Distance learning and telemedicine ............................. Rural electrification and telecommunications loans .... Rural telephone bank ................................................... Rural housing insurance fund ...................................... 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 .................... 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 ............ 921 –1 –2 ............ 1 –42 ............ –29 –1 –1 3 65 ............ 10 –7 1 1 –1 101 –3 –435 –1 –3 –1 –348 –112 –701 –8 ............ * –1 265 –7 –64 ............ ............ –84 33 –44 –147 7 * * 1 143 –6 –200 –2 –3 –34 –43 ............ –2 –1 * 3 7 –197 –17 109 * –2 –73 –239 ............ –14 ............ * ............ ............ ............ ............ ............ ............ ............ ............ –26 ............ Commerce: Fisheries finance ........................................................... ............ ............ ............ ............ ............ –19 –1 –3 ............ 1 –15 –12 Defense: Military housing improvement fund .............................. ............ ............ ............ ............ ............ Education: Federal direct student loan program: 3 Volume reestimate ................................................... Other technical reestimate ....................................... College housing and academic facilities loans ........... ............ ............ ............ ............ * –4 –1 ............ 3 ............ ............ –83 ............ ............ 172 ............ 22 –383 ............ ............ –2,158 ............ –6 560 –1 ............ ............ ............ 43 3,678 ............ ............ 1,999 ............ ............ 855 ............ ............ 2,827 ............ ............ 2,674 11 Homeland Security: Disaster assistance ....................................................... ............ ............ ............ ............ 47 36 –7 –6 * 4 * * Interior: Bureau of Reclamation loans ....................................... Bureau of Indian Affairs direct loans ........................... Assistance to American Samoa ................................... ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ 1 ............ 3 5 ............ 3 –1 ............ –9 –1 ............ –14 2 ............ ............ * * 17 * * 1 * ............ * 1 2 State Repatriation loans ......................................................... ............ Transportation: High priority corridor loans ........................................... Alameda corridor loan .................................................. Transportation infrastructure finance and innovation .. Railroad rehabilitation and improvement program ...... ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ –4 ............ ............ ............ ............ ............ ............ ............ ............ –3 ............ ............ ............ ............ ............ ............ ............ ............ –58 ............ ............ ............ ............ 18 ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ –12 ............ –5 ............ ............ 3 –14 ............ ............ –11 –11 ............ ............ 7 –1 Treasury: Community development financial institutions fund .... ............ ............ ............ ............ 1 ............ ............ * –1 * –1 1 Veterans Affairs: Veterans housing benefit program fund ...................... Native American veteran housing ................................ Vocational Rehabilitation Loans ................................... 76 ............ ............ –72 ............ ............ 465 ............ ............ –111 ............ ............ –52 ............ ............ –107 ............ ............ –697 ............ ............ 17 –3 * –178 * * 987 * * –44 * –1 –76 1 1 Environmental Protection Agency: Abatement, control and compliance ............................. ............ ............ ............ ............ ............ 3 –1 * –3 * * * ............ 13 4 1 152 –166 119 –397 –64 –41 –7 –6 ............ ............ ............ ............ ............ ............ * ............ * ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ 36 ............ –4 ............ ............ –4 * –21 –47 3 –104 –7 54 72 –3 Small Business Administration: Business loans .............................................................. Disaster loans ............................................................... ............ ............ ............ ............ ............ –193 ............ 246 ............ –398 1 –282 –2 –14 1 266 25 589 ............ 196 –16 61 –4 258 Other Independent Agencies: Export-Import Bank direct loans ................................... Federal Communications Commission ......................... 37 ............ ............ ............ ............ 4,592 ............ 980 –177 –1,501 157 –804 117 92 –640 346 –305 380 111 732 –257 –24 –227 11 12 –51 96 ............ –31 205 40 –36 –33 –22 –162 20 DIRECT LOANS: 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 .............................................................. LOAN GUARANTEES: Agriculture: Agriculture credit insurance fund ................................. 90 ANALYTICAL PERSPECTIVES Table 7–2. REESTIMATES OF CREDIT SUBSIDIES ON LOANS DISBURSED BETWEEN 1992–2006 1—Continued (Budget authority and outlays, in millions of dollars) Program 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Agriculture resource conservation demonstration ........ Commodity Credit Corporation export guarantees ...... Rural development insurance fund .............................. Rural housing insurance fund ...................................... Rural community advancement program 2 ................... ............ –426 ............ 7 ............ ............ 343 –3 –10 –10 ............ ............ ............ ............ ............ ............ ............ ............ 109 41 ............ ............ ............ ............ ............ 2 –1,410 ............ 152 63 ............ ............ ............ –56 17 1 –13 ............ 32 91 –1 –230 ............ 50 15 * –205 ............ 66 29 * –366 34 44 –64 ............ –232 ............ ............ ............ Commerce: Fisheries finance ........................................................... Emergency steel guaranteed loans ............................. Emergency oil and gas guaranteed loans ................... ............ ............ ............ ............ ............ ............ –2 ............ ............ ............ ............ ............ ............ ............ ............ –3 ............ * –1 ............ * 3 50 * * * * 1 3 * * –75 –1 1 –13 * Defense: Military housing improvement fund .............................. Defense export loan guarantee ................................... Arms initiative guaranteed loan program ..................... ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ –3 ............ ............ –1 –5 ............ –3 ............ ............ –5 ............ 20 Education: Federal family education loan program: 3 Volume reestimate ........................................................ Other technical reestimate ........................................... 535 60 99 ............ ............ ............ –13 –140 –60 667 –42 –3,484 ............ ............ 277 –2,483 ............ –3,278 ............ 1,348 ............ 6,837 ............ –3,399 Health and Human Services: Heath center loan guarantees ..................................... Health education assistance loans .............................. ............ ............ ............ ............ ............ ............ ............ ............ 3 ............ ............ ............ * ............ * –5 ............ –37 1 –33 * –18 * –20 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 ....................................... ............ ............ ............ ............ –110 ............ ............ ............ –340 –25 ............ ............ ............ ............ 743 ............ ............ ............ 3,789 79 ............ ............ ............ ............ ............ –6 ............ ............ 2,413 –217 * ............ ............ –1,308 –403 –1 –1 ............ 1,100 77 * 1 19 5,947 352 –3 4 –10 1,979 507 –1 * –2 2,842 238 * –4 4 636 –1,254 Interior: Bureau of Indian Affairs guaranteed loans .................. ............ 31 ............ ............ ............ –14 –1 –2 –2 * 15 5 Transportation: Maritime guaranteed loans (Title XI) ........................... Minority business resource center ............................... ............ ............ ............ ............ ............ ............ –71 ............ 30 ............ –15 ............ 187 1 27 ............ –16 * 4 * –76 ............ –11 * Treasury: Air transportation stabilization program ....................... ............ ............ ............ ............ ............ ............ ............ 113 –199 292 –109 –38 Veterans Affairs: Veterans housing benefit fund program ...................... 334 –706 38 492 229 –770 –163 –184 –1,515 –462 –842 –525 ............ ............ –7 ............ ............ ............ ............ ............ –14 ............ ............ ............ ............ ............ ............ ............ ............ ............ –1 ............ –4 ............ ............ –15 1 2 48 –3 –2 –2 –2 ............ –5 2 –3 –11 ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............ –34 ............ ............ ............ ............ ............ ............ –76 ............ ............ –111 ............ ............ 188 7 ............ 34 14 International Assistance Programs: U.S. Agency for International Development: Development credit authority ................................... Micro and small enterprise development ................ Urban and environmental credit .............................. Assistance to the new independent states of the former Soviet Union ............................................. Loan Guarantees to Israel ....................................... Loan Guarantees to Egypt ....................................... Overseas Private Investment Corporation: OPIC guaranteed loans ........................................... 2006 2007 ............ ............ ............ ............ ............ ............ 5 77 60 –212 –21 –149 Small Business Administration: Business loans .............................................................. 257 –16 –279 –545 –235 –528 –226 304 1,750 1,034 –390 –268 Other Independent Agencies: Export-Import Bank guarantees ................................... 13 ............ ............ ............ –191 –1,520 –417 –2,042 –1,133 –655 –1,164 –579 Total .................................................................................. 727 –832 5,642 4,518 –3,641 –6,427 –1,854 –142 3,468 6,008 9,037 –3,111 * Less than $500,000. 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 programs represent a change in volume of loans disbursed in the prior years. 91 7. CREDIT AND INSURANCE Table 7–3. DIRECT LOAN SUBSIDY RATES, BUDGET AUTHORITY, AND LOAN LEVELS, 2006-2008 (In millions of dollars) 2006 Actual Agency and Program Subsidy Subsidy budget rate 1 authority 2007 Estimate Subsidy Subsidy budget rate 1 authority Loan levels 2008 Proposed Subsidy Subsidy budget rate 1 authority Loan levels Loan levels Agriculture: Agricultural credit insurance fund .................................................................................... 8.03 80 989 9.47 94 995 9.88 97 977 Farm storage facility loans .............................................................................................. –0.62 –1 111 0.25 .............. 74 1.12 1 93 Rural community advancement program ........................................................................ 5.90 83 1,406 9.00 90 1,009 .............. .............. .............. Rural electrification and telecommunications loans ........................................................ –0.50 –31 6,080 –0.71 –38 5,377 –0.51 –24 4,790 Distance learning, telemedicine, and broadband program ............................................. 2.14 7 333 1.94 22 1,155 2.15 6 300 Rural water and waste disposal ...................................................................................... .............. .............. .............. .............. .............. .............. 14.20 153 1,080 Rural community facility ................................................................................................... .............. .............. .............. .............. .............. .............. 5.55 17 302 Rural housing assistance grants ..................................................................................... 46.76 2 4 47.82 4 8 .............. .............. .............. Farm labor ........................................................................................................................ 44.59 9 20 47.95 5 10 43.26 6 14 Multifamily housing revitalization ..................................................................................... 46.76 1 2 47.82 1 2 .............. .............. .............. Rural housing insurance fund .......................................................................................... 14.57 199 1,357 13.22 195 1,463 17.23 7 39 Rural development loan fund .......................................................................................... 43.02 15 34 44.07 15 33 42.89 14 34 Rural economic development loans ................................................................................ 19.97 5 25 21.84 5 23 22.59 7 33 Public law 480 title I direct credit and food for progress ............................................... 67.92 27 39 .............. .............. .............. .............. .............. .............. Commerce: Fisheries finance .............................................................................................................. –3.34 –4 138 –6.21 –5 75 –10.58 –1 8 Defense—Military: Defense family housing improvement fund ..................................................................... 2.56 2 78 28.40 251 883 26.38 61 233 Education: College housing and academic facilities loans ............................................................... .............. .............. Federal direct student loan program ............................................................................... 4.98 1,807 15 36,305 57.72 2.43 179 474 310 .............. .............. .............. 19,503 2.35 509 21,636 100.00 1 1 .............. .............. .............. Health and Human Services: State grants and demonstrations .................................................................................... 100.00 140 140 Homeland Security: Disaster assistance direct loan ........................................................................................ 75.00 953 1,271 1.18 .............. Housing and Urban Development: FHA-mutual mortgage insurance ..................................................................................... .............. .............. 3 .............. .............. State: Repatriation loans ............................................................................................................ 1 64.99 1 Transportation: Federal-aid highways ....................................................................................................... 8.50 4 Railroad rehabilitation and improvement program .......................................................... .............. .............. 1 42 5.05 121 155 .............. .............. Treasury: Community development financial institutions fund ........................................................ 37.47 .............. 1 Veterans Affairs: Housing ............................................................................................................................. Native American veteran housing loan ........................................................................... General operating expenses ............................................................................................ 2.27 3 –13.79 –1 1.59 .............. 163 4 3 International Assistance Programs: Debt restructuring ............................................................................................................. .............. Overseas Private Investment Corporation ...................................................................... 3.63 60.14 37.47 25 1.73 .............. 25 50 .............. .............. 50 1 1 1 2,400 5.00 79 200 .............. .............. 1,581 600 1 3 5.25 18 –13.46 –1 2.00 .............. 335 4 3 29 .............. .............. 7 193 2.74 60.22 37.52 1 2 3.86 20 –14.48 –1 2.16 .............. 539 4 3 84 .............. .............. 10 350 3.22 255 .............. 16 500 Small Business Administration: Disaster loans .................................................................................................................. Business loans ................................................................................................................. 14.64 7.17 1,286 1 8,785 20 17.73 10.21 471 1 Export-Import Bank of the United States: Export-Import Bank loans ................................................................................................ 1.79 1 56 34.00 17 50 33.01 17 50 Total ............................................................................................................................. N/A 4,625 57,773 N/A 2,016 37,011 N/A 1,414 33,983 1 Additional information on credit subsidy rates is contained in the Federal Credit Supplement. N/A = Not applicable. 2,659 16.27 173 10 .............. .............. 1,064 25 92 ANALYTICAL PERSPECTIVES Table 7–4. LOAN GUARANTEE SUBSIDY RATES, BUDGET AUTHORITY, AND LOAN LEVELS, 2006-2008 (In millions of dollars) 2006 Actual Agency and Program Subsidy Subsidy budget rate 1 authority 2007 Estimate Subsidy Subsidy budget rate 1 authority Loan levels Agriculture: Agricultural credit insurance fund .................................................................................... 3.12 67 2,147 2.39 Commodity Credit Corporation export loans ................................................................... 4.88 71 1,453 3.00 Rural community advancement program ........................................................................ 3.99 38 933 4.02 Rural water and waste disposal ...................................................................................... .............. .............. .............. .............. Rural community facility ................................................................................................... .............. .............. .............. .............. Rural housing insurance fund .......................................................................................... 1.29 41 3,173 1.26 Rural business and industry ............................................................................................ .............. .............. .............. .............. Rural business investment ............................................................................................... 7.72 2 24 .............. Renewable energy ........................................................................................................... 6.45 2 24 6.49 Education: Federal family education loan ......................................................................................... 17,274 135,576 2,624 2.54 62 2,450 1,990 2.63 63 2,440 1,197 .............. .............. .............. .............. –0.82 –1 75 .............. 3.68 8 210 4,998 0.57 29 5,049 .............. 4.32 43 1,000 .............. .............. .............. .............. 154 9.69 19 195 Energy: Title 17 innovative technology loan guarantee program ................................................ .............. .............. .............. .............. .............. .............. .............. .............. 9,000 2 Housing and Urban Development: Indian housing loan guarantee fund ................................................................................ 2.42 5 190 Native Hawaiian Housing Loan Guarantee Fund ........................................................... .............. .............. .............. Native American housing block grant ............................................................................. 12.26 2 13 Community development loan guarantees ...................................................................... 2.20 5 220 FHA-mutual mortgage insurance ..................................................................................... –1.70 –880 51,783 FHA-general and special risk .......................................................................................... –1.74 –504 28,702 Interior: Indian guaranteed loan .................................................................................................... 4.75 5 117 5,860 Loan levels 99,481 3.50 .............. 6.65 Subsidy Subsidy budget rate 1 authority Loan levels 3,861 Health and Human Services: Health resources and services ........................................................................................ 12.74 65 61 48 .............. .............. 62 .............. .............. 10 2008 Proposed 3.42 .............. 88,062 3.88 8 .............. .............. .............. 2.35 2.35 11.99 2.17 –0.37 –2.01 5 1 2 3 –164 –413 251 43 17 136 44,418 20,499 2.42 2.42 12.12 2.20 –0.83 –2.54 6 1 2 1 –680 –242 367 41 17 45 81,996 9,514 6.45 5 87 6.52 5 86 Transportation: Minority business resource center program .................................................................... 1.85 .............. 2 1.82 .............. 18 2.03 .............. 18 Federal-aid highways ....................................................................................................... .............. .............. .............. 3.90 8 200 5.90 12 200 Railroad rehabilitation and improvement program .......................................................... .............. .............. .............. .............. .............. .............. .............. .............. 100 Maritime guaranteed loan (title XI) .................................................................................. .............. .............. .............. 5.93 4 67 .............. .............. .............. Veterans Affairs: Housing ............................................................................................................................. –0.32 –73 23,500 –0.36 –102 International Assistance Programs: Loan guarantees to Israel ................................................................................................ .............. .............. .............. .............. .............. Development credit authority ........................................................................................... 3.66 6 159 5.45 6 Overseas Private Investment Corporation ...................................................................... –1.96 –13 661 –1.22 –12 28,260 –0.37 –108 29,104 1,000 .............. .............. 110 6.03 21 950 –0.78 –8 1,000 348 950 Small Business Administration: Business loans ................................................................................................................. .............. .............. 19,936 .............. .............. 28,000 .............. .............. 28,000 Export-Import Bank of the United States: Export-Import Bank loans ................................................................................................ 1.16 12,094 0.06 15,860 –1.95 18,714 Total ............................................................................................................................. N/A 16,189 280,709 N/A 5,459 238,949 N/A 141 10 –367 2,727 290,400 ADDENDUM: SECONDARY GUARANTEED LOAN COMMITMENT LIMITATIONS GNMA: Guarantees of mortgage-backed securities loan guarantee .......................................... –0.23 –188 SBA: Secondary market guarantee .......................................................................................... .............. .............. Total, secondary guaranteed loan commitments .................................................. 1 N/A Additional information on credit subsidy rates is contained in the Federal Credit Supplement. N/A = Not applicable. –188 81,739 –0.21 –181 3,633 .............. .............. 85,372 N/A –181 86,000 –0.27 –209 77,400 12,000 .............. .............. 12,000 98,000 89,400 N/A –209 93 7. CREDIT AND INSURANCE Table 7–5. SUMMARY OF FEDERAL DIRECT LOANS AND LOAN GUARANTEES (In billions of dollars) Actual 1999 2000 2001 2002 Estimate 2003 2004 2005 2006 2007 2008 Direct Loans: Obligations .............................................................. Disbursements ........................................................ New subsidy budget authority ................................ Reestimated subsidy budget authority 1 ................ Total subsidy budget authority ............................... 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 56.3 50.6 2.1 3.8 6.0 57.8 46.6 4.7 3.1 7.8 37.0 31.4 2.0 3.6 5.5 34.0 32.9 1.4 ................ 1.4 Loan guarantees: Commitments 2 ........................................................ Lender disbursements 2 .......................................... New subsidy budget authority ................................ Reestimated subsidy budget authority 1 ................ Total subsidy budget authority ............................... 252.4 224.7 * 4.3 4.3 192.6 180.8 3.6 0.3 3.9 256.4 212.9 2.3 (7.1) (4.8) 303.7 271.4 2.9 (2.4) 0.5 345.9 331.3 3.8 (3.5) 0.3 300.6 279.9 7.3 2.0 9.3 248.5 221.6 10.1 3.5 13.6 280.7 256.0 17.2 7.0 24.2 239.0 210.1 5.2 (6.8) (1.6) 290.4 256.0 2.4 ................ 2.4 * Less than $50 million. 1 Includes interest on reestimate. 2 To avoid double-counting, totals exclude GNMA secondary guarantees of loans that are guaranteed by FHA, VA, and RHS, and SBA’s guarantee of 7(a) loans sold in the secondary market. 94 ANALYTICAL PERSPECTIVES Table 7–6. DIRECT LOAN WRITEOFFS AND GUARANTEED LOAN TERMINATIONS FOR DEFAULTS In millions of dollars Agency and Program As a percentage of outstanding loans 1 2006 Actual 2007 Estimate 2008 Estimate 2006 Actual 2007 Estimate 2008 Estimate Agriculture: Agricultural credit insurance fund .............................................................................................................. Commodity Credit Corporation fund .......................................................................................................... Rural community advancement program ................................................................................................... Rural electrification and telecommunications loans .................................................................................. Rural development insurance fund ............................................................................................................ Rural housing insurance fund .................................................................................................................... Rural development loan fund .................................................................................................................... Debt restructuring ....................................................................................................................................... 45 .................. 9 9 1 90 3 130 78 .............. 4 .............. 1 99 2 .............. 70 –1 4 .............. 1 112 1 .............. 0.67 .................. 0.10 0.02 0.05 0.36 0.69 24.95 1.21 ................ 0.04 ................ 0.05 0.40 0.45 ................ 1.15 –0.05 0.03 ................ 0.06 0.45 0.21 ................ Commerce: Economic development revolving fund ...................................................................................................... 1 1 .............. 10.00 14.28 ................ Education: Student financial assistance ...................................................................................................................... Perkins loan assets .................................................................................................................................... 14 .................. 14 .............. .............. 54 4.33 .................. 4.34 ................ ................ ................ Housing and Urban Development: Revolving fund (liquidating programs) ....................................................................................................... Guarantees of mortgage-backed securities ............................................................................................... .................. 4 1 24 1 20 .................. 40.00 16.66 342.85 25.00 285.71 Interior: Indian direct loan ........................................................................................................................................ .................. 1 1 .................. 4.34 5.00 Labor: Pension benefit guaranty corporation fund ............................................................................................... 87 93 93 .................. ................ ................ Veterans Affairs: Veterans housing benefit program ............................................................................................................ 31 3 3 3.07 0.33 0.25 International Assistance Programs: Debt restructuring ....................................................................................................................................... Overseas Private Investment Corporation ................................................................................................ .................. 15 2 6 29 15 .................. 2.41 0.81 0.82 12.03 1.78 Small Business Administration: Disaster loans ............................................................................................................................................. Business loans ........................................................................................................................................... 107 2 33 2 61 2 2.93 1.09 0.48 1.11 0.85 1.28 Other Independent Agencies: Debt reduction (ExIm Bank) ...................................................................................................................... Export-Import Bank .................................................................................................................................... Spectrum auction program ......................................................................................................................... Tennessee Valley Authority fund ............................................................................................................... 776 1,112 .................. 1 58 36 50 1 107 36 150 1 73.34 12.43 .................. 2.08 19.07 0.58 11.70 1.92 42.29 0.67 41.89 1.72 Total, direct loan writeoffs ................................................................................................................. 2,437 509 760 1.11 0.22 0.32 Agriculture: Agricultural credit insurance fund .............................................................................................................. Commodity Credit Corporation export loans ............................................................................................. Rural community advancement program ................................................................................................... Rural housing insurance fund .................................................................................................................... 37 24 115 249 48 52 135 107 48 61 158 242 0.35 0.97 2.44 1.69 0.47 1.72 3.01 0.68 0.45 1.91 3.41 1.52 Commerce: Fisheries finance ........................................................................................................................................ 4 .............. .............. 12.50 ................ ................ Defense—Military: Procurement of ammunition, Army ............................................................................................................ Family housing improvement fund ............................................................................................................ 11 .................. 15 7 .............. 7 42.30 .................. 78.94 1.40 ................ 1.43 Education: Federal family education loans .................................................................................................................. 5,614 6,962 7,671 1.94 2.14 2.12 Health and Human Services: Health education assistance loans ............................................................................................................ Health center loan guarantees .................................................................................................................. 16 .................. 24 1 21 .............. 0.93 .................. 1.74 2.63 1.92 ................ Housing and Urban Development: Indian housing loan guarantee .................................................................................................................. Native American housing block grant ....................................................................................................... FHA—Mutual mortgage insurance ............................................................................................................. FHA—General and special risk ................................................................................................................. 1 .................. 5,381 1,034 1 2 5,722 1,535 1 2 6,250 1,767 0.52 .................. 1.60 1.15 0.27 2.40 1.80 1.57 0.17 2.17 1.98 1.78 DIRECT LOAN WRITEOFFS GUARANTEED LOAN TERMINATIONS FOR DEFAULT 95 7. CREDIT AND INSURANCE Table 7–6. DIRECT LOAN WRITEOFFS AND GUARANTEED LOAN TERMINATIONS FOR DEFAULTS—Continued In millions of dollars Agency and Program 2006 Actual As a percentage of outstanding loans 1 2007 Estimate 2008 Estimate 2006 Actual 2007 Estimate 2008 Estimate Interior: Indian guaranteed loans ............................................................................................................................ 1 5 5 0.31 1.57 1.47 Transportation: Maritime guaranteed loans (Title XI) ......................................................................................................... .................. 35 32 .................. 1.19 1.16 Veterans Affairs: Veterans housing benefit program ............................................................................................................ 2,207 5,792 5,382 1.07 2.74 2.36 International Assistance Programs: Micro and small enterprise development .................................................................................................. Urban and environmental credit program ................................................................................................. Development credit authority ..................................................................................................................... Overseas Private Investment Corporation ................................................................................................ 1 32 .................. 118 .............. 11 2 200 1 12 2 55 7.14 1.93 .................. 3.28 ................ 0.72 0.98 4.94 16.66 0.86 0.73 1.22 Small Business Administration: Business loans ........................................................................................................................................... 1,200 1,141 1,151 1.63 1.69 1.60 Other Independent Agencies: Export-Import Bank .................................................................................................................................... 217 225 225 0.60 0.61 0.58 Total, guaranteed loan terminations for default .............................................................................. 16,262 22,022 23,093 1.07 1.43 1.44 Total, direct loan writeoffs and guaranteed loan terminations ..................................................... 18,699 22,531 23,853 1.08 1.28 1.30 Agriculture: Agricultural credit insurance fund .............................................................................................................. 3 5 7 5.76 7.81 10.00 Commerce: Fisheries finance ........................................................................................................................................ 5 .............. .............. 13.88 ................ ................ Education: Federal family education loans .................................................................................................................. 990 1,121 1,185 4.40 4.57 4.70 Housing and Urban Development: FHA—Mutual mortgage insurance ............................................................................................................. FHA—General and special risk ................................................................................................................. .................. 276 9 25 1 22 .................. 6.23 2.25 0.51 1.69 0.35 Interior: Indian guaranteed loans ............................................................................................................................ 1 2 2 7.69 11.11 10.00 Treasury: Air transportation stabilization guaranteed loans ...................................................................................... 39 54 .............. 31.20 72.00 ................ International Assistance Programs: Overseas Private Investment Corporation ................................................................................................ 1 8 11 0.46 2.29 2.98 Small Business Administration: Business loans ........................................................................................................................................... Pollution control equipment ........................................................................................................................ 1,012 8 281 .............. 279 .............. 19.04 40.00 5.52 ................ 5.35 ................ Other Independent Agencies: Export-Import Bank .................................................................................................................................... 4 .............. .............. 3.41 ................ ................ Total, writeoffs of loans receivable ................................................................................................... 2,339 1,505 1,507 6.18 3.85 3.72 ADDENDUM: WRITEOFFS OF DEFAULTED GUARANTEED LOANS THAT RESULT IN LOANS RECEIVABLE 1 Average of loans outstanding for the year. 96 ANALYTICAL PERSPECTIVES Table 7–7. APPROPRIATIONS ACTS LIMITATIONS ON CREDIT LOAN LEVELS 1 (In millions of dollars) Agency and Program 2006 Actual 2007 Estimate 2008 Estimate DIRECT LOAN OBLIGATIONS Agriculture: Agricultural credit insurance fund ................................................................................................................................................................ P.L. 480 ........................................................................................................................................................................................................ 936 39 933 ...................... 917 ..................... Commerce: Fisheries finance .......................................................................................................................................................................................... 138 75 8 Education: Historically black college and university capital financing .......................................................................................................................... 208 216 ..................... Homeland Security: Disaster assistance ...................................................................................................................................................................................... 1,270 25 25 Housing and Urban Development: FHA-general and special risk ...................................................................................................................................................................... FHA-mutual mortgage insurance ................................................................................................................................................................. 50 50 50 50 50 50 State: Repatriation loans ........................................................................................................................................................................................ 1 1 1 Transportation: Railroad rehabilitation and improvement direct loans ................................................................................................................................ .................. ...................... 600 Treasury: Community development financial institutions fund .................................................................................................................................... 11 8 6 Veterans Affairs: Vocational rehabilitation ............................................................................................................................................................................... Native American loans ................................................................................................................................................................................. 3 30 3 30 3 ..................... Small Business Administration: Business loans ............................................................................................................................................................................................. 20 10 25 Total, limitations on direct loan obligations ..................................................................................................................................... 2,756 1,401 1,685 Agriculture: Agricultural credit insurance fund ................................................................................................................................................................ 2,147 2,622 2,450 Energy: Title 17 innovative technology loan guarantees ......................................................................................................................................... .................. ...................... 9,000 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 ................................................................................................................................................................. 116 17 36 135 35,000 185,000 158 17 36 136 35,000 185,000 367 17 41 ..................... 35,000 185,000 Interior: Indian guaranteed and insured loans ......................................................................................................................................................... 117 87 86 Transportation: Minority business resource center .............................................................................................................................................................. Railroad rehabilitation and improvement loan guarantees ......................................................................................................................... 18 .................. 18 ...................... 18 100 International Assistance Programs: Development credit authority ....................................................................................................................................................................... 700 ...................... 700 Small Business Administration: Business loans ............................................................................................................................................................................................. 19,936 28,000 28,000 Total, limitations on loan guarantee commitments .......................................................................................................................... 243,222 251,074 260,779 200,000 100,000 100,000 12,000 12,000 12,000 LOAN GUARANTEE COMMITMENTS ADDENDUM: SECONDARY GUARANTEED LOAN COMMITMENT LIMITATIONS Housing and Urban Development: Guarantees of mortgage-backed securities ................................................................................................................................................ Small Business Administration: Secondary market guarantees .................................................................................................................................................................... 97 7. CREDIT AND INSURANCE Table 7–7. APPROPRIATIONS ACTS LIMITATIONS ON CREDIT LOAN LEVELS 1—Continued (In millions of dollars) Agency and Program Total, limitations on secondary guaranteed loan commitments .................................................................................................... 1 Data 2006 Actual 212,000 2007 Estimate 112,000 2008 Estimate 112,000 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. 98 ANALYTICAL PERSPECTIVES Table 7–8. FACE VALUE OF GOVERNMENT-SPONSORED LENDING 1 (In billions of dollars) Outstanding 2005 2006 Government Sponsored Enterprises Fannie Mae 2 .................................................................................................... Freddie Mac 3 ................................................................................................... Federal Home Loan Banks ............................................................................. Farm Credit System ......................................................................................... N/A N/A 574 92 N/A N/A 621 105 Total ................................................................................................................. N/A N/A N/A = Not available. 1 Net of purchases of federally guaranteed loans. 2 Financial data for Fannie Mae is not presented here because following a restatement of financial data for 2001–2004, audited financial results for 2005 and 2006 have not been released. 3 Financial data for Freddie Mac is not presented here because following the release of previous earnings restatements, audited financial statements for 2005 and 2006 have not been released. 99 7. CREDIT AND INSURANCE Table 7–9. LENDING AND BORROWING BY GOVERNMENTSPONSORED ENTERPRISES (GSEs) 1 (In millions of dollars) Enterprise 2006 LENDING Federal National Mortgage Association: 2 Portfolio programs: Net change .............................................................................................. Outstandings ............................................................................................ Mortgage-backed securities: Net change .............................................................................................. Outstandings ............................................................................................ Federal Home Loan Mortgage Corporation: 3 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: 4 Net change .................................................................................................. Outstandings ................................................................................................ Less guaranteed loans purchased by: Federal National Mortgage Association: 2 Net change .............................................................................................. Outstandings ............................................................................................ Other: Net change .............................................................................................. Outstandings ............................................................................................ N/A N/A N/A N/A N/A N/A N/A N/A 3,642 28,763 9,383 76,185 1,933 7,059 21,302 743,855 N/A N/A N/A N/A BORROWING Federal National Mortgage Association: 2 Portfolio programs: Net change .............................................................................................. Outstandings ............................................................................................ Mortgage-backed securities: Net change .............................................................................................. Outstandings ............................................................................................ Federal Home Loan Mortgage Corporation: 3 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: 4 Net change .................................................................................................. Outstandings ................................................................................................ N/A N/A N/A N/A N/A N/A N/A N/A 4,381 32,847 13,015 94,376 623 4,554 39,094 944,039 100 ANALYTICAL PERSPECTIVES Table 7–9. LENDING AND BORROWING BY GOVERNMENTSPONSORED ENTERPRISES (GSEs) 1—Continued (In millions of dollars) Enterprise 2006 DEDUCTIONS 5 Less borrowing from other GSEs: 5 Net change .................................................................................................. Outstandings ................................................................................................ Less purchase of Federal debt securities: 5 Net change .................................................................................................. Outstandings ................................................................................................ Federal National Mortgage Association: 5 Net change .................................................................................................. Outstandings ................................................................................................ Other: 5 Net change .................................................................................................. Outstandings ................................................................................................ N/A N/A N/A N/A N/A N/A N/A N/A N/A = Not available. 1 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. 2 Financial data for Fannie Mae is not presented here because following a restatement of financial data for 2001–2004, audited financial results for 2006 have not been released. 3 Financial data for Freddie Mac is not presented here because following the release of previous earnings restatements, audited financial statements for 2006 have not been released. 4 The net change in borrowings is derived from the difference in borrowings between 2006 and the Federal Home Loan Banks’ audited financial statements of 2005. 5 Totals and subtotals have not been calculated because a substantial portion of the total is unavailable as described above. 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 $434.1 billion in 2006 and are estimated to be $448.8 billion in 2007 and $454.0 billion in 2008. Grant outlays to State and local governments for payments to individuals, such as Medicaid payments, are estimated to be 65 percent of total grants in 2008; grant outlays for physical capital investment, 16 percent; and grant outlays for all other purposes, largely education, training, and social services, 19 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 bonds from Federal taxation comprise the two largest categories of tax expenditures benefiting State and local governments. In 2008, these provisions are estimated to be worth $80.1 billion. 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. Tax expenditures that especially aid State and local governments are displayed separately at the end 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) Agency 2006 Actual 2007 Estimate 2008 Proposed 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 ................................................................... 25.9 0.5 41.2 0.3 245.0 15.3 33.2 4.4 4.3 8.6 46.7 0.5 0.6 4.0 3.7 27.0 0.5 41.8 0.2 257.5 10.1 36.2 4.3 3.7 8.8 49.6 0.5 0.6 3.7 4.2 27.0 0.4 38.8 0.2 265.5 7.7 37.3 4.3 3.1 8.5 52.5 0.6 0.7 3.5 3.9 Total ............................................................................... 434.1 448.8 454.0 Table 8–1 shows the distribution of grants by agency. Grant outlays by the Department of Health and Human Services are estimated to be $265.5 billion in 2008, almost 60 percent of total grant outlays. Most of the remaining grant spending is in the Departments of Agriculture, Education, Housing and Urban Development, and Transportation, which account for another 34 percent of 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. In addition to the proposals relating to specific grant programs discussed below, 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 through reducing improper payments and assessing performance of grants with the Program Assessment Rating Tool (PART), as discussed in a later section of this chapter. Highlights of proposals affecting grants to State and local governments are presented below. For additional information on these proposals, see discussions in the main Budget volume. 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 two forms of aid are grants and tax expenditures, and grants include both outright grants and the value of loan subsidies. Homeland Security Since 2001, this Administration has provided nearly $37.5 billion to State, local, and tribal government’s to enhance first responder preparedness. Of this 101 102 amount, $22 billion was allocated through Department of Homeland Security (DHS) grant programs. To improve coordination and provide assistance to State and local law enforcement officials, the Budget will expand a successful Federal/State and local partnership—the 287(g) program, which provides State and local law enforcement officials with guidance and training in immigration law, subject to the direction of the Secretary of Homeland Security. The 2008 Budget includes an increase of $26 million for the 287(g) program and the Law Enforcement Support Center, including the training of an additional 250 State and local law enforcement officers, providing information technology connections to participating agencies, detention beds for apprehended illegal aliens, and additional personnel to assist State and local law enforcement when they encounter aliens. It also includes an increase of $29 million to identify criminal aliens in Federal, State, and local prison facilities and remove those aliens from the United States. Natural Resources and Environment Grant outlays for natural resources and environment programs are estimated to be $5.6 billion in 2008. Through the Environmental Protection Agency (EPA), the 2008 Budget provides $842 million in new capitalization for the Drinking Water State Revolving Fund. States use their capitalization grants, along with matching funds, to make loans to localities. The funds ‘‘revolve’’ as States use loan repayments to make new loans. Included in the President’s Budget is a proposal to exempt private activity bonds (PABs) used to finance drinking water and wastewater infrastructure from the overall private activity bond cap. PABs are tax-exempt bonds issued by a State or local government, the proceeds of which are used by another entity for a public purpose. This exemption will ensure all States and communities have access to PABs to help finance their water infrastructure needs. The proposal also will facilitate public-private partnerships and require full-cost pricing for services, helping drinking water and wastewater systems become self-sustaining. The Tax Relief and Health Care Act, passed by Congress in December 2006, converted abandoned mine land (AML) reclamation grants to States from discretionary to mandatory funding. Uncertified States (those with high-priority reclamation work) will receive mandatory AML grants from the Abandoned Mine Reclamation Fund to continue their projects. Certified States (those that have already addressed high-priority reclamation work) will no longer be eligible for AML grants. The Act also created a new set of mandatory payments from the Treasury to States in amounts equivalent to the amount allocated to States from coal fees in the AML Trust Fund under the existing AML grant formula. Transportation Grants support State and local programs for highways, mass transit, and airports. Grant outlays to State ANALYTICAL PERSPECTIVES and local governments for transportation, mostly for highways, are estimated to be $52.5 billion in 2008. This Budget requests $100 million to issue capital matching grants to States for intercity passenger rail projects. This new program would give local communities resources to direct investment in facilities that reflect their top rail transportation priorities. Community and Regional Development Grant outlays for community and regional development programs are estimated to be $16.5 billion in 2008. This Budget provides over $3 billion for the Community Development Block Grant Program (CDBG) and advances a reform agenda that will distribute resources more equitably and promote efficiency. The current CDBG formula allocates a disproportionate amount of resources to areas with relatively few critical development needs while other, needier areas go underserved. Additionally, HUD continues to work with State and local authorities in the stewardship of $16.7 billion in supplemental Community Development Block Grant (CDBG) disaster funds to assist in the long-term recovery and rebuilding of the Gulf Coast. Education Grant outlays for elementary, secondary, and vocational education is estimated to be $35.4 billion in 2008. Leaving No Child Behind. The central goal of the 2001 No Child Left Behind Act (NCLB) is for all students to read and do math at grade level or above by 2014. NCLB refocused Federal education programs on the principles of stronger accountability for results, more choices for parents and students, greater flexibility for States and school districts, and the use of proven instructional methods. In 2007 the President will work with Congress to reauthorize NCLB. Highlights of the President’s plan include the following: • Reforming high schools and improving college readiness. For 2008, this Budget provides $13.8 billion for Title I, a $1.1 billion increase, sufficient to devote new funds to high schools, in proportion to the number of low-income students they educate, while also increasing funding for elementary schools. In addition, the Administration proposes to add two new high school tests, including an assessment of college readiness. Together with the existing tests in reading and math in grades 3–8, these assessments will help parents and teachers know how their schools are performing across the K-12 spectrum. The Budget provides $412 million for these State assessments. • Ensuring future competitiveness. To remain competitive in the global economy, every high school graduate needs strong analytical skills from a rigorous mathematics and science curriculum. In support of this objective, this Budget provides a $365 million increase for math and science education programs as part of the American Competitiveness Initiative (ACI). 8. 103 AID TO STATE AND LOCAL GOVERNMENTS • Helping schools in need of improvement. The 2008 Budget provides $500 million, along with over $500 million reserved from Title I, to help improve schools that have not met their NCLB goals for at least two years, with a particular focus on schools that have been low-performing for five years or more. This significant increase will ensure that States and school districts have the capacity to turn around the schools that need the most help. • Enhancing opportunities for parental choice. While the Administration expects most schools in need of improvement to turn around and meet the goals of NCLB, some schools will not be able to do so quickly. The 2008 Budget includes a new $300 million program, Scholarships for Students in Restructuring Schools, which will enable States to offer low-income students in these chronically lowperforming schools educational alternatives. These students will be eligible for scholarships to cover some of the cost of attending the private school of their choice or a public school in a neighboring district or receive intensive supplemental services, such as tutoring. Training and Employment Grant outlays for training and employment are estimated to be $5.5 billion in 2008. The 2008 Budget again proposes job training reforms in the Department of Labor that will give States more flexibility to deliver workforce services tailored to their unique needs and focus resources on training workers instead of supporting bureaucracy. The reforms will consolidate several similar programs, cut Federal red tape, limit amounts spent on overhead, and create Career Advancement Accounts (CAAs). CAAs are workerdirected accounts that give workers the resources necessary to increase their skills and better compete for 21st Century jobs. The President’s job training reform proposal will triple the number of workers receiving training while saving taxpayer dollars. Over the last several years the Administration has worked to make the Nation’s workforce investment system more responsive to the needs of workers and employers. The 2008 Budget continues these initiatives. The President’s Budget requests $150 million for the Community-Based Job Training Grants program, which helps community colleges and related organizations expand their capacity to train workers for jobs that are in demand in local economies. Since 2005 the program has provided grants of almost $250 million—funds that will be used to train an estimated 100,000 workers. The High Growth Job Training Grants Initiative provides funds to partnerships of training providers, employers, and the public workforce investment system who commit to training workers for jobs in high growth industries. Since its inception the program has trained approximately 51,000 workers, and a total of 128,000 are expected to be trained by 2008. Social Services Grant outlays for social service programs are estimated to be $14.4 billion in 2008. Head Start. In the Department of Health and Human Services (HHS), the Budget supports reauthorization of Head Start and provides $6.8 billion in budget authority for 2008, enough to serve more than 900,000 children. Child Welfare Program Option. The Budget seeks legislation to introduce an option for all States so they can choose an alternative system for foster care. Flexible financing will allow States to design programs with a stronger emphasis on child-abuse prevention, family support, and increased flexibility in providing services. Health Grant outlays for health-related programs are estimated to be $219.0 billion in 2008. Medicaid and the State Children’s Health Insurance Program (SCHIP). In 2008, Department of Health and Human Service’s (HHS) Federal Medicaid outlays are estimated to be $201.9 billion. Medicaid is an open-ended means-tested entitlement program that is financed jointly by the Federal Government and States. Medicaid provides health coverage and services to low-income children, pregnant women, elderly persons, and disabled individuals during the year. SCHIP was established in 1997 to provide $40 billion over 10 years to States for health care coverage to low-income, uninsured children whose income levels were higher than Medicaid eligibility levels. The authorization for SCHIP expires at the end of 2007. • SCHIP. The 2008 Budget proposes reauthorizing SCHIP for five years. The goal is to maintain current enrollment levels for targeted low-income children over the next few years through increasing the SCHIP allotments by approximately $5 billion over five years. The 2008 Budget proposes to re-focus SCHIP on low-income, uninsured children below 200 percent of the Federal poverty level as the program was originally intended. The Budget will also seek the authority to target SCHIP funds more efficiently to States with the most need. • Transitional Medical Assistance. This program provides coverage for former welfare recipients entering the workforce, and the Administration proposes extending the provision through 2008. • Qualified Individuals. The 2008 Budget proposes an extension of the Qualified Individuals (QI) provision, which reimburses States for Part B premiums at 100 percent. Under current law, States receive 100 percent Federal funding to pay Medicare Part B premiums for beneficiaries between 120 and 135 percent of the Federal Poverty Level. This program’s authorization expires at the end of 2007. 104 ANALYTICAL PERSPECTIVES • 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: 1) Eligibility for a Medicaid/ SCHIP Employer-Sponsored Insurance (ESI) Program would be a qualifying event allowing families to enroll in ESI immediately through special enrollment; and 2) Require SCHIP programs to issue certificates of creditable coverage promoting portable health coverage by verifying the period of time an individual was covered by a specific health insurance policy. Expanding Access to Recovery (ATR). The 2008 Budget includes $98 million for 20 grants to States and Native American Tribes to provide services to more than 55,000 individuals annually. ATR expands access to treatment and recovery support services, increases clinical treatment and recovery support providers, and enhances accountability through mandatory reporting on outcome measures. Income Support Grant outlays for income security programs are estimated to be $92.5 billion in 2008. 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 (WIC) serves the nutritional needs of low-income pregnant and post partum women, infants and children up to their fifth birthday. This Budget provides $5.4 billion for WIC services, which is funding for the estimated 8 million eligible beneficiaries. To address the rising the costs of WIC administration, the 2008 Budget proposes to cap nutrition services and administration funding at 2006 levels. In keeping with the Administration’s promotion of childhood wellness and fitness, the department is issuing updated WIC food packages that reduce maximum allowances of certain foods and increase the intake of fresh fruits and vegetables. Housing Assistance. Grant outlays for housing assistance are estimated to be $29.0 billion in 2008. Ending Chronic Homelessness. The 2008 Budget continues the Administration’s commitment to end chronic homelessness by creating new supportive housing options for these individuals. The approximately 150,000 chronically homeless persons identified as the target of this effort include those who have been on the street for long periods and have an addiction and/or suffer from a disabling physical or mental condition. Across the country, local leaders have embraced this goal with over 225 jurisdictions committing to 10-year plans to end chronic homelessness. A number of the jurisdictions that have implemented their plans—including New York, Minneapolis and Columbus—are seeing steady decreases in the number of chronic homeless individuals on their streets and in shelters. This Budget proposes a $50 million increase, to $1.6 billion, for Housing and Urban Development’s (HUD) Homeless Assistance Grants, which received an Effective rating in last year’s Program Assessment Rating Tool (PART) assessment due to its capable program design and strong performance measures. Up to $50 million will be available for the Samaritan Initiative within the Homeless Assistance Grants annual competition, to provide the chronically homeless with housing assistance coupled with case management to access other essential services. Administration of Justice Grant outlays for the administration of justice programs are estimated to be $3.8 billion in 2008. The 2008 Budget includes $1.2 billion in assistance to State and local partners. The Budget proposes to create a new Violent Crime Reduction Partnership Initiative to target resources to those communities with the greatest crime problems. This Budget also proposes to consolidate numerous small grant programs to better target resources to the Nation’s most critical needs and increase the efficiency and effectiveness of the grant programs. The 2008 Budget also provides $345 million in funding for criminal justice needs, including drug-related priorities, through the new, consolidated Byrne Public Safety and Protection Grants. In addition to funding other law enforcement priorities, the Byrne grants will provide competitive funding to States and localities that can be used to establish Drug Courts and Prescription Drug Monitoring Programs, as well as provide assistance with cannabis eradication and cleanup of toxic methamphetamine labs, and the successful re-entry of prisoners into communities. 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 using the Program Assessment Rating Tool, or PART. With this budget, the fifth year of using the PART, the Administration has evaluated about 96 percent of the Budget. The PART 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— 8. 105 AID TO STATE AND LOCAL GOVERNMENTS results/accountability carries the greatest weigh—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 good performance measures or lacks data for existing measures. Chapter 2 of this volume discusses the PART in more detail. As shown in Table 8–2, 257 of the programs that have been assessed are primarily grants to State and local governments. Of these 257, 94 programs, or 47 percent of all grant programs assessed, received a rating of ‘‘Results Not Demonstrated’’. This is higher than for all programs, in which 34 percent were given this Table 8–2. 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 and performance measures, and therefore lack of focused planning to achieve common goals. Table 8–2 also shows that the average rating for the 257 grant programs was ‘‘adequate.’’ • Thirteen were rated effective; • Sixty-one were rated moderately effective; • Seventy-four were rated adequate; and • Fifteen were rated ineffective. • Ninety-four were rated ‘‘results not demonstrated;’’ If the 94 programs rated ‘‘Results Not Demonstrated’’ are excluded, the average rating was ‘‘adequate;’’ the same as the rating for all 257 grants. SUMMARY OF PART RATINGS AND SCORES FOR GRANTS TO STATE AND LOCAL GOVERNMENTS Average Scores Component All grant programs (257 programs) Purpose .............................................................................................. Planning .............................................................................................. Management ....................................................................................... Results/Accountability ........................................................................ Average rating 1 .................................................................................. 84% 64% 77% 34% Adequate Programs excluding grants rated ‘‘results not demonstrated’’ (163 programs) 87% 79% 82% 47% Adequate Number of grant programs Rating 1 Effective .............................................................................................. Moderately effective ........................................................................... Adequate ............................................................................................ Ineffective ........................................................................................... Results not demonstrated .................................................................. 13 61 74 15 94 Total number of grant programs rated .............................................. 257 1 Weighted as follows: Purpose (20%), Planning (10%), Management (20%), Results/Accountability (50%). The rating of effective indicates a score of 85 percent or more; moderately effective, 70–85 percent; adequate, 50–70 percent; and ineffective, 49 percent or less. The ratings of the largest five of these 257 grant programs are summarized here. More complete summaries of these and other programs can be found at www.ExpectMore.gov. • Department of Transportation: Highway Infrastructure ($34.2 billion in 2006). Rating: Moderately Effective. This program has been successful in improving highway safety and maintaining mobility — traffic-related fatalities per 100 million vehicle miles traveled have decreased from 1.51 in 2001 to an estimated 1.43 in 2005. But the program does not have adequate measures to demonstrate improved efficiency or cost effectiveness. For example, the program does not measure project cost and schedule performance. It also does not hold program managers or States accountable for cost, schedule, or performance results because oversight of State management of Federal highway dollars is lacking. The Administration is preparing a plan for improving program and project oversight of States, directing more resources to comprehensive evaluation activities (particularly at the State project level), and devising efficiency measures to show that program delivery is costeffective. • Department of Health and Human Services: Temporary Assistance for Needy Families (TANF) ($17.1 billion in 2006). Rating: Moderately Effec- 106 tive. This program provides time-limited cash assistance to needy families with children while working toward achieving the goals of ending dependence by promoting work and marriage, prevent out-of-wedlock births, and encouraging the formation and maintenance of two-parent families. The program has produced modest, but statistically significant increases in employment and earnings among welfare recipients as well as reduced caseloads, poverty, and welfare dependency. It is inconclusive whether the program has promoted marriage or reduced the incidence of outof-wedlock births. The program does not require States to report or demonstrate progress on promoting marriage. • Department of Housing and Urban Development (HUD): Housing Vouchers ($14.1 billion in 2006). Rating: Moderately Effective. The Housing Choice Voucher Program assists two million low-income households across the country to afford housing. The program purpose is to help these families afford decent, safe and sanitary housing. Tenants, who would otherwise pay over 50% of their income to rent an apartment on the private market, pay 30% of their income under this program. A variety of studies show housing vouchers to be a costeffective means of delivering decent, safe and sanitary housing for low-income families. Housing subsidies provide access in most cases to better housing, often in better neighborhoods. The new funding structure simplifies the program and allocates tenant-based assistance on a budget, rather than unit basis, assuring that programs for housing assistance are fully utilized. The Administration will continue to work with Congress to streamline the program, giving more flexibility to Public Housing Agencies to administer the program to better address local needs and market conditions. • Department of Education: Title I Grants to Local Educational Agencies ($12.7 billion for 2006). Rating: Moderately Effective. This program provides supplemental education funding, especially in high-poverty areas, for local activities that help improve the performance of low-achieving students or, in the case of school-wide programs, to help all students in high-poverty schools to meet challenging State academic standards. The program has developed meaningful long-term performance measures, established baselines, and set annual targets required to meet ambitious statutory academic proficiency goals. First-year data show a rate of progress consistent with meeting annual performance targets. The Department of Education has expanded and strengthened its monitoring of State and local program implementation, including compliance with statutory requirements and fiscal management practices. ANALYTICAL PERSPECTIVES • Department of Education: IDEA Special Education Grants to States ($10.6 billion for 2006). Rating: Adequate. The program has made some progress in improving student achievements. Between 2000 and 2005, the percentage of students with disabilities scoring at or above Basic on the National Assessment of Educational Progress (the Nation’s Report Card) grew from 22% to 33% for 4th grade reading and from 20% to 31% for 8th grade mathematics. Also, more students with disabilities are staying in school. The percentage of students with disabilities who graduate from high school with a regular high school diploma increased from 46% in 2000 to 54% in 2004 and the percentage who drop out of school decreased from 42% in 2000 to 31% in 2004. An independent evaluation is needed to provide information on the relationship between outcomes for children with disabilities and the program. While performance on the Nation’s Report Card has improved, drop-out rates have declined, and graduation rates have increased, there is little information on the program’s role in relation to these outcomes. 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, 15 percent of block grant programs assessed to date were rated ineffective, and 37 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. 8. 107 AID TO STATE AND LOCAL GOVERNMENTS The 2008 Budget also enhances accountability and improves performance outcomes by encouraging the Community Mental Health Services and Substance Abuse, Prevention, and Treatment Block Grant Programs to report on established National Outcome Measures. 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 inTable 8–3. 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. TRENDS IN FEDERAL GRANTS TO STATE AND LOCAL GOVERNMENTS (Outlays; in billions of dollars) Actual 1960 1965 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 ............................................................................................................. * 0.1 1970 1975 1980 Estimate 1985 1990 1995 2000 2005 2006 2007 2008 0.4 0.6 4.6 2.4 0.4 5.9 5.4 0.6 13.0 4.1 2.4 17.0 3.7 1.3 19.2 4.0 0.8 25.8 4.6 0.7 32.2 5.9 0.9 43.4 6.1 0.7 46.7 5.9 0.8 49.6 5.6 0.8 52.5 1.8 2.8 6.5 5.2 5.0 7.2 8.7 20.2 21.3 18.9 16.5 6.4 3.8 5.8 * 0.5 0.1 12.1 8.8 9.4 0.7 7.1 0.2 21.9 15.8 18.5 0.5 8.6 0.7 17.1 24.5 27.9 0.1 6.8 0.8 21.8 43.9 36.8 0.6 2.3 0.8 30.9 93.6 58.4 1.2 2.3 0.8 36.7 124.8 68.7 5.3 2.1 2.1 57.2 197.8 90.9 4.8 4.4 2.6 60.5 197.3 89.8 5.0 3.9 2.8 61.6 208.9 91.8 4.3 3.7 3.3 56.7 219.0 92.5 3.8 3.5 3.1 Total .......................................................................................................... 7.0 10.9 24.1 49.8 91.4 105.9 135.3 225.0 285.9 428.0 434.1 448.8 454.0 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 94.0 131.0 116.7 169.2 181.7 246.3 186.1 248.0 185.8 263.0 182.2 271.8 Total ..................................................................................................... 7.0 10.9 24.1 49.8 91.4 105.9 135.3 225.0 285.9 428.0 434.1 448.8 454.0 C. Composition: 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 54.6 273.9 60.8 93.3 272.6 64.1 97.4 285.2 69.2 94.4 296.7 71.8 85.4 Total ..................................................................................................... 7.0 10.9 24.1 49.8 91.4 105.9 135.3 225.0 285.9 428.0 434.1 448.8 454.0 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% 16.0% 22.0% 22.2% 2.9% 17.3% 23.4% 24.3% 3.5% 16.3% 22.4% 23.3% 3.3% 16.1% 22.2% N/A 3.3% 15.6% 21.8% N/A 3.1% 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% 21.5% 78.5% 20.9% 79.1% 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% 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 108 ANALYTICAL PERSPECTIVES 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 (construction 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 services; and transportation, with combined estimated grant outlays of $394.4 billion, or more than 90 percent of total grant outlays in 2006. 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 $197.3 billion in 2006. 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 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 $248.0 billion in 2006. The three largest mandatory grant programs are Medicaid, with outlays of $180.6 billion in 2006, Temporary Assistance for Needy Families, $16.9 billion, and child nutrition programs, $12.3 billion. The funding level for discretionary grant programs is determined annually through appropriations acts. Outlays for discretionary grant programs were $186.1 billion in 2006. 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 about a third of the total in 1960 to slightly less than two-thirds in the mid-1990s, and have remained about that proportion since then. 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, 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 2006, grants for physical capital were $64.1 billion, 15 percent of total grants. The other grants are primarily for education, training, employment, and social services. These grants were 22 percent of total grants in 2006. 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 16 percent in 2006. Grants as a percentage of domestic programs were 22 percent in 2006. As a percentage of total State and local expenditures, grants have increased from 19 percent in 1990 to 23 percent in 2006. 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 21 percent of State and local gross investment in 2006. 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 govern- 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. ments 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 a separate budget volume entitled Historical Tables. Section 12 of that document is devoted exclusively to 8. 109 AID TO STATE AND LOCAL GOVERNMENTS 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 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 Bureau’s major reports and databases on grant-making include: • Federal Aid to States, a report on 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 governmental jurisdictions. • The Federal Assistance Awards Data System (FAADS) provides computerized information about current grant funding. Data on all direct assistance awards are provided quarterly to the States and to the Congress. • The Federal Audit Clearinghouse maintains an on-line database (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. The Bureau of Economic Analysis, also in the Department of Commerce, publishes the monthly Survey of Current Business, which 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.’’ 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 www.cfda.gov. 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. 110 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 NATIONAL DEFENSE Discretionary: Department of Defense—Military: Research, development, test, and evaluation, Army ........................................................ 2006 Actual 2007 Estimate 2 Outlays 2008 Estimate 2 2006 Actual 2 ENERGY Discretionary: Department of Energy: Energy Programs: Energy conservation ........................................................................................................... .................... ...................... ...................... Energy supply and conservation ........................................................................................ 279 213 179 2007 Estimate 2 2008 Estimate 2 2 150 ...................... ...................... 125 215 200 Total, discretionary ........................................................................................................... 279 213 179 275 215 200 Mandatory: Tennessee Valley Authority fund ................................................................................................ 376 439 449 376 439 449 Total, energy .......................................................................................................................... 655 652 628 651 654 649 NATURAL RESOURCES AND ENVIRONMENT Discretionary: Department of Agriculture: Farm Service Agency: Grassroots source water protection program .................................................................... 4 4 ...................... Natural Resources Conservation Service: Watershed rehabilitation program ...................................................................................... 5 5 ...................... Resource conservation and development .......................................................................... .................... ...................... ...................... Watershed and flood prevention operations ...................................................................... 164 15 ...................... Forest Service: State and private forestry ................................................................................................... 303 216 183 Management of national forest lands for subsistence uses ............................................. 5 5 5 Department of Commerce: National Oceanic and Atmospheric Administration: Operations, research, and facilities .................................................................................... 91 77 93 Pacific coastal salmon recovery ......................................................................................... 67 20 67 Procurement, acquisition and construction ........................................................................ 89 1 16 Department of the Interior: Office of Surface Mining Reclamation and Enforcement: Regulation and technology ................................................................................................. 59 59 62 Abandoned mine reclamation fund .................................................................................... 167 163 33 United States Fish and Wildlife Service: State and tribal wildlife grants ........................................................................................... 67 50 69 Cooperative endangered species conservation fund ........................................................ 80 80 80 Landowner incentive program ............................................................................................ 22 15 ...................... National Park Service: Urban park and recreation fund ......................................................................................... .................... ...................... ...................... National recreation and preservation ................................................................................. 54 47 49 Land acquisition and State assistance .............................................................................. 30 2 ...................... Historic preservation fund ................................................................................................... 115 59 64 Environmental Protection Agency: State and tribal assistance grants ..................................................................................... 3,141 3,009 2,739 Hazardous substance superfund ........................................................................................ 45 33 29 Leaking underground storage tank trust fund ................................................................... 70 56 60 Total, discretionary ........................................................................................................... 4,578 3,916 Mandatory: Department of the Interior: Bureau of Land Management: Miscellaneous permanent payment accounts .................................................................... 139 40 Minerals Management Service: National forests fund, Payment to States .......................................................................... 9 6 Leases of lands acquired for flood control, navigation, and allied purposes .................. 5 3 Coastal impact assistance .................................................................................................. .................... 250 Office of Surface Mining Reclamation and Enforcement: Abandoned mine reclamation fund .................................................................................... .................... ...................... 4 4 ...................... 2 1 133 2 1 141 2 1 81 339 5 326 7 290 5 35 80 61 31 65 1 40 67 11 58 186 59 157 60 156 74 38 14 66 80 21 81 80 22 14 59 107 66 9 52 83 77 3 50 60 79 3,874 38 54 3,634 25 53 3,381 25 54 3,549 5,242 4,894 4,548 49 138 46 49 7 9 3 5 250 .................... 6 3 250 8 3 250 94 .................... ...................... 25 8. 111 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 2006 Actual 2007 Estimate Outlays 2008 Estimate 2006 Actual 2007 Estimate 2008 Estimate Bureau of Reclamation: Bureau of Reclamation loan subsidy ................................................................................. United States Fish and Wildlife Service: Federal aid in wildlife restoration ....................................................................................... Cooperative endangered species conservation fund ........................................................ Sport fish restoration .......................................................................................................... Department of the Treasury: Financial Management Service: Payment to terrestrial wildlife habitat restoration trust fund ............................................. 265 39 364 293 46 432 300 48 452 257 39 365 251 46 376 264 48 410 5 5 5 5 5 5 Total, mandatory ............................................................................................................... 828 1,079 1,208 820 987 1,062 Total, natural resources and environment ............................................................... 5,406 4,995 4,757 6,062 5,881 5,610 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 ....................................................................................................... 456 6 241 25 456 6 249 25 436 7 223 5 423 6 241 23 443 6 256 27 496 7 249 26 11 1 1 5 1 1 4 4 4 4 4 5 Total, discretionary ........................................................................................................... 743 741 676 702 737 784 2 4 ...................... Mandatory: Department of Agriculture: Office of the Secretary: Fund for rural America ....................................................................................................... .................... ...................... ...................... Farm Service Agency: Commodity Credit Corporation fund .................................................................................. 46 41 40 2 4 ...................... 1 ...................... ...................... 46 41 40 Total, mandatory ............................................................................................................... 46 41 40 47 41 40 Total, agriculture .......................................................................................................... 789 782 716 749 778 824 COMMERCE AND HOUSING CREDIT Mandatory: Department of Commerce: National Oceanic and Atmospheric Administration: Promote and develop fishery products and research pertaining to American fisheries .. Federal Communications Commission: Universal service fund ........................................................................................................ 12 6 6 12 9 6 1,462 1,977 1,760 1,462 1,977 1,760 Total, commerce and housing credit ........................................................................ 1,474 1,983 1,766 1,474 1,986 1,766 .................... ...................... ...................... 3,841 3,821 3,711 TRANSPORTATION Discretionary: Department of Transportation: Federal Aviation Administration: Grants-in-aid for airports (Airport and airway trust fund) .................................................. Federal Highway Administration: Emergency relief program .................................................................................................. State infrastructure banks .................................................................................................. Appalachian development highway system ....................................................................... Federal-aid highways .......................................................................................................... Miscellaneous appropriations ............................................................................................. Miscellaneous highway trust funds .................................................................................... Federal Motor Carrier Safety Administration: Motor Carrier Safety Grants ............................................................................................... National Highway Traffic Safety Administration: Highway traffic safety grants .............................................................................................. 3,452 .................... 20 .................... .................... .................... ...................... ...................... 82 ...................... ...................... ...................... ...................... ...................... ...................... ...................... –149 –260 849 1 95 32,703 187 145 1,438 1 139 33,083 116 140 586 1 127 36,857 41 11 279 291 300 74 271 284 558 566 581 263 534 580 112 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 Federal Railroad Administration: Alaska railroad rehabilitation .............................................................................................. Federal Transit Administration: Job access and reverse commute grants ......................................................................... Interstate transfer grants-transit ......................................................................................... Washington Metropolitan Area Transit Authority ............................................................... Formula grants .................................................................................................................... Capital investment grants ................................................................................................... Discretionary grants (Highway trust fund, mass transit account) ..................................... Formula and bus grants ..................................................................................................... Pipeline and Hazardous Materials Safety Administration: Pipeline safety .................................................................................................................... United States-Canada Alaska Rail Commission: Contribution to United States-Canada Alaska Rail Commission ...................................... Total, discretionary ........................................................................................................... 2006 Actual 10 2007 Estimate Outlays 2008 Estimate 10 ...................... 2006 Actual 2007 Estimate 2008 Estimate 20 11 6 .................... .................... .................... 144 1,487 .................... 8,281 ...................... ...................... ...................... ...................... 1,548 ...................... 7,190 ...................... ...................... ...................... ...................... 1,400 ...................... 7,873 95 –19 4 3,376 3,073 92 1,863 103 2 2 2,464 3,350 53 4,074 65 2 1 1,504 2,905 40 5,759 19 20 24 19 23 24 .................... ...................... ...................... 14,250 9,707 9,769 2 ...................... ...................... 46,683 49,625 52,504 Mandatory: Department of Transportation: Federal Aviation Administration: Grants-in-aid for airports (Airport and airway trust fund) .................................................. Federal Highway Administration: Federal-aid highways .......................................................................................................... 3,070 4,267 2,750 .................... ...................... ...................... 32,916 37,498 40,381 .................... ...................... ...................... Total, mandatory ............................................................................................................... 35,986 41,765 43,131 .................... ...................... ...................... Total, transportation .................................................................................................... 50,236 51,472 52,900 46,683 553 ...................... 773 COMMUNITY AND REGIONAL DEVELOPMENT Discretionary: Department of Agriculture: Rural Development: Rural community advancement program ........................................................................... Rural Utilities Service: Distance learning, telemedicine, and broadband program ............................................... Rural water and waste disposal subsidy ........................................................................... Rural Housing Service: Rural community facility subsidy ........................................................................................ Rural Business—Cooperative Service: Rural business and industry subsidy ................................................................................. Department of Commerce: Economic development assistance programs ........................................................................ Department of Homeland Security: Federal Emergency Management Agency: State and local programs ................................................................................................... Firefighter assistance grants .............................................................................................. 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/renewal communities ................................ Office of Lead Hazard Control and Healthy Homes: Lead hazard reduction ........................................................................................................ Department of the Interior: Bureau of Indian Affairs and Bureau of Indian Education: Operation of Indian programs ............................................................................................ Indian guaranteed loan subsidy ......................................................................................... Appalachian Regional Commission ............................................................................................ Delta regional authority ............................................................................................................... Denali Commission ...................................................................................................................... 735 49,625 52,504 726 ...................... 16 16 .................... ...................... 16 14 13 502 .................... ...................... 15 485 .................... ...................... 22 .................... ...................... 74 .................... ...................... 38 .................... ...................... 71 250 231 170 284 2,318 2,367 1,633 648 662 300 .................... ...................... ...................... –17,423 2,909 1,409 2,601 228 34 11,868 20,851 4,215 2,681 5,012 .................... ...................... ...................... .................... 4 3 ...................... 8 .................... ...................... ...................... 18 .................... ...................... ...................... 39 314 295 1,956 2,128 565 639 98 ...................... 6,895 4,302 7,828 2 8 22 35 7,999 2 5 28 30 150 150 116 120 141 154 149 26 56 12 49 150 20 27 5 8 150 6 57 4 2 148 24 63 6 42 146 20 65 5 44 147 6 66 7 70 8. 113 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 2006 Actual 2007 Estimate Total, discretionary ........................................................................................................... 7,841 Mandatory: Department of Housing and Urban Development: Community Planning and Development: Community development loan guarantees subsidy ........................................................... 3 Total, community and regional development ........................................................... 7,844 Outlays 2008 Estimate 11,316 2006 Actual 2007 Estimate 7,106 21,282 8 ...................... 3 11,324 7,106 EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES Discretionary: Department of Commerce: National Telecommunications and Information Administration: Public telecommunications facilities, planning and construction ....................................... 22 20 ...................... Information infrastructure grants ........................................................................................ .................... ...................... ...................... Department of Education: Office of Elementary and Secondary Education: Reading excellence ............................................................................................................ .................... ...................... ...................... Indian education ................................................................................................................. 115 115 115 Impact aid ........................................................................................................................... 1,224 1,253 1,224 Education reform ................................................................................................................ .................... ...................... ...................... Education for the disadvantaged ....................................................................................... 14,434 14,434 16,641 School improvement programs .......................................................................................... 5,110 5,120 4,635 Office of Innovation and Improvement: Innovation and improvement .............................................................................................. 643 549 778 Office of Safe and Drug-Free Schools: Safe schools and citizenship education ............................................................................ 688 685 290 Office of English Language Acquisition: English language acquisition .............................................................................................. 629 631 631 Office of Special Education and Rehabilitative Services: Special education ............................................................................................................... 11,439 11,346 10,505 Rehabilitation services and disability research .................................................................. 127 127 56 American Printing House for the Blind .............................................................................. 18 18 18 Office of Vocational and Adult Education: Career, technical and adult education ............................................................................... 1,972 1,970 1,960 Office of Postsecondary Education: Higher education ................................................................................................................. 403 403 302 Office of Federal Student Aid: Student financial assistance ............................................................................................... 65 64 ...................... Institute of education sciences ............................................................................................... 25 49 49 Hurricane education recovery ................................................................................................. 1,885 ...................... ...................... Department of Health and Human Services: Administration for Children and Families: Promoting safe and stable families ................................................................................... 82 82 82 Children and families services programs .......................................................................... 8,560 8,507 7,869 Administration on Aging: Aging services programs .................................................................................................... 1,345 1,349 1,318 Department of the Interior: Bureau of Indian Affairs and Bureau of Indian Education: Operation of Indian programs ............................................................................................ 116 116 116 Department of Labor: Employment and Training Administration: Training and employment services .................................................................................... 4,706 4,897 4,543 Community service employment for older Americans ....................................................... 94 94 76 State unemployment insurance and employment service operations .............................. 124 120 17 Unemployment trust fund ................................................................................................... 726 952 256 Corporation for National and Community Service: Domestic volunteer service programs, operating expenses ............................................. 105 105 ...................... National and community service programs, operating expenses ..................................... 265 265 255 Corporation for Public Broadcasting ........................................................................................... 460 464 350 District of Columbia: District of Columbia General and Special Payments: Federal payment for resident tuition support .................................................................... 33 33 35 Federal payment for school improvement ......................................................................... 40 40 41 National Endowment for the Arts: grants and administration .................................................... 41 40 41 2008 Estimate 18,883 16,523 8 ...................... 21,285 18,891 16,523 24 11 33 7 25 4 1 114 1,138 15 14,604 5,589 6 ...................... 116 113 1,456 1,224 4 ...................... 14,716 14,478 5,439 5,107 451 893 625 717 730 685 551 795 585 11,582 140 19 11,267 172 20 10,581 80 18 1,958 2,034 1,910 439 478 424 68 4 1,140 71 51 38 39 743 ...................... 82 8,492 82 8,466 82 8,104 1,358 1,327 1,323 114 111 112 4,566 88 155 803 4,489 94 123 1,055 4,283 76 130 797 142 255 460 133 224 464 79 200 350 33 40 37 33 40 38 35 41 39 114 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 2006 Actual 2007 Estimate Outlays 2008 Estimate 2006 Actual 2007 Estimate 2008 Estimate Institute of Museum and Library Services: Office of Museum and Library Services: grants and administration ................................ 238 231 254 226 273 282 Total, discretionary ........................................................................................................... 55,734 54,079 52,457 55,416 55,970 51,882 2,874 2,679 2,848 2,858 364 1,200 334 1,848 361 2,155 357 1,306 260 235 260 5 .................... ...................... 260 5 Mandatory: Department of Education: Office of Special Education and Rehabilitative Services: Rehabilitation services and disability research .................................................................. 2,720 2,837 Department of Health and Human Services: Administration for Children and Families: Promoting safe and stable families ................................................................................... 364 364 Social services block grant ................................................................................................ 2,250 1,700 Department of Labor: Employment and Training Administration: Federal unemployment benefits and allowances .............................................................. 259 260 Foreign labor certification processing ................................................................................ .................... ...................... Total, mandatory ............................................................................................................... 5,593 5,161 4,703 5,096 5,624 4,786 Total, education, training, employment, and social services ................................ 61,327 59,240 57,160 60,512 61,594 56,668 43 43 46 38 45 44 HEALTH Discretionary: Department of Agriculture: Food Safety and Inspection Service: Salaries and expenses ....................................................................................................... Department of Health and Human Services: Health Resources and Services Administration ..................................................................... Centers for Disease Control and Prevention: Disease control, research, and training ............................................................................. Substance Abuse and Mental Health Services Administration ............................................. Departmental Management: Public health and social services emergency fund ........................................................... General departmental management ................................................................................... Department of Labor: Occupational Safety and Health Administration: Salaries and expenses ....................................................................................................... Mine Safety and Health Administration: Salaries and expenses ....................................................................................................... 3,298 3,302 2,847 3,340 3,183 3,110 4,052 3,204 3,926 2,308 3,926 2,196 3,039 3,183 3,832 2,308 3,969 2,294 436 102 242 110 436 106 184 109 158 77 321 80 101 91 91 101 101 97 8 8 8 8 8 8 Total, discretionary ........................................................................................................... 11,244 10,030 9,656 10,002 9,712 9,923 Mandatory: Department of Health and Human Services: Centers for Medicare and Medicaid Services: Grants to States for medicaid ............................................................................................ State children’s health insurance fund .............................................................................. State grants and demonstrations ....................................................................................... 215,471 4,365 2,566 168,290 5,040 707 204,944 5,040 764 180,625 5,451 1,269 191,876 5,647 1,679 201,944 6,644 496 Total, mandatory ............................................................................................................... 222,402 174,037 210,748 187,345 199,202 209,084 Total, health .................................................................................................................. 233,646 184,067 220,404 197,347 208,914 219,007 187 5,172 177 5,169 70 5,387 182 5,056 180 5,172 79 5,320 3,160 387 2,055 2,161 370 2,056 1,782 473 2,056 2,637 425 2,185 2,635 421 2,017 1,874 479 2,046 INCOME SECURITY Discretionary: Department of Agriculture: Food and Nutrition Service: 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 .............................. 8. 115 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 2006 Actual 2007 Estimate Outlays 2008 Estimate 2006 Actual 2007 Estimate 2008 Estimate Department of Homeland Security: Federal Emergency Management Agency: Emergency food and shelter .............................................................................................. 151 151 140 151 151 140 Department of Housing and Urban Development: Public and Indian Housing Programs: Public housing operating fund ........................................................................................... 3,564 3,564 4,000 3,496 3,614 3,891 Drug elimination grants for low-income housing ............................................................... –3 ...................... ...................... 1 2 1 Revitalization of severely distressed public housing (HOPE VI) ...................................... 99 183 –99 567 560 535 Native Hawaiian Housing Block Grant .............................................................................. 9 ...................... 6 .................... 2 3 Tenant based rental assistance ......................................................................................... 14,401 15,081 16,000 12,966 15,321 15,986 Project-based rental assistance ......................................................................................... 205 221 221 210 222 200 Public housing capital fund ................................................................................................ 2,420 2,208 2,024 3,161 3,082 3,075 Prevention of resident displacement .................................................................................. .................... ...................... ...................... 71 1 ...................... Native American housing block grant ................................................................................ 624 624 627 585 584 579 Housing certificate fund ...................................................................................................... .................... ...................... ...................... 2,188 ...................... ...................... Community Planning and Development: Homeless assistance grants .............................................................................................. 1,327 1,353 1,586 1,346 1,378 1,395 Home investment partnership program .............................................................................. 1,757 1,805 1,967 1,812 1,870 1,901 Housing opportunities for persons with AIDS ................................................................... 286 296 300 309 309 309 Rural housing and economic development ....................................................................... 17 24 ...................... 21 22 27 Housing Programs: Homeownership and opportunity for people everywhere grants (HOPE grants) ............. .................... ...................... ...................... 1 1 1 Housing for persons with disabilities ................................................................................. 231 240 125 301 260 259 Housing for the elderly ....................................................................................................... 726 747 575 922 875 874 Department of Labor: Employment and Training Administration: Unemployment trust fund ................................................................................................... 2,514 2,653 2,654 2,668 2,668 2,795 Total, discretionary ........................................................................................................... 39,289 39,083 39,894 Mandatory: Department of Agriculture: Agricultural Marketing Service: Funds for strengthening markets, income, and supply (section 32) ................................ 1,133 1,177 1,087 Food and Nutrition Service: Food stamp program .......................................................................................................... 4,579 4,636 4,832 Commodity assistance program ......................................................................................... 15 15 15 Child nutrition programs ..................................................................................................... 12,534 13,033 13,739 Department of Health and Human Services: Administration for Children and Families: Payments to States for child support enforcement and family support programs .......... 3,322 4,399 3,957 Contingency fund ................................................................................................................ .................... ...................... ...................... Payments to States for foster care and adoption assistance .......................................... 6,620 6,941 6,892 Child care entitlement to States ........................................................................................ 1,926 2,917 2,917 Temporary assistance for needy families .......................................................................... 11,988 17,059 17,059 41,261 41,347 41,769 1,281 1,024 1,087 4,608 15 12,263 4,638 15 13,482 4,812 15 13,669 4,001 77 6,353 3,060 16,897 4,519 103 6,533 2,828 17,318 4,085 91 6,834 2,800 17,296 Total, mandatory ............................................................................................................... 42,117 50,177 50,498 48,555 50,460 50,689 Total, income security ................................................................................................. 81,406 89,260 90,392 89,816 91,807 92,458 SOCIAL SECURITY Mandatory: Social Security Administration: Federal disability insurance trust fund ............................................................................... 32 54 60 9 50 57 466 501 563 466 501 563 85 32 85 18 85 32 122 37 92 15 86 21 583 604 680 625 608 670 VETERANS BENEFITS AND SERVICES Discretionary: Department of Veterans Affairs: Veterans Health Administration: Medical services ................................................................................................................. Departmental Administration: Grants for construction of State extended care facilities .................................................. Grants for the construction of State veterans cemeteries ................................................ Total, veterans benefits and services ....................................................................... 116 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 ADMINISTRATION OF JUSTICE Discretionary: Department of Homeland Security: Federal Emergency Management Agency: State and local programs ................................................................................................... Department of Housing and Urban Development: Fair Housing and Equal Opportunity: Fair housing activities ......................................................................................................... Department of Justice: Legal Activities and U.S. Marshals: Assets forfeiture fund ......................................................................................................... Office of Justice Programs: Justice assistance ............................................................................................................... State and local law enforcement assistance ..................................................................... Juvenile justice programs ................................................................................................... Community oriented policing services ............................................................................... Violence against women prevention and prosecution programs ...................................... Equal Employment Opportunity Commission: Salaries and expenses ....................................................................................................... Federal Drug Control Programs: High-intensity drug trafficking areas program .................................................................... State Justice Institute: State Justice Institute: salaries and expenses .................................................................. Total, discretionary ........................................................................................................... 2006 Actual 2007 Estimate Outlays 2008 Estimate 2006 Actual 2007 Estimate 2008 Estimate 411 364 263 292 255 334 46 45 45 47 46 45 17 17 21 16 15 16 151 1,115 270 385 368 87 1,042 263 428 401 100 390 226 –55 356 256 1,711 366 708 367 139 1,272 403 634 297 166 1,037 377 293 347 33 28 28 29 43 42 200 225 220 172 170 218 4 ...................... ...................... 5 ...................... ...................... 3,000 2,900 1,594 3,969 3,274 2,875 383 282 375 342 377 270 585 537 589 561 582 570 84 80 80 89 80 80 Total, mandatory ............................................................................................................... 1,052 899 1,044 992 1,039 920 Total, administration of justice .................................................................................. 4,052 3,799 2,638 4,961 4,313 3,795 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 ...................................................................................................... GENERAL GOVERNMENT Discretionary: Department of Health and Human Services: Administration for Children and Families: Disabled voter services ...................................................................................................... .................... ...................... ...................... 3 5 2 Department of the Interior: United States Fish and Wildlife Service: National wildlife refuge fund ............................................................................................... 14 14 11 14 14 13 Insular Affairs: Assistance to territories ...................................................................................................... 48 47 47 58 53 52 Trust Territory of the Pacific Islands ................................................................................. .................... ...................... ...................... .................... ...................... 1 Department-Wide Programs: Payments in lieu of taxes .................................................................................................. 233 233 190 232 233 190 District of Columbia: District of Columbia Courts: Federal payment to the District of Columbia courts ......................................................... 217 220 214 182 220 214 Defender services in District of Columbia courts .............................................................. 45 37 43 37 37 42 District of Columbia General and Special Payments: Federal support for economic development and management reforms in the District ... 52 13 38 52 13 38 Election Assistance Commission: Election reform programs ................................................................................................... .................... ...................... ...................... 58 ...................... ...................... Total, discretionary ........................................................................................................... 609 564 543 636 575 552 8. 117 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 2006 Actual Mandatory: Department of Agriculture: Forest Service: Forest Service permanent appropriations .......................................................................... 582 Department of Energy: Energy Programs: Payments to States under Federal Power Act .................................................................. 3 Department of Homeland Security: Security, Enforcement, and Investigations: Refunds, transfers, and expenses of operation, Puerto Rico .......................................... 106 Department of the Interior: Bureau of Land Management: Miscellaneous permanent payment accounts .................................................................... 109 Minerals Management Service: Mineral leasing and associated payments ........................................................................ 2,113 Geothermal lease revenues, payment to counties ............................................................ 4 United States Fish and Wildlife Service: National wildlife refuge fund ............................................................................................... 12 Insular Affairs: Assistance to territories ...................................................................................................... 28 Payments to the United States territories, fiscal assistance ............................................ 131 Department of the Treasury: Alcohol and Tobacco Tax and Trade Bureau: Internal revenue collections for Puerto Rico ..................................................................... 360 Corps of Engineers-Civil Works: Permanent appropriations .................................................................................................. .................... 2007 Estimate Outlays 2008 Estimate 2006 Actual 2007 Estimate 2008 Estimate 364 130 425 409 130 3 3 3 3 3 111 117 101 142 117 103 4 109 103 9 1,875 1,995 3 ...................... 2,113 4 1,875 1,995 3 ...................... 9 7 12 9 6 31 119 28 119 29 131 36 119 34 119 448 484 360 448 484 4 .................... 4 4 4 Total, mandatory ............................................................................................................... 3,448 3,070 2,891 3,287 3,151 2,901 Total, general government .......................................................................................... 4,057 3,634 3,434 3,923 3,726 3,453 Total, Grants ............................................................................................................. Discretionary .......................................................................................................... Mandatory .............................................................................................................. 451,509 138,152 313,357 411,868 133,155 278,713 442,643 126,105 316,538 434,099 186,095 248,004 448,829 185,842 262,987 453,986 182,232 271,754 118 ANALYTICAL PERSPECTIVES APPENDIX: SELECTED GRANT DATA BY STATE This Appendix displays State-by-State spending for the selected grant programs to State and local governments shown in the following table, ‘‘Summary of Programs by Agency and Bureau.’’ The programs selected here cover more than 80 percent of total grant spending. The first summary table shows the obligations for each program. The second summary table, ‘‘Summary of Programs by State,’’ shows the amounts for each State for these programs. The individual program tables display obligations for each program on a Stateby-State basis, consistent with the estimates in this budget. Each table reports the following information: • The Federal agency that administers the program. • The program title and number as contained in the Catalog of Federal Domestic Assistance. • The budget account number from which the program is funded. • Actual 2006 obligations by State, Federal territory, and Indian tribes in thousands of dollars. Undistributed obligations shown at the bottom of each page are generally project funds that are not distributed by formula, or programs for which State-by-State data are not available. • Estimates of 2007 obligations by State from previous budget authority, from new budget authority, and total obligations. • Estimates of 2008 obligations by State, which are also based on the 2008 Budget request, unless otherwise noted. • The percentage share of 2008 estimated program funds distributed to each State. 8. 119 AID TO STATE AND LOCAL GOVERNMENTS Table 8–5. SUMMARY OF PROGRAMS BY AGENCY, BUREAU, AND PROGRAM (Obligations in millions of dollars) Agency, Bureau, and Program Department of Agriculture, Food and Nutrition Service School Breakfast Program (10.553) ............................................................................................................................. National School Lunch Program (10.555) .................................................................................................................... Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (10.557) .................................... Child and Adult Care Food Program (10.558) ............................................................................................................. State Administrative Matching Grants for Food Stamp Program (10.561) ................................................................. Department of Education, Office of Elementary and Secondary Education Title I Grants to Local Educational Agencies (84.010) ................................................................................................ Improving Teacher Quality State Grants (84.367) ....................................................................................................... Department of Education, Office of Special Education and Rehabilitative Services Special Education—Grants to States (84.027) ............................................................................................................. Rehabilitation Services—Vocational Rehabilitation Grants to States (84.126) ........................................................... Department of Health and Human Services, Centers for Medicare and Medicaid Services State Children’s Health Insurance Program (93.767) .................................................................................................. Grants to States for Medicaid (93.778) ........................................................................................................................ Department of Health and Human Services, Administration for Children and Families Temporary Assistance for Needy Families (TANF)—Family Assistance Grants (93.558) ......................................... Child Support Enforcement—Federal Share of State and Local Administrative Costs and Incentives (93.563) ...... Low Income Home Energy Assistance Program (93.568) .......................................................................................... Child Care and Development Block Grant (93.575) .................................................................................................... Child Care and Development Fund—Mandatory (93.596a) ......................................................................................... Child Care and Development Fund—Matching (93.596b) ........................................................................................... Head Start (93.600) ....................................................................................................................................................... Foster Care—Title IV–E (93.658) ................................................................................................................................. Adoption Assistance (93.659) ....................................................................................................................................... Social Services Block Grant (93.667) ........................................................................................................................... Department of Homeland Security, Departmental Management Homeland Security Grant Program (97.067) ................................................................................................................ Department of Homeland Security, Federal Emergency Management Agency Disaster Grants—Public Assistance (Presidentially Declared Disasters) (97.036) ..................................................... Department of Housing and Urban Development, Public and Indian Housing Programs Public Housing Operating Fund (14.850) ..................................................................................................................... Section 8 Housing Choice Vouchers (14.871) ............................................................................................................. Public Housing Capital Fund (14.872) .......................................................................................................................... Department of Housing and Urban Development, Community Planning and Development Community Development Block Grants (14.218) ......................................................................................................... Department of the Interior, Minerals Management Service Mineral Leasing and Associated Payments ................................................................................................................. Department of Transportation, Federal Aviation Administration Airport Improvement Program (20.106) ........................................................................................................................ Department of Transportation, Federal Highway Administration Highway Planning and Construction (20.205) .............................................................................................................. Department of Transportation, Federal Transit Administration Capital Investment Grants—Fixed Guideway Modernization (Section 5309) (20.500) ............................................... Federal Transit Formula Grants and Research (20.507) ............................................................................................ Total .................................................................................................................................................................................... FY 2006 (actual) Estimated FY 2007 obligations from: Previous authority New authority FY 2008 (estimated) Total 2,086 .................. 7,570 63 5,363 295 2,141 .................. 2,455 .................. 2,241 7,792 5,168 2,172 2,551 2,241 7,855 5,463 2,172 2,551 2,390 8,181 5,477 2,289 2,662 12,713 .................. 2,887 .................. 12,713 2,887 12,713 2,887 13,910 2,787 10,583 .................. 2,720 .................. 10,492 2,837 10,492 2,837 10,492 2,837 4,365 .................. 201,842 .................. 5,040 195,191 5,040 195,191 5,040 206,886 .................. .................. .................. .................. .................. .................. .................. .................. .................. .................. 17,059 4,415 1,980 2,062 1,240 1,677 6,789 4,475 2,027 1,700 17,059 4,415 1,980 2,062 1,240 1,677 6,789 4,475 2,027 1,700 17,059 3,963 1,500 2,062 1,240 1,677 6,789 4,593 2,159 1,200 2,033 .................. 788 788 265 17,140 4,197 2,480 2,061 1,240 1,680 6,851 4,325 1,791 2,250 8,147 .................. .................. .................. .................. 3,564 13,797 2,409 1 724 335 3,564 15,081 2,208 3,565 15,805 2,543 4,000 16,000 2,024 3,823 467 3,888 4,355 2,619 2,113 .................. 1,875 1,875 1,995 3,709 .................. 3,514 3,514 2,750 33,128 .................. 35,672 35,672 39,585 1,407 5,534 197 1,566 1,036 3,645 1,233 5,211 1,701 6,568 378,403 3,649 363,779 367,428 382,699 120 ANALYTICAL PERSPECTIVES Table 8–6. Summary of Programs by State (Obligations in millions of dollars) Programs distributed in all years State or Territory All programs FY 2006 (actual) FY 2006 (actual) 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 .............................................................................................................. 5,326 1,754 6,977 3,857 44,287 3,590 4,244 998 1,998 18,461 9,432 1,456 1,454 12,937 6,533 3,097 2,656 5,613 10,060 2,212 5,534 8,946 10,327 5,495 7,116 7,037 1,317 1,994 1,767 1,235 9,391 3,719 38,888 10,192 832 14,007 4,169 3,886 15,985 1,830 4,909 1,077 7,563 23,293 3,202 1,065 5,317 6,359 3,121 5,379 1,861 62 132 66 2,347 7 146 761 Total, programs distributed by State in all years ........................................... 367,278 367,278 MEMORANDUM:. Not distributed by State in all years 1 ................................................................... 11,125 Total, including undistributed ................................................................................ 378,403 * $500,000 or less or 0.005 percent or less. 1 The sum of programs not distributed by State in all years. FY 2008 (estimated) FY 2008 Percentage of distributed total Estimated FY 2007 obligations from: Previous authority 5,326 36 1,754 8 6,977 48 3,857 12 44,287 465 3,590 17 4,244 105 998 4 1,998 43 18,461 244 9,432 105 1,456 10 1,454 7 12,937 100 6,533 41 3,097 11 2,656 19 5,613 22 10,060 58 2,212 6 5,534 60 8,946 140 10,327 37 5,495 51 7,116 23 7,037 33 1,317 6 1,994 7 1,767 19 1,235 7 9,391 82 3,719 17 38,888 647 10,192 64 832 –11 14,007 76 4,169 18 3,886 14 15,985 165 1,830 18 4,909 25 1,077 6 7,563 29 23,293 225 3,202 37 1,065 3 5,317 53 6,359 65 3,121 16 5,379 24 1,861 7 62 2 132 4 66 2 2,347 62 7 .................... 146 4 761 3 New authority Total 5,104 1,741 7,264 3,868 42,429 3,604 4,179 984 1,981 15,921 9,090 1,348 1,473 12,421 6,726 3,024 2,544 5,544 6,321 1,807 5,505 9,573 10,339 5,503 4,454 7,189 1,224 1,806 1,601 1,203 9,280 3,690 39,090 10,449 758 14,502 4,520 3,870 15,964 1,743 4,733 1,017 7,228 23,349 3,188 1,029 5,539 6,119 3,126 5,456 1,744 59 135 62 2,377 7 140 777 5,140 1,749 7,311 3,881 42,895 3,620 4,285 988 2,024 16,165 9,195 1,358 1,480 12,521 6,767 3,034 2,563 5,566 6,379 1,812 5,565 9,714 10,376 5,554 4,477 7,222 1,230 1,813 1,620 1,211 9,362 3,706 39,737 10,514 747 14,578 4,538 3,885 16,129 1,762 4,759 1,023 7,257 23,574 3,225 1,032 5,592 6,184 3,142 5,480 1,751 61 139 64 2,439 7 144 780 5,239 1,789 7,830 4,160 44,570 3,788 4,365 1,055 2,151 16,638 9,799 1,394 1,579 13,273 7,059 3,191 2,639 5,800 6,740 1,865 5,833 9,821 10,421 6,049 4,786 7,604 1,287 1,892 1,634 1,261 9,781 3,885 39,940 11,954 815 14,926 4,687 4,119 16,757 1,858 4,769 1,053 7,381 24,268 3,370 1,087 5,901 6,370 3,313 5,615 1,853 61 135 57 2,488 7 146 807 1.40 0.48 2.10 1.12 11.95 1.02 1.17 0.28 0.58 4.46 2.63 0.37 0.42 3.56 1.89 0.86 0.71 1.56 1.81 0.50 1.56 2.63 2.79 1.62 1.28 2.04 0.35 0.51 0.44 0.34 2.62 1.04 10.71 3.21 0.22 4.00 1.26 1.10 4.49 0.50 1.28 0.28 1.98 6.51 0.90 0.29 1.58 1.71 0.89 1.51 0.50 0.02 0.04 0.02 0.67 * 0.04 0.22 3,403 355,721 359,124 372,917 100.00 11,125 245 8,059 8,304 9,782 N/A 378,403 3,649 363,779 367,428 382,699 N/A Department of Agriculture, Food and Nutrition Service 12–3539–0–1–605 Table 8-7. School Breakfast Program (10.553) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 ...................................................................... 39,539 4,986 41,125 29,311 244,215 17,157 12,828 4,899 4,117 119,072 102,069 7,321 10,408 57,686 33,279 13,470 15,434 42,329 45,828 6,033 23,746 26,919 46,487 21,505 42,730 40,822 4,495 8,713 11,783 3,069 34,067 26,354 111,431 73,581 2,808 56,991 36,521 25,748 50,475 5,160 46,550 4,852 48,591 277,837 11,292 3,184 38,462 30,440 17,048 16,933 2,202 ...................... 1,753 ...................... 26,392 ...................... 883 ...................... 55,138 30 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 43,632 5,502 45,382 32,345 269,500 18,933 14,156 5,406 4,543 131,399 112,635 8,079 11,485 63,658 36,724 14,864 17,032 46,711 50,572 6,658 26,204 29,706 51,299 23,731 47,154 45,048 4,960 9,615 13,003 3,387 37,594 29,082 122,967 81,198 3,099 62,891 40,302 28,413 55,700 5,694 51,369 5,354 53,621 306,599 12,461 3,514 42,444 33,591 18,813 18,686 2,430 ...................... 1,934 ...................... 29,124 ...................... 974 ...................... ...................... 33 43,632 5,502 45,382 32,345 269,500 18,933 14,156 5,406 4,543 131,399 112,635 8,079 11,485 63,658 36,724 14,864 17,032 46,711 50,572 6,658 26,204 29,706 51,299 23,731 47,154 45,048 4,960 9,615 13,003 3,387 37,594 29,082 122,967 81,198 3,099 62,891 40,302 28,413 55,700 5,694 51,369 5,354 53,621 306,599 12,461 3,514 42,444 33,591 18,813 18,686 2,430 ...................... 1,934 ...................... 29,124 ...................... 974 ...................... ...................... 33 46,529 5,867 48,395 34,493 287,386 20,190 15,096 5,765 4,845 140,121 120,113 8,615 12,248 67,884 39,162 15,851 18,162 49,812 53,929 7,099 27,944 31,678 54,705 25,307 50,284 48,038 5,290 10,253 13,866 3,612 40,089 31,013 131,129 86,588 3,304 67,066 42,977 30,300 59,398 6,072 54,779 5,710 57,181 326,952 13,288 3,747 45,261 35,821 20,062 19,926 2,591 ...................... 2,063 ...................... 31,058 ...................... 1,039 ...................... ...................... 35 1.95 0.25 2.02 1.44 12.02 0.84 0.63 0.24 0.20 5.86 5.03 0.36 0.51 2.84 1.64 0.66 0.76 2.08 2.26 0.30 1.17 1.33 2.29 1.06 2.10 2.01 0.22 0.43 0.58 0.15 1.68 1.30 5.49 3.62 0.14 2.81 1.80 1.27 2.49 0.25 2.29 0.24 2.39 13.68 0.56 0.16 1.89 1.50 0.84 0.83 0.11 .................... 0.09 .................... 1.30 .................... 0.04 .................... .................... * Total ................................................................................................. 2,086,098 ........................ 2,241,210 2,241,210 2,389,988 1 100.00 * $500 or less or 0.005 percent or less. 1 Excludes undistributed obligations. 121 Department of Agriculture, Food and Nutrition Service 12–3539–0–1–605 Table 8-8. National School Lunch Program (10.555) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 ...................................................................... 140,626 23,222 163,074 88,703 960,948 77,686 59,462 16,666 14,649 404,115 310,125 28,354 33,922 284,408 138,480 62,924 62,606 122,667 151,869 22,453 91,658 102,191 184,249 94,387 126,244 134,630 17,621 40,006 48,854 15,765 145,162 64,259 463,599 236,140 12,135 219,989 106,373 72,946 225,243 20,103 130,187 19,154 161,539 846,828 57,542 9,612 140,682 119,857 46,223 100,393 9,322 ...................... 5,610 ...................... 104,369 ...................... 4,506 ...................... 220,130 5,290 1,210 200 1,403 763 8,264 668 512 143 126 3,477 2,668 244 292 2,447 1,191 541 539 1,055 1,307 193 789 879 1,585 812 1,086 1,158 152 344 420 136 1,249 553 3,988 2,031 104 1,893 915 628 1,938 173 1,120 165 1,390 7,285 495 83 1,210 1,031 398 864 80 ........................ 48 ........................ 898 ........................ 39 ........................ ........................ 46 149,087 24,619 172,886 94,040 1,018,766 82,360 63,040 17,669 15,530 428,430 328,785 30,060 35,963 301,520 146,812 66,710 66,373 130,048 161,007 23,804 97,173 108,340 195,335 100,066 133,840 142,730 18,681 42,413 51,793 16,714 153,896 68,125 491,493 250,348 12,865 233,225 112,773 77,335 238,795 21,313 138,020 20,306 171,258 897,780 61,004 10,190 149,147 127,069 49,004 106,433 9,883 ...................... 5,948 ...................... 110,649 ...................... 4,777 ...................... ...................... 5,608 150,297 24,819 174,289 94,803 1,027,030 83,028 63,552 17,812 15,656 431,907 331,453 30,304 36,255 303,967 148,003 67,251 66,912 131,103 162,314 23,997 97,962 109,219 196,920 100,878 134,926 143,888 18,833 42,757 52,213 16,850 155,145 68,678 495,481 252,379 12,969 235,118 113,688 77,963 240,733 21,486 139,140 20,471 172,648 905,065 61,499 10,273 150,357 128,100 49,402 107,297 9,963 ...................... 5,996 ...................... 111,547 ...................... 4,816 ...................... ...................... 5,654 156,532 25,849 181,519 98,736 1,069,640 86,473 66,188 18,551 16,306 449,824 345,203 31,561 37,759 316,577 154,143 70,041 69,687 136,542 169,047 24,993 102,025 113,750 205,089 105,063 140,523 149,858 19,614 44,531 54,380 17,548 161,581 71,527 516,036 262,849 13,508 244,872 118,405 81,197 250,720 22,377 144,912 21,320 179,810 942,612 64,050 10,699 156,594 133,414 51,451 111,748 10,376 ...................... 6,245 ...................... 116,174 ...................... 5,016 ...................... ...................... 5,888 1.91 0.32 2.22 1.21 13.07 1.06 0.81 0.23 0.20 5.50 4.22 0.39 0.46 3.87 1.88 0.86 0.85 1.67 2.07 0.31 1.25 1.39 2.51 1.28 1.72 1.83 0.24 0.54 0.66 0.21 1.98 0.87 6.31 3.21 0.17 2.99 1.45 0.99 3.06 0.27 1.77 0.26 2.20 11.52 0.78 0.13 1.91 1.63 0.63 1.37 0.13 .................... 0.08 .................... 1.42 .................... 0.06 .................... .................... 0.07 Total ................................................................................................. 7,569,757 63,228 7,791,838 7,855,066 8,180,933 1 100.00 1 Excludes undistributed obligations. 122 Department of Agriculture, Food and Nutrition Service 12–3510–0–1–605 Table 8-9. Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (10.557) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... 87,836 22,813 95,434 55,944 891,953 53,928 37,059 12,506 12,890 253,231 174,247 29,836 21,077 193,217 79,808 39,774 38,076 83,488 100,807 14,828 69,093 75,840 146,696 77,642 67,537 80,188 13,088 25,542 29,027 13,165 98,738 38,206 350,694 146,997 9,440 165,805 56,573 63,983 141,741 16,335 72,970 12,259 108,469 498,446 34,826 11,918 95,059 111,441 32,286 72,010 7,067 6,903 7,023 4,636 199,223 ...................... 5,521 49,982 47,706 4,877 1,267 5,298 3,106 49,519 2,994 2,057 694 716 14,059 9,674 1,656 1,170 10,727 4,431 2,208 2,114 4,635 5,597 823 3,836 4,211 8,144 4,311 3,750 4,452 727 1,418 1,612 731 5,482 2,121 19,470 8,161 524 9,205 3,141 3,552 7,869 907 4,051 681 6,022 27,673 1,933 662 5,278 6,187 1,792 3,998 392 383 390 257 11,061 ........................ 307 2,775 ........................ 84,604 21,974 91,922 53,885 859,130 51,944 35,695 12,046 12,416 243,913 167,835 28,738 20,301 186,107 76,871 38,310 36,675 80,416 97,098 14,282 66,551 73,049 141,298 74,785 65,052 77,237 12,606 24,602 27,959 12,681 95,105 36,800 337,789 141,588 9,093 159,704 54,491 61,629 136,525 15,734 70,285 11,808 104,478 480,104 33,544 11,479 91,561 107,340 31,098 69,360 6,807 6,649 6,765 4,465 191,892 ...................... 5,318 48,143 48,510 89,481 23,241 97,220 56,991 908,649 54,938 37,752 12,740 13,132 257,972 177,509 30,394 21,471 196,834 81,302 40,518 38,789 85,051 102,695 15,105 70,387 77,260 149,442 79,096 68,802 81,689 13,333 26,020 29,571 13,412 100,587 38,921 357,259 149,749 9,617 168,909 57,632 65,181 144,394 16,641 74,336 12,489 110,500 507,777 35,477 12,141 96,839 113,527 32,890 73,358 7,199 7,032 7,155 4,722 202,953 ...................... 5,625 50,918 48,510 90,045 23,387 97,834 57,351 914,380 55,284 37,991 12,821 13,214 259,599 178,629 30,586 21,607 198,076 81,815 40,774 39,034 85,588 103,342 15,201 70,831 77,747 150,385 79,595 69,235 82,205 13,417 26,184 29,757 13,496 101,221 39,167 359,513 150,694 9,677 169,975 57,996 65,592 145,306 16,746 74,805 12,567 111,197 510,981 35,702 12,218 97,450 114,244 33,098 73,821 7,245 7,077 7,200 4,753 204,233 ...................... 5,660 51,239 28,710 1.65 0.43 1.80 1.05 16.78 1.01 0.70 0.24 0.24 4.76 3.28 0.56 0.40 3.64 1.50 0.75 0.72 1.57 1.90 0.28 1.30 1.43 2.76 1.46 1.27 1.51 0.25 0.48 0.55 0.25 1.86 0.72 6.60 2.77 0.18 3.12 1.06 1.20 2.67 0.31 1.37 0.23 2.04 9.38 0.66 0.22 1.79 2.10 0.61 1.35 0.13 0.13 0.13 0.09 3.75 .................... 0.10 0.94 .................... Total ................................................................................................. 5,362,827 295,088 5,168,046 5,463,134 5,477,497 1 100.00 1 Excludes undistributed obligations. 123 Department of Agriculture, Food and Nutrition Service 12–3539–0–1–605 Table 8-10. Child and Adult Care Food Program (10.558) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... 33,900 7,186 42,853 28,448 241,873 18,856 10,695 10,350 3,617 111,034 81,193 4,791 5,103 97,786 30,736 20,628 30,047 24,717 46,106 9,228 33,230 43,298 51,046 54,276 27,274 39,093 9,101 23,079 4,033 2,844 50,258 34,496 149,995 72,377 9,107 63,168 48,927 22,757 57,680 7,168 23,274 6,627 39,977 181,695 19,162 3,912 28,391 37,874 14,741 34,508 4,844 ...................... 53 ...................... 21,786 ...................... 654 ...................... 61,236 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 35,409 7,506 44,761 29,715 252,641 19,696 11,171 10,811 3,778 115,978 84,808 5,004 5,330 102,140 32,105 21,546 31,385 25,818 48,159 9,639 34,710 45,226 53,319 56,693 28,488 40,834 9,506 24,107 4,213 2,971 52,496 36,032 156,674 75,600 9,513 65,981 51,106 23,770 60,248 7,487 24,310 6,922 41,757 189,785 20,015 4,086 29,655 39,560 15,397 36,045 5,060 ...................... 55 ...................... 22,756 ...................... 683 ...................... ...................... 35,409 7,506 44,761 29,715 252,641 19,696 11,171 10,811 3,778 115,978 84,808 5,004 5,330 102,140 32,105 21,546 31,385 25,818 48,159 9,639 34,710 45,226 53,319 56,693 28,488 40,834 9,506 24,107 4,213 2,971 52,496 36,032 156,674 75,600 9,513 65,981 51,106 23,770 60,248 7,487 24,310 6,922 41,757 189,785 20,015 4,086 29,655 39,560 15,397 36,045 5,060 ...................... 55 ...................... 22,756 ...................... 683 ...................... ...................... 37,306 7,908 47,159 31,306 266,176 20,751 11,770 11,390 3,980 122,191 89,351 5,272 5,616 107,612 33,824 22,701 33,066 27,201 50,739 10,155 36,569 47,649 56,175 59,730 30,015 43,021 10,015 25,398 4,438 3,130 55,308 37,962 165,067 79,650 10,022 69,515 53,843 25,044 63,476 7,888 25,613 7,293 43,994 199,952 21,087 4,305 31,244 41,680 16,222 37,975 5,331 ...................... 58 ...................... 23,975 ...................... 720 ...................... ...................... 1.63 0.35 2.06 1.37 11.63 0.91 0.51 0.50 0.17 5.34 3.90 0.23 0.25 4.70 1.48 0.99 1.44 1.19 2.22 0.44 1.60 2.08 2.45 2.61 1.31 1.88 0.44 1.11 0.19 0.14 2.42 1.66 7.21 3.48 0.44 3.04 2.35 1.09 2.77 0.34 1.12 0.32 1.92 8.74 0.92 0.19 1.37 1.82 0.71 1.66 0.23 .................... * .................... 1.05 .................... 0.03 .................... .................... Total ................................................................................................. 2,141,088 ........................ 2,172,460 2,172,460 2,288,838 1 100.00 * $500 or less or 0.005 percent or less. 1 Excludes undistributed obligations. 124 Department of Agriculture, Food and Nutrition Service 12–3505–0–1–605 Table 8-11. State Administrative Matching Grants for Food Stamp Program (10.561) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... 30,789 9,742 32,769 24,277 435,360 23,694 21,748 8,664 13,451 72,355 59,420 10,917 8,537 91,040 37,385 16,632 17,303 30,079 47,744 8,270 34,940 39,858 93,105 41,159 26,503 35,284 8,211 14,673 12,692 5,354 89,092 18,424 276,857 66,199 6,669 100,137 42,224 45,328 136,979 7,733 21,274 7,221 42,800 179,510 20,024 5,862 79,531 48,976 13,746 34,291 3,951 ...................... 2,517 ...................... ...................... ...................... 4,141 ...................... ¥110,543 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 30,616 9,687 32,585 24,140 432,909 23,560 21,625 8,615 13,375 71,947 59,085 10,855 8,489 90,528 37,175 16,538 17,206 29,909 47,475 8,224 34,743 39,634 92,581 40,928 26,353 35,085 8,165 14,591 12,620 5,324 88,591 18,321 275,299 65,826 6,631 99,573 41,987 45,073 136,208 7,690 21,154 7,180 42,560 178,500 19,911 5,829 79,083 48,701 13,668 34,098 3,929 ...................... 2,503 ...................... ...................... ...................... 4,118 ...................... ...................... 30,616 9,687 32,585 24,140 432,909 23,560 21,625 8,615 13,375 71,947 59,085 10,855 8,489 90,528 37,175 16,538 17,206 29,909 47,475 8,224 34,743 39,634 92,581 40,928 26,353 35,085 8,165 14,591 12,620 5,324 88,591 18,321 275,299 65,826 6,631 99,573 41,987 45,073 136,208 7,690 21,154 7,180 42,560 178,500 19,911 5,829 79,083 48,701 13,668 34,098 3,929 ...................... 2,503 ...................... ...................... ...................... 4,118 ...................... ...................... 31,948 10,109 34,002 25,191 451,744 24,585 22,566 8,990 13,957 75,078 61,656 11,328 8,858 94,467 38,792 17,258 17,954 31,211 49,541 8,582 36,255 41,359 96,609 42,708 27,500 36,612 8,520 15,226 13,170 5,556 92,446 19,118 287,277 68,690 6,920 103,906 43,814 47,034 142,135 8,024 22,074 7,493 44,411 186,267 20,778 6,083 82,524 50,820 14,263 35,582 4,100 ...................... 2,612 ...................... ...................... ...................... 4,297 ...................... ...................... 1.20 0.38 1.28 0.95 16.97 0.92 0.85 0.34 0.52 2.82 2.32 0.43 0.33 3.55 1.46 0.65 0.67 1.17 1.86 0.32 1.36 1.55 3.63 1.60 1.03 1.38 0.32 0.57 0.49 0.21 3.47 0.72 10.79 2.58 0.26 3.90 1.65 1.77 5.34 0.30 0.83 0.28 1.67 7.00 0.78 0.23 3.10 1.91 0.54 1.34 0.15 .................... 0.10 .................... .................... .................... 0.16 .................... .................... Total ................................................................................................. 2,454,896 ........................ 2,551,000 2,551,000 2,662,000 1 100.00 1 Excludes undistributed obligations. 125 Department of Education, Office of Elementary and Secondary Education 91–0900–0–1–501 Table 8-12. Title I Grants to Local Educational Agencies (84.010) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... Census ............................................................................................. Pacific Regional Education Lab ...................................................... 199,115 33,134 260,348 125,531 1,723,483 129,040 100,364 33,835 48,702 648,780 411,619 45,972 42,377 539,610 184,340 64,917 81,640 184,219 283,726 45,516 171,998 207,264 426,805 109,156 170,367 188,075 40,962 50,562 76,712 31,001 265,388 112,418 1,205,156 292,733 30,068 410,461 140,733 130,590 483,257 47,136 177,541 36,392 205,049 1,186,021 54,087 28,355 208,012 175,975 99,180 154,633 28,892 8,494 10,290 3,477 451,345 ...................... 11,413 88,423 ...................... 3,437 5,000 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 192,920 33,536 261,506 121,264 1,614,040 123,166 110,619 33,734 45,943 585,698 407,228 39,302 40,901 588,963 227,419 68,486 84,542 182,269 275,087 43,353 186,326 210,251 456,631 114,399 171,499 201,220 38,273 50,587 79,068 34,313 249,374 103,003 1,197,913 298,503 29,515 445,977 126,946 121,175 513,126 49,795 185,909 36,775 204,431 1,158,900 57,543 26,896 203,783 181,353 88,808 200,471 27,643 8,436 9,261 3,303 452,318 ...................... 11,336 89,762 ...................... 3,437 5,000 192,920 33,536 261,506 121,264 1,614,040 123,166 110,619 33,734 45,943 585,698 407,228 39,302 40,901 588,963 227,419 68,486 84,542 182,269 275,087 43,353 186,326 210,251 456,631 114,399 171,499 201,220 38,273 50,587 79,068 34,313 249,374 103,003 1,197,913 298,503 29,515 445,977 126,946 121,175 513,126 49,795 185,909 36,775 204,431 1,158,900 57,543 26,896 203,783 181,353 88,808 200,471 27,643 8,436 9,261 3,303 452,318 ...................... 11,336 89,762 ...................... 3,437 5,000 209,039 37,170 285,534 129,523 1,767,658 133,331 118,876 37,399 49,867 639,516 443,327 41,042 44,932 652,228 246,398 73,268 90,976 196,261 298,264 47,250 206,301 226,515 499,236 123,385 185,338 217,710 41,722 54,588 88,390 37,977 265,576 107,860 1,335,800 325,485 32,712 484,906 132,886 129,518 561,163 54,372 202,199 40,915 222,890 1,261,370 62,767 29,788 220,745 195,986 90,874 218,836 30,684 9,406 8,387 3,551 536,485 ...................... 12,639 100,076 ...................... 4,000 5,000 1.50 0.27 2.05 0.93 12.71 0.96 0.85 0.27 0.36 4.60 3.19 0.30 0.32 4.69 1.77 0.53 0.65 1.41 2.14 0.34 1.48 1.63 3.59 0.89 1.33 1.57 0.30 0.39 0.64 0.27 1.91 0.78 9.60 2.34 0.24 3.49 0.96 0.93 4.03 0.39 1.45 0.29 1.60 9.07 0.45 0.21 1.59 1.41 0.65 1.57 0.22 0.07 0.06 0.03 3.86 .................... 0.09 0.72 .................... 0.03 0.04 Total ................................................................................................. 12,713,125 ........................ 12,713,233 12,713,233 13,909,900 1 100.00 1 Excludes undistributed obligations. 126 Department of Education, Office of Elementary and Secondary Education 91–1000–0–1–501 Table 8-13. Improving Teacher Quality State Grants (84.367) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... 46,150 13,752 48,147 28,203 335,451 32,312 26,179 13,752 13,752 134,653 77,237 13,752 13,752 116,334 47,998 21,617 22,209 44,228 64,350 13,752 41,277 50,505 108,504 37,545 41,918 49,119 13,752 14,029 15,208 13,752 64,457 23,007 228,755 64,910 13,752 103,564 33,350 28,259 112,880 13,752 36,834 13,752 49,235 239,613 18,476 13,752 51,710 47,045 23,520 44,988 13,752 3,416 5,057 1,611 91,727 ...................... 4,281 14,365 14,437 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 46,151 13,752 48,148 28,203 335,457 32,313 26,179 13,752 13,752 134,655 77,239 13,752 13,752 116,336 47,999 21,618 22,209 44,229 64,351 13,752 41,278 50,506 108,505 37,545 41,919 49,120 13,752 14,029 15,208 13,752 64,458 23,007 228,758 64,912 13,752 103,566 33,350 28,260 112,881 13,752 36,835 13,752 49,236 239,617 18,476 13,752 51,711 47,046 23,521 44,989 13,752 3,416 5,057 1,611 91,729 ...................... 4,281 14,365 14,437 46,151 13,752 48,148 28,203 335,457 32,313 26,179 13,752 13,752 134,655 77,239 13,752 13,752 116,336 47,999 21,618 22,209 44,229 64,351 13,752 41,278 50,506 108,505 37,545 41,919 49,120 13,752 14,029 15,208 13,752 64,458 23,007 228,758 64,912 13,752 103,566 33,350 28,260 112,881 13,752 36,835 13,752 49,236 239,617 18,476 13,752 51,711 47,046 23,521 44,989 13,752 3,416 5,057 1,611 91,729 ...................... 4,281 14,365 14,437 44,496 13,259 45,973 27,163 322,115 31,117 25,400 13,259 13,259 129,262 74,165 13,259 13,259 112,548 46,366 20,960 21,515 42,819 62,372 13,259 39,938 49,056 105,577 36,445 40,606 47,466 13,259 13,536 14,524 13,259 62,398 22,186 222,219 62,230 13,259 100,485 32,147 27,220 109,650 13,259 35,403 13,259 47,408 230,552 17,818 13,259 49,857 45,399 22,900 43,715 13,259 3,281 4,895 1,551 88,438 ...................... 4,141 13,868 13,937 1.60 0.48 1.66 0.98 11.61 1.12 0.92 0.48 0.48 4.66 2.67 0.48 0.48 4.06 1.67 0.76 0.78 1.54 2.25 0.48 1.44 1.77 3.81 1.31 1.46 1.71 0.48 0.49 0.52 0.48 2.25 0.80 8.01 2.24 0.48 3.62 1.16 0.98 3.95 0.48 1.28 0.48 1.71 8.31 0.64 0.48 1.80 1.64 0.83 1.58 0.48 0.12 0.18 0.06 3.19 .................... 0.15 0.50 .................... Total ................................................................................................. 2,887,439 ........................ 2,887,488 2,887,488 2,787,488 1 100.00 1 Excludes undistributed obligations. 127 Department of Education, Office of Special Education and Rehabilitative Services 91–0300–0–1–501 Table 8-14. Special Education—Grants to States (84.027) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 ....................................................................... 167,635 32,452 162,328 103,400 1,130,940 137,481 122,567 29,742 14,954 580,457 285,369 36,801 50,036 466,850 235,740 112,542 98,509 145,505 174,506 50,442 184,574 261,681 369,262 174,985 109,703 209,400 33,879 68,834 61,046 43,748 333,206 84,016 699,789 288,431 24,150 403,485 136,350 118,887 393,753 40,312 161,465 28,769 214,982 888,269 98,327 23,285 259,641 204,037 70,009 191,909 24,428 6,122 13,575 4,652 99,227 6,579 8,628 86,306 ...................... 15,000 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 166,195 32,157 160,852 102,488 1,120,726 136,232 121,552 29,471 14,818 575,467 282,776 36,471 49,584 462,872 233,778 111,615 97,661 144,269 172,920 50,027 183,007 259,526 365,972 173,502 108,724 207,671 33,574 68,267 60,492 43,387 330,463 83,315 693,935 285,889 23,930 399,918 135,170 117,857 390,290 39,980 160,107 28,507 213,139 880,215 97,444 23,074 257,403 202,211 69,433 190,281 24,206 6,110 13,547 4,643 98,325 6,579 8,611 86,306 ...................... 15,000 166,195 32,157 160,852 102,488 1,120,726 136,232 121,552 29,471 14,818 575,467 282,776 36,471 49,584 462,872 233,778 111,615 97,661 144,269 172,920 50,027 183,007 259,526 365,972 173,502 108,724 207,671 33,574 68,267 60,492 43,387 330,463 83,315 693,935 285,889 23,930 399,918 135,170 117,857 390,290 39,980 160,107 28,507 213,139 880,215 97,444 23,074 257,403 202,211 69,433 190,281 24,206 6,110 13,547 4,643 98,325 6,579 8,611 86,306 ...................... 15,000 166,195 32,157 160,852 102,488 1,120,726 136,232 121,552 29,471 14,818 575,467 282,776 36,471 49,584 462,872 233,778 111,615 97,661 144,269 172,920 50,027 183,007 259,526 365,972 173,502 108,724 207,671 33,574 68,267 60,492 43,387 330,463 83,315 693,935 285,889 23,930 399,918 135,170 117,857 390,290 39,980 160,107 28,507 213,139 880,215 97,444 23,074 257,403 202,211 69,433 190,281 24,206 6,110 13,547 4,643 98,325 6,579 8,611 86,306 ...................... 15,000 1.58 0.31 1.53 0.98 10.68 1.30 1.16 0.28 0.14 5.48 2.70 0.35 0.47 4.41 2.23 1.06 0.93 1.38 1.65 0.48 1.74 2.47 3.49 1.65 1.04 1.98 0.32 0.65 0.58 0.41 3.15 0.79 6.61 2.72 0.23 3.81 1.29 1.12 3.72 0.38 1.53 0.27 2.03 8.39 0.93 0.22 2.45 1.93 0.66 1.81 0.23 0.06 0.13 0.04 0.94 0.06 0.08 0.82 .................... 0.14 Total ................................................................................................. 10,582,961 ........................ 10,491,941 10,491,941 10,491,941 1 100.00 1 Excludes undistributed obligations. 128 Department of Education, Office of Special Education and Rehabilitative Services 91–0301–0–1–506 Table 8-15. Rehabilitation Services—Vocational Rehabilitation Grants to States (84.126) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... 55,858 8,994 51,413 34,986 260,883 32,548 19,462 9,004 12,250 140,570 81,909 10,749 14,723 100,712 63,749 30,428 25,966 49,003 54,442 15,047 39,360 44,839 92,608 41,955 40,552 59,109 10,650 17,112 16,598 10,238 52,405 21,894 142,194 83,840 8,957 114,994 39,002 33,265 118,964 9,972 47,937 9,018 63,092 201,770 25,154 8,999 60,880 46,907 25,011 52,854 8,194 891 1,289 1,055 60,974 ...................... 1,936 33,024 ...................... ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 56,445 9,342 56,407 35,708 271,453 34,105 19,871 9,342 12,182 154,109 86,685 11,255 15,465 103,911 66,226 31,581 26,963 50,877 56,315 14,885 39,069 45,164 95,240 43,338 41,031 61,039 10,907 17,540 17,844 10,574 54,175 22,360 146,134 90,329 9,342 118,397 40,565 34,855 121,735 10,276 49,595 9,342 64,866 212,142 26,821 9,342 62,457 48,831 24,796 54,832 9,342 924 2,831 1,126 70,460 ...................... 1,965 34,444 ...................... 56,445 9,342 56,407 35,708 271,453 34,105 19,871 9,342 12,182 154,109 86,685 11,255 15,465 103,911 66,226 31,581 26,963 50,877 56,315 14,885 39,069 45,164 95,240 43,338 41,031 61,039 10,907 17,540 17,844 10,574 54,175 22,360 146,134 90,329 9,342 118,397 40,565 34,855 121,735 10,276 49,595 9,342 64,866 212,142 26,821 9,342 62,457 48,831 24,796 54,832 9,342 924 2,831 1,126 70,460 ...................... 1,965 34,444 ...................... 55,155 9,342 57,084 35,365 271,762 35,528 19,720 9,342 12,492 150,676 91,012 10,900 15,648 103,891 65,825 30,768 26,583 51,115 55,711 14,854 37,646 45,051 96,112 42,601 40,799 61,268 10,624 17,140 17,653 10,605 54,539 22,386 145,603 91,614 9,342 118,931 40,118 34,701 119,677 9,932 50,089 9,342 64,763 214,752 27,637 9,342 61,302 50,423 25,018 54,572 9,342 916 2,840 1,142 70,167 ...................... 1,951 34,444 ...................... 1.94 0.33 2.01 1.25 9.58 1.25 0.70 0.33 0.44 5.31 3.21 0.38 0.55 3.66 2.32 1.08 0.94 1.80 1.96 0.52 1.33 1.59 3.39 1.50 1.44 2.16 0.37 0.60 0.62 0.37 1.92 0.79 5.13 3.23 0.33 4.19 1.41 1.22 4.22 0.35 1.77 0.33 2.28 7.57 0.97 0.33 2.16 1.78 0.88 1.92 0.33 0.03 0.10 0.04 2.47 .................... 0.07 1.21 .................... Total ................................................................................................. 2,720,192 ........................ 2,837,160 2,837,160 2,837,160 1 100.00 1 Excludes undistributed obligations. 129 Department of Health and Human Services, Centers for Medicare and Medicaid Services 75–0515–0–1–551 Table 8-16. State Children’s Health Insurance Program (93.767) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... 64,182 9,100 107,366 43,796 646,682 57,951 34,535 9,045 9,557 249,330 129,458 12,404 20,611 225,395 73,000 33,096 27,490 57,764 77,133 11,928 62,419 81,306 117,165 46,515 123,498 64,245 12,558 32,591 41,896 9,193 139,970 42,157 272,452 113,067 6,346 124,632 57,371 46,887 134,097 33,619 55,545 8,372 80,407 454,742 32,208 4,818 72,303 64,706 23,350 55,764 5,881 546 1,592 501 41,675 ...................... 1,183 ...................... ...................... ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 74,295 11,535 127,859 49,308 790,789 71,545 39,891 11,058 11,709 296,067 165,874 15,314 24,316 209,767 93,469 36,230 36,542 70,115 89,586 15,172 66,961 73,335 149,383 48,613 60,495 72,140 15,736 21,892 52,056 10,779 105,206 52,045 340,807 136,117 7,738 157,997 70,828 56,734 173,554 13,983 70,651 10,354 97,460 557,980 40,486 5,753 94,070 79,883 27,517 69,563 6,942 630 1,838 578 48,090 ...................... 1,365 ...................... ...................... 74,295 11,535 127,859 49,308 790,789 71,545 39,891 11,058 11,709 296,067 165,874 15,314 24,316 209,767 93,469 36,230 36,542 70,115 89,586 15,172 66,961 73,335 149,383 48,613 60,495 72,140 15,736 21,892 52,056 10,779 105,206 52,045 340,807 136,117 7,738 157,997 70,828 56,734 173,554 13,983 70,651 10,354 97,460 557,980 40,486 5,753 94,070 79,883 27,517 69,563 6,942 630 1,838 578 48,090 ...................... 1,365 ...................... ...................... 74,295 11,535 127,859 49,308 790,789 71,545 39,891 11,058 11,709 296,067 165,874 15,314 24,316 209,767 93,469 36,230 36,542 70,115 89,586 15,172 66,961 73,335 149,383 48,613 60,495 72,140 15,736 21,892 52,056 10,779 105,206 52,045 340,807 136,117 7,738 157,997 70,828 56,734 173,554 13,983 70,651 10,354 97,460 557,980 40,486 5,753 94,070 79,883 27,517 69,563 6,942 630 1,838 578 48,090 ...................... 1,365 ...................... ...................... 1.47 0.23 2.54 0.98 15.69 1.42 0.79 0.22 0.23 5.87 3.29 0.30 0.48 4.16 1.85 0.72 0.73 1.39 1.78 0.30 1.33 1.46 2.96 0.96 1.20 1.43 0.31 0.43 1.03 0.21 2.09 1.03 6.76 2.70 0.15 3.13 1.41 1.13 3.44 0.28 1.40 0.21 1.93 11.07 0.80 0.11 1.87 1.58 0.55 1.38 0.14 0.01 0.04 0.01 0.95 .................... 0.03 .................... .................... Total ................................................................................................. 1 4,365,400 ........................ 5,040,000 5,040,000 2 5,040,000 3 100.00 1 Includes 2 Assumes 3 Excludes $283 million in shortfall funding from the Deficit Reduction Act. program receives reauthorization. undistributed obligations. 130 Department of Health and Human Services, Centers for Medicare and Medicaid Services 75–0512–0–1–551 Table 8-17. Grants to States for Medicaid (93.778) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 ............................................................... Incurred But Not Reported ............................................................. Adjustments ..................................................................................... 2,811,355 733,492 4,436,368 2,304,017 21,931,980 1,532,446 2,227,657 515,728 1,062,487 8,733,890 4,744,732 728,625 777,351 5,993,277 3,696,015 1,754,671 1,320,586 3,343,139 3,631,368 1,506,300 2,929,314 5,150,675 5,206,747 3,079,537 2,810,880 4,208,911 569,840 1,050,601 719,691 626,147 5,047,720 1,929,108 24,223,095 6,206,828 354,268 7,945,914 2,199,646 2,079,179 9,287,096 1,004,539 2,986,972 430,904 4,825,494 11,431,765 1,167,263 575,123 2,529,202 3,240,127 1,658,639 2,880,647 256,828 6,120 9,390 3,467 241,017 ...................... 9,702 ...................... ...................... 186,478 161,600 1,974,295 264,230 6,829,757 ¥241,804 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 2,806,831 872,800 4,662,315 2,444,471 20,818,937 1,603,055 2,224,734 545,539 1,199,039 8,715,628 4,541,194 643,587 820,475 5,775,493 3,888,848 1,717,644 1,354,092 3,306,988 3,692,810 1,157,172 2,952,992 5,911,206 5,336,206 3,168,233 2,696,873 4,442,233 546,316 957,874 671,157 650,051 4,952,112 1,997,852 25,020,102 6,528,916 366,542 8,543,294 2,662,883 2,158,554 9,469,818 974,072 2,898,600 431,162 4,594,265 12,634,509 1,119,241 591,582 2,726,856 3,197,092 1,779,241 2,985,034 265,055 8,496 13,130 4,662 286,222 ...................... 13,295 ...................... ...................... 256,900 174,800 2,905,330 350,000 3,000,000 ¥7,843,497 2,806,831 872,800 4,662,315 2,444,471 20,818,937 1,603,055 2,224,734 545,539 1,199,039 8,715,628 4,541,194 643,587 820,475 5,775,493 3,888,848 1,717,644 1,354,092 3,306,988 3,692,810 1,157,172 2,952,992 5,911,206 5,336,206 3,168,233 2,696,873 4,442,233 546,316 957,874 671,157 650,051 4,952,112 1,997,852 25,020,102 6,528,916 366,542 8,543,294 2,662,883 2,158,554 9,469,818 974,072 2,898,600 431,162 4,594,265 12,634,509 1,119,241 591,582 2,726,856 3,197,092 1,779,241 2,985,034 265,055 8,496 13,130 4,662 286,222 ...................... 13,295 ...................... ...................... 256,900 174,800 2,905,330 350,000 3,000,000 ¥7,843,497 2,819,149 897,687 5,114,866 2,661,730 21,560,850 1,675,586 2,285,441 592,470 1,279,839 9,121,444 4,955,788 657,414 891,629 6,168,570 4,069,372 1,829,478 1,395,370 3,461,452 3,999,621 1,194,973 3,116,243 5,927,750 5,162,765 3,577,872 2,970,793 4,712,989 563,911 1,008,403 671,000 694,608 5,130,144 2,103,655 24,961,924 7,831,399 386,256 8,687,791 2,732,840 2,316,595 9,928,379 1,056,158 2,853,534 430,179 4,629,530 13,023,608 1,192,293 625,536 2,943,719 3,281,008 1,899,449 3,040,913 274,265 8,496 13,690 4,662 286,222 ...................... 13,815 ...................... ...................... 262,000 183,540 2,761,957 ...................... 3,000,000 ¥4,016,947 1.36 0.43 2.47 1.29 10.42 0.81 1.10 0.29 0.62 4.41 2.40 0.32 0.43 2.98 1.97 0.88 0.67 1.67 1.93 0.58 1.51 2.87 2.50 1.73 1.44 2.28 0.27 0.49 0.32 0.34 2.48 1.02 12.07 3.79 0.19 4.20 1.32 1.12 4.80 0.51 1.38 0.21 2.24 6.30 0.58 0.30 1.42 1.59 0.92 1.47 0.13 * 0.01 * 0.14 .................... 0.01 .................... .................... 0.13 0.09 1.34 .................... 1.45 ¥1.94 Total ................................................................................................. 201,842,436 ........................ 195,190,913 195,190,913 206,885,673 1 100.00 * $500 or less or 0.005 percent or less. 1 Excludes undistributed obligations. 131 Department of Health and Human Services, Administration for Children and Families 75–1552–0–1–609 Table 8-18. Temporary Assistance for Needy Families (TANF)—Family Assistance Grants (93.558) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 ........................................................................ Responsible Fatherhood ................................................................. Territories Matching Fund ............................................................... 123,072 54,837 226,449 63,117 3,669,879 150,126 264,387 31,411 90,505 624,265 374,208 98,905 33,911 585,057 207,020 131,525 101,931 181,288 181,998 78,121 228,194 459,371 776,207 263,548 100,142 217,052 39,172 57,855 46,637 38,521 404,035 117,131 2,443,135 338,350 26,400 727,968 147,594 166,799 719,499 95,104 119,961 21,280 251,394 551,999 84,349 47,353 158,442 382,854 109,185 314,580 18,430 ...................... 2,599 ...................... 71,562 ...................... 2,890 160,573 ...................... 7,558 149,975 ...................... ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 104,408 53,620 226,131 62,951 3,665,160 149,626 266,788 32,291 92,610 622,746 368,025 98,905 33,911 585,057 206,799 130,994 101,931 181,288 180,999 78,121 229,098 459,371 775,353 263,434 95,803 217,052 39,172 57,769 47,641 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 47,353 158,285 382,854 110,176 314,499 18,501 ...................... 3,465 ...................... 71,563 ...................... 2,847 167,529 ...................... 7,633 150,000 15,000 104,408 53,620 226,131 62,951 3,665,160 149,626 266,788 32,291 92,610 622,746 368,025 98,905 33,911 585,057 206,799 130,994 101,931 181,288 180,999 78,121 229,098 459,371 775,353 263,434 95,803 217,052 39,172 57,769 47,641 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 47,353 158,285 382,854 110,176 314,499 18,501 ...................... 3,465 ...................... 71,563 ...................... 2,847 167,529 ...................... 7,633 150,000 15,000 104,408 53,620 226,131 62,951 3,665,160 149,626 266,788 32,291 92,610 622,746 368,025 98,905 33,911 585,057 206,799 130,994 101,931 181,288 180,999 78,121 229,098 459,371 775,353 263,434 95,803 217,052 39,172 57,769 47,641 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 47,353 158,285 382,854 110,176 314,499 18,501 ...................... 3,465 ...................... 71,563 ...................... 2,847 167,529 ...................... 7,633 150,000 15,000 0.61 0.31 1.33 0.37 21.49 0.88 1.56 0.19 0.54 3.65 2.16 0.58 0.20 3.43 1.21 0.77 0.60 1.06 1.06 0.46 1.34 2.69 4.55 1.54 0.56 1.27 0.23 0.34 0.28 0.23 2.37 0.69 14.32 1.98 0.15 4.27 0.87 0.98 4.22 0.56 0.59 0.12 1.25 3.16 0.49 0.28 0.93 2.24 0.65 1.84 0.11 .................... 0.02 .................... 0.42 .................... 0.02 0.98 .................... 0.04 0.88 0.09 Total 1 ............................................................................................... 2 17,139,710 ........................ 17,058,625 17,058,625 17,058,625 3 100.00 1 Unobligated 2 Includes 3 Excludes contingency fund balances were $1,900 million in 2006 and are estimated to be $1,793 million in 2007 and $1,703 million in 2008. State Family Assistance Grants and Supplemental Population Growth Grants. For 2006, also includes $107 million in Contingency funds. undistributed obligations. 132 Department of Health and Human Services, Administration for Children and Families 75–1501–0–1–609 Table 8-19. Child Support Enforcement—Federal Share of State and Local Administrative Costs and Incentives (93.563) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... 42,365 16,879 48,888 31,758 795,581 57,248 42,267 20,373 18,081 212,260 83,222 14,539 20,349 116,701 46,365 41,034 37,582 48,210 54,608 12,539 65,615 68,874 199,793 106,479 18,695 69,953 10,161 34,168 29,869 14,543 172,482 27,776 243,896 101,518 9,382 240,706 41,393 43,159 192,854 8,004 29,500 6,903 54,725 226,374 31,737 8,161 72,485 109,443 23,103 99,816 6,663 ...................... 4,271 ...................... 41,585 ...................... 3,928 17,665 ...................... ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 44,452 17,711 51,296 33,322 834,765 60,068 44,349 21,376 18,971 222,714 87,321 15,255 21,351 122,448 48,649 43,055 39,433 50,584 57,298 13,157 68,847 72,266 209,633 111,723 19,616 73,398 10,661 35,851 31,341 15,259 180,977 29,144 255,908 106,518 9,844 252,561 43,431 45,285 202,352 8,398 30,953 7,243 57,420 237,523 33,300 8,563 76,055 114,833 24,241 104,732 6,992 ...................... 4,481 ...................... 43,633 ...................... 4,121 30,000 ...................... 44,452 17,711 51,296 33,322 834,765 60,068 44,349 21,376 18,971 222,714 87,321 15,255 21,351 122,448 48,649 43,055 39,433 50,584 57,298 13,157 68,847 72,266 209,633 111,723 19,616 73,398 10,661 35,851 31,341 15,259 180,977 29,144 255,908 106,518 9,844 252,561 43,431 45,285 202,352 8,398 30,953 7,243 57,420 237,523 33,300 8,563 76,055 114,833 24,241 104,732 6,992 ...................... 4,481 ...................... 43,633 ...................... 4,121 30,000 ...................... 39,637 15,792 45,739 29,713 744,340 53,561 39,545 19,060 16,916 198,589 77,862 13,603 19,038 109,184 43,379 38,391 35,161 45,105 51,091 11,732 61,389 64,438 186,925 99,621 17,491 65,447 9,507 31,967 27,946 13,606 161,373 25,987 228,187 94,980 8,778 225,203 38,727 40,379 180,433 7,488 27,600 6,458 51,200 211,793 29,693 7,635 67,816 102,394 21,615 93,387 6,234 ...................... 3,996 ...................... 38,907 ...................... 3,675 53,000 ...................... 1.00 0.40 1.15 0.75 18.78 1.35 1.00 0.48 0.43 5.01 1.96 0.34 0.48 2.76 1.09 0.97 0.89 1.14 1.29 0.30 1.55 1.63 4.72 2.51 0.44 1.65 0.24 0.81 0.71 0.34 4.07 0.66 5.76 2.40 0.22 5.68 0.98 1.02 4.55 0.19 0.70 0.16 1.29 5.34 0.75 0.19 1.71 2.58 0.55 2.36 0.16 .................... 0.10 .................... 0.98 .................... 0.09 1.34 .................... Total ................................................................................................. 4,196,528 ........................ 4,414,678 4,414,678 3,962,713 1 100.00 1 Excludes undistributed obligations. 133 Department of Health and Human Services, Administration for Children and Families 75–1502–0–1–609 Table 8-20. Low Income Home Energy Assistance Program (93.568) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... Discretionary Funds ........................................................................ Technical Assistance ....................................................................... 31,129 8,738 13,994 22,765 152,030 31,704 47,809 10,141 7,852 49,529 39,170 2,555 13,673 145,959 53,980 36,762 26,786 44,347 32,010 25,835 58,499 82,764 108,028 78,363 26,793 59,541 14,224 21,102 7,112 18,197 77,346 11,031 250,543 67,810 14,298 122,259 26,228 24,059 134,810 15,780 24,867 12,227 46,363 82,421 16,806 13,639 71,259 38,885 23,818 70,538 6,644 55 120 42 2,990 ...................... 114 26,135 ...................... 26,953 294 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 16,673 7,418 7,448 12,796 89,199 31,334 40,920 5,431 6,355 26,527 20,979 2,113 11,642 113,259 51,272 36,343 16,675 26,686 17,144 25,541 31,332 81,820 106,543 77,469 14,350 45,240 11,843 17,961 3,809 15,493 75,798 9,358 247,980 36,319 12,753 100,195 13,991 23,614 133,273 13,435 13,318 10,410 27,033 44,144 14,233 11,613 38,166 38,355 17,660 69,733 5,558 44 95 33 2,381 ...................... 91 21,280 ...................... 27,225 297 16,673 7,418 7,448 12,796 89,199 31,334 40,920 5,431 6,355 26,527 20,979 2,113 11,642 113,259 51,272 36,343 16,675 26,686 17,144 25,541 31,332 81,820 106,543 77,469 14,350 45,240 11,843 17,961 3,809 15,493 75,798 9,358 247,980 36,319 12,753 100,195 13,991 23,614 133,273 13,435 13,318 10,410 27,033 44,144 14,233 11,613 38,166 38,355 17,660 69,733 5,558 44 95 33 2,381 ...................... 91 21,280 ...................... 27,225 297 12,574 5,594 5,617 9,650 67,269 23,631 30,860 4,096 4,793 20,006 15,822 1,593 8,780 85,415 38,667 27,409 12,576 20,126 12,929 19,262 23,629 61,706 80,351 58,424 10,822 34,118 8,931 13,546 2,873 11,684 57,164 7,058 187,016 27,390 9,617 75,563 10,552 17,809 100,509 10,132 10,044 7,851 20,387 33,292 10,734 8,758 28,783 28,925 13,319 52,590 4,191 33 72 25 1,795 ...................... 68 16,048 ...................... 27,225 297 0.84 0.37 0.37 0.64 4.48 1.58 2.06 0.27 0.32 1.33 1.05 0.11 0.59 5.69 2.58 1.83 0.84 1.34 0.86 1.28 1.58 4.11 5.36 3.89 0.72 2.27 0.60 0.90 0.19 0.78 3.81 0.47 12.47 1.83 0.64 5.04 0.70 1.19 6.70 0.68 0.67 0.52 1.36 2.22 0.72 0.58 1.92 1.93 0.89 3.51 0.28 * * * 0.12 .................... * 1.07 .................... 1.82 0.02 Total ................................................................................................. 2,479,725 ........................ 1,980,000 1,980,000 1,500,000 1 100.00 * $500 or less or 0.005 percent or less. 1 Excludes undistributed obligations. 134 Department of Health and Human Services, Administration for Children and Families 75–1515–0–1–609 Table 8-21. Child Care and Development Block Grant (93.575) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 ............................................................................ 40,558 4,031 49,967 24,681 228,983 23,735 14,304 4,526 3,096 114,828 75,686 8,099 11,585 75,951 41,403 18,217 18,822 35,437 46,991 6,852 26,266 25,610 58,711 25,797 32,277 38,877 5,699 11,885 13,529 4,722 36,865 18,519 107,464 65,036 3,832 67,666 31,231 22,319 62,745 5,809 37,046 5,724 45,097 210,925 22,353 2,946 39,823 32,997 13,678 29,774 2,803 2,681 4,064 1,700 38,244 ...................... 1,866 41,242 ...................... 4,587 9,521 982 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 40,166 4,037 50,263 25,039 230,818 23,885 14,330 4,408 3,057 114,080 77,908 7,737 11,574 76,663 41,684 17,763 18,656 35,306 45,956 6,705 25,531 25,589 58,069 25,584 31,879 38,680 5,650 11,506 14,087 4,714 36,730 18,306 107,664 66,549 3,645 67,281 31,057 22,465 62,629 5,497 36,946 5,416 44,427 216,109 22,349 2,898 38,903 33,070 13,550 29,631 2,694 2,679 4,061 1,722 35,432 ...................... 1,847 41,242 ...................... 5,155 9,821 982 40,166 4,037 50,263 25,039 230,818 23,885 14,330 4,408 3,057 114,080 77,908 7,737 11,574 76,663 41,684 17,763 18,656 35,306 45,956 6,705 25,531 25,589 58,069 25,584 31,879 38,680 5,650 11,506 14,087 4,714 36,730 18,306 107,664 66,549 3,645 67,281 31,057 22,465 62,629 5,497 36,946 5,416 44,427 216,109 22,349 2,898 38,903 33,070 13,550 29,631 2,694 2,679 4,061 1,722 35,432 ...................... 1,847 41,242 ...................... 5,155 9,821 982 40,166 4,037 50,263 25,039 230,818 23,885 14,330 4,408 3,057 114,080 77,908 7,737 11,574 76,663 41,684 17,763 18,656 35,306 45,956 6,705 25,531 25,589 58,069 25,584 31,879 38,680 5,650 11,506 14,087 4,714 36,730 18,306 107,664 66,549 3,645 67,281 31,057 22,465 62,629 5,497 36,946 5,416 44,427 216,109 22,349 2,898 38,903 33,070 13,550 29,631 2,694 2,679 4,061 1,722 35,432 ...................... 1,847 41,242 ...................... 5,155 9,821 982 1.95 0.20 2.44 1.21 11.19 1.16 0.69 0.21 0.15 5.53 3.78 0.38 0.56 3.72 2.02 0.86 0.90 1.71 2.23 0.33 1.24 1.24 2.82 1.24 1.55 1.88 0.27 0.56 0.68 0.23 1.78 0.89 5.22 3.23 0.18 3.26 1.51 1.09 3.04 0.27 1.79 0.26 2.15 10.48 1.08 0.14 1.89 1.60 0.66 1.44 0.13 0.13 0.20 0.08 1.72 .................... 0.09 2.00 .................... 0.25 0.48 0.05 Total ................................................................................................. 2,060,664 ........................ 2,062,081 2,062,081 2,062,081 1 100.00 1 Excludes undistributed obligations. 135 Department of Health and Human Services, Administration for Children and Families 75–1550–0–1–609 Table 8-22. Child Care and Development Fund—Mandatory (93.596a) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 85,590 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 8,308 101,984 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 ...................... ...................... ...................... ...................... ...................... ...................... 58,340 ...................... 3,792 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 16,442 3,545 19,827 5,300 85,590 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 8,308 101,984 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 ...................... ...................... ...................... ...................... ...................... ...................... 58,340 ...................... 3,792 16,442 3,545 19,827 5,300 85,590 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 8,308 101,984 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 ...................... ...................... ...................... ...................... ...................... ...................... 58,340 ...................... 3,792 16,442 3,545 19,827 5,300 85,590 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 8,308 101,984 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 ...................... ...................... ...................... ...................... ...................... ...................... 58,340 ...................... 3,792 1.33 0.29 1.60 0.43 6.90 0.82 1.51 0.42 0.37 3.47 2.95 0.40 0.23 4.59 2.11 0.69 0.79 1.35 1.12 0.24 1.88 3.63 2.59 1.89 0.51 1.99 0.26 0.85 0.21 0.37 2.13 0.67 8.23 5.62 0.20 5.66 2.01 1.57 4.46 0.54 0.80 0.14 3.04 4.83 1.02 0.32 1.72 3.38 0.70 1.98 0.23 .................... .................... .................... .................... .................... .................... 4.71 .................... 0.31 Total ................................................................................................. 1,239,657 ........................ 1,239,657 1,239,657 1,239,657 1 100.00 1 Excludes undistributed obligations. 136 Department of Health and Human Services, Administration for Children and Families 75–1550–0–1–609 Table 8-23. Child Care and Development Fund—Matching (93.596b) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 ....................................................................... 24,871 4,204 36,239 15,462 221,412 27,340 18,943 4,420 2,627 91,116 54,242 6,918 8,522 74,674 36,702 15,328 15,603 22,416 26,556 6,100 31,566 33,274 57,026 27,941 17,173 31,311 4,548 9,917 14,146 6,685 49,429 11,122 104,303 49,039 3,072 62,884 19,718 19,355 63,075 5,467 23,271 4,289 31,862 146,569 17,634 2,885 41,312 33,507 8,648 29,166 2,578 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 3,501 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 24,871 4,196 36,179 15,435 221,032 27,294 18,908 4,413 2,622 90,962 54,150 6,906 8,507 74,544 36,639 15,300 15,576 22,416 26,556 6,089 31,566 33,216 56,925 27,892 17,143 31,256 4,539 9,900 14,123 6,673 49,344 11,102 104,120 48,955 3,066 62,770 19,683 19,321 62,964 5,458 23,232 4,282 31,806 146,323 17,634 2,880 41,242 33,507 8,633 29,114 2,578 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 3,501 24,871 4,196 36,179 15,435 221,032 27,294 18,908 4,413 2,622 90,962 54,150 6,906 8,507 74,544 36,639 15,300 15,576 22,416 26,556 6,089 31,566 33,216 56,925 27,892 17,143 31,256 4,539 9,900 14,123 6,673 49,344 11,102 104,120 48,955 3,066 62,770 19,683 19,321 62,964 5,458 23,232 4,282 31,806 146,323 17,634 2,880 41,242 33,507 8,633 29,114 2,578 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 3,501 24,871 4,196 36,179 15,435 221,032 27,294 18,908 4,413 2,622 90,962 54,150 6,906 8,507 74,544 36,639 15,300 15,576 22,416 26,556 6,089 31,566 33,216 56,925 27,892 17,143 31,256 4,539 9,900 14,123 6,673 49,344 11,102 104,120 48,955 3,066 62,770 19,683 19,321 62,964 5,458 23,232 4,282 31,806 146,323 17,634 2,880 41,242 33,507 8,633 29,114 2,578 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 3,501 1.48 0.25 2.16 0.92 13.18 1.63 1.13 0.26 0.16 5.42 3.23 0.41 0.51 4.44 2.18 0.91 0.93 1.34 1.58 0.36 1.88 1.98 3.39 1.66 1.02 1.86 0.27 0.59 0.84 0.40 2.94 0.66 6.21 2.92 0.18 3.74 1.17 1.15 3.75 0.33 1.39 0.26 1.90 8.72 1.05 0.17 2.46 2.00 0.51 1.74 0.15 .................... .................... .................... .................... .................... .................... .................... .................... 0.21 Total ................................................................................................. 1 1,679,968 ........................ 1,677,343 1,677,343 1,677,343 2 100.00 1 Includes 2 Excludes reappropriated funds from prior year. undistributed obligations. 137 Department of Health and Human Services, Administration for Children and Families 75–1536–0–1–506 Table 8-24. Head Start (93.600) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... Palau ................................................................................................ Migrant Program .............................................................................. Unallocated Expansion .................................................................... Technical Assistance ....................................................................... Research, Development, & Education ........................................... Program Support ............................................................................. Hurricane Relief ............................................................................... 105,468 12,337 102,373 63,824 822,591 67,594 51,333 13,092 24,834 260,267 166,672 22,637 22,565 267,812 95,151 50,988 50,372 106,670 144,312 27,310 77,184 107,169 231,993 71,219 159,927 117,695 20,721 35,665 24,015 13,240 127,607 51,730 428,470 139,735 16,988 244,205 80,166 58,821 225,685 21,775 81,603 18,620 118,039 473,492 37,353 13,412 98,018 99,268 50,091 89,887 12,236 2,127 2,140 1,646 246,599 ...................... 7,910 185,394 ...................... 1,319 283,371 ...................... 164,057 19,788 38,202 73,999 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 105,468 12,337 102,373 63,824 822,591 67,594 51,333 13,092 24,834 260,267 166,672 22,637 22,565 267,812 95,151 50,988 50,372 106,670 144,312 27,310 77,184 107,169 231,993 71,219 159,927 117,695 20,721 35,665 24,015 13,240 127,607 51,730 428,470 139,735 16,988 244,205 80,166 58,821 225,685 21,775 81,603 18,620 118,039 473,492 37,353 13,412 98,018 99,268 50,091 89,887 12,236 2,127 2,140 1,646 246,599 ...................... 7,910 185,394 ...................... 1,319 283,371 70,629 104,815 19,800 38,590 ...................... 105,468 12,337 102,373 63,824 822,591 67,594 51,333 13,092 24,834 260,267 166,672 22,637 22,565 267,812 95,151 50,988 50,372 106,670 144,312 27,310 77,184 107,169 231,993 71,219 159,927 117,695 20,721 35,665 24,015 13,240 127,607 51,730 428,470 139,735 16,988 244,205 80,166 58,821 225,685 21,775 81,603 18,620 118,039 473,492 37,353 13,412 98,018 99,268 50,091 89,887 12,236 2,127 2,140 1,646 246,599 ...................... 7,910 185,394 ...................... 1,319 283,371 70,629 104,815 19,800 38,590 ...................... 105,468 12,337 102,373 63,824 822,591 67,594 51,333 13,092 24,834 260,267 166,672 22,637 22,565 267,812 95,151 50,988 50,372 106,670 144,312 27,310 77,184 107,169 231,993 71,219 159,927 117,695 20,721 35,665 24,015 13,240 127,607 51,730 428,470 139,735 16,988 244,205 80,166 58,821 225,685 21,775 81,603 18,620 118,039 473,492 37,353 13,412 98,018 99,268 50,091 89,887 12,236 2,127 2,140 1,646 246,599 ...................... 7,910 185,394 ...................... 1,319 283,371 70,629 104,815 19,800 38,590 ...................... 1.55 0.18 1.51 0.94 12.12 1.00 0.76 0.19 0.37 3.83 2.46 0.33 0.33 3.95 1.40 0.75 0.74 1.57 2.13 0.40 1.14 1.58 3.42 1.05 2.36 1.73 0.31 0.53 0.35 0.20 1.88 0.76 6.31 2.06 0.25 3.60 1.18 0.87 3.32 0.32 1.20 0.27 1.74 6.97 0.55 0.20 1.44 1.46 0.74 1.32 0.18 0.03 0.03 0.02 3.63 .................... 0.12 2.73 .................... 0.02 4.17 1.04 1.54 0.29 0.57 .................... Total ................................................................................................. 6,850,783 ........................ 6,788,571 6,788,571 6,788,571 1 100.00 1 Excludes undistributed obligations. 138 Department of Health and Human Services, Administration for Children and Families 75–1545–0–1–506 Table 8-25. Foster Care—Title IV–E (93.658) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 ...................................................................... 18,616 16,010 94,357 31,578 1,183,911 61,416 82,984 6,157 9,363 144,204 31,631 23,637 8,907 213,896 99,023 26,704 29,911 54,155 55,643 8,149 121,066 68,972 91,435 58,689 7,925 57,235 12,864 14,470 21,183 16,913 54,992 20,872 342,991 84,336 9,751 201,789 42,358 55,539 220,820 13,014 10,622 5,592 40,841 212,079 23,033 11,452 78,547 78,829 12,715 84,861 3,080 ...................... ...................... ...................... 37,195 ...................... ...................... ...................... ...................... 9,051 ...................... ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 19,252 16,557 97,580 32,657 1,224,363 63,514 85,820 6,367 9,683 149,131 32,712 24,445 9,212 221,204 102,406 27,617 30,933 56,005 57,544 8,427 125,202 71,329 94,559 60,694 8,196 59,191 13,303 14,964 21,907 17,491 56,870 21,585 354,710 87,218 10,084 208,683 43,805 57,437 228,365 13,459 10,985 5,783 42,236 219,325 23,820 11,843 81,231 81,522 13,149 87,761 3,185 ...................... ...................... ...................... 38,466 ...................... ...................... ...................... ...................... 11,213 ...................... 19,252 16,557 97,580 32,657 1,224,363 63,514 85,820 6,367 9,683 149,131 32,712 24,445 9,212 221,204 102,406 27,617 30,933 56,005 57,544 8,427 125,202 71,329 94,559 60,694 8,196 59,191 13,303 14,964 21,907 17,491 56,870 21,585 354,710 87,218 10,084 208,683 43,805 57,437 228,365 13,459 10,985 5,783 42,236 219,325 23,820 11,843 81,231 81,522 13,149 87,761 3,185 ...................... ...................... ...................... 38,466 ...................... ...................... ...................... ...................... 11,213 ...................... 19,703 16,945 99,867 33,422 1,253,059 65,003 87,831 6,516 9,909 152,626 33,478 25,018 9,428 226,388 104,806 28,264 31,658 57,318 58,893 8,624 128,136 73,000 96,775 62,116 8,388 60,578 13,615 15,315 22,420 17,901 58,203 22,091 363,022 89,262 10,320 213,574 44,832 58,783 233,717 13,774 11,243 5,918 43,226 224,466 24,378 12,121 83,135 83,432 13,457 89,818 3,260 ...................... ...................... ...................... 39,367 ...................... ...................... ...................... ...................... 15,601 9,000 0.43 0.37 2.17 0.73 27.28 1.42 1.91 0.14 0.22 3.32 0.73 0.54 0.21 4.93 2.28 0.62 0.69 1.25 1.28 0.19 2.79 1.59 2.11 1.35 0.18 1.32 0.30 0.33 0.49 0.39 1.27 0.48 7.90 1.94 0.22 4.65 0.98 1.28 5.09 0.30 0.24 0.13 0.94 4.89 0.53 0.26 1.81 1.82 0.29 1.96 0.07 .................... .................... .................... 0.86 .................... .................... .................... .................... 0.34 0.20 Total ................................................................................................. 4,325,363 ........................ 1 4,475,000 4,475,000 4,593,000 2 100.00 1 Assumes 2 Excludes a lapse of $282 million. undistributed obligations. 139 Department of Health and Human Services, Administration for Children and Families 75–1545–0–1–506 Table 8-26. Adoption Assistance (93.659) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... 7,812 7,283 37,146 10,132 313,126 19,941 24,854 1,605 11,621 60,960 34,751 11,221 3,369 88,696 36,956 21,852 13,084 24,766 13,507 8,318 19,671 28,982 113,110 22,009 4,284 36,222 7,437 7,035 6,573 3,571 31,676 11,677 211,357 28,654 3,397 146,037 28,611 30,402 73,207 9,409 13,004 2,706 29,991 58,296 6,826 5,678 14,197 34,314 10,741 39,670 850 ...................... ...................... ...................... 866 ...................... ...................... ...................... ...................... ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 8,839 8,241 42,030 11,464 354,296 22,563 28,122 1,816 13,149 68,975 39,320 12,697 3,812 100,357 41,815 24,725 14,804 28,022 15,283 9,412 22,257 32,793 127,982 24,903 4,847 40,984 8,415 7,960 7,437 4,041 35,840 13,212 239,146 32,422 3,843 165,238 32,373 34,399 82,832 10,646 14,714 3,062 33,934 65,960 7,724 6,425 16,064 38,825 12,153 44,885 962 ...................... ...................... ...................... 980 ...................... ...................... ...................... ...................... 8,839 8,241 42,030 11,464 354,296 22,563 28,122 1,816 13,149 68,975 39,320 12,697 3,812 100,357 41,815 24,725 14,804 28,022 15,283 9,412 22,257 32,793 127,982 24,903 4,847 40,984 8,415 7,960 7,437 4,041 35,840 13,212 239,146 32,422 3,843 165,238 32,373 34,399 82,832 10,646 14,714 3,062 33,934 65,960 7,724 6,425 16,064 38,825 12,153 44,885 962 ...................... ...................... ...................... 980 ...................... ...................... ...................... ...................... 9,414 8,778 44,767 12,210 377,372 24,032 29,953 1,934 14,005 73,467 41,880 13,524 4,060 106,893 44,538 26,335 15,769 29,847 16,278 10,024 23,706 34,928 136,316 26,525 5,163 43,653 8,963 8,479 7,922 4,304 38,174 14,072 254,719 34,533 4,094 175,998 34,481 36,639 88,226 11,339 15,672 3,261 36,144 70,256 8,226 6,843 17,110 41,353 12,945 47,808 1,025 ...................... ...................... ...................... 1,043 ...................... ...................... ...................... ...................... 0.44 0.41 2.07 0.57 17.48 1.11 1.39 0.09 0.65 3.40 1.94 0.63 0.19 4.95 2.06 1.22 0.73 1.38 0.75 0.46 1.10 1.62 6.31 1.23 0.24 2.02 0.42 0.39 0.37 0.20 1.77 0.65 11.80 1.60 0.19 8.15 1.60 1.70 4.09 0.53 0.73 0.15 1.67 3.25 0.38 0.32 0.79 1.92 0.60 2.21 0.05 .................... .................... .................... 0.05 .................... .................... .................... .................... Total ................................................................................................. 1,791,460 ........................ 1 2,027,000 2,027,000 2,159,000 2 100.00 1 Assumes 2 Excludes a lapse of $17 million. undistributed obligations. 140 Department of Health and Human Services, Administration for Children and Families 75–1534–0–1–506 Table 8-27. Social Services Block Grant (93.667) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... Hurricane Relief ............................................................................... 26,163 3,772 32,442 15,845 206,275 26,454 20,249 4,752 3,275 98,934 50,485 7,311 7,943 73,557 36,016 17,114 15,832 23,937 26,138 7,590 32,024 37,398 58,596 29,411 16,749 33,161 5,334 10,111 13,028 7,485 50,216 10,897 111,555 48,872 3,685 66,478 20,413 20,692 71,882 6,256 24,108 4,443 33,959 128,578 13,669 3,599 42,938 35,643 10,524 31,811 2,914 49 293 59 8,793 ...................... 293 ...................... ...................... 550,000 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 26,163 3,772 32,442 15,845 206,275 26,454 20,249 4,752 3,275 98,934 50,485 7,311 7,943 73,557 36,016 17,114 15,832 23,937 26,138 7,590 32,024 37,398 58,596 29,411 16,749 33,161 5,334 10,111 13,028 7,485 50,216 10,897 111,555 48,872 3,685 66,478 20,413 20,692 71,882 6,256 24,108 4,443 33,959 128,578 13,669 3,599 42,938 35,643 10,524 31,811 2,914 49 293 59 8,793 ...................... 293 ...................... ...................... ...................... 26,163 3,772 32,442 15,845 206,275 26,454 20,249 4,752 3,275 98,934 50,485 7,311 7,943 73,557 36,016 17,114 15,832 23,937 26,138 7,590 32,024 37,398 58,596 29,411 16,749 33,161 5,334 10,111 13,028 7,485 50,216 10,897 111,555 48,872 3,685 66,478 20,413 20,692 71,882 6,256 24,108 4,443 33,959 128,578 13,669 3,599 42,938 35,643 10,524 31,811 2,914 49 293 59 8,793 ...................... 293 ...................... ...................... ...................... 18,468 2,662 22,900 11,185 145,607 18,673 14,294 3,354 2,312 69,836 35,637 5,160 5,607 51,922 25,423 12,081 11,176 16,897 18,450 5,358 22,605 26,399 41,362 20,761 11,823 23,408 3,765 7,137 9,196 5,284 35,447 7,692 78,744 34,498 2,601 46,925 14,409 14,606 50,740 4,416 17,017 3,136 23,971 90,761 9,649 2,540 30,309 25,160 7,429 22,455 2,057 34 207 41 6,207 ...................... 207 ...................... ...................... ...................... 1.54 0.22 1.91 0.93 12.13 1.56 1.19 0.28 0.19 5.82 2.97 0.43 0.47 4.33 2.12 1.01 0.93 1.41 1.54 0.45 1.88 2.20 3.45 1.73 0.99 1.95 0.31 0.59 0.77 0.44 2.95 0.64 6.56 2.87 0.22 3.91 1.20 1.22 4.23 0.37 1.42 0.26 2.00 7.56 0.80 0.21 2.53 2.10 0.62 1.87 0.17 * 0.02 * 0.52 .................... 0.02 .................... .................... .................... Total ................................................................................................. 2,250,000 ........................ 1,700,000 1,700,000 1,200,000 1 100.00 * $500 or less or 0.005 percent or less. 1 Excludes undistributed obligations. 141 Department of Homeland Security, Departmental Management 70–0560–0–1–453 Table 8-28. Homeland Security Grant Program (97.067) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... 18,916 11,047 24,351 11,036 271,002 25,386 16,297 12,108 70,419 111,003 51,572 14,957 13,765 110,894 25,264 16,066 16,969 27,503 36,320 9,774 28,360 58,046 54,702 17,631 11,091 48,163 9,779 23,893 23,917 9,869 57,947 10,463 252,532 35,216 12,848 49,537 22,285 21,704 67,203 9,745 18,258 9,840 18,144 102,194 10,821 12,651 21,814 40,445 15,467 27,927 9,373 5,159 3,337 3,203 10,645 102 3,579 ...................... ...................... ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 11,824 9,252 13,557 10,101 54,027 10,807 10,449 8,802 28,106 19,376 16,688 9,283 9,067 28,116 12,599 9,811 10,167 11,333 14,457 8,853 11,466 28,197 14,321 11,729 9,784 12,200 8,689 9,747 9,684 9,296 13,828 9,159 84,520 13,637 8,379 16,834 10,500 10,063 25,240 9,515 10,890 8,433 13,463 24,182 9,935 8,371 13,777 14,452 9,376 11,330 8,514 2,727 2,882 2,709 9,946 150 2,929 ...................... ...................... 11,824 9,252 13,557 10,101 54,027 10,807 10,449 8,802 28,106 19,376 16,688 9,283 9,067 28,116 12,599 9,811 10,167 11,333 14,457 8,853 11,466 28,197 14,321 11,729 9,784 12,200 8,689 9,747 9,684 9,296 13,828 9,159 84,520 13,637 8,379 16,834 10,500 10,063 25,240 9,515 10,890 8,433 13,463 24,182 9,935 8,371 13,777 14,452 9,376 11,330 8,514 2,727 2,882 2,709 9,946 150 2,929 ...................... ...................... 4,495 2,923 4,892 3,768 17,029 4,503 4,075 2,990 2,893 9,498 6,162 3,169 3,208 7,815 5,180 3,861 3,771 4,334 4,494 3,189 4,893 5,290 6,772 4,713 3,834 4,981 3,031 3,367 3,549 3,181 6,175 3,418 10,499 6,064 2,919 7,333 4,089 4,100 7,707 3,097 4,340 2,971 5,031 11,571 3,607 2,912 5,644 5,143 3,397 4,886 2,863 1,685 1,842 1,706 4,238 115 1,892 ...................... ...................... 1.70 1.10 1.85 1.42 6.42 1.70 1.54 1.13 1.09 3.58 2.32 1.20 1.21 2.95 1.95 1.46 1.42 1.63 1.70 1.20 1.85 2.00 2.55 1.78 1.45 1.88 1.14 1.27 1.34 1.20 2.33 1.29 3.96 2.29 1.10 2.77 1.54 1.55 2.91 1.17 1.64 1.12 1.90 4.36 1.36 1.10 2.13 1.94 1.28 1.84 1.08 0.64 0.69 0.64 1.60 0.04 0.71 .................... .................... Total ................................................................................................. 2,032,541 ........................ 787,530 1 787,530 1 265,100 2 100.00 1 FY 2007-2008 amounts do not include funds subject to risk and threat analysis. undistributed obligations. 2 Excludes 142 Department of Homeland Security, Federal Emergency Management Agency 70–0702–0–1–453 Table 8-29. Disaster Grants—Public Assistance (Presidentially Declared Disasters) (97.036) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... Micronesia ....................................................................................... 111,839 16,846 7,164 45,375 173,937 12,123 14,707 6,942 1,772 1,822,569 17,262 25,386 2,370 13,546 4,691 1,284 48,095 4,878 2,988,611 5,416 10,194 25,969 1,481 17,595 1,548,706 16,793 397 6,619 9,990 24,278 2,794 1,628 59,622 27,300 16,854 5,305 16,859 8,414 42,947 1,110 14,643 25,019 44,599 851,540 3,234 61 11,525 6,854 1,240 1,149 ...................... 1,659 276 1,333 14,539 ...................... ¥862 ...................... ...................... 852 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... Total ................................................................................................. 8,147,330 ........................ ...................... 1 1 .................... 1 Grants are funded as needed through the Disaster Relief Fund, and are not awarded unless a state has significant damage from a declared major disaster. There are no estimates for 2007 and 2008 since disaster-related damages have not yet occurred. 143 Department of Housing and Urban Development, Public and Indian Housing Programs 86–0163–0–1–604 Table 8-30. Public Housing Operating Fund (14.850) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... 105,777 7,953 15,290 25,785 102,907 20,605 56,203 8,988 40,862 86,675 108,382 10,417 991 232,696 39,265 5,517 15,957 52,913 60,189 9,949 74,032 120,793 49,838 44,941 28,014 37,157 4,116 11,426 14,499 7,785 168,489 8,187 904,356 96,267 2,246 173,629 25,324 15,255 244,823 21,864 29,223 2,398 87,377 119,403 4,150 2,545 63,692 34,042 16,766 20,565 1,272 ...................... 3,039 ...................... 100,525 ...................... 18,539 ...................... ...................... 36 3 5 9 35 7 19 3 14 30 37 4 ........................ 80 13 2 5 18 21 3 25 42 17 15 10 13 1 4 5 3 58 3 310 33 1 60 9 5 84 8 10 1 30 41 1 1 22 12 6 7 1 ........................ 1 ........................ 34 ........................ 6 ........................ ........................ 105,780 7,954 15,291 25,786 102,910 20,606 56,205 8,988 40,863 86,678 108,385 10,416 991 232,702 39,266 5,518 15,957 52,915 60,191 9,950 74,033 120,795 49,840 44,942 28,015 37,159 4,115 11,427 14,500 7,785 168,493 8,188 904,382 96,270 2,246 173,634 25,325 15,255 244,830 21,865 29,224 2,398 87,380 119,406 4,150 2,545 63,694 34,043 16,766 20,566 1,271 ...................... 3,039 ...................... 100,528 ...................... 18,539 ...................... ...................... 105,816 7,957 15,296 25,795 102,945 20,613 56,224 8,991 40,877 86,708 108,422 10,420 991 232,782 39,279 5,520 15,962 52,933 60,212 9,953 74,058 120,837 49,857 44,957 28,025 37,172 4,116 11,431 14,505 7,788 168,551 8,191 904,692 96,303 2,247 173,694 25,334 15,260 244,914 21,873 29,234 2,399 87,410 119,447 4,151 2,546 63,716 34,055 16,772 20,573 1,272 ...................... 3,040 ...................... 100,562 ...................... 18,545 ...................... ...................... 118,720 8,927 17,162 28,940 115,499 23,127 63,081 10,088 45,862 97,281 121,645 11,692 1,112 261,170 44,069 6,192 17,910 59,388 67,554 11,167 83,091 135,574 55,937 50,440 31,442 41,704 4,620 12,825 16,274 8,738 189,107 9,189 1,015,019 108,047 2,521 194,875 28,423 17,121 274,780 24,539 32,799 2,691 98,069 134,013 4,658 2,857 71,485 38,207 18,817 23,081 1,428 ...................... 3,411 ...................... 112,826 ...................... 20,806 ...................... ...................... 2.97 0.22 0.43 0.72 2.89 0.58 1.58 0.25 1.15 2.43 3.04 0.29 0.03 6.53 1.10 0.15 0.45 1.48 1.69 0.28 2.08 3.39 1.40 1.26 0.79 1.04 0.12 0.32 0.41 0.22 4.73 0.23 25.38 2.70 0.06 4.87 0.71 0.43 6.87 0.61 0.82 0.07 2.45 3.35 0.12 0.07 1.79 0.96 0.47 0.58 0.04 .................... 0.09 .................... 2.82 .................... 0.52 .................... .................... Total ................................................................................................. 3,563,898 1,223 3,564,000 3,565,223 4,000,000 1 100.00 1 Excludes undistributed obligations. 144 Department of Housing and Urban Development, Public and Indian Housing Programs 86–0319–0–1–604 Table 8-31. Section 8 Housing Choice Vouchers (14.871) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... Disaster Assistance ......................................................................... 127,597 25,208 123,774 80,666 2,494,118 188,818 268,159 29,239 111,868 600,515 351,497 76,922 30,449 682,461 167,166 78,936 47,632 136,301 204,130 63,454 305,871 679,638 265,481 183,294 94,177 186,318 24,364 51,180 87,228 62,097 526,783 63,563 1,595,757 275,520 25,766 447,835 107,139 164,645 432,950 141,099 55,916 107,206 22,616 151,665 860,784 55,851 34,542 267,173 284,715 51,357 120,411 8,822 24,443 2,011 ...................... ...................... 7,364 ...................... ...................... 132,297 4,350 859 4,220 2,750 85,038 6,438 9,143 997 3,814 20,475 11,984 2,623 1,038 23,269 5,700 2,691 1,624 4,647 6,960 2,163 10,429 23,173 9,052 6,249 3,211 6,353 831 1,745 2,974 2,117 17,961 2,167 54,408 9,394 878 15,269 3,653 5,614 14,762 4,811 1,906 3,655 771 5,171 29,349 1,904 1,178 9,109 9,707 1,751 4,105 301 833 69 ........................ ........................ 251 ........................ ........................ 258,003 140,824 27,821 136,604 89,028 2,752,653 208,391 295,956 32,270 123,465 662,763 387,933 84,896 33,605 753,204 184,494 87,119 52,569 150,429 225,290 70,032 337,578 750,088 293,000 202,294 103,940 205,631 26,889 56,485 96,270 68,534 581,388 70,152 1,761,170 304,080 28,437 494,257 118,245 181,712 477,829 155,725 61,712 118,319 24,960 167,387 950,011 61,640 38,122 294,868 314,228 56,681 132,893 9,737 26,977 2,219 ...................... ...................... 8,127 ...................... ...................... ...................... 145,174 28,681 140,824 91,778 2,837,691 214,829 305,099 33,267 127,279 683,238 399,917 87,518 34,643 776,472 190,193 89,810 54,193 155,077 232,250 72,195 348,006 773,261 302,052 208,544 107,151 211,984 27,720 58,230 99,244 70,651 599,349 72,319 1,815,578 313,474 29,315 509,526 121,898 187,326 492,591 160,536 63,618 121,974 25,731 172,558 979,360 63,544 39,300 303,977 323,935 58,432 136,998 10,038 27,811 2,288 ...................... ...................... 8,378 ...................... ...................... 258,003 149,406 29,517 144,929 94,453 2,920,407 221,091 313,992 34,237 130,989 703,154 411,574 90,069 35,653 799,106 195,737 92,428 55,773 159,597 239,019 74,300 358,150 795,801 310,856 214,623 110,274 218,163 28,528 59,928 102,137 72,711 616,819 74,427 1,868,501 322,612 30,170 524,378 125,451 192,786 506,949 165,215 65,473 125,530 26,481 177,588 1,007,907 65,397 40,446 312,838 333,377 60,135 140,992 10,330 28,621 2,355 ...................... ...................... 8,623 ...................... ...................... ...................... 0.93 0.18 0.91 0.59 18.25 1.38 1.96 0.21 0.82 4.39 2.57 0.56 0.22 4.99 1.22 0.58 0.35 1.00 1.49 0.46 2.24 4.97 1.94 1.34 0.69 1.36 0.18 0.37 0.64 0.45 3.86 0.47 11.68 2.02 0.19 3.28 0.78 1.20 3.17 1.03 0.41 0.78 0.17 1.11 6.30 0.41 0.25 1.96 2.08 0.38 0.88 0.06 0.18 0.01 .................... .................... 0.05 .................... .................... .................... Total ................................................................................................. 13,796,790 723,899 15,080,930 15,804,830 16,000,000 1 100.00 1 Excludes undistributed obligations. 145 Department of Housing and Urban Development, Public and Indian Housing Programs 86–0304–0–1–604 Table 8-32. Public Housing Capital Fund (14.872) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... 74,004 2,684 11,120 22,002 100,539 15,451 33,286 5,172 32,991 81,434 90,927 13,756 1,163 174,966 31,987 5,958 13,193 44,145 85,130 6,477 46,050 66,694 46,547 35,343 32,255 39,839 3,418 9,927 10,809 5,906 83,574 8,379 407,605 63,768 ¥89,446 103,676 21,551 11,436 167,687 15,409 26,877 2,053 65,426 98,404 3,562 2,902 55,883 32,047 10,650 21,463 1,080 ...................... 2,783 ...................... 140,910 ...................... 8,308 ...................... ...................... 10,282 373 1,545 3,057 13,969 2,147 4,625 719 4,584 11,315 12,634 1,911 162 24,310 4,444 828 1,833 6,134 11,828 900 6,398 9,267 6,467 4,911 4,482 5,535 475 1,379 1,502 821 11,612 1,164 56,634 8,859 ¥12,428 14,405 2,994 1,589 23,299 2,141 3,734 285 9,091 13,672 495 403 7,765 4,453 1,480 2,981 150 ........................ 387 ........................ 19,578 ........................ 1,154 ........................ ........................ 67,826 2,460 10,191 20,164 92,145 14,160 30,506 4,740 30,237 74,635 83,335 12,608 1,066 160,357 29,316 5,461 12,092 40,459 78,022 5,937 42,204 61,125 42,661 32,392 29,563 36,513 3,132 9,098 9,908 5,412 76,596 7,680 373,571 58,443 ¥81,977 95,019 19,751 10,480 153,685 14,123 24,634 1,882 59,963 90,188 3,264 2,660 51,217 29,371 9,760 19,670 989 ...................... 2,551 ...................... 129,144 ...................... 7,615 ...................... ...................... 78,108 2,833 11,736 23,221 106,114 16,307 35,131 5,459 34,821 85,950 95,969 14,519 1,228 184,667 33,760 6,289 13,925 46,593 89,850 6,837 48,602 70,392 49,128 37,303 34,045 42,048 3,607 10,477 11,410 6,233 88,208 8,844 430,205 67,302 ¥94,405 109,424 22,745 12,069 176,984 16,264 28,368 2,167 69,054 103,860 3,759 3,063 58,982 33,824 11,240 22,651 1,139 ...................... 2,938 ...................... 148,722 ...................... 8,769 ...................... ...................... 62,174 2,255 9,342 18,484 84,466 12,980 27,964 4,345 27,717 68,415 76,390 11,557 977 146,994 26,873 5,006 11,084 37,087 71,520 5,442 38,687 56,031 39,106 29,693 27,099 33,470 2,871 8,340 9,082 4,961 70,213 7,040 342,440 53,573 ¥75,146 87,101 18,105 9,607 140,878 12,946 22,581 1,725 54,966 82,672 2,992 2,438 46,949 26,923 8,947 18,031 907 ...................... 2,338 ...................... 118,382 ...................... 6,980 ...................... ...................... 3.07 0.11 0.46 0.91 4.17 0.64 1.38 0.21 1.37 3.38 3.77 0.57 0.05 7.26 1.33 0.25 0.55 1.83 3.53 0.27 1.91 2.77 1.93 1.47 1.34 1.65 0.14 0.41 0.45 0.25 3.47 0.35 16.92 2.65 ¥3.71 4.30 0.89 0.47 6.96 0.64 1.12 0.09 2.72 4.08 0.15 0.12 2.32 1.33 0.44 0.89 0.04 .................... 0.12 .................... 5.85 .................... 0.34 .................... .................... Total ................................................................................................. 2,409,160 334,734 2,208,000 2,542,734 2,024,000 1 100.00 1 Excludes undistributed obligations. 146 Department of Housing and Urban Development, Community Planning and Development 86–0162–0–1–451 Table 8-33. Community Development Block Grants (14.218) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... Brownfields ...................................................................................... Economic Development Initiative Rescission ................................. Adjustments to Prior Year Funds ................................................... 50,788 4,749 55,309 27,654 480,027 40,129 39,212 7,265 21,318 173,253 83,164 15,362 11,176 184,134 80,895 41,419 25,586 46,705 58,207 20,040 57,100 120,971 138,796 61,912 35,644 67,950 9,236 21,305 20,332 13,278 108,937 21,193 374,643 73,787 6,390 164,287 31,032 38,405 222,491 18,138 35,795 8,024 50,425 265,035 20,446 8,369 64,727 61,696 25,166 65,898 4,233 1,020 2,757 1,233 112,482 ...................... 1,934 ...................... 21,541 ...................... ...................... ...................... 2,968 ........................ ........................ ........................ 71,904 299 21,963 ........................ 19,275 111,108 ........................ ........................ 1,324 25,499 2,372 ........................ 2,485 ........................ 11,307 ........................ 8,511 481 ........................ 491 3,094 769 ........................ ........................ ........................ ........................ 28,144 445 22,905 ........................ ........................ 7,583 4,616 ........................ 8,780 ........................ 5,031 ........................ ........................ 95,902 3,171 ........................ 4,731 3,441 112 2,726 460 1,018 2,751 1,230 1,371 ........................ 1,930 ........................ ........................ ........................ ........................ ¥12,777 51,956 4,966 56,969 28,958 492,314 40,312 43,946 7,588 19,570 169,636 86,888 16,034 12,807 184,729 73,973 43,378 29,402 48,021 65,464 20,828 58,583 115,618 138,827 61,168 37,051 71,029 9,688 20,440 21,316 13,919 106,359 22,157 368,230 74,998 6,693 170,739 31,883 38,602 233,915 18,067 40,929 8,416 52,727 268,828 21,689 8,789 64,541 64,748 26,452 70,376 4,430 1,028 2,779 1,243 116,634 ...................... 1,950 ...................... ...................... 15,000 ...................... ...................... 54,924 4,966 56,969 28,958 564,218 40,611 65,909 7,588 38,845 280,744 86,888 16,034 14,131 210,228 76,345 43,378 31,887 48,021 76,771 20,828 67,094 116,099 138,827 61,659 40,145 71,798 9,688 20,440 21,316 13,919 134,503 22,602 391,135 74,998 6,693 178,322 36,499 38,602 242,695 18,067 45,960 8,416 52,727 364,730 24,860 8,789 69,272 68,189 26,564 73,102 4,890 2,046 5,530 2,473 118,005 ...................... 3,880 ...................... ...................... 15,000 ...................... ¥12,777 37,198 3,555 40,787 20,733 352,475 28,862 31,463 5,433 14,011 121,452 62,208 11,480 9,169 132,258 52,961 31,057 21,050 34,381 46,869 14,912 41,943 82,777 99,394 43,794 26,527 50,854 6,936 14,634 15,261 9,965 76,148 15,863 263,636 53,695 4,792 122,241 22,827 27,637 167,473 12,935 29,303 6,025 37,750 192,469 15,528 6,293 46,208 46,357 18,938 50,386 3,172 1,028 2,779 1,243 83,505 ...................... 1,950 ...................... 200,000 ...................... ¥356,000 ...................... 1.54 0.15 1.69 0.86 14.57 1.19 1.30 0.22 0.58 5.02 2.57 0.47 0.38 5.47 2.19 1.28 0.87 1.42 1.94 0.62 1.73 3.42 4.11 1.81 1.10 2.10 0.29 0.61 0.63 0.41 3.15 0.66 10.90 2.22 0.20 5.05 0.94 1.14 6.92 0.53 1.21 0.25 1.56 7.96 0.64 0.26 1.91 1.92 0.78 2.08 0.13 0.04 0.11 0.05 3.45 .................... 0.08 .................... .................... .................... ¥14.72 .................... Total 1 ............................................................................................... 2 3,823,000 467,420 3,887,580 3 4,355,000 3 2,618,580 4 100.00 1 Includes Small Cities Program (CFDA 14.219), Special Purpose Grants/Insular Areas (CFDA 14.225), State’s Program (CFDA 14.228), and Brownfields Economic Development Initiative (CFDA 14.246). 2 Excludes Disaster Supplementals. 3 Based on estimated budget authority. 4 Excludes undistributed obligations. 147 Department of the Interior, Minerals Management Service 14–5003–0–1–301 Table 8-34. Mineral Leasing and Associated Payments (1) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... 457 14,431 135 3,030 47,481 147,408 ...................... ...................... ...................... 142 ...................... ...................... 1,275 ...................... ...................... ...................... 2,447 ...................... 790 ...................... ...................... ...................... 552 1 73 ...................... 38,273 28 7,697 ...................... ...................... 574,195 ...................... ...................... 15,244 ...................... 4,598 657 ...................... ...................... ...................... 850 ...................... 5,355 173,132 ...................... ...................... 1,082 ...................... ...................... 1,073,217 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 406 12,811 120 2,690 42,151 130,861 ...................... ...................... ...................... 126 ...................... ...................... 1,132 ...................... ...................... ...................... 2,172 ...................... 701 ...................... ...................... ...................... 490 1 65 ...................... 33,977 24 6,833 ...................... ...................... 509,741 ...................... ...................... 13,533 ...................... 4,082 583 ...................... ...................... ...................... 755 ...................... 4,754 153,698 ...................... ...................... 961 ...................... ...................... 952,746 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 406 12,811 120 2,690 42,151 130,861 ...................... ...................... ...................... 126 ...................... ...................... 1,132 ...................... ...................... ...................... 2,172 ...................... 701 ...................... ...................... ...................... 490 1 65 ...................... 33,977 24 6,833 ...................... ...................... 509,741 ...................... ...................... 13,533 ...................... 4,082 583 ...................... ...................... ...................... 755 ...................... 4,754 153,698 ...................... ...................... 961 ...................... ...................... 952,746 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 432 13,626 127 2,861 44,833 139,187 ...................... ...................... ...................... 134 ...................... ...................... 1,204 ...................... ...................... ...................... 2,311 ...................... 746 ...................... ...................... ...................... 521 1 69 ...................... 36,138 26 7,268 ...................... ...................... 542,171 ...................... ...................... 14,394 ...................... 4,342 620 ...................... ...................... ...................... 803 ...................... 5,056 163,476 ...................... ...................... 1,022 ...................... ...................... 1,013,361 ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... 0.02 0.68 0.01 0.14 2.25 6.98 .................... .................... .................... 0.01 .................... .................... 0.06 .................... .................... .................... 0.12 .................... 0.04 .................... .................... .................... 0.03 * * .................... 1.81 * 0.36 .................... .................... 27.18 .................... .................... 0.72 .................... 0.22 0.03 .................... .................... .................... 0.04 .................... 0.25 8.20 .................... .................... 0.05 .................... .................... 50.80 .................... .................... .................... .................... .................... .................... .................... .................... Total 1 ............................................................................................... 2,112,550 ........................ 1,875,413 1,875,413 1,994,729 2 100.00 * $500 or less or 0.005 percent or less. 1 This program is not included in the Catalog of Federal Domestic Assistance. 2 Excludes undistributed obligations. 148 Department of Transportation, Federal Aviation Administration 69–8106–7–402 Table 8-35. Airport Improvement Program (20.106) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... 59,317 232,319 71,738 35,625 317,795 90,562 11,106 6,322 355 1 172,084 96,322 33,076 22,102 159,073 59,631 40,959 22,714 86,935 73,411 18,975 37,672 38,354 110,228 65,442 110,723 80,579 32,695 28,178 44,720 36,333 57,919 24,819 155,910 65,624 19,499 87,114 45,615 34,879 120,634 25,758 27,419 24,073 68,291 266,211 46,630 7,350 84,730 95,985 31,463 61,663 17,701 ...................... 9,532 29,999 11,440 ...................... 3,299 ...................... 90,339 ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 56,132 219,842 67,885 33,712 300,728 85,699 10,510 5,983 336 162,600 91,149 31,300 20,915 150,530 56,429 38,759 21,494 82,266 69,469 17,956 35,649 36,294 104,308 61,927 104,776 76,251 30,939 26,665 42,319 34,382 54,808 23,486 147,537 62,099 18,452 82,436 43,166 33,006 114,156 24,375 25,947 22,780 64,624 251,914 44,126 6,955 80,179 90,830 29,773 58,351 16,750 ...................... 9,020 28,388 10,832 ...................... 3,121 ...................... 90,185 56,132 219,842 67,885 33,712 300,728 85,699 10,510 5,983 336 162,600 91,149 31,300 20,915 150,530 56,429 38,759 21,494 82,266 69,469 17,956 35,649 36,294 104,308 61,927 104,776 76,251 30,939 26,665 42,319 34,382 54,808 23,486 147,537 62,099 18,452 82,436 43,166 33,006 114,156 24,375 25,947 22,780 64,624 251,914 44,126 6,955 80,179 90,830 29,773 58,351 16,750 ...................... 9,020 28,388 10,832 ...................... 3,121 ...................... 90,185 43,285 169,528 52,349 25,997 231,902 66,085 8,104 4,613 259 125,387 70,288 24,136 16,128 116,079 43,514 29,889 16,575 63,439 53,570 13,846 27,490 27,988 80,436 47,754 80,797 58,800 23,858 20,562 32,633 26,513 42,265 18,111 113,771 47,887 14,229 63,569 33,287 25,452 88,030 18,796 20,009 17,567 49,834 194,260 34,027 5,363 61,829 70,042 22,959 44,997 12,917 ...................... 6,956 21,891 8,353 ...................... 2,407 ...................... 109,388 1.64 6.42 1.98 0.98 8.78 2.50 0.31 0.17 0.01 4.75 2.66 0.91 0.61 4.40 1.65 1.13 0.63 2.40 2.03 0.52 1.04 1.06 3.05 1.81 3.06 2.23 0.90 0.78 1.24 1.00 1.60 0.69 4.31 1.81 0.54 2.41 1.26 0.96 3.33 0.71 0.76 0.67 1.89 7.36 1.29 0.20 2.34 2.65 0.87 1.70 0.49 .................... 0.26 0.83 0.32 .................... 0.09 .................... .................... Total ................................................................................................. 3,709,241 ........................ 3,514,500 3,514,500 2,750,000 2 100.00 1 Includes 2 Excludes Emergency Response Grant funding. undistributed obligations. 149 Department of Transportation, Federal Highway Administration 69–8083–0–7–401 Table 8-36. Highway Planning and Construction (20.205) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... 618,975 372,147 476,573 433,870 2,850,603 383,086 431,712 140,484 128,947 2,047,791 1,095,630 110,882 228,981 1,023,014 753,457 339,701 390,821 499,581 1,241,933 170,867 475,565 572,088 976,091 474,610 1,262,560 676,453 329,907 266,371 274,778 150,699 724,937 304,090 1,388,547 847,860 242,982 1,087,836 500,605 354,465 1,191,352 184,152 528,297 227,132 615,152 2,584,506 231,410 161,911 667,161 693,629 427,069 608,062 205,296 8,149 13,611 4,862 93,690 ...................... 33,433 ...................... ...................... ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ ........................ 548,700 250,267 538,529 347,184 2,408,038 360,141 366,382 109,353 111,043 1,406,291 969,692 115,267 203,333 910,388 704,288 295,144 278,297 472,047 428,616 122,527 441,365 451,909 821,004 437,258 329,837 645,400 262,635 201,577 189,509 124,655 742,676 263,313 1,235,368 790,658 170,821 1,003,336 417,431 312,843 1,231,575 138,243 463,552 183,777 608,526 2,336,793 198,305 116,196 752,517 464,963 297,110 535,233 187,340 5,529 9,236 3,299 110,025 ...................... 22,686 ...................... 8,219,992 548,700 250,267 538,529 347,184 2,408,038 360,141 366,382 109,353 111,043 1,406,291 969,692 115,267 203,333 910,388 704,288 295,144 278,297 472,047 428,616 122,527 441,365 451,909 821,004 437,258 329,837 645,400 262,635 201,577 189,509 124,655 742,676 263,313 1,235,368 790,658 170,821 1,003,336 417,431 312,843 1,231,575 138,243 463,552 183,777 608,526 2,336,793 198,305 116,196 752,517 464,963 297,110 535,233 187,340 5,529 9,236 3,299 110,025 ...................... 22,686 ...................... 8,219,992 654,118 297,346 607,839 415,195 3,156,772 445,235 429,975 131,851 132,757 1,569,233 1,156,480 136,719 242,347 1,140,222 832,033 361,208 332,208 564,936 513,048 150,249 514,730 541,395 1,050,691 567,992 391,126 773,247 312,985 243,429 212,782 147,376 848,554 314,681 1,463,313 938,729 205,828 1,215,672 503,858 376,965 1,453,084 162,932 524,163 220,571 707,799 2,668,568 235,490 143,266 867,826 566,351 355,794 637,629 225,021 6,452 10,777 3,850 137,895 ...................... 26,471 ...................... 6,738,016 1.99 0.91 1.85 1.26 9.61 1.36 1.31 0.40 0.40 4.78 3.52 0.42 0.74 3.47 2.53 1.10 1.01 1.72 1.56 0.46 1.57 1.65 3.20 1.73 1.19 2.35 0.95 0.74 0.65 0.45 2.58 0.96 4.45 2.86 0.63 3.70 1.53 1.15 4.42 0.50 1.60 0.67 2.15 8.12 0.72 0.44 2.64 1.72 1.08 1.94 0.69 0.02 0.03 0.01 0.42 .................... 0.08 .................... .................... Total ................................................................................................. 33,128,373 ........................ 35,672,019 35,672,019 39,585,079 1 100.00 1 Excludes undistributed obligations. 150 Department of Transportation, Federal Transit Administration 69–1134–0–1–401 Table 8-37. Capital Investment Grants—Fixed Guideway Modernization (Section 5309) (20.500) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... Oversight ......................................................................................... ...................... 12,758 2,288 ...................... 135,963 4,503 43,825 ...................... 70,359 21,251 8,857 2,400 ...................... 168,374 13,891 ...................... ...................... ...................... 2,667 ...................... 50,803 103,609 1,224 2,400 ...................... 8,355 ...................... ...................... ...................... ...................... 93,563 ...................... 519,390 ...................... ...................... 22,659 ...................... 7,525 28,834 525 ...................... ...................... 89 29,616 ...................... ...................... 9,645 26,275 ...................... 785 ...................... ...................... ...................... ...................... 877 ...................... ...................... ...................... ...................... 13,298 ........................ 146 1,327 ........................ 24,133 ........................ 22,730 ........................ 3,012 7,036 18,990 157 ........................ 1,371 ........................ ........................ ........................ ........................ 804 ........................ 15,174 29,265 ........................ 8,276 ........................ 16 ........................ ........................ ........................ ........................ 3,150 ........................ 791 ........................ ........................ 1,699 ........................ * 45,089 1,378 ........................ ........................ 210 7,462 ........................ ........................ ........................ 1,409 1,025 260 ........................ ........................ ........................ ........................ 2,070 ........................ ........................ ........................ ........................ ........................ ...................... 10,138 2,062 ...................... 130,612 2,677 32,925 ...................... 45,518 16,645 21,835 970 ...................... 110,702 7,192 ...................... ...................... ...................... 2,492 ...................... 23,579 63,138 252 5,420 ...................... 3,415 ...................... ...................... ...................... ...................... 86,183 ...................... 305,013 ...................... ...................... 14,407 ...................... 5,847 81,264 59 ...................... ...................... 342 11,596 ...................... ...................... 14,830 20,414 855 820 ...................... ...................... ...................... ...................... 1,641 ...................... ...................... ...................... ...................... 13,298 ...................... 10,284 3,389 ...................... 154,745 2,677 55,655 ...................... 48,530 23,681 40,825 1,126 ...................... 112,074 7,192 ...................... ...................... ...................... 3,296 ...................... 38,754 92,403 252 13,695 ...................... 3,431 ...................... ...................... ...................... ...................... 89,333 ...................... 305,804 ...................... ...................... 16,106 ...................... 5,847 126,353 1,437 ...................... ...................... 552 19,058 ...................... ...................... 14,830 21,822 1,880 1,080 ...................... ...................... ...................... ...................... 3,711 ...................... ...................... ...................... ...................... 13,298 ...................... 21,263 3,734 ...................... 232,484 5,340 50,358 ...................... 84,789 30,827 42,780 1,817 ...................... 174,055 11,591 ...................... ...................... ...................... 3,813 ...................... 39,804 100,627 485 9,739 ...................... 6,730 ...................... ...................... ...................... ...................... 133,509 ...................... 481,989 ...................... ...................... 22,927 ...................... 6,831 124,611 107 ...................... ...................... 524 21,239 ...................... ...................... 27,630 35,895 1,599 1,615 ...................... ...................... ...................... ...................... 3,358 ...................... ...................... ...................... ...................... 18,854 .................... 1.25 0.22 .................... 13.67 0.31 2.96 .................... 4.98 1.81 2.52 0.11 .................... 10.23 0.68 .................... .................... .................... 0.22 .................... 2.34 5.92 0.03 0.57 .................... 0.40 .................... .................... .................... .................... 7.85 .................... 28.34 .................... .................... 1.35 .................... 0.40 7.33 0.01 .................... .................... 0.03 1.25 .................... .................... 1.62 2.11 0.09 0.09 .................... .................... .................... .................... 0.20 .................... .................... .................... .................... 1.11 Total 1 ............................................................................................... 1,406,611 196,980 1,036,142 1,233,122 1,700,923 2 100.00 * $500 or less or 0.005 percent or less. 1 Includes funding from the Formula and Bus Grants Program (69X8350). 2 Excludes undistributed obligations. 151 Department of Transportation, Federal Transit Administration 69–8350–0–7–401 Table 8-38. Federal Transit Formula Grants and Research (20.507) (Obligations in thousands of dollars) Estimated FY 2007 obligations from: State or Territory FY 2006 Actual Previous authority New authority Total FY 2008 (estimated) FY 2008 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 .................................................................................... Oversight ......................................................................................... 44,912 23,818 86,475 20,437 828,993 72,793 71,059 15,574 133,260 197,020 124,679 22,381 10,593 322,588 57,379 28,286 12,975 29,299 35,556 19,599 83,713 117,962 112,398 105,947 15,731 80,944 7,010 16,073 57,279 22,022 214,384 18,869 759,866 69,056 8,912 205,835 33,855 99,939 504,096 18,856 38,048 9,570 61,228 281,590 43,440 11,344 101,462 84,624 13,614 66,401 4,381 ...................... 982 949 76,769 ...................... 157 ...................... ...................... 28,685 12,539 5,020 33,732 2,648 212,526 4,132 44,329 1,367 11,648 76,751 48,743 3,209 2,901 12,161 22,743 4,452 10,844 5,387 19,706 1,805 14,882 72,869 11,695 26,391 7,099 14,739 4,146 2,063 12,936 3,599 14,442 10,234 488,464 35,594 237 25,658 2,387 3,077 63,651 8,956 9,621 1,049 11,683 67,939 1,209 253 32,771 38,867 1,434 11,835 1,725 297 ........................ ........................ 27,113 ........................ 460 ........................ ........................ ........................ 27,461 21,857 52,365 16,558 535,338 50,443 54,261 9,483 55,579 171,374 75,660 21,672 10,281 197,699 44,683 20,841 17,193 27,660 36,256 8,150 84,699 134,291 76,725 48,343 15,184 45,616 8,590 12,858 25,108 7,840 221,942 15,093 503,768 55,473 6,296 95,353 22,137 40,102 147,579 15,146 23,938 6,468 39,394 207,119 28,753 3,751 60,082 92,268 11,275 46,497 5,187 395 669 739 49,111 ...................... 837 ...................... ...................... 31,542 40,001 26,877 86,097 19,206 747,864 54,575 98,590 10,850 67,228 248,125 124,402 24,881 13,182 209,860 67,427 25,293 28,036 33,048 55,962 9,955 99,581 207,161 88,420 74,734 22,284 60,355 12,736 14,921 38,044 11,439 236,384 25,327 992,232 91,067 6,533 121,011 24,525 43,178 211,230 24,102 33,559 7,517 51,078 275,059 29,963 4,004 92,853 131,135 12,709 58,331 6,912 692 669 739 76,224 ...................... 1,297 ...................... ...................... 31,542 47,660 38,650 93,884 28,230 978,117 87,656 98,542 16,701 102,258 308,158 135,123 42,018 17,661 360,150 80,469 36,310 29,439 48,438 65,311 13,695 154,311 251,367 138,384 86,246 25,725 80,769 14,272 21,867 42,062 13,479 404,893 26,496 924,181 98,093 10,627 172,746 38,997 71,395 269,748 27,227 42,807 10,737 68,858 379,558 52,435 6,455 107,821 164,920 19,351 83,621 8,414 490 1,071 1,373 75,081 ...................... 1,517 ...................... ...................... 41,966 0.73 0.59 1.43 0.43 14.89 1.33 1.50 0.25 1.56 4.69 2.06 0.64 0.27 5.48 1.23 0.55 0.45 0.74 0.99 0.21 2.35 3.83 2.11 1.31 0.39 1.23 0.22 0.33 0.64 0.21 6.16 0.40 14.07 1.49 0.16 2.63 0.59 1.09 4.11 0.41 0.65 0.16 1.05 5.78 0.80 0.10 1.64 2.51 0.29 1.27 0.13 0.01 0.02 0.02 1.14 .................... 0.02 .................... .................... 0.64 Total 1 ............................................................................................... 5,533,669 1,566,024 3,644,980 5,211,004 6,567,831 2 100.00 1 Includes Metropolitan Planning (CFDA 20.505), Formula Program for Non-Urbanized Areas (CFDA 20.509), Rural Transportation Assistance Program (CFDA 20.509), Elderly and Persons with Disabilities (CFDA 20.513), Job Access and Reverse Commute (CFDA 20.516), and New Freedom Initiative (CFDA 20.521). 2 Excludes undistributed obligations. 152 9. INTEGRATING SERVICES WITH INFORMATION TECHNOLOGY As one of the largest users and acquirers of data, information and supporting technology systems in the world, the United States Government will continue its efforts to strengthen its capabilities in managing technology and information in order to be the world’s leader in information technology. This year, the President proposes to spend about $65 billion for Information Tech- nology (IT) and the associated support services. Departments and agencies continue to build upon their successes including their efforts with portfolio management by applying the principles and methods of Earned Value Management (EVM) to achieve greater savings, better results and improved customer service levels. ACHIEVING RESULTS FOR THE AMERICAN PEOPLE The Federal government continues to make progress by maximizing its, IT investments to deliver program results through the adoption of electronic government management principles and best practices. Departments and agencies continue to focus on: • Improving service levels to citizens and government decision makers; • Making better purchasing decisions; • Securing our systems and data; and • Reducing duplication and related costs. 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 of the Clinger-Cohen Act of 1996. 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 Performance.—The Federal government has shown improvement over the last year in achieving the goals specifically included in the President’s Management Agenda, the Expanded Electronic Government (E-Government) initiative. For example, each IT investment must have specific performance targets tied to a specific, significant, beneficial impact for our citizens. Performance functions must be defined, valued and deliver measurable results. The Federal departments and agencies continue to improve in their efforts to guarantee the success and results for the taxpayer. There were 263 major investments representing about $10 billion on the ‘‘Management Watch List,’’ i.e., those IT investment justifications needing improvement in performance measurement, earned value management or system security. Before the start of the fiscal year, agencies were directed to remediate the shortfalls identified prior to expending additional funds. The agencies have worked to remediate the weaknesses or have put measures in place to monitor the progress of the IT investment which could include multiple projects. If an investment is still on the ‘‘Management Watch List,’’ agencies must describe their plans to manage or mitigate risk before undertaking or continuing activities related to that in- vestment. As of December 31, 2006, 81 percent of the agencies (22 of 27) had all acceptable FY 2007 business cases. Thus, remaining on last year’s Management Watch list, there were 84 business cases valued in FY 07 at $4.3 billion from five agencies. This year, 346 of the 840 FY 2008 major IT investments are on the ‘‘Management Watch List.’’ These investments still need to address performance measures, implementation of earned value management, security or other issues before obligating funding in Fiscal Year 2008. See Table 9–3, ‘‘Agencies with IT Investments on the Management Watch List.’’ The Report on Information Technology (IT) Spending for the Federal Government (Exhibit 53) will be published in the spring of 2007 and is located at www.whitehouse.gov/OMB. It provides details of the Administration’s proposed 2008 IT investments. Related documents on IT security and Electronic Government (E-Government) are also available at www.whitehouse.gov/OMB. Fiscal Year 2008 proposed IT investments were analyzed for trends and potential duplications across government entities. At about $65 billion, the Fiscal Year 2008 Federal IT portfolio represents a 3 percent increase over Fiscal Year 2007 President’s Budget. The following represents the highlights: Major IT Investments .......................... Not Well Planned and Managed ........ Well Planned and Managed ............... 1 Change FY 2006 FY 2007 FY 2008 1,087 358 682 857 263 594 840 346 494 Percent 1 Change –2% 32% –17% from FY 2007 to FY 2008. The decreasing number of major IT investments is attributed to departments and agencies better managing their Capital Planning and Investment Control (CPIC) process in conformance with their enterprise architectures. The continued maturation of the CPIC processes provide for greater oversight and evaluation of the investments achieving and/or addressing intended results by departments’ and agencies’ Chief Information Officers. This oversight and understanding allows for changes in the IT portfolio to address mission 153 154 priorities, consolidation and elimination of redundant investments. With the Administration’s focus on achieving program results, the department and agencies partner with OMB to identify high-risk projects (those IT projects requiring special attention from oversight authorities and/or the highest level of agency management) and report on the agreed upon list of projects quarterly to OMB. As a result, oversight authorities and agency management now have available quarterly data on the progress of these projects to ensure improved execution and performance. OMB is working with departments and agencies to implement corrective action plans in cases where a project did not meet one or more of the four principle criteria. Additional information about high-risk projects including agency performance for FY07Q1 can be found at: www.whitehouse.gov/omb/ egov/b-1-information.html#io. When duplication across Federal agencies has been identified, the Administration has an ongoing process to bring together the appropriate agencies and help them to consider broad-based approaches to promote inter-agency data sharing and cooperation in building common solutions, rather than maintaining separate investments. Upon migration to common, governmentwide solutions, agencies will shut down existing systems—which will not only save money but also freeup resources for agencies to better focus on achieving their missions. These inter-agency taskforces focus on the agency Lines of Business (LoB) rather than a specific technology or investment. The following are the current LoB initiatives underway: • Case Management; • Federal Health Architecture; • Financial Management; • Human Resources Management; • Grants Management; • Information System Security; • Budget Formulation and Execution; • IT Infrastructure; and • Geospatial. The inter-agency taskforces have driven significant accomplishments for each LoB initiative. The Information System Security (ISS) LoB evaluated agency proposals to become shared service centers in the areas of security awareness training and Federal Information Security Management Act (FISMA) reporting. On the basis of the evaluation and recommendations, the following agencies were selected to be the initial shared service centers: • Security Awareness Training: —Office of Personnel Management —Department of State/United States Agency for International Development —Department of Defense • FISMA Reporting: —Environmental Protection Agency ANALYTICAL PERSPECTIVES —Department of Justice Accomplishments of this LoB and the remaining LoB initiatives as well as the next steps are included in Table 9–5, ‘‘Lines of Business (LoB) Update.’’ The Administration continues to leverage government buying power while reducing redundant purchases through the SmartBUY program. Launched in June 2003, the SmartBUY program continues to provide increased cost avoidance savings to federal agencies through new and existing agreements with commercial software providers. In FY 2006, the Federal Government has achieved cost avoidance of over $300 million for the Oracle agreement alone. The SmartBUY Office located at the General Services Administration (GSA) continues to manage a total of nine agreements. In December 2006, the Administration established an agreement with the first of several Antivirus software developers with projected cost avoidance of as much as $18 million annually compared with the current best pricing available on GSA schedule and projected agency buying patterns. SmartBUY will continue to identify and develop new agreements throughout the year. In particular, SmartBUY will pursue a multiple award agreement in support of OMB policy memorandum, M06–16, ‘‘Protection of Sensitive Agency Information,’’ which would include data at rest and remote access. Government IT Workforce.—With rapid advances in IT, improved program performance is first and foremost driven by the Federal employees who manage the IT projects and portfolios. Qualified project managers and an IT workforce with the necessary skills and competencies help ensure agency investments are well planned and managed. In 2005, agencies submitted plans to OMB for closing critical IT skill and competency gaps. Progress against these plans is measured and included in the President’s Management Agenda Human Capital Scorecard. As of September 30, 2006, out of the 26 scorecard agencies: • 17 agencies (65 percent) have met all planned skill or competency gap closure milestones; and • 15 agencies (58 percent) have met or are consistently meeting their IT hiring targets. The table below provides a summary of agency progress toward hiring goals. Job Area IT IT IT IT Fiscal Year 2006—Total Number of Current Positions 1 Number of Vacant Positions Agencies Planned to Fill by the End of Fiscal Year FY 2006 Project Management ............................................................ Security ................................................................................. Architecture (Enterprise) ...................................................... Architecture (Solutions) ........................................................ 4,619 9,030 1,169 942 600 488 180 148 Total ...................................................................................... 15,760 1,416 1 As of date agencies reported to OMB. 9. 155 INTEGRATING SERVICES WITH INFORMATION TECHNOLOGY Agencies have also made progress in assignment of project managers to major IT investments. As reported by agencies on their FY 2008 Exhibit 53 submissions, 83 percent of major IT investments have qualified project managers, an increase from approximately 70 percent in agency FY 2007 submissions. Going forward, agencies are completing a new IT Workforce Assessment Survey developed and administered by the Chief Information Officers (CIO) Council. The survey collects information from Federal IT professionals about the types of work they perform, as well as their level of proficiency in competencies and skills. The survey also identifies top training needs; gathers information on the types of certifications owned by employees; and provides key demographic data. Using the survey results, agencies will prepare a gap analysis report and improvement plan. OMB will be working in conjunction with OPM and the CIO Council to review the survey results as well as the agency plans to address identified gaps. Securing Government Systems.—The Federal government continues to improve information security performance; however, declines in a few agencies have resulted in a net decrease in overall performance in some areas. Additionally, aspects of IT security such as securing data on removable media remain under addressed government-wide. Departments and agencies progress against their corrective actions plans will be measured in the President’s Management Agenda Expanded Electronic Government Scorecard. On balance, the majority of agencies continue to improve or sustain high performance. Agencies report quarterly on their efforts to address IT security weaknesses against key IT security performance measures. The 2006 agency FISMA reports reveal continued progress in the area of system certification and accreditation. In FY 2006, the percentage of certified and accredited systems rose from 85 percent to 88 percent, despite a 3 percent increase in the total system inventory to 10,600 operational systems. A few larger agencies made exceptional progress in closing the gap on certification and accreditation and testing of security controls and contingency plans. The State Department and Department of Homeland security both more than doubled their percentage of secured systems. Several departments achieved impressive increases in the percentage of systems with tested security controls and/ or contingency plans, most notably Homeland Security, the Department of Housing and Urban Development, the Department of Defense, Department of Energy, Education, and the General Services Administration. Overall quality of the certification and accreditation processes as determined by agency Inspectors General (IG) decreased slightly compared to 2005, with 60 percent of agencies reporting ‘‘satisfactory’’ or better processes. Over 72 percent of agencies can demonstrate they have an effective process in place for identifying and correcting weaknesses, a slight decrease from 2005. The overall security status and progress in percentage of systems, from FY 2002 to FY 2006, is as follows: (In Fiscal Years) 2002 Effective Security and Privacy Controls (C&A) ...................................... Tested Contingency Plans .................. Tested Security Controls .................... Total Systems Reported ..................... 47% 35% 60% 7,957 2003 62% 48% 64% 7,998 2004 77% 57% 76% 8,623 2005 2006 85% 61% 72% 10,289 88% 88% 77% 10,600 The number of agencies where the IG has verified the process exists to remediate IT security weaknesses (Plan of Actions & Milestones): FY 2002 ........................................................................ FY FY FY FY 2003 2004 2005 2006 ........................................................................ ........................................................................ ........................................................................ ........................................................................ N/A (was not required in until FY 2003) 12 18 19 18 Government-wide, incremental progress in resolving fundamental IT security weaknesses has been made in many aspects of information security; however departments and agencies must continually assess the risks associated with technological developments and service offerings. Thus, each year brings new challenges and approaches, and potentially new measures for performance. 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, 2007, and will be made available on OMB’s website. Protecting Privacy.—In 2006, several agencies experienced high profile data security breaches involving personal information. Most notable of these was the Department of Veterans Affairs, but significant problems also exist at other departments and agencies. Virtually all of these incidents resulted from ‘‘internal’’ problems within agencies and not external attacks on agency systems. To help address this issue, in May 2006, the President signed an Executive Order creating the Federal Identity Theft Task Force. Several of the Task Force’s interim recommendations address the need to improve data security in the government, improve the agencies’ ability to respond to data breaches, and reduce the risk to personally identifiable information. In this context, OMB has issued four security and privacy policy and advisory memoranda. These memoranda reemphasize agency responsibilities under law and policy regarding protection and safeguard of sensitive personally identifiable information, including information accessed through removable media, and incident reporting. They are included in Table 9–2, ‘‘Management Guidance,’’ and are available at: www.whitehouse.gov/OMB/memoranda. To help ensure safeguard of personally identifiable information, agencies are required to report on several performance metrics related to information privacy. Additionally, this year agencies were also required to provide quantitative performance measures to assess the privacy of agencies’ personally identifiable information. The FY 2006 agency FISMA reports reveal modest suc- 156 cess in meeting several key privacy performance measures: • Program Oversight. In 2006, the majority of agencies report having appropriate oversight over their privacy programs in place. All agencies report having a privacy official who participates in privacy compliance activities, however, 84 percent report coordinated oversight coordination with the Office of the Inspector General (OIG). Most agencies report privacy training for Federal employees and contractors, with 92 percent reporting general privacy training and 84 percent reporting job-specific privacy training. • Privacy Impact Assessments. In 2006, 82 percent of applicable systems government-wide have publicly posted privacy impact assessments verses the goal of 90 percent. • System of Records Notices (SORNs). In 2006, 82 percent of systems government-wide with personally identifiable information contained in a system of records covered by the Privacy Act have developed, published, and maintained current systems of records notices verses the goal of 90 percent. Initiative to Secure Federal Information Systems and Facilities.—Inconsistent agency approaches to facility security and computer security are inefficient and costly, and increase risks to the Federal government. On August 27, 2004, the President signed Homeland Security Presidential Directive (HSPD) 12, ‘‘Policy for a Common Identification Standard for Federal Employees and Contractors,’’ which requires agencies to implement a mandatory, government-wide standard for secure and reliable forms of identification for Federal employees and contractors. In October 2006, agencies met the major milestone of their HSPD-12 implementation plans which was to begin issuance of compliant identification cards. During FY2007—FY2008, agencies are required to complete issuance of these IDs to all applicable employees and contractors and install infrastructure to use them. Initiative for Improving Government Networking Capabilities.—In order for the departments and agencies to overcome technical limitations arising from this need to interoperate and support emerging requirements and technologies, the Administration set June 2008 as the date by which all agencies’ infrastructure (network backbones) must be IPv6-capable. In August 2005, OMB issued guidance to agencies to ensure an orderly and secure transition from Internet Protocol Version 4 (IPv4) to Version 6 (IPv6). Since the Internet Protocol is core to an agency’s IT infrastructure, in February 2006, the Administration began using the Enterprise Architecture (EA) Assessment Framework to evaluate agency IPv6 transition planning and progress. The agencies are responsible for a series of actions by specific dates. For instance, by June 30, 2006, agencies were to complete: —an inventory of existing routers, switches, and hardware firewalls; and ANALYTICAL PERSPECTIVES —an impact analysis of fiscal and operational impacts and risks. Agencies are required to submit status reports with their quarterly EA submissions showing progress against the agency-specific milestones detailed in their IPv6 transition plans. To avoid unnecessary costs in the future, agencies are also required to the maximum extent practicable, to ensure all new IT procurements are IPv6 compliant. Any exceptions to the use of IPv6 require the agency’s CIO to give advance, written approval. In support of this requirement, the National Institute of Standards and Technology (NIST) will release a standards profile. The profile will be released for public comment in January 2007. Additionally, the President’s National Strategy to Secure Cyberspace directed the Secretary of Commerce to form a task force to examine the most recent iteration of the Internet Protocol, IP version 6 (IPv6). The President charged the task force with considering a variety of IPv6-related issues, ‘‘including the appropriate role of government, international interoperability, security in transition, and costs and benefits.’’ The task force, co-chaired by the Administrator of the National Telecommunications and Information Administration (NTIA) and the Director of the NIST, prepared a report discussing the benefits and impacts of IPv6. This report was published in January 2006. Making Government Accessible to All.—The efficient, effective, and appropriately consistent use of Federal agency public websites is important to promote a more citizen centered government. Federal agency public websites are information resources funded in whole or in part by the Federal government and operated by an agency, contractor, or other organization on behalf of the agency. They present government information or provide services to the public or a specific non-Federal user group and support the proper performance of an agency function. GSA’s Office of Citizen Services and Communications manages the operations of FirstGov.gov and recently upgraded their search capability and changed its name to USA.gov in order to improve public access to Federal government information. An interagency ‘‘web content’’ working group, sponsored by GSA, regularly hosts training for Federal agency webmasters and public affairs officers. Recent courses provided instructions for making agency websites more effective and relevant to popular search engines. Additionally, a web content working group maintains www.webcontent.gov, conducts interagency meetings to assist agencies in managing their websites, and exchanges best practices among other agencies. These activities support agency efforts to provide access to and dissemination of government information to the public. GSA plans to complete the online tutorial by April 2007. This service will complement other services at USA.gov and elsewhere to aid the public in locating government information. 9. INTEGRATING SERVICES WITH INFORMATION TECHNOLOGY 157 SUCCESSFULLY USING ELECTRONIC GOVERNMENT The departments and agencies continue to leverage information technologies to make government services available to citizens 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 will far outweigh the cost of implementation. 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 and made available on line at www.egov.gov. Examples of how the tenets of E-Government are helping to deliver services to the citizen and make the government more effective include: Department of Commerce. The Online Positioning User Service (OPUS) transforms how users of global positioning systems obtain highly accurate geographic coordinates and elevation data (see: www.ngs.noaa.gov/ OPUS/). The system allows users, such as professional surveyors, to electronically submit geospatial information via the Internet to the Department, where data are processed to determine corresponding three-dimensional positional coordinates. As a result, the Department is able to provide access to and disseminate more accurate and quality geospatial information to the public. For example, construction, transportation, and mapping industries reduce surveying time and costs (estimated $270 million cost savings to the public) of creating specific maps and other products needed to operate their business to a fraction of those previously reported. User forums and workshops to obtain feedback are held regularly across the country, and usage of the system has grown from 1,000 data submissions per month in 2002, to over 13,000 per month in 2006. Extensive interaction between the National Oceanic and Atmospheric Administration (NOAA) and system users takes place during these sessions, and NOAA is currently identifying and surveying representatives from individual counties to ensure their diverse needs are being met. Additionally, users can complete an online survey to provide the Department comments and suggestions on how to improve the system and related positioning products and services. OPUS users include more than 175 organizations, including other Federal agencies, state and local governments, universities, the private sector, foreign governments, and others who share the goal of making more accurate positioning available worldwide. Users without Internet access and those with disabilities can mail their GPS observations to NOAA on a compact disk and receive the results back via the same mechanism on a prearranged basis. U.S. Department of Agriculture. The Animal and Plant Health Inspection Service (APHIS) launched its new electronic permitting system (ePermits) on April 3, 2006. The system allows customers to apply for a permit, check its status, and view it online. The ability to submit applications and receive permits via the Internet and in some cases the ability to pay applicable permit application fees online, saves customers and APHIS the time and effort associated with the paperbased process. Additional information on system features can be found on the Web site at www.aphis.usda.gov/permits/. To successfully implement the system, USDA demonstrated a desire to team with customers, state officials, and peer agencies by facilitating outreach sessions and customer tests. USDA continues to maintain ongoing dialogue with system developers, users, partners, and stakeholders to plan and implement additional features. Customers without Internet access at their facility can still use the paper permit application process and USDA developed the system to be compliant with Section 508 of The Rehabilitation Act of 1998. Previously, the permit processing workload was growing to become unmanageable with current staff and resources. By eliminating the cost of processing paper and automating the system, more efficiency will result, with benefits to the Federal Government, state governments, and the general public estimated at $1.2 million per year in the first full year of operating the system. APHIS estimated that when the system is fully deployed it will cut in half the time it takes to process applications to import enterable plants and timber when the applications are entered online. In addition, the system will make it more difficult to tamper with a permit because the system provides immediate access to information relating to applications and permits The Administration continues the focus of the department and agency specific services movement to citizencentered services. Overall funding for the President’s E-Government initiatives has reduced annually since Fiscal Year 2004 as the initiatives have met their milestones and have become incorporated into the daily operations of Federal departments and agencies. This reduction has come as result of moving the initiatives to fee-for-service models where appropriate, thereby eliminating the need for agency contributions. Table 9–4, ‘‘Status of the Presidential E-Government Initiatives,’’ included on the CD–ROM, provides an update for each project. CONTINUING TO ACHIEVE RESULTS The Administration will continue to use the Federal Enterprise Architecture data for business analysis to focus our efforts to direct information technology investments to improve service delivery to citizens and other 158 entities. The Administration will continue to improve performance and achieve results by continuing our efforts in linking IT investments to program performance as demonstrated by the analytical tool called the Program Assessment Rating Tool (PART). In 2008 and beyond, the Federal government will continue to identify IT opportunities for collaboration and consolidation while improving services. Although the Federal government continues to improve, much more work is needed to better serve the citizen. Through the PMA, the Clinger-Cohen Act, the E-Government Act, FISMA, budget guidance and other man- ANALYTICAL PERSPECTIVES agement tools, the Federal government has the ability to be the best manager, innovator and user of information, services and information systems in the world. The Federal Government has huge potential and opportunities for growth and to ensure program success and results through the effective use of information technology. Each department and agency will leverage existing capabilities to the maximum potential while ensuring reliability, security, privacy and continuity of services. The institution of the management practices within each department and agency and throughout the government will ensure these results. 10. FEDERAL DRUG CONTROL FUNDING Table 10–1. Federal Drug Control Funding, FY 2006–2008 1 (Budget authority, in millions of dollars) Estimate 2008 Request Department/Agency 2006 2007 Department of Defense .......................................................................................... 1,086.6 1,073.9 936.8 Department of Education ...................................................................................... 489.8 524.8 275.0 Department of Health and Human Services: National Institute on Drug Abuse ........................................................................ Substance Abuse and Mental Health Services Administration .......................... 998.9 2,440.9 1,000.0 2,442.5 1,000.4 2,360.4 Total HHS ............................................................................................................ 3,439.7 3,442.5 3,360.7 Department of Homeland Security: Customs and Border Protection .......................................................................... Immigration and Customs Enforcement .............................................................. U.S. Coast Guard ................................................................................................ 1,635.3 382.3 1,225.5 1,874.6 422.8 1,140.2 1,970.3 450.2 1,073.2 Total DHS ............................................................................................................ 3,243.1 3,437.6 3,493.7 Department of Justice: Bureau of Prisons ................................................................................................ Drug Enforcement Administration ........................................................................ Interagency Crime and Drug Enforcement ......................................................... Office of Justice Programs .................................................................................. 62.6 1,890.8 483.2 238.2 65.1 1,876.0 485.1 227.8 67.2 2,041.8 509.2 178.9 Total Department of Justice ............................................................................. 2,674.9 2,654.0 2,797.0 ONDCP: Counterdrug Technology Assessment Center .................................................... Operations ............................................................................................................ High Intensity Drug Trafficking Area Program .................................................... Other Federal Drug Control Programs ............................................................... 29.7 26.6 224.7 193.0 19.6 26.0 225.3 194.0 5.0 23.9 220.0 224.5 Total ONDCP ...................................................................................................... 474.0 464.9 473.4 Department of State: Bureau of International Narcotics and Law Enforcement Affairs ....................... Economic Support Assistance ............................................................................. 1,036.0 120.9 1,011.2 84.0 783.7 313.1 Total Department of State ................................................................................ 1,156.9 1,095.2 1,096.8 Department of Treasury: Internal Revenue Service .................................................................................... 55.0 55.0 57.3 Department of Veterans Affairs: Veterans Health Administration ........................................................................... 376.7 376.6 392.0 Other Priorities 2 ..................................................................................................... 2.6 3.7 78.7 Total Federal Drug Budget ................................................................................... $12,999.2 $13,128.1 $12,961.4 1 Detail may not add due to rounding. (1) the Small Business Administration’s Drug-Free Workplace grants, (2) the Department of Transportation National Highway Traffic Safety Administration’s Drug Impaired Driving Program, and (3) for FY 2008, Screening and Brief Intervention reimbursement by the Department of Health and Human Services’ Centers for Medicare and Medicaid Services. 2 Includes 159 11. CALIFORNIA–FEDERAL BAY–DELTA PROGRAM BUDGET CROSSCUT (CALFED) The California-Federal Bay-Delta program (also known as CALFED) is a cooperative effort of the Federal Government, the State of California, local Governments, and water users, to proactively address the water management and aquatic ecosystem needs of California’s Central Valley. This valley, one of the most productive agricultural regions of the world, is drained by the Sacramento River in the north, and the San Joaquin River in the south. The two rivers meet southwest of Sacramento, forming the Sacramento-San Joaquin Delta, and drain west into San Francisco Bay. The extensive development of the area’s water resources has significantly boosted agricultural production, but has also adversely affected the region’s ecosystems. CALFED participants recognized the need to provide a safe, clean, reliable source of water for multiple uses, while at the same time restoring or maintaining the ecosystems of the area and protecting against floods. This recognition resulted in the 1994 Bay-Delta Accord, which laid the foundation for the CALFED program. CALFED’s adaptive management approach to water resources development and management seeks to balance achievement among the program’s four objectives: Water Supply Reliability, Levee System Integrity, Water Quality, and Ecosystem Restoration. The program integrates science and moni- toring into program management to track progress toward achieving those goals. The parties signed a Record of Decision in 2000, spelling out the different program components and goals. In 2004, the President signed the Calfed Bay-Delta Authorization Act (P.L. 108–361) into law. This Act, authorizing funding and activities for the CALFED program through 2010, provides new programmatic authority for participating agencies, authorizes $395 million to be appropriated for the Federal share of CALFED activities, and specifies criteria for program cost-shares and achieving balanced implementation of CALFED program components. Federal agencies contributing to CALFED goals include: the Department of the Interior’s Bureau of Reclamation, Fish and Wildlife Service, and U.S. Geological Survey; the Department of Agriculture’s Natural Resources Conservation Service; the U.S. Army Corps of Engineers; the Department of Commerce’s National Oceanic and Atmospheric Administration; and the Environmental Protection Agency. The Budget includes a crosscut of estimated Federal funding by each of the CALFED agencies, fulfilling the reporting requirements of P.L. 108–361. Detailed tables are included on the CD–ROM included with the Analytical Perspectives, as well as an explanation of budget crosscut methodology. CALFED–RELATED FEDERAL FUNDING BUDGET CROSSCUT Federal Fiscal Years 1998–2008 (Dollars in millions) Bureau of Reclamation .......................... Corps of Engineers ................................ Natural Resources Conservation Service ............................................... National Oceanic and Atmospheric Administration .................................... Geological Survey .................................. Fish and Wildlife Service ....................... Environmental Protection Agency ......... Total ................................................... 1 Estimate 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 153.368 100.686 114.672 103.341 138.507 93.786 79.748 54.192 103.320 58.227 74.212 57.827 75.738 72.644 81.104 52.306 99.828 91.285 84.075 76.980 84.073 29.755 ................ 14.543 12.845 16.945 39.078 38.998 48.745 36.393 34.635 31.937 36.000 0.300 3.158 0.941 3.204 0.375 3.158 1.143 3.049 0.450 4.319 3.647 57.262 0.550 5.366 18.230 53.375 0.575 5.089 5.605 54.255 0.775 5.089 11.189 20.693 0.775 4.910 13.684 62.780 0.775 5.419 8.914 97.652 0.775 5.177 10.744 32.324 0.500 4.078 1.483 0.533 0.525 3.814 1.483 1 N/A $261.657 $240.281 $310.816 $228.406 $266.149 $208.783 $279.276 $282.563 $274.768 $199.59 $155.650 not available. 161 ECONOMIC ASSUMPTIONS AND ANALYSES 163 12. ECONOMIC ASSUMPTIONS By the end of 2006 the U.S. economy had entered its sixth year of expansion, with a moderate pace of economic growth, sustained increases in payroll jobs, relatively low levels of unemployment and underlying inflation, and good prospects for steady, sustained growth ahead. 1 The ongoing solid economic performance of recent years demonstrates the resilience of the U.S. economy and the beneficial effects of successful pro-growth policies, including tax relief, Federal Reserve monetary policy actions, and ongoing efforts to promote investment in innovative technologies and to liberalize international trade. The performance of the past five years reveals the robust nature of the U.S. economic expansion and the ability of the economy to overcome a series of shocks, including: sharp declines in the stock market and in investment in business equipment that led to the economic slowdown and recession of 2000–2001; the terrorist attacks of September 11, 2001; the onset of the Global War on Terror; high and increasing prices for crude oil and energy in recent years; and the substantial damage and disruptions from the 2005 hurricane season. Further, during 2006, the U.S. economy began to experience adverse effects from a housing market slowdown. Despite these unfavorable events, the U.S. economy has continued to expand, with solid productivity and income growth, low unemployment, and the generation of more than 7.2 million payroll jobs since August 2003 (including revisions). As 2007 begins, the Administration and other public and private forecasters expect the expansion to continue throughout the budget window, with sustained non-inflationary real growth providing a solid foundation for the Federal budget outlook. Recent Economic Performance At the time of the preparation of the Budget, real gross domestic product (GDP) in the U.S. economy has been increasing for 20 consecutive quarters, averaging 3.0 percent growth at an annual rate during the expansion. Over the four quarters of 2006, real GDP growth was on track to register about a 3.1 percent growth rate, following the same pace during 2005 and a 3.4 percent rate during 2004. Increases in employment and ongoing strong gains in the efficiency of the U.S. workforce—that is, high growth in labor productivity—have combined to generate the sustained growth in real output in recent years. • In labor markets, nonfarm payroll employment has increased by more than 7.2 million jobs since the post-recession low in August 2003, with about 1 Economic performance is discussed in terms of calendar years. Budget figures are in terms of fiscal years. 2.0 million of those job gains occurring during 2006. • Reflecting the improved labor situation, the unemployment rate was down to 4.5 percent in December 2006 from its post-recession high of 6.3 percent in June 2003—and recently has been at its lowest level in five years, and at levels below the averages of each of the past five decades. • Labor productivity gains—the increase in output per hour of labor—have been remarkably strong during the expansion, providing a substantial boost to growth in real GDP. Output per hour in the nonfarm business sector has increased at a 3.0 percent average annual rate over the past five years, although at a slower 2.5 percent pace since the spring of 2003, reflecting the return to stronger employment growth. • The productivity gains during the expansion reinforce the stronger trend productivity performance of the past decade. Since 1995, labor productivity in the nonfarm business sector has increased at about a 2.8 percent annual rate, double the 1.4 percent annual rate of gain in the period from 1973 to 1995. Stronger growth in labor productivity is a fundamental building block for the longer-term performance of the economy and represents the essential basis for rising wages and increasing standards of living for American workers and families. • Reflecting labor gains from stronger productivity growth, during 2006 real hourly earnings of production workers rose by 1.7 percent, the strongest annual gain in five years. • Through November, real disposable personal income had increased by 3.0 percent at an annual rate during 2006, and the real per capita increase was at a 2.0 percent rate. By way of comparison, during the current expansion real disposable personal income per capita is up 9.7 percent, compared with the 6.7 percent increase during the equivalent period of the prior expansion of the 1990s. Other economic indicators also provide evidence for the sustained growth performance of the U.S. economy in recent years and during 2006: • Through the third quarter of 2006, real consumer spending had increased at a 3.4 percent annual rate, following increases at a 2.9 percent rate during 2005 and at a 4.0 percent rate during 2004. In the fourth quarter, consumption spending growth continued, providing a strong base for final demand in the economy at the end of the year. 165 166 • Real fixed business investment in structures showed strong gains in 2006, rising at a 15 percent annual rate through the third quarter of the year, on track to being the strongest annual increase in more than two decades. • Real business investment in durable equipment and software increased by 7.1 percent at an annual rate through the third quarter of 2006, following the increases of 7.0 percent during 2005 and 8.3 percent during 2004. • Real net exports improved during the year as real exports grew by 9.0 percent at an annual rate through the third quarter of 2006—on track to being the strongest performance in 10 years. Although the underlying trend performance of the U.S. economy has been good and the gains have translated into solid growth of output, incomes, wages, and accumulating wealth, the economy continues to face important challenges—some new, some ongoing including: • The housing market and residential investment activity generally slowed sharply during 2006, subtracting significantly from real GDP growth as the year went on. Housing starts peaked at an annual rate of more than 2.2 million units early in the year, but fell back to about a 1.5 million to 1.6 million annual pace near the end of the year— the lowest in about 5 years. During 2006, real residential investment spending was on track to subtract about 0.7 percentage point from overall real GDP growth. • Manufacturing activity showed signs of slowing at the end of the summer and into the fall. Industrial production of consumer durables slipped in September and October, reflecting declines in production of motor vehicles, energy products, and residential appliances, furniture, and carpeting. Survey measures of manufacturing activity also showed slowing activity. Even so, manufacturing industrial production rose in December and was 3.3 percent higher than in December 2005. • Energy prices—notably crude oil, natural gas, and gasoline prices—increased sharply over the past five years and continued at relatively high levels during much of 2006. For example, the benchmark price for West Texas Intermediate crude oil increased from under $20 a barrel in December 2001 to about $74 a barrel in July 2006. Over the same period, the national average retail gasoline price rose from $1.09 a gallon to $2.98 a gallon. Some relief occurred during the second half of 2006 as the price of crude oil fell back to below $61 a barrel by the end of the year, and the retail gasoline price fell to $2.34 a gallon. • The lingering effects from hurricane damage presented challenges during 2006 as the economy worked through and rebounded from the adverse effects of the severe 2005 hurricane season. Some of the persisting high energy prices in the first half of the year described above can be attributed ANALYTICAL PERSPECTIVES to effects from hurricane damage to key oil, natural gas, and refining facilities. • Inflation initially increased as the rise in energy and gasoline prices contributed to higher inflation rates during 2005 and through the middle of 2006—but price increases began to moderate by the end of 2006. The consumer price index (CPI) rose 2.5 percent during 2006 (December to December), down from a 3.4 percent rate during 2005. • Core inflation rose during the first half of 2006 and then began to subside. Abstracting from volatile food and energy items shows that ‘‘core’’ CPI inflation was 2.6 percent during 2006, up from 2.2 percent during 2005. The price index for personal consumption expenditures excluding food and energy items from the National Income and Product Accounts (NIPAs)—which uses a method of calculation that eliminates one source of upward bias that exists in the CPI measures—was up at a 2.3 percent annual rate through November, compared to the 2.1 percent rate during 2005. • Imbalances in international accounts persisted during 2006 with the trade deficit at about 6 percent of GDP and the current account deficit at nearly 7 percent of GDP. Even so, the international imbalances actually stabilized over the past year with little effect on real GDP growth— after having risen steadily over the past decade and subtracting 0.6 percentage point per year on average from GDP growth over that time. The economy continued to grow in the face of these challenges, although growth has slowed somewhat over the past year. Despite the volatility in the overall rate of inflation, underlying inflation remains relatively subdued and was lower during the last six months than earlier in 2006. Meanwhile, expectations of future inflation do not appear to be adversely affecting business or household decisions. In general, despite adverse events and slowing performance in specific sectors, economic performance as a whole during 2006 confirms that the U.S. economy is on track for continued expansion with non-inflationary real growth. Policy Background The fiscal and monetary policies of the past five years have successfully contributed to the current good economic performance. The general fiscal policy outlook— as presented in the President’s Budget—reflects the outlook for sustained expansion in the U.S. economy for the foreseeable future. Looking back, timely tax relief and reductions in interest rates promoted the economy’s recovery from recession and helped the Nation overcome the adverse effects from the variety of shocks it faced. Those policies continue to provide a solid foundation for current and future economic performance. Fiscal Policy: Beginning in 2001, the Administration proposed, and the Congress enacted, significant tax relief designed to overcome the shocks and recession— promoting recovery in the growth of output, income, and jobs—and to provide a strong basis for continued 167 12. ECONOMIC ASSUMPTIONS economic expansion in the long term. Key tax relief legislation included: • The Economic Growth and Tax Relief and Reconciliation Act of 2001 lowered marginal income tax rates; reduced the marriage tax penalty; and created a new, lower 10 percent tax bracket, among other changes. • The Job Creation and Worker Assistance Act of 2002 permitted immediate depreciation of 30 percent of the value of qualified new capital assets put in place for three years. The Act also extended unemployment insurance benefits to workers who had exhausted their normal benefits. • The Jobs and Growth Tax Relief Reconciliation Act of 2003 lowered income tax rates, reduced the marriage penalty, raised the child tax credit, and raised the exemption amount for the individual Alternative Minimum Tax. The Act also reduced tax rates on dividend income and capital gains and expanded bonus depreciation and small business expensing of equipment purchases. Additional legislation of recent years has extended tax relief, helping to ensure that key provisions would continue and not expire. Monetary Policy and Interest Rates: As 2007 begins, the Federal Reserve continues to orient monetary policy toward promoting sustained non-inflationary real growth in the U.S. economy. As the expansion strengthened, the Federal Reserve raised the Federal funds rate in a steady series of increases from 1 percent to 5.25 percent. The Federal funds rate remained at 5.25 percent over the second half of 2006. In a recent policy statement, the Federal Open Market Committee stated that ‘‘the economy seems likely to expand at a moderate pace on balance over coming quarters... Nonetheless... some inflation risks remain.’’ The Administration’s forecast for the 3-month Treasury bill rate, presented below, was derived to be consistent with market expectations for the interest rate outlook at the time the forecast was completed. During 2006, longer-term interest rates, notably the yield on 10-year Treasury notes, remained low by historical standards. The 10-year rate traded as low as 4.3 percent in January and as high as 5.25 percent in June, but it ended the year at 4.7 percent. With the Federal funds rate exceeding 5 percent for most of the year, the low 10-year Treasury yields during the year produced a somewhat inverted structure of interest rates across short- to long-term maturities. Trade and Regulatory Policies and Competitiveness Initiatives: Beyond these budget and monetary policies, the Administration continues to work to advance a comprehensive set of policies to promote the short- and long-term performance of the U.S. economy, including trade and regulatory policies and initiatives aimed at boosting competitiveness in domestic and international markets. Expanding opportunities in international trade and investment is one of the Administration’s top priorities. Efforts continue to negotiate and implement bilateral, regional, and multilateral agreements to promote international trade and investment with countries around the world. These policies create and expand markets for U.S. exports and strengthen the U.S. economy while also creating new economic opportunities for our trading partners—including helping to alleviate poverty in the developing world and promote democratic reform. The Administration’s American Competitiveness Initiative is targeted at advancing U.S. competitiveness through promoting technological innovation, opening new markets, increasing research in the physical sciences and engineering, and protecting intellectual property. Efforts also continue to streamline and simplify Federal regulations that can hinder economic growth and job creation. Economic Projections The Administration’s economic projections, based on information available as of mid-November 2006, are summarized in Table 12–1. These assumptions are close to those of the Congressional Budget Office and the consensus of private-sector forecasters, as described in more detail below and shown in Table 12–2. In brief, the assumptions call for a continuation of the recent trends of sustained growth, solid jobs growth, low inflation, and relatively low interest rates. Real GDP, Potential GDP, and Unemployment Rate: Real GDP, which is estimated to have increased 3.1 percent in 2006 on a fourth quarter-over-fourth quarter basis, is projected to increase 2.9 percent this year. During the next few years, both actual and potential growth are projected to moderate slightly from 3.1 percent for 2008 to 2.9 percent by 2012. As a result, the unemployment rate, which dipped as low as 4.4 percent late in 2006, is projected to edge up to its sustainable rate of 4.8 percent and remain at that level. That rate is the center of the range that is thought to be consistent with stable inflation. The main sources of growth in demand in coming years are likely to be business capital spending, net exports, and to a lesser extent, consumer spending. The contributions to overall growth from residential investment and the government sector are expected to be small at most. For the private business sector of the economy, potential growth is approximately equal to the sum of the trend rates of growth of the labor force and of productivity. Potential growth of total GDP (including government sectors) is projected to be about 3.1 percent over the next two years, trending down to 2.9 percent by 2012, primarily because of an assumed slowing in labor force growth. The labor force is projected to grow about 1.0 percent per year through 2008 on average, slowing to about 0.7 percent yearly on average during 2009–2012 as increasing numbers of baby boomers enter retirement. 168 ANALYTICAL PERSPECTIVES Table 12–1. ECONOMIC ASSUMPTIONS 1 (Calendar years; dollar amounts in billions) Projections Actual 2005 2006 2007 2008 2009 2010 2011 2012 12,456 11,049 112.7 13,248 11,412 116.1 13,946 11,721 119.0 14,711 12,077 121.8 15,507 12,451 124.6 16,316 12,827 127.2 17,148 13,211 129.8 18,003 13,599 132.4 6.4 3.1 3.1 5.9 3.1 2.7 5.5 2.9 2.5 5.5 3.1 2.3 5.3 3.1 2.2 5.2 3.0 2.1 5.0 3.0 2.0 5.0 2.9 2.0 6.3 3.2 3.0 6.4 3.3 3.0 5.3 2.7 2.5 5.5 3.0 2.4 5.4 3.1 2.2 5.2 3.0 2.1 5.1 3.0 2.0 5.0 2.9 2.0 Incomes, billions of current dollars: Corporate profits before tax ........................................... Wages and salaries ........................................................ Other taxable income 2 ................................................... 1,519 5,665 2,563 1,779 6,115 2,754 1,785 6,478 2,949 1,815 6,862 3,112 1,839 7,248 3,261 1,846 7,628 3,404 1,860 8,035 3,579 1,879 8,454 3,756 Consumer Price Index: 3 Level (1982—84=100), annual average ........................ Percent change, fourth quarter over fourth quarter ...... Percent change, year over year .................................... 195.3 3.7 3.4 201.7 2.3 3.3 206.0 2.6 2.1 211.4 2.6 2.6 216.8 2.5 2.5 222.0 2.4 2.4 227.2 2.3 2.3 232.5 2.3 2.3 Unemployment rate, civilian, percent: Fourth quarter level ........................................................ Annual average ............................................................... 5.0 5.1 4.5 4.6 4.7 4.6 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 Federal pay raises, January, percent: Military 4 ........................................................................... Civilian 5 .......................................................................... 3.5 3.5 3.1 3.1 2.7 2.2 3.0 3.0 NA NA NA NA NA NA NA NA Interest rates, percent: 91–day Treasury bills 6 ................................................... 10–year Treasury notes ................................................. 3.1 4.3 4.7 4.8 4.7 5.0 4.6 5.1 4.4 5.2 4.2 5.3 4.1 5.3 4.1 5.3 Gross Domestic Product (GDP): Levels, dollar amounts in billions: Current dollars ................................................................ Real, chained (2000) dollars .......................................... Chained price index (2000=100), annual average ........ Percent change, fourth quarter over fourth quarter: Current dollars ................................................................ Real, chained (2000) dollars .......................................... Chained price index (2000=100) .................................... Percent change, year over year: Current dollars ................................................................ Real, chained (2000) dollars .......................................... Chained price index (2000=100) .................................... NA = Not Available. 1 Based on information available as of mid-November 2006. 2 Dividends, rent, interest and proprietors’ income components of personal income. 3 Seasonally adjusted CPI for all urban consumers. 4 Percentages apply to basic pay only; percentages to be proposed for years after 2008 have not yet been determined. 5 Overall average increase, including locality pay adjustments. Percentages to be proposed for years after 2008 have not yet been determined. 6 Average rate, secondary market (bank discount basis). Trend productivity growth in the nonfarm business sector 2 is assumed to be 2.6 percent per year. The 2.6 percent trend pace is noticeably below the average since the business cycle peak in the first quarter of 2001 (3.1 percent per year). It is, however, close to the pace from 1995 through 2000 (2.5 percent) and not far from the 60-year average since the official productivity series began in 1947 (2.3 percent). jected to increase 2.5 percent in 2007, moderating to 2.0 by 2011 and 2012, slightly less than CPI inflation, which is the usual pattern. The forecast of low inflation reflects the current very low core inflation rate, falling energy prices, modest inflation expectations, the downward pressure on inflation due to both domestic and global competition, and the Federal Reserve’s monetary policy. Inflation: Inflation moderated in 2006, in large part because of declining energy prices. With the recent easing of these prices, inflation is likely to be lower in 2007. On a year-over-year basis, the CPI is projected to increase 2.1 percent this year but to rebound to 2.6 percent in 2008, with the increase moderating to 2.3 percent a year through 2012. This inflation rate is lower than the average during each decade of the 1970s, 1980s, and 1990s. The GDP price index is pro- Interest Rates: Short-term interest rates are projected to decline somewhat and long-term rates to rise slightly, achieving a more normal yield curve spread. The 3-month Treasury bill rate, which was 4.9 percent at the end of December, is expected to decrease to 4.1 percent by 2011. The yield on the 10-year Treasury note, 4.7 percent at the end of last year, is projected to increase to 5.3 percent by 2010. The forecast rates are historically low: the projected averages for 3-month and 10-year Treasuries during 2007–2012 are lower than the averages for these instruments during each decade of the 1970s, 1980s, and 2 The nonfarm business sector accounts for about three-fourths of the value of GDP, with households, institutions, and government accounting for the remainder. The nonfarm business sector serves as the standard sector of reference for productivity because of its reliable measurement. 169 12. ECONOMIC ASSUMPTIONS 1990s. The relatively low projected yields are due largely to the relatively low projected inflation rate. Adjusted for inflation, the projected real interest rates are close to their historical averages. Income Shares: The share of labor compensation in GDP is projected to rise from its low level in 2006, while the share of corporate profits is projected to decline from the unusually high levels of 2006 and those anticipated for 2007. In recent years, growth of hourly compensation adjusted for inflation has lagged the growth of productivity. During the projection period, however, real hourly labor compensation is expected to catch up, which would raise the labor share in GDP back to about its historical average. Among the components of labor compensation, the wage share in GDP is expected to rise from its recent low level while the share of supplements to wages and salaries is expected to remain at around the high level reached in 2006. Corporate profits before tax jumped sharply as a share of GDP in 2005 and 2006 in part due to the end of the accelerated depreciation permitted by the 2002 and 2003 tax acts. Accelerated depreciation lowered profits before tax compared with what they otherwise would have been in 2003 and 2004 by allowing firms to write off more of their investment sooner. Since 2004, however, corporate profits before tax have been higher than normal both because new investment has not qualified for the temporary acceleration and because the remaining depreciation permitted on 2003 and 2004 investment that used this provision has been thereby reduced. Among the other income components, the share of personal interest income in GDP is projected to decline, reflecting the low nominal interest rates of recent years. Personal dividend income’s share, too, is projected to decline, reflecting the declining profit share. A slight rise is projected for proprietors’ income, while the remaining share of the tax base, rental income, is projected to remain relatively stable at around its 2006 level. Comparison with CBO and Private-Sector Forecasts In addition to the Administration, the Congressional Budget Office (CBO) and many private-sector forecasters also make economic projections. CBO develops its projections to aid Congress in formulating budget policy. In the executive branch, this function is performed jointly by the Treasury Department, the Council of Economic Advisers, and the Office of Management and Budget. Private-sector forecasts are often used by businesses for current decision-making and in long-term planning, and the ‘‘consensus’’ or average serves as a useful benchmark for comparison. Table 12–2 compares the 2008 Budget assumptions with projections as of January 2007 by CBO and by the Blue Chip Consensus, an average of about 50 private-sector forecasts. The three sets of economic assumptions are based on different underlying assumptions concerning eco- nomic policies. The Administration forecast generally assumes that the President’s Budget proposals will be enacted. In contrast, the CBO baseline projection assumes that current law as of the time the estimates are made remains unchanged. The 50 or so private forecasters in the Blue Chip Consensus make differing policy assumptions. Despite their differing policy assumptions, the three sets of economic projections, shown in Table 12–2, are very close. The similarity of the Budget economic projection to both the CBO baseline projection and the Consensus forecast underscores the conservative nature of the Administration forecast. For real GDP, the Administration, CBO, and the Blue Chip Consensus anticipate moderate growth this year. The Administration projects 2.7 percent growth on a year-over-year basis, slightly higher than either the Consensus or CBO’s forecast, which are 2.4 percent and 2.3 percent, respectively. For calendar year 2008, the Administration, CBO, and the Consensus all forecast 3.0 percent real growth. The three forecasts are in agreement in both 2009 (3.1 percent) and 2010 (3.0 percent). In 2011 and 2012, the Administration’s projection is about the same as the Consensus growth rate but CBO’s is slightly lower. Over the six-year span as a whole, the Administration, CBO and the Consensus all project average annual growth rates in a narrow range of 2.8 to 3.0 percent. All three forecasts anticipate continued low inflation in the range of 1.8 to 2.5 percent as measured by the GDP price index; and, after 2007, between 2.2 and 2.6 percent as measured by the CPI, with CBO lower than the Administration and the Consensus, which are close to each other. The three unemployment rate projections are also similar with projected rates in the narrow range of 4.8 percent to 5.0 percent after 2007. All three project slightly falling short-term interest rates and a slight rise in long-term rates during the next few years, with the Administration’s short-term rates slightly below the Blue Chip’s and CBO’s, and the long-term rate forecasts nearly identical. Changes in Economic Assumptions The economic assumptions underlying this Budget for 2008 are similar to those of the 2007 Budget, as shown in Table 12–3. Real GDP growth is now expected to be 2.7 percent in 2007, 3.0 percent in 2008, and 3.1 percent in 2009 on a year-over-year basis, moderating gradually to 2.9 percent by 2012. In comparison, last year’s Budget projections showed 3.3 percent real growth for both 2007 and 2008, moderating to 3.0 percent by 2012. Despite the lower real growth forecast this year, the level of nominal GDP is now projected to be higher than in the 2007 Budget projection because of a faster-thanexpected rise in the GDP price index last year and slightly higher projected GDP inflation in the next few years. The unemployment rate projection has been adjusted slightly, reflecting a new assessment of the ‘‘natural 170 ANALYTICAL PERSPECTIVES Table 12–2. COMPARISON OF ECONOMIC ASSUMPTIONS (Calendar years) Projections GDP (billions of current dollars): 2008 Budget ...................................................................................................................................... CBO January ..................................................................................................................................... Blue Chip Consensus January ......................................................................................................... 2007 2008 2009 2010 2011 2012 13,946 13,805 13,843 14,711 14,472 14,561 15,507 15,196 15,323 16,316 15,923 16,116 17,148 16,647 16,937 18,003 17,395 17,805 Average, 2007–12 Real GDP (chain-weighted): 1 2008 Budget ...................................................................................................................................... CBO January ..................................................................................................................................... Blue Chip Consensus January ......................................................................................................... 2.7 2.3 2.4 3.0 3.0 3.0 3.1 3.1 3.1 3.0 3.0 3.0 3.0 2.7 2.9 2.9 2.7 3.0 3.0 2.8 2.9 Chain-weighted GDP Price Index: 1 2008 Budget ...................................................................................................................................... CBO January ..................................................................................................................................... Blue Chip Consensus January ......................................................................................................... 2.5 1.9 2.1 2.4 1.8 2.1 2.2 1.8 2.1 2.1 1.8 2.1 2.0 1.8 2.1 2.0 1.8 2.1 2.2 1.8 2.1 Consumer Price Index (all-urban): 1 2008 Budget ...................................................................................................................................... CBO January ..................................................................................................................................... Blue Chip Consensus January ......................................................................................................... 2.1 1.9 2.0 2.6 2.3 2.3 2.5 2.2 2.3 2.4 2.2 2.3 2.3 2.2 2.3 2.3 2.2 2.4 2.4 2.2 2.3 Unemployment rate: 2 2008 Budget ...................................................................................................................................... CBO January ..................................................................................................................................... Blue Chip Consensus January ......................................................................................................... 4.6 4.7 4.8 4.8 4.9 4.9 4.8 5.0 4.9 4.8 5.0 4.9 4.8 5.0 4.9 4.8 5.0 4.9 4.8 4.9 4.9 Interest rates: 2 91–day Treasury bills: 2008 Budget .................................................................................................................................. CBO January ................................................................................................................................ Blue Chip Consensus January ..................................................................................................... 4.7 4.8 4.9 4.6 4.5 4.8 4.4 4.4 4.7 4.2 4.4 4.5 4.1 4.4 4.5 4.1 4.4 4.6 4.4 4.5 4.7 10–year Treasury notes: 2008 Budget .................................................................................................................................. CBO January ................................................................................................................................ Blue Chip Consensus January ..................................................................................................... 5.0 4.8 4.8 5.1 5.0 5.0 5.2 5.1 5.2 5.3 5.2 5.2 5.3 5.2 5.2 5.3 5.2 5.3 5.2 5.1 5.1 Sources: Congressional Budget Office; Blue Chip Economic Indicators, Aspen Publishers, Inc. January 2007 Blue Chip Consensus forecast for 2007 and 2008; Blue Chip October 2006 long-run extension for 2009—2012. 1 Year-over-year percent change. 2 Annual averages, percent. rate’’ consistent with stable inflation. While the 2007 Budget had the rate level at 5.0 percent in future years, the rate is now projected to stabilize at 4.8 percent in the outyears. The 3-month Treasury bill rate is expected to trend downward, ultimately to the same level, 4.3 percent, as before. The 10-year Treasury note rate is now projected to rise to 5.3 percent by 2010, lower than the previous assumption that it would reach 5.6 percent. Structural and Cyclical Balances Historically, a budget measure called the structural balance has provided an alternative perspective on the stance of fiscal policy as compared to the unadjusted budget balance which includes a component related to the cyclical performance of the economy. For example, when the economy operates below potential, the unemployment rate exceeds the long-run sustainable average consistent with price stability. As a result, receipts are lower and outlays for unemployment-sensitive programs (such as unemployment compensation and food stamps) are higher; the deficit is larger (or the surplus smaller) than if the unemployment rate were at its sustainable long-run average. The portion of the deficit (or surplus) that can be traced to this factor can be called the cyclical component. The portion of the deficit that remains when the unemployment rate is at its long-run value is then called the structural deficit (or structural surplus). In the typical post-World War II business cycle, the structural balance has provided a gauge of the surplus or deficit that would persist if the economy were operating at the sustainable level of unemployment. Conventional estimates of the structural balance are based on the historical relationship between changes in the unemployment rate and real GDP growth on the one hand, and receipts and outlays on the other. For various reasons, these estimated relationships do not take into account all of the cyclical changes in the economy. One example of a cyclical phenomenon not captured in these estimates was the sharply rising stock market during the second half of the 1990s. It boosted capital gains-related receipts and pulled down the deficit. The subsequent fall in the stock market reduced receipts and added to the deficit. Some of this rise and fall was cyclical in nature. It is not possible, however, to estimate the cyclical component of the stock market accurately, and for that reason, all of the stock 171 12. ECONOMIC ASSUMPTIONS Table 12–3. COMPARISON OF ECONOMIC ASSUMPTIONS IN THE 2007 AND 2008 BUDGETS (Calendar years; dollar amounts in billions) 2006 2007 2008 2009 2010 2011 2012 Nominal GDP: 2007 Budget assumptions 1 .................................................................................... 2008 Budget assumptions ...................................................................................... 13,192 13,248 13,931 13,946 14,693 14,711 15,473 15,507 16,288 16,316 17,154 17,148 18,059 18,003 Real GDP (2000 dollars): 2007 Budget assumptions 1 .................................................................................... 2008 Budget assumptions ...................................................................................... 11,433 11,412 11,813 11,721 12,198 12,077 12,580 12,451 12,970 12,827 13,373 13,211 13,779 13,599 Real GDP (percent change): 2 2007 Budget assumptions ...................................................................................... 2008 Budget assumptions ...................................................................................... 3.4 3.3 3.3 2.7 3.3 3.0 3.1 3.1 3.1 3.0 3.1 3.0 3.0 2.9 GDP price index (percent change): 2 2007 Budget assumptions ...................................................................................... 2008 Budget assumptions ...................................................................................... 2.4 3.0 2.2 2.5 2.1 2.4 2.1 2.2 2.1 2.1 2.1 2.0 2.2 2.0 Consumer Price Index (percent change): 2 2007 Budget assumptions ...................................................................................... 2008 Budget assumptions ...................................................................................... 3.0 3.3 2.4 2.1 2.4 2.6 2.4 2.5 2.4 2.4 2.5 2.3 2.5 2.3 Civilian unemployment rate (percent): 3 2007 Budget assumptions ...................................................................................... 2008 Budget assumptions ...................................................................................... 5.0 4.6 5.0 4.6 5.0 4.8 5.0 4.8 5.0 4.8 5.0 4.8 5.0 4.8 91–day Treasury bill rate (percent): 3 2007 Budget assumptions ...................................................................................... 2008 Budget assumptions ...................................................................................... 4.2 4.8 4.2 4.9 4.3 4.7 4.3 4.6 4.3 4.4 4.3 4.3 4.3 4.3 10–year Treasury note rate (percent): 3 2007 Budget assumptions ...................................................................................... 2008 Budget assumptions ...................................................................................... 5.0 4.8 5.4 5.0 5.5 5.1 5.6 5.2 5.6 5.3 5.6 5.3 5.6 5.3 1 Adjusted for July 2006 NIPA revisions. 2 Year-over-year. 3 Calendar year average. market’s contribution to receipts is counted in the structural balance. Other factors unique to the current economic cycle provide additional examples of less-than-complete cyclical adjustment. The fall-off in labor force participation, from 67.1 percent of the U.S. population in 1997–2000 to 66.1 percent in 2004–2006, appears to be at least partly cyclical in nature. Since the official unemployment rate does not include workers who have left the labor force, the conventional measures of potential GDP, incomes, and Government receipts understate the extent to which potential work hours have been underutilized in the current expansion to date because of the decline in labor force participation. Table 12–4. A third example is the fall-off in the wage and salary share of GDP, from 49.2 percent in 2000 to 45.3 percent in the second quarter of 2006. Again, this change is widely suspected to be partly cyclical. Since Federal tax collections depend heavily on wage and salary income, the larger-than-predicted decline in the wage share of GDP suggests that the true cyclical component of the deficit is understated for this reason as well. There are also lags in the collection of tax revenue that can delay the impact of cyclical effects beyond the year in which they occur. The result is that even after the unemployment rate has fallen, receipts may remain cyclically depressed for some time until these lagged effects have dissipated. ADJUSTED STRUCTURAL BALANCE (Fiscal years; in billions of dollars) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Unadjusted surplus or deficit (–) ...................................... Cyclical component ....................................................... 128.2 92.7 –157.8 –28.7 –377.6 –70.8 –412.7 –33.4 –318.3 –5.5 –248.2 15.1 –244.2 8.6 –239.4 –4.8 –187.2 –3.1 –94.4 –0.4 –53.8 0.0 61.0 0.0 Structural surplus or deficit (–) ......................................... Deposit insurance outlays ............................................ 35.5 1.6 –129.0 1.0 –306.8 1.4 –379.3 2.0 –312.9 1.4 –263.3 1.1 –252.8 2.2 –234.6 3.4 –184.1 5.6 –93.9 5.9 –53.8 6.1 61.0 3.9 Adjusted structural surplus or deficit (–) .......................... 37.1 –128.0 –305.3 –377.4 –311.5 –262.2 –250.6 –231.2 –178.5 –88.0 –47.7 65.0 NOTE: The NAIRU is assumed to be 4.8% in 2006 and subsequent years, 4.9% in earlier years. 2012 172 ANALYTICAL PERSPECTIVES For all these reasons, the current estimates of the cyclical deficit are probably understated. The current unemployment gap is believed to be near zero, and the Administration forecasts that it will remain so, but in the broader sense discussed above, the cyclical gap in receipts is likely to still be large and only slowly shrinking. During fiscal year 2001 the unemployment rate appears to have been lower than could be sustained in the long run. Therefore, as shown in Table 12–4, in that year the structural surplus was smaller than the actual surplus, which was enlarged by the boost to receipts and the reduction in outlays associated with the low level of unemployment. Similarly, in 2006 the unemployment rate appeared to be slightly lower than the ‘‘natural rate,’’ rendering the structural deficit for that year slightly higher than the actual deficit, and that effect persists into 2007. • Sensitivity of the Budget to Economic Assumptions Both receipts and outlays are affected by changes in economic conditions. This sensitivity complicates budget planning because errors in economic assumptions lead to errors in the budget projections. It is therefore useful to examine the implications of possible changes in economic assumptions. Many of the budgetary effects of such changes are fairly predictable, and a set of rules of thumb embodying these relationships can aid in estimating how changes in the economic assumptions would alter outlays, receipts, and the surplus or deficit. These rules of thumb should be understood as suggesting orders of magnitude; they ignore a long list of secondary effects that are not captured in the estimates. Economic variables that affect the budget do not usually change independently of one another. Output and employment tend to move together in the short run: a high rate of real GDP growth is generally associated with a declining rate of unemployment, while slow or negative growth is usually accompanied by rising unemployment. In the long run, however, changes in the average rate of growth of real GDP are mainly due to changes in the rates of growth of productivity and the labor force, and are not necessarily associated with changes in the average rate of unemployment. Inflation and interest rates are also closely interrelated: a higher expected rate of inflation increases interest rates, while lower expected inflation reduces interest rates. Changes in real GDP growth or inflation have a much greater cumulative effect on the budget over time if they are sustained for several years than if they last for only one year. Highlights of the budgetary effects of the above rules of thumb are shown in Table 12–5. For real growth and employment: • As shown in the first block, if in 2007 for one year only, real GDP growth is lower by one percentage point and the unemployment rate permanently rises by one-half percentage point relative to the Budget assumptions, the fiscal year 2007 • • • deficit is estimated to increase by $16.1 billion; receipts in 2007 would be lower by $13.4 billion, and outlays would be higher by $2.7 billion, primarily for unemployment-sensitive programs. In fiscal year 2008, the estimated receipts shortfall would grow further to $27.7 billion, and outlays would increase by $8.0 billion relative to the base, even though the growth rate in calendar year 2008 equaled the rate originally assumed. This is because the level of real (and nominal) GDP and taxable incomes would be permanently lower, and unemployment permanently higher. The budget effects (including growing interest costs associated with larger deficits) would continue to grow slightly in each successive year. During 2007–2012, the cumulative increase in the budget deficit is estimated to be $243 billion. The budgetary effects are much larger if the real growth rate is permanently reduced by one percentage point and the unemployment rate is unchanged, as shown in the second block. This scenario might occur if trend productivity were permanently lowered. In this example, during 2007–2012, the cumulative increase in the budget deficit is estimated to be $689 billion. The third block shows the effect of a one percentage point higher rate of inflation and one percentage point higher interest rates during calendar year 2007 only. In subsequent years, the price level and nominal GDP would be one percent higher than in the base case, but interest rates and future inflation rates are assumed to return to their base levels. In 2007 and 2008, outlays would be above the base by $10.8 billion and $18.3 billion, respectively, due in part to lagged cost-ofliving adjustments. Receipts would rise by $23.2 billion in 2007, but then would rise by $44.5 billion above the base in 2008 due to the sustained effects of the elevated price level on the tax base, and to the temporary effect of higher 2007 interest rates on financial corporations’ profits and taxes, resulting in a $26.1 billion improvement in the 2008 budget balance. In subsequent years, the amounts added to receipts would continue to be larger than the additions to outlays. During 2007–2012, cumulative budget deficits would be $130 billion smaller than in the base case. In the fourth block, the rate of inflation and the level of interest rates are higher by one percentage point in all years. As a result, the price level and nominal GDP rise by a cumulatively growing percentage above their base levels. In this case, the effects on receipts and outlays mount steadily in successive years, adding $344 billion to outlays over 2007–2012 and $834 billion to receipts, for a net decrease in the 2007–2012 deficits of $490 billion. The outlay effects of a one percentage point increase in interest rates alone are shown in the fifth block. The receipts portion of this rule-of- 173 12. ECONOMIC ASSUMPTIONS thumb is due to the Federal Reserve’s deposit of earnings on its securities portfolio and the effect of interest rate changes on financial corporations’ profits (and taxes). • The sixth block shows that a sustained one percentage point increase in the GDP price index and in CPI inflation decreases cumulative deficits by a substantial $445 billion during 2007–2012. This large effect is because the receipts from a higher tax base exceed the combination of higher outlays from mandatory cost-of-living adjustments and lower receipts from CPI indexation of tax brackets. Outlays for discretionary programs are assumed to be unchanged in spite of the higher inflation rate. The separate effects of higher inflation and higher interest rates in the fifth and sixth blocks Table 12–5. do not sum to the effects for simultaneous changes in both in the fourth block. This occurs largely because the gains in budget receipts due to higher inflation result in higher debt service savings when interest rates are assumed to be higher as well (the combined case) than when interest rates are assumed to be unchanged (the separate case). The last entry in the table shows rules of thumb for the added interest cost associated with changes in the budget deficit. The effects of changes in economic assumptions in the opposite direction are approximately symmetric to those shown in the table. The impact of a one percentage point lower rate of inflation or higher real growth would have about the same magnitude as the effects shown in the table, but with the opposite sign. SENSITIVITY OF THE BUDGET TO ECONOMIC ASSUMPTIONS (Fiscal years; in billions of dollars) Budget effect 2007 2008 2009 2010 2011 Total of Effects, 2007–2012 2012 Real Growth and Employment Budgetary effects of 1 percent lower real GDP growth: (1) For calendar year 2007 only: 1 Receipts ............................................................................................................... Outlays ................................................................................................................ –13.4 2.7 –27.7 8.0 –31.2 10.3 –33.8 12.3 –35.6 14.4 –37.6 16.4 –179.3 63.9 Increase in deficit (–) .......................................................................................... –16.1 –35.7 –41.5 –46.1 –49.9 –54.0 –243.3 (2) Sustained during 2007–2017, with no change in unemployment: Receipts ............................................................................................................... Outlays ................................................................................................................ –13.6 0.2 –43.6 1.3 –80.4 3.8 –123.2 7.6 –167.6 13.0 –216.2 18.8 –644.7 44.8 Increase in deficit (–) .......................................................................................... –13.8 –44.9 –84.2 –130.8 –180.6 –235.0 –689.4 Budgetary effects of 1 percentage point higher rate of: (3) Inflation and interest rates during calendar year 2007 only: Receipts ............................................................................................................... Outlays ................................................................................................................ 23.2 10.8 44.5 18.3 38.4 15.2 34.4 14.1 36.1 13.4 38.2 12.6 214.8 84.4 Inflation and Interest Rates Decrease in deficit (+) ........................................................................................ 12.4 26.1 23.2 20.4 22.7 25.6 130.4 (4) Inflation and interest rates, sustained during 2007–2017: Receipts ............................................................................................................... Outlays ................................................................................................................ 23.2 11.2 71.3 32.9 116.5 52.1 160.5 68.6 206.4 83.3 256.5 96.1 834.3 344.1 Decrease in deficit (+) ........................................................................................ 12.0 38.3 64.4 91.9 123.1 160.4 490.1 (5) Interest rates only, sustained during 2007–2017: Receipts ............................................................................................................... Outlays ................................................................................................................ 9.7 7.7 28.5 21.5 38.7 31.0 41.9 36.6 45.0 39.7 47.4 41.5 211.1 178.0 Increase in deficit (–) .......................................................................................... 2.0 7.0 7.6 5.3 5.2 5.9 33.1 (6) Inflation only, sustained during 2007–2017: Receipts ............................................................................................................... Outlays ................................................................................................................ 13.4 3.5 42.7 11.7 77.7 21.9 118.3 33.6 161.0 46.4 208.5 59.0 621.6 176.2 Decrease in deficit (+) ........................................................................................ 9.9 31.0 55.8 84.7 114.6 149.5 445.4 2.5 5.1 5.2 5.2 5.3 5.5 28.8 Interest Cost of Higher Federal Borrowing (7) Outlay effect of $100 billion increase in borrowing in 2007 ................................ $50 million or less. 1 The unemployment rate is assumed to be 0.5 percentage point higher per 1.0 percent shortfall in the level of real GDP. 13. STEWARDSHIP Introduction The budget is an essential tool for allocating resources within the Federal Government and between the public and private sectors, but current outlays, receipts, and the deficit give at best a partial picture of the Government’s financial condition. Indeed, changes in the annual budget deficit or surplus can be misleading. For example, the temporary shift from annual deficits to surpluses in the late 1990s did nothing to correct the long-term fiscal deficiencies in the major entitlement programs, which are the major source of the long-run shortfall in Federal finances. This would have been more apparent at the time if greater attention had been focused on long-term measures such as those presented in this chapter. As important as the current budget surplus or deficit is, other indicators are also needed to judge the Government’s fiscal condition. For the Federal Government, unfortunately, there is no single number that corresponds to a business’s bottom line. The Government is judged by how its actions affect the country’s security and well-being, and that cannot easily be summed up with a single statistic. Also, even though its financial condition is important, the Government is not expected to earn a profit. One measure of the Government’s performance is the extent to which it collects the taxes that are owed to it, and another is whether it delivers value in spending the taxes that it collects. Both of those questions are addressed below. In general, the Government’s financial status is best evaluated using a broad range of data and several complementary perspectives. This chapter presents a framework for such analysis. Because there are serious limitations on the available data and the future is uncertain, this chapter’s findings should be interpreted as tentative; its conclusions are subject to future revision. The chapter consists of four parts: • Part I explains how the separate pieces of analysis link together. Chart 13–1 is a schematic diagram showing the linkages. • Part II presents estimates of the Government’s assets and liabilities, which are shown in Table 13–1. This table is similar to a business balance sheet, but for that reason it cannot reveal some of the Government’s unique financial features and needs to be supplemented by the information in Parts III and IV. • Part III shows possible long-run paths for the Federal budget. These projections vary depending on alternative economic and demographic assumptions. The projections are summarized in Table 13–2 and in a related set of charts. Table 13–3 shows present value estimates of the funding shortfall in Social Security and Medicare. Together, these data indicate the scope of the Government’s future responsibilities and the resources it will have available to discharge them under current law and policy. In particular, they show the looming long-run fiscal challenge posed by the Federal entitlement programs. • Part IV returns the focus to the present. This part presents information on national economic and social conditions. It begins with an analysis of tax compliance, including what can be done to improve it, and what resources might be made available with new efforts to assure compliance. The private economy is the ultimate source of the Government’s resources. Table 13–4 gives a summary of total national wealth, while highlighting the Federal investments that have contributed to that wealth. Table 13–5 shows trends in wealth and Table 13–6 presents a small sample of statistical indicators, which are intended to show how the Government’s efforts to improve social and economic outcomes might be measured. PART I—A FRAMEWORK TO EVALUATE FEDERAL FINANCES No single framework can encompass all of the factors that affect the financial condition of the Federal Government, but the framework presented here is reasonably comprehensive and offers a useful way to examine the financial implications of Federal policies. This framework includes information about assets and liabilities such as might appear on a balance sheet, but it also includes long-run projections of the entire budget showing where future fiscal strains are most likely to appear. It includes an analysis of the Government’s potential revenue and what can be done realistically through better education and more rigorous enforce- ment of the tax law to reach that potential. Measures of national wealth, which support future income and tax receipts, are presented along with an array of economic and social indicators showing potential pressure points that may require future policy responses. The Government’s binding obligations—its liabilities—consist in the first place of Treasury debt. Other liabilities include the pensions and medical benefits owed to retired Federal employees and veterans. These employee obligations are a form of deferred compensation; they have counterparts in the business world, and would appear as liabilities on a business balance sheet. 175 176 Accrued obligations for Government insurance policies and the estimated present value of failed loan guarantees and deposit insurance claims are also analogous to private liabilities. These Government liabilities are discussed further in Part II along with the Government’s assets. The liabilities and assets are collected in Table 13–1. The liabilities shown in Table 13–1 are only a subset of the Government’s overall financial responsibilities. Indeed, the full extent of the Government’s fiscal exposure through programmatic commitments dwarfs the outstanding total of all acknowledged Federal liabilities. The commitments to Social Security and Medicare alone amount to many times the value of Federal debt held by the public. In addition to Social Security and Medicare, the Government has a broad range of programs that dispense cash and other benefits to individual recipients. A few examples of such programs are Medicaid, food stamps, veterans’ pensions, and veterans’ health care. The Government also provides a wide range of public services that must be financed through the tax system. It is true that specific programs may be modified or even ended at any time by the Congress and the President, and changes in the laws governing these programs are a regular part of the legislative cycle. For this reason, these programmatic commitments do not constitute ‘‘liabilities’’ that would appear on a balance sheet. Until the law is changed, they are Federal responsibilities, however, and will have a claim on budgetary resources for the foreseeable future. All of the Government’s existing programs are reflected in the long-run budget projections in Part III. It would be misleading to leave out any of these programmatic commitments in projecting future claims on the Government or in calculating the Government’s long-run fiscal balance. The Federal Government has many assets. These include financial assets, such as loans and mortgages which have been acquired through various credit programs. They also include the plant and equipment used to produce Government services. The Government also owns a substantial amount of land. Such assets would normally be shown on a balance sheet. The Government also has resources in addition to those that might be expected to appear on a balance sheet. These additional resources include most importantly the Government’s sovereign power to tax. Because of its unique responsibilities and resources, the most revealing way to analyze the future strains on the Government’s fiscal position is to make a longrun projection of the entire Federal budget. Part III of this chapter presents a set of such projections under different assumptions about policy and future economic and demographic conditions. Over long periods of time, the spending of the Government must be financed by the taxes and other receipts it collects. Although the Government can borrow for temporary periods, it must pay interest on any such borrowing, which adds to future spending. In the long run, a solvent Government must pay for its programmatic spending out of its receipts. The projections in Part III show that under an ANALYTICAL PERSPECTIVES extension of the estimates in this Budget, long-run balance in this sense is not achieved, mostly because projected spending for Social Security, Medicare, and Medicaid grows faster than the revenue available to pay for them. The long-run budget projections and the table of assets and liabilities are silent on the questions of whether the Government is collecting the full amount of taxes owed, whether the public is receiving value for its taxes paid, and whether Federal resources are being used effectively. Information on those points requires performance measures for Government programs supplemented by appropriate information about conditions in the economy and society. Recent changes in budgeting practices have contributed to the goal of providing more information about Government programs and will permit a closer alignment of the cost of programs with performance measures. These changes have been described in detail in previous Budgets. They are reviewed in Chapter 2 of this volume, and in the accompanying material that describes results obtained with the Program Assessment Rating Tool (PART). This Stewardship chapter complements the detailed exploration of Government performance with an assessment of the overall impact of Federal policy as reflected in general measures of economic and social well-being, shown in Table 13–7. Relationship with FASAB Objectives The framework presented here meets the stewardship objective for Federal financial reporting recommended by the Federal Accounting Standards Advisory Board (FASAB) and adopted for use by the Federal Government in September 1993. 1 Federal financial reporting should assist report users in assessing the impact on the country of the government’s operations and investments for the period and how, as a result, the government’s and the Nation’s financial conditions have changed and may change in the future. Federal financial reporting should provide information that helps the reader to determine: 3a. Whether the government’s financial position improved or deteriorated over the period. 3b. Whether future budgetary resources will likely be sufficient to sustain public services and to meet obligations as they come due. 3c. Whether government operations have contributed to the nation’s current and future well-being. The current presentation is an experimental approach for fulfilling this objective at the Federal Governmentwide level. It is intended to meet the broad interests of economists and others in evaluating trends over time, including both past and future trends. The annual Financial Report of the United States Government presents related information, but from a different perspective. The Financial Report includes a balance sheet. The assets and liabilities on that balance sheet are all based on transactions and other events that have already occurred. A similar table can be found in Part II of this chapter, which is based on different data 1 Statement of Federal Financial Accounting Concepts, Number 1, Objectives of Federal Financial Reporting, September 2, 1993. Other objectives are budgetary integrity, operating performance, and systems and controls. 177 13. STEWARDSHIP and methods of valuation. The Financial Report also includes a statement of social insurance that reviews a substantial body of information on the condition and sustainability of the Government’s social insurance programs. The Report, however, does not extend that review to the condition or sustainability of the Government as a whole, which is a main focus of this chapter, and it does not try to relate the Government’s assets and liabilities to private wealth or broader economic and social conditions. Connecting the Dots:: The presentation that follows is constructed around a series of tables and charts. The schematic diagram, Chart 13–1, shows how the different pieces fit together. The tables and charts should be viewed as an ensemble, the main elements of which are grouped in two broad categories—assets/ resources and liabilities/responsibilities. • The left-hand side of Chart 13–1 shows the full range of Federal resources, including assets the Government owns, tax receipts it can expect to collect based on current and proposed laws, the tax gap, and national wealth, including the trained skills of the national work force, that provide the base for Government revenues. • The right-hand side reveals the full range of Federal obligations and responsibilities, beginning with the Government’s acknowledged liabilities from past actions, such as the debt held by the public, and including future budget outlays needed to maintain present policies and trends. This column ends with a set of indicators highlighting areas where Government activity affects society or the economy. Chart 13-1. The Financial Condition of the Federal Government and the Nation Liabilities/Responsibilities Assets/Resources Federal Liabilities Federal Assets Financial Assets Monetary Assets Mortgages and Other Loans Other Financial Assets Less Expected Loan Losses Physical Assets Financial Liabilities Federal Governmental Assets and Liabilities (Table 13-1) Debt Held by the Public Guarantees and Insurance Deposit Insurance Pension Benefit Guarantees Loan Guarantees Other Insurance Fixed Reproducible Capital Defense Nondefense Inventories Federal Retiree Pension and Health Insurance Liabilities Non-reproducible Capital Land Mineral Rights Net Balance Resources/Receipts Projected R
@FedFRASER