2000 Federal Budget Document

8/8/2019 2000 Federal Budget Document

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43

IV. IMPROVING P ERFORMANCETHROUGH BETTER

MANAGEMENT


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45

IV. IMP ROVING PERFORMANCE THROUGH

BETTER MANAGEMENTWe made a decision that was profoundly important, that the way Government works matters,

that we could not maintain the confidence of the American people and we could not have ideasthat delivered unless the Government was functioning in a sensible, modern, and prudent way.

President ClintonDecember 1998

On September 30, 1998, President Clintonannounced that the Federal budget had

reached balance and produced a surplus forthe first time in a generation. Without thisAdministrat ions ear ly and firm commitm entto streamlining and reinventing Government,it would not have been possible to eliminatethe deficit. After all, Vice President Gorehas said, it is our progress in reinventingand downsizing Government, while improvingit, that has enabled us to balance the budget,cut taxes for families, and invest properlyin key priorities for the future.

Reinventing Governmentthe goals of im-

proving the quality of services that Americansrightfully expect, while reducing the sizeof the Government that delivers themseemsan almost contradictory notion. How to domore with less? The answer is that theGovernment must meet the needs of theAmerican people by improving its m an agementand the performance of programsmuch asU.S. business has done in the face of competi-tive pressure over the last quarter century.From the start, Vice President Gore, workingwith the departments, agencies, inter-agencyworking groups, and worker representatives,and drawing on the expertise of the privatesector, has led an unprecedented effort tomake the Federal Government more efficientand effective while also reducing its size.

From 1993-1998, the Administration hascut the Federal civilian work force by 365,000full-time equivalent employees (FTEs). Basedon the number of Federal employees onthe payroll, the work force is the smallestit has been since the Kennedy Administration.

Working with Federa l employees, the Adminis-tration has eliminated wasteful spending and

cut num erous outdat ed Government programs.These efforts have saved the American peoplemore than $136 billion. Today, we havea smaller, more efficient Government thatprovides the services the American peoplehave come to count on: protecting the environ-ment; improving our schools; and providingretirement benefits to seniors, to name onlya few. To recognize the Federal employeeswho help the Government operate more effi-ciently and better serve the American people,the President proposes a 4.4 percent payraise, the largest increase since 1981, forcivilian employees and milita ry m embers.

The Clinton-Gore Administration relies onseveral key strategies to achieve its reinven-tion goals. Key among them are the NationalPartnership for Reinventing Government(NPR), Priority Management Objectives(PMOs), and inter-agency management groups.

Founded at the start of the Administration,the NPR (then the National PerformanceReview) has empowered Federal employeesand managers and they have responded by

improving services and cutting costs. It countsamong its many successes the Food andDrug Administrations (FDAs) streamlineddrug approval process, the Defense Depart-ments (DODs) reduction of many militaryspecification buying standards, and the Fed-eral Aviation Administrations (FAAs) im-proved safety procedures. NPR will con-centrate on fostering customer-oriented, re-sults-driven organizations that focus on per-formance.


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46 THE BUDGET FOR FISCAL YEAR 2000

PMOs focus the Administrations effortsto meet some of the Governments biggestmanagement challenges. They are specificmanagement initiatives covering a wide rangeof concerns, ranging from meeting the year2000 computer challenge to implementingthe restructuring of the Internal RevenueService (IRS). The Administration also engagesinter-agency groups (discussed later in thisSection) to marshal resources across the Gov-ernment to address concerns important toAmericans.

Six years out, there is measurable success,more to be done, and a determination torealize the Presidents vision of a Governmentthat functions in a modern, sensible, andpru dent wa y.

Internet addresses in this Section referthe reader to websites where work is describedin greater detail.

NPR: Changing the Government

NPR has consistently pursued initiativesto build a Government that works better,costs less, and gets the results that matterto the American people. NPR efforts haveled to operational improvements in agenciesthat affect everyday American life, such asbetter customer service at the Social Security

Administration (SSA), and improvement indelivery of services, including the provisionof water, food, and shelter to disaster victimsby the Federal Emergency Management Agen-cy.

In the coming year, NPR will focus onthe following four major initiatives designedto improve Government services to all Ameri-cans:

(1) Workin g to deliver result s Am ericanscare about: In 1998, the NPR launched aneffort with 32 agencies to increase their

focus on customers and achieve results thatmatter to Americans. These High ImpactAgencies (HIAs) interact directly with thepublic. The HIAs have defined specific commit-ments to improve service delivery and agency

operations. Table IV1 includes examples of the specific commitments made by manyof the HIAs. This focus on customers willbuild on t he agencies stra tegic an d an nu alperformance plans discussed in Section VI.Additional information on the HIAs effortsis available on th e NP R website, www.npr.gov.

(2) Developin g custom er and emp loyee satisfaction measures that will supplement agency program results: A key initiative in improvingGovernment performance, the GovernmentPerformance and Results Act (GPRA), wasenacted by Congress in 1993. This Act in-creases th e accoun ta bility of Governmen t a gen-cies by requiring them to define measurableperformance goals and report on their achieve-ments .

In 1999 and 2000, the Administration in-tends to reinforce GPRA efforts by increasingthe use of customer satisfaction goals inannual plans of selected agencies. For agencyprograms dealing directly with the public,customer satisfaction is a key measure. TheAdministration will also conduct the secondannual employee satisfaction survey for Fed-eral workers and use the data to monitorprogress in br inging the benefits of reinventionto all Federal workers. Employee satisfactionalso affects agency performancesatisfied em-ployees mean better Government services,products, and benefits t o the pu blic.

(3) Improving American life in ways that no one Governm ent program could a ccomp lishalone: The Administration will pilot test strat-egies to provide seamless service deliveryin areas of greatest concern to Americans,effectively creating a system of one-stop shop-ping for important Government services. Peo-ple interested in help finding jobs or inimproving public health in their communityshould be able to obtain that help swiftly

and easily. The Administration is committedto using partnership approaches among Fed-eral, State, and local programs to achievethe outcomes most Americans expect fromtheir government.


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47IV. IMPROVING PERFORMANCE THROUGH BETTER MANAGEMENT

Table IV1. STRATEGIES TO ACHIEVE HIGH IMPACT AGENCY GOALS

Between n ow and J anu ary 1, 2001, agencies with great impa ct on Americans will:

I . Par tner to get resu lt s tha t Amer icans care about tha t no agency can ach ieve a lone . Forexample:

In partnership with the airline industry, three Federal agencies (the Animal andPlant Health Inspection Service (APHIS), Customs, and the Immigration and Natu-ralization Service (INS)) will obtain advance information on 80 percent of inter-national air passengers to expedite the overall flow of passengers with no loss in en-forcement.

The Food and Drug Administration will work closely with industry, health care pro-viders, and the consumer to ensure that 75 percent of all consumers receiving newdrug prescriptions will be given useful and readable information about their product.

The Food Safety and Inspection Service will collaborate closely with other publichealt h agen cies tha t ar e members of the Pr esidents Food Safety Council to reducefood-borne illnesses by 25 percent, between 1997 and 2000. As a first step, they willwork together in 1999 to develop a common approach and coordinate budgetary re-sources.

II . Create electronic access and processing in government. For example: The number of States issuing food stamps by electronic benefit transfer will increase

from 22 in 1997 to 42 in 2000. An electronic trademar k a pplication will be placed on the Pat ent a nd Tr ademar k Of-

fices website. Trademark customers will be able to file applications and related pa-pers electr onically.

By October 2000, the Department of Education will enable three million studentsand families to submit their Federal student aid applications electronically. Thisdoubles the current annual number.

III . Manage with a set of measures that balance customer sat isfact ion, employee sat isfac-tion, an d business r esults. For example:

The Veterans Health Administration (VHA) shows continuing improvement in pa-tient satisfaction with the care they receive. In 1995, 60 percent of patients ratedtheir care as very good or excellent. That number rose to 75 percent in 1998. Thegoal for 1999 is 79 percent. The 2000 goal is 83 percent and the 2003 goal is 95 per-cent.

By 2001, the VHA will expan d its a dher ence to clinical guidelines t o cover 95 percentof common diseases among veterans compared to 76 percent in 1997.

The Federal Emergency Management Agency will increase individual customer satis-faction with the assistance application process from 84 percent in 1995 to at least 90percent in 2000.

Note: Inform ation on specific HIAs is ava ilable on agency websites.


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1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998

1.7

1.8

1.9

2

2.1

2.2

2.3

2.4

EMPLOYEES IN MILLIONS

Note: Data is end-of-year count.

Chart IV-1. ACTUAL CIVILIAN EMPLOYMENT IN THE EXECUTIVE BRANCH,1962 - 1998

(Excluding Postal Service)

0

One example of such partnerships is theestablishment this year by Executive Orderof a Food Safety Council, committed to reduc-ing the incidence of food-borne illnesses. Toimprove the well-being of children, the FederalGovernment will also enter into 10 partner-ships with State and local governments todevise new ways, under current law, toincrease flexibility in the use of Federalprogram dollars and to redirect administrativesavings for services and results. Successfulpartnerships will demonstrate measurable im-provements in the lives of children. Thisperformance partnership initiative has fourcomponents: 1) establishment of a results-driven accountability system, working withthe Federal Interagency Forum on Child

and Family Statistics, that will focus onkey indicators of child well-being, such asimmunization coverage, infant and child mor-tality, high school graduation rates, teenbirthrates, youth crime rates, and child healthinsurance coverage; 2) identification of waysto consolidate planning and reporting forprograms with related goals and greater

flexibility in administering grant funds; 3)development of recommendations for newways, within current law, through whichadministrative savings from discretionarygrant programs might be pooled to establisha local Child Well-Being Investment Fundfor innovations and priority programs; and4) sharing of lessons learned through ahow-to manual detailing strategies to reduceadministrative costs and allow local flexibility.

(4) Allowing Americans to do business withth e Governm ent electronically: In 1997, theAdministration announced the Access Americainitiatives to enable Americans to do businesswith the Government electronically. Recently,Vice President Gore launched Access America

for Students, which pilots the integrated,computerized delivery of Government servicesto postsecondary students. This program willinclude services such as student loan applica-tions and renewals, online address changes,veteran s educational benefits, campu s a dmis-sions and services, and electronic incometax filing. Access America for Students will


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O P M G

S A

N A S A

D O D - -

M i l i t a r y

T V A

A l l O t h e r

H U D

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S t a t e

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h A v g

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V e t e r a n s

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T r e a s u r y

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S m i t h s o n

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T r a n s p o r t a t

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Chart IV-2. CIVILIAN FTE CHANGESON A PERCENT BASIS, 1993 - 2000

CABINET DEPARTMENTS AND SELECTED INDEPENDENT AGENCIES

FTEs(in thousands)

1993 2000 ReductionPercent

ReductionCabinetDepts.

1,880 1,600 -280 -14.9

All OtherAgencies

275 217 -59 -21.4

Exec.Branch

Total

2,155 1,817 -338 -15.7

Notes: The Executive Branch total excludes Postal Service. The 1993 base, which is the starting point for calculating the 272,900 FTE reduction required by the Federal WorkforceRestructuring Act, is 2.2 million. The Department of Commerce includes 64,000 temporary hires for decenial census.

PERCENT

be carefully constructed to ensure the privacyand security of all users. Other Access Americaprograms are planned for users of otherGovernment services (e.g., senior citizens).Additional information on Access Americais available at www.gits.gov.

St reaml in ing the Government

Two fundamental changes in the Federalwork force have combined to create a leaner,more efficient Governmen t. F irst, t he Adminis-tration has cut the overall size of the Govern-ment by 16 percent. Second, the Administra-tion has given Federal employees the authorityto propose and carry out significant improve-ments in agency programs. These changeshave led to the elimination of many internalrules, establishment of customer service stand-ards, creation of agency reinvention labs,and improved labor-management relations.

The Administ ra tions accomplishm ent s indownsizing Government are unprecedentedsince the demobilization after World WarII. As Chart IV1 shows, this is the smallest

Federal work force in 36 years. The savingshave been used to help pay for a varietyof initiatives authorized by the 1994 crimebill, including the successful effort to put100,000 new local police officers on the streets.

Almost all of the 14 Cabinet Departmentsand large independent agencies are cuttingtheir work forces. For example, the GeneralServices Administration (GSA) is reducingFTEs by 31 percent by streamlining itslines of business. The J ust ice Depart ment sgrowth r eflects th e Administra tions expan dedwar on crime and drugs. The decennialcensus is temporarily increasing the sizeof the Commerce Departments payroll (seeCha rt IV2).

Reducing the size of Government is justone measure of success. Acquiring and retain-ing the right mix of people with the bestcombination of skills is a challenge to allemployers, and the Government is no excep-tion. Streamlining organizations is never easy,but a partnership with Federal employeeunions has made change possible. As agencies


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continue reinventing themselves to be moreeffective and responsive to Americas needs,they will require management tools to restruc-ture their work forces and achieve greaterefficiencies. The Administration will supportagencies if they needas in the case of DOD, the Department of Energy (DOE), andthe IRSseparate authority to restructuretheir work force with voluntary separationincentives. The Administration will also seek renewal of the authority to offer voluntaryseparation incentives to support downsizingefforts in those areas where cost/benefit analy-sis indicates that it would be beneficial.

Creat ing Powerful Incent ives to Managefor Resul ts

A new toolthe Performance-Based Organi-zation (PBO)was developed to help theGovernment operate more efficiently. Proposedby the Administration, and enacted by theCongress, the first PBO was mandated toimprove the efficiency and delivery of studentfinan cial a ssistan ce.

PBOs encourage a group of Governmentexecutives in an organization to bear respon-sibility for its level of performance. Theseexecutives commit to meet tough annual

performance goals, and if successful, theycan receive substantial bonuses. To help themmeet these goals, executives can exercisegreater flexibility in hiring, compensation,and procurement. During the 106th Congress,the Administration will develop legislationto establish additional PBOs, including theFAA Air Traffic Services, the Seafood Inspec-tion Service, the Patent and Trademark Office,the Rural Telephone Bank, the Defense Com-missary Agency, the National Technical Infor-mation Service, the St. Lawrence SeawayDevelopment Corporation, Federal Lands

Highway, and the U.S. Mint.

Tackling Governme nts Bigges tManagemen t Cha l lenges

To create a clear set of priorities formanagement efforts, the Administration hasselected 24 key issues, listed in Table IV2,to be PMOs. These were chosen as areasin need of real change, and will receiveongoing attention from the Administration.

There are six new initiatives while 18continue from last year s budget. PMOs arecoordinated by OMB with assistance fromthe NPR and inter-agency working groups.This assures that objectives receive seniormanagement attention. Periodic reporting andreview of these objectives provide an oppor-tunity for corrective action as necessarythr oughout t he year.

St reng then ing Government -Wide Manage- ment

1. Manage the year 2000 (Y2K) computer problem: There is no more immediate manage-ment challenge facing governments and indus-tries world-wide than the impending shift

of dates from the year 1999 to the year2000. A year ago, 27 percent of the FederalGovernments mission-critical systems wereY2K compliant. At the end of 1998, morethan double that number61 percentmetthat standard. The Administration has setMarch 31, 1999, as the deadline for allmission-critical systems to be Y2K ready.

Under the direction of the P residents Coun-cil on Year 2000 Conversion, agencies arereaching out to private sector organizations,State and local governments, and international

institutions. External Y2K activities have beenorganized to focus on key sectors, includingenergy, telecommunications, and financial in-stitu tions. In December 1998, the U.S. Govern-ment helped organize a United Nations con-ference of Y2K coordinators from over 100countries.

The Administration also recognizes a criticalneed for industry to share its Y2K experiencesand solutions with each other and withthe public. Accordingly, the Administrationproposed and the Congress enacted the Year

2000 Information Disclosure Act, which en-cour ages compan ies to sha re informa tion aboutpossible Y2K solut ions.

In 1999, agencies will focus primarily ontesting their systems and their interactionswith other systems, and will develop contin-gency and continuity of operations plans.In 2000, agencies will focus on assuringthat Federal programs continue to deliveruninterrupted service to the public.


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Table IV2. PRIORITY MANAGEMENT OBJECTIVES

STRENGTHENING GOVERNMENT-WIDE MANAGEMENT

1. Manage the year 2000 (Y2K) computer problem2. Use resu lt s to improve program management3. Improve financial management information4. Protect cr i t ical information infrastructure5 . S t rengthen s ta t is t ica l p rograms6. Implement acquis it ion re forms7. Implement electronic Government init iat ives

IMPROVING STEWARDSHIP OF ASSETS

8. Better manage financial portfol ios9 . B et t er m a n a ge r ea l pr op er t y

IMPROVING PROGRAM OPERATIONS AND INTEGRITY

10. Verify that the r ight person is get t ing the r ight benefi t11. Use competit ion to improve operat ions

IMPROVING PROGRAM MANAGEMENT

12. Modern ize s tudent a id de livery13. Improve DOE cont ract management14. Strengthen the HCFAs management capacity1 5. I m ple me n t H U D re for m16. Resolve disputes over Indian trust funds17. Implement FAA management reform1 8. I m ple me n t IR S r efor m s

19. Stream line SSAs disability claims system20. Revolutionize DOD business affairs21. Improve management of the decennial census22. Manage r isks in building the International Space Stat ion23. Improve security at diplomat ic facilities around the world24. Reengineer the na tur alization process and reduce the citizenship application backlog

2. Use results to imp rove program m ana ge-ment : GPRA makes Government agencies moreaccountable by focusing managers and policymakers on agency performance. GPRA canfundamentally change how the Governmentcarries out its programs and makes fundingdecisions. The Act requires Federal agenciesto periodically develop long-range strategicplans an d an nua lly prepare performan ce plansand performance reports. The annual plansset specific performance targets for an agencysprograms and activities. The combination of GPRA plans and reports introduces an unprec-edented degree of managerial and institutionalaccountability for accomplishing program

goals. Key to achieving success is makingthe plans useful to the Congress, the Presi-dent, and agency mana gement.

In 2000, agencies will submit to the Con-

gress and the President the first of theirannual reports on program performance. Thesereports, covering 1999, will compare actualperformance to the performance target levelsin the annual plans for that year, andprovide an explanation for any goal notmet. With these reports, the first cycle of GPRA implementation will be complete.

During 2000, agencies will also be revisingand updating strategic plans for submission


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Table IV3 . CFO Agency F inanc ia l S ta tement Per fo rmance Goa ls

Financial Statements 1997ActualEstimate

1998 1999 2000

Au dits Completed ................................................ 23 24 24 24Agencies with Unqu alified Opin ion ................... 11 14 20 23Agencies with Unqu alified and Timely Opin ion 8 12 20 23

to the Congress and OMB by September2000. All GPRA plans and reports are publiclyavailable, and can often be found on individualagency websites.

Budgeting for Results is an effort to displayand budget for all the resources used byFederal programs in a way that allows thecosts to be systematically compared withthe benefits provided. Although all costs arereflected somewhere in the budget, thesecosts are not all associated with the individualprograms that use the resources. Some costsmay be paid by other components withinthe Government. Thus, some of the basicinformation necessary for effective decisionmaking is not readily available. In the comingyear, efforts will continue toward makingBudgeting for Results a r eality.

3. Improve financial management informa-tion: In March 1998, for the first timein the history of the United States, theGovernment issued audited financial state-ments presenting the results of its operations.While the audit disclosed financial systemweaknesses and problems in fundamentalrecord-keeping in a number of areas, theGovernments efforts to provide a full account-ing is unprecedented. Bringing problems tolight will force improvements. Improvementhas already begun as illustrated by TableIV3, which presents the anticipated resultsof audits of the financial statements of the24 largest Federal agencies in 1998. Theseshow that the Administration has alreadymade substantial progress in improving finan-cial management. Recognizing more must bedone, the President directed agencies to re-solve systems and record-keeping problemsduring 1999with the goal being an unquali-fied report on th e Govern men ts 1999 fina ncial

statements, which will be issued in March2000.

4. Protect critical informat ion infrast ructure:Last year, Presidential Decision Directive 63,

Pr otecting Americas Cr itical Infrast ru ctu res,launched a program to counter risks tothe increasingly interconnected national infra-structures, such as telecommunications, bank-ing and finance, energy, transportation, andessential Government services. These infra-structures are particularly vulnerable to dis-ruptionswhether deliberate or accidentalto the computer systems that support them.The goal for 2000 is increased security forGovernment systems. The Federal Governmentshould be a model of infrastructure protection,linking security measures to business risksan d a gency mission.

The goal for 2003 is a reliable and secureprivate information system infrastructure. TheAdministration will work with private indus-try, which owns the vast majority of theNat ions infrast ructu re, to meet common pro-tection goals. Care will be taken to preserveprivacy, and regulation will be used onlyif there is a material failure of the marketto protect the health, safety, or well beingof the American people.

5. Strengthen statistical programs: The Gov-ernment spends more than $3 billion eachyear to produce statistical measures of oureconomy a nd society tha t help decision mak ersin the public and private sectors. Thesedata are used for everything from spottingimportant trends in public health to projectingthe impact of future demographic shifts onthe Social Security system. In 1998, to improveaccess to, and the quality of, Governmentstatistical data, the Administration: 1) spon-sored a bill to permit limited sharing of


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Chart IV-3. FEDERAL PURCHASE CARD PROGRAM GROWTH

DOLLARS IN BILLIONS

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 20000

5

10

15

20

Note: The average annual growth in the Federal Purchase Card Program is over 75 percent since its inception in 1989.

Lessthan

100 million 0.1 0.30.50.1

0.81.6

2.9

5.1

8.0

12.0

18.0

confidential data among selected agencies sole-ly for statistical use with appropriate safe-guards; 2) doubled (to 28) the number of Federal agencies whose data series are indexedon www.fedstats.gov; and 3) published innova-tive inter-agency thematic reports based onfederally-collected statistics, including Ameri-cas Chil dren: Key N ational In dicators of Well-Being, and Changing America: Indicatorsof Social and Economic Well-Being by Raceand Hispanic Origin. In 1999, the Administra-tion will continue to seek passage of legislationfor statistical data sharing, and continuework on the American Community Surveyto provide comparable demographic, economic,and housing data for small geographic areas.In 2000, the Administration will begin imple-

menting the newly revised 1998 StandardOccupational Classification.

6. Implement acquisition reforms: The Fed-eral Govern ment is the N at ions largest bu yerof goods and services, purchasing almost$200 billion annually. In the past six years,the Congress and the Administration have

initiated numerous acquisition reforms toma ximize th e taxpa yers buying power. Con-tr actors ar e increasingly being held responsiblefor results and measured on their performancewhen competing for future work. Agenciesare buying commercial products and servicesrather than costly Government-unique solu-tions. The buying process continues to bestreamlined, paperwork reduced, and resultsmeasured. In 1999, the Government willhave 60 percent of Government purchasesbelow $2,500 made by credit cardbypassingmore paper intensive and time consumingprocurement processes. By 2000, this ratewill increase to 80 percent (see Chart IV3).By 2000, over $23 billion in services contractswill be converted to Performance-Based Serv-ice Contracting (PBSC). Pilot programs dem-onstrated price reductions averaging 15 per-cent in nominal dollars, and agency satisfac-tion with contractor performance rose by18 percent. Also by 2000, all major agencieswill have systems which record contractorsperformance. This information will be a key


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determinant to better manage contracts andsuccessfully select contractors.

7. Im plem ent electronic Governm ent initia -tives: As discussed in the Vice Presidents

1997 Access America Report, todays mostimportant infrastructure improvement neededto promote electronic access to Governmentservices is the ability to authenticate usersover open networks like the Internet. TheGovernment Paperwork Elimination Act of 1998 promotes Federal agency use of electronicsignatures to verify identities and integrityof information and establishes the legal valid-ity of electronic documents. In 1999, theAdministration will work with the privatesector to develop guidelines for implementingthe Act. In 2000, the Administration willissue those guidelines, incorporating lessonsfrom the Access America projects. Additionalmission performance improvements from spe-cific information systems investments are dis-cussed in Chapter 22 of Analytical Perspec-tives .

Improv ing S t ewar dsh ip o f Asset s

8. Better m ana ge fina ncial portfolios: Th eFederal Government currently underwritesmore than $1 trillion in loans, primarilyto students, homebuyers, and small busi-

nesses. The Government must better servethese customers and protect its interest inobtaining efficient and timely repayment.Using electronic commerce and the Internet,the Government will test streamlined proc-esses for student loan applications and elec-tronic drawdown to those who qualify. Privacywill be protected though the use of electronicsignatures. The Government will also beginsharing information electronically to bettermanage its single-family home loans, andif successful, will apply the same modelto other lending programs. By 2000, the

Debt Collection Improvement Act, which re-quires agencies to refer debt over 180 daysdelinquent to the Treasury Department forcollection, will be fully implemented withthe help of a Government-wide offset program,private collection agencies, and asset sales.

9. Better manage real property: The Govern-ment owns billions of dollars worth of realproperty, including office buildings, hospitals,

laboratories, and military bases. The Adminis-tration will pursue a number of initiatives,and where necessary, will submit legislationto:

continue DODs successful housing privat-ization program that augments each Fed-eral dollar with two or more private sectordollars to construct and manage housing,thereby enabling the department to im-prove the quality of military family hous-ing three times faster than would other-wise be possible;

allow the Department of Veteran Affairs(VA) to sell unneeded property and keepthe proceeds to improve direct care andservices to veterans, with a share of the

proceeds being used to provide assistancegrants to local homeless populations; and

amend the Federal Property and Adminis-trative Services Act of 1949 to improvereal property management, including al-lowing agencies to exchange or sellunneeded property and retain a share of the sales proceeds for other property in-vestments.

Improv ing Program Opera t ions and In teg - r i ty

10. Verify that the right person is gettingthe right benefit: It is important to ensurethat beneficiaries get the benefits to whichthey are entitled and that errors in providingbenefits are minimized. Agencies can shortenapplication review times and strengthen pro-gram integrity by sharing information amongGovernment programs. For instance, in 2000,HUD will begin verifying tenant-reported in-come against other Federal income data.This will help ensure that housing assistancegoes to those entitled to these benefits. Alsoin 2000, the Department of Education willpropose legislation to permit the use of income information in the National Directoryof New Hires to verify income reported onstudent loan applications and to identifyincome received by student loan defaulters.This could lead to an estimated savingsof over $450 million.

In 1999, the Administration will supportimproved Federal and State program informa-tion sharing to minimize erroneous payments


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at benefit determination; to eliminate unneces-sary burdens on applicants by coordinatinginformation collection and verification; to pro-tect individual privacy; and to enable cus-tomers to use secure and convenient electronicapplication processes.

11. Use com petition to im prove operations:Competition has become a cornerstone of the business strategy for DOD. DOD willcompete over 200,000 positions (in accordancewith OMB Circular A76 procedures), includ-ing more than 100,000 positions between2000 and 2005. Savings will result from:1) reengineering work that stays in-house;and 2) contracting out, which has shownsavings of 30 to 40 percent. Other agencies

are identifying potential commercial activities,which will provide a basis for implementingthe Federal Activities Inventory Reform Actof 1998 (FAIR). Inventories are due to OMBby June 30, 1999, under the Act.

Improv ing Program Imp lementa t ion

12. Modernize student aid delivery: Eachyear, nearly nine million students receivea total of $50 billion in aid through sixmajor Federal student financial assistanceprograms. These programs are separately au-

thorizedwith unique featuresand haveevolved information and other managementsystems that are not always consistent withone another. To improve and streamline themanagement of these programs, the HigherEducation Amendments of 1998 authorizedthe Governm ents first ever P erforma nceBased Organization (PBO). During 1999, thisPBO will work with a broadly representativegroup of lenders, students, and program inter-mediaries to develop a five-year performanceplan to modernize student aid delivery. Thegoals will includ e:

improving service to students and otherparticipants in the student aid process;

reducing costs of administering the pro-grams;

integrating and improving program infor-mation and delivery systems; and

developing open, common, and integrateddelivery and informa tion systems.

13. Improve DOE contract management:More than 90 percent of DOEs budget isspent through contractors who are responsiblefor the operation, management, and safetyof DOE facilities. Making more effective useof Performance Based Service Contracts(PBSC) and competition would improve DOEsmission attainment and could potentially saveup to $1 billion. In 1999, DOE will focuson PBSC conversions for two managementand operating contracts and 10 service con-tracts to increase work accomplished andlower costs. Also, DOE will compete fourof th e eight m ajor expiring cont racts.

14. Strengthen Health Care Financing Ad-m inist rations (HCFA s) m an agement capacity:HCFA is responsible for the stewardship

of many of the most important social programsrun by the Federal Government, includingMedicar e, Medicaid, an d t he Childrens H ealthInsurance Program (CHIP). HCFA faces theformidable challenge of modernizing its admin-istrative infrastructure, meeting pressing stat-utory deadlines for program change fromthe Balanced Budget Act (BBA) and theHealth Insurance Portability and Accountabil-ity Act (HIPAA), and perhaps most important,the need to be highly responsive to itscustomers.

HCFA has begun the process of managementchange through its recent reorganization. How-ever, further reform is needed. HCFA, HHS,and OMB have together begun the develop-ment of a reform initiative that will increaseHCFAs flexibility to operate as a customercentered prudent purchaser of health carewhile also increasing accountability. This ini-tiative has five components: 1) managementflexibilities (e.g., evaluation of personnel needsand flexibilities); 2) increased accountabilityto constituencies (e.g., regular reports tothe Congress and the Administration, creation

of an outside advisory board); 3) programflexibilities (e.g., new authorities and greateruse of existing authorities to pay for servicesat market rates, enter into selective contracts,and engage in competitive bidding); 4) struc-tural reforms (e.g., re-engineering the relation-ship between HCFAs centra l and regiona loffices and between HCFA and HHS; contract-ing out functions); and 5) contractor reform(e.g., promoting competition in Medicareclaims processings, introducing contract terms


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that allow more flexibility for the FederalGovernment).

HCFAs core functionsmodernizing Medi-care, detecting fraud and abuse, providing

beneficiary a nd provider education, implemen t-ing legislative changes, processing claims,providing increased beneficiary choices, andmanaging Federal and State Medicaid andCHIP programsare vital and continue toexpand. To meet these expanding pro-grammatic challenges, as well as the chal-lenges of continuous management reform, itis critical to move toward a stable sourceof funding for HCFA. As HCFA and HHSmove down the road toward achieving fun-damental reform and begin to accomplishsome of the basic objectives noted above(e.g., contractor reform), the Administrationwill review legislative proposals to increasethe stability of HCFAs funding.

15. Implement HUD reform: HUDs com-prehensive reforms are geared toward produc-ing improvements in agency operationssothat all tenants can live in safe and well-man aged h ousing. These reform s include: clari-fying the mission of each employee; cleaningup the data in existing management andfinancial systems; integrating these disparatemanagement and financial systems where

possible; an d enh an cing a ccoun ta bility in H UDprograms. For instance, by 2000, HUD willinitiate an independent, on-going assessmentof all public housing and Section 8 projects.Projects that fail to meet reasonable privatesector benchmarks for safety and financialintegrity will be referred to a newly estab-lished HUD Enforcement Center for intensiveoversight and technical assistance. If aprojects safety and financial status do notimprove, new management will be installed,or Federal assistance to the project willend. By 2000, HUD will also begin periodiccustomer and employee satisfaction surveys.The results of these surveys will be usedto monitor progress in implementing meaning-ful H UD r eform.

16. Resolve disputes over Indian trust funds:The Department of the Interior (DOI) isresponsible for managing nearly $3 billionin trusts the Federal Government holds forthe Indian Tribes and individual Native Amer-icans. In 1998, DOI verified over half of

all individual trust accounts, and conversionof these accounts to a commercial accountingsystem will be completed by the end of 1999. The Administration will also re-intro-duce legislation to settle disputed tribal trustbalances that resulted from decades of mis-management, and consolidate highlyfractionated ownership of Indian lands. In2000, DOI will:

develop and negotiate settlement offerswith Tribes whose accounts lack full docu-mentation, and develop formula-drivensettlement payments for Tribes that acceptthese offers;

double the number of pilot projects to con-solidate ownership of fractionated lands;

and complete verification of the remaining one-

third of all trust asset account data andfinalize the conversion to the new commer-cial trust a sset mana gement system.

17. Implement FAA management reform:The safety of the flying public depends onthe FAAits air traffic controllers, technology,and preparation for future challenges. FAAhas begun an 18-month pilot project to link pay increases for some staff to the achieve-ment of their performance targets. In 1999,

FAA will evaluate the overall impact of the first three years of its personnel reform.FAA will also continue to develop its costaccounting system to allow more business-like operations and management improve-ments. By early 2000, FAA will completereplacement of en route air traffic controllerworkstations and begin purchasing modernizedairport terminal radar. FAA will continueto develop promising free flight technologiesto improve air traffic control efficiency andeffectiveness.

18. Implement IRS reforms: The IRS ismodernizing its organization and its informa-tion technology to better serve over 200million taxpayers and enhance its productivityby encouraging quality work. Major portionsof th e IRS modernization plans wer e ma n-dated by the Internal Revenue Service Re-structuring and Reform Act of 1998. Thenew focus is captured by the IRS revisedmission sta temen t: Pr ovide Americas t ax-payers top quality service by helping them


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understand and meet their tax responsibilit iesand by applying the tax law with integrityand fairness to all. The basic outline of the new structure was completed in August1998. The IRS Commissioner expects to an-nounce the final design and implementationplans on April 15, 1999. The new organizationand system improvements will be implementedover the following two and a half years.At the same time, IRS is modernizing itsinformation technology to better support itsnew organization. In December 1998, IRSawarded a prime contract for informationtechnology modernization. This is a long-term partnership between IRS and privateindustry to deliver the modernized financialand information systems needed to support

IRS new customer oriented organization.19. Stream line S S As disability claim s sys-

tem: SSA has undertaken a multi-year rede-sign project to improve service delivery forthe millions of individuals filing for, or appeal-ing decisions on, disability claims. SSA isproviding all its adjudicators with uniformtraining, instructions which clarify complexpolicy areas, and an improved quality assur-ance process. Initial results indicate thatthese changes are helping SSA make moreaccurate disability determinations earlier inthe claims process. SSA is also pilot testingmodifications designed to streamline the dis-ability applications process and increase claim-ant interaction with SSA at both the initialclaim and hearing levels. Implementation of pilot modifications that prove successful willbegin in 1999 an d 2000.

20. Revolutionize DOD business affairs: DO Dis changing the way it does business. Justas industry was forced to change to becompetitive, so too must DOD upgrade itsbusiness operations to effectively support fu-ture national security strategy. DOD willadopt better business processes, pursue com-mercial alternatives, consolidate redundantfunctions, and streamline organizations toreduce overhead and apply resultant savingsto fund modernization and quality of lifeprograms. For example:

DOD has devolved day-to-day programmanagement functions from the Office of the Secretary of Defense to the militarydepartments and defense agencies so that

it could concentrate on policy and over-sight responsibilities.

DOD competitive sourcing initiatives willproduce savings of over $6 billion from

1998 to 2003, with annual recurring sav-ings th ereafter of more t ha n $2 billion. DOD will also improve the work environ-

ment, and benefit the lives of Departmentpersonnel, by establishing a career transi-tion office for military personnel, estab-lishing a Chancellor for Education andProfessional Development, reengineeringtravel procedures, and streamlining theshipment of household goods.

21. Improve management of the decennialcensus: The goal of the decennial census

is to conduct the most accurate census inU.S. history. The Census Bu reau s plan willimplement strategies to conduct a thoroughand complete census. Specifically, managementimprovements include: user-friendly forms; atelephone questionnaire assistance program;language assistance; and using state-of-theart statistical sampling techniques. In 1999,preparations include developing the masteraddress list, printing the questionnaires, andopening local census offices. In 2000, thecensus becomes operational. Activities willinclude hiring 300,000 temporary field staff,staffing the local census offices, and conductingnon-response follow up and integrated cov-erage measurement.

22. Manage risks in building the Inter-national Space Station: The United Stateshas the lead role in the international effortto build the International Space Station.The cost of U.S. participation has escalatedbecause of technical difficulties, new work requirements, performance shortfalls, and Rus-sian delays and shortfalls. In 1999, theprogram will continue to address cost and

schedule performance problems in its keycontracts, strengthen contract managementand cost controls, and further reduce risksfrom potential Russian shortfalls. In 2000,the program begins a transition from develop-ment activities to orbital operations and re-search, seeking to take advantage of commer-cial practices, products, and services. Thefirst two components of the space stationwere launched successfully in November andDecember of 1998. Additional 1999 launches


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will prepare the orbital platform for thefirst permanent crew in January of 2000.Assembly will continue through 2004.

23. Im prove securit y at dip loma tic facilities

around the world: The State Departmentreceived $1.4 billion in 1999 emergency fundsto implement a broad program of securityenhancements in response to terrorist bomb-ings in Kenya and Tanzania and relatedthreats directed at U.S. diplomatic and con-sular facilities overseas. Achieving global up-grades and maintaining that readiness atthe Depart ment s overseas posts poses a sig-nificant management challenge. Follow-on ef-forts will include significant investments inoverseas facilities to ensure continued protec-tion of U.S. Government employees workingoverseas. Long-range capital planning, includ-ing a review of future security requirementsby a panel of experts and careful use of resources, will ensure that these investmentsmeet cost, schedule, and performance goalsof th e program.

24. Reengineer the naturalization processand reduce the citizenship application backlog:The Immigration and Naturalization Service(INS) is redesigning its naturalization processto ensure service and benefits are providedwith complete integrity and in a timely

manner. At the same time, INS is addressinga backlog of 1.8 million pending applicationsfor citizensh ip.

INS is committed to completing the natu-ralization process reengineering in 2000 andreducing the citizenship backlogwhich cur-rently requires applicants to wait upwardsof 20 months to naturalizeto a 12-monthwait-time in 1999 and a six to nine monthwait-time by the end of 2000.

Using Inter-agency Groups to Improve

Per formanceTo achieve the Administrations goal of

making fundamental change in the operationof Government, inter-agency groups have beenextensively used to lead crosscutting efforts.

These groups draw together operational, finan-cial, procurement, integrity, labor relations,and systems technology experts from acrossthe Government. They establish Government-wide goals in their areas of expertise, andthey marshal the resources within individualagencies to meet those goals. Several of these groups were established for the firsttime by this Administration, including thePr esidents Mana gement Council and th e Na-tional Partnership Council. Other interagencygroups ar e described in Table IV4.

T he President s Man agement Coun cil (PMC):The PMC consists of the Chief OperatingOfficers of all Federal departments and thelargest agencies. The PMC provides leadershipfor the most important Government-wide re-forms. Council priorities include: streamliningagencies without unnecessarily disrupting thework force; identifying criteria and rec-ommending methods for agency restructuring;identifying performance measures to supportelectronic commerce and performance-basedservice contracting; facilitating developmentof customer service standards; supportinglabor-management partnerships; and leadingGPRA implementation.

The National Partnership Council (NPC):President Clinton established the NPC in

October 1993 to enlist the Federal laborunions as allies in reinvention and to shiftFederal labor relations from adversarial litiga-tion to cooperative problem solving. Membersof the NPC include: representatives of Federalemployee unions and Federal managers andsupervisors; the Federal Mediation and Concil-iation Service; the Federal Labor RelationsAuthority; the Office of Personnel Manage-ment; OMB; DOD; and the Department of Labor. In 2000, NPC will continue developingmethods to evaluate partnerships and theireffect on agency productivity and service.The results of this research will guide individ-ual agencies in evaluating and promotingtheir efforts. More information on the NPCcan be found on its website: www.opm.gov/ npc.


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Table IV4. MAJOR INTER-AGENCY GROUPS

Coun cil Name/Membersh ip Coun cil Pr ior it ies/Recent Activit ies

Chief Financial Officers (CFO)Council : The CFOs and DeputyCFOs of the 24 largest Federalagencies and senior officials fromOMB and Treasury.http://www.financenet.gov

1998 activities included interagency projects on GPRA imple-mentation, electronic commerce, grants management, andhum an resources development.

Upcoming priorities include: achieving an unqualified opinion onthe Government-wide consolidated financial statements; improv-ing finan cial m ana gement systems; addr essing GP RA implemen-tation issues; improving management of receivables; moderniz-ing payments and business methods; and improving the admin-istration of Federal a ssistance program s.

Chief Information Officers(CIO) Council: The CIOs andDeputy CIOs for 28 major Fed-eral agencies, two CIOs fromsmall Federal agencies, and rep-resentatives from OMB and twoinform ation t echnology boar ds.http://cio.gov

The Council develops recommendations for information tech-nology management policy; identifies opportunities to share in-form at ion resour ces; an d support s the Federa l Govern ment s de-velopmen t of an in form at ion technology workforce.

Priorities for the coming year include: defining an inter-operableFederal information technology architecture; ensuring informa-tion security practices that protect Government services; leadingthe Federal year 2000 conversion effort; establishing sound cap-ital planning and investment practices; improving the informa-tion technology skills of the Federal work force; and building re-lationships through outreach programs with Federal organiza-tions, th e Congress, indust ry, and the pu blic.

Presidents Council on Integri tyand Efficiency (PCIE): The 27Presidentially-appointed Inspec-tors General (IGs), the Vice Chairof the agency-appointed IG coun-cil, and other key integrity offi-cials.http://www.ignet.gov

Priorities include mounting collaborative efforts to address in-tegrity, economy, and effectiveness issues that transcend indi-vidual agencies. Recent efforts included a review of the controlsof the Federal Electronics Benefits Transfer System and agencyprogress in debt collection. Current efforts include a project onnon-tax delinquent debt.

Another priority is increasing the professionalism and effective-ness of IG personnel across the Government by setting stand-ards for OIG work; maintaining professional training for OIGstaff; and assisting OIGs as they confront new professional chal-lenges su ch as GPRA implementa tion.

Elec t ronic Processes In i t ia t ivesCommittee (EPIC): Senior pol-icy officials from DOD, GSA,Treasury, and OMB.http://policyworks.gov/org/main/

me/epic/

The PMC established EPIC to further the use of electronic com-merce technologies and processes within the Government.

Its goals are to: facilitate electronic commerce and implementa-tion of the Paperwork Elimination Act through the use of digitalsignatures to authenticate users and transactions; support inte-grated, commercially-based electronic buying and paying sys-tems in the Government; improve citizen access to Governmentinformation and services through technology; improve financialmanagement and reporting to assure taxpayers that Govern-ment resources are efficiently utilized; and foster the use of cur-ren t t echnology, such a s sma rt cards, to impr ove bu siness a ndadministra tive processes in the Government.


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Table IV4. MAJOR INTER-AGENCY GROUPSContin ue d

Coun cil Name/Membersh ip Coun cil Pr ior it ies/Recent Activit ies

Federal Credit Policy WorkingGroup: Representatives from themajor credit and debt collectionagencies and OMB.http://www.financenet.gov/

financenet/fed/fcpwg

Provides advice and assistance to OMB, Treasury, and Justice informulating and implementing Government-wide credit policy.

Upcoming priorities are to: use the Internet for loan applicationprocessing and portfolio status reporting; share data amongagencies to validate application and specially collected data; doasset valuation and sale of loans delinquent over one year; im-plement revised write-off policies and procedures; and developcommon portfolio performance measures.

Procurement Execut ives Coun-cil: Senior procurement execu-tives from major Federal agen-cies.

An inter-agency forum for improving the Federal acquisition sys-tem.

Its priorities are improving the Federal acquisition work force;offering easier access to Government business to all segments of the private sector; promoting electronic commerce; and reducing

government unique requirements.Inter-agency Alternative Dis-

pute Resolu t ion WorkingGroup (ADR): The AttorneyGeneral, representatives of theheads of all Cabinet Depart-ments, and others with signifi-cant interest in Federal disputeresolution.http://www.financenet.gov/

financenet/fed/iadrwg

President Clinton established the ADR in May 1998 to assistGovernment agencies in m aking great er u se of consensual meth -ods for resolving disputes, including mediation, neutral evalua-tion, ar bitration, and other pr ocesses.

The Attorney General has called upon experts throughout theGovernment to help other agencies establish new ADR programsin four areas: contracts and procurement; workplace disputesbrought by Federal employees; claims arising from civil enforce-ment initiated by Government agencies; and m onetary claims bycitizens against the Government. A goal for 1999 is to assisteach participating agency in establishing at least one new ADRprogram.

Jo in t F inancia l ManagementImprovement Program(JFMIP): A joint effort of GAO,OMB, Treasur y, and OPM, with arotating representative from an-other agency.http://www.financenet.gov/

financenet/fed/jfmip/

During 1998, JFMIP issued draft revised system requirementsfor Federal financial, human resource, and payroll systems; com-pleted plans to redesign the testing and qualification process forcommercial off-the-shelf accounting system software for Federalagencies; and issued guidance on core competencies in financialmanagement.

In 2000, JFMIP will publish new financial system testing andqualifying processes and update other financial systems require-ments.


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61

V. P R EPARIN G F OR THE 21s tCENTURY


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63

3 . INVESTING IN EDUCATION AND

TRAININGWe must redouble our efforts to make sure every American child, regardless of race, ethnicity,

or income, has access to the finest public elementary and secondary schools in the world. This isthe fair and right thing to do, because we live in an information age in which education is every-thing. If we believe in the value that every American should share in the bounty of prosperity,then every American deserves a first-class education.

President ClintonSeptember 1998

A century ago, as the economy was shiftingfrom agriculture to manufacturing, the waythat Americans lived and worked changeddramatically. Today, the economy has shiftedonce againthis time from manufacturingto information and technology. These changeshave been, in many ways, the engine of our economic growth. Yet Americans whohave not had access to education and trainingto prepare them for this new economy risk being left behind.

For the past six years, the President hasworked hard to ensure that all Americanshave the tools they need for the 21st Century.Education and training have been the corner-stone of the Administrations efforts. AfterWorld War II, American workers could enjoybasic economic security with just a highschool diploma. But in the late 20th Century,the workplace demands workers with theanalytical skills to reason and adapt quickly,especially to innovations in technology. Theneed for highly educated workers will continueto increase, making the quality of our edu-cational system in the next century thekey to the success of our people, our economy,and our Na tion.

The Clinton Administration has launchednew initiatives and built on existing programsto: provide children in the early gradeswith the attention and instruction they needto acquire fundamental skills; enable all stu-dents to reach their full potential; makeavailable resources to pay for postsecondaryeducation to all who need them; ensurethat those who need another chance at edu-

cation and training, or who need to improveor learn new skills during their workinglives, get those opportunities; and ensurethat States and communities receiving Federalfunds can use them more flexibly with fewerregulations and less paperwork.

In order to strengthen elementary andsecondary school education, the Administrationproposed, and worked with Congress to enact,new laws in 1994 that have built the founda-tion for a fundamental restructuring of K12education programs. These efforts include:Goals 2000, which helps States and schooldistricts set and meet challenging educationalstandards; the Improving Americas SchoolsAct, which focuses on student achievement,helps students reach challenging standards,and expands public school choice throughcharter schools initiatives; and the School-to-Work Opportunities Act, which financedthe first efforts toward State-wide systemsto link high school students more effectivelyto high-skill careers and postsecondary edu-cation. In 1998, the President proposed aninititive on class size which took an importantfirst step toward adding 100,000 new teachersto the classroom by 2005.

Expanding access to, and preparing studentsfor, postsecondary education is a central partof th e Pr esidents education agenda . TheAdministration has: increased the maximumPell Grant award to $3,125 in 1999, up36 percent from $2,300 when President Clin-ton took office; established the Direct StudentLoan program, which reduced costs and in-creased efficiency in the $41 billion loan


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programs and which offered income-contingentrepayment options to students; made highereducation more affordable through the pro-posal and enactment of the Hope Scholarshipand Lifetime Learning tax credits; and helpedstudents in high poverty schools preparefor and attend college through the GEAR-UP program.

To improve and expand job training andemployment services, the Administration hasmore than doubled the resources devotedto assisting dislocated workers. In addition,the Administration proposed, and worked withthe Congress to pass, the Workforce Invest-ment Act, to streamline the job trainingsystem, empower people with individual train-ing accounts, enhance accountability, and in-crease customer information and choice. TheAdministration also proposed and obtainedfunding for the Youth Opportunity Grantsprogram to provide intensive, comprehensiveeducation an d t ra ining services to ra ise signifi-cantly the employment rate of young peoplein high poverty areas.

The budget builds upon this record. Itincludes: $1.4 billion for the second annualinstallment of support to States and schooldistricts to hire new teachers in the earlygrades; $22 billion in school construction

and modernization bonds, financed throughtax credits to investors; $600 million forafter-school and summer programs, increasingfunding three-fold; a $320 million increasefor Title IEducation for the Disadvantagedto support increased accountability for edu-cational achievement; and other increasesfor serving dislocated workers and enhancingone-stop career centers. The budget includesresources to enhance public school choice,advance the Hispanic Education Agenda, andimprove adult education.

A cent ra l part of th e Pres ident s effort sto increase accountability is the focus onending social promotion, the practice of pro-moting students from grade to grade withoutregard to whether they have mastered theskills and met academic standards requiredto succeed at the next grade level. Thebudget provides $600 million for 21st CenturyCommunity Learning Centers, tripling fundingfor after-school and summer school programs,to end social promotion the right way

by giving students the tools they need tosucceed.

Elementary and Seconda ry Educa t ion

The budget increases support for key Edu-cation Department programs to help all chil-dren in school, especially those in high-poverty areas, achieve at higher levels (seeTable 31). Early in 1999, the Administrationwill transmit to Congress its reform proposalfor the reauthorization of the Elementaryand Secondary Education Act. That proposalwill focus on improving accountability toraise the educational achievement of all stu-dents, especially those in low-income commu-nities. The budget includes the proposals

below that will prepare the way for thesebroader reforms. (For information on HeadSta rt , see Cha pter 4, Supporting WorkingFamilies.)

Performance Accountabi l i ty : All childrendeserve to attend high quality public schools.When schools fail to help children reachrigorous standards of academic achievement,they must be held accountable for theirperformance. The budget includes $200 millionin Title I to hold States and school districtsmore accountable for raising student

achievement. States will use funds to fix theirlowest performing schools through a varietyof approaches including bringing in newmanagement and teachers. Funds will also beused to ensure that students receive extraeducational help while the school is being re-formed. The increase described below for newfunds for after-school and summer school ac-tivities is an integral part of this initiative.

21s t Cen tu ry Communi ty Learn ing Cen- ters /After-School and Summer School Pro- g rams : The budget proposes to triple this pro-

gram to $600 million, as part of a comprehen-sive approach to fix failing schools and helpend social promotion the way successfulschools do itwithout harming the children.School districts will have a competitive advan-tage for these new funds if they combinebefore- and after-school, as well as summerschool programs, with other resources thatsupport State and school commitments to highstandards, more qualified teachers, smallerclasses and accept accountability for increasing


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653. INVESTING IN EDUCATION AND TRAINING

Table 31. THE BUDGET INCREASES RESOURCES FOR SELECTED EDUCATIONAND TRAINING PROGRAMS BY $5 BILLION, OR 10.9 PERCENT OVER 1999, ANDBY A TOTAL INCREASE OVER 1993 OF 101 P ERCENT

(Dollar amounts in millions)

1993Actual

1999Est imate

2000Proposed

DollarChange:1999 to

2000

PercentChange:1993 to

2000

TAX EXPENDITURES:H op e S ch ol ar s hi ps C re di t ... ... ... ... ... ... ... ... ... ... ... .. ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... . ... ... ... .. 4 ,0 15 4 ,8 55 + 84 0 N ALife t ime Lea rn ing Cred it . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . .. .. .. .. .. . 2 ,510 2 ,655 +145 NAS tu den t Loa n I nt er es t D ed uct ion ................................................................... ............ 2 45 2 83 +3 8 N ASchool Cons t ruct ion . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . .. .. .. .. .. . . .. .. .. .. .. .. .. 146 +146 NAWork Oppor tunity Tax Credit (Target ed J obs Tax Credit in 1993) ............. 160 358 446 +88 +179%We lfa r e/J ob s Ta x C red it .................................................................................. ............ 38 54 +1 6 N A

Total , tax expe ndi tures ............................................................................ 160 7,140 8,426 +1,260 +5,116%MANDATORY OUTLAYS:

We lfa r e-t o-Wor k G r an t s .. ... ... ... ... ... ... ... ... ... .. ... ... ... ... ... ... ... ... ... ... ... ... ... ... .. ... ... . . ... ... ... .. 8 72 1 ,5 97 + 72 5 N AE a r ly L ea r n in g F u n d (s ee C ha p t er 4 ) . ... ... .. ... ... ... ... ... ... ... ... ... ... ... ... ... ... .. ... ... . . ... ... ... .. ... ... ... .. ... . 3 72 + 37 2 N A

DISCRETIONARY BUDGET AUTHORITY:Pre-School : H ea d S ta r t (s ee Ch a pt er 4 ) . ..................................................... 2 ,7 76 4,66 0 5 ,2 67 +6 07 +9 0%

Elementary and Secondary Educat ion:Clas s S ize Reduct ion . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . . .. .. .. .. .. . 1 ,200 1 ,400 +200 NAAm er ica Re ad s/Re ad in g E xcel le nce ............................................................. ............ 2 60 2 86 +2 6 N AGoa l s 2000 . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . .. .. .. .. .. . 491 491 . .. .. .. .. .. .. . NAE du cat ion Tech nology (Educa tion Depa rt men t gr an t pr ogr am s) ............. 23 698 801 +103 +3,383%Tit le I - Ed uca tion for t h e Dis ad va nt aged/Accou nt abilit y ......................... 6,709 8,371 8,744 +373 +30%Specia l Educa t ion . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 2 ,966 5 ,334 5 ,450 +116 +84%Bilin gu al a nd Im migr an t E du ca tion ........................................................... 213 380 415 +35 +95%Sa fe a nd Dr ug F ree Sch ools Com mu nit ies ................................................. 582 566 591 +25 +2%C ha r t er S ch ool s . ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .. ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... . ... ... ... .. 1 00 1 30 + 30 N ATroops t o Teache r s . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . .. .. .. .. .. . . .. .. .. .. .. .. .. 18 +18 NACom pr eh en sive S ch ool Refor m Dem on st ra tion .......................................... ............ 145 175 +30 N A21s t Cen tu ry Com mu nit y Lea rn in g Cen ter s .............................................. ............ 200 600 +400 N A

Pos t secondary Educa t ion :P e ll G r an t s ... ... .. ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .. ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 6 ,3 72 7 ,7 04 7 ,4 63 24 1 1 7%

Pell Grant m aximum award (non-add, in d ollars) ................................ 2,300 3,125 3,250 +125 +41%C ol le ge Wor k-S tu dy ...................................................................................... 6 17 8 70 9 34 +6 4 +5 1%O th er Ca mpu s-ba sed Aid ............................................................................. 764 749 761 +12 *C ol le ge Com p le t ion C ha ll en ge Gr a n t .. ... ... ... ... ... ... ... ... ... ... .. ... ... ... ... ... ... ... ... . ... ... ... .. ... ... ... .. ... . 3 5 + 35 N A

Tea ch er Qu alit y E nh an cem en t .................................................................... ............ 75 115 +40 N AG E AR -U P . ... ... ... ... ... ... ... ... ... ... ... .. ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .. ... ... ... ... ... ... . . ... ... ... .. 1 20 2 40 + 12 0 N AP repa rin g f or College Ca mpa ign ................................................................. ............ 7 15 +8 N A

Work Force Development:Learning Anytime, Anywhere Partnerships (Education and Labor De-

p ar t me nt s) ................................................................................................. ............ 20 3 0 +1 0 N ARigh t Track Pa r tne r sh ips . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . . .. .. .. .. .. . . .. .. .. .. .. .. .. 100 +100 NAJ o b C or p s ... ... ... .. ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .. ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 9 66 1 ,3 09 1 ,3 47 + 38 + 39 %You th O ppor tu nit y Gr an ts /Rewa rd in g Ach ievem en t in You th ................. ............ 250 250 .............. N AVoca t ion a l E d uca t ion . ... ... ... ... ... ... ... .. ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .. ... ... ... ... . 1 ,1 70 1 ,1 54 1 ,1 63 + 9 1%Ad ult E du ca t ion ............................................................................................ 3 05 3 85 5 75 +1 90 +8 9%Vet er ans E mploym ent Services a nd Tr ain in g . ........................................... 167 167 169 +2 +1%D is loca t ed Wor k er Tra in in g .. ... ... ... ... ... ... ... ... .. ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 5 17 1 ,4 06 1 ,5 96 + 19 0 + 20 9%E mploym en t Ser vice a nd O ne-St op C en ter s .............................................. 895 968 1,048 +80 +17%

Total , budget au thori ty ........................................................................ 25,042 37,589 40,209 +2,620 +61%TOTAL RESOURCES FOR SELECTED PROGRAMS (tax expenditures;

receipts; man datory outlays; and budget aut hority) 25,202 45,601 50,604 +4,977 +101%

STUDENT LOANS (face value of loan s issu ed):Direct loans . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . .. .. .. .. .. . 11,363 12,078 +715 NAGuaranteed Loans . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 16,089 20,921 22,243 +1,322 +38%Consol ida t ed Loans . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 1 ,540 7 ,525 6 ,840 685 +344%

Total , s tuden t loans .................................................................................. 17,629 39,809 41,161 +1,352 +133%

DEPARTMENT OF EDUCATION:Discre t iona ry P rog ram Level . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 23,977 33,467 34,711 +1,244 +45%

DEPARTMENT OF LABOR:D is cr e ti on a r y B ud ge t Au t h or it y .. ... ... ... ... ... ... ... ... ... .. ... ... ... ... ... ... ... ... ... ... ... ... ... 6 ,0 19 6 ,9 86 7 ,2 85 + 29 9 + 21 %

NA = Not applicable.*Less than 0.5 percent.


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student achievement. The program will reach7,500 schools in 2000.

New, Qua l i f i ed Teachers and Smal le rClass S izes : Soaring school enrollments have

overwhelmed school capacity, causing severeteacher shorta ges an d classroom overcrowding,which hinder the ability of students to learn.The budget provides $1.4 billion as the secondinsta llment of the Pr esidents plan to helpschools recruit, hire, and train 100,000 newteachers by 2005 and reduce class size in theearly grades. Research shows that reducingclass size to 1518 students in the early gradesimproves student achievement, particularlyamong low-income and minority students ininner cities. The budget also proposes a newinitiative to recruit and train 1,000 new Indian

teachers to serve in school districts with highconcentr at ions of Indian children.

Rec ru i tmen t , P repa ra t ion , and Tra in ing of High-Qual i ty Teachers : Children in allcommunities should have highly-qualified andeffective teachers.

Teacher quality enhancement: The budgetprovides $115 million to help improve thequality of teacher preparation programs atcolleges and universities and addressshortages of well-prepared teachers, par-ticularly in urban and rural schools. Thebudget will fund approximately 16 part-nerships of exemplary teaching collegesand universities, urban and rural schools,and subsidiary colleges and universitieswith teaching programs. It also will fundup to 7,000 scholarships to help recruitteachers to teach in high priority areas.

Eisenhower professional development: Th ebudget proposes $335 million to helpStates provide high-quality, professionaldevelopment for teachers and administra-tors.

Troops-to-Teachers: The budget proposes$18 million to recruit and train retiringmilitary personnel and other to mid-careerprofessionals to serve as new teachers inpublic schools.

Bilingual education: The budget includesan increase of $25 million, for a total of $75 million, for the bilingual educationprofessional development program to give6,000 teachers the skills they need to help

their students learn English and meetchallenging academic standards.

New Classrooms: A third of all schoolsacross the country, with 14 million students,

have one or more buildings that need extensiverepair, according to the General AccountingOffice. School districts also face the cost of up-grading schools to accommodate computersand modern technology, and of constructingnew classrooms and schools to meet expectedrecord enrollment levels over the next decade.To help States and school districts meet thisneed, the budget proposes $22 billion in schoolconstruction and modernization bonds, and$2.4 billion in additonal Qualified Zone Acad-emy bonds financed through tax credits to in-vestors, currently valued at $3.7 billion over

five years and $8.9 billion over 10 years. ThePresident also proposes $10 million for Schoolsas Centers of Community, a new initiative topromote broad community involvement in theplanning and design of new schools.

Indian reservations have some of the mostcritical needs for school construction assist-ance. Within the new school constructioninitiative, $400 million in bonding authoritywill be provided for Bureau of Indian Affairsschools. For those schools serving the poorestTribes who would have difficulty issuing

such bonds, the budget proposes $30 millionfor the Interior Department to pay the prin-cipal of about $75 million in bonds.

Educat ion Technology: In February 1996,the President challenged the public and pri-vate sectors to work together to ensure thatall children are technologically literate by thedawn of the 21st Century, and that schoolstake full advantage of the benefits of tech-nology to raise student achievement. Achievingthis goal will require progress in four areas:connecting every classroom to the Internet;expanding access to multimedia computers;increasing the availability of high-qualityeducational software and content; andensuring that teachers can teach effectivelyusing technology.

The most significant program that advancesthese goals is the Technology Literacy Chal-lenge Fund. In 1997, the President committedto providing States $2 billion by 2002 throughthis Fund to support the education technologygoals. Through 1999, $1.05 billion has been


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673. INVESTING IN EDUCATION AND TRAINING

provided. The budget includes $450 millionfor t he Fu nd.

Other technology progra ms include: Technology Innovation Challenge Grants,

which provides $110 million for competi-tive grants to develop innovative educationtechnology applications;

Technology Training for Teachers, whichprovides $75 million to help ensure thatnew teachers know how to use technologyeffectively;

Computing Technology Centers, whichprovides $65 million, an increase of $55million over 1999, to establish computercenters in low-income communities forthose who cannot afford home computers;

Middle School Teacher Training Initiative,which provides $30 million to train tech-nology leaders in all middle schools; andthe

Software Development Initiative, whichprovides $5 million for a competition opento students in partnership with others todevelop high quality software andwebsites.

E-Rate: The education rate, or E-rate, wascreated under the Telecommunications Act of 1996 to provide discounts for schools and li-braries to buy high-speed Internet access, in-ternal wiring, and telecommunications serv-ices. Over the first 18 months of the program,$1.9 billion has been provided to start connect-ing up to 47,000 schools and libraries andmore than 30 million children to the Internet.In 2000, $1.3 billion will be made available.

America Reads/Reading Excel lence: Twoyears ago, the President launched the AmericaReads Challenge, a multi-faceted effort to helpStates and communities ensure that all chil-

dren can read well and independently by theend of third grade. This budget builds uponlast years commitment of $260 million, by pro-posing an investment of $286 million to con-tinue this program in 2000. The funds helptrain reading tutors and coordinate after-school, weekend, and summer reading pro-grams linked to in-school instruction; helptrain teachers to teach reading; and help par-ents help children prepare to learn to read.In addition, more than 1,000 colleges have

pledged to use federally-financed work-studypositions for tu toring programs.

Publ ic School Choice: Choice in educationhas become one of the most hotly debated edu-

cation issues in the last decade. The Adminis-tration firmly supports expanding school choicethrough its Charter Schools, Magnet Schools,and Satellite Work-Site Schools initiatives.These efforts strengthen the public educationsystem by giving it the support it needs tofulfill its mission of providing equal edu-cational opportunities for all while still provid-ing children their choice of schools that bestmeet their needs. The budget supports the ex-pansion of public school choice in three ways:

Charter Schools: Through public charterschools, parents, teachers, and commu-nities create innovative schools to raisestudent achievement, while States freethese schools from unnecessary rules andregulations. The budget proposes $130million for charter schools, a $30 millionincrease over 1999, to fund start-up costsfor approximately 2,200 schools, continu-ing progress toward the Pr esidents goalof 3,000 charter schools by 2002.

Magnet Schools: Magnet schools offer aspecial curriculum to encourage studentsof different racial backgrounds to attendpreviously racially isolated schools. Thebudget proposes a $10 million increase, toa total of $114 million, to fund inter-dis-trict magnet programs where, for example,an urban school district with high con-centrations of minority and poor studentscan partner with neighboring suburbandistricts to form a specialized (e.g., mathor art) curriculum which students of bothdistricts attend.

S atellite Work-S ite S chools: These schoolsgenerally operate as public-private part-

nerships between large employers andschool districts, with employers providingfacilities on site for the schools. Experienceshows that these schools can: (1) be moreracially diverse th an other schools becau seworksites are more diverse than residen-tial neighborhoods; (2) save the school dis-tricts the cost of new facilities; (3) increaseparental involvement in the schools; and(4) provide safe and enriching after-schoolprograms. The budget proposes $10 mil-


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lion for a demonstration project to supportthe planning and implementation of ap-proximately 100 work-site elementaryschools.

Safe and Drug-Free Schoo l s and Com- muni t ies : Since 1993, this program has pro-vided $3.7 billion to help 97 percent of allschool districts implement anti-drug and anti-violence programs. The budget proposes $591million, including $90 million in competitivegrants for projects that use proven programdesigns in high-need areas and $50 million forthe Administration-proposed, newly estab-lished School Drug Prevention Coordinatorsprogram to ensure that at least half of all mid-dle schools have a director of drug and violenceprevention programs to link school-based pro-

grams to commun ity-based program s. This pro-gram also provides $12 million to fund SERV,the Administrat ions initiat ive to support ef-forts in the Departments of Education, Justice,and Health and Human Services to respondto serious incidents of school violence.

S p e c i a l E d u c a t i o n : The budget proposes$5.4 billion to support State and local edu-cation for children with disabilities, an in-crease of $116 million over 1999. The increaseis targeted toward improving educational re-sults for children with disabilities through

early intervention. The new resources support:a $50 million initiative to help schools imple-ment research-based practices for how best toserve children with disabilities in the primarygrades; an increase of $28 million to preschoolgrants, for a total of $402 million; and an in-crease of $20 million for grants to infants andfamilies, for a tota l of $390 m illion.

Comprehens ive Schoo l Refo rm Dem- ons t ra t ion : This program funds competitivegrants to schools to implement research-basedschool improvement models. The budget in-cludes $150 million for such grants in high-poverty schools, an increase of $30 million over1999, and $25 million for such grants in otherschools. Nearly 3,500 schools will receivegrants .

Advanced P lacement and Othe r Courses :To ensure greater preparation for college, thebudget proposes $20 million primarily to helpschools provide advanced placement and otherhigher level courses to high-poverty schoolsthat do not currently offer them.

Educa t ion Coord ina to r fo r Empower- ment Zones: The 10 Education Regional Of-fices will each have a designated Empower-ment Zones (EZ) coordinator to augment theexisting Department of Education Empower-ment Zones and Enterprise Community Task Force. The Coordinators will help EZs by fos-tering communication with educational institu-tions, facilitating access to Education technicalassistance and program evaluation resources,providing technical assistance to EZ schoolsapplying for competitive gra nt s, an d coordinat-ing education reform efforts among EZs.

Inves t ing in the Spe c ia l Needs of Hispan icAmericans

Raising the educational achievement of His-panic Americans continues to require specialattention. Their high school dropout rate,for example, is unacceptably high: in 1996,29 percent of Hispanics aged 16 to 24 werehigh school dropouts, compared to seven per-cent of non-Hispanic whites and 13 percentof non-Hispanic blacks. Hispanic now

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2000 Federal Budget Document

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