IV. UNITED STATES

In the 1990s, there was a renewed emphasis on improving the performance of federal government. The GPRA mandated that departments and agencies prepare and update strategic plans and performance plans covering each programme activity. Based on agencies’ plans, OMB includes a performance plan for the federal government in the President’s budget. The OMB has developed the Program Assessment Rating Tool (PART), which is a series of questions designed to evaluate a programme’s result, management, purpose, design, and strategic planning (OMB, 2004b).10 A major challenge for full introduction of performance-based budgeting is to ensure that congressional processes of approving appropriations make use of the performance information required by the GPRA and PART.

2. Principles underlying budget system laws

The 1789 Constitution specifies the principle of the authorisation of public money by the Congress (Art. I, Sec. 9, Clause 7). It states that “no money shall be drawn from the Treasury, but in consequence of appropriations made by law”. It is an essential requirement for the executive to obtain the approval of Congress for the use of public money. The law also specifies that the fiscal year begins on 1st October and ends on 30 September (annual basis of the budget, Title 31, Sec. 1102). The federal budget documents are required to provide information for all federal agencies and programmes, referred to as an “unified or consolidated budget” (principles of unity and universality of the budget). However, budget authority for many expenditures is not provided in annual appropriations acts. Only discretionary spending, which accounts for only about 35% of total federal spending, is approved through the annual appropriations process. Appropriations are prepared by programmes within accounts under the heading of each agency (the principle of specificity). Title 31 (s. 1103) requires Congress to reaffirm its commitment that budget outlays for a fiscal year may be not more than the receipts for that year even though it is an account-based balance (principle of budget balance).

The GRH Act and the BEA aimed to reduce federal budget deficits within a medium-term context (the principle of stability). There is no legal requirement to balance the budget, although there has been much debate on this issue, including calls for a balanced budget constitutional amendment (Buchanan, 1997) At sub-national level, most of the 50 states require a “balanced budget” in their Constitution (Briffault, 1996). Since the enactment of the GPRA in 1993, the executive is required to report its performance to Congress (principle of performance). The principle of accountability is stated in various laws, including the BAA, IGA and the CFOA.

The principle of transparency is well respected. The Constitution provides a strong and well-tested framework that clearly defines the roles of