Summary:

Federal efforts to integrate performance information
into the budget process have a long history. Current
attempts by the George W. Bush administration are
consistent with this historical trend but place greater
emphasis on the use of performance information by
decision makers. This report discusses “performanceinformed”
budgeting in the federal budget process,
presenting a comprehensive view of how performance
information can be used at various stages
and describing a preliminary research agenda for
the future study of this reform.
Since the early part of the 20th century, federal
budget reform has focused on measurement, first
of inputs, then of outputs, and finally of outcomes.
Budget systems such as the Planning-Programming-
Budgeting System (PPBS) and zero-based budgeting
(ZBB) laid the groundwork for 1990s reforms,
embodied most particularly in the Government
Performance and Results Act (GPRA). The Bush
administration, with its Program Assessment Rating
Tool (PART) and the budget and performance
integration (BPI) component of the President’s
Management Agenda (PMA), has advocated more
systematic use of performance information in the
budget process.
Traditional studies of the use of performance
information in the federal budget process tend to
focus almost exclusively on uses by the Office of
Management and Budget (OMB) and the Congress.
This traditional focus takes an incomplete view
of the budget process, however, because it fails
to recognize the opportunities for performanceinformed
budgeting at other stages, such as agency budget development, budget execution, and audit
and evaluation. At each of these stages, it is important
to focus both on whether appropriate information
is available and on whether that information is
used for budgeting decisions.
The manner in which information can be used differs
according to the stage of the budget process. In
budget development, the agency and its component
units can build a budget within the context of the
overall goals of the agency, attempting in the process
to create a budget request that has a firmer justification.
OMB can use performance information to
make tradeoffs among competing priorities and to
evaluate spending and tax policies in light of the
President’s objectives. The Congress can use performance
information to support its legislative budget
agenda, including development of the budget resolution,
authorizing legislation, and appropriations.
After the budget becomes law, agencies can use the
discretion that they have in allocating resources to
attempt to maximize performance. The audit and
evaluation process can focus on raising and answering
performance questions, with an eye toward
informing future budget development. Understanding
the many ways in which performance information
can be used at these different stages permits a more
complete and robust understanding of this reform
and its potential implications.