Summary: GAO outlined proposed solutions to basic weaknesses in the federal budget's structure, costs, and process.
GAO found that the: (1) present unified budget structure's exclusive focus on a bottom-line cash deficit obscures important program differences and understanding of the government's finances; (2) budget's strong emphasis on cash transactions results in inaccurate statements of many costs; and (3) budgeting process has become an endless, repetitive cycle, with numerous opportunities for delay and uncertainty. GAO believes that: (1) budget subdivisions which separately report general, trust, and enterprise funds' operating and capital costs could greatly enhance the budget's relevance to emerging fiscal issues and increase the budget's usefulness for setting and carrying out multiyear budget policy goals; (2) inclusion in the budget of costs related to program initiatives and economic events which create the likelihood or certainty of future payments could reduce the chance of future budget surprises; (3) recognition of budget costs for federal payroll and similar liabilities as they are incurred would eliminate the incentive to claim budget savings by shifting paydays from one fiscal year to another; and (4) negotiation between Congress and the President of a politically binding 2-year agreement on the broad shape of the budget could expedite budgetary actions and ensure timely appropriations actions.
