Mr. Chairman, Members of the Subcommittee, I am pleased to be here this afternoon to discuss President Clinton's request for fiscal 1998 funding for the Office of Management and Budget (OMB).

     I will make a short statement, and then I would be delighted to answer any questions that you have.

     Mr. Chairman, if I have one message for you today, it is this: OMB is doing more than it ever has, it is continuing to perform at a very high professional level, and it is doing so with fewer resources and less staff.

     On one hand, the workload has exploded in recent years, due to the year-round, all- consuming nature of the budget process as well as a host of new laws and reporting requirements designed to make our Government work better. With these new laws, the President and Congress have taken significant steps to ensure that the Federal Government and its programs operate as efficiently and effectively as possible.

     On the other hand, OMB is operating with fewer people and a very constrained budget. At OMB's request, Congress has held the agency's budget essentially flat since fiscal 1993, when it totaled $56,039, 000. Also since 1993, OMB has cut the number of funded full-time equivalent (FTE) positions by 55 -- from the 573 in 1993 to 518 in 1998 -- or nearly 10 percent. Over those six years, OMB has cut its administrative costs by $1,467,000 -- from $6,831,000 in 1993 to $5,364,000 in 1998 -- or 21 percent.

     We are proud of the work we do. We feel strongly that we are providing high-quality work, both in support of the President as well as in response to the varied new legal requirements that we face.

     At the same time, I want to make it clear today that the work will continue to increase at OMB. The legal requirements that Congress has imposed will add even more to our workload in fiscal 1998.

     To ensure that OMB continues to provide the high-quality work that the President and Congress have come to expect, the President requests $57,240,000 in 1998, three percent more than the enacted level of $55, 573,000 in 1997. The budget provides for 518 FTEs, the same as in 1997. Anything less will jeopardize our ability to meet the goals that Congress has set for us.

     The last two Congresses -- the 103rd and the 104th -- added numerous new or broadened responsibilities for OMB, requiring the institution to perform at even higher levels of production.

     OMB is on the cutting edge of major changes in Government. Congress has asked OMB to manage and oversee numerous new initiatives. We are playing a leading role in balancing the budget, improving Government performance, auditing Government programs, and managing information technology.

     I would like to take a moment to walk you through some of the new requirements that we must fulfill:

• The Government Performance and Results Act of 1993 (GPRA): We have devoted considerable resources to setting overall Government policy and coordinating the development of strategic plans by the agencies. OMB also has reviewed the results of the pilot projects that GPRA authorized. And we will continue such efforts in 1998.

  Beginning in 1998, however, OMB will face a whole new set of major GPRA-related tasks. They include preparing the initial Government-wide performance plan, which will become part of the President's budget for 1999, and reviewing and approving the initial set of agency annual performance plans.

  Also in 1998, GPRA calls for Government-wide implementation of various managerial accountability and flexibility provisions. In this area, OMB will review and decide whether to approve agency requests for waivers from administrative requirements.

• The Unfunded Mandates Reform Act of 1995: Title II of this Act requires that -- before promulgating any proposed or final rule that may lead to annual spending by State, local, and Tribal governments, or the private sector of over $100,000,000 -- each agency must conduct a cost-benefit analysis and select the least costly, most cost- effective, or least burdensome alternative. Also, each agency must seek State, local, and Tribal government input.

  OMB must issue guidelines to agencies, monitor agency compliance with Title II, and publish an annual report on agency compliance.

• The Paperwork Reduction Act of 1995: This Act requires that OMB review and approve (or disapprove) over 3,000 proposed agency collections of information each year. It explicitly added third-party disclosures to OMB's review (totaling over 500,000,000 annual burden hours across the Nation).

  The Act also requires agencies to plan more carefully and explicitly for each new information collection, and OMB must ensure compliance with this requirement in reviewing each collection.

  Finally, the Act requires agencies to reduce information collection burdens by set percentages each year, and OMB must promulgate guidance and track agency compliance with these goals.

• The Information Technology Management Reform Act of 1996: This Act requires that OMB develop Government-wide policy and guidance to oversee agencies in implementing the Act. Examples include OMB Memorandum 97-02, the Capital Planning Guide, and multi-agency contracting guidance.

  Under the Act, OMB must (1) examine agency capital investment proposals for information technology, (2) oversee the establishment and evaluate the effectiveness of agency Chief Information Officers, and (3) oversee multi-agency and Government-wide procurement programs for information technology.

  The Act directs OMB to report annually on the benefits of Federal information technology investments.

  Finally, as part of its oversight under the Act, an Executive Order directs OMB to: coordinate the work of the Information Technology Resources Board to help agencies evaluate and improve major information technology systems investments; participate in the Government Information Technology Services Board to promote the effective use of information technology across agency lines (in order to cut costs and improve Government effectiveness and customer service); and chair the Chief Information Officers Council.

• The Regulatory Flexibility Act Amendments (1996): These amendments require the Environmental Protection Agency and the Occupational Safety and Health Administration to convene a small business advocacy review panel for certain rulemakings. The review panel comprises the host agency, OMB, and the Small Business Administration (SBA) -- all of whom must review the proposed rule, hear from SBA-designated representatives of small business, and prepare a report on the panel's recommendations for the host agency.

  OMB must advise the SBA on whether it should waive the small business comment process for particular rules.

• The Congressional Review of Agency Rulemaking Act (1996): Under the law, each agency now must send each final rule to both houses of Congress and the General Accounting Office (GAO).

  OMB must determine whether a rule is “major” (that is, whether it will have an effect on the economy of at least $100,000,000). Unless it is exempted, the law imposes a 60-day waiting period before a major rule takes effect.

  In the past year, OMB has designated at least 58 rules as major, and, particularly at the outset, helped agencies understand how the new law works.

• The National Technology Transfer and Advancement Act of 1995: OMB must regularly consult with, and advise, the agencies as to how this Act applies to their programs.

  To ensure agency compliance, OMB must reach out to the agencies and solicit formal written and oral public comments in order to revise and maintain OMB Circular A-119, “Voluntary Standards.”

  Also, due to requirements of the Act, OMB must coordinate with the National Institute of Standards and Technology on developing and implementing Government- wide standard policies, and on how agencies are implementing them.

  Finally, OMB must communicate policy and seek agency views on compliance with the Act by participating in the Interagency Council on Standards Policy.

• The Single Audit Amendment Act of 1996: The Act requires OMB to provide guidance to implement the Act, which includes revising the single audit circular (OMB A-133) and annually updating the Compliance Supplement to help auditors perform audits under the Act.

  The Act also authorizes the OMB Director to review and approve pilot projects to test alternative methods of achieving the Act's purposes.

• The Federal Financial Management Improvement Act of 1996: The Act will necessitate that OMB revise several of its OMB documents, including &# 147;Financial Management Systems” (A-127), “Management Accountability and Control” (A-123), and “Audit of Federal Financial Statements” (Bulletin 93-06).

  The Act requires that OMB staff work with agency staff on a remediation plan when an audit determines that agency financial systems do not comply with the Act.

  In addition, when an agency head disagrees with an auditor's finding, the OMB Director must review such determinations and provide a report to Congress.

• The Government Management and Reform Act of 1994: The Act requires that OMB revise its bulletin on the “Audit of Federal Financial Statements.”

  In addition, OMB will spend a considerable amount of time helping agencies meet the department-wide and Government-wide financial statements requirements under the Act. They include identifying and resolving complex and long-standing difficulties that prevent agencies, and the Government as a whole, from producing accurate and timely financial data.

• The Federal Workforce Restructuring Act of 1994: The Act requires that executive agencies cut their staffing levels, measured by FTEs, by 272,900 by the end of 1999.

  The Act includes declining annual targets, and requires that OMB continuously monitor compliance. On a quarterly basis, OMB must determine whether the required reductions are being met, and if not, freeze hiring until they are. We are ahead of schedule in meeting these targets.

  OMB manages the voluntary separation incentive payment (“ buyout”) program that the Act (and the subsequent buyout authority enacted in 1996) authorizes, ensuring compliance with the requirement that total non-Defense employment levels be reduced by one FTE for each buyout separation under the Act.

     Mr. Chairman, OMB is a proud institution that has performed well over the years. I can tell you with great confidence that the more than 500 employees want to continue serving at the highest possible level.

     At a time of tight resources, we have sought to ensure that we are working as efficiently as possible. Our proposed budget request will allow us to meet the new or broadened workload requirements of the laws that I have discussed, in addition to our many existing functions, with the same number of FTE as in 1997.

     Mr. Chairman, that concludes my statement. I would be happy to answer any questions that the Subcommittee has.

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