The Performance Institute
1515 N. Courthouse Rd. • Suite 600 • Arlington, VA 22201
Tel: 703-894-0481 • Fax: 703-894-0482 • www.performanceweb.org
N E W S R E L E A S E

President's Budget Delivers Big Dividends on Performance Budgeting

ARLINGTON, Va. - With the release of the President's '05 budget today, the federal government is taking another bold step towards a comprehensive "performance budgeting" system for the federal budget. Moreover, given that the President's budget uses performance information to eliminate 13 federal programs and save over $1 billion in federal funds, the use of performance budgeting offers opportunities to save taxpayers billions.

"Performance budgeting is finally paying dividends for taxpayers," notes Carl DeMaio, president of the Performance Institute. "We can credit an Administration that has stuck to its promise to evaluate the performance of federal programs and actually impose positive and negative consequences in the budget based on performance."

The President's '05 budget proposal delivers on a promise made early in the Administration to subject over half of federal programs to rigorous performance evaluations and tie agency budgets to those evaluations. To fully and fairly evaluate federal programs, the White House's Office of Management and Budget developed systematic, methodological, and evidence-based assessment system known as the Program Assessment Rating Tool" (PART). The '05 budget contains PART "scores" for 399 programs this year (nearly half of all federal expenditures.)

"While performance information has been included periodically in previous budgets, the '05 budget is jammed-packed with performance information for almost half of all federal programs. "Most importantly, the big news in the '05 budget is the USE of performance information to terminate or make targeted reforms in poor-performing programs while expand programs with solid results," DeMaio notes.

Now in its second year, the PART evaluation process demonstrates that many federal programs are actually starting to take accountability for performance seriously. Programs rated as effective, moderately effective or adequate rose to 58.2 percent over 44.5 percent from last year. Programs rated ineffective or results not demonstrated dropped to 42.9 percent from 55.5 percent last year. The highest increase was the number of programs showing results not demonstrated. That number fell sharply from 50.4 percent last year to 37.1 percent this year.

"Based on the improvement in the scores, it is clear that this year managers got the message that the President was serious about evaluating performance and using the budget to impose consequences, both positive and negative," DeMaio concludes.

Attention will now turn to Congress-which could base its decisions on the performance reviews or disregard the performance all together. "Congress must engage in performance budgeting and hold itself accountable for getting better performance from federal programs," DeMaio notes.

The Performance Institute is a private think tank seeking to improve government performance through the principles of competition, accountability, performance and transparency. The Institute serves as the nation's leading authority and repository on performance-based management practices for government. Its mission is to identify, study and disseminate the leading management innovations pioneered by "best-in-class" organizations. Complete information on the PART process and the '05 budget is available at www.transparentgovernment.org.

# # #