Life

cycle of a federal program

Types of government programs
Spending: Federal assistance programs like Medicare, large purchases like the F-35 fighter plane and loans like federal student loans are considered spending programs. They come in two flavors: Mandatory: Programs including Medicare, Social Security and other entitlements are called mandatory spending. The only way to reduce or increase their spending is to change the rules that govern who gets the money and how much each beneficiary gets. There is no annual budget process for these programs, though changes often come at the same time as Congress looks for ways to move money around. There are very few of these programs but they make up about two-thirds of the $3.4 trillion budget. Discretionary: The kind of program that requires annual spending bills and goes through the appropriations process. Most programs are discretionary, but they make up a small part of the budget. Tax expenditures: Its often easier to encourage an activity through the tax code rather than to directly subsidize it. These are dubbed tax expenditures by the Congressional Budget Office, and they do not show up on any budget documents. They go through a different set of congressional committees and arent annually renegotiated. For Republicans in particular who have signed a no-tax pledge, they can be added to the deficit without either increasing spending or raising taxes. These programs are extremely difficult to track, since most (but not all) tax breaks are recorded on the tax return, which is only public for non-profit organizations. Regulatory: Although they make up little of the governments budget, regulatory programs may have the biggest effect on the most people. These are things like safe workplace rules, standards of decency in broadcast, consumer protection or environmental rules. Most of the cost of these rules is in the personnel needed to inspect and ensure theyre followed. They are often funded both directly and indirectly by the organizations being regulated. There are some specialized categories that go through different a different process. Revolving funds live off the fees they charge, like the U.S. Patent and Trademark Office.

Creating a program

This description is for domestic spending programs, though the same general steps all of the types of programs. A program is created by Congressional authorization legislation, which is the backbone of the program. For example, the Social Security Act of 1965 created Medicare. The authorization bill creates the funding structure, outlines what the goals of the program are and how it will work. It can be quite detailed or quite general a decision that sometimes depends on how much Congress trusted the president who was in office at the time it was created.
Sarah Cohen / Duke University / August 2011 This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.

 Authorization bills can have several names: The overarching legislation that contains it; the name identified in the bill itself as the short name, the public law that it creates or even the section number of a law that creates its funding. The American Recovery and Reinvestment Act of 2009, known as the stimulus bill, included new or renewed authorizations for three separate programs, each which have different names depending on the context. Youll sometimes hear programs described by the section of the bill that creates them, such as section 502 funds. Recognizing the names will become important when you start following the money trail. What to look for in authorization process Promises or warnings about the results. For example, a member might say that a program will revitalize poor neighborhoods, save family farms or feed poor children. Another might say that a provision is ripe for fraud, wont meet its goals or will kill jobs through regulation. These promised benefits are natural standards against which you can measure success; the warnings are natural places to look for problems. Reporting requirements. Congress will sometimes require agencies to report back either regularly or after key steps are accomplished. These are usually ignored by the committees that ask for them, but they are also usually produced by the agency. For example, the Commanders Emergency Response Program is required to give a list of recipients to Congress every quarter. No one in the committee ever remembered seeing such a list, but the Defense Department sent it and had copies. Earmarks. The specific recipients or targets might be explicitly or implicitly included in the bill. For instance, a program created to help communities directly affected by 9/11 had no specific recipients in the legislation but the House Report listed in great detail who should get the money and for what.

Initial Implementation

When a program is created, it goes through a series of behind-the-scenes exercises, most of which are unimportant for accountability but are useful to generally understand. It is up to the Office of Management and Budget, an arm of the Executive Office of the President, to oversee the initial implementation. It has a hand in virtually every step, making it probably the most powerful agency in the federal government. It watches the implementation process all the way through to make sure the presidents priorities are reflected in agency work and that it is fully integrated into the budget. Most new programs are slices of other, existing, programs when they are created. They may even already exist under the agenys discretionary activity. For example, the Brownfields program in the Environmental Protection Agency was created by the Clinton administration as an arm of Superfund, with Congressional approval through the budget. It was later spun it off into its own program. The agencies work with OMB on broad plans for the program. OMB then sets up a lot of the key identifiers that will track it through all of the executive branch systems, such as
Sarah Cohen / Duke University / August 2011 This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.

procurement or budgeting. These include Treasury Account Symbols, object, class and agency codes, and the Catalog of Domestic Federal Assistance codes. At this point, the agency will also look for congressionally directed spending (also called earmarks). This is relatively rare in authorizing legislation except for highway and transportation bills, its more common in the annual budget cycle. Agencies then have to determine how the program will work, clarify anything that Congress left open for interpretation, and create mechanisms for applications, awards, audits, and accountability. Each of these steps is recorded in the daily Federal Register, which the government calls The Daily Journal of the United States Government. What to look for in implementation Comments from lawmakers, affected organizations or interest groups on guidelines and reporting mechanisms Forms or information collections required from recipients. Many programs are administered through states, which in turn might have recordkeeping requirements but dont have to send them to the agency. Award and scoring formulas that will determine who makes the decisions and who gets the money. Waivers or special rules for certain situations At this stage, you are looking for anything that will help you follow the paper trail from the federal government down to the ultimate recipient or regulated organization. Most important is the information collected from recipients if they never report anything, the government cant know how the money is spent.

Spending

Every government program except tax expenditures requires some form of spending. It might be a grant program, employees to carry out the regulation, contractors or some combination . Well go through all of the standard spending sources later in the semester, but following the money is the most difficult and most important phase of accountability reporting. The basic process goes something like this, using a domestic assistance program as the example. 1. Each year, Congress tells each program how much it has to spend through the annual appropriations and budget process. It usually allows an agency to roll over funds it hasnt spent yet, though some of the recent budget deals eliminated these cushions. 2. The program selects recipients using some sort of formula, competition or earmark, usually announcing how much the total amount of the grant is. It probably has not given out any money at this point. 3. The agency doles out the money in chunks. It might give a certain amount each quarter subject to reports from the recipient. This is called an obligation, sort of like a homewner signing a contract for a remodeled kitchen. It will be hard to get out of the contract unless the work is botched. The federal government isnt allowed to pay in advance for work it can only reimburse or pay for work done. When you hear about government spending, it almost always refers to these obligations the agency may not even know what bills have been paid. This years debt ceiling debate
Sarah Cohen / Duke University / August 2011 This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.

was really about paying for these obligations that Congress had approved (or mandated) and that agencies had promised, but the Treasury had not yet paid. 4. One the agency is happy with the recipients work, it directs the Treasury to pay the bill. In federal-ese, this is called an outlay.

Oversight

The key forms of oversight within the federal government are: Audits. Each aid program requires annual or routine audits of the entity. A single audit is possible for, say, a state agency that has many grants. But each funding stream will usually have routine reports that outline exactly how the money was spent. Inspectors General. These are the internal cops of an agency, specifically charged with making sure that the agency is carrying out its job properly. It can investigate employees, recipients, or anything else related to the agency. Government Accountability Office. An arm of Congress that performs audits and investigations at the request of a member. It also does some contracting oversight. Congressional Research Service. Another arm of Congress that serves committees and updates members on budget issues and context. It doesnt do oversight per se, but does advise Congress on the context, budget and performance of a program. When there is a specific report available, its often the best backgrounder you will find. Congressional oversight committees. The House Committee on Government Reform and Oversight, in particular, has been known as a fierce watchdog on politically charged programs. Only the majority party can schedule a hearing or subpoena documents, so they are often only active during periods of divided government. Courts and law enforcement. Fraud, improper implementation procedures and other contentious parts of a program will eventually find their way into federal court. It is here that some of the most specific documents will be found.

Sarah Cohen / Duke University / August 2011 This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.