Summary

The nation's long-term economic future depends in large part upon budget and investment decisions made today. Current trends arediscouraging, however, as federal budget deficits have absorbed increasing proportions of national saving that might otherwise have financed productive economic investment. These deficits, in turn, have placed growing pressure on discretionary federal spending, including programs with long-term potential for economic growth. Changes are needed in the U.S. budget process to focus on the long-term impacts of both overall fiscal policy decisions and the choices made among programs. In GAO's view, the most important contribution the federal government can make to a healthy and growing U.S. economy is to bring down the federal deficit. In doing so, it is important to recognize the unique contribution of investment programs to economic growth. GAO believes the investment implications of federal budget decisions need to be considered as those decisions are made. To do that, the choices presented by the budget need to be changed to more clearly reveal those implications. Better information on the costs and benefits of programs also needs to be available to decisionmakers. Two bills being considered by Congress--H.R. 4420 and H.R. 4558--offer the possibility that those programs could be considered differently in budget deliberations.