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ment effort to move our Budget Analysis Data System from off-site mainframes to a server based in CBO. That is to say, they have already been devoted to other purposes and have been taken into account in our budget request.


One of your efforts for the coming year is to streamline your procurement process. You currently utilize the financial system of the Library of Congress, which has a procurement component.

Question. Will you be investigating the possibility of using that system, which is already tied to the financial system?

Answer. One of the steps already taken to improve our procurement process was our recent implementation of the Library of Congress's, automated procurement program. It is a component of the financial management system that the library provides under our current interagency agreement.


For the record, insert all reprogramming documents submitted to and received from the Committee.

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I would like your approval to reprogram $190,000 within the Congressional Budget Office's fiscal year 2000 appropriation. If approved, the reprogramming will let CBO fund two ADP projects to upgrade desktop computers and to obtain a tape backup system for our large capacity disk storage unit. Savings in administrative expenses, primarily mailing, printing, and communications costs, will pay for these projects.

Upgrade Personal Computers for New Operating System

In order to migrate to the next generation operating system and not experience a significant performance decline, CBO plans to replace sixty-eight of its older microcomputers at a cost of about $135,000. This will complete the effort to upgrade personal computers that was started in fiscal year 1999, and implement a purchase we had anticipated in the initial budget request for fiscal year 2000.

Purchase Tape Backup for Large Capacity Storage

To meet the high-volume data demands that feed current and developing economic models, CBO has moved to a large capacity disk storage system. This equipment holds vast amounts of data that is shared by many users. However, current resources are unable to provide backup and restore this important data. CBO wants to purchase a tape-based system, at a cost of about $55,000, that will perform this task in a reliable and timely fashion, while providing the capacity to handle future growth in this method of storage.

Thank you for your consideration of this request. If you have any questions, please contact me, or you may wish to have your staff contact our Chief Financial Officer, Polly Hodges, at 226-2609.


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Mr. TAYLOR. Since we are going to the floor with the transportation legislation a little later I must ask you the question about what are your current tax surplus projections and how do they compare with those that we had in January? We have all been hearing what is going to happen. We want to see what your thoughts are.

Mr. CRIPPEN. We are interested as well. We just started, Mr. Chairman, the process a couple weeks ago that we go through to update our reporting. The report we will issue in August, which is a typical time frame for us. Our economic advisors from around the country were in 2 weeks ago, and we will now refine in the next week or so our economic forecasts and start determining what the budget implications are.

We have noted, as is obvious in the Monthly Treasury Statement and other sources, that corporate tax collections are down somewhat over what we had expected. This is also true for personal withholding, but that decline is less certain and more variable. So in the Analysis of the President's Budget we produced a month ago, we reduced the amount of corporate taxes we expected for the upcoming tax year by about $20 billion.

On the other hand, outlays are running below what we had projected as well. So all in all, and most of what I am telling you appeared in our Analysis of the President's Budget-what we have seen so far doesn't change dramatically in either the short run or long run. My guess is-but it is only a guess at this point-as others have conjectured as well, that our revenue projections will be down a bit more, come August, for the next fiscal year, too; but the long-run estimates will stay pretty much where they are.

That is not to say there will actually be $5.6 trillion surplus, which is the 10-year total that you hear a lot about, but we haven't seen any evidence that the productivity increases we have seen over the last few years are going away. So we have no reason at this point to change the long-term estimates. The obvious softness in the economy will cause some diminution in revenue over the next year or two, but we think not in a major way as we work through this.

Over the month of July, we will get precise numbers for our midsession_review, but at the moment, as I say, it doesn't look as if the on-budget surplus, for example, which is what we are all focused on the moment, for the next year will go away. You'll have the room that the budget resolution provides, certainly plus some, to work in.

Mr. TAYLOR. Well, then, you feel that the $1.3 trillion tax reduction and the $2 trillion budget reduction planned over the 10-year period is on track and would not be disturbed precipitously, and that would still give you an adequate spending budget?

Mr. CRIPPEN. I would certainly agree with that for 2002, which is the year you are currently working on. The 2003-4 time period looks to be a little tighter. That is not to say there will be no onbudget surpluses, but they could be in single-digit billions, plus or minus, because of the pattern of both the tax cuts and spending.

economy will have come back, and we will be in good shape for the future years. But right now, 2003 and 2004 are certainly closeif you want to draw a line around both Social Security and the hospital insurance trust funds-then we are getting close to that line in 2003 and 2004.

Mr. TAYLOR. Those of us, in my district, who are anxious and appreciative of the tax reductions will be feeling more assured, and we appreciate that. And those of us who want to continue to reduce the debt will feel then, especially in the protections of Social Security and Medicare, will feel secure. It will just be up to Congress to stay within our spending limits, so that we do not create problems for ourselves.

Thank you very much for your appearance today and we appreciate your good job.

Mr. CRIPPEN. Thank you, sir.

Mr. TAYLOR. The committee will be in recess now, subject to the call of the Chair. Also, I have some questions that Mr. Hoyer has submitted to be answered for the record.

[The questions for the record from Mr. Hoyer and the responses follow:]


Question. Some argue that Congress should fund your education fund. You obviously believe it could be successful as you have proposed to structure it. How much money are you talking about?

Answer. In the first year, CBO could effectively use $350,000 to carry out the activities under the new authority. This amount would fund six to eight highly specialized educational conferences attended by CBO employees and other legislative branch analysts; one highly competitive fellowship for an academic economist to perform targeted research while in residence at CBO; and one or two CBO employees' pursuit of long-term training or development work experience expected to benefit economic or budget-related work essential to CBO in accomplishing its mission. If successful, and deemed cost-effective, the program could grow modestly over a 5year period by perhaps 5 percent per year in financial terms. Question. Who might contribute to such a fund, and why?

Answer. Potential contributors would be major philanthropic organizations that have an interest in strengthening the quality of public policy analysis and developing better public finance and budget concepts. Possible examples might be the Ford Foundation or the Robert Wood Johnson Foundation, which have long supported research and advances in public policy education and methodology. The motivation would likely be to improve the quality of advice and analytical support that the Congress receives in the legislative decisionmaking process.

Question. Can you imagine rejecting some gifts or bequests?

Answer. Certainly, a grant or gift provided for a purpose deemed inconsistent with CBO's core mission or the agency's reputation for independence would not be considered.

Question. The education program would allow what might be called "externships" for CBO staff in other agencies or governments, or even the private sector. Where might CBO employees go and what benefits might you anticipate the agency might realize from putting CBO staff in such placements?

Answer. We can envision a sojourn to the Federal Reserve Board for a CBO macroeconomist, an assignment with an academic research department specializing in public finance for one of our financial economists, or a return to academia for specialized training for one of our economists who specializes in a particular subject area. Such arrangements would allow staff to update their methodological or subject matter knowledge or to pursue a specific research topic critical to our future work, and to do so in an environment enriched by colleagues working on similar topics. Question. Over 75 percent of the additional funds you are requesting for 2002 will be used for salaries and benefits. Do these increases reflect your efforts to keep your salary levels competitive?

Answer. Our mandatory pay and benefit increases are directly related to the con

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