President Carter's highly touted zero-base budgeting program is getting off to a better than expected - but still decidedly unspectacular - start.
Although key officials concede that ZBB, as the process now is known in bureaucratic jargon, has not quite revolutionized the federal budget making procedure, analysts insist in giving top government managers a little better handle on agency spending habits.
At the same time, insiders admit the program simply has not lived up to the high-blown promises implied in either presidential rhetoric. Not only has ZBB failed to yield any significant new savings, as Carter previously has [TEXT OMITTED FROM SOURCE] problems of its own.
Among them: A mountain of paperwork resulting from requirements that agencies make detailed "decision packages" on each of their hundreds of individual programs and then rank them in order of priority. In some departments, the number of annual budget documents has doubled with the onset of ZBB. In others, the increase is smaller, but the trend still is the same.
Noted Robert W. Hartman, a Brookings Institute budget expert: "In a few departments and agencies, where budget analysis has not been too sophisticted, ZBB is bound to result in better discipline and management. But in others, it actually may be making the situation worse."
Alice M. Rivlin, director of the Congressional Budget Office, is equally wary of heady claims: "You just aren't going to get miracles," she said, "out of any new procedure."
To be sure, as defenders point out it's too early to make any final judgments about the zero-base budgeting program. Th ZBB budget - due out next January - still is incomplete. The Office of Management and Budget has just finished reviewing initial requests from departments and agencies and putting them together.
But policy makers say the administration, now is far along enough in its fiscal 1979 budget process for analysts to draw some initial conclusions about the impact of zero-base budgeting, that are likely to stick even after the January budget has been complete. And the verdict is a mixed one: The procedure seems to be a useful budget making tool. But no sweeping changes are in sight.
There are these developments:
Despite Carter's frequent claims that the program would cut spending, analysts say they are unable to point to a single dollar saved by ZBB. Budget makers argue they might not be able to tell if they did - "how can you say what you would have done otherwise? "but still, the money savings benefits are elusive. "If there'd been any major net savings," an outside budget watcher said, "you would have heard about it."
Although the President has made a point of hailing ZBB as an effective tool for "reordering priorities," insiders concede there have been no sizeable shifts as a result of the program. Officials predict most major programs and bureaus will remain essentially the same in fiscal 1979, following a year of ZBB - including the Pentagon and the Department of Health, Education and Welfare.
Possibly the most visible outgrowth of the ZBB process has been a quantum jump in paperwork - a phenomenon officials expected from earlier state-level experiences. An OMB survey of the government's 23 largest agencies showed significant increases in paperwork - from 1 1/2 to 2 times previous levls in all but one department.
(The exception: The Interior Department. Planners ther actually were able to reduce the paperwork load because ZBB required them to submit one department-wide budget package, rather than the often-repetitive plans filed by Interior's disparate agencies and bureaus. In the Department of Health, Education and Welfare, however, the problem was the opposite. Budget makers there say they were innundated with paperwork from agencies and divisions.)
Moreover, as agency budget chiefs complain, the paperwork means tiedup as well. In one key governmental department, top policy officials were so bogged down in ZBB obligations that they were unable to devote time to hammering out new legislative initiatives the Secretary had wanted to propose next year. "Broad policy making functions took a back seat," one onlooker explained, "to more attention to details."
Although officials say ZBB is valuable for making decisions involving daily operating costs, insiders concede it has been virtually useless for so-called "entitlement" programs where spending levels are mandated by law - by far the lion's share of the federal budget. An OMB official points out that ZBB doesn't preclude the administration from proposing legislation to change these problems levels, as in welfare payments or veterans' benefits. But it doesn't help cope with bloated benefit levels either.
The main area where ZBB appears to have been most helpful is in giving OMB budget examiners (and central departmental budget chiefs) a better grasp of the details of existing spending - what the programs actually are about in each department and agency, and how significant the effort really is.
"We're really getting a lot better impression of priorities here than we ever did before," said one OMB official. "Before, if a cabinet officer wanted $50 million or so for some new initiative, we never were sure whether it was important or just a throwaway. Now he has to rank it with other programs. If he places it fourth out of 265 programs, it tells us one thing. If he puts it third from last, it tells us something else."
The results of the administration's new experiment essentially parallel the experience of officials in Georgia, where Carter first instituted the ZBB system as governor in 1971.
A study by George S. Minmier, a former Georgia State University researcher who now is an accounting professor at Memphis State University, showed that that program, too, produced no visible savings and increased paperwork "geometrically." (After ZBB was put into effect there, the State Highway Department budget, which previously had taken up only one large volume, grew so large it had to be hauled around on a handtruck.)
Although Carter himself proclaimed that the program saved $54 million out of the state's $1.8 million budget, the Georgia plan emerged from its maiden year with more detractors than admirers. Pete Hackney, chief budget office for the Georgia General Assembly, said, "There's not 10 cents' worth of difference between what we're doing now and what we did before ZBB began. It hasn't accomplished a thing." Other Georgia officials are somewhat more charitable, but still don't make any great claims for the program.
The difference between ZBB and traditional budget making theoretically is that ZBB forces policy makers to review every single program and expenditure each time the budget is put together - not simply to focus on new spending requests, as has been the case historically.
To do this, the major departments each prepare a series of "decision packages." For each item they administer, the agencies must show what they would do with their programs under three specific alternatives: (1) If they were given only enough money to accomplish their legally-mandated objectives; (2) If they had only enough to continue current efforts, and (3) If they had more available for new initiatives.
The departments then rank their spending packages according to their own priorities - what they think should be done first, second and so on if only limited funds are available.
In the past, the agencies simply have submitted requests for any increases they want, and attempted to justify them on paper. But any discussion of alternatives packages - and ranking, if any - has been done almost solely by OMB.
In this year's experiment, the agencies consolidated about $90,000 separate budgetary decisions into 9,500 packages.
Rather than leaving the decision entirely to top budget makers, ZBB for the first time turns everything upside down by seeking recommendations initially from the lowest-level division personnel, and then "building up" slowly to the head of a broad department. As a result, said one knowledgeable official involved in the new ZBB program, almost all of an energy's program personnel are "involved" in the budget process.
Admittedly, the initial ZBB experiment has gone more smoothly than expected. Officials who had coped with the new process in Georgia had admonished firmly against putting it all into effect the first year here. And old budget hands were skeptical at best. But the career officials, at least, now seem converted.
"We're generally pleased with the results it's produced," said Dale R. McOmber, assistant director of OMB and a key figure in the program. "It's really surprised us that it's all been this helpful."
The problem is, the procedure has its drawbacks as well as its advantages. Carter administration officials boast that forcing the agencies to rank their spending priorities in detail, the process is bringing on better management.
"Our shining example," one budget maker said, "is the Enviromental Protection Agency." Officials say the ranking system there forced agency chiefs to integrate EPA's dealings with water, air and other forms of pollution, which previously had been considered separately.
But others close to the budget making process complaing that while the procedure may give technicians a more detailed view of what is going on, it too often diverts policy makers' attention from broader issues, such as overall programs and objectives. In HEW, for example, observers report that policy planners were so preoccupied with how to cope with ZBB requirements that "no really hard decisions were made."
Moreover, departmental budget officers report the effectiveness of ZBB is spotty - visibly more pronounced in some agencies than in others. Even OMB officials concede some bureaucracies have been sloppy in preparing their decision packages, or simply have gone their own way and simply ignored central directives. As under the old system, a number tried to "pad" their budget requests to allow a cushion for cutbacks at higher levels (although OMB officials insist it's less than before ZBB appeared.)
And other lower-level officials cleverly tried to get around the ranking process by giving the lowest priorities to items they know won't get cut - in hopes of forcing OMB to approve the less-important items. "It's what we call the Washington Monument syndrome," one top budget maker said. The budget agency is taking steps to deal with the problem.
To no one's surprise, then, ZBB is most popular with top budget planners at OMB and with chief departmental budget officers. In the lower-level departments and agencies, some insiders report, it's greeted with the same enthuasism as Republican plans for draconian civil service cuts.
As with any first-time operation, OMB officials plan to make some changes in the procedufe the next time they undertake it. For one thing, planners say they will insist on more coordination in departments. HEW, for example, has to include all its budget items under one package, instead of ranking health, education and welfare spending in three separate categories.
There's no real indication yet precisely how the administration's fiscal 1979 budget will come out. A first draft is scheduled to reach President Carter's desk by Dec. 1. It is expected to show an even larger deficit than this year that some analysts say will douse for good his goal of balancing the budget by 1981. Policy makers are said to be shooting for a spending target of about $505 billion - depending on the size of the new urban financing initiative Carter is planning.
But whether the budget is held down or not, analysts say little of the credit will go to the new Carter budget program. "It's a good tool," said one key budget expert with long experience in evaluating such fiscal experiments, "but it's notproducing any revolutions."