Budget Policy: Federal Capital Budgeting

GAO discussed proposals to establish a federal capital budget. GAO noted that: (1) a capital budget segregates capital revenues and outlays from an operating budget's revenues and outlays; (2) the federal unified budget focuses policymakers' attention on the economic impact of federal cash borrowing and is critical to understanding how federal budgetary decisions affect the business cycle in the short term as well as potential consequences for long term economic output; (3) recognizing the impact of various types of federal spending would provide a valuable supplement to the unified budget for long-term economic growth; (4) issues to be considered in developing a capital or investment budget include determining how to make resource allocation decisions and allocating federal resources among competing budgetary claims; and (5) a federal capital budget could help the federal government make better informed decisions that will foster economic growth.