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Letter from June E. O'Neill, Director Congressional Budget Office to Thomas Daschle re: base realignment and closure (BRAC) actions 1 (July 1998)

handle is hein.congrec/cbo9962 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE June E. O'Neill U.S. CONGRESS Director WASHINGTON, D.C. 20515 July 1, 1998 Honorable Thomas A. Daschle Democratic Leader United States Senate Washington, DC 20510 Dear Mr. Leader: In your April 17 letter, you pose 10 questions about base realignment and closure (BRAC) actions. This letter responds to those questions. In addition, I have enclosed the Congressional Budget Office's (CBO's) review of The Report of the Department of Defense on Base Realignment and Closure, which elaborates on many of the issues you address in your letter. Actual BRAC Savings. The Department is able to provide reasonable estimates of BRAC savings. Yet the firm measures of BRAC savings that were requested by the Congress do not-and indeed cannot-exist. BRAC savings are really avoided costs-costs that DoD would have incurred if BRAC actions had not taken place. Because those avoided costs are not actual expenditures, DoD cannot observe them and record them in its financial records. As a result, DoD can only estimate savings rather than actually measure them. DoD Information Systems. It is not possible for DoD to establish an information system to track actual savings. The BRAC budget justification books track only estimated savings. DoD is more successful in tracking one-time implementation costs, which typically reflect actual expenditures made from BRAC accounts. Its information systems, however, cannot always categorize those expenditures in the most useful way. For example, in its report, DoD could not provide BRAC obligations by base type for the Navy and the defense agencies. To comply with the spirit of the request in section 2824(g), DoD might try to provide better documentation of how the budget estimates for savings are made and to maintain more accessible records of BRAC costs on an installation-by-installation basis. Economic Effects of Future BRAC Rounds. DoD's report does not make detailed projections of the specific outcomes of future BRAC rounds. The economic impact of base closures on communities depends on many factors, including the size and strength

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