Pursuant to a congressional request, GAO reviewed the proposals for alternative organizational placement of the U.S. Coast Guard, focusing on: (1) the organizational alternatives in terms of their likely impact on the Coast Guard's essential character, multimission capabilities, and funding; and (2) the actions the Coast Guard has taken and will need to take to ensure optimal use of available resources. GAO found that: (1) the Coast Guard's budget increased from $1.7 billion to $3.1 billion between fiscal year (FY) 1980 and FY 1989; (2) the Coast Guard's budget growth was attributable to substantial funding assistance from sources outside the transportation appropriation, most notably funds appropriated for national defense and drug interdiction; (3) while moving the Coast Guard or making it independent might enhance its effectiveness in certain functional areas, such steps are not likely to increase its available resources or enhance its overall effectiveness; and (4) the Coast Guard has yet to fully develop and implement a performance management system capable of determining how efficiently it uses resources and how well its programs are achieving their objectives.