1999 Federal Budget Historical Tables

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HISTORICAL

TABLES

B U D G E T O F T H E U N I T E D S T A T E S G O V E R N M

Fiscal Year 1999


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THE BUDGET DOCUMENTS

Budget o f the Uni ted S ta tes Government , F i sca l Year 1999contains the Budget Message of the President and information onthe President s 1999 budget proposals. In a ddition, the Budget in -cludes the Nat ions first compreh ensive Governm ent-wide Perform-ance Plan.

Analy t ica l Perspec t ives , Budget o f the Uni ted S ta tes Govern- ment, Fiscal Year 1999 contains analyses that are designed to high-light specified subject areas or provide other significant presentationsof budget data that place the budget in perspective.

Th e Analytical Perspectives volume includes economic and account-ing ana lyses; informa tion on Federa l receipts an d collections; analysesof Federal spending; detailed information on Federal borrowing anddebt; the Budget Enforcement Act preview report; current servicesestimates; and other technical presentations. It also includes informa-tion on the budget system and concepts and a listing of the Federalprograms by agency and a ccount.

His tor ica l Tables , Budget o f the Uni ted S ta tes Government , Fiscal Year 1999 provides data on budget receipts, outlays, sur-pluses or deficits, Federal debt, and Federal employment coveringan extended time periodin most cases beginning in fiscal year 1940or earlier and ending in fiscal year 2003. These are much longertime periods than those covered by similar tables in other budgetdocuments. As much as possible, the data in this volume and allother historical data in the budget documents have been made con-sistent with the concepts and presentation used in the 1999 Budget,so the data series are comparable over time.

Budget o f the Uni ted S ta tes Government , F i sca l Year 1999 Appendix contains detailed information on the various appropria-tions a nd funds tha t consti tute the budget an d is designed primarilyfor the use of the Appropriations Committee. The Appendix containsmore detailed financial information on individual programs and ap-

propriation accounts than any of the other budget documents. Itincludes for each agency: the proposed text of appropriations lan-guage, budget schedules for each account, new legislative proposals,explanations of the work to be performed and the funds needed,

and proposed general provisions applicable to the appropriations of entire agencies or group of agencies. Information is also providedon certain activities whose outlays are not part of the budget totals.

A Ci t izens Guid e to the Federa l Bud get , Budget o f the Uni t -ed S ta tes Governm ent , Fi sca l Year 1999 provides general informa -tion about the budget and the budget process for the general public.

Budget Sys tem and Concepts , F i sca l Year 1999 contains anexplanation of the system and concepts used to formulate the Presi-dents budget proposals.

Budget Informat ion for S ta tes , F i sca l Year 1999 is an Officeof Mana gement and Budget (OMB) publicat ion t hat provides proposedState-by-State obligations for the major Federal formula grant pro-grams to State and local governments. The allocations are basedon the proposals in the P residents budget. The report is r eleased

after the budget and can be obtained from the Publications Officeof the Executive Office of the President, 725 17th Street NW, Wash-ington, DC 20503; (202) 3957332.

AUTOMATED SOURCES OF BUD GET INFORMATION

The information contained in these documents is available inelectronic format from the following sources:

CD-ROM. The CD-ROM contains all of the budget documents andsoftware to support reading, printing, and searching the documents.The CD-ROM also has many of the tables in the budget inspreadsheet format .

Internet . All budget documents, including documents that arereleased at a future date, will be available for downloading in severalformats from the Internet. To access documents through the WorldWide Web, use t he following a ddress:

http://www.access.gpo.gov/su _docs/budget/index.htmlFor more information on access to the budget documents, call toll-

free (888) 2936498.

GENERAL NOTES

1. All years referred to are fiscal years, unless otherwise noted.2. Detail in this document ma y not add to the totals due to rounding.

U.S. GOVERNMENT PRINTING OFFICEWAS HI NG TO N 1 99 8

For sale by the U.S. Government Printing OfficeSuperintendent of Documents, Mail Stop: SSOP, Washington, D.C. 204029328


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i

Contents o f the His tor ica l Tables

Page

Introduction:St ru ctur e, Covera ge an d Concepts ........................................................................................................................................ 1

Section Notes .......................................................................................................................................................................... 5

Hist orical Tren ds .................................................................................................................................................................... 15

Section 1Overview of F edera l Govern ment Fina nces ............................................................................................................. 19Table 1.1Summ ary of Receipts, Outlays, and Surpluses or Deficits (): 17892003 ..... .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 19Table 1.2Summary of Receipts , Outlays, and Surpluses or Defici ts () as Percentages of GDP: 19302003 . .. .. .. .. .. .. 21Table 1.3Summary of Receipts, Outlays, and Surpluses or Deficits () in Current Dollars, Constant (FY 1992)

Dollars, an d as Per cent ages of GDP : 19402003 ............................................................................................................. 23Table 1.4Receipts, Outlays, and Sur pluses or Deficits () by Fun d Group: 19342003 ..... .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 25

Section 2Composition of Feder al Govern men t Receipts ......................................................................................................... 27Table 2.1Receipts by Sour ce: 193420 03 .......................................................................................................................... 27Table 2.2Per cent age Composition of Receipts by Sour ce: 19342003 ............................................................................ 29Table 2.3Receipts by Sour ce as Per centages of GDP: 19342003 .................................................................................. 31Table 2.4Composition of Social Insur ance Taxes and Contributions and of Excise Taxes: 19402003 ..... .. .. .. .. .. .. .. .. . 33Table 2.5Composition of Oth er Receipts: 194020 03 .................................................................................................... 40

Section 3Federal Govern men t Out lays by Fu nction ............................................................................................................... 42Table 3.1Out lays by Sup erfun ction a nd F un ction: 19402003 ....................................................................................... 42Table 3.2Outlays by F un ction an d Subfun ction: 19622003 ........................................................................................... 51

Section 4Feder al Govern men t Out lays by Agency .................................................................................................................. 65Table 4.1Out lays by Agency: 19622 003 .......................................................................................................................... 65Table 4.2Per cent age Distr ibution of Outlays by Agency: 19622003 ............................................................................. 70

Section 5Budget Auth ority (On-an d Off-Budget ) .................................................................................................................... 75Table 5.1Budget Auth ority by Fu nction and Subfunction: 19762003 .......................................................................... 75Table 5.2Budget Auth ority by Agency: 19762 003 .......................................................................................................... 87

Table 5.3Per cent age Distribu tion of Budget Authority by Agency: 19762003 ............................................................ 91Table 5.4Discret iona ry Bu dget Aut hority by Agency: 19762003 .................................................................................. 95Table 5.5Percentage Distribution of Discretionar y Budget Authority by Agency: 19762003 ..... .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 99

Section 6Composition of Fed era l Govern men t Ou tla ys .......................................................................................................... 103Table 6.1Comp osition of Out lays: 19402003 .................................................................................................................. 103

Section 7Feder al Debt ............................................................................................................................................................... 110Table 7.1Fed era l Debt at the End of Year: 194020 03 ................................................................................................... 110Table 7.2Debt Su bject to Sta tu tory Limit : 194020 03 .................................................................................................... 112Table 7.3Sta tu tory Limits on Feder al Debt: 1940Cu rr ent ............................................................................................ 113

Section 8Out lays by Bu dget Enforcemen t Act Cat egory ........................................................................................................ 117Table 8.1Outlays by Bu dget En forcement Act Cat egory: 19622003 ............................................................................. 117Table 8.2Outlays by Budget Enforcement Act Cat egory in Constant (FY 1992) Dollars: 19622003 ..... .. .. .. .. .. .. .. .. .. .. 118Table 8.3Percentage Distribution of Outlays by Budget E nforcement Act Cat egory: 19622003 ..... .. .. .. .. .. .. .. .. .. .. .. .. .. 119Table 8.4Outlays by Budget E nforcement Act Ca tegory as Percentages of GDP: 19622003 ..... .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 120

Table 8.5Out lays for Ma nda tory an d Related P rogram s: 19622003 ............................................................................ 121Table 8.6Outlays for Manda tory and Related Programs in Consta nt (FY 1992) Dollars: 19622003 ..... .. .. .. .. .. .. .. .. .. . 126Table 8.7Out lays for Discret ionar y Pr ogram s: 196220 03 .............................................................................................. 131Table 8.8Out lays for Discret iona ry Program s in Const an t (FY 1992) Dollars: 19622003 .......................................... 136Table 8.9Budget Auth ority for Discret iona ry P rogram s: 19762003 ............................................................................. 141

Section 9Federal Government Outlays for Major Physical Capital, Research and Development, and Education andTra inin g ...................................................................................................................................................................................... 145

Table 9.1Total Investment Outlays for Physical Capital, Research and Development, and Education and Train-ing: 196219 99 .................................................................................................................................................................... 145

Table 9.2Major Physical Capital Investment Outlays in Current and Constant (FY 1992) Dollars: 19401999 . .. .. . 146Table 9.3Major P ublic Physical Capital Investment Ou tlays in Percentage Terms: 19401999 ..... .. .. .. .. .. .. .. .. .. .. .. .. .. .. 148Table 9.4National Defense Outlays for Major Public Direct Physical Capital Investment: 19401999 ..... .. .. .. .. .. .. .. .. 150Table 9.5Nondefense Outlays for Major Public Direct P hysical Capital Investment : 19401999 ..... .. .. .. .. .. .. .. .. .. .. .. .. .. 151


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ii THE BUDGET FOR FISCAL YEAR 1999, HISTORICAL TABLES

Contents o f the His tor ica l TablesCont inu ed

Page

Section 9 (Cont inued).Table 9.6Composition of Outlays for Gran ts for Major Public Physical Capital Investment: 19411999 ..... .. .. .. .. .. .. . 153Table 9.7Summary of Outlays for the Conduct of Research and Development: 19491999 (In Current Dollars, as

Percentages of Total Out lays, as Percentages of GDP, and in Constant (FY 1992) Dollars) ... .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 159Table 9.8Composition of Outlays for the Conduct of Research an d Development: 19491999 ..... .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 160Table 9.9Composition of Outlays for the Conduct of Education an d Tr aining: 19621999 ..... .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 166

Section 10Gross Domest ic Pr oduct an d Implicit Out lay Deflat ors ........................................................................................ 169Table 10.1Gross Domestic Product and Deflators Used in the Historical Tables: 19402003 ..... .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 169

Section 11Federal Govern men t Pa yment s for Ind ividua ls ..................................................................................................... 171Table 11.1Summary Comparison of Outlays for Payments for Individuals: 19402003 (In Current Dollars, as

Percentages of Total Out lays, as Percentages of GDP, and in Constant (FY 1992) Dollars) ... .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 171Table 11.2Fu nctional Composition of Outla ys for Payment s for Ind ividua ls: 19402003 ............................................ 173Table 11.3Outlays for Pa yments for Individuals by Category and Major Program: 19402003 ..... .. .. .. .. .. .. .. .. .. .. .. .. .. .. 181

Section 12Federal Gra nt s To St ate an d Local Govern ment s ................................................................................................. 203Table 12.1Summary Comparison of Total Outlays for Grants to State and Local Governments: 19402003 (in

Current Dollars , as Percentages of Total Outlays, as Percentages of GDP, and in Constant (FY 1992) Dollars) . .. .. 203Table 12.2Total Outlays for Grants to State and Local Governments, by Function and Fund Group: 19402003 . .. 205Table 12.3Total Outlays for Grants to State and Local Governments, by Function, Agency, and Program:

19402 003 ........................................................................................................................................................................... 211

Section 13Social Secur ity a nd Medicar e .................................................................................................................................. 251Table 13.1Cash Income, Outgo, and Balances of the Social Securi ty and Medicare Trust Funds: 19362003 . .. .. .. .. . 251

Section 14Feder al Sector Tran sactions in the Nat iona l Income an d Product Account s ...................................................... 262Table 14.1Federal Transactions in the National Income and Product Accounts for Federal Fiscal Years:

19471 999 ........................................................................................................................................................................... 262Table 14.2Federal Transactions in the National Income and Product Accounts as Percentages of GDP for Federal

Fisca l Years : 194719 99 ..................................................................................................................................................... 265

Section 15Total (Federa l an d St at e an d Local) Govern men t F inan ces ................................................................................. 268Table 15.1Total Governmen t Receipts in Absolute Amounts an d as Percentages of GDP: 19471997 ..... .. .. .. .. .. .. .. .. . 268Table 15.2Total Govern men t Expend itur es: 19471997 ................................................................................................. 269Table 15.3Total Governm ent Expen ditur es as Percentages of GDP: 19471997 .......................................................... 270

Table 15.4Total Governm ent Expenditures by Major Category of Expenditure: 19471997 ..... .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 271Table 15.5Total Government E xpenditures by Major Category of Expenditure as Percentages of GDP: 19471997 272Table 15.6Total Government Surpluses or Deficits () in Absolute Amounts and as Percentages of GDP:

19471 997 ........................................................................................................................................................................... 273

Section 16Fed era l Hea lth Spen ding ......................................................................................................................................... 274Table 16.1Total Out lays for Healt h Pr ograms: 19622003 ............................................................................................. 274

Section 17Govern men t E mp loyment ........................................................................................................................................ 275Table 17.1Tota l E xecut ive Bra nch Civilian Emp loyees, 19401997 .............................................................................. 275Table 17.2Total Executive Bra nch Civilian Em ployees, 19401997 (as percenta ge of total) ....................................... 276Table 17.3Total E xecutive Bran ch Civilian F ull-Time Equivalent (FTE) Employees, 19811999 ..... .. .. .. .. .. .. .. .. .. .. .. .. . 277Table 17.4Total Executive Branch Civilian Full-Time Equivalent (FTE) Employees, 19811999 (as percentage of

tot al) ..................................................................................................................................................................................... 278Table 17.5Governm ent Em ploymen t an d Populat ion, 19621997 .................................................................................. 279


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1

INTRODUCTION

STRUCTURE, COVERAGE AND CONCEPTS

Historical T ables provides budget users witha wide range of data on Federal Governmentfinances. Many of the data series beginin 1940 and include estimates of the Presi-dents budget for 19982003. Additionally,Table 1.1 provides data on receipts, outlays,and surpluses or deficits for 19011939 andfor earlier multi-year periods.

Structure

This document is composed of 17 sections,each of which has one or more tables.Each section covers a common theme. Section1, for example, provides an overview of the budget and off-budget totals; Section2 provides tables on receipts by source;and Section 3 shows outlays by function.When a section contains several tables, thegeneral rule is to start with tables showingthe broadest overview data and then work down to more detailed tables. The purposeof these tables is to present a broad rangeof historical budgetary data in one convenientreference source and to provide relevant com-parisons most likely to be of assistance.The most common comparisons are in termsof proportions (e.g., each major receipt categoryas a percentage of total receipts and of the gross domestic product).

Section notes explain the nature of theactivities covered by the tables in each section.Additional descriptive information is also in-cluded where appropriate. Explanations aregenerally not repeated, but there are occa-sional cross-references to related materials.

Because of the numerous changes in theway budget data have been presented overtime, there are inevitable difficulties in tryingto produce comparable data to cover manyyears. The general rule is to provide datain as meaningful and comparable a fashionas possible. To the extent feasible, the dataare presented on a basis consistent withcurrent budget concepts. When a structural

change is made, insofar as possible the dataare adjusted for all years.

One significant change in recent yearsconcerns the budgetary treatment of Federalcredit programs, which was changed by theFederal Credit Reform Act of 1990. Previouslythe budget recorded the cost of direct andguaranteed loans on a cash basis. Undercredit reform, the budget only records budgetauthority and outlays for the subsidy cost

of direct and guaranteed loans made in1992 and subsequent years. The subsidyis defined as the net estimated cash flowsto and from the Government over the lifeof the loan, discounted to the present. Thecash transactions are recorded as meansof financing the deficit. Because it was impos-sible to convert the pre1992 loans to acredit reform basis, the data are on a cashbasis for pre1992 loans and on a creditreform basis for loans made in 1992 andsubsequent years.

This years budget also includes a proposedchange in the treatment of discretionaryobligation limitations for transportation trustfunds. Starting in 1997, discretionary budgetauthority equal to the obligation limitationamounts is recorded for these funds. Foryears prior to 1997, no discretionary budgetauthority is shown for these limitations.

Coverage

The Federal Government has used theunified or consolidated budget concept as

the foundation for its budgetary analysisand presentation since the 1969 budget. Thebasic guidelines for the unified budget werepresented in the Report of the PresidentsCommission on Budget Concepts (October1967). The Commission recommended thebudget include all Federal fiscal activitiesunless there were exceptionally persuasivereasons for exclusion. Nevertheless, from thevery beginning some programs were perceivedas warranting special treatment. Indeed, the


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2 THE BUDGET FOR FISCAL YEAR 1999, HISTORICAL TABLES

Commission itself recommended a bifurcatedpresentation: a unified budget composedof an expenditure account and a loanaccount. The distinction between the expendi-ture account and the loan account provedto be confusing and caused considerable com-plication in the budget for little benefit.As a result, this distinction was eliminatedstarting with the 1974 budget. However,even prior to the 1974 budget, the Export-Import Bank had been excluded by lawfrom the budget totals, and other exclusionsfollowed. The structure of the budget wasgradually revised to show the off-budget trans-actions in many locations along with theon-budget transactions, and the off-budgetamounts were added to the on-budget amountsin order to show total Federal spending.

The Ba lanced Budget a nd Em ergency DeficitControl Act of 1985 (Public Law 99177)repealed the off-budget status of all thenexisting off-budget entities, but it also includeda provision moving the Federal old-age, survi-vors, and disability insurance funds (collec-tively known as social security) off-budget.To provide a consistent time series, thebudget historical data show social securityoff-budget for all years since its inception,and show all formerly off-budget entitieson-budget for all years. The Omnibus BudgetReconciliation Act of 1989 (OBRA 1989) movedthe Postal Service fund off-budget, startingin fiscal year 1989. Prior to that year,the Postal Service fund is shown on-budget.

Though social security and the Postal Serv-ice are now off-budget, they continue tobe Federal programs. Indeed, social securitycurrently accounts for about one-fourth of all Federa l receipts an d one-fifth of all Federa lspending. Hence, the budget documents in-clude these funds and focus on the Federaltotals that combine the on-budget and off-

budget amounts. Various budget tables andcharts show total Federal receipts, outlays,and surpluses and deficits, and divide thesetotals between the portions that are on-budget and off-budget.

Changes in His tor ica l Budget Author i ty,Out lays , Receipts and Def ic i t s

The major budget totals for 1996 havechanged from those published in the 1998

Budget due to corrections of budget authorityand outlays reported to the Treasury. Budgetauthority and outlays for the FHA generaland special risk insurance funds liquidatingaccount have been reduced by $272 millionin 1996. In addition, off-budget outlays forthe Postal Service in 1996 have been increasedby $446 million and outlays for the RuralUtilities Service rural electrification tele-communications loan program account havebeen increased by $8 million. As a resultof these three changes, total outlays andthe deficit for 1996 are increased by $182million. Major budget totals have also beenchanged for 1984 through 1987 to makethe classification of Nuclear Regulatory Com-mission (NRC) fees consistent with currentclassification. The reclassification reduces gov-ernmental receipts, by amounts ranging from$13 million to $76 million, and increasesoffsetting receipts (and, thus, decreases discre-tionary outlays and total outlays) by thesame amounts. In addition, 1998 discretionarybudget authority totals have been reducedby $178 million to correct a reporting errorin the NRC account. Other changes weremade to the agency, functional or BudgetEnforcement Act category classification of certa in accounts.

Note on the Fiscal Year

The Federal fiscal year begins on October1 and ends on the subsequent September30. It is designated by the year in whichit ends; for example, fiscal year 1995 beganon October 1, 1994, and ended on September30, 1995. Prior to fiscal year 1977 theFederal fiscal years began on July 1 andended on June 30. In calendar year 1976the July-September period was a separateaccounting period (known as the transitionquarter or TQ) to bridge the period required

to shift to th e new fiscal year.

Concep t s Re levan t t o the Hi s to r i ca lTables

Budget (or on-budget) receipts constitutethe income side of the budget; they arecomposed almost entirely of taxes or othercompulsory payments to the Government. Anyincome from business-type activities (e.g., in-terest income or sale of electric power),


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3THE BUDGET FOR FISCAL YEAR 1999, HISTORICAL TABLES

and any income by Government accountsarising from payments by other Governmentaccounts is offset against outlays, so thattotal budget outlays are reported net of offsetting collections. This method of account-ing permits users to easily identify the sizeand trends in Federal taxes and other compul-sory income, and in Federal spending financedfrom taxes, other compulsory income, or bor-rowing. Budget surplus refers to any excessof budget receipts over budget outlays, whilebudget deficit refers to any excess of budgetoutlays over budget r eceipts.

The terms off-budget receipts, off-budget outlays, off-budget surpluses, and off-budget deficits refer to similar categories for off-budget activities. The sum of the on-budgetand off-budget transactions constitute theconsolidated or total Federal Governmenttransactions.

The budget is divided between two fundgroups, Federal funds and trust funds. TheFederal funds grouping includes all receiptsand outlays not specified by law as beingtrust funds. All Federal funds are on-budgetexcept for the Postal Service fund startingwith fiscal year 1989. All trust funds areon-budget, except the two social securityretirement trust funds, which are shownoff-budget for all yea rs.

The term trust fund as used in Federalbudget a ccoun ting is frequently misun derstood.In the private sector, trust refers to fundsof one party held by a second party (thetrustee) in a fiduciary capacity. In the Federalbudget, the term trust fund means onlythat the law requires the funds be accountedfor separately and used only for specifiedpurposes and that the account in whichthe funds are deposited is designated asa trust fund. A change in law may changethe future receipts and the terms underwhich t he funds resources are spent. Th e

determining factor as to whether a particularfund is designated as a Federal fund ortrust fund is the law governing the fund.

The largest trust funds are for retirement

and social insurance (e.g., civil service andmilitary retirement, social security, medicare,and unemployment benefits). They are fi-nanced largely by social insurance taxes andcontributions and payments from the generalfund (the main component of Federal funds).However, there are also major trust fundsfor transportation (highway and airport andairways) and for other programs financedin whole or in part by user charges.

The budget documents do not separatelyshow user charges. Frequently there is confu-

sion between the concept of user chargesand the concept of offsetting collections. Usercharges are charges for services rendered.Such charges may take the form of taxes(budget receipts), such as highway excisetaxes used to finance the highway trustfund. They may also take the form of business-type charges, in which case they are offsettingcollectionsoffset against budget outlays rath-er than being recorded as budget receipts.Examples of such charges are the proceedsfrom the sale of electric power by the Ten-nessee Valley Authority and medical insurance

premium s paid to medicar es supplement ar ymedical insurance trust fund. User chargesmay go to the general fund of the Treasuryor they may be earmarked. If the fundsare earmarked, it means the collections areseparately identified and used for a specifiedpurposethey are not commingled (in anaccounting sense) with any other money.This does not mean the money is actuallykept in a separate bank account. All moneyin the Treasury is merged for efficient cashmanagement. However, any earmarked fundsare accounted for in such a way that thebalances are always identifiable and availablefor the stipulated purposes.


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5

SECTION NOTES

Notes on Sec t ion 1 (Overv iew o f Fede ra lGovernmen t F inances )

This section provides an overall perspectiveon total receipts, outlays (spending), andsurpluses or deficits, the on-budget and off-budget amounts are also separately shown.Tables 1.1 and 1.2 have similar structures;1.1 shows the data in millions of dollars,while 1.2 shows the same data as percentagesof the gross domestic product (GDP). Forall the historical tables, fiscal year GDPis used to calculate percentages of GDP.The fiscal year GDP data are shown inTable 1.2. Additionally, Table 1.1 shows budg-et totals annually back to 1901 and formulti-year periods back to 1789.

Table 1.3 shows total Federal receipts,outlays, and surpluses or deficits in currentand constant dollars, and as percentagesof GDP. Section 6 provides a disaggregationof th e const an t dollar outlays.

Table 1.4 shows receipts, outlays and sur-pluses or deficits for the consolidated budgetby fund group. The budget is composedof two principal fund groupsFederal fundsand trust funds. Normally, whenever dataare shown by fund group, any paymentsfrom programs in one fund group to accountsof the other are shown as outlays of thepaying fund and receipts of the collectingfund. When the two fund groups are aggre-gated to arrive at budget totals these interfundtransactions are deducted from both receiptsand outlays in order to arrive at transactionswith the public. Table 1.4 displays receiptsand outlays on a gross basis. That is, incontrast to normal budget practice, collections

of interfund payments are included in thereceipts totals rather than as offsets to outlays.These interfund collections are grossed-upto more closely approximate cash incomean d outgo of the fund groups.

Notes on Sec t ion 2 (Compos i t ion o f Fede ra l Governmen t Rece ip t s )

Section 2 provides historical informationon on-budget and off-budget receipts. Table

2.1 shows total receipts divided into fivemajor categories; it also shows the splitbetween on-budget and off-budget receipts.Table 2.2 shows the receipts by major categoryas percentages of total receipts, while Table2.3 shows the same categories of receiptsas percentages of GDP. Table 2.4disaggregates two of the major receipts cat-egories, social insurance taxes and contribu-tions and excise taxes, and Table 2.5disaggregates the other receipts category.While the focus of the section is on totalFederal receipts, auxiliary data show the

amounts of trust fund receipts in each cat-egory, so it is possible to readily distinguishthe Federal fund and trust fund portions.

Notes on Sec t ion 3 (Fede ra l Governmen tOut l ays by Func t ion )

Section 3 displays Federal Government out-lays (on-budget and off-budget) according totheir functional classification. The functionalstructure is divided into 18 broad areas(functions) that provide a coherent and com-prehensive basis for analyzing the budget.

Each function, in turn, is divided into basicgroupings of programs entitled subfunctions.The structure has two categoriesallowancesand undistributed offsetting receiptsthat arenot truly functions but are required in orderto cover the entire budget. At times a moresummary presentation of functional data isneeded; the data by superfunction is pro-duced to satisfy this need. Table 3.1 providesoutlays by superfunction and function whileTable 3.2 shows outlays by function andsubfunction.

In arraying data on a functional basis,budget authority and outlays are classifiedaccording to the primary purpose of theactivity. To the extent feasible, this classifica-tion is made without regard to agency ororganizational distinctions. Classifying eachactivity solely in the function defining itsmost important purposeeven though manyactivities serve more than one purposepermits adding the budget authority andoutlays of each function to obtain the budget


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totals. For example, Federal spending formedicaid constitutes a health care program,but it also constitutes a form of incomesecurity benefits. However, the spending can-not be counted in both functions; since themain purpose of medicaid is to finance thehealth care of the beneficiaries, this programis classified in the health function. Section3 provides data on budget outlays by function,while Section 5 provides comparable dataon budget authority.

Notes on Sec t ion 4 (Fede ra l Governmen tOut lays by Agency)

Section 4 displays Federal Government out-lays (on- and off-budget) by agency. Table

4.1 shows the dollar amounts of such outlays,and Table 4.2 shows the percentage distribu-tion. The outlays by agency are based onthe agency structure currently in effect. Forexample, the Department of Education wasestablished by legislation enacted in 1979.However, these data show spending by theDepartment of Education in previous yearsthat consists of education spending attrib-utable to other agencies in earlier years,but now attributable to the Department of Education.

Notes on Sect ion 5 (Budget Author i tyOn- and Off-Budget)

Section 5 provides data on budget authority(BA). BA is the authority provided by lawfor agencies to obligate the Government tospend. Table 5.1 shows BA by function andsubfunction, starting with 1976. Table 5.2provides the same information by agency,and Table 5.3 provides a percentage distribu-tion of BA by agency. Tables 5.4 and 5.5provide the same displays as Tables 5.2and 5.3, but for discretionary budget authorityrather than total budget authority.

The data in these tables were compiledusing the same methods used for the budgethistorical tables for receipts and outlays (e.g.,to the extent feasible, changes in classificationare reflected retroactively so the data showthe same stream of transactions in the samelocation for all years). However, BA is hetero-geneous in nature, varying significantly fromone program to another. As a result, it

is not additiveeither across programs oragencies for a year or, in many cases, foran agency or program across a series of yearsin the same sense that budget receiptsand budget outlays are additive. The followingare examples of different kinds of BA andthe manner in which there are largedivergences between the creation and useof BA.

BA and outlays for each year may be ex-actly the same (e.g., interest on the publicdebt).

For each year the Congress may appro-priate a large quantity of BA that willbe spent over a subsequent period of years(e.g., many defense procurement contracts

an d ma jor const ru ction programs). Some BA (e.g., the salaries and expenses

of an operating agency) is made availableonly for a year and any portion not obli-gated during that year lapses (i.e., itceases to be available to be obligated).

Revolving funds may operate spendingprograms indefinitely with no new infu-sion of BA, other than the authority tospen d offsettin g collections.

BA may be enacted with the expectationit is unlikely ever to be used (e.g., standbyborrowing a ut hority).

All income to a fund (e.g., certain revolv-ing, special, and trust funds) may be per-manently appropriated as BA; as long asthe fund has adequate resources, there isno further relationship between the BAand outlays.

As a result of the Budget Enforcement Actof 1990, the measurement of BA changedin most special and trust funds with legis-latively imposed limitations or benefit for-

mulas that constrain the use of BA. Wherepreviously budget authority was the totalincome to the fund, BA in these funds for1990 and subsequent years is now an esti-mate of the obligations to be incurred dur-ing the fiscal year for benefit payments,administration and other expenses of thefund. In some, but not all, cases it waspossible to adjust BA figures for thesefunds for years prior to 1990 to conformto the current concepts. As mentioned ear-


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lier, a proposed cha nge in th is years budg-et to record discretionary budget authorityequal to the obligation limitation amountsfor transportation trust funds is reflectedfor 1997 and beyond.

Although major changes in the way BAis measured for credit programs (begin-ning in 1992) result from the Budget En-forcement Act, these tables could not bereconstructed to show revised BA figuresfor 1991 and prior years on the new basis.

In its earliest years, the Federal FinancingBank (FFB) was conducted as a revolvingfund, making direct loans to the public orpurchasing loan assets from other fundsor accounts. Each new loan by the FFBrequired new BA. In many cases, if thesame loan were made by the account beingserviced by the FFB, the loan could befinanced from offsetting collections and nonew BA would be recorded. Under termsof the 1985 legislation moving the FFBon-budget, the FFB ceased to make directloans to the public. Instead, it makes loansto the accounts it services, and these ac-counts, in tu rn, mak e the loans t o the pub-lic. Such loans could be made from newBA or other obligational authority avail-able to the parent account. These tables

have not been reconstructed to shift BApreviously scored in the FFB to the parentaccounts, because there is no technicalway to reconfigure the data.

Despite these qualifications there is a desirefor historical data on BA, and this sectionhas been developed to meet that desire.Budget authority data are also provided byfunction in Table 8.9 for various discretionaryprogram groupings.

Notes on Sec t ion 6 (Compos i t ion o f

Federal Government Out lays)The composition categories in this section

divide total outlays (including social security)into national defense and nondefense compo-nents, and then disaggregate the nondefensespending into several parts:

Payments for individuals: These are Fed-eral Government spending programs de-signed to transfer income (in cash or inkind) to individuals or families. To the ex-

tent feasible, this category does not in-clude reimbursements for current servicesrendered to the Government (e.g., salariesand interest). The payments m ay be in theform of cash paid directly to individualsor they may take the form of the provisionof services or the payment of bills for ac-tivities largely financed from personal in-come. They include outlays for the provi-sion of medical care (in veterans hospitals,for example) and for the payment of medi-cal bills (e.g., medicare). They also includesubsidies to reduce the cost of housingbelow market rates, and food and nutritionassistance (such as food stamps). The database, while not precise, provides a reason-able perspective of the size and composi-

tion of income support transfers withinany particular year and trends over time.Section 11 disaggregates the componentsof this category. The data in Section 6show a significant amount of payments forindividuals takes the form of grants toState and local governments to financebenefits for the ultimate recipients. Thesegrants include medicaid, some food andnutrition assistance, and a significant por-tion of the housing assistance payments.Sections 11 an d 12 pr ovide a m ore detaileddisaggregation of th is spending.

All other grants to State and local govern-ments: This category consists of the Fed-eral nondefense grants to State and localgovernments other than grants defined aspayments for individuals. Section 12disaggregates this spending.

Net interest: This category consists of allspending (including offsetting receipts) in-cluded in the functional category net in-terest. Most spending for net interest ispaid to the public as interest on the Fed-eral debt. As shown in Table 3.2, net inter -est includes, as an offset, significantamoun ts of int erest income.

All other: This category consists of all re-maining Federal spending and offsettingreceipts except for those included in thecategory undistributed offsetting re-ceipts. It includes most Federal loan ac-tivities and most Federal spending for for-eign assistance, farm price supports, medi-cal and other scientific research, and, in


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general, Federal direct program oper-ations.

Undistributed offsetting receipts: These areoffsetting receipts that are not offset

against any specific agency or pro-grammatic function. They are classified asfunction 950 in the functional tables. Addi-tional details on their composition can befoun d at th e end of Table 3.2.

Table 6.1 shows these outlays in currentand constant dollars, the percentage distribu-tion of current dollar outlays, and the currentdollar outlays as percentages of GDP. Theterm constant dollars means the amountsof money that would have had to be spentin each year if, on average, the unit costof everything purchased within that categoryeach year (including purchases financed byincome transfers, interest, etc.) were thesame as in the base year (1992). The adjust-ments to constant dollars are made by apply-ing a series of chain-weighted price deflatorsto the current dollar data base. The compositedeflator is used to produce estimates of constant dollar receipts published in Table1.3. The separate deflators used for thesecalculations are shown in Table 10.1.

Notes on Sec t ion 7 (Fede ra l Deb t )

This section provides information aboutFederal debt. Table 7.1 contains data ongross Federal debt and its major componentsin terms of both the amount of debt outstand-ing at the end of each year and that amountas a percentage of fiscal year GDP.

Gross Federal debt is composed both of Federal debt held (owned) by the publicand Federal debt held by Federal Governmentaccounts, which is mostly held by trustfunds. Federal debt held by the public consistsof all Federal debt held outside the FederalGovernmen t accounts. F or example, it includesdebt held by individuals, private banks andinsurance companies, the Federal ReserveBanks, and foreign central banks. The saleof Federal debt to the public is the principalmean s of finan cing t he F ederal deficit.

The Federal Government accounts holdingthe largest amount of Federal debt securitiesare the civil service and military retirement,social security, and medicare trust funds.

However, significant amounts are also heldby some other Government accounts, suchas the unemployment and highway trustfunds.

Table 7.1 divides debt held by the publicbetween the amount held by the FederalReserve Banks and the remainder. The Fed-eral Reserve System is the central bank for the Nation. Their holdings of Federaldebt are shown separately because they donot have the same impact on private creditmarkets as does other debt held by thepublic. They accumulate Federal debt asa r esult of th eir role as th e coun trys centra lbank, and the size of these holdings hasa m ajor impa ct on t he N ations money supply.Since the Federal budget does not forecastFederal Reserve monetary policy, it doesnot project future changes in the amountsof Federal debt that will be held by theFederal Reserve Banks. Hence, the split of debt held by the public into that portionheld by the Federal Reserve Banks andthe remainder is provided only for pastyears. Table 2.5 shows deposits of earningsby the Federal Reserve System. Most interestpaid by Treasury on debt held by the FederalReserve Banks is returned to the Treasuryas deposits of earnings, which are recordedas budget receipts.

As a result of a conceptual revision inthe quantification of Federal debt, the dataon debt held by the public and gross Federaldebtbut only a small part of debt heldby Government accountswere revised back to 1956 in the 1990 budget. The total revisionwas relatively smalla change of under onepercent of the recorded value of the debtbut the revised basis is more consistentwith the quantification of interest outlays,and provides a more meaningful measureof Federal debt. The change converted mostdebt held by the public from the par valueto the sales price plus amortized discount.

Most debt held by Government accountsis issued at par, and securities issued ata premium or discount have traditionallybeen recorded at par. However, zero-couponbonds are recorded at estimated market price.Starting in 1989, total debt held by Govern-ment accounts is adjusted for any initialdiscount on other securities.


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Table 7.2 shows the end-of-year amountsof Federal debt subject to the general statutorylimitation. It is recorded at par value (exceptfor savings bonds) through 1988, but bylaw the basis was changed, in part, toaccrual value for later years. Before WorldWar I, each debt issue by the Governmentrequired specific authorization by the Con-gress. Starting in 1917, the nature of thislimitation was modified in several steps untilit developed into a limit on the total amountof Federal debt outstanding. The Treasuryis free to borrow whatever amounts areneeded up to the debt limit, which is changedfrom time to time to meet new requirements.Table 7.3 shows the ceiling at each pointin time since 1940. It provides the specific

legal citation, a short description of thechange, and the amount of the limit specifiedby each Act. Most of gross Federal debtis subject to the statutory limit. However,ther e ar e some differences.

Notes on Sect ion 8 (Out lays by BudgetEnforcement Act Category)

Section 8 is composed of nine tables, eightof which present outlays by the major cat-egories used under the Budget EnforcementAct (BEA) and under previous budget agree-ments between Congress and the currentand previous Administrations. The final tablepresents discretionary budget authority. Table8.1 shows Federal outlays within each of the categories and subcategories. The principalcategories are outlays for mandatory andrelated programs and outlays for discretionaryprograms. Mandatory and related programsinclude direct spending and offsetting receiptswhose budget authority is provided by lawother than appropriations acts. These includeappropriated entitlements and the food stamp

program, which receive pro forma appropria-tions. Discretionary programs are those whosebudgetary resources (other than entitlementauthority) are provided in appropriations acts.The table shows three categories of discre-tionary programs: Defense (Function 050),International (Function 150), and Domestic(all other discretionary programs). Table 8.2has the same structure, but shows the datain constant (FY 1992) dollars. Table 8.3shows the percentage distribution of outlays

by BEA category and Table 8.4 shows outlaysby BEA category as a percentage of GDP.

Table 8.5 provides additional detail byfunction and/or subfunction for mandatory

and related programs. Table 8.6 shows thesame dat a in constan t dollars.

Table 8.7 provides additional detail byfunction and/or subfunction on outlays fordiscretionary programs. Table 8.8 providesthe same data in constant dollars. Table8.9 provides function and/or subfunction detailon budget authority for discretionary pro-grams.

Notes on Sec t ion 9 (Fede ra l Governmen tOut lays for Major Physical Capi ta l ,

Resea rch and Deve lopmen t , and Edu-cat ion and Training)

Tables in this section provide a broadperspective on Federal Government outlaysfor public physical capital, the conduct of research and development (R&D), and edu-cation and training. These data measurenew F ederal spen ding for ma jor public physicalassets, but they exclude major commodityinventories. In some cases it was necessaryto use supplementary data sources to estimatemissing data in order to develop a consistent

historical data series. The data for the conductof research and development continue toexclude outlays for construction and majorequipment because such spending is includedin outlays for physical capital.

Table 9.1 shows total investment outlaysfor major public physical capital, R&D, andeducation a nd t raining in curr ent a nd constan t(FY 1992) dollars, and shows the percentagedistribution of outlays and outlays as apercentage of GDP. Table 9.2 focuses ondirect Federal outlays and grants for major

public physical capital investment in currentand constant (FY 1992) dollars, disaggregatingdirect Federal outlays into national defenseand nondefense capital investment. Table 9.3retains the same structure as 9.2, but showsdirect Federa l outlay totals for physical capitalinvestment as percentages of total outlaysand as percentages of GDP. Table 9.4disaggregates national defense direct outlays,while Table 9.5 disaggregates nondefense out-lays for major public physical capital invest-


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ment. Table 9.6 shows the composition of grant outlays for major public physical capitalinvestment.

Table 9.7 provides an overall perspective

on Federa l Governmen t outlays for the condu ctof R&D. It shows total R&D spending andthe split between national defense and non-defense spending in four forms: in currentdollars, in constant dollars, as percentagesof total outlays, and as percentages of GDP.Table 9.8 shows outlays in current dollarsby major function a nd pr ogra m.

Table 9.9 shows outlays for the conductof education and training in current dollarsfor direct Federal programs and for grantsto State and local governments. Total outlays

for the conduct of education and trainingas a percentage of Federal outlays and inconstant (FY 1992) dollars are also shown.As with the series on physical capital, severalbudget data sources have been used to developa consistent data series extending back to1962. A discontinuity occurs between 1991and 1992 and affects primarily direct Federalhigher education outlays. For 1991 and earlier,these data include net loan outlays. Beginningin 1992, pursuant to changes in the treatmentof loans as specified in the Credit ReformAct of 1990, this series includes outlays

for loan repayments and defaults for loansoriginated in 1991 and earlier and creditsubsidy outlays for loans originated in 1992and later years.

Table 9.9 also excludes education and train-ing outlays for physical capital (which areincluded in Table 9.7) and education andtraining outlays for the conduct of researchand development (which are in Table 9.8).Also excluded are education and trainingprograms for Federal civilian and militarypersonnel.

Notes on Sect ion 10 ( Impl ic i t Out layDefla tors)

Section 10 consists of Table 10.1, GrossDomestic Product and Deflators Used in theHistorical Tables, which shows the variousimplicit deflators used to convert currentdollar outlays to constant dollars. The constantdollar deflators are based on chain-weighted(FY 1992 chained-dollars) deflators derived

from the National Income and Product Ac-count s data .

Notes on Sect ion 11 (Federal

Governmen t Paymen t s fo r Ind iv idua l s )This section provides detail on outlays

for Federal Government payments for individ-uals, which are also described in the noteson Section 6. The basic purpose of thepayments for individuals aggregation is toprovide a broad perspective on Federal cashor in-kind payments for which no currentservice is rendered yet which constitutesincome transfers to individuals and families.Table 11.1 provides an overview display of these data in four different forms. All four

of these displays show the total paymentsfor individuals, and the split of this totalbetween grants to State and local governmentsfor payments for individuals (such as medicaidand grants for housing assistance) and allother (direct) payments for individuals.

Table 11.2 shows the functional compositionof payments for individuals (see notes onSection 3 for a description of the functionalclassification), and includes the same grantsversus nongrants (direct) split provided inTable 11.1. The off-budget social securityprogram finances a significant portion of the Federal payments for individuals. Thesetables do not distinguish between the on-budget and off-budget payments for individ-uals. However, all payments for individualsshown in Table 11.2 in function 650 (socialsecurity) are off-budget outlays, and all otherpayments for individuals are on-budget. Table11.3 displays the payments for individualsby ma jor program category.

Notes on Sect ion 12 (Federal Grants ToSta t e and Loca l Governmen t s )

For several decades the Federal budgetdocuments have provided data on Federalgrants to State and local governments. Thepurpose of these data is to identify FederalGovernment outlays that constitute incometo State and local governments to help financetheir services and their income transfers(payments for individuals) to the public.Grants generally exclude Federal Governmentpayments for services rendered directly to


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the Federal Government; for example, theyexclude most Federal Government paymentsfor research and development, and they ex-clude payments to State social service agenciesfor screening disability insurance beneficiariesfor the Federal disability insurance trustfund.

Table 12.1 provides an overall perspectiveon grants; its structure is similar to thestru cture of Table 11.1.

Table 12.2 displays Federal grants by func-tion (see notes on Section 3 for a descriptionof the functional classification). The bulk of Federal grants are included in the Federalfunds group; however, since the creationof the highway trust fund in 1957, significant

amounts of grants have been financed fromtrust funds (see notes to Section 1 for adescription of the difference between Federalfunds and trust funds). All Federal grantsare on-budget. Wherever trust fund outlaysare included in those data, Table 12.2 notonly identifies the total grants by functionbut also shows the split between Federalfunds an d trust funds.

Table 12.3 provides data on grants atthe account or program level, with an identi-fication of the function, agency, and fundgroup of the payment.

Notes on Sec t ion 13 (Soc ia l Secur i ty andMedicare)

Over the past several decades the socialsecurity programs (the Federal old-age andsurvivors insurance (OASI) and the Federaldisability insurance (DI) trust funds) andthe medicare programs (the Federal hospitalinsurance (HI) and the Federal supplementarymedical insurance (SMI) trust funds) havegrown to be among the largest parts of

the Federal budget. Because of the size,the rates of growth, and the specializedfinancing of these programs, policy analystsfrequently wish to identify these activitiesseparately from all other Federal taxes andspending. As discussed in the introductorynotes, the two social security funds areoff-budget, while the medicare funds areon-budget. As Table 13.1 shows, the firstof these funds (OASI) began in 1937. Thetable shows the annual transactions of that

fund and of the other funds beginning withtheir points of origin.

The table provides detailed informationabout social security and medicare by fund.

It shows total cash income (including offsettingreceipts) by fund, separately identifying socialinsurance taxes and contributions,intragovernmental income, and proprietaryreceipts from the public. Virtually all of the proprietary receipts from the public, espe-cially those for the supplementary medicalinsurance trust fund, are medicare insurancepremiums. The table shows the income, outgo,and surplus or deficit of each fund foreach year, and also shows the balancesof the funds available for future requirements.Most of these fund balances are invested

in public debt securities and constitute asignificant portion of the debt held by Govern-ment accounts (see Table 7.1).

The SMI fund, which was established in1967, is financed primarily by payments fromFederal funds and secondarily by medicalinsurance premiums (proprietary receipts fromthe public). The other three trust fundsare financed primarily by social insurancetaxes. The law establishing the rate andbase of these taxes allocates the tax receiptsamong the th ree funds.

The table shows significant transfers byOASI and DI to the railroad retirementsocial secur ity equivalent a ccoun t. These t ra ns-fers are equal to the additional amountsof money social security would have hadto pay, less additional receipts it wouldhave collected, if the rail labor force hadbeen included directly under social securitysince the inception of the social securityprogram.

In 1983, when the OASI fund ran shortof money, Congress passed legislation that

(a) provided for a one-time acceleration of military service credit payments to thesetrust funds, (b) provided for a Federal fundpayment to OASDI for the estimated valueof checks issued in prior years and chargedto the trust funds but never cashed, (c)required that the Treasury make paymentsto OASDHI on the first day of the monthfor the estimated amounts of their socialinsurance taxes to be collected over thecourse of each month (thereby increasing


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each affected t ru st funds balan ces at th ebeginning of the month), and (d) subjectedsome social security benefits to Federal incomeor other taxes and provided for paymentsby Federal funds to social security of amountsequal to these additional taxes. Additionally,in 1983 the OASI fund borrowed from theDI and H I funds (the t ables show the amountsof such borrowing and repayments of borrow-ing). The large intragovernmental collectionsby OASDHI in 1983 are a result of thetransactions described under (a) and (b) above.Also starting in 1983, OASI began payinginterest to DI and HI to reimburse themfor the balances OASI borrowed from them;OASDHI paid interest to Treasury to com-pensate it for the balances transferred tothese funds on the first day of each month.The legal requirement for Treasury to makepayments on the first day of the month,and the associated interest payment, endedin 1985 for HI and in 1991 for OASIand DI.

Notes on Sec t ion 14 (Fede ra l Sec to rTransac t ions in the Na t iona l Incomeand Produc t Accoun t s )

The principal system used in the UnitedStates for measuring total economic activity

is the system of national income and productaccounts (NIPA), which provide calculationsof the GDP and related data series. Thesedata are produced by the Bureau of EconomicAnalysis (BEA) of the Department of Com-merce. As part of this work the BEA staff analyze the budget data base and estimatetran sactions consistent with this measu rementsystem. The NIPA data are normally producedfor calendar years and quarters. Section 14provides Federal Sector NIPA data on afiscal year basis.

Notes on Sect ion 15 (Tota l (Federal andS ta t e and Loca l ) Governmen t F inances )

Section 15 provides a perspective on thesize and composition of total Government(Federal, State, and local) receipts and spend-ing. Both the Bureau of the Census andthe Bureau of Economic Analysis in theCommerce Department provide information(in the national income and product accounts(NIPA) data) on income and spending for

all levels of government in the United States.These tables include the NIPA State andlocal transactions with the Federal Govern-ment (deducting the amount of overlap dueto Federal grants to State and local govern-ments) to measure total Government receiptsan d spending on a fiscal year basis.

Notes on Sect ion 16 (Federal Heal thSpend ing)

Section 16 consists of Table 16.1, TotalOutlays for Health Programs. This tableshows a broad definition of total Federalhealth spending by type of health program,including defense and veterans health pro-gram s, medicare, medicaid, Federa l employeeshealth benefits and other health spending.It also shows Federal health spending aspercentages of total outlays and of GDP.

Notes on Sect ion 17 (FederalEmployment )

Section 17 provides an overview of thesize and scope of the Federal work force.The measures of Federal employment cur-rently in use are end-strength and full-time equivalents (FTEs). End-strength is themeasure of total positions filled at the end

of the fiscal year, representing a head countof all pa id emp loyees.

Federal employment in the ExecutiveBranch, however, is controlled on the basisof FTEs. Full-time equivalent (FTE) employ-ment is the measure of the total numberof regular (non-overtime) hours worked byan employee divided by the number of compen-sable hours applicable to each fiscal year.A typical FTE workyear is equal to 2,080hours. Put simply, one full-time employeecounts as one FTE, and two employees whowork half-time count as one FTE. FTE datahave been collected for Executive Branchagencies since 1981.

The tables included in this section illustratethe size of the governmental work forcesutilizing these measures. Table 17.1 showsthe end-strength of the Executive Branchand selected agencies starting in 1940. Table17.2 shows the end-strength of the ExecutiveBranch and selected agencies as a percentageof total Executive Branch employment starting


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in 1940. Table 17.3 shows FTEs for theExecutive Branch and selected agencies for1981 and subsequent years; Table 17.4 showsthese FTEs as a percentage of total ExecutiveBranch FTEs. Table 17.5 shows a comparison

of the end-strengths of Federal employmentand State and local government employment,and the total of the two as a percentageof th e U.S. population in each year.


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15

HISTORICAL TRENDS

Because the Historical Tables publicationprovides a large volume and wide arrayof data on Federal Government finances,it is sometimes difficult to perceive the longerterm patterns in various budget aggregatesand components. To assist the reader inunderstanding some of these longer termpatterns, this section provides a short sum-mary of the trends in Federal deficits andsurpluses, debt, receipts, outlays and employ-ment .

Deficits and Debt. As shown in Table1.1, except for periods of war (when spendingfor defense increased sharply), depressionsor other economic downturns (when receiptsfell precipitously), the Federal budget wasgenerally in surplus throughout most of theNations first 200 years. For our first 60years as a Nation (through 1849), cumulativebudget surpluses and deficits yielded a netsurplus of $70 million. The Civil War, alongwith the Spanish-American War and thedepression of the 1890s, resulted in a cumu-lative deficit totaling just under $1 billionduring the 18501900 period. Between 1901

and 1916, the budget hovered very closeto balance every year. World War I broughtlarge deficits that totaled $23 billion overthe 19171919 period. The budget was thenin surplus throughout the 1920s. However,the combination of the Great Depressionfollowed by World War II resulted in along, unbroken string of deficits that werehistorically unprecedented in magnitude. Asa result, Federal debt held by the publicmushroomed from less than $3 billion in1917 to $16 billion in 1930 and then to$242 billion by 1946. In relation to thesize of the economy, debt held by the publicgrew from 15% of GDP in 1930 to 109%in 1946.

During much of the postwar period, thissame pattern persistedlarge deficits wereincurred only in time of war (e.g., Koreaand Vietnam) or as a result of recessions.As shown in Table 1.2, prior to the 1980s,postwar deficits as a percent of GDP reachedtheir highest during the 197576 recession

at 4.3% in 1976. Debt held by the publichad grown to $477 billion by 1976, but,because the economy had grown faster, debtas a percent of GDP had declined throughoutthe postwar period to a low of 23.9% in1974, climbing back to 27.6% in 1976. Follow-ing five years of deficits averaging 2.5%of GDP between 1977-1981, debt held bythe public rose to 25.8% of GDP by 1981,only two percentage points higher than itspostwar low.

The traditional pattern of running largedeficits only in times of war or economicdownturns was broken during the rest of the 1980s. In 1982, large tax cuts wereenacted as were substantial increases indefense spending. Reductions in nondefensespending were not sufficient to offset theimpact on the deficit. As a result, deficitsaveraging $207 billion were incurred between1983 and 1992. As a result of these unprece-dented peacetime deficits, debt held by thepublic grew from $785 billion in 1981 to$3.0 trillion (48.8% of GDP) in 1992.

Since peaking at $290 billion in 1992,

deficits have declined each year, droppingto a level of $22 billion in 1997. As apercent of GDP, deficits were reduced bynearly 95% during those 5 years, from 4.7%in 1992 to 0.3% in 1997. Debt held bythe public, which peaked at 50.2% of GDPin 1993, has fallen to 47.3% in 1997.

Receipts. From the beginning of the Re-public until the start of the Civil War,our Nation relied on customs duties to financethe activities of the Federal Government.During the 19th Century, sales of public

lands supplemented customs duties. Whilelarge amounts were occasionally obtained fromthe sale of lands, customs duties accountedfor over 90% of Federal receipts in mostyears prior to the Civil War. Excise taxesbecame an important and growing sourceof Federal receipts starting in the 1860s.Estate and gift taxes were levied and collectedsporadically from the 1860s through WorldWar I, although never amounting to a signifi-cant source of receipts during that time.


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Prior to 1913, income taxes did not existor were inconsequential, other than for abrief time during the Civil War period, whenspecial tax legislation raised the income taxshare of Federal receipts to as much as13% in 1866. Subsequent to the enactmentof income tax legislation in 1913, thesetaxes grew in importance as a Federal receiptssource during following decade. By 1930,the Federal Government was relying on in-come taxes for 60% of its receipts, whilecustoms duties and excise taxes each ac-counted for 15% of the receipts total.

During the 1930s, total Federal receiptsaveraged about 5% of GDP. World WarII brought a dramatic increase in receipts,with the Federal receipts share of GDPpeaking at 20.9% in 1944. The share declinedsomewhat after the war and has remainedfairly steady since the early 1950s, fluctuatingbetween 1620% of GDP, and are currentlyat 19.8% of GDP. Despite staying withinthis 4% range during the postwar period,there have been some significant shifts overtime in the underlying sources or compositionof receipts .

The increase in taxes needed to supportthe war effort in the 1940s saw the incometax rise to prominence as a source of Federal

receipts, reaching nearly 80% of total receiptsin 1944. After the war, the income taxshare of total receipts fell from a postwarhigh of 74% in 1952 to 64% in the late1960s. The growth in social insurance taxes(such as social security and medicare) morethan offset a postwar secular decline inexcise and other non-income tax shares. Thecombination of substantial reductions in in-come taxes enacted in the early 1980s andthe continued growth in social insurancetaxes has resulted in a continued declinein the income tax share of total receipts.By 1983 income taxes had dropped to 54%of total receipts and have remained between53% an d 58% since th en.

Corporation income taxes accounted for alarge part of this postwar decline, fallingfrom 30% of total Federal receipts in theearly 1950s to 20% in 1969. During thesame period, pretax corporate profits fellfrom about 12% of GDP in the early 1950sto 10% in 1968. By 1980 the corporation

income tax share of total receipts had droppedto 12.5%. During the 1980s, pretax corporateprofits declined as a percent of GDP and,thus, the corporation income tax share droppedto as low as 6.2% in 1983, but eventuallyclimbed back to 11.8% in 1996 and 11.5%in 1997still below the 1980 share. Thissharp drop in corporation income tax shareof total receipts was more than offset bythe growth in social insurance taxes, asboth tax rates and percentage of the workforcecovered by these taxes increased. Social insur-ance taxes increased from only 8% of totalreceipts during the mid-1940s to 38% by1992, and declining to 34% by 1997. Excisetaxes have also declined in relative importanceduring the postwar period, falling from a

19% share in 1950 to slightly under 4%currently.

Outlays and Federal employment. Through-out m ost of th e Na tions h istory prior t othe 1930s, the bulk of Federal spendingwent towards national defense, veterans bene-fits and interest on the public debt. In1929, for example, 71% of Federal outlayswere in these three categories. The 1930sbegan with Federal outlays comprising just3.3% of GDP. As shown in Table 1.2, theefforts to fight the Great Depression withpublic works and other nondefense Federalspending, when combined with the depressedGDP levels, caused outlays and their shareof GDP to increase steadily during mostof that decade, with outlays rising to 10.3%of GDP by 1939 and to 12.0% by 1941on the eve of U.S. involvement in WorldWar II. Defense spending during World WarII resulted in outlays as a percent of GDPrising sharply, to a peak of 43.7% in 1944.The end of the war brought total spendingdown to 14.3% of GDP by 1949. Then theKorean war increased spending to an average

19.5% of GDP for a few years in the early1950s, but outlays as a percent of GDPthen stabilized at around 1719% until U.S.involvement in the Vietnam war escalatedsharply in the middle 1960s and early 1970s.From 1967 through 1972, Federal outlaysaveraged 19.6% of GDP. The decline indefense spending as a percent of GDP thatbegan in 1971, as the Vietnam War beganto wind down, was more than offset byincreased spending on human resources pro-


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grams during the 1970sdue to the matura-tion of the social security program and otherlongstanding income support programs, aswell as a takeoff in spending on the recentlyenacted Great Society programs, such asmedicare and medicaidso that total spendingincreased as a percent of GDP, averaging20.9% during the last half of that decade.Also contributing to the increase in Federalspending was a substantial increase through-out the 1970s in grants to State and localgovernments. Since receipts were averaging18% of GDP during the decade, chronicdeficits averaging 2% of GDP were incurred(contributing to this was the recession of 197576, which saw deficits increase to 4.3%in 1976).

The 1980s began with substantial momen-tum in the growth of Federal nondefensespending in the areas of human resources,grants to State and local governments, and,as a result of the deficits incurred throughoutthe 1970s, interest on the public debt. Inthe early 1980s, a combination of substantiallyincreased defense spending, continued growthin human resource spending, a tax cut anda recession caused the deficits to soar, which,in turn, sharply increased spending for inter-est on the public debt. Federal spendingclimbed to an average of nearly 23% of GDP during the 1981-1985 period. Partialreversals of the tax cut and rapid defensebuildup, along with a strong economy duringthe second half of the decade, brought Federalspending back down to 21.4% of GDP by1989. In the early 1990s, another recession,in the face of continued rapid growth inFederal health care spending and additionalspending necessitated by the Savings andLoan crisis, caused outlays to average over22.5% of GDP in 1991 and 1992. Duringthe past five years, this outlay growth trendwas reversed. Outlays have begun to fallas a percent of GDP, dropping to 20.1%by 1997.

Despite the growth in total Federal spendingas a percent of GDP in the postwar period,Federal employment, as shown in Table 17.1,has remained roughly constant, ranging from1.8 to 2.3 million civilian employees (excludingthe Postal Service) throughout this period.The composition of employment has shifteddramatically between defense and civilian

agencies over the last 35 years. In 1951,for example, of the 2.0 million employees,1.2 million worked for the Department of Defense and 0.7 million worked for civilianagencies. By 1974, Federal employment wassplit equally between defense and civilianagencies, with each accounting for 1.07 millionemployees. After a buildup in defense civilianemployment in the 1980s, the shift awayfrom defense to civilian agency employmentresumed in the 1990s, so that by 1997civilian agency employment was 1.15 millionand Department of Defense employment was0.72 million, nearly the reverse of the propor-tions in 1951. During the past several yearstotal Federal employment has begun to de-cline. Since 1992, when there were over

2.2 million civilians employed by the FederalGovernment, reductions of over 350 thousandemployees have been achieved, bringing Fed-eral employment down to less than 1.9 millionin 1997.

Although total spending has increased sub-stantially as a percent of GDP since the1950s, the growth in the various componentsof spending has not been even and, thus,the composition of spending has changedsignifican tly dur ing th e sam e period.

Discretionary spending totaled 12.7% of

GDP in 1962, with three-fourths going todefense. Defense spending increased duringthe Vietnam War buildup in the late 1960scausing total discretionary outlays to riseto 13.6% of GDP by 1968, after whicha secular decline began. By the middle 1970s,this category had dropped to 10% of GDP.It fluctuated between 9

1 2 10

1 2 % of GDP

un til the lat e 1980s, when t he defense buildupthat started early in that decade ended.Total discretionary spending has fallen moresharply over the past ten years, from 9.4%in 1988 to 6.9% in 1997. Although totaldiscretionary spending has followed a pathof secular decline over the past 25 years,its major componentsdefense and non-defensehave experienced contrasting his-tories.

Defense discretionary spending was at 9.3%of GDP in 1962. As shown in Table 8.4,spending in this category had declined to7.4% of GDP by 1965, then increased asa result of the Vietnam War. After peaking


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at 9.5% of GDP in 1968, it returned tothe 1965 level by 1971. The decline continuedthroughout the 1970s, hitting a low pointof 4.7% of GDP in 1979. The defense buildupstarting in the early 1980s boosted its percent-age of GDP back to 6.3% by 1986, afterwhich it again began a gradual declinethroughout the rest of that decade. By 1997,defense discretionary spending stood at 3.4%of GDP, reflecting the impact of the endof the Cold War on our Nations defenserequirements.

Nondefense discretionary spending as apercent of GDP has followed a much differentpath. In 1962, it stood at 3.4% of GDP.During the next few years it quickly increased,reaching 4.2% of GDP by 1967. It dropped

slightly after that year, but still averagedabout 4.0% of GDP until 1975, when itsurged to 4.5% of GDP due to the recessionand, in part, to growth in spending onenergy and the environment, housing andother income support programs. Much of this growth was in the form of Federalgrants to State and local governments. Addi-tional grant spending arose from the creationof General Revenue Sharing in 1972 andvarious anti-recession grants at the end of the decade. Nondefense discretionary outlayspeaked as a percent of GDP during therecession in 1980 at 5.2%. They declinedsharply as a percent of GDP starting in1982, falling to 4.0% by 1985 and to 3.5%during the 19871990 period. Spending forthese programs has increased slightly since1990, climbing to 3.8% by 1992 before fallingback to 3.4% in 1997.

Programmatic mandatory spending (whichexcludes net interest and undistributed offset-ting receipts) accounts for a large part of the growth in total Federal spending asa percent of GDP since the 1950s. Major

programs in this category include social secu-rity, medicare, deposit insurance and means-tested entitlements (medicaid, aid to depend-ent children, food stamps and other programssubject to an income test). Prior to thestart of medicare and medicaid in 1966,this category averaged 5.7% of GDP between

1962 and 1965 (less than half the sizeof total discretionary spending), with socialsecurity accounting for nearly half. Withina decade, this category was comparable insize to total discretionary spending, nearlydoubling as a percent of GDP to 10.6%by 1976 (1.1% of which was for unemploymentcompensation that year).

Although part of this growth representedthe impact of the 197576 recession on GDPlevels and outlays for unemployment com-pensation, the largest part was due to growthin social security, medicare and medicaid.These three programs totaled 3.4% of GDPin 1968 and grew rapidly to 5.6% of GDPby 1976. While social security stabilized asa percent of GDP during 19851997, rangingfrom 4.3% to 4.7%, the growth in otherprogrammatic mandatory spending has contin-ued to outpace the growth in GDP sincethe mid-1970s (apart from the recessionaryperiods) due largely to medicare and medicaid.These two programs, which were 1.4% of GDP in 1976, have more than doubled asa percent of GDP since then, reaching 3.5%in 1997. Excluding medicaid, spending formeans-tested entitlements in 1997 was at1.2% percent of GDP, less than it wastwenty years ago in 1976. By way of contrast,

the remaining programmatic mandatoryspending i.e, excluding medicare, unemploy-ment compensation, social security, depositinsurance and means-tested entitlementshas been halved as a percent of GDP, fallingfrom 2.8% in 1976 to 1.4% of GDP in1997. (Major programs in t his grouping includeFederal employee and railroad retirement,veteran s benefits other t ha n vetera ns pen-sions, and farm price supports.) Nevertheless,total programmatic mandatory spending in1997 had reached 10.8% of GDP comparedto 6.9% for total discretionary spending.

Additional perspectives on spending trendsavailable in this document include spendingby agency, by function and subfunction andby composition of outlays categories, whichinclude payments for individuals and grantsto State and local governments.


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Table 1.1SUMMARY OF RECEIPTS, OUTLAYS, AND SURPLUSES OR DEFICITS(): 17892003(in millions of dollars)

YearTotal On-Budget Off-Budget

Receipts Outlays Surplus orDeficit () Receipts OutlaysSurplus orDeficit () Receipts Outlays

Surplus oDeficit (

17891849 ....................................................................... 1,160 1,090 70 1,160 1,090 70 .................. .................. ....18501900 ....................................................................... 14,462 15,453 991 14,462 15,453 991 .................. .................. ...

1901 ................................................................................. 588 525 63 588 525 63 .................. .................. .....1902 ................................................................................. 562 485 77 562 485 77 .................. .................. .....1903 ................................................................................. 562 517 45 562 517 45 .................. .................. .....1904 ................................................................................. 541 584 43 541 584 43 .................. .................. .....

1905 ................................................................................. 544 567 23 544 567 23 .................. .................. .....1906 ................................................................................. 595 570 25 595 570 25 .................. .................. .....1907 ................................................................................. 666 579 87 666 579 87 .................. .................. .....1908 ................................................................................. 602 659 57 602 659 57 .................. .................. .....1909 ................................................................................. 604 694 89 604 694 89 .................. .................. .....

1910 ................................................................................. 676 694 18 676 694 18 .................. .................. .....1911 ................................................................................. 702 691 11 702 691 11 .................. .................. ......1912 . .. .. ... .. .. .. ... .. .. ... .. .. .. ... .. .. .. ... .. .. .. ... .. .. ... .. .. .. ... .. .. .. ... .. .. . 693 690 3 693 690 3 ... .. .. .. ... .. .. .. .. .. ... .. .. .. ... .. . ... ..1913 ................................................................................. 714 715 * 714 715 * .................. .................. ....1914 ................................................................................. 725 726 * 725 726 * .................. .................. ....

1915 ................................................................................. 683 746 63 683 746 63 .................. .................. .....1916 ................................................................................. 761 713 48 761 713 48 .................. .................. .....1917 ................................................................................. 1,101 1,954 853 1,101 1,954 853 .................. .................. ....1918 ................................................................................. 3,645 12,677 9,032 3,645 12,677 9,032 .................. .................. ...1919 ................................................................................. 5,130 18,493 13,363 5,130 18,493 13,363 .................. .................. ..

1920 ................................................................................. 6,649 6,358 291 6,649 6,358 291 .................. .................. ....1921 ................................................................................. 5,571 5,062 509 5,571 5,062 509 .................. .................. ....1922 ................................................................................. 4,026 3,289 736 4,026 3,289 736 .................. .................. ....1923 ................................................................................. 3,853 3,140 713 3,853 3,140 713 .................. .................. ....1924 ................................................................................. 3,871 2,908 963 3,871 2,908 963 .................. .................. ....

1925 ................................................................................. 3,641 2,924 717 3,641 2,924 717 .................. .................. ....1926 ................................................................................. 3,795 2,930 865 3,795 2,930 865 .................. .................. ....1927 ................................................................................. 4,013 2,857 1,155 4,013 2,857 1,155 .................. .................. ...1928 ................................................................................. 3,900 2,961 939 3,900 2,961 939 .................. .................. ....1929 ................................................................................. 3,862 3,127 734 3,862 3,127 734 .................. .................. ....

1930 ................................................................................. 4,058 3,320 738 4,058 3,320 738 .................. .................. ....1931 ................................................................................. 3,116 3,577 462 3,116 3,577 462 .................. .................. ....1932 ................................................................................. 1,924 4,659 2,735 1,924 4,659 2,735 .................. .................. ...1933 ................................................................................. 1,997 4,598 2,602 1,997 4,598 2,602 .................. .................. ...1934 ................................................................................. 2,955 6,541 3,586 2,955 6,541 3,586 .................. .................. ...

1935 ................................................................................. 3,609 6,412 2,803 3,609 6,412 2,803 .................. .................. ...1936 ................................................................................. 3,923 8,228 4,304 3,923 8,228 4,304 .................. .................. ...1937 ................................................................................. 5,387 7,580 2,193 5,122 7,582 2,460 265 2 1938 ................................................................................. 6,751 6,840 89 6,364 6,850 486 387 10

1999 Federal Budget Historical Tables

Documents

Transcript of 1999 Federal Budget Historical Tables