Budget of the U.S. Government 2012

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Historical

tablesBudget of the u.S. government

Fiscal year 2012

Budget.gov

office of management and Budget


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Budget of the United States Government, FiscalYear 2012 contains the Budget Message o the President,

inormation on the Presidents priorities, budget over-views organized by agency, and summary tables.

Analytical Perspectives, Budget of the UnitedStates Government, Fiscal Year 2012 contains analy-

ses that are designed to highlight specied subject areasor provide other signicant presentations o budget data

that place the budget in perspective. This volume includeseconomic and accounting analyses; inormation on Federalreceipts and collections; analyses o Federal spending; in-

ormation on Federal borrowing and debt; baseline or cur-rent services estimates; and other technical presentations.

TheAnalytical Perspectivesvolume also contains sup-plemental material with several detailed tables, including

tables showing the budget by agency and account and byunction, subunction, and program, that is available onthe Internet and as a CD-ROM in the printed document.

Historical Tables, Budget of the United StatesGovernment, Fiscal Year 2012 provides data on budgetreceipts, outlays, surpluses or decits, Federal debt, and

Federal employment over an extended time period, gener-ally rom 1940 or earlier to 2012 or 2016.

To the extent easible, the data have been adjusted to

provide consistency with the 2012 Budget and to providecomparability over time.

Appendix, Budget of the United States

Government, Fiscal Year 2012 contains detailed in-ormation on the various appropriations and unds that

constitute the budget and is designed primarily or theuse o the Appropriations Committees. TheAppendix con-tains more detailed nancial inormation on individual

programs and appropriation accounts than any o theother budget documents. It includes or each agency: the

proposed text o appropriations language; budget sched-ules or each account; legislative proposals; explanationso the work to be perormed and the unds needed; and

proposed general provisions applicable to the appropria-tions o entire agencies or group o agencies. Inormation

is also provided on certain activities whose transactionsare not part o the budget totals.

AUTOMATED SOURCES OF

BUDGET INFORMATION

The inormation contained in these documents is avail-

able in electronic ormat rom the ollowing sources:

Internet. All budget documents, including documentsthat are released at a uture date, spreadsheets o manyo the budget tables, and a public use budget database

are available or downloading in several ormats rom theInternet at www.budget.gov/budget. Links to documents

and materials rom budgets o prior years are also provided.

Budget CD-ROM. The CD-ROM contains all o thebudget documents in ully indexed PDF ormat along withthe sotware required or viewing the documents. The

CD-ROM has many o the budget tables in spreadsheetormat and also contains the materials that are included

on the separateAnalytical Perspectives CD-ROM.

For more inormation on access to electronic versions o thebudget documents (except CD-ROMs), call (202) 512-1530 in

the D.C. area or toll-ree (888) 293-6498. To purchase the bud-get CD-ROM or printed documents call (202) 512-1800.

THE BUDGET DOCUMENTS

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON 2010

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ISBN 978-0-16-087368-3

GENERAL NOTES

1. All years reerenced or budget data are scal years unless otherwise noted.

2. Detail in this document may not add to the totals due to rounding.

3. At the time o this writing, none o the ull-year appropriations bills or 2011 was enacted; thereore, theprograms and activities normally provided or in the ull-year appropriations bills were operating under acontinuing resolution (P.L. 111242, as amended). For those programs and activities, data or the current yearcolumn (2011) in the budgetAppendix, and in tables that show details on discretionary spending amounts intheAnalytical Perspectives volume, refect the annualized level provided by the continuing resolution. In themainBudget volume, theHistorical Tables volume, and in tables that include total discretionary spendingin theAnalytical Perspectives volume, current year totals by agency and or the total Government will matchthe Presidents 2011 Budget request.


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i

Contents of the Historical Tables

Page

Introduction:

Structure, Coverage, and Concepts......................................................................................................................................... 1

Historical Trends .................................................................................................................................................................... 5Section Notes ........................................................................................................................................................................... 12

Section 1Overview o Federal Government Finances ............................................................................................................... 21

Table 1.1Summary o Receipts, Outlays, and Surpluses or Decits (): 17892016 ....................................................... 21

Table 1.2Summary o Receipts, Outlays, and Surpluses or Decits () as Percentages o GDP: 19302016 .......... ....... 24

Table 1.3Summary o Receipts, Outlays, and Surpluses or Decits () in Current Dollars, Constant (FY 2005)

Dollars, and as Percentages o GDP: 19402016 .............................................................................................................. 26

Table 1.4Receipts, Outlays, and Surpluses or Decits () by Fund Group: 19342016 ................................................... 28

Section 2Composition o Federal Government Receipts ........................................................................................................... 30

Table 2.1Receipts by Source: 19342016 ............................................................................................................................ 30

Table 2.2Percentage Composition o Receipts by Source: 19342016 ............................................................................... 32

Table 2.3Receipts by Source as Percentages o GDP: 19342016 ..................................................................................... 34

Table 2.4Composition o Social Insurance and Retirement Receipts and o Excise Taxes: 19402016 .......................... 36

Table 2.5Composition o Other Receipts: 19402016 ...................................................................................................... 45Section 3Federal Government Outlays by Function................................................................................................................. 47

Table 3.1Outlays by Superunction and Function: 19402016.......................................................................................... 47

Table 3.2Outlays by Function and Subunction: 19622016 ............................................................................................. 56

Section 4Federal Government Outlays by Agency.................................................................................................................... 77

Table 4.1Outlays by Agency: 19622016 ............................................................................................................................ 77

Table 4.2Percentage Distribution o Outlays by Agency: 19622016 ................................................................................ 84

Section 5Budget Authority by Agency and by Subunction ..................................................................................................... 91

Table 5.1Budget Authority by Function and Subunction: 19762016 ............................................................................. 91

Table 5.2Budget Authority by Agency: 19762016 ............................................................................................................ 106

Table 5.3Percentage Distribution o Budget Authority by Agency: 19762016 ................................................................ 111

Table 5.4Discretionary Budget Authority by Agency: 19762016 ..................................................................................... 116

Table 5.5Percentage Distribution o Discretionary Budget Authority by Agency: 19762016 ........................................ 121

Table 5.6Budget Authority or Discretionary Programs: 19762016 ................................................................................ 126Section 6Composition o Federal Government Outlays ............................................................................................................ 131

Table 6.1Composition o Outlays: 19402016..................................................................................................................... 131

Section 7Federal Debt ................................................................................................................................................................ 139

Table 7.1Federal Debt at the End o Year: 19402016 ....................................................................................................... 139

Table 7.2Debt Subject to Statutory Limit: 19402016 ....................................................................................................... 141

Table 7.3Statutory Limits on Federal Debt: 1940Current............................................................................................... 142

Section 8Outlays by Budget Enorcement Act Category and Budget Authority or Discretionary Programs ...................... 145

Table 8.1Outlays by Budget Enorcement Act Category: 19622016................................................................................ 145

Table 8.2Outlays by Budget Enorcement Act Category in Constant (FY 2005) Dollars: 19622016 ............................ 147

Table 8.3Percentage Distribution o Outlays by Budget Enorcement Act Category: 19622016 ................................... 149

Table 8.4Outlays by Budget Enorcement Act Category as Percentages o GDP: 19622016 ......................................... 151

Table 8.5Outlays or Mandatory and Related Programs: 19622016 .............................................................................. 153

Table 8.6Outlays or Mandatory and Related Programs in Constant (FY 2005) Dollars: 19622016 ........................... 160Table 8.7Outlays or Discretionary Programs: 19622016 ................................................................................................ 167

Table 8.8Outlays or Discretionary Programs in Constant (FY 2005) Dollars: 19622016 ............................................. 174

Section 9Federal Government Outlays or Major Public Physical Capital, Research and Development, and

Education and Training ............................................................................................................................................................ 181

Table 9.1Total Investment Outlays or Major Public Physical Capital, Research and Development, and

Education and Training: 19622012 ................................................................................................................................. 181


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ii THE BUDGET FOR FISCAL YEAR 2012, HISTORICAL TABLES

Contents of the Historical TablesContinued

Page

Table 9.2Major Public Physical Capital Investment Outlays in Current and Constant (FY 2005) Dollars:

19402012 ........................................................................................................................................................................... 182Table 9.3Major Public Physical Capital Investment Outlays in Percentage Terms: 19402012......... .......... .......... ....... 184

Table 9.4National Deense Outlays or Major Public Direct Physical Capital Investment: 19402012 ........................ 186

Table 9.5Nondeense Outlays or Major Public Direct Physical Capital Investment: 19402012 ................................. 188

Table 9.6Composition o Outlays or Grants or Major Public Physical Capital Investment: 19412012 ..................... 190

Table 9.7Summary o Outlays or the Conduct o Research and Development: 19492012 (in Current Dollars,

in Constant (FY 2005) Dollars, as Percentages o Total Outlays, and as Percentages o GDP) ..................................... 198

Table 9.8Composition o Outlays or the Conduct o Research and Development: 19492012 ....................................... 200

Table 9.9Composition o Outlays or the Conduct o Education and Training: 19622012 ............................................. 208

Section 10Gross Domestic Product and Implicit Outlay Defators .......................................................................................... 211

Table 10.1Gross Domestic Product and Defators Used in the Historical Tables: 19402016 ......................................... 211

Section 11Federal Government Payments or Individuals ...................................................................................................... 213

Table 11.1Summary Comparison o Outlays or Payments or Individuals: 19402016 (in Current Dollars, as

Percentages o Total Outlays, as Percentages o GDP, and in Constant (FY 2005) Dollars) .... .......... .......... .......... ....... 213Table 11.2Functional Composition o Outlays or Payments or Individuals: 19402016 ............................................... 215

Table 11.3Outlays or Payments or Individuals by Category and Major Program:

19402016 ........................................................................................................................................................................... 224

Section 12Federal Grants to State and Local Governments .................................................................................................... 250

Table 12.1Summary Comparison o Total Outlays or Grants to State and Local Governments: 19402016

(in Current Dollars, in Constant (FY 2005) Dollars, as Percentages o Federal Outlays, and as Percentages

o GDP) ................................................................................................................................................................................ 250

Table 12.2Total Outlays or Grants to State and Local Governments by Function and Fund Group: 19402016 ........ 252

Table 12.3Total Outlays or Grants to State and Local Governments by Function, Agency, and

Program: 19402012 ........................................................................................................................................................... 259

Section 13Social Security and Medicare ................................................................................................................................... 311

Table 13.1Cash Income, Outgo, and Balances o the Social Security and Medicare Trust Funds: 19362016 ........... ... 311

Section 14Federal Sector Transactions in the National Income and Product Accounts ......................................................... 326Table 14.1Federal Transactions in the National Income and Product Accounts or Federal

Fiscal Years: 19482012 ..................................................................................................................................................... 326

Table 14.2Federal Transactions in the National Income and Product Accounts as Percentages

o GDP or Federal Fiscal Years: 19482012 ..................................................................................................................... 333

Section 15Total (Federal and State and Local) Government Finances ................................................................................... 340

Table 15.1Total Government Receipts in Absolute Amounts and as Percentages o GDP: 19482010 .......................... 340

Table 15.2Total Government Expenditures: 19482010 .................................................................................................... 342

Table 15.3Total Government Expenditures as Percentages o GDP: 19482010 ............................................................. 344

Table 15.4Total Government Expenditures by Major Category o Expenditure: 19482010 .......................................... 346

Table 15.5Total Government Expenditures by Major Category o Expenditure as

Percentages o GDP: 19482010 ........................................................................................................................................ 348

Table 15.6Total Government Surpluses or Decits () in Absolute Amounts and as Percentages

o GDP: 19482010 ............................................................................................................................................................. 350Section 16Federal Health Spending .......................................................................................................................................... 352

Table 16.1Outlays or Health Programs: 19622016 ......................................................................................................... 352

Section 17Executive Branch Civilian Full-Time Equivalent Employment ............................................................................. 353

Table 17.1Total Executive Branch Civilian Full-Time Equivalent (FTE) Employees: 19812012 ............................... 353

Table 17.2Total Executive Branch Civilian Full-Time Equivalent (FTE) Employees:

19812012 as percentage o total ...................................................................................................................................... 354


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1

INTRODUCTION

STRUCTURE, COVERAGE, AND CONCEPTS

Historical Tables provides a wide range odata on Federal Government nances. Manyo the data series begin in 1940 and includeestimates o the Presidents budget or 20112016. Additionally, Table 1.1 provides data onreceipts, outlays, and surpluses or decits or19011939 and or earlier multiyear periods.

Structure

This document is composed o 17 sections,each o which has one or more tables. Eachsection covers a common theme. Section 1, or

example, provides an overview o the budgetand o-budget totals; Section 2 providestables on receipts by source; and Section 3shows outlays by unction. When a sectioncontains several tables, the general rule is tostart with tables showing the broadest over-view data and then work down to more de-tailed tables. The purpose o these tables is topresent a broad range o historical budgetarydata in one convenient reerence source andto provide relevant comparisons likely to bemost useul. The most common comparisonsare in terms o proportions (e.g., each majorreceipt category as a percentage o total re-ceipts and o the gross domestic product).

Section notes explain the nature o the ac-tivities covered by the tables in each section.Additional descriptive inormation is also in-cluded where appropriate. Explanations aregenerally not repeated, but there are occa-sional cross-reerences to related materials.

Because o the numerous changes in theway budget data have been presented over

time, there are inevitable diculties in tryingto produce comparable data to cover manyyears. The general rule is to provide data inas meaningul and comparable a ashion aspossible. To the extent easible, the data arepresented on a basis consistent with currentbudget concepts. When a structural changeis made, insoar as possible the data are ad-justed or all years.

One signicant change made in the early1990s concerns the budgetary treatment oFederal credit programs, which was changedby the Federal Credit Reorm Act o 1990.Previously the budget recorded the cost odirect and guaranteed loans on a cash basis.Under credit reorm, the budget recordsbudget authority and outlays or the subsidycost o direct and guaranteed loans made in1992 and subsequent years. The subsidy isdened as the net estimated cash fows toand rom the Government over the lie o theloan, discounted to the present. The remain-

ing cash transactions o credit programs arerecorded as a means o nancing the decit.Because it is impossible to convert the pre-1992 loans to a credit reorm basis, the dataare on a cash basis or pre-1992 loans and ona credit reorm basis or loans made in 1992and subsequent years.

Coverage

The Federal Government has used theunied or consolidated budget concept asthe oundation or its budgetary analysisand presentation since the 1969 budget. Thebasic guidelines or the unied budget werepresented in the Report o the PresidentsCommission on Budget Concepts (October1967). The Commission recommended thebudget include all Federal scal activitiesunless there were exceptionally persuasivereasons or exclusion. Nevertheless, romthe very beginning some programs wereperceived as warranting special treatment.Indeed, the Commission itsel recommendeda biurcated presentation: a unied budget

composed o an expenditure account and aloan account. The distinction between theexpenditure account and the loan accountproved to be conusing and caused consid-erable complication in the budget or littlebenet. As a result, this distinction waseliminated starting with the 1974 budget.However, even prior to the 1974 budget, theExport-Import Bank had been excluded by


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THE BUDGET FOR FISCAL YEAR 2012, HISTORICAL TABLES2

law rom the budget totals, and other exclusionsollowed. The structure o the budget was gradu-ally revised to show the o-budget transactionsin many locations along with the on-budgettransactions, and the o-budget amounts were

added to the on-budget amounts in order toshow total Federal spending and receipts.

The Balanced Budget and Emergency DecitControl Act o 1985 (Public Law 99177) re-pealed the o-budget status o all then existingo-budget entities, but it also included a provi-sion moving the Federal old-age, survivors, anddisability insurance unds (collectively known asSocial Security) o-budget. To provide a consis-tent time series, the budget historical data showSocial Security o-budget or all years sinceits inception, and show all ormerly o-budget

entities on-budget or all years. The OmnibusBudget Reconciliation Act o 1989 (OBRA 1989)moved the Postal Service und o-budget, start-ing in 1989. Again to provide a consistent timeseries, transactions o the Postal Service undare shown o-budget beginning with its incep-tion in 1972. The transactions o its predecessor,the Post Oce Department, remain on-budget.

Though Social Security and the PostalService are now o-budget, they continue tobe Federal programs. Indeed, Social Securitycurrently accounts or about one-ourth o allFederal receipts and over one-th o all Federalspending. Hence, the budget documents includethese unds and ocus on the Federal totals thatcombine the on-budget and o-budget amounts.Various budget tables and charts show totalFederal receipts, outlays, and surpluses anddecits, and divide these totals between the por-tions that are on-budget and o-budget.

Changes in Historical Budget Authority,

Outlays, Receipts, and Decits

This years annual consultations with theCongress regarding reclassication o accountsor activities as to unction or subunction result-ed in two account reclassications, which onlyaected data or FY 2010 and beyond:

The Patient-Centered Outcomes ResearchTrust Fund and the Payment to the Patient-

Centered Outcomes Research Trust Fund wereoriginally misclassied in the Mid-SessionReview o the FY 2011 Budget as subunction551 (Health care services). The subunction wascorrected or the FY 2012 Budget and both ac-

counts are now classied as subunction 552(Health research and training).

The Budget Scorekeeping Group reclassiedthe Budget Enorcement Act (BEA) o budgetauthority and outlays o 22 Working CapitalFunds rom the Mandatory category to the Dis-cretionary category. This reclassication to dis-cretionary was limited to the working capitalunds currently classied as mandatory thatcollect discretionary purchase orders romother accounts and then purchase goods or ser-vices or them.

The Budget Scorekeepers group also correct-ed the BEA Category classication o InteriorDepartment osetting receipts or HardrockMining Holding Fees, which they determinedhad been incorrectly classied as Mandatory.As a result, both net Budget Authority and netOutlays or the mandatory category increase(and or discretionary, decrease).

A minor reclassication o budget authorityand outlays associated with certain activities othe Food Stamp (SNAP) program and Child Nu-trition program between the BEA discretionaryand mandatory categories was made in order toreach a common classication o these activities.These changes aect category classications or19972009. Amounts in any one year change byno more than $25 million.

In the Mid-Session Review o the FY 2011Budget, a correction was made to the classi-cation o the Recoveries account in the OilSpill Liability Trust Fund. This account hadpreviously been classied as a Governmental

Receipt. Ater discussions with the Congres-sional Budget Oce it was determined thatthe account should be classied as an Oset-ting Receipt. As a result, governmental receiptswere reduced and osetting receipts increasedby equal amounts (ranging rom $2 million to$60 million) back to FY 1990. Since budget au-thority and outlays are reported net o osetting


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3THE BUDGET FOR FISCAL YEAR 2012, HISTORICAL TABLES

receipts, total budget authority and outlays werereduced by the same amounts as governmentalreceipts were reduced, producing no change inthe budget surplus or decit.

Very minor adjustments have also been madeto refect corrections in agency reporting provid-ed to the Treasury Department.

Note on the Fiscal Year

The Federal scal year begins on October 1and ends on the subsequent September 30. Itis designated by the year in which it ends; orexample, scal year 2010 began on October 1,2009, and ended on September 30, 2010. Priorto scal year 1977 the Federal scal years beganon July 1 and ended on June 30. In calendar

year 1976 the July-September period was a sep-arate accounting period (known as the transi-tion quarter or TQ) to bridge the period requiredto shit to the new scal year.

Data or the Current Year

At the time o this writing, none o the ull-year appropriations bills or 2011 was enacted;thereore, the programs and activities normallyprovided or in the ull-year appropriations billswere operating under a continuing resolution(P.L. 111242, as amended). For those programsand activities, data or the current year column(2011) in the budget Appendix, and in tablesthat show details on discretionary spendingamounts in the Analytical Perspectives volume,refect the annualized level provided by the con-tinuing resolution. In the mainBudget volume,theHistorical Tables volume, and in tables thatinclude total discretionary spending in theAna-lytical Perspectives volume, current year totalsby agency and or the total Government willmatch the Presidents 2011 Budget request.

Note on Proposed Reclassication oCertain Programs

The Budget includes a proposal to change thenancing o certain ground transportation pro-grams, which would result in the reclassicationo certain activities as to Budget EnorcementAct (BEA) categories. A similar reclassicationoccurs or registration (6b)ees collected by the

Securities and Exchange Commission (SEC) asa result o the recently enacted nancial reormbill (the Dodd-Frank Wall Street Reorm andConsumer Protection Act). The proposed reclas-sications arent eective until 2012, but, or

purposes o comparability, the Budget estimat-ies show the category reclassications startingin 2010. Tables in this document that displayBudget Enorcement Act (BEA) categoriesrefect these reclassications as starting in 2011in order to show the actual categorization or2010. As a result, discretionary and mandatorycategory totals or 2011 and beyond are not ullycomparable with corresponding totals or 2010and prior years.

Concepts Relevant to the Historical Tables

Budget receipts constitute the income side othe budget; they are composed almost entirelyo taxes or other compulsory payments to theGovernment. In contrast, any income rombusiness-type activities (e.g., interest income orthe sale o electric power), and any income byGovernment accounts arising rom paymentsby other Government accounts, is oset againstoutlays, so that total budget outlays are reportednet o osetting collections. This method o ac-counting permits users to easily identiy the sizeand trends in Federal taxes and other compul-sory income, and in Federal spending nancedrom taxes, other compulsory income, or borrow-ing. The budget surplus reers to any excess obudget receipts over budget outlays, while thebudget decit reers to any excess o budgetoutlays over budget receipts.

The terms o-budget receipts, o-budgetoutlays, o-budget surpluses, and o-budgetdefcits reer to similar categories or o-bud-get activities. The sum o the on-budget ando-budget transactions are reerred to as theconsolidated, unied, or total Federal Govern-

ment transactions.

The budget is divided between two undgroups, Federal unds and trust unds. TheFederal unds group includes all receipts andoutlays not specied by law as being trust unds.All Federal unds are on-budget except or thePostal Service und, which is shown as o-bud-get starting in 1972. All trust unds are on-bud-


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get, except the two Social Security retirementand disability trust unds, which are shown o-budget or all years.

The term trust und as used in Federal budget

accounting is requently misunderstood. In theprivate sector, trust reers to unds o one partyheld by a second party (the trustee) in a du-ciary capacity. In the Federal budget, the termtrust und means only that the law requiresthe unds be accounted or separately and usedonly or specied purposes and that the accountin which the unds are deposited is designatedas a trust und. A change in law may changethe uture receipts and the terms under whichthe unds resources are spent. The determiningactor as to whether a particular und is desig-nated as a Federal und or trust und is the

designation specied in the law governing theund.

The largest trust unds are or retirementand social insurance (e.g., civil service and mili-tary retirement, Social Security, Medicare, andunemployment benets). They are nancedlargely by social insurance taxes and contribu-tions and payments rom the general und (themain component o Federal unds). However,there are also major trust unds or transporta-tion (highway and airport and airways) and orother programs nanced in whole or in part bybeneciary-based, dedicated taxes.

Sometimes there is conusion between budgetreceipts and osetting receipts and osettingcollections. Receipts are income that resultsrom the Governments exercise o its sovereignpower to tax, or otherwise compel payment, aspreviously noted. They are also called govern-mental receipts or budget receipts. Osettingcollections and osetting receipts result romeither o two kinds o transactions: business-

like or market-oriented activities with the publicand intragovernmental transactions, the receiptby one Government account o a payment romanother account.

For example, the budget records the proceedsrom the sale o postage stamps, the ees chargedor admittance to recreation areas, and the pro-ceeds rom the sale o Government-owned landas osetting collections or osetting receipts.These are proprietary osetting collections orosetting receipts, coming rom the public tothe Government. Sometimes, however, pay-ments are made rom one Government agencyto another, creating intragovernmental osettingreceipts or collections. For example, the GeneralServices Administration receives payments romother Government agencies or the rent o oce

space. These are credited as osetting collec-tions in the Federal Buildings Fund. Osettingcollections and osetting receipts are deductedrom gross budget authority and outlays, ratherthan added to receipts. This treatment producesbudget totals or receipts, budget authority, andoutlays that represent governmental transac-tions with the public rather than market activity.

When unds are dedicated, it means the re-ceipts or collections are separately identied andused or a specied purposethey are not com-mingled (in an accounting sense) with any othermoney. This does not mean the money is actuallykept in a separate bank account. All money inthe Treasury is merged or ecient cash man-agement. However, any dedicated unds are ac-counted or in such a way that the balances arealways identiable and available or the stipu-lated purposes.


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5

HISTORICAL TRENDS

Because the Historical Tables publica-tion provides a large volume and wide array

o data on Federal Government nances, itis sometimes dicult to perceive the long-term patterns in various budget aggregatesand components. To assist the reader inunderstanding some o these long-termpatterns, this section provides a shortsummary o the trends in Federal decitsand surpluses, debt, receipts, outlays andemployment.

Defcits and Debt.As shown in Table 1.1,except or periods o war (when spending ordeense increased sharply), depressions, or

other economic downturns (when receiptsell precipitously), the Federal budget wasgenerally in surplus throughout most othe Nations rst 200 years. For our rst 60years as a Nation (through 1849), cumula-tive budget surpluses and decits yieldeda net surplus o $70 million. The CivilWar, along with the Spanish-American Warand the depression o the 1890s, resultedin a cumulative decit totaling just under$1 billion during the 18501900 period.Between 1901 and 1916, the budget hoveredvery close to balance every year. WorldWar I brought large decits that totaled$23 billion over the 19171919 period. Thebudget was then in surplus throughout the1920s. However, the combination o theGreat Depression ollowed by World War IIresulted in a long, unbroken string o de-cits that were historically unprecedented inmagnitude. As a result, Federal debt heldby the public mushroomed rom less than$3 billion in 1917 to $16 billion in 1930 andthen to $242 billion by 1946. In relationto the size o the economy, debt held by the

public grew rom 16 percent o GDP in 1930to 109 percent in 1946.

During much o the postwar period,this same pattern persistedlarge de-cits were incurred only in time o war (e.g.,Korea and Vietnam) or as a result o reces-sions. As shown in Table 1.2, prior to the1980s, postwar decits as a percent o GDP

reached their highest during the 197576recession at 4.2 percent in 1976. Debt held

by the public had grown to $477 billion by1976, but, because the economy had grownaster, debt as a percent o GDP had de-clined throughout the postwar period to alow o 23.9 percent in 1974, climbing backto 27.5 percent in 1976. Following veyears o decits averaging only 2.5 percento GDP between 1977 and 1981, debt heldby the public stood at 25.8 percent o GDPby 1981, less than two percentage pointshigher than its postwar low.

The traditional pattern o running large

decits only in times o war or economicdownturns was broken during much o the1980s. In 1982, large permanent tax cutswere enacted. Moreover, these were accom-panied by substantial increases in deensespending. Although reductions were madeto nondeense spending, they were not osucient size to oset the impact on thedecit. As a result, decits averaging $206billion were incurred between 1983 and1992. These unprecedented peacetime de-cits increased debt held by the public rom$789 billion in 1981 to $3.0 trillion (48.1percent o GDP) in 1992.

Ater peaking at $290 billion in 1992,decits declined each year, dropping to alevel o $22 billion in 1997. In 1998, theNation recorded its rst budget surplus($69.3 billion) since 1969. As a percent oGDP, the budget bottom line went rom adecit o 4.7 percent in 1992 to a surpluso 0.8 percent in 1998, increasing to a 2.4percent surplus in 2000. An economic slow-down began in 2001. The deterioration in

the perormance o the economy togetherwith large tax reductions, as well as addi-tional spending in response to the Septem-ber terrorist attacks, produced a drop in thesurplus rom $236 billion in 2000 to $128billion (1.3 percent o GDP) in 2001 and areturn to decit ($158 billion, 1.5 percento GDP) in 2002. These actors also con-tributed to the increase in the decit in the


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ollowing two years, reaching $413 billion (3.5percent o GDP) in 2004. Economic growth in2005 and 2006 produced a sharp increase inrevenues, helping to reduce the decit to $248billion (1.9 percent o GDP) in 2006 and even

urther to $161 billion (1.2 percent o GDP) in2007.

Debt held by the public, which had peakedat 49.3 percent o GDP in 1993, ell to 32.5percent by 2001 and increased thereater,reaching 36.9 percent by 2005. The declines inthe decit in 2006 and 2007 helped to reducedebt held by the public to 36.2 percent o GDPin 2007.

In December 2007, the economy ell intorecession. In response, tax reductions in the

orm o rebates were enacted in mid-February2008. In addition, several years o poor pri-vate-sector mortgage lending practices andother risky nancial market behaviors led toa nancial market crisis in September 2008that signicantly deepened the ongoing re-cession. Lower revenue (due to both the taxreductions and lower economic activity) andrecession-induced spending or unemploy-ment assistance and other automatic stabiliz-ers combined with a large stimulus package ourther tax reductions and program increasesas well as increased deense spending (duepartly to the surge o troops in Iraq and, sub-sequently, in Aghanistan) to produce decitsin 2008 o $459 billion (3.2 percent o GDP),$1,413 billion (10.0 percent o GDP) in 2009,and dropping to $1,294 billion (8.9 percent oGDP) in 2010. As a result there were corre-sponding increases in debt held by the publicto 40.3 percent o GDP in 2008, 53.5 percento GDP in 2009 and 62.2 percent o GDP in2010. The Government used a portion o theincreased debt to acquire nancial assets romthe private sector as a way o ameliorating

the nancial market crisis and assisting theeconomy. These nancial assets can be consid-ered osets to the increase in the debt; takingthem into account, however, still shows thatdebt net o nancial assets increased to 47.1percent o GDP by the end o 2009 and 54.4percent o GDP by the end o 2010.

Receipts.From the beginning o theRepublic until the start o the Civil War, ourNation relied on customs duties to nance theactivities o the Federal Government. Duringthe 19th Century, sales o public lands supple-

mented customs duties. While large amountswere occasionally obtained rom the saleo lands, customs duties accounted or over90 percent o Federal receipts in most yearsprior to the Civil War. Excise taxes becamean important and growing source o Federalreceipts starting in the 1860s. Estate and gittaxes were levied and collected sporadicallyrom the 1860s through World War I, althoughnever amounting to a signicant source o re-ceipts during that time. Prior to 1913, incometaxes did not exist or were inconsequential,other than or a brie time during the Civil

War period, when special tax legislation raisedthe income tax share o Federal receipts to asmuch as 13 percent in 1866. Subsequent to theenactment o income tax legislation in 1913,these taxes grew in importance as a source oFederal receipts during the ollowing decade.By 1930, the Federal Government was relyingon income taxes or 60 percent o its receipts,while customs duties and excise taxes each ac-counted or 15 percent o the receipts total.

During the 1930s, total Federal receipts av-eraged about 5 percent o GDP. World War IIbrought a dramatic increase in receipts, withthe Federal receipts peaking at 20.9 percento GDP in 1944. The percentage declinedsomewhat ater the war and has remainedbetween 16 percent20 percent o GDP duringmost o this time. In recent years, receiptshave increased as a percent o GDProm17.5 percent in 1992 to 20.6 percent in 2000,dropping back to 16.1 percent in 2004 beoreincreasing to 18.2 percent in 2006 and 18.5percent in 2007. The eects o the recession onthe rate o growth in GDP and on receipts col-

lections in 2008 combined to reduce the GDPshare o receipts back to the 1992 level o 17.5percent. The deepening recession and urthertax reductions enacted in 2009 to help revivethe economy urther reduced receipts as apercent o GDP to 14.9, the lowest since 1950.Receipts were also at 14.9 percent o GDP in2010. There have also been some signicant


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shits during the postwar period in the under-lying sources or composition o receipts.

The increase in taxes needed to support thewar eort in the 1940s saw total (corporate and

individual) income taxes rise to prominence asa source o Federal receipts, reaching nearly 80percent o total receipts in 1944. Ater the war,the total income tax share o receipts ell rom apostwar high o 74 percent in 1952 to an averageo 64 percent in the late 1960s. The growth insocial insurance taxes (such as Social Secu-rity and Medicare) more than oset a postwarsecular decline in excise and other non-incometax shares. The combination o substantial re-ductions in income taxes enacted in the early1980s and the continued growth in social insur-ance taxes resulted in a continued decline in

the total income tax share o receipts. By 1983the total income tax share had dropped to 54percent o receipts, and it remained in the 53to 56 percent range until the mid-1990s. Since1994, the total income tax share o receipts hasincreased, reaching 60 percent in 2000, beoredropping back to 52 percent by 2003 and thenincreasing to 58 percent in 2006 and 60 percentin 2007. As a result o the recession and tax re-ductions enacted as part o the stimulus pack-ages in February 2008 and again in the springo 2009, the total income tax share dropped to 57percent in 2008 and dropped even urther, to 50percent in 2009. In 2010 the income tax share oreceipts rose slightly to 50.4 percent.

Corporation income taxes accounted ora large part o this postwar decline in totalincome tax share, alling rom over 30 percento total Federal receipts in the early 1950s to20 percent in 1969. During the same period,pretax corporate prots ell rom about 12percent o GDP in the early 1950s to 10percent in 1968. By 1980 the corporationincome tax share o total receipts had dropped

to 12.5 percent. Pretax corporate prots alsodeclined as a percent o GDP during the 1980sand, thus, the corporation income tax share ototal receipts dropped to a low o 6.2 percentin 1983. By 1996, the share had climbed backto 11.8 percent. But, by 2003, it had droppedback to 7.4 percent, well below the 1980 share,beore climbing back to 10.1 percent in 2004

and increasing urther to 14.7 percent in 2006.The December 2007 recession reduced the cor-poration income tax share o total receiptsto 12.1 percent in 2008 and substantiallyreduced their share to just 6.6 percent in 2009.

In 2010 the share rose to 8.9 percent.

This postwar drop in corporation incometaxes as a share o total receipts has beenmore than oset by the growth in social in-surance taxes and retirement receipts, as bothtax rates and the percentage o the workorcecovered by these payroll taxes increased.This category o receipts increased rom only8 percent o total receipts during the mid-1940s to 38 percent by 1992, but declined to32.2 percent by 2000 beore rising to back a40.0 percent share in 2003, then alling o to

34.8 percent in 2006 and 33.9 percent in 2007,beore rising to 35.7 percent in 2008. Oneeect o the deepening recession was to reducethe relative share o income taxes (both indi-vidual and corporation) to 50.0 percent, whichhelped raise the 2009 social insurance taxesand retirement receipts share o total receiptsto 42.3 percent. In 2010 this share dropped to40.0 percent.

Excise taxes have also declined in relativeimportance during the postwar period, allingrom a 19 percent share o total receipts in 1950to 10 percent by 1965 and 5 percent by 1985.Excise taxes accounted or only 3 percent ototal receipts in 2006 and dropped urther to2.5 percent in 2007, due, in part, to the end othe Federal telephone excise tax on long dis-tance telephone calls. In 2008, the excise taxshare o total receipts increased slightly to 2.7percent and increased urther to 3 percent in2009, but this was due to the rapid decline inincome tax receipts rather than any substan-tial growth in excise tax receipts. In 2010 thisshare rose slightly to 3.1 percent.

Outlays and Executive Branch Civilian Em-

ployment.Throughout most o the Nationshistory prior to the 1930s, the bulk o Federalspending went towards national deense, vet-erans benets and interest on the public debt.In 1929, or example, 71 percent o Federaloutlays were in these three categories. The


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1930s began with Federal outlays equalingjust 3.4 percent o GDP. As shown in Table 1.2,the eorts to ght the Great Depression withpublic works and other nondeense Federalspending, when combined with the depressed

GDP levels, caused outlays and their share oGDP to increase steadily during most o thatdecade, with outlays rising to 10.3 percent oGDP by 1939 and to 12.0 percent by 1941 onthe eve o U.S. involvement in World War II.

Deense spending during World War II re-sulted in outlays as a percent o GDP risingsharply, to a peak o 43.6 percent in both1943 and 1944. The end o the war broughttotal spending down to 14.3 percent o GDPby 1949. The Korean War increased spendingto 20.4 percent o GDP by 1953, but outlays

then dropped as a percent o GDP and stayedbelow 19 percent until U.S. involvement in theVietnam War escalated sharply in the middle1960s and remained high into the early 1970s.

From 1967 through 1972, Federal outlaysaveraged 19.6 percent o GDP, with a peak oc-curring in 1968 at 20.5 percent o GDP. Thedecline in deense spending as a percent oGDP that began in 1973, as the withdrawal oU.S. orces rom Vietnam was nearing comple-tion, was more than oset by increased spend-ing on human resources programs during the1970sdue to the maturation o the SocialSecurity program and increases in educationand training, general and Federal employeeretirement and other income support pro-grams, such as ood stamps and (due largelyto recessions) unemployment assistance, aswell as a takeo in spending on the recent-ly enacted Great Society programs (such asMedicare and Medicaid), so that total spend-ing increased as a percent o GDP, averaging20.1 percent during the 1970s (also refect-ing, in part, the substantial increase in grants

to State and local governments during the1970s). Since receipts were averaging only17.9 percent o GDP during that decade, theresult was chronic decits averaging over 2.2percent o GDP (contributing to this was therecession o 197576, which saw decits in-crease to 4.0 percent in 1976).

The 1980s began with substantial momen-tum in the growth o Federal nondeensespending in the areas o human resources,grants to State and local governments, and,as a result o the decits incurred throughout

the 1970s, interest on the public debt. In theearly 1980s, a combination o substantially in-creased deense spending, continued growth inhuman resource spending, large tax cuts, anda deep recession caused the decits to soar,which, in turn, sharply increased spending orinterest on the public debt. Federal spend-ing climbed to an average o 22.8 percent oGDP during 19811985. An end to the rapiddeense buildup and a partial reversal o thetax cuts, along with a strong economy duringthe second hal o the decade, brought Federalspending back down to 21.2 percent o GDP

by 1989.

In the early 1990s, another recession, inthe ace o continued rapid growth in Federalhealth care costs and additional spendingresulting rom the savings and loan crisis,caused the outlay share o GDP to averageover 22.2 percent in 1991 and 1992. Duringthe decade ollowing 1992, this upward trendwas reversed, with outlays as a percent oGDP declining gradually but steadily, allingto a low o 18.2 percent in both 2000 and 2001.Since then, the outlay share o GDP has risen,to 19.1 percent in 2002 and 19.5 percent in2003, due, in part, to the increase in deenseand homeland security spending in responseto the September 11, 2001, attacks, and inpart to the weakness o GDP as a result othe 2001 recession. The outlay share o GDPincreased urther, reaching 19.9 percent in2005 and 20.1 percent in 2006, due, in part,to increased spending on the wars in Iraq andAghanistan, as well as urther increases inresponse to the devastating hurricanes thatstruck States along the Gul Coast in late

summer 2005. However, by 2007, outlays haddropped back slightly to 19.6 percent o GDP,only to shoot back up signicantly in 2008, to20.7 percent o GDP, as a result o both therecession that began in December 2007 andspending associated with the rst stages oa Federal eort to restore nancial marketsto ull unctionality. The deepening recessionin the rst part o 2009 and additional eorts


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to ght the recession with a large package oprogram increases and additional tax reduc-tions combined with a drop in the level o GDPto increase outlays as a percent o GDP to 25.0percent, the highest share since World War

II. In 2010 the continuing economic recoveryalong with repayment o part o the unds ad-vanced to the nancial and other sectors o theeconomy helped reduce outlays as a percent oGDP to 23.8 percent.

Despite the growth in total Federal spend-ing as a percent o GDP in recent decades,Executive Branch (ull-time equivalent) civil-ian employment, as shown in Table 17.1, hasremained roughly constant, ranging rom 1.7to 2.2 million civilian employees (excludingthe Postal Service) since 1981. However, the

composition o employment has shited signi-cantly between deense and civilian agenciesduring the postwar period, especially sincethe mid-1980s. In 1986, or example, the 2.1million total or civilian employees was splitequally between deense and the civilianagencies, with each accounting or 1 millionemployees. During the 1990s and up throughthe current decade there has been a shit awayrom deense to civilian agency employment.In recent years, civilian agency employmenthas been nearly twice that o the Depart-ment o Deense, accounting or 1.2 milliono the 1.9 million total. Nevertheless, therehas been a gradual decline in total ExecutiveBranch civilian employment during the pasttwo decades, alling rom the 1992 level o 2.2million to 1.9 million by 2008 and increasingslightly to 2.0 million in 2009 and 2.1 millionin 2010.

Although total spending has increasedsubstantially as a percent o GDP since the1950s, the growth in the various componentso spending has not been even and, thus, the

composition o spending has changed signi-cantly during the same period.

Outlays or discretionary programs (whoseunding levels are determined by annual ap-propriations bills) totaled 12.7 percent o GDPin 1962, with nearly three-ourths going todeense. Discretionary spending or deenseprograms increased during the Vietnam War

buildup in the late 1960s, causing total dis-cretionary outlays to rise to 13.6 percent oGDP by 1968, ater which a gradual declinebegan. By the middle 1970s, this category haddropped to 10 percent o GDP, where it hovered

until the late 1980s, when the deense buildupthat started early in that decade came to anend. Discretionary spending, as a percent oGDP, ell even more substantially over the1990s, rom 9.0 percent in 1991 to 6.2 percentin 1999. Since then, discretionary spendinghas increased. Much o this growth occurredin 2002 and 2003, in response to the 9/11 ter-rorist attacks and the initiation o the warsin Aghanistan and Iraq. Additional outlays inresponse to the Gul Coast hurricanes in Sep-tember 2005 brought the discretionary outlayshare o GDP to 7.8 percent in 2005. This per-

centage dropped over the next two years to 7.5percent by 2007. In 2008, outlays or discre-tionary programs increased as a percentageo GDP to 7.9 percent, largely due to a cor-responding increase in deense spending. Therecession that began in December 2007 andcaused GDP to drop in 2008 and 2009, in con-junction with additional program spending, in-creased discretionary spending to 8.7 percento GDP in 2009. In 2010 discretionary outlaysrose to 9.3 percent o GDP. While total dis-cretionary spending as a percent o GDP hasgenerally ollowed a downward path over thepast 25 years, its major componentsdeenseand nondeensehave contrasting histories.

As shown in Table 8.4, discretionary deensespending was at 9.3 percent o GDP in 1962.By 1965, spending in this category had de-clined to 7.4 percent o GDP. It then increasedas a result o the Vietnam War, peaking at9.5 percent o GDP in 1968, returning to the1965 level by 1971. This decline continuedthroughout the 1970s, hitting a low point inthat decade o 4.7 percent o GDP in 1978 and

1979.

The deense buildup starting in the early1980s boosted its percentage o GDP backto 6.2 percent by 1986, ater which it againbegan a gradual decline throughout the resto that decade. By 1999, deense discretionaryspending had allen to 3.0 percent o GDP, re-fecting the end o the Cold War and the above-


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average economic growth during much o the1990s. Spending in response to the September11, 2001 attacks, ollowed by the wars in Iraqand Aghanistan, reversed this decline, withdeense spending growing rom 3.0 percent

o GDP in 2001 to 4.0 percent in 2005, 4.3percent in 2008 and (due in part to the dropin GDP) to 4.7 percent in 2009 and the samein 2010.

Nondeense discretionary spending as apercent o GDP has ollowed a much dier-ent path. In 1962, it stood at 3.4 percent oGDP. During the next ew years it quickly in-creased, reaching 4.3 percent o GDP by 1967.It dropped slightly ater that year, but stillaveraged about 4.0 percent o GDP until 1975,when it surged to 4.5 percent o GDP due to the

recession and partly due to growth in spend-ing on energy, the environment, and housingand other income support programs. Much othis growth was in the orm o Federal grantsto State and local governments. Additionalspending arose rom the creation o variousanti-recession grants at the end o the decade.Nondeense discretionary outlays peaked as apercent o GDP during the recession in 1980at 5.2 percent. This category declined sharplyas a percent o GDP starting in 1982, alling to3.9 percent by 1985 and averaging 3.5 percentduring 19871991. Spending or these pro-grams then increased slightly as a percent oGDP, climbing to 3.8 percent by 1993 beorereceding in subsequent years, reaching a lowo 3.2 percent in 1999. Growth in recent yearshas increased, with nondeense discretionaryspending reaching 3.8 percent o GDP duringthe 2003-2006 period, then dropping slightlyto 3.6 percent in 2007 and 2008. The eectso the deepening recession and the anti-reces-sion stimulus spending enacted in the springo 2009 combined to increase the nondeensediscretionary spending to 4.1 percent in 2009

and 4.5 percent in 2010.

Programmatic mandatory spending (whichexcludes net interest and undistributed oset-ting receipts) accounts or the largest part o thegrowth in total Federal spending as a percent oGDP since the 1950s. Major programs in thiscategory include Social Security, Medicare, un-employment insurance, deposit insurance, andmeans-tested entitlements (Medicaid, SNAP

(ormerly ood stamps), Supplemental SecurityIncome, the reundable portions o the EarnedIncome and Child Tax Credits, and other pro-grams subject to an income or asset test). Priorto the start o Medicare and Medicaid in 1966,

this category averaged 5.7 percent o GDPbetween 1962 and 1965 (less than hal the sizeo total discretionary spending), with SocialSecurity accounting or nearly hal. Within adecade, this category was comparable in size tototal discretionary spending, nearly doubling asa percent o GDP to 10.6 percent by 1976 (1.1percent o which was or unemployment com-pensation that year).

Although part o this growth representedthe impact o the 197576 recession on GDPlevels and outlays or unemployment compen-

sation and other programs sensitive to unem-ployment, the largest part was due to growthin Social Security, Medicare, and Medicaid.These three programs totaled 3.4 percent oGDP in 1968 and grew rapidly to 5.5 percento GDP by 1976. By 1985, they reached 6.6percent o GDP. While Social Security stabi-lized as a percent o GDP during 19851998,ranging rom 4.3 percent to 4.6 percent, thegrowth in other programmatic mandatoryspending has continued to outpace the growthin GDP since the mid-1970s (apart rom reces-sion recovery periods) due largely to Medicareand Medicaid. These two programs, whichwere 1.2 percent o GDP in 1975, have morethan doubled as a percent o GDP since then,reaching 3.4 percent in the mid-90s and drop-ping slightly to 3.2 percent in 1999 and 2000beore beginning a steady climb during thepast decade, growing to 3.8 percent in 2004and 4.1 percent by 2008. The eects o theongoing recession helped to increase the GDPshare to 4.8 percent in 2009 and 5.0 percentin 2010. Spending or means-tested entitle-ments other than Medicaid was at 1.3 percent

o GDP in 2006 and 2007, the same as it wasover thirty years ago in 1976. The impact othe current recession increased this spendingto 1.6 percent o GDP in 2008, 1.7 percent in2009, and 2.0 percent in 2010.

By way o contrast, programmatic man-datory spending other than Social Security,Medicare, means-tested entitlements (which


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includes Medicaid), unemployment compen-sation, and deposit insurance has shrunknearly in hal as a percent o GDP, allingrom 3.2 percent in 1975 to no more than 1.7during the 19902008 period. (Major pro-

grams in this grouping include Federal em-ployee and railroad retirement, arm pricesupports and veterans compensation andreadjustment benets.) However, the largeassistance provided to the nancial sector inresponse to the nancial crisis in the all o2008, along with the drop in GDP associatedwith the ongoing recession, caused this per-centage to more than double in 2009, reach-ing 3.2 percent o GDP. Nevertheless, totalprogrammatic mandatory spending was 11.7percent o GDP in 2008 compared with 7.9percent or total discretionary spending. The

eects o the deepening recession and the

anti-recession stimulus spending enactedin the spring o 2009, along with spendingrom automatic stabilizers, such as unem-ployment assistance and other cyclicallysensitive mandatory programs, combined to

increase outlays or the programmatic man-datory category to 15.5 percent o GDP in2009, while total discretionary spending roseto 8.8 percent o GDP. In 2010, these two cat-egories o outlays were 13.8 percent and 9.3percent o GDP, respectively.

Additional perspectives on spendingtrends available in this document includespending by agency, by unction and subunc-tion and by composition o outlays categories,which include payments or individuals andgrants to State and local governments.


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SECTION NOTES

Notes on Section 1 (Overview o Federal

Government Finances)

This section provides an overall perspec-tive on total receipts, outlays (spending),and surpluses or decits. O-budget trans-actions, which consist o the Social Securitytrust unds and the Postal Service und, andon-budget transactions, which equal the totalminus the o-budget transactions, are shownseparately. Tables 1.1 and 1.2 have similarstructures; 1.1 shows the data in millionso dollars, while 1.2 shows the same data aspercentages o the gross domestic product(GDP). For all the tables using GDP, scal

year GDP is used to calculate percentages oGDP. The scal year GDP data are shownin Table 1.2. Additionally, Table 1.1 showsbudget totals annually back to 1901 and ormulti-year periods back to 1789.

Table 1.3 shows total Federal receipts,outlays, and surpluses or decits in currentand constant (Fiscal Year 2005) dollars, andas percentages o GDP. Section 6 provides adisaggregation o the constant dollar outlays.

Table 1.4 shows receipts, outlays and sur-pluses or decits or the consolidated budgetby und group. The budget is composed otwo principal und groupsFederal undsand trust unds. Normally, whenever dataare shown by und group, any payments romprograms in one und group to accounts othe other are shown as outlays o the payingund and receipts o the collecting und.When the two und groups are aggregatedto arrive at budget totals these interundtransactions are deducted rom both receiptsand outlays in order to arrive at transactions

with the public. Table 1.4 displays receiptsand outlays on a gross basis. That is, in con-trast to normal budget practice, collections ointerund payments are included in the re-ceipts totals rather than as osets to outlays.These interund collections are grossed-up tomore closely approximate cash income andoutgo o the und groups.

Notes on Section 2 (Composition o

Federal Government Receipts)

Section 2 provides historical inormationon on-budget and o-budget governmen-tal receipts. Table 2.1 shows total receiptsdivided into ve major categories; it alsoshows the split between on-budget and o-budget receipts. Table 2.2 shows the receiptsby major category as percentages o total re-ceipts, while Table 2.3 shows the same cat-egories o receipts as percentages o GDP.Table 2.4 disaggregates two o the major re-ceipts categories, social insurance taxes andcontributions and excise taxes, and Table 2.5

disaggregates the other receipts catego-ry. While the ocus o the section is on totalFederal receipts, auxiliary data show theamounts o trust und receipts in each cat-egory, so it is readily possible to distinguishthe Federal und and trust und portions.

Notes on Section 3 (Federal Government

Outlays by Function)

Section 3 displays Federal Governmentoutlays (on-budget and o-budget) accord-ing to their unctional classication. Theunctional structure divides the budget into18 broad areas (unctions) that provide a co-herent and comprehensive basis or analysis.Each unction, in turn, is divided into basicgroupings o programs, called subunctions.The structure has two categoriesallow-ances and undistributed osetting receiptsthat are not truly unctions but are requiredin order to cover the entire budget. At timesa more summary presentation o unctionaldata is needed; the data by superunction isproduced to satisy this need. Table 3.1 pro-

vides outlays by superunction and unctionwhile Table 3.2 shows outlays by unctionand subunction.

In arraying data on a unctional basis,budget authority and outlays are classiedaccording to the primary purpose o the activ-ity. To the extent easible, this classicationis made without regard to agency or organi-


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zational distinctions. Classiying each activitysolely in the unction dening its most importantpurposeeven though many activities servemore than one purposepermits adding thebudget authority and outlays o each unction to

obtain the budget totals. For example, Federalspending or Medicaid constitutes a health careprogram, but it also constitutes a orm o incomesecurity benets. However, the spending cannotbe counted in both unctions; since the mainpurpose o Medicaid is to nance the health careo the beneciaries, this program is classied inthe health unction. Section 3 provides dataon budget outlays by unction, while Section 5provides comparable data on budget authority.


Outlays by Agency)Section 4 displays Federal Government out-

lays (on- and o-budget) by agency. Table 4.1shows the dollar amounts o such outlays, andTable 4.2 shows the percentage distribu tion.The outlays by agency are based on the agencystructure currently in eect. For example, theDepartment o Homeland Security was estab-lished by legislation enacted in 2002. However,these data show spending by the Departmento Homeland Security in previous years thatconsists o spending attributable to predecessoragencies in earlier years, but now attributableto the Department o Homeland Security.

Notes on Section 5 (Budget Authority by

Agency and by Subunction

Section 5 provides data on budget authority(BA). BA is the authority provided by law oragencies to obligate the Government to spend.Table 5.1 shows BA by unction and subunction,starting with 1976. Table 5.2 provides the sameinormation by agency, and Table 5.3 provides apercentage distribution o BA by agency. Tables

5.4 and 5.5 provide the same displays as Tables5.2 and 5.3, but or discretionary budget author-ity rather than total budget authority. Budgetauthority data are also provided by unctionin Table 5.6 or various discretionary programgroupings. (Discretionary reers to the BudgetEnorcement Act category that comprises pro-grams subject to the annual appropriationsprocess.)

The data in these tables were compiledusing the same methods used or the histori-cal tables or receipts and outlays (e.g., to theextent easible, changes in classication are re-fected retroactively so the data show the same

stream o transactions in the same location orall years). However, BA is heterogeneous innature, varying in type rom one program toanother. As a result, it is not additiveeitheracross programs or agencies or a year or, inmany cases, or an agency or program across aseries o yearsin the same sense that budgetreceipts and budget outlays are additive. Theollowing are examples o dierent kinds o BAand the manner in which BA results in outlays:

BA and outlays or each year may be ex-

actly the same (e.g., interest on the public

debt).

For each year, the Congress may appro-priate a large quantity o BA that will be

spent over a subsequent period o years(e.g., many deense procurement con-

tracts and major construction programs).

Some BA (e.g., the salaries and expenses

o an operating agency) is made avail-able only or a year and any portion not

obligated during that year lapses (i.e., itceases to be available to be obligated).

Revolving unds may operate spending

programs indefnitely with no new inu-sion o BA, other than the authority tospend osetting collections.

BA may be enacted with the expectation

it is unlikely ever to be used (e.g., stand-by borrowing authority).

As a result o the Budget EnorcementAct o 1990, the measurement o BA

changed in most special and trust undswith legislatively imposed limitations or

beneft ormulas that constrain the useo BA. Where previously budget author-

ity was the total income to the und, BAin these unds or 1990 and subsequentyears is now an estimate o the obliga-

tions to be incurred during the fscal yearor beneft payments, administration, and


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other expenses o the und. In some, but

not all, cases it was possible to adjust BAfgures or these unds or years prior to

1990 to conorm to the current concepts.

All income to a und (e.g., certain revolv-ing, special, and trust unds not subjectto limitation or beneft ormula) may be

permanently appropriated as BA; as longas the und has adequate resources, there

is no urther relationship between the BAand outlays.

Although major changes in the way BAis measured or credit programs (begin-

ning in 1992) result rom the Budget En-orcement Act, these tables could not be

reconstructed to show revised BA fgures

or 1991 and prior years on the new basis.(This distinction between pre-1992 credit

transactions and later ones also existsor outlays, which otherwise do not suer

rom dierences in type.)

In its earliest years, the Federal Financ-ing Bank (FFB) was conducted as a re-volving und, making direct loans to the

public or purchasing loan assets rom oth-er unds or accounts. Each new loan by

the FFB required new BA. In many cas-es, i the same loan were made by the ac-

count being serviced by the FFB, the loancould be fnanced rom osetting collec-

tions and no new BA would be recorded.Under terms o the 1985 legislation mov-ing the FFB on-budget, the FFB ceased to

make direct loans to the public. Instead,it makes loans to the accounts it services,

and these accounts, in turn, make theloans to the public. Such loans could be

made rom new BA or other obligationalauthority available to the parent account.These tables have not been reconstructed

to shit BA previously scored in the FFBto the parent accounts, because there is

no technical way to reconfgure the data.

Despite these qualications, there is a desireor historical data on BA, and this section hasbeen developed to meet that desire.

Notes on Section 6 (Composition o Federal

Government Outlays)

The composition categories in this sectiondivide total outlays into national deense and

nondeense components, and then disaggregatethe nondeense spending into several parts:

Payments for individuals: These are Fed-eral Government spending programs de-

signed to transer income (in cash or inkind) to individuals or amilies. To theextent easible, this category does not

include reimbursements or current ser-vices rendered to the Government (e.g.,

salaries and interest). The paymentsmay be in the orm o cash paid direct-

ly to individuals or they may take the

orm o the provision o services or thepayment o bills or activities largely f-

nanced rom personal income. They in-clude outlays or the provision o medical

care (in veterans hospitals, or example)and or the payment o medical bills (e.g.,

Medicare). They also include subsidies toreduce the cost o housing below marketrates, and ood and nutrition assistance

(such as SNAPormerly ood stamps).The data base, while not precise, provides

a reasonable perspective o the size andcomposition o income support transers

in any particular year and trends overtime. Section 11 disaggregates the com-

ponents o this category. The data in Sec-tion 6 show that a signifcant amount opayments or individuals takes the orm

o grants to State and local governmentsto fnance benefts or the ultimate re-

cipients. These grants include Medicaid,some ood and nutrition assistance, and

a signifcant portion o the housing as-sistance payments. Sections 11 and 12provide a more detailed disaggregation o

this spending.

All other grants to State and local govern-

ments: This category consists o the Fed-

eral nondeense grants to State and localgovernments other than grants defnedas payments or individuals. Section 12

disaggregates this spending.


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Net interest: Most spending or net inter-

est is paid to the public as interest on theFederal debt. As shown in Table 3.2, net

interest includes, as an oset, signifcantamounts o interest income. Spending in

this category is equal to net outlays inthe budget unction o the same name.

All other: This category consists o all re-maining Federal spending and osetting

receipts except or those included in theunctional category undistributed oset-ting receipts. It includes most Federal

loan activities and most Federal spend-ing or oreign assistance, arm price

supports, medical and other scientifcresearch, and, in general, Federal direct

program operations.

Undistributed offsetting receipts: These

are osetting receipts that are not o-set against any specifc agency or pro-

grammatic unction. They are classifedas unction 950 in the unctional tables.

Additional details on their compositioncan be ound at the end o Table 3.2.

Table 6.1 shows these outlays in current andconstant dollars, the percentage distribution ocurrent dollar outlays, and the current dollaroutlays as percentages o GDP. The term con-stant dollars means the amounts o money thatwould have had to be spent in each year i, onaverage, the unit cost o everything purchasedwithin that category each year (including pur-chases nanced by income transers, interest,etc.) were the same as in the base year (FiscalYear 2005). The adjustments to constant dollarsare made by applying a series o chain-weightedprice indexes to the current dollar data base.The composite total outlays defator is used todefate current dollar receipts to produce theconstant dollar receipts in Table 1.3. The sep-

arate composite defators used or the variousoutlay categories are shown in Table 10.1.

Notes on Section 7 (Federal Debt)

This section provides inormation aboutFederal debt. Table 7.1 contains data on grossFederal debt and its major components in termso both the amount o debt outstanding at the

end o each year and that amount as a percent-age o scal year GDP.

Gross Federal debt is composed both o Federaldebt held (owned) by the public and Federal debt

held by Federal Government accounts, which ismostly held by trust unds. Federal debt heldby the public consists o all Federal debt heldoutside the Federal Government accounts. Forexample, it includes debt held by individuals,private banks and insurance companies, theFederal Reserve Banks, and oreign centralbanks. The sale (or repayment) o Federal debtto the public is the principal means o nanc-ing a Federal budget decit (or disposing o aFederal budget surplus).

The Federal Government accounts holding

the largest amount o Federal debt securitiesare the Social Security, civil service retirement,military retirement, and Medicare trust unds.However, amounts are also held by some otherGovernment accounts.

Table 7.1 divides debt held by the publicbetween the amount held by the Federal ReserveBanks and the remainder. The Fed eral ReserveSystem is the central bank or the Nation. Theirholdings o Federal debt are shown separatelybecause they do not have the same impact onprivate credit markets as does other debt heldby the public. They accumulate Federal debtas a result o their role as the countrys centralbank, and the size o these holdings has a majorimpact on the Nations money supply. Sincethe Federal budget does not orecast FederalReserve monetary policy, it does not projectuture changes in the amounts o Federal debtthat will be held by the Federal Reserve Banks.Hence, the split o debt held by the public intothat portion held by the Federal Reserve Banksand the remainder is provided only or pastyears. Table 2.5 shows deposits o earnings by

the Federal Reserve System. Most interest paidby Treasury on debt held by the Federal ReserveBanks is returned to the Treasury as deposits oearnings, which are recorded as budget receipts.

As a result o a conceptual revision in thequantication o Federal debt, the data on debtheld by the public and gross Federal debtbutonly a small part o debt held by Government


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accountswere revised back to 1956 in the1990 budget. The total revision was relativelysmalla change o less than one percent o therecorded value o the debtbut the revised basisis more consistent with the quantication o in-

terest outlays, and provides a more meaningulmeasure o Federal debt. The change convertedmost debt held by the public rom the par valueto the sales price plus amortized discount.

Most debt held by Government accounts isissued at par, and securities issued at a premiumor discount were ormerly recorded at par. Thatportion o debt held by Government accountsthat was not revised back to 1956 in the 1990budget was rst recorded with an adjustmentor any initial discount starting with debt issuedin 1989. Zero-coupon bonds, however, are re-

corded at estimated market or redemption price.

Table 7.2 shows the end-o-year amounts oFederal debt subject to the general statutorylimitation. It is recorded at par value (exceptor savings bonds) through 1988, but by law thebasis was changed, in part, to accrual value orlater years. Beore World War I, each debt issueby the Government required specic authori-zation by the Congress. Starting in 1917, thenature o this limitation was modied in severalsteps until it developed into a limit on the totalamount o Federal debt outstanding. The Trea-sury is ree to borrow whatever amounts areneeded up to the debt limit, which is changedrom time to time to meet new requirements.Table 7.3 shows the ceiling at each point in timesince 1940. It provides the specic legal cita-tion, a short description o the change, and theamount o the limit specied by each Act. Most,but not all, o gross Federal debt is subject to thestatutory limit.

Notes on Section 8 (Outlays by Budget

Enorcement Act Category and Budget Au-

thority or Discretionary Programs)

Section 8 is composed o eight tables thatpresent outlays by the major categories usedunder the Budget Enorcement Act (BEA) andunder previous budget agreements betweenCongress and previous Administrations. (Dis-cretionary budget authority is shown on anagency basis in Section 5, Table 5.4 and Table

5.5. It is shown on a unctional basis in Table5.6). Table 8.1 shows Federal outlays withineach o the categories and subcategories. Theprincipal categories are outlays or mandatoryand related programs and outlays or discretion-

ary programs. Mandatory and related programsinclude direct spending and osetting receiptswhose budget authority is determined by lawother than appropriations acts. These includeappropriated entitlements and SNAP (ormerlythe ood stamp program), which receive proor-ma appropriations. Discretionary programs arethose whose budgetary resources (other than en-titlement authority) are determined by annualappropriations acts. The table shows two majorcategories o discretionary programs: NationalDeense (Function 050) and Nondeense (allother discretionary programs). Table 8.2 has

the same structure, but shows the data in con-stant (FY 2005) dollars. Table 8.3 shows the per-centage distribution o outlays by BEA categoryand Table 8.4 shows outlays by BEA categoryas a percentage o GDP. Tables 8.1 through 8.4include a category called Means-Tested Entitle-ments. These programs include entitlement pro-grams that limit benets or payments based onthe beneciarys income and/or assets. Also in-cluded are payments rom reundable tax creditsthat are phased out at certain income (generally,Adjusted Gross Income) levels. The programscurrently categorized as Means-Tested Entitle-ments are:

Funds or Strengthening Markets, In-come, and Supply (section 32)

Special milk program

SNAP (ormerly the Food Stamp Program) Child Nutrition Programs

Nutrition assistance or Puerto Rico The Pell Grants Program, proposed to be

converted to an entitlement Grants to States or Medicaid Childrens Health Insurance Program

Child Enrollment Contingency Fund

Payments to States or Child Support En-

orcement and Family Support Programs Temporary Assistance or Needy Families (TANF) Contingency Fund Payment Where Adoption Credit Exceeds

Liability or Tax

Payments to States or Foster Care andAdoption Assistance


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Child Care Entitlement to States

Payment Where Recovery Rebate Ex-ceeds Liability or Tax

Payment Where Earned Income CreditExceeds Liability or Tax

Payment Where Savers Credit ExceedsLiability or Tax

Health insurance supplement to earned

income credit Payment Where Child Credit Exceeds Li-

ability or Tax Payment Where Credit to Aid First-

Time Homebuyers Exceeds Liability or

Tax Payment Where American Opportunity

Credit Exceeds Liability or Tax Payment Where Making Work Pay Credit

Exceeds Liability or Tax Supplemental Security Income Program

(SSI)

Receipts rom SSI Administrative Fee Recovery o Benefciary Overpayments

rom SSI Program Housing Trust Fund Veterans Pensions benefts Reundable Premium Assistance Tax

Credit

Reduced Cost Sharing or IndividualsEnrolling in Qualifed Health Plans

Table 8.5 provides additional detail by unc-tion or subunction or mandatory and relatedprograms. Table 8.6 shows the same data inconstant dollars.

Table 8.7 provides additional detail by unc-tion and subunction on outlays or discretion-ary programs. Table 8.8 provides the same datain constant dollars.


Outlays or Major Physical

Capital, Research and Development, and

Education and Training)

Tables in this section provide a broad perspec-tive on Federal Government outlays or publicphysical capital, the conduct o research and de-velopment (R&D), and education and training.These data measure new Federal spending ormajor public physical assets, but they exclude

major commodity inventories. In some casesit was necessary to use supplementary datasources to estimate missing data in order todevelop a consistent historical data series. Thedata or the conduct o research and develop-

ment exclude outlays or construction and majorequipment because such spending is included inoutlays or physical capital.

Table 9.1 shows total investment outlays ormajor public physical capital, R&D, and educa-tion and training in current and constant (FY2005) dollars, and shows the percentage distri-bution o outlays and outlays as a percentage oGDP. Table 9.2 ocuses on direct Federal outlaysand grants or major public physical capital in-vestment in current and constant (FY 2005)dollars, disaggregating direct Federal outlays

into national deense and nondeense capital in-vestment. Table 9.3 retains the same structureas 9.2, but shows direct Federal outlay totalsor physical capital investment as percentag-es o total outlays and as percentages o GDP.Table 9.4 disaggregates national deense directoutlays, while Table 9.5 disaggregates nonde-ense outlays or major public physical capitalinvestment. Table 9.6 shows the composition ogrant outlays or major public physical capitalinvestment.

Table 9.7 provides an overall perspective onFederal Government outlays or the conducto R&D. It shows total R&D spending and thesplit between national deense and nondeensespending in our orms: in current dollars, inconstant dollars, as percentages o total outlays,and as percentages o GDP. Table 9.8 showsoutlays in current dollars by major unction andprogram.

Table 9.9 shows outlays or the conduct oeducation and training in current dollars ordirect Federal programs and or grants to State

and local governments. Total outlays or theconduct o education and training as a percent-age o Federal outlays and in constant (FY 2005)dollars are also shown. As with the series onphysical capital, several budget data sourceshave been used to develop a consistent dataseries extending back to 1962. A discontinuityoccurs between 1991 and 1992 and aects pri-marily direct Federal higher education outlays.


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For 1991 and earlier, these data include netloan outlays. Beginning in 1992, pursuant tochanges in the treatment o loans as speciedin the Federal Credit Reorm Act o 1990, thisseries includes outlays or loan repayments and

deaults or loans originated in 1991 and earlier,but credit subsidy outlays or loans originated in1992 and later years.

Table 9.9 also excludes education and train-ing outlays or physical capital (which are in-cluded in Table 9.7) and education and trainingoutlays or the conduct o research and devel-opment (which are in Table 9.8). Also excludedare education and training programs or Federalcivilian and military personnel.

Notes on Section 10 (Implicit Outlay

Defators)

Section 10 consists o Table 10.1, Gross Do-mestic Product and Defators Used in the His-torical Tables, which shows the various implicitdefators used to convert current dollar outlaysto constant dollars. The constant dollar defa-tors are based on chain-weighted (FY 2005chained-dollars) price indexes derived rom theNational Income and Product Accounts data.


Payments or Individuals)

This section provides detail on outlays orFederal Government payments or individuals,which are also described in the notes on Section6. The basic purpose o the payments or indi-viduals aggregation is to provide a broad per-spective on Federal cash or in-kind payments orwhich no current service is rendered, yet whichconstitutes income transers to individualsand amilies. Table 11.1 provides an overviewdisplay o these data in our dierent orms.All our o these displays show the total pay-

ments or individuals, and the split o this totalbetween grants to State and local governmentsor payments or individuals (such as Medicaidand grants or housing assistance) and all other(direct) payments or individuals.

Table 11.2 shows the unctional composi-tion o payments or individuals (see notes onSection 3 or a description o the unctional clas-

sication), and includes the same grants versusnongrants (direct) split provided in Table 11.1.The o-budget Social Security program nancesa signicant portion o the Federal paymentsor individuals. These tables do not distinguish

between the on-budget and o-budget paymentsor individuals. However, all payments or in-dividuals shown in Table 11.2 in unction 650(Social Security), except or minor paymentamounts associated with the 2009 Recovery Act(ARRA), are o-budget outlays, and all otherpayments or individuals are on-budget. Table11.3 displays the payments or individuals bymajor program category.

Notes on Section 12 (Federal Grants To

State and Local Governments)

For several decades the Federal budget docu-ments have provided data on Federal grants toState and local governments. The purpose othese data is to identiy Federal Governmentoutlays that constitute income to State andlocal governments to help na

Budget of the U.S. Government 2012

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