Historical Tables 2010 Federal Budget

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Historical TablesBudget of the U.S. Government

O f f i c e o f M a n a g e m e n t a n d B u d g e t

w w w . b u d g e t . g o v

Fiscal Year 2010


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THE BUDGET DOCUMENTS

GENERAL NOTES

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

U.S. GOVERNMENT PRINTING OFFICEWASHINGTON 2009

For sale by the Superintendent of Documents, U.S. Government Printing OfceInternet: bookstore.gpo.gov Phone: (202) 512-1800 Toll-Free 1-866-512-1800 Fax: (202) 512-2104

Mail: Stop IDCC, Washington, DC 20402-0001ISBN 978-0-16-082761-7

A New Era of Responsibility: Renewing Americas Promise contains the Budget Message of the President,information on the Presidents priorities, and budget over-

views organized by agency. This document was pub lishedon February 26, 2009.

Since publication of this initial volume, the Adminis-tration has produced updated budget estimates basedon new technical and other information. The following

volumes are based on those new estimates, and updatedsummary tables were published in the following volume.

Updated Summary Tables, May, 2009, Budget of the United States Government, Fiscal Year 2010 con-tains a set of summary tables updated and expanded fromthe February FY 2010 Presidents Budget overview.

Analytical Perspectives, Budget of the UnitedStates Government, Fiscal Year 2010 containsanalyses that are designed to highlight specied subjectareas or provide other signicant presentations of budgetdata that place the budget in perspective. This volumeincludes economic and accounting analyses; informationon Federal receipts and collections; analyses of Federalspending; information on Federal borrowing and debt;baseline or current services estimates; and other techni-cal presentations. The Analytical Perspectives volume alsocontains supplemental material with several detailedtables, including tables showing the budget by agencyand account and by function, subfunction, and program,that is available on the Internet and as a CD-ROM in theprinted document.

Historical Tables, Budget of the United StatesGovernment, Fiscal Year 2010 provides data on budgetreceipts, outlays, surpluses or decits, Federal debt, andFederal employment over an extended time period, gener-ally from 1940 or earlier to 2010 or 2014.

To the extent feasible, the data have been adjusted toprovide consistency with the 2010 Budget and to providecomparability over time.

Appendix, Budget of the United States Govern-ment, Fiscal Year 2010 contains detailed informationon the various appropriations and funds that constitutethe budget and is designed primarily for the use of the

Appropriations Committees. The Appendix contains more

detailed nancial information on individual programsand appropriation accounts than any of the other budgetdocuments. It includes for each agency: the proposed textof appropriations language; budget schedules for each ac-count; legislative proposals; explanations of the work tobe performed and the funds needed; and proposed generalprovisions applicable to the appropriations of entire agen-cies or group of agencies. Information is also provided oncertain activities whose transactions are not part of thebudget totals.

AUTOMATED SOURCES OF BUDGETINFORMATION

The information contained in these documents is avail-able in electronic format from the following sources:

Internet. All budget documents, including documentsthat are released at a future date, spreadsheets of manyof the budget tables, and a public use budget database areavailable for downloading in several formats from the In-ternet at www.budget.gov/budget . Links to documents andmaterials from budgets of prior years are also provided.

Budget CD-ROM . The CD-ROM contains all of thebudget documents in fully indexed PDF format along withthe software required for viewing the documents. The CD-ROM has many of the budget tables in spreadsheet for-mat and also contains the materials that are included onthe separate Analytical Perspectives CD-ROM.

For more information on access to electronic versionsof the budget documents (except CD-ROMs), call (202)512-1530 in the D.C. area or toll-free (888) 293-6498. Topurchase the budget CD-ROM or printed documents call(202) 512-1800.


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i

Contents of the Historical Tables

Page

Introduction:Structure, Coverage and Concepts ......................................................................................................................................... 1Historical Trends .................................................................................................................................................................... 5Section Notes ........................................................................................................................................................................... 11

Section 1Overview o Federal Government Finances ............................................................................................................... 21Table 1.1Summary o Receipts, Outlays, and Surpluses or De cits (): 17892014 ....................................................... 21Table 1.2Summary o Receipts, Outlays, and Surpluses or De cits () as Percentages o GDP: 19302014 ................. 24Table 1.3Summary o Receipts, Outlays, and Surpluses or De cits () in Current Dollars, Constant (FY 2000)

Dollars, and as Percentages o GDP: 19402014 .............................................................................................................. 26Table 1.4Receipts, Outlays, and Surpluses or De cits () by Fund Group: 19342014 ................................................... 28

Section 2Composition o Federal Government Receipts ............. .............. .............. ............. .............. .............. ............. ............ 30Table 2.1Receipts by Source: 19342014 ............................................................................................................................ 30Table 2.2Percentage Composition o Receipts by Source: 19342014 ............................................................................... 32Table 2.3Receipts by Source as Percentages o GDP: 19342014 ..................................................................................... 34Table 2.4Composition o Social Insurance and Retirement Receipts and o Excise Taxes: 19402014 .......................... 36Table 2.5Composition o Other Receipts: 19402014 ...................................................................................................... 45

Section 3Federal Government Outlays by Function................................................................................................................. 47Table 3.1Outlays by Super unction and Function: 19402014 .......................................................................................... 47Table 3.2Outlays by Function and Sub unction: 19622014 ............................................................................................. 56

Section 4Federal Government Outlays by Agency.................................................................................................................... 74Table 4.1Outlays by Agency: 19622014 ............................................................................................................................ 74Table 4.2Percentage Distribution o Outlays by Agency: 19622014 ................................................................................ 80

Section 5Budget Authority (On-and O -Budget) ..................................................................................................................... 86Table 5.1Budget Authority by Function and Sub unction: 19762014 ............................................................................. 86Table 5.2Budget Authority by Agency: 19762014 ............................................................................................................ 101Table 5.3Percentage Distribution o Budget Authority by Agency: 19762014 ................................................................ 106

Table 5.4Discretionary Budget Authority by Agency: 19762010 ..................................................................................... 111Table 5.5Percentage Distribution o Discretionary Budget Authority by Agency: 19762010 ........................................ 115

Section 6Composition o Federal Government Outlays ............................................................................................................ 119Table 6.1Composition o Outlays: 19402014 ..................................................................................................................... 119

Section 7Federal Debt ................................................................................................................................................................ 127Table 7.1Federal Debt at the End o Year: 19402014 .............. ............. .............. .............. ............. .............. .............. ....... 127Table 7.2Debt Subject to Statutory Limit: 19402014 ....................................................................................................... 129Table 7.3Statutory Limits on Federal Debt: 1940Current............................................................................................... 130

Section 8Outlays by Budget En orcement Act Category .......................................................................................................... 134Table 8.1Outlays by Budget En orcement Act Category: 19622014................................................................................ 134Table 8.2Outlays by Budget En orcement Act Category in Constant (FY 2000) Dollars: 19622014 ............................ 136Table 8.3Percentage Distribution o Outlays by Budget En orcement Act Category: 19622014 ................................... 138Table 8.4Outlays by Budget En orcement Act Category as Percentages o GDP: 19622014 ......................................... 140

Table 8.5Outlays or Mandatory and Related Programs: 19622014 .............................................................................. 142Table 8.6Outlays or Mandatory and Related Programs in Constant (FY 2000) Dollars: 19622014 ........................... 148Table 8.7Outlays or Discretionary Programs: 19622014 ................................................................................................ 154Table 8.8Outlays or Discretionary Programs in Constant (FY 2000) Dollars: 19622014 ............................................. 160Table 8.9Budget Authority or Discretionary Programs: 19762014 ................................................................................ 166

Section 9Federal Government Outlays or Major Public Physical Capital, Research and Development, andEducation and Training ............................................................................................................................................................ 171Table 9.1Total Investment Outlays or Major Public Physical Capital, Research and Development, and

Education and Training: 19622010 ................................................................................................................................. 171


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ii THE BUDGET FOR FISCAL YEAR 2010, HISTORICAL TABLES

Contents of the Historical TablesContinued

Page

Table 9.2Major Public Physical Capital Investment Outlays in Current and Constant (FY 2000) Dollars:19402010 ........................................................................................................................................................................... 172

Table 9.3Major Public Physical Capital Investment Outlays in Percentage Terms: 19402010.................................... 174Table 9.4National De ense Outlays or Major Public Direct Physical Capital Investment: 19402010 ........................ 176Table 9.5Nonde ense Outlays or Major Public Direct Physical Capital Investment: 19402010 ................................. 178Table 9.6Composition o Outlays or Grants or Major Public Physical Capital Investment: 19412010 ..................... 180Table 9.7Summary o Outlays or the Conduct o Research and Development: 19492010 (In Current Dollars,

in Constant (FY 2000) Dollars, as Percentages o Total Outlays, and as Percentages o GDP) ..................................... 187Table 9.8Composition o Outlays or the Conduct o Research and Development: 19492010 ....................................... 189Table 9.9Composition o Outlays or the Conduct o Education and Training: 19622010 ............................................. 196

Section 10Gross Domestic Product and Implicit Outlay Defators .......................................................................................... 199Table 10.1Gross Domestic Product and Defators Used in the Historical Tables: 19402014 ......................................... 199

Section 11Federal Government Payments or Individuals ...................................................................................................... 201Table 11.1Summary Comparison o Outlays or Payments or Individuals: 19402014 (In Current Dollars, as

Percentages o Total Outlays, as Percentages o GDP, and in Constant (FY 2000) Dollars) .. .............. ............. ............ 201Table 11.2Functional Composition o Outlays or Payments or Individuals: 19402014 ............................................... 203Table 11.3Outlays or Payments or Individuals by Category and Major Program:

19402014 ........................................................................................................................................................................... 212Section 12Federal Grants To State and Local Governments ................................................................................................... 238

Table 12.1Summary Comparison o Total Outlays or Grants to State and Local Governments: 19402014(in Current Dollars, in Constant (FY 2000) Dollars, as Percentages o Federal Outlays, and as Percentageso GDP) ................................................................................................................................................................................ 238

Table 12.2Total Outlays or Grants to State and Local Governments by Function and Fund Group: 19402014 ........ 240Table 12.3Total Outlays or Grants to State and Local Governments by Function, Agency, and

Program: 19402010 ........................................................................................................................................................... 247Section 13Social Security and Medicare ................................................................................................................................... 295

Table 13.1Cash Income, Outgo, and Balances o the Social Security and Medicare Trust Funds: 19362014 .............. 295

Section 14Federal Sector Transactions in the National Income and Product Accounts ......................................................... 308Table 14.1Federal Transactions in the National Income and Product Accounts or Federal

Fiscal Years: 19482010 ..................................................................................................................................................... 308Table 14.2Federal Transactions in the National Income and Product Accounts as Percentages

o GDP or Federal Fiscal Years: 19482010 .............. .............. ............. .............. .............. .............. ............. .............. ....... 315Section 15Total (Federal and State and Local) Government Finances ................................................................................... 322

Table 15.1Total Government Receipts in Absolute Amounts and as Percentages o GDP: 19482008 .......................... 322Table 15.2Total Government Expenditures: 19482008 .................................................................................................... 324Table 15.3Total Government Expenditures as Percentages o GDP: 19482008 ............................................................. 326Table 15.4Total Government Expenditures by Major Category o Expenditure: 19482008 .......................................... 328Table 15.5Total Government Expenditures by Major Category o Expenditure as

Percentages o GDP: 19482008 ........................................................................................................................................ 330Table 15.6Total Government Surpluses or De cits () in Absolute Amounts and as Percentages

o GDP: 19482008 ............................................................................................................................................................. 332Section 16Federal Health Spending .......................................................................................................................................... 334

Table 16.1Outlays or Health Programs: 19622014 ......................................................................................................... 334Section 17Executive Branch Civilian Full-Time Equivalent Employment ............................................................................. 335

Table 17.1Total Executive Branch Civilian Full-Time Equivalent (FTE) Employees: 19812010 ............................... 335Table 17.2Total Executive Branch Civilian Full-Time Equivalent (FTE) Employees:

19812010 (as percentage o total) .................................................................................................................................... 336


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1

INTRODUCTION

STRUCTURE, COVERAGE, AND CONCEPTS

Historical Tables provides a wide range o data on Federal Government nances. Manyo the data series begin in 1940 and includeestimates o the Presidents budget or 20092014. Additionally, Table 1.1 provides data onreceipts, outlays, and surpluses or de cits or19011939 and or earlier multi year periods.

Structure

This document is composed o 17 sections,each o which has one or more tables. Eachsection covers a common theme. Section 1, orexample, 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 re erence source andto provide relevant com parisons likely to bemost use ul. The most common comparisonsare in terms o propor tions (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 in ormation is also in-cluded where appropriate. Explanations aregenerally not repeated, but there are occa-sional cross-re erences to related materials.

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

time, there are inevitable di culties in tryingto produce comparable data to cover manyyears. The general rule is to provide data inas meaning ul and comparable a ashion aspossible. To the extent easible, the data arepresented on a basis consistent with currentbudget concepts. When a structural changeis made, inso ar as possible the data are ad-

justed or all years.

One signi cant change made in the early1990s concerns the budgetary treatment o Federal credit programs, which was changedby the Federal Credit Re orm Act o 1990. Pre-

viously the budget recorded the cost o directand guaranteed loans on a cash basis. Undercredit re orm, the budget records budget au-thority and outlays or the subsidy cost o direct and guaranteed loans made in 1992and subsequent years. The subsidy is de nedas the net estimated cash fows to and romthe Government over the li e o the loan, dis-counted to the present. The cash transactionsare recorded as a means o nancing item.Because it was impossible to convert the pre-1992 loans to a credit re orm basis, the dataare on a cash basis or pre-1992 loans and ona credit re orm basis or loans made in 1992and subsequent years.

Coverage

The Federal Government has used theuni ed or consolidated budget concept asthe oundation or its budgetary analysisand presentation since the 1969 budget. Thebasic guidelines or the uni ed 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 bi urcated presentation: a uni ed budgetcomposed o an expenditure account and a

loan account. The distinction between theexpendi ture account and the loan accountproved to be con using and caused consid-erable com plication in the budget or littlebene t. As a result, this distinction waseliminated starting with the 1974 budget.However, even prior to the 1974 budget, theExport-Import Bank had been excluded bylaw rom the budget totals, and other exclu-


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THE BUDGET FOR FISCAL YEAR 2010, HISTORICAL TABLES2

sions ollowed. The structure o the budget wasgradually revised to show the o -budget trans-actions in many locations along with the on-bud-get transactions, and the o -budget amountswere added to the on-budget amounts in order

to show total Federal spending and receipts.

The Balanced Budget and Emergency De citControl 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, sur vivors, anddisability insurance unds (collec tively 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 -budgetentities 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 O ce Department, remain on-budget.

Though Social Security and the PostalService are now o -budget, they continue tobe Federal programs. Indeed, Social Secu ritycurrently 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 budg et tables and charts show totalFederal receipts, outlays, and surpluses andde cits, and divide these totals between the por-tions that are on-budget and o -budget.

Changes in Historical Budget Authority,Outlays, Receipts, and De cits

This years annual consultations with the

Congress regarding reclassi cation o accountsor activities as to unction or sub unction result-ed in one signi cant reclassi cation o historicaland ongoing data:

The Payment to Alaska rom oil and gasleasing in the Naval Petroleum Reservewas misclassifed as sub unction 306(Other Natural Resources) in the FY

2009 Budget. This has been corrected toshow the payments as sub unction 806(General Purpose Fiscal Assistance) orthe FY 2010 Budget.

However, there were two signi cant correc-tions made to historical amounts or the ollow-ing Department o De enseMilitary accounts:

Corrections to the De ense WorkingCapital Fund accounts or 2006 reducedmandatory budget authority by a total o $60,865 million.

Corrections to the Department o De enseMilitary Personnel, Army account or2008 reduced outlays by $1,282 million.

Additionally, o setting receipts were trans-erred rom the Department o the Interiors

Minerals Management Service to the Depart-ment o Agricultures Forest Service, resultingin increases to net budget authority and outlays

or the Department o the Interior and a cor-responding decrease or the Department o Ag-riculture covering the period 19932007. Theamounts involved were less than $25 million inany given year. Very minor adjustments havealso been made to refect correc tions in agencyreporting provided 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 2008 began on October 1,2007, and ended on September 30, 2008. Prior to

scal year 1977 the Federal scal years beganon July 1 and ended on June 30. In calendaryear 1976 the July-September period was a sep-arate accounting period (known as the transi-tion quarter or TQ) to bridge the period required

to shi t to the new scal year.

Note on Gross Domestic Product (GDP)

Prior to this (the Fiscal Year 2010) edition o the Historical Tables, GDP or scal years hasbeen derived using quarterly gures on a NotSeasonally Adjusted (NSA) basis. Since GDPdata on this basis are no longer available, the


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3THE BUDGET FOR FISCAL YEAR 2010, HISTORICAL TABLES

gures or scal year GDP have been revisedin this edition to use quarterly gures that areon a Seasonally Adjusted, Annual Rate (SAAR)basis. As a result, minor changes in budget dataexpressed as percentages o GDP occur through-

out the tables.

Note on Proposed Reclassi cation o PellGrant Program

The Budget includes a proposal to change thelegal status o Pell grants and, there ore, to re-classi y the Pell Grant program rom the discre-tionary category to mandatory, starting in 2010.Tables in this document that display Budget En-

orcement Act (BEA) categories refect this pro-posal. As a result, discretionary and mandatorycategory totals or 2010 and beyond are not ullycomparable with corresponding totals or 2009and prior years.

Note on Modi cation o the FinancingSystem or the Federal Aviation

Administration

Starting in 2011, the Budget assumes thatsome aviation excise taxes are modi ed and re-placed with direct user charges that would o setdiscretionary budget authority and outlays. Asa result, discretionary and revenue categorytotals or 2011 and beyond are not ully com-parable with corresponding totals or 2010 andprior years.

Note on Department o De ense Fundingor Contingency Operations

The Department o De ense unding includesthe cost o Overseas Contingency Operations.The total o this category o unding or 2009through 2014 is as ollows (in billions o dollars):

Budget Authority: 2009: $141.4; 2010: $130.0;

and $50.0 or each succeeding year.Outlays: 2009: $78.4; 2010: $120.5; 2011:

$82.9; 2012: $57.2; 2013: $52.3; 2014: $50.8.

Concepts Relevant to the Historical Tables

Budget receipts constitute the income side o the budget; they are composed almost entirely

o taxes or other compulsory payments to theGovernment. Any income rom business-typeactivities (e.g., interest income or sale o electricpower), and any income by Govern ment accountsarising rom payments by other Government ac-

counts, is o set against outlays, so that totalbudget outlays are reported net o o settingcollections. This method o accounting permitsusers to easily identi y the size and trends inFederal taxes and other compulsory income,and in Federal spending nanced rom taxes,other compul sory income, or borrowing. Budgetsurplus re ers to any excess o budget receiptsover budget outlays, while budget de cit re ersto any excess o budget outlays over budget re-ceipts.

The terms o -budget receipts, o -budgetoutlays, o -budget surpluses, and o -budgetdefcits re er to similar categories or o -bud-get activities. The sum o the on-budget ando -budget transactions are re erred to as theconsolidated, uni ed, or total Federal Govern-ment transactions.

The budget is divided between two undgroups, Federal unds and trust unds. TheFederal unds grouping includes all receiptsand outlays not speci ed by law as being trust

unds. All Federal unds are on-budget exceptor the Postal Service und, which is shown as

o -budget starting in 1972. All trust unds areon-budget, except the two Social Security retire-ment trust unds, which are shown o -budget

or all years.

The term trust und as used in Federal budgetaccounting is requently misunderstood. In theprivate sector, trust re ers 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 used

only or speci ed 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 determining

actor as to whether a particular und is desig-nated as a Federal und or trust und is thedesignation speci ed in the law governing the

und.


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The largest trust unds are or retirementand social insurance (e.g., civil service and mili-tary retirement, Social Security, Medicare, andunemployment bene ts). 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 bybene ciary-based, earmarked taxes.

Sometimes there is con usion between budg etreceipts and o setting receipts and o set tingcollections. Receipts are income that results

rom the Governments exercise o its sovereignpower to tax, or otherwise compel payment, or

rom gi ts o money to the Government. Theyare also called governmental receipts or budgetreceipts. O setting collections and o setting re-ceipts result rom either o two kinds o transac-tions: business-like or market-oriented activitieswith the public and intragovernmental transac-tions, the receipt by one Government account o a payment rom another 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 land

as o setting collections or o setting receipts.These are proprietary o setting collections oro setting receipts, coming rom the public tothe Government. Sometimes, however, pay-ments are made rom one Government agency to

another, creating intragovernmental o settingreceipts or collections. For example, the GeneralServices Administration receives payments romother Government agencies or the rent o o cespace. These are credited as o setting collec-tions in the Federal Buildings Fund. O settingcollections and o setting receipts are deducted

rom 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 activ-ity.

When unds are earmarked, it means thereceipts or collections are separately identi edand used or a speci ed purposethey are notcommingled (in an accounting sense) with anyother money. This does not mean the money isactually kept in a separate bank account. Allmoney in the Treasury is merged or e cientcash management. However, any earmarked

unds are accounted or in such a way that thebalances are always identi able 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 di cult to perceive the longerterm patterns in various budget aggregatesand components. To assist the reader inunderstanding some o these longer termpatterns, this section provides a shortsum mary o the trends in Federal de citsand surpluses, debt, receipts, outlays andemploy ment.

Defcits and Debt. As shown in Table 1.1,except or periods o war (when spending orde ense increased sharply), depressions orother economic downturns (when receipts

ell precipitously), the Federal budget wasgenerally in surplus throughout most o the Nations rst 200 years. For our rst 60years as a Nation (through 1849), cumula-tive budget surpluses and de cits yieldeda net surplus o $70 million. The Civil War,along with the Spanish-American Warand the depression o the 1890s, resultedin a cumu lative de cit totaling just under$1 billion during the 18501900 period.Between 1901 and 1916, the budget hovered

very close to balance every year. WorldWar I brought large de cits 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 relation tothe 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 de cits 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 grown

aster, 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. Fol lowing ve yearso de cits averaging 2.5 percent o GDPbetween 1977 and 1981, debt held by thepublic stood at 25.8 percent o GDP by 1981,only two percentage points higher than itspostwar low.

The traditional pattern o running largede cits 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 de ensespending. Although reduc tions were madeto nonde ense spending, they were not su -

cient to o set the impact on the de cit. As a result, de cits averaging $206 billionwere incurred between 1983 and 1992.These unprecedented peacetime de cits in-creased debt held by the public rom $789billion in 1981 to $3.0 trillion (48.1 percento GDP) in 1992.

A ter peaking at $290 billion in 1992, de -icits declined each year, dropping to a levelo $22 billion in 1997. In 1998, the Nationrecorded its rst budget surplus ($69.3billion) since 1969. As a percent o GDP, thebudget bottom line went rom a de cit o 4.7percent in 1992 to a surplus o 0.8 percentin 1998, increasing to a 2.4 percent surplusin 2000. An economic slowdown began in2001. The deterioration in the per ormance

o the economy together with large tax re-ductions, as well as additional spend ing inresponse to the terrorist attacks, pro duceda drop in the surplus to $128 billion (1.3percent o GDP) in 2001 and a return tode cits ($158 billion, 1.5 percent o GDP) in2002. These actors also contributed to theincrease in the de cit in the ollowing twoyears, reaching $413 billion (3.6 percent o


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GDP) in 2004. Economic growth in 2005 and2006 produced a sharp increase in revenues,helping to reduce the de cit to $248 billion (1.9percent o GDP) in 2006 and even urther to$161 billion (1.2 percent o GDP) in 2007. Debt

held by the public, which had peaked at 49.4percent o GDP in 1993, ell to 33.0 percent by2001 and increased therea ter, reaching 37.5percent by 2005. The declines in the de cit in2006 and 2007 helped to reduce debt held bythe public to 36.9 percent o GDP in 2007.

In December 2007, the economy ell into re-cession. In response, tax reductions in the ormo rebates were enacted in mid-February 2008.In addition, several years o poor private-sec-tor mortgage lending practices and other risky

nancial market behaviors led to a nancialmarket crisis in September 2008 that deep-ened the ongoing recession. Lower revenue(due to both the tax reductions and lower eco-nomic activity) and recession-induced spend-ing or unemployment assistance and otherautomatic stabilizers combined with large in-creases in de ense spending (due partly to thesurge o troops in Iraq) to produce a de cit or2008 o $459 billion (3.2 percent o GDP) andan increase in debt held by the public to 40.8percent o GDP.

Receipts. From the beginning o theRepub lic 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 became animportant and growing source o Federal re-ceipts starting in the 1860s. Estate and gi ttaxes were levied and collected sporadically

rom the 1860s through World War I, althoughnever amounting to a signi cant 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 CivilWar 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 Federalreceipts source during the ollowing decade.By 1930, the Federal Government was relyingon in come 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 share o GDP peaking at20.9 percent in 1944. The share declined some-what a ter the war and has remained between16 percent20 percent o GDP during most o this time. In recent years, receipts have in-creased as a share o GDP rom 17.5 percentin 1992 to 20.9 percent in 2000, dropping backto 16.3 percent in 2004 be ore increasing to18.5 percent in 2006 and 18.8 percent in 2007.The e ects o the recession on both the rateo growth in GDP and receipts collections in2008 combined to reduce the GDP share o re-ceipts back to 17.7 percent. There have beensome signi cant shi ts during the post warperiod in the underlying sources or composi-tion o receipts.

The increase in taxes needed to support thewar e ort in the 1940s saw total (corporate andindividual) income taxes rise to promi nence asa source o Federal receipts, reaching nearly 80percent o total receipts in 1944. A ter 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 o set a postwarsecular decline in excise and other non-incometax shares. The combination o substantial re-ductions in in come taxes enacted in the early1980s and the continued growth in social insur-ance taxes resulted in a continued decline in thetotal income tax share o receipts. By 1983 the

total income tax share had dropped to 54 percento receipts, where it remained until the mid-1990s. Since 1994, the total income tax shareo receipts has increased, reaching 60 percentin 2000, be ore dropping back to 53 percent by2004 and then increasing to 58 percent in 2006and 60 percent in 2007. In 2008, this sharedropped to 57 percent.


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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 pro ts ell rom about 12percent o GDP in the early 1950s to 10 percentin 1968. By 1980 the corporation income taxshare o total receipts had dropped to 12.5percent. During the 1980s, pretax corporatepro ts declined as a percent o GDP and, thus,the corporation income tax share dropped to alow o 6.2 percent in 1983. By 1996, the sharehad climbed back to 11.8 percent. By 2003, ithad dropped back to 7.4 percent, which waswell below the 1980 share, be ore climbingback to 10.1 percent in 2004 and increasing

urther to 14.7 percent in 2006, but droppingslightly to 14.4 percent in 2007. The recessionin 2008 had a signi cant impact on corpora-tion income taxes, bringing its share o totalreceipts down to just 12.1 percent.

This postwar drop in corporation incometax share o total receipts has been more thano set by the growth in social insurance taxesand retirement receipts, as both tax rates andpercentage o the work orce covered by thesepayroll taxes increased. This category o re-ceipts increased rom only 8 percent o totalreceipts during the mid-1940s to 38 percentby 1992, but declined to 32.2 percent by 2000be ore rising to back a 40.0 percent share in2003 then alling o to 34.8 percent in 2006and 33.9 percent in 2007, be ore rising to 35.7percent in 2008.

Excise taxes have also declined in relativeimportance during the postwar period, alling

rom a 19 percent share in 1950 to 10 percentby 1965 and 5 percent by 1985. Excise taxesaccounted or only 3 percent o total receiptsin 2006 and dropped urther to 2.5 percent in

2007, due, in part, to the end o the Federaltelephone excise tax on long distance tele-phone calls. In 2008, the excise tax share o total receipts increased slightly to 2.7 percent.

Outlays and Executive Branch Civilian Em- ployment. Through out most o the Nationshistory prior to the 1930s, the bulk o Federal

spending went towards national de ense, vet-erans bene ts and interest on the public debt.In 1929, or example, 71 percent o Federaloutlays were in these three categories. The1930s began with Federal outlays comprising

just 3.4 percent o GDP. As shown in Table 1.2,the e orts to ght the Great Depression withpublic works and other nonde ense Federalspending, when combined with the depressedGDP levels, caused outlays and their share o GDP to increase steadily during most o thatdecade, with outlays rising to 10.3 percent o GDP by 1939 and to 12.0 percent by 1941 onthe eve o U.S. involvement in World War II.

De ense spending during World War II re-sulted in outlays as a percent o GDP risingsharply, to a peak o 43.6 percent in 1944. Theend o the war brought total spending down to14.3 percent o GDP by 1949. Then the KoreanWar increased spending to an average o 19.0percent o GDP or a ew years during the rsthal o the 1950s, but outlays as a percento GDP then dropped and stayed below 19percent until U.S. involvement in the Vietnamwar escalated sharply in the middle 1960s andearly 1970s.

From 1967 through 1971, Federal outlaysaveraged 19.6 percent o GDP, with a peak oc-curring in 1968 at 20.5 percent o GDP. Thedecline in de ense spending as a percent o GDP that began in 1971, as the withdrawal o U.S. orces rom Vietnam was nearing comple-tion, was more than o set by increased spend-ing on human resources pro grams during the1970sdue to the matura tion o the SocialSecurity program and other longstandingincome support programs, as well as a takeo in spending on the recently enacted GreatSociety programs (such as Medicare and Med-icaid) so that total spending increased as apercent o GDP, averaging 20.2 percent during

the 1970s (refecting, in part, the substantialincrease in grants to State and local govern-ments during the 1970s). Since receipts wereaveraging only 18.0 percent o GDP duringthat decade, the result was chronic de cits av-eraging over 2.2 percent o GDP (contrib utingto this was the recession o 197576, whichsaw de cits increase to 4.2 percent in 1976).


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

the 1970s, interest on the public debt. In theearly 1980s, a combination o substantially in-creased de ense spending, continued growthin human resource spending, large tax cuts,and a recession caused the de cits to soar,which, in turn, sharply increased spending

or inter est on the public debt. Federal spend-ing climbed to an average o 22.7 percent o GDP during 19811985. An end to the rapidde ense 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 GDPby 1989.

In the early 1990s, another recession, inthe ace o continued rapid growth in Federalhealth care spending and additional spend-ing resulting 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 o GDP declining gradually, alling to a low o 18.4 percent by 2000 and 18.5 percent in 2001.Since then, they have risen, to 19.4 in 2002and 20.0 percent in 2003, due, in large part,to the increase in de ense and homeland se-curity spending in response to the September11, 2001, attacks. The outlay share o GDPincreased urther, reaching 20.2 percent in2005 and 20.4 percent in 2006, due, in part,to increased spending on the wars in Iraqand A ghanistan, as well as urther spend-ing increases in response to the devastatinghurri canes that struck States along the Gul Coast in late summer 2005. However, by 2007,outlays had dropped back slightly 20.0 percent

o GDP, only to shoot up signi cantly in 2008,to 21.0 percent o GDP, as a result o both therecession that began in December 2007 andspending associated with the rst stages o aFederal e ort to restore nancial markets to

ull unctionality.

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 Serv ice) since 1981. However, the

composition o employment has shi ted signi -cantly be tween de ense and civilian agenciesduring the postwar period, especially sincethe mid-1980s. In 1986, or example, the 2.1million total or civilian employees was splitequally between de ense and the civilianagencies, with each accounting or 1 millionemployees. During the 1990s and up throughthe current decade there has been a cumula-tive shi t away rom de ense to civilian agencyemployment. In recent years, civilian agencyemployment has been nearly twice that o theDepartment o De ense, accounting or 1.2million o the 1.9 million total. Nevertheless,there has been a gradual decline in total Exec-utive Branch civilian employment during thepast two decades, alling rom the 1992 level o 2.2 million to the current level o 1.9 million.

Although total spending has increasedsub stantially as a percent o GDP since the1950s, the growth in the various componentso spending has not been even and, thus, thecomposition o spending has changed signi -cantly during the same period.

Discretionary spending totaled 12.7 percento GDP in 1962, with three- ourths going tode ense. De ense spending increased duringthe Vietnam War buildup in the late 1960s,causing total discretionary outlays to rise to13.6 percent o GDP by 1968, a ter which asecular decline began. By the middle 1970s,this category had dropped to 10 percent o GDP, where it hovered until the late 1980s,when the de ense buildup that started earlyin that decade came to an end. Discretionaryspending, as a percent o GDP, ell even more

substantially over the 1990s, rom 9.0 percentin 1991 to 6.3 percent in 1999. Since then,discretionary spending has increased. Mucho this growth occurred in 2002 and 2003, inresponse to the 9/11 terrorist attacks and theinitiation o the wars in A ghanistan and Iraq.

Additional spending in response to the Gul Coast hurricanes in September 2005 broughtthe discretionary outlay share o GDP to 7.9


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percent in 2005. This share dropped over thenext to years to 7.6 percent o GDP by 2007.In 2008, discretionary spending increased as apercentage o GDP to 8.0 percent, largely dueto a corresponding increase in de ense spend-

ing. While discretionary spending has ol-lowed a path o secular decline over the past25 years, its major componentsde ense andnonde ensehave contrasting histories.

De ense spending was at 9.3 percent o GDPin 1962. As shown in Table 8.4, spending inthis category had declined to 7.4 percent o GDP by 1965, then increased as a result o the

Vietnam War. A ter peaking at 9.5 percent o GDP in 1968, it returned to the 1965 level by1971. This decline continued throughout the1970s, hitting a low point in this decade o 4.7percent o GDP in 1978 and 1979.

The de ense buildup starting in the early1980s boosted its percentage o GDP backto 6.2 percent by 1986, a ter which it againbegan a gradual decline throughout the rest o that decade. By 2000, de ense spending stoodat 3.0 percent o GDP, refecting the impacto the end o the Cold War and the signi canteconomic growth during much o the 1990s.Spending on the Iraq and A ghanistan warsreversed this decline, with de ense spendinggrowing rom 3.0 percent o GDP in 2001 to 4.0percent in 2005, 2006 and 2007, and jumpingto 4.3 percent in 2008.

Nonde ense discretionary spending as apercent o GDP has ollowed a much di erentpath. In 1962, it stood at 3.4 percent o GDP.During the next ew years it quickly increased,reaching 4.3 percent o GDP by 1967. It droppedslightly a ter that year, but still averaged about4.0 percent o GDP until 1975, when it surgedto 4.5 percent o GDP due to the recession andpartly due to growth in spending on energy, the

environment, housing, and other income supportprograms. Much o this growth was in the ormo Federal grants to State and local govern-ments. Additional grant spending arose romthe creation o various anti recession grants atthe end o the decade. Nonde ense discretionaryoutlays peaked as a percent o GDP during therecession in 1980 at 5.2 percent. This categorydeclined sharply as a percent o GDP starting

in 1982, alling to 3.9 percent by 1985 and to 3.5percent during 19871991. Spending or thesepro grams then increased slightly as a percento GDP, climbing to 3.8 percent by 1993 be orereceding in subsequent years, reaching a low o

3.2 percent in 1999. Growth in recent years hasincreased, with nonde ense discre tionary spend-ing reaching 3.9 percent o GDP in 2005, drop-ping slightly to 3.6 percent by 2007, and edgingup slightly to 3.7 percent in 2008.

Programmatic mandatory spending (whichexcludes net interest and undistributed o set-ting receipts) accounts or the largest part o thegrowth in total Federal spending as a percento GDP since the 1950s. Major programs in thiscategory include Social Secu rity, Medicare, un-employment insurance, deposit insurance, andmeans-tested entitlements (Medicaid, SNAP( ormerly ood stamps), Supplemental SecurityIncome, the re undable 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 represented theimpact o the 197576 recession on GDP levelsand outlays or unemployment com pensationand other unemployment-sensitive programs,the largest part was due to growth in SocialSecurity, Medicare, and Medicaid. These threeprograms totaled 3.4 percent o GDP in 1968and grew rapidly to 5.5 percent o GDP by 1976.While Social Security stabilized as a percent

o GDP during 19851997, ranging rom 4.3percent to 4.6 percent, the growth in other pro-grammatic mandatory spending has continuedto outpace the growth in GDP since the mid-1970s (apart rom recession recovery periods)due largely to Medicare and Medicaid. Thesetwo programs, which were 1.2 percent o GDPin 1975, have more than doubled as a percent o GDP since then, reaching 3.5 percent in 1997,


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dropping slightly to 3.2 percent in 1999 and2000, be ore beginning a steady climb duringthe current decade, growing to 3.9 percent in2005 and 4.3 percent by 2008. Excluding Med-icaid, spending or means-tested entitlements in

2006 and 2007 was at 1.3 percent o GDP, nearlythe same as it was over thirty years ago in 1975.The impact o the recession in 2008 increasedthis spending to 1.6 percent o GDP. By way o contrast, the remaining programmatic manda-tory spendingi.e., ex cluding Medicare, unem-ployment compensa tion, Social Security, depositinsurance and means-tested entitlementshasbeen more than halved as a percent o GDP,

alling rom 3.2 percent in 1975 to a range o 1.0

to 1.7 percent during past two decades. (Majorprograms in this grouping include Federalemployee and railroad retirement, arm pricesupports and veterans compensation and read-

justment bene ts.) Nevertheless, total program-

matic mandatory spending was 11.8 percent o GDP in 2008 compared to 8.0 percent or totaldiscretionary spending.

Additional perspectives on spending trendsavailable in this document include spendingby agency, by unction and sub unction andby composition o outlays categories, whichinclude payments or individuals and grantsto State and local governments.


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11

SECTION NOTES

Notes on Section 1 (Overview o FederalGovernment Finances)

This section provides an overall perspec-tive on total receipts, outlays (spending),and surpluses or de cits. 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, scalyear GDP is used to calculate percentageso GDP. 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 de cits in currentand constant (Fiscal Year 2000=100) dollars,and as percentages o GDP. Section 6 pro-

vides a disaggregation o the constant dollaroutlays.

Table 1.4 shows receipts, outlays and sur-pluses or de cits or the consolidated budgetby und group. The budget is composed o twoprincipal und groupsFederal unds andtrust unds. Normally, whenever data areshown by und group, any payments romprograms in one und group to accounts o the other are shown as outlays o the paying

und and receipts o the collecting und.When the two und groups are aggre gatedto arrive at budget totals these inter undtransactions are deducted rom both receipts

and outlays in order to arrive at transactionswith the public. Table 1.4 displays receiptsand outlays on a gross basis. That is, in con-trast to normal budget practice, collections o inter und payments are included in the re-ceipts totals rather than as o sets to outlays.These inter und 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 in ormationon 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 cat egories, social insurance taxes andcontribu tions and excise taxes, and Table 2.5disaggregates 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 GovernmentOutlays by Function)

Section 3 displays Federal Governmentout lays (on-budget and o -budget) accordingto their unctional classi cation. The unc-tional structure is divided into 18 broad areas( unctions) that provide a coherent and com-prehensive basis or analyzing the budget.Each unction, in turn, is divided into basicgroupings o programs, called sub unctions.The structure has two categoriesallow-ances and undistributed o setting 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 super unction ispro duced to satis y this need. Table 3.1 pro-

vides outlays by super unction and unctionwhile Table 3.2 shows outlays by unctionand sub unction.

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


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zational distinctions. Classi ying each activitysolely in the unction de ning 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 bene ts. However, the spending can notbe counted in both unctions; since the mainpurpose o Medicaid is to nance the health careo the bene ciaries, this program is classi ed inthe health unction. Section 3 provides data onbudget outlays by unction, while Section 5 pro-

vides comparable data on budget authority.

Notes on Section 4 (Federal GovernmentOutlays 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 e ect. For example, theDepartment o Homeland Secu rity 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 AuthorityOn-and O -Budget)

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 sub unction,starting with 1976. Table 5.2 provides the samein ormation by agency, and Table 5.3 provides apercentage distribu tion 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. (Discre-tionary re ers to the Budget En orcement Actcategory that is comprised o programs subjectto the annual appropriations process.)

The data in these tables were compiled usingthe same methods used or the historical tables

or receipts and outlays (e.g., to the extent ea-sible, changes in classi cation are refected ret-roactively so the data show the same streamo transactions in the same location or allyears). However, BA is hetero geneous in nature,

varying in type rom one program to another. Asa result, it is not additiveeither across pro-grams or agencies or a year or, in many cases,

or an agency or program across a series o yearsin the same sense that budget receiptsand budget outlays are additive. The ollowingare examples o di erent kinds o BA and themanner in which BA results in outlays:

BA and outlays or 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 o BA that will bespent over a subsequent period o years(e.g., many de ense procurement con-tracts and major construction programs).

Some BA (e.g., the salaries and expenseso an operating agency) is made avail-able only or a year and any portion notobligated during that year lapses (i.e., itceases to be available to be obligated).

Revolving unds may operate spendingprograms indefnitely with no new in u-sion o BA, other than the authority tospend o setting collections.

BA may be enacted with the expectationit is unlikely ever to be used (e.g., stand-by borrowing authority).

As a result o the Budget En orcement Act o 1990, the measurement o BAchanged in most special and trust undswith legis latively imposed limitations or

beneft or mulas 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 dur ing the fscal year

or beneft payments, administration, andother expenses o the und. In some, butnot all, cases it was possible to adjust BA


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fgures or these unds or years prior to1990 to con orm to the current concepts.

All income to a und (e.g., certain revolv-ing, special, and trust unds not subject

to limitation or beneft ormula) may bepermanently appropriated as BA; as longas the und has adequate resources, thereis 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 bereconstructed to show revised BA fgures

or 1991 and prior years on the new basis.(This distinction between pre-1992 credittransactions and later ones also exists

or outlays, which otherwise do not su errom di erences in type.)

In its earliest years, the Federal Financ-ing Bank (FFB) was conducted as a re-

volving und, making direct loans to thepublic or purchasing loan assets romother unds or accounts. Each new loan bythe FFB required new BA. In many cases,i the same loan were made by the ac-count being serviced by the FFB, the loancould be fnanced rom o setting collec-tions and no new BA would be recorded.Under terms o the 1985 legislation mov-ing the FFB on-budget, the FFB ceased tomake direct loans to the public. Instead,it makes loans to the accounts it services,and these ac counts, in turn, make theloans to the pub lic. Such loans could bemade rom new BA or other obligationalauthority avail able to the parent account.These tables have not been reconstructedto shi t BA previously scored in the FFBto the parent accounts, because there is

no technical way to reconfgure the data.Despite these quali cations, there is a desire

or historical data on BA, and this section hasbeen developed to meet that desire. Budgetauthority data are also provided by unctionin Table 8.9 or various discretionary programgroupings.

Notes on Section 6 (Composition o FederalGovernment Outlays)

The composition categories in this sectiondivide total outlays (including Social Security)

into national de ense and nonde ense compo-nents, and then disaggregate the nonde ensespending into several parts:

Payments or individuals: These are Fed-eral Government spending programs de-signed to trans er income (in cash or inkind) to individuals or amilies. To theextent easible, this category does notin clude reimbursements or current ser-

vices rendered to the Government (e.g.,salaries and interest). The payments maybe in the orm o cash paid directly to in-dividuals or they may take the orm o the provision o services or the paymento bills or activities largely fnanced rompersonal in come. They include outlays orthe provi sion o medical care (in veteranshospitals, or example) and or the pay-ment o med ical bills (e.g., Medicare).They also include subsidies to reducethe cost o housing below market rates,and ood and nutrition assistance (suchas SNAP ormerly ood stamps). Thedata base, while not precise, provides areason able perspective o the size andcomposi tion o income support trans ersin 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 o payments or individuals takes the ormo grants to State and local governmentsto fnance benefts or the ultimate re-cipients. These grants include Medicaid,some ood and nutrition assistance, anda signifcant por tion o the housing as-sistance payments. Sections 11 and 12

provide a more detailed disaggregation o this spending.

All other grants to State and local govern-ments: This category consists o the Fed-eral nonde ense grants to State and localgovernments other than grants defnedas payments or individuals. Section 12disaggregates this spending.


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Net interest: Most spending or net in-terest is paid to the public as interest onthe Fed eral debt. As shown in Table 3.2,net inter est includes, as an o set, signif-cant amounts o interest income. Spend-

ing in this category is equal to net outlaysin the budget unction o the same name.

All other: This category consists o all re-maining Federal spending and o settingreceipts except or those included in the

unctional category undistributed o set-ting re ceipts. It includes most Federalloan ac tivities and most Federal spend-ing or oreign assistance, arm pricesupports, med ical and other scientifcresearch, and, in general, Federal directprogram oper ations.

Undistributed o setting receipts: Theseare o setting receipts that are not o -set against any specifc agency or pro-grammatic unction. They are classifedas unction 950 in the unctional tables.

Addi tional 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 distribu tion o current 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 trans ers, interest,etc.) were the same as in the base year (Fiscal

Year 2000). 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 sepa-

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

Notes on Section 7 (Federal Debt)

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

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

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

Federal debt held by Federal Government ac-counts, which is mostly held by trust unds.Federal debt held by the public consists o allFederal debt held outside the Federal Govern-ment accounts. For example, it includes debtheld by individuals, private banks and insur-ance companies, the Federal Reserve Banks,and oreign central banks. The sale (or repay-ment) o Federal debt to the public is the princi-pal means o nancing a Federal budget de cit(or disposing o a Federal budget surplus).

The Federal Government accounts holdingthe 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 debt as aresult o their role as the countrys central bank,and the size o these holdings has a major impacton the Nations money supply. Since the Federalbudget does not orecast Federal Reserve mon-etary policy, it does not project uture changes inthe amounts o Federal debt that will be held bythe Federal Reserve Banks. Hence, the split o debt held by the public into that portion held bythe Federal Reserve Banks and the remainderis provided only or past years. Table 2.5 showsdeposits o earnings by the Federal Reserve

System. Most interest paid by Treasury on debtheld by the Federal Reserve Banks is returnedto the Treasury as deposits o earnings, whichare recorded as budget receipts.

As a result o a conceptual revision in thequanti cation 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 quanti cation o in-

terest outlays, and provides a more meaning ulmeasure 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 began being recorded with an adjust-ment or any initial discount starting with debtissued in 1989. Zero-coupon bonds, however,are re corded at estimated market or redemptionprice.

Table 7.2 shows the end-o -year amounts o Federal debt subject to the general statutorylimitation. It is recorded at par value (except

or savings bonds) through 1988, but by law thebasis was changed, in part, to accrual value orlater years. Be ore World War I, each debt issueby the Government required speci c authori-zation by the Con gress. Starting in 1917, thenature o this limitation was modi ed 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 changed

rom time to time to meet new requirements.Table 7.3 shows the ceiling at each point in timesince 1940. It provides the speci c legal cita-tion, a short description o the change, and theamount o the limit speci ed by each Act. Most,but not all, o gross Federal debt is subject to thestatutory limit.

Notes on Section 8 (Outlays by Budget

En orcement Act Category)

Section 8 is composed o nine tables, eight o which present outlays by the major cat egoriesused under the Budget En orcement Act (BEA)and under previous budget agree ments betweenCongress and previous Administrations. The

nal table presents discretionary budget author-ity. (Dis cretionary budget authority is shown on

an agency basis in Section 5, Table 5.4 and Table5.5.) Table 8.1 shows Federal outlays withineach o the categories and subcat egories. Theprincipal categories are outlays or mandatoryand related programs and outlays or discretion-

ary programs. Mandatory and related programsinclude direct spending and o setting receiptswhose budget authority is provided by law otherthan appropriations acts. These include appro-priated entitlements and SNAP ( ormerly the

ood stamp program), which receive pro ormaappropriations. Discretionary pro grams arethose whose budgetary resources (other than en-titlement authority) are pro vided in appropria-tions acts. The table shows two major categorieso discretionary pro grams: De ense (Function050) and Nonde ense (all other discretionaryprograms). Table 8.2 has the same structure, butshows the data in constant (FY 2000) dollars.Table 8.3 shows the percentage distribution o outlays by BEA category and Table 8.4 showsoutlays by BEA category as a percentage o GDP.

Tables 8.1 through 8.4 include a categorycalled Means-Tested Entitlements . These pro-grams include entitlement programs that limitbene ts or payments based on the bene ciarysincome and/or assets. Also included are pay-ments rom re undable tax credits that arephased out at certain income (generally, Ad-

justed 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 Grants to States or Medicaid State Childrens Health Insurance

Program

Child Enrollment Contingency Fund Payments to States or Child Support En-orcement and Family Support Programs

(AFDC) Contingency Fund Payments to States or Foster Care and

Adoption Assistance Child Care Entitlement to States Temporary Assistance or Needy

Families


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Payment Where Recovery Rebate Ex-ceeds Liability or Tax

Payment Where Earned Income CreditExceeds Liability or Tax

Payment Where Savers Credit Exceeds

Liability 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 orTax

Payment Where American OpportunityCredit Exceeds Liability or Tax

Payment Where Making Work Pay CreditExceeds 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

Table 8.5 provides additional detail by unc-tion and/or sub unction or mandatory andrelated programs. Table 8.6 shows the samedata in constant dollars.

Table 8.7 provides additional detail by unc-tion and/or sub unction on outlays or discre-tionary programs. Table 8.8 provides the samedata in constant dollars. Table 8.9 provides unc-tion and/or sub unction detail on budget author-ity or discretionary pro grams.

Notes on Section 9 (Federal GovernmentOutlays or Major Physical

Capital, Research and Development, andEdu cation 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 edu cation and training.These data measure new Federal spending ormajor public physical assets, but they excludemajor commodity inventories. In some casesit was necessary to use supplementary datasources to estimate missing data in order to

develop 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 (FY2000) dollars, and shows the percentage distri-bution o outlays and outlays as a percentage o GDP. Table 9.2 ocuses on direct Federal outlaysand grants or major public physical capitalinvestment in current and constant (FY 2000)dollars, disaggregating direct Federal outlaysinto national de ense and nonde ense capital in-

vestment. Table 9.3 retains the same structureas 9.2, but shows direct Federal outlay totals

or physical capital investment as percentag-es o total outlays and as percentages o GDP.Table 9.4 disaggregates national de ense directoutlays, while Table 9.5 disaggregates nonde-

ense out lays or major public physical capitalinvest ment. Table 9.6 shows the composition o grant 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 de ense and non de ensespending 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 conducto education and training in current dollars

or direct Federal programs and or grants toState and local governments. Total outlays orthe conduct o education and training as a per-centage o Federal outlays and in constant (FY

2000) dollars are also shown. As with the serieson physical capital, several budget data sourceshave been used to develop a consistent dataseries extending back to 1962. A discontinuityoccurs between 1991 and 1992 and a ects pri-marily direct Federal higher education outlays.For 1991 and earlier, these data include net loanoutlays. Beginning in 1992, pursuant to changesin the treatment o loans as speci ed in the


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Credit Re orm Act o 1990, this series includesoutlays or loan repayments and de aults orloans originated in 1991 and earlier and creditsubsidy outlays or loans originated in 1992 andlater 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 OutlayDefators)

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 defatorsare based on chain-weighted (FY 2000 chained-dollars) price indexes de rived rom the NationalIncome and Product Accounts data.

Notes on Section 11 (Federal GovernmentPayments or Individuals)

This section provides detail on outlays orFederal Government payments or individ uals,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 trans ers to individualsand amilies. Table 11.1 provides an overviewdisplay o these data in our di erent orms.

All our o these displays show the total pay-ments or individuals, and the split o this totalbetween grants to State and local governments

or payments or individuals (such as Medicaid

and 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-si cation), and includes the same grants versusnongrants (direct) split provided in Table 11.1.The o -budget Social Security program nances

a signi cant portion o the Federal paymentsor individuals. These tables do not distinguish

between the on-budget and o -budget paymentsor individ uals. However, all payments or in-

dividuals shown in Table 11.2 in unction 650

(Social Security) are o -budget outlays, and allother payments or individuals are on-budget.Table 11.3 displays the payments or individu-als by major program category.

Notes on Section 12 (Federal Grants ToState and Local Governments)

For several decades the Federal budget docu-ments have provided data on Federal grants toState and local governments. The purpose o these data is to identi y Federal Governmentoutlays that constitute income to State andlocal governments to help nance their servicesand their income trans ers (payments or indi-

viduals) to the public. Grants generally excludeFederal Government payments or servicesrendered directly to the Federal Government;

or example, they exclude most Federal Gov-ernment payments or research and develop-ment, and they ex clude payments to State socialservice agencies or screening disability insur-ance bene ciaries or the Federal disability in-surance trust und.

Table 12.1 provides an overall perspectiveon grants; its structure is similar to the struc-ture o Table 11.1.

Table 12.2 displays Federal grants by unc-tion (see notes on Section 3 or a descriptiono the unctional classi cation). The bulk o Federal grants are included in the Federal

unds group; however, since the creation o the highway trust und in 1957, signi cantamounts o grants have been nanced romtrust unds (see notes to Section 1 or a de-scription o the di erence between Federal

unds and trust unds). All Federal grantsare on-budget. Wherever trust und outlaysare included in those data, Table 12.2 not onlyidenti es the total grants by unction but alsoshows the split between Federal unds andtrust unds.

Table 12.3 provides data on grants at theaccount or program level, with an identi-


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cation o the unction, agency, and und groupo the payment.

Notes on Section 13 (Social Security andMedicare)

Over the past several decades the SocialSecurity programs (the Federal old-age andsurvivors insurance (OASI) and the Federaldisability insurance (DI) trust unds) andthe Medicare programs (the Federal hospitalinsurance (HI) and the Federal supplemen-tary medical insurance (SMI) trust unds)have grown to be among the largest parts o the Federal budget. Because o the size, therates o growth, and the specialized nancingo these programs, policy analysts requentlywish to identi y these activities separately

rom all other Federal taxes and spending. Asdiscussed in the introductory notes, the twoSocial Security unds are o -budget, while theMedicare unds are on-budget. As Table 13.1shows, the rst o these unds (OASI) began in1937. The table shows the annual transactionso that und and o the other unds beginningwith their points o origin.

The table provides detailed in ormationabout Social Security and Medicare by und.It shows total cash income (including o set-ting receipts, but excluding any o settingcollec tions, which are o set within the expen-diture accounts) by und, separately identi y-ing social insurance taxes and contributions,intragovernmental income, and proprietaryreceipts rom the public. Virtually all o theproprietary receipts rom the public, espe-cially those or the supplementary medicalinsurance trust und, are Medicare insur-ance premiums. The table shows the income,outgo, and surplus or de cit o each und oreach year, and also shows the balances o the

unds available or uture requirements. Most

o these und balances are invested in publicdebt securities and constitute a signi cantportion o the debt held by Govern ment ac-counts (see Table 7.1).

The SMI und, which was established in1967, is nanced primarily by payments romFederal unds and secondarily by medical in-

surance premiums (proprietary receipts romthe public). The other three trust unds are

nanced primarily by social insurance taxes.The law establishing the rate and base o these taxes allocates the tax receipts among

the three unds.

The table shows signi cant trans ers byOASI and DI to the railroad retirement SocialSecurity equivalent account. These trans ersare equal to the additional amounts o moneySocial Security would have had to pay, lessadditional receipts it would have collected, i the rail labor orce had been included directlyunder Social Security since the inception o the Social Security program.

In 1983, when the OASI und ran short o money, Congress passed legislation that (a)provided or a one-time acceleration o mili-tary service credit payments to these trust

unds, (b) provided or a Federal und paymentto OASDI or the estimated value o checksissued in prior years and charged to the trust

unds but never cashed, (c) required thatthe Treasury make payments to OASDHI onthe rst day o the month or the estimatedamounts o their social insurance taxes tobe collected over the course o each month(thereby increasing each a ected trust undsbalances at the beginning o the month), and(d) subjected some Social Security bene ts toFederal in come or other taxes and provided orpayments by Federal unds to Social Securityo amounts equal to these additional taxes.

Additionally, in 1983 the OASI und borrowedrom the DI and HI unds (the tables show the

amounts o such borrowing and repaymentso borrowing). The large intragovernmentalcollec tions by OASDHI in 1983 are a resulto the transactions described under (a) and(b) above. Also starting in 1983, OASI beganpaying interest to DI and HI to reimburse

them or the balances OASI borrowed romthem; OASDHI paid interest to Treasury tocompensate it or the balances trans erred tothese unds on the rst day o each month. Thelegal requirement or Treasury to make pay-ments on the rst day o the month, and theassociated interest payment, ended in 1985 orHI and in 1991 or OASI and DI.


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Notes on Section 14 (Federal SectorTransactions in the National I