[Historical Tables]
[Introduction]
[From the U.S. Government Printing Office, www.gpo.gov]
STRUCTURE, COVERAGE AND CONCEPTS
Historical Tables provides budget users with a wide range of data on
Federal Government finances. Many of the data series begin in 1940 and
include estimates of the President's budget for 1996-2002. Additionally,
Section 1 provides data on receipts, outlays, and surpluses or deficits
for 1901-1939 and for earlier multi-year periods.
Note on GDP and Constant-Dollar Data
Many of the tables in this document show receipts or outlays as
percentages of Gross Domestic Product (GDP) or show budget data in
constant-dollar (i.e., inflation-adjusted) terms. These data are shown
on what is called a pre-benchmark basis. The Bureau of Economic Analysis
of the Department of Commerce has recently completed a benchmark
revision to the National Income and Product Accounts, which include GDP
and the components used to calculate various deflators to construct
constant-dollar time series data. Unfortunately, their revision has only
been completed back to fiscal year 1960. To preserve the consistency of
the time series data contained in the Historical Tables, many of which
go back to 1940 or earlier, the GPD figures and the deflators for
constant-dollar data do not reflect the benchmark revision. Generally,
the pre-benchmark GDP data are approximately 2\1/2\ percent to 4 percent
lower than the post-benchmark levels.
Structure
This document is composed of 17 sections, each of which has one or
more tables. Each section covers a common theme. Section 1, for example,
provides an overview of the budget and off-budget totals; Section 2
provides tables on receipts by source; and Section 3 shows outlays by
function. When a section contains several tables, the general rule is to
start with tables showing the broadest overview data and then work down
to more detailed tables. The purpose of these tables is to present a
broad range of historical budgetary data in one convenient reference
source and to provide relevant comparisons most likely to be of
assistance. The most common comparisons are in terms of proportions
(e.g., each major receipt category as a percentage of total receipts and
of the gross domestic product).
Section notes explain the nature of the activities covered by the
tables in each section. Additional descriptive information is also
included where appropriate. Explanations are generally not repeated, but
there are occasional cross-references to related materials.
Because of the numerous changes in the way budget data have been
presented over time, there are inevitable difficulties in trying to
produce comparable data to cover many years. The general rule is to
provide data in as meaningful and comparable a fashion as possible. To
the extent feasible, the data are presented on a basis consistent with
current budget concepts. When a structural change is made, insofar as
possible the data are adjusted for all years.
One significant change in recent years concerns the budgetary
treatment of Federal credit programs, which was changed by the Federal
Credit Reform Act of 1990. Previously the budget recorded the cost of
direct and guaranteed loans on a cash basis. Under credit reform, the
budget only records budget authority and outlays for the subsidy cost of
direct and guaranteed loans made in 1992 and subsequent years. The
subsidy is defined as the net estimated cash flows to and from the
Government over the life of the loan, discounted to the present. The
cash transactions are recorded as means of financing the deficit.
Because it was impossible to convert the pre-1992 loans to a credit
reform basis, the data are on a cash basis for pre-1992 loans and on a
credit
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reform basis for loans made in 1992 and subsequent years.
Coverage
The Federal Government has used the unified or consolidated budget
concept as the foundation for its budgetary analysis and presentation
since the 1969 budget. The basic guidelines for the unified budget were
presented in the Report of the President's Commission on Budget Concepts
(October 1967). The Commission recommended the budget include all
Federal fiscal activities unless there were exceptionally persuasive
reasons for exclusion. Nevertheless, from the very beginning some
programs were perceived as warranting special treatment. Indeed, the
Commission itself recommended a bifurcated presentation: a ``unified
budget'' composed of an ``expenditure account'' and a ``loan account.''
The distinction between the expenditure account and the loan account
proved to be confusing and caused considerable complication in the
budget for little benefit. As a result, this distinction was eliminated
starting with the 1974 budget. However, even prior to the 1974 budget,
the Export-Import Bank had been excluded by law from the budget totals,
and other exclusions followed. The structure of the budget was gradually
revised to show the off-budget transactions in many locations along with
the on-budget transactions, and the off-budget amounts were added to the
on-budget amounts in order to show total Federal spending.
The Balanced Budget and Emergency Deficit Control Act of 1985 (Public
Law 99-177) repealed the off-budget status of all then existing off-
budget entities, but it also included a provision moving the Federal
old-age, survivors, and disability insurance funds (collectively known
as social security) off-budget. To provide a consistent time series, the
budget historical data show social security off-budget for all years
since its inception, and show all formerly off-budget entities on-budget
for all years. The Omnibus Budget Reconciliation Act of 1989 (OBRA 1989)
moved the Postal Service fund off-budget, starting in fiscal year 1989.
Prior to that year, the Postal Service fund is shown on-budget.
Though social security and the Postal Service are now off-budget, they
continue to be Federal programs. Indeed, social security currently
accounts for about one-fourth of all Federal receipts and one-fifth of
all Federal spending. Hence, the budget documents include these funds
and focus on the Federal totals that combine the on-budget and off-
budget amounts. Various budget tables and charts show total Federal
receipts, outlays, and surpluses and deficits, and divide these totals
between the portions that are on-budget and off-budget.
Changes in Historical Budget Authority, Outlays, Receipts and Deficits
Totals for 1990, 1991 and 1994 have changed from those published in
the 1996 Budget.
Correction of deposit insurance outlays reported to the Treasury for
1990 and 1991 for the Bank Insurance Fund and the FSLIC Resolution Fund
reduces outlays and the deficit for 1990, and increases outlays and the
deficit for 1991, by $190 million.
Various other adjustments by the Treasury Department to 1994 actual
receipts and outlays decrease outlays by $73 million, receipts by $8
million, and the deficit by $65 million.
Budget authority for major trust funds and the Federal Buildings Fund
has been adjusted to conform to the current treatment required under the
Budget Enforcement Act of 1990 (see Notes on Section 5, below).
Note on the Fiscal Year
The Federal fiscal year begins on October 1 and ends on the subsequent
September 30. It is designated by the year in which it ends; for
example, fiscal year 1995 began on October 1, 1994, and ended on
September 30, 1995. Prior to fiscal year 1977 the Federal fiscal years
began on July 1 and ended on June 30. In calendar year 1976 the July-
September period was a separate accounting period (known as the
transition quarter or TQ) to bridge the period required to shift to the
new fiscal year.
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Concepts Relevant to the Historical Tables
Budget (or ``on-budget'') receipts constitute the income side of the
budget; they are composed almost entirely of taxes or other compulsory
payments to the Government. Any income from business-type activities
(e.g., interest income or sale of electric power), and any income by
Government accounts arising from payments by other Government accounts
is offset against outlays, so that total budget outlays are reported net
of offsetting collections. This method of accounting permits users to
easily identify the size and trends in Federal taxes and other
compulsory income, and in Federal spending financed from taxes, other
compulsory income, or borrowing. Budget surplus refers to any excess of
budget receipts over budget outlays, while budget deficit refers to any
excess of budget outlays over budget receipts.
The terms off-budget receipts, off-budget outlays, off-budget
surpluses, and off-budget deficits refer to similar categories for off-
budget activities. The sum of the on-budget and off-budget transactions
constitute the consolidated or total Federal Government transactions.
The budget is divided between two fund groups, Federal funds and trust
funds. The Federal funds grouping includes all receipts and outlays not
specified by law as being trust funds. All Federal funds are on-budget
except for the Postal Service fund starting with fiscal year 1989. All
trust funds are on-budget, except the two social security retirement
trust funds, which are shown off-budget for all years.
The term trust fund as used in Federal budget accounting is frequently
misunderstood. In the private sector, ``trust'' refers to funds of one
party held by a second party (the trustee) in a fiduciary capacity. In
the Federal budget, the term ``trust fund'' means only that the law
requires the funds be accounted for separately and used only for
specified purposes and that the account in which the funds are deposited
is designated as a ``trust fund.'' A change in law may change the future
receipts and the terms under which the fund's resources are spent. The
determining factor as to whether a particular fund is designated as a
``Federal'' fund or ``trust'' fund is the law governing the fund.
The largest trust funds are for retirement and social insurance (e.g.,
civil service and military retirement, social security, medicare, and
unemployment benefits). They are financed largely by social insurance
taxes and contributions and payments from the general fund (the main
component of Federal funds). However, there are also major trust funds
for transportation (highway and airport and airways) and for other
programs financed in whole or in part by user charges.
The budget documents do not separately show user charges. Frequently
there is confusion between the concept of user charges and the concept
of offsetting collections. User charges are charges for services
rendered. Such charges may take the form of taxes (budget receipts),
such as highway excise taxes used to finance the highway trust fund.
They may also take the form of business-type charges, in which case they
are offsetting collections--offset against budget outlays rather than
being recorded as budget receipts. Examples of such charges are the
proceeds from the sale of electric power by the Tennessee Valley
Authority and medical insurance premiums paid to medicare's
supplementary medical insurance trust fund. User charges may go to the
general fund of the Treasury or they may be ``earmarked''. If the funds
are earmarked, it means the collections are separately identified and
used for a specified purpose--they are not commingled (in an accounting
sense) with any other money. This does not mean the money is actually
kept in a separate bank account. All money in the Treasury is merged for
efficient cash management. However, any earmarked funds are accounted
for in such a way that the balances are always identifiable and
available for the stipulated purposes.
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SECTION NOTES
Notes on Section 1 (Overview of Federal Government Finances)
This section provides an overall perspective on total receipts,
outlays (spending), and surpluses or deficits, the on-budget and off-
budget amounts are also separately shown. Tables 1.1 and 1.2 have
similar structures; 1.1 shows the data in millions of dollars, while 1.2
shows the same data as percentages of the gross domestic product (GDP).
For all the historical tables, fiscal year GDP is used to calculate
percentages of GDP. The fiscal year GDP data are shown in Table 1.2.
Additionally, Table 1.1 shows budget totals annually back to 1901 and
for multi-year periods back to 1789.
Table 1.3 shows total Federal receipts, outlays, and surpluses or
deficits in current and constant dollars, and as percentages of GDP.
Section 6 provides a disaggregation of the constant dollar outlays.
Table 1.4 shows receipts, outlays and surpluses or deficits for the
consolidated budget by fund group. The budget is composed of two
principal fund groups--Federal funds and trust funds. Normally, whenever
data are shown by fund group, any payments from programs in one fund
group to accounts of the other are shown as outlays of the paying fund
and receipts of the collecting fund. When the two fund groups are
aggregated to arrive at budget totals these interfund transactions are
deducted from both receipts and outlays in order to arrive at
transactions with the public. Table 1.4 displays receipts and outlays on
a gross basis. That is, in contrast to normal budget practice,
collections of interfund payments are included in the receipts totals
rather than as offsets to outlays. These interfund collections are
grossed-up to more closely approximate cash income and outgo of the fund
groups.
Notes on Section 2 (Composition of Federal Government Receipts)
Section 2 provides historical information on on-budget and off-budget
receipts. Table 2.1 shows total receipts divided into five major
categories; it also shows the split between on-budget and off-budget
receipts. Table 2.2 shows the receipts by major category as percentages
of total receipts, while Table 2.3 shows the same categories of receipts
as percentages of GDP. Table 2.4 disaggregates two of the major receipts
categories, social insurance taxes and contributions and excise taxes,
and Table 2.5 disaggregates the ``other receipts'' category. While the
focus of the section is on total Federal receipts, auxiliary data show
the amounts of trust fund receipts in each category, so it is possible
to readily distinguish the Federal fund and trust fund portions.
Notes on Section 3 (Federal Government Outlays by Function)
Section 3 displays Federal Government outlays (on-budget and off-
budget) according to their functional classification. The functional
structure is divided into 18 broad areas (functions) that provide a
coherent and comprehensive basis for analyzing the budget. Each
function, in turn, is divided into basic groupings of programs entitled
subfunctions. The structure has two categories--allowances and
undistributed offsetting receipts--that are not truly functions but are
required in order to cover the entire budget. At times a more summary
presentation of functional data is needed; the data by ``superfunction''
is produced to satisfy this need. Table 3.1 provides outlays by
superfunction and function while Table 3.2 shows outlays by function and
subfunction.
In arraying data on a functional basis, budget authority and outlays
are classified according to the primary purpose of the activity. To the
extent feasible, this classification is made without regard to agency or
organizational distinctions. Classifying each activity solely in the
function defining its most important purpose--even though many
activities serve more than one purpose--permits adding the budget
authority and outlays of each function to obtain the budget
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totals. For
example, Federal spending for medicaid constitutes a health care
program, but it also constitutes a form of income security benefits.
However, the spending cannot be counted in both functions; since the
main purpose of medicaid is to finance the health care of the
beneficiaries, this program is classified in the ``health'' function.
Section 3 provides data on budget outlays by function, while Section 5
provides comparable data on budget authority.
Notes on Section 4 (Federal Government Outlays by Agency)
Section 4 displays Federal Government outlays (on- and off-budget) by
agency. Table 4.1 shows the dollar amounts of such outlays, and Table
4.2 shows the percentage distribution. The outlays by agency are based
on the agency structure currently in effect. For example, the Department
of Education was established by legislation enacted in 1979. However,
these data show spending by the Department of Education in previous
years that consists of education spending attributable to other agencies
in earlier years, but now attributable to the Department of Education.
Notes on Section 5 (Budget Authority--On- and Off-Budget)
Section 5 provides data on budget authority (BA). BA is the authority
provided by law for agencies to obligate the Government to spend. Table
5.1 shows BA by function and subfunction, starting with 1976. Table 5.2
provides the same information by agency, and Table 5.3 provides a
percentage distribution of BA by agency.
The data in these tables were compiled using the same methods used for
the budget historical tables for receipts and outlays (e.g., to the
extent feasible, changes in classification are reflected retroactively
so the data show the same stream of transactions in the same location
for all years). However, BA is heterogeneous in nature, varying
significantly from one program to another. As a result, it is not
additive--either across programs or agencies for a year or, in many
cases, for an agency or program across a series of years--in the same
sense that budget receipts and budget outlays are additive. The
following are examples of different kinds of BA and the manner in which
there are large divergences between the creation and use of BA.
BA and outlays for each year may be exactly the same (e.g.,
interest on the public debt).
For each year the Congress may appropriate a large quantity of
BA that will be spent over a subsequent period of years (e.g.,
many defense procurement contracts and major construction
programs).
Some BA (e.g., the salaries and expenses of an operating
agency) is made available only for a year and any portion not
obligated during that year lapses (i.e., it ceases to be
available to be obligated).
Revolving funds may operate spending programs indefinitely
with no new infusion of BA, other than the authority to spend
offsetting collections.
BA may be enacted with the expectation it is unlikely ever to
be used (e.g., standby borrowing authority).
All income to a fund (e.g., certain revolving, special, and
trust funds) may be permanently appropriated as BA; as long as
the fund has adequate resources, there is no further
relationship between the BA and outlays.
As a result of the Budget Enforcement Act of 1990, the
measurement of BA changed in most special and trust funds with
legislatively imposed limitations or benefit formulas that
constrain the use of BA. Where previously budget authority was
the total income to the fund, BA in these funds for 1992 and
subsequent years is now an estimate of the obligations to be
incurred during the fiscal year for benefit payments,
administration and other expenses of the fund. To the extent
possible, BA figures for these funds for years prior to 1992
have been adjusted to conform to the current concepts.
Although major changes in the way BA is measured for credit
programs (beginning in 1992) result from the Budget
En-
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forcement Act, these tables could not be reconstructed to
show revised BA figures for 1991 and prior years on the new
basis.
In its earliest years, the Federal Financing Bank (FFB) was
conducted as a revolving fund, making direct loans to the
public or purchasing loan assets from other funds or accounts.
Each new loan by the FFB required new BA. In many cases, if
the same loan were made by the account being serviced by the
FFB, the loan could be financed from offsetting collections
and no new BA would be recorded. Under terms of the 1985
legislation moving 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 the
loans to the public. Such loans could be made from new BA or
other obligational authority available to the parent account.
These tables have not been reconstructed to shift BA
previously scored in the FFB to the parent accounts, because
there is no technical way to reconfigure the data.
Despite these qualifications there is a desire for historical data on
BA, and this section has been developed to meet that desire. Budget
authority data are also provided in Table 8.9 for various discretionary
program groupings.
Notes on Section 6 (Composition of Federal Government Outlays)
The ``composition'' categories in this section divide total outlays
(including social security) into national defense and nondefense
components, and then disaggregate the nondefense spending into several
parts:
Payments for individuals: These are Federal Government
spending programs designed to transfer income (in cash or in
kind) to individuals or families. To the extent feasible, this
category does not include reimbursements for current services
rendered to the Government (e.g., salaries and interest). The
payments may be in the form of cash paid directly to
individuals or they may take the form of the provision of
services or the payment of bills for activities largely
financed from personal income. They include outlays for the
provision of medical care (in veterans hospitals, for example)
and for the payment of medical bills (e.g., medicare). They
also include subsidies to reduce the cost of housing below
market rates, and food and nutrition assistance (such as food
stamps). The data base, while not precise, provides a
reasonable perspective of the size and composition of income
support transfers within any particular year and trends over
time. Section 11 disaggregates the components of this
category. The data in Section 6 show a significant amount of
payments for individuals takes the form of grants to State and
local governments to finance benefits for the ultimate
recipients. These grants include medicaid, some food and
nutrition assistance, and a significant portion of the housing
assistance payments. Sections 11 and 12 provide a more
detailed disaggregation of this spending.
All other grants to State and local governments: This category
consists of the Federal nondefense grants to State and local
governments other than grants defined as payments for
individuals. Section 12 disaggregates this spending.
Net interest: This category consists all spending (including
offsetting receipts) included in the functional category ``net
interest.'' Most spending for net interest is paid to the
public as interest on the Federal debt. As shown in Table 3.2,
net interest includes, as an offset, significant amounts of
interest income.
All other: This category consists of all remaining Federal
spending and offsetting receipts except for those included in
the category ``undistributed offsetting receipts.'' It
includes most Federal loan activities and most Federal
spending for foreign assistance, farm price supports, medical
and other scientific research, and, in general, Federal direct
program operations.
Undistributed offsetting receipts: These are offsetting
receipts that are not offset against any specific agency or
programmatic function. They are classified as function 950 in
the functional tables. Addi-
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tional details on their composition
can be found at the end of Table 3.2.
Table 6.1 shows these outlays in current and constant dollars, the
percentage distribution of current dollar outlays, and the current
dollar outlays as percentages of GDP. The term ``constant dollars''
means the amounts of money that would have had to be spent in each year
if, on average, the unit cost of everything purchased within that
category each year (including purchases financed by income transfers,
interest, etc.) were the same as in the base year (1987). The
adjustments to constant dollars are made by applying a series of price
deflators to the current dollar data base. The composite deflator is
used to produce estimates of constant dollar receipts published in Table
1.3. The separate deflators used for these calculations are shown in
Table 10.1.
Notes on Section 7 (Federal Debt)
This section provides information about Federal debt. Table 7.1
contains data on gross Federal debt and its major components in terms of
both the amount of debt outstanding at the end of each year and that
amount as a percentage of fiscal year GDP.
Gross Federal debt is composed both of Federal debt held (owned) by
the public and Federal debt held by Federal Government accounts, which
is mostly held by trust funds. Federal debt held by the public consists
of all Federal debt held outside the Federal Government accounts. For
example, it includes debt held by individuals, private banks and
insurance companies, the Federal Reserve Banks, and foreign central
banks. The sale of Federal debt to the public is the principal means of
financing the Federal deficit.
The Federal Government accounts holding the largest amount of Federal
debt securities are the civil service and military retirement, social
security, and medicare trust funds. However, significant amounts are
also held by some other Government accounts, such as the unemployment
and highway trust funds.
Table 7.1 divides debt held by the public between the amount held by
the Federal Reserve Banks and the remainder. The Federal Reserve System
is the central bank for the Nation. Their holdings of Federal debt are
shown separately because they do not have the same impact on private
credit markets as does other debt held by the public. They accumulate
Federal debt as a result of their role as the country's central bank,
and the size of these holdings has a major impact on the Nation's money
supply. Since the Federal budget does not forecast Federal Reserve
monetary policy, it does not project future changes in the amounts of
Federal debt that will be held by the Federal Reserve Banks. Hence, the
split of debt held by the public into that portion held by the Federal
Reserve Banks and the remainder is provided only for past years. Table
2.5 shows deposits of earnings by the Federal Reserve System. Most
interest paid by Treasury on debt held by the Federal Reserve Banks is
returned to the Treasury as deposits of earnings, which are recorded as
budget receipts.
As a result of a conceptual revision in the quantification of Federal
debt, the data on debt held by the public and gross Federal debt--but
only a small part of debt held by Government accounts--were revised back
to 1956 in the 1990 budget. The total revision was relatively small--a
change of under one percent of the recorded value of the debt--but the
revised basis is more consistent with the quantification of interest
outlays, and provides a more meaningful measure of Federal debt. The
change converted most debt held by the public from the par value to the
sales price plus amortized discount.
Most debt held by Government accounts is issued at par, and securities
issued at a premium or discount have traditionally been recorded at par.
However, zero-coupon bonds are recorded at estimated market price.
Starting in 1989, total debt held by Government accounts is adjusted for
any initial discount on other securities.
Table 7.2 shows the end-of-year amounts of Federal debt subject to the
general statutory limitation. It is recorded at par value (except for
savings bonds) through 1988, but by law the basis was changed, in part,
to accrual value for later years. Before World War I, each debt issue by
the Government
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required specific authorization by the Congress. Starting
in 1917, the nature of this limitation was modified in several steps
until it developed into a limit on the total amount of Federal debt
outstanding. The Treasury is free to borrow whatever amounts are needed
up to the debt limit, which is changed from time to time to meet new
requirements. Table 7.3 shows the ceiling at each point in time since
1940. It provides the specific legal citation, a short description of
the change, and the amount of the limit specified by each Act. Most of
gross Federal debt is subject to the statutory limit. However, there are
some differences.
Notes on Section 8 (Outlays by Budget Enforcement Act Category)
Section 8 is composed of nine tables that present budget authority and
outlays by the major categories used under the Budget Enforcement Act
(BEA) and under previous budget agreements between Congress and the
current and previous Administrations. Table 8.1 shows Federal outlays
within each of the categories and subcategories. The principal
categories are outlays for mandatory and related programs and outlays
for discretionary programs. Mandatory and related programs include
direct spending and offsetting receipts whose budget authority is
provided by law other than appropriations acts. These include
appropriated entitlements and the food stamp program, which receive pro
forma appropriations. Discretionary programs are those whose budgetary
resources (other than entitlement authority) are provided in
appropriations acts. The table shows three categories of discretionary
programs: Defense (Function 050), International (Function 150), and
Domestic (all other discretionary programs). Table 8.2 has the same
structure, but shows the data in constant (FY 1987) dollars. Table 8.3
shows the percentage distribution of outlays by BEA category and Table
8.4 shows outlays by BEA category as a percentage of GDP.
Table 8.5 provides additional detail by function and/or subfunction
for mandatory and related programs. Table 8.6 shows the same data in
constant dollars.
Table 8.7 provides additional detail by function and/or subfunction on
outlays for discretionary programs. Table 8.8 provides the same data in
constant dollars. Table 8.9 provides function and/or subfunction detail
on budget authority for discretionary programs.
Notes on Section 9 (Federal Government Outlays for Major Physical
Capital, Research and Development, and Education and Training)
Tables in this section provide a broad perspective on Federal
Government outlays for public physical capital, the conduct of research
and development (R&D), and education and training. These data measure
new Federal spending for major public physical assets, but they exclude
major commodity inventories. In some cases it was necessary to use
supplementary data sources to estimate missing data in order to develop
a consistent historical data series. The data for the conduct of
research and development continue to exclude outlays for construction
and major equipment because such spending is included in outlays for
physical capital.
Table 9.1 shows total investment outlays for major public physical
capital, R&D, and education and training in current and constant (FY
1987) dollars, and shows the percentage distribution of outlays and
outlays as a percentage of GDP. Table 9.2 focuses on direct Federal
outlays and grants for major public physical capital investment in
current and constant (FY 1987) dollars, disaggregating direct Federal
outlays into national defense and nondefense capital investment. Table
9.3 retains the same structure as 9.2, but shows direct Federal outlay
totals for physical capital investment as percentages of total outlays
and as percentages of GDP. Table 9.4 disaggregates national defense
direct outlays, while Table 9.5 disaggregates nondefense outlays for
major public physical capital investment. Table 9.6 shows the
composition of grant outlays for major public physical capital
investment.
Table 9.7 provides an overall perspective on Federal Government
outlays for the conduct of R&D. It shows total R&D spending and the
split between national defense and
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nondefense spending in four forms: in
current dollars, in constant dollars, as percentages of total outlays,
and as percentages of GDP. Table 9.8 shows outlays in current dollars by
major function and program.
Table 9.9 shows outlays for the conduct of education and training in
current dollars for direct Federal programs and for grants to State and
local governments. Total outlays for the conduct of education and
training as a percentage of Federal outlays and in constant FY 1987
dollars are also shown. As with the series on physical capital, several
budget data sources have been used to develop a consistent data series
extending back to 1962. A discontinuity occurs between 1991 and 1992 and
affects primarily direct Federal higher education outlays. For 1991 and
earlier, these data include net loan outlays. Beginning in 1992,
pursuant to changes in the treatment of loans as specified in the Credit
Reform Act of 1990, this series includes outlays for loan repayments and
defaults for loans originated in 1991 and earlier and credit subsidy
outlays for loans originated in 1992 and later years.
Table 9.9 also excludes education and training outlays for physical
capital (which are included in Table 9.7) and education and training
outlays for the conduct of research and development (which are in Table
9.8). Also excluded are education and training programs for Federal
civilian and military personnel.
Notes on Section 10 (Implicit Outlay Deflators)
Section 10 consists of Table 10.1, Gross Domestic Product and
Deflators Used in the Historical Tables, which shows the various
implicit deflators used to convert current dollar outlays to constant
dollars.
Notes on Section 11 (Federal Government Payments for Individuals)
This section provides detail on outlays for Federal Government
payments for individuals, which are also described in the notes on
Section 6. The basic purpose of the payments for individuals aggregation
is to provide a broad perspective on Federal cash or in-kind payments
for which no current service is rendered yet which constitutes income
transfers to individuals and families. Table 11.1 provides an overview
display of these data in four different forms. All four of these
displays show the total payments for individuals, and the split of this
total between grants to State and local governments for payments for
individuals (such as medicaid and grants for housing assistance) and all
other (``direct'') payments for individuals.
Table 11.2 shows the functional composition of payments for
individuals (see notes on Section 3 for a description of the functional
classification), and includes the same grants versus nongrants
(``direct'') split provided in Table 11.1. The off-budget social
security program finances a significant portion of the Federal payments
for individuals. These tables do not distinguish between the on-budget
and off-budget payments for individuals. However, all payments for
individuals shown in Table 11.2 in function 650 (social security) are
off-budget outlays, and all other payments for individuals are on-
budget. Table 11.3 displays the payments for individuals by major
program category.
Notes on Section 12 (Federal Grants To State and Local Governments)
For several decades the Federal budget documents have provided data on
Federal grants to State and local governments. The purpose of these data
is to identify Federal Government outlays that constitute income to
State and local governments to help finance their services and their
income transfers (payments for individuals) to the public. Grants
generally exclude Federal Government payments for services rendered
directly to the Federal Government; for example, they exclude most
Federal Government payments for research and development, and they
exclude payments to State social service agencies for screening
disability insurance beneficiaries for the Federal disability insurance
trust fund.
Table 12.1 provides an overall perspective on grants; its structure is
similar to the structure of Table 11.1.
[[Page 11]]
Table 12.2 displays Federal grants by function (see notes on Section 3
for a description of the functional classification). The bulk of Federal
grants are included in the Federal funds group; however, since the
creation of the highway trust fund in 1957, significant amounts of
grants have been financed from trust funds (see notes to Section 1 for a
description of the difference between ``Federal funds'' and ``trust
funds''). All Federal grants are on-budget. Wherever trust fund outlays
are included in those data, Table 12.2 not only identifies the total
grants by function but also shows the split between Federal funds and
trust funds.
Table 12.3 provides data on grants at the account or program level,
with an identification of the function, agency, and fund group of the
payment.
Notes on Section 13 (Social Security and Medicare)
Over the past several decades the social security programs (the
Federal old-age and survivors insurance (OASI) and the Federal
disability insurance (DI) trust funds) and the medicare programs (the
Federal hospital insurance (HI) and the Federal supplementary medical
insurance (SMI) trust funds) have grown to be among the largest parts of
the Federal budget. Because of the size, the rates of growth, and the
specialized financing of these programs, policy analysts frequently wish
to identify these activities separately from all other Federal taxes and
spending. As discussed in the introductory notes, the two social
security funds are off-budget, while the medicare funds are on-budget.
As Table 13.1 shows, the first of these funds (OASI) began in 1937. The
table shows the annual transactions of that fund and of the other funds
beginning with their points of origin.
The table provides detailed information about social security and
medicare by fund. It shows total cash income (including offsetting
receipts) by fund, separately identifying social insurance taxes and
contributions, intragovernmental income, and proprietary receipts from
the public. Virtually all of the proprietary receipts from the public,
especially those for the supplementary medical insurance trust fund, are
medicare insurance premiums. The table shows the income, outgo, and
surplus or deficit of each fund for each year, and also shows the
balances of the funds available for future requirements. Most of these
fund balances are invested in public debt securities and constitute a
significant portion of the debt held by Government accounts (see Table
7.1).
The SMI fund, which was established in 1967, is financed primarily by
payments from Federal funds and secondarily by medical insurance
premiums (proprietary receipts from the public). The other three trust
funds are financed primarily by social insurance taxes. The law
establishing the rate and base of these taxes allocates the tax receipts
among the three funds.
The table shows significant transfers by OASI and DI to the railroad
retirement social security equivalent account. These transfers are equal
to the additional amounts of money social security would have had to
pay, less additional receipts it would have collected, if the rail labor
force had been included directly under social security since the
inception of the social security program.
In 1983, when the OASI fund ran short of money, Congress passed
legislation that (a) provided for a one-time acceleration of military
service credit payments to these trust funds, (b) provided for a Federal
fund payment to OASDI for the estimated value of checks issued in prior
years and charged to the trust funds but never cashed, (c) required that
the Treasury make payments to OASDHI on the first day of the month for
the estimated amounts of their social insurance taxes to be collected
over the course of each month (thereby increasing each affected trust
fund's balances at the beginning of the month), and (d) subjected some
social security benefits to Federal income or other taxes and provided
for payments by Federal funds to social security of amounts equal to
these additional taxes. Additionally, in 1983 the OASI fund borrowed
from the DI and HI funds (the tables show the amounts of such borrowing
and repayments of borrowing). The large intragovernmental collections by
OASDHI in 1983 are a result of the
[[Page 12]]
transactions described under (a) and
(b) above. Also starting in 1983, OASI began paying interest to DI and
HI to reimburse them for the balances OASI borrowed from them; OASDHI
paid interest to Treasury to compensate it for the balances transferred
to these funds on the first day of each month. The legal requirement for
Treasury to make payments on the first day of the month, and the
associated interest payment, ended in 1985 for HI and in 1991 for OASI
and DI.
Notes on Section 14 (Federal Sector Transactions in the National Income
and Product Accounts)
The principal system used in the United States for measuring total
economic activity is the system of national income and product accounts
(NIPA), which provide calculations of the GDP and related data series.
These data are produced by the Bureau of Economic Analysis (BEA) of the
Department of Commerce. As part of this work the BEA staff analyze the
budget data base and estimate transactions consistent with this
measurement system. The NIPA data are normally produced for calendar
years and quarters. Section 14 provides Federal Sector NIPA data on a
fiscal year basis starting in 1947.
The BEA recently completed a benchmark revision to the NIPA data;
however, the data required to update this section to the revised basis
are not yet available. Thus, the data are presented on a pre-benchmark
basis through FY 1995.
Notes on Section 15 (Total (Federal and State and Local) Government
Finances)
Section 15 provides a perspective on the size and composition of total
Government (Federal, State, and local) receipts and spending. Both the
Bureau of the Census and the Bureau of Economic Analysis in the Commerce
Department provide information (in the national income and product
accounts (NIPA) data) on income and spending for all levels of
government in the United States. These tables include the NIPA State and
local transactions with the Federal Government (deducting the amount of
overlap due to Federal grants to State and local governments) to measure
total Government receipts and spending on a fiscal year basis from 1947
through 1994.
Notes on Section 16 (Federal Health Spending)
Section 16 consists of Table 16.1, Total Outlays for Health Programs.
This table shows a broad definition of total Federal health spending by
type of health program, including defense and veterans health programs,
medicare, medicaid, Federal employees' health benefits and other health
spending. It also shows Federal health spending as percentages of total
outlays and of GDP.
Notes on Section 17 (Federal Employment)
Section 17 provides an overview of the size and scope of the Federal
work force. The measures of Federal employment currently in use are end-
strength and full-time equivalents (FTEs). End-strength is the measure
of total positions filled at the end of the fiscal year, representing a
``head count'' of all paid employees.
Federal employment in the Executive Branch, however, is controlled on
the basis of FTEs. Full-time equivalent (FTE) employment is the measure
of the total number of regular (non-overtime) hours worked by an
employee divided by the number of compensable hours applicable to each
fiscal year. A typical FTE workyear is equal to 2,080 hours. Put simply,
one full-time employee counts as one FTE, and two employees who work
half-time count as one FTE. FTE data have been collected for Executive
Branch agencies since 1981.
The tables included in this section illustrate the size of the
governmental work forces utilizing these measures. Table 17.1 shows the
end-strength of the Executive Branch and selected agencies starting in
1940. Table 17.2 shows the end-strength of the Executive Branch and
selected agencies as a percentage of total Executive Branch employment
starting in 1940. Table 17.3 shows FTEs for the Executive Branch and
selected agencies for 1981 and subsequent years; Table 17.4 shows
[[Page 13]]
these
FTEs as a percentage of total Executive Branch FTEs. In Table 17.3, the
data included for 1998-1999 are the limitations for the Executive Branch
established by the Federal Workforce Restructuring Act of 1994. Table
17.5 shows a comparison of the end-strengths of Federal employment and
State and local government employment, and the total of the two as a
percentage of the U.S. population in each year.
WARNING - DO NOT USE KEDIT ON THIS FILE deg. THE
LINE LENGTH CONSTRAINTS MAY CAUSE PROBLEMS deg. USE XYWRITE
(XY) deg.
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HISTORICAL TRENDS
Because the Historical Tables publication provides a large volume and
wide array of data on Federal Government finances, it is sometimes
difficult to perceive the longer term patterns in various budget
aggregates and components. To assist the reader in understanding some of
these longer term patterns, this section provides a short summary of the
trends in Federal deficits and surpluses, debt, receipts, outlays and
employment.
Deficits and Debt.--As shown in Table 1.1, except for periods of war
(when spending for defense increased sharply), depressions or other
economic downturns (when receipts fell precipitously), the Federal
budget was generally in surplus throughout most of the Nation's first
200 years. For our first 60 years as a Nation (through 1849), cumulative
budget surpluses and deficits yielded a net surplus of $70 million. The
Civil War, along with the Spanish-American War and the depression of the
1890s, resulted in a cumulative deficit totaling just under $1 billion
during the 1850-1900 period. Between 1901 and 1916, the budget hovered
very close to balance every year. World War I brought large deficits
that totaled $23 billion over the 1917-1919 period. The budget was then
in surplus throughout the 1920s. However, the combination of the Great
Depression followed by World War II resulted in a long, unbroken string
of deficits that were historically unprecedented in magnitude. As a
result, Federal debt held by the public mushroomed from less than $3
billion in 1917 to $16 billion in 1930 and then to $242 billion by 1946.
In relation to the size of the economy, debt held by the public grew
from 16% of GDP in 1930 to 114% in 1946.
During much of the postwar period, this same pattern persisted--large
deficits were incurred only in time of war (e.g., Korea and Vietnam) or
as a result of recessions. As shown in Table 1.2, prior to the 1980s,
postwar deficits as a percent of GDP reached their highest during the
1975-76 recession at 4.4% in 1976. Debt held by the public had grown to
$477 billion by 1976, but, because the economy had grown faster, debt as
a percent of GDP had declined throughout the postwar period to a low of
24.5% in 1974, climbing back to 28.3% in 1976. Between 1977 and 1981,
deficits averaged 2.5% of GDP. By 1981, debt held by the public stood at
26.5% of GDP, only two percentage points higher than its postwar low.
The traditional pattern of running large deficits only in times of war
or economic downturns was broken during the rest of the 1980s. In 1982,
large tax cuts were enacted as were substantial increases in defense
spending. Reductions in nondefense spending were not sufficient to
offset the impact on the deficit. As a result, deficits averaging $207
billion were incurred between 1983 and 1992. As a result of these
unprecedented peacetime deficits, debt held by the public grew from $785
billion in 1981 to $3.0 trillion in 1992.
Since peaking in 1992, deficits have declined each year, dropping to a
level of $164 billion in 1995. As a percent of GDP, deficits were more
than cut in half during those 3 years, from 4.9% in 1992 to 2.3% in
1995.
Receipts.-- From the beginning of the Republic until the start of the
Civil War, our Nation relied on customs duties to finance the activities
of the Federal Government. During the 19th Century, sales of public
lands supplemented customs duties. While large amounts were occasionally
obtained from the sale of lands, customs duties accounted for over 90%
of Federal receipts in most years prior to the Civil War. Excise taxes
became an important and growing source of Federal receipts starting in
the 1860s. Estate and gift taxes were levied and collected sporadically
from the 1860s through World War I, although never amounting to a
significant source of receipts during that time. Prior to 1913, income
taxes did not exist or were inconsequential, other than for a brief time
during the Civil War period, when
[[Page 16]]
special tax legislation raised the
income tax share of Federal receipts to as much as 13% in 1866.
Subsequent to the enactment of income tax legislation in 1913, these
taxes grew in importance as a Federal receipts source during following
decade. By 1930, the Federal Government was relying on income taxes for
60% of its receipts, while customs duties and excise taxes each
accounted for 15% of the receipts total.
During the 1930s, total Federal receipts averaged about 5% of GDP.
World War II brought a dramatic increase in receipts, with the Federal
receipts share of GDP peaking at 22% in 1944. The share declined
somewhat after the war and has remained fairly steady since the early
1950s, fluctuating between 16-20% of GDP. Federal receipts ranged from
17\1/2\ to 20 percent of GDP in the 1960s and 1970s and are currently at
19% of GDP. This relative stability in the postwar receipts share of GDP
masks some significant shifts over time in the underlying sources or
composition of receipts.
The increase in taxes needed to support the war effort in the 1940s
saw the income tax rise to prominence as a source of Federal receipts,
reaching nearly 80% of total receipts in 1944. After the war, the income
tax share of total receipts fell from a postwar high of 74% in 1952 to
63% in the late 1960s. The growth in social insurance taxes (such as
social security and medicare) more than offset a postwar secular decline
in excise and other non-income tax shares. The combination of
substantial reductions in income taxes enacted in the early 1980s and
the continued growth in social insurance taxes has resulted in a
continued decline in the income tax share of total receipts. By 1983
income taxes had dropped to 54% of total receipts and have remained at
roughly the same share since then.
Corporation income taxes accounted for a large part of this postwar
decline, falling from 30% of total Federal receipts in the early 1950s
to 20% in 1969. During the same period, pretax corporate profits fell
from about 12% of GDP in the early 1950s to 10% in 1969. By 1980 the
corporation income tax share of total receipts had dropped to 12.5%.
During the 1980s, pretax corporate profits declined as a percent of GDP
and, thus, the corporation income tax share dropped to as low as 6.2%,
but eventually climbed back to 11.6% by 1995--still below the 1980
share. This sharp drop in corporation income tax share of total receipts
was more than offset by the growth in social insurance taxes, as both
tax rates and percentage of the workforce covered by these taxes
increased. Social insurance taxes increased from only 8% of total
receipts during the mid-1940s to 38% by 1992, declining slightly to 36%
by 1995. Excise taxes have also declined in relative importance during
the postwar period, falling from a 19% share in 1947 to slightly over 4%
currently.
Outlays and Federal employment.--Throughout most of the Nation's
history prior to the 1930s, the bulk of Federal spending went towards
national defense, veterans benefits and interest on the public debt. In
1929, for example, 71% of Federal outlays were in these three
categories. The 1930s began with Federal outlays comprising 3.4% of GDP.
The efforts to fight the Great Depression with public works and other
nondefense Federal spending, when combined with the depressed GDP
levels, caused outlays and their share of GDP to increase steadily
during most of that decade, with outlays rising to 10.4% of GDP by 1939
and to 12.4% by 1941 on the eve of U.S. involvement in World War II (as
shown in Table 1.2). Defense spending during World War II resulted in
outlays as a percent of GDP rising sharply, to a peak of 45.3% in 1944.
The end of the war brought total spending down to 14.5% of GDP in 1951.
The Korean war increased spending to 19-21% of GDP for a few years in
the early 1950s, but outlays as a percent of GDP then stabilized at
around 18-19% until U.S. involvement in the Vietnam war escalated
sharply in the middle 1960s and early 1970s. From 1967 through 1972,
Federal outlays averaged 20% of GDP. The decline in defense spending as
a percent of GDP that began in 1971, as the Vietnam War came to a close,
was more than offset by increased spending on human resources programs
during the 1970s--due to the maturation of the social security program
and other longstanding income support programs, as well as a takeoff in
spending
[[Page 17]]
on the recently enacted Great Society programs, such as
medicare and medicaid--so that total spending increased as a percent of
GDP to average more than 21% during the last half of that decade. Also
contributing to the increase in Federal spending was a substantial
increase throughout the 1970s in grants to State and local governments.
Since receipts stabilized at 18-19% of GDP during most of the decade,
chronic deficits of about 2% of GDP were incurred (except for the
recession of 1975-76, which saw deficits increase to an average of 4%).
The 1980s began with substantial momentum in the growth of Federal
nondefense spending in the areas of human resources, grants to State and
local governments, and, as a result of the deficits incurred throughout
the 1970s, interest on the public debt. In the early 1980s, a
combination of substantially increased defense spending, continued
growth in human resource spending, a tax cut and recession caused the
deficits to soar, which, in turn, sharply increased spending for
interest on the public debt. Federal spending climbed to an average of
nearly 24% in the first half of the decade. Partial reversals of the tax
cut and rapid defense buildup, along with a strong economy during the
second half of the decade, brought Federal spending back down to 22% of
GDP by 1989. In the early 1990s, another recession in the face of
continued rapid growth in Federal health care spending and additional
spending necessitated by the Savings and Loan crisis caused outlays to
rise to over 23% of GDP in 1991 and 1992. During the past three years,
this outlay growth trend was reversed. Outlays have begun to fall as a
percent of GDP, dropping to 21.2% in 1995.
Despite the growth in total Federal spending as a percent of GDP in
the postwar period, Federal employment, as shown in Table 17.1, has
remained nearly constant, ranging from 1.8 to 2.3 million civilian
employees (excluding the Postal Service) throughout this period. The
composition of employment has shifted dramatically between defense and
civilian agencies over the last 35 years. In 1951, for example, of the
2.0 million employees, 1.2 million worked for the Department of Defense
and 0.7 million worked for civilian agencies. By 1974, Federal
employment was split equally between defense and civilian agencies, with
each accounting for 1.07 million employees. The shift away from defense
to civilian agency employment continued throughout the next two decades
so that by 1995 civilian agency employment was 1.2 million and
Department of Defense employment was 0.8 million, nearly the reverse of
the proportions in 1951. During the past several years total Federal
employment has begun to decline. Since 1992, when there were 2.2 million
employed by the Federal Government, reductions in excess of 200 thousand
employees have been achieved, bringing Federal employment down to 2.0
million in 1995.
Although total spending has increased substantially as a percent of
GDP since the 1950s, the growth in the various components of spending
has not been even and, thus, the composition of spending has changed
significantly during the same period.
Discretionary spending totaled 13% in 1962, with three-fourths going
to defense. Defense spending increased during the Vietnam War buildup in
the late 1960s causing total discretionary outlays to rise to 14% of GDP
by 1968, after which a secular decline began. By the middle 1970s, this
category had dropped to 10\1/2\% of GDP. It fluctuated between 10-10\1/
2\% of GDP until the late 1980's, when the defense buildup that started
early in that decade ended. Total discretionary spending has fallen more
sharply over the past ten years, from 10.0% in 1987 to 7.8% in 1995.
Although total discretionary spending has followed a path of secular
decline over the past 25 years, its major components--defense and
nondefense--have experienced contrasting histories.
Defense discretionary spending ended the 1950s at 10% of GDP. As shown
in Table 8.4, spending in this category had declined to 7.6% of GDP by
1965, then increased as a result of the Vietnam War. After peaking at
9.7% of GDP in 1968, it returned to the 1965 level by 1971. The decline
continued throughout the 1970s, hitting a low point of 4.8% of GDP in
1979. The defense buildup starting in the early 1980s boosted its
percentage of GDP back to 6.5% by 1986, after
[[Page 18]]
which it again began a
gradual decline throughout the rest of that decade. By 1995, defense
discretionary spending stood at 3.9% of GDP, reflecting the impact of
the end of the Cold War on our Nation's defense requirements.
Nondefense discretionary spending as a percent of GDP has followed a
much different path. In 1962, it stood at 3.5% of GDP. During the next
few years it quickly increased, reaching 4.3% of GDP by 1967. It dropped
slightly after that year, but still averaged about 4.1% of GDP until
1975, when it surged to 4.7% of GDP due to the recession and, in part,
to growth in spending on energy and the environment, housing and other
income support programs. Much of this growth was in the form of Federal
grants to State and local governments. Additional grant spending arose
from the creation of General Revenue Sharing in 1972 and various anti-
recession grants at the end of the decade. Nondefense discretionary
outlays peaked as a percent of GDP during the recession in 1980 at 5.3%.
They declined sharply starting in 1982, falling to 4.1% by 1985 and to
3.6% during the 1987-1990 period. Spending for these programs has
increased slightly since 1990, climbing to 4.0% by 1993 before falling
back to 3.9% in 1995.
Programmatic mandatory spending (which excludes net interest and
undistributed offsetting receipts) accounts for a large part of the
growth in total Federal spending as a percent of GDP since the 1950s.
Major programs in this category include social security, medicare,
deposit insurance and means-tested entitlements (medicaid, aid to
dependent children, food stamps and other programs subject to an income
test). Prior to the start of medicare and medicaid in 1966, this
category ranged from 5\1/2\% to 6% of GDP between 1962 and 1965 (less
than half the size of total discretionary spending), with social
security accounting for half. Within a decade, this category was
comparable in size to total discretionary spending, nearly doubling as a
percent of GDP to 10.9% by 1976 (1.1% of which was for unemployment
compensation that year).
Although part of this growth represented the impact of the 1975-76
recession on GDP levels and outlays for unemployment compensation, the
largest part was due to growth in social security, medicare and
medicaid. These three programs totaled 2.6% of GDP in 1965 and had more
than doubled to 5.7% of GDP by 1976. While social security stabilized as
a percent of GDP during 1985-1995, ranging from 4.5% to 4.8%, the growth
in other programmatic mandatory spending has continued to outpace the
growth in GDP since the mid-1970s (apart from the recessionary periods)
due largely to medicare and medicaid. These two programs, which were
1.4% of GDP in 1976, have more than doubled as a percent of GDP since
then, reaching 3.5% in 1995. Excluding medicaid, spending for means-
tested entitlements in 1995 was at 1.3% percent of GDP, the same as it
was twenty years ago in 1976. By way of contrast, programmatic mandatory
spending--other than medicare, unemployment compensation, social
security, deposit insurance and means-tested entitlements--has fallen
from 2.8% in 1976 to 1.6% of GDP in 1995. (Major programs in this
grouping include Federal employee and railroad retirement, veterans'
benefits other than veterans' pensions, and farm price supports.)
Nevertheless, total programmatic mandatory spending in 1995 had reached
11.2% of GDP compared to 7.8% for total discretionary spending.
Additional perspectives on spending trends available in this document
include spending by agency, by function and subfunction and by
composition of outlays categories, which include payments for
individuals and grants to State and local governments.