Full text of Budget in Brief : Fiscal Year 1954

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THE FEDERAL BUDGET




IN BRIEF

THE BUDGET DOLLAR
¡¡¡1




THE FEDERAL BUDGET
IN BRIEF
FISCAL YEAR 1954
(July 1, 1953-June 30, 1954)

T h is B ud get represents m y ju d gm en t as to the
am ou n t of funds needed to carry forw ard our
p rogram s for the security an d w elfare of our people
an d for w orld peace. It is based, like all those I
have tran sm itted in previous years, on the policy
th at the G overnm ent should undertake to do only
w hat is essential for the safety and w ell-being of
the N ation, an d that w hat m ust be done should
be done in the m ost efficient m anner.
B u d get and fiscal policies are tools of n ation al
policy. As such, they are subjects of controversy
an d evolution. I believe th at the policies I have
su p ported are sound, and th at the recom m endations
in this B u d get will enable us to m eet our n ation al
needs in the fiscal year 1954 in the light of the
N ation-w ide an d w orld-wide objectives o f the
U n ited States.
H a r r y
S. T r u m a n .
T h e B ud get M essage
Ja n u a ry 9, 1953




INTRODUCTION
Each January the President sends to the Congress the Budget of the United
States, which contains his recommendations for the financial program of the
Government in the coming fiscal year—the year beginning the following
July 1.
In the Budget, the President estimates how much money will be received
by the Government under existing tax laws and how much money will be
needed to carry out the Government’s activities, including whatever new
programs he proposes.
This issue of the Federal Budget in Brief summarizes the most important
facts about the Budget for the fiscal year 1954, which will begin on July 1,
1953, and end on June 30, 1954.
By law, the President must transmit the Budget to the Congress within
15 days after Congress convenes. Therefore, President Truman was re­
quired to prepare the Budget for the fiscal year 1954, even though the newly
elected President was to take office almost 6 months before the beginning of
the fiscal year.
The estimates of receipts and expenditures which appear in the Budget
are subject to change from the time they are transmitted in January until
the close of the fiscal year 18 months later. They will be affected by amend­
ments and recommendations made by the new President, and also by con­
gressional action on taxes and on appropriations.

2




CONTENTS

Page

S ummary of the 1954 B u d g e t .....................................................................
B udget R e c e ip t s ...............................................................................................
B udget E x pen d itu r es .....................................................................................
B udget E xpenditures by F unction :
M ilitary services..........................................................................................
International security and foreign relations........................................
Finance, commerce, and industry..........................................................
Transportation and com m unication......................................................
N atural resources........................................................................................
Agriculture and agricultural resources.................................................
L a b o r ..............................................................................................................
Housing and community developm ent.................................................
Education and general research.............................................................
Social security, welfare, and h ealth .......................................................
V eterans’ services and benefits................................................................
General governm ent...................................................................................
In terest...........................................................................................................
B udget E xpenditures as a P ercentage of N ational I ncome .........
B udget E xpenditures per C a p it a ............................................................
A p p e n d ix e s ...........................................................................................................
A. T rust Funds— Receipts and Expenditures....................................
B. Receipts from and Payments to the P u b lic..................................
C. Budget Authorizations Related to E xpenditures........................
H istorical T a b le s :
Budget Receipts and Expenditures and Public D ebt— Fiscal Years
1 9 1 5 -5 4 .......................................................................................................
Budget Expenditures by Function— Fiscal Years 1945-54...........




3

4
6
8
10
12
14
16
18
20
22
24
26
28
30
32
34
36
36
39
40
42
43

44
44

SUMMARY OF THE 1954 BUDGET
such as defense housing, aid for
schools in defense areas, generation
and transmission of power for atomic
energy and defense plants, the port
security program of the Coast Guard,
and the internal security program of
the Federal Bureau of Investigation.
In his Budget Message, the Presi­
dent said that if no new aggressions
occur and if our armed forces are
stabilized at their presently approved
levels, he expected national security
expenditures to reach their peak in
the fiscal year 1954. Under these
assum ptio n s, to tal ex p en d itu res
should begin to drop after 1954, as
defense outlays start declining toward
the amount necessary to keep our
armed forces in a state of readiness.
Under present tax laws, which
provide for the expiration of some
of the post-Korean tax increases,
Budget receipts in the fiscal year
1954 are estimated at 68.7 billion
dollars, about the same as estimated
receipts in the current fiscal year,
and a Budget deficit of 9.9 billion
dollars is in prospect.

Federal expenditures in the fiscal
year 1954 are estimated at 78.6 bil­
lion dollars, 4.0 billion dollars higher
than estimated expenditures in the
current fiscal year, and almost twice
the amount spent in 1950, the last
fiscal year before the outbreak of the
Korean conflict.
The 1954 Budget, like all Budgets
since World War II, is dominated by
the costs of safeguarding our security
and paying for past wars. About 73
percent of all Budget expenditures in
1954 will be for major national
security programs—military services,
international security and foreign
relations, atomic energy, defense pro­
duction and economic stabilization,
civil defense, and merchant marine
activities. An additional 14 percent
of Budget expenditures will be for
interest and for veterans’ services and
benefits, which are largely continu­
ing costs of World War II.
The remaining 13 percent will be
for all other activities of the Govern­
ment, including many which con­
tribute directly to the defense effort—

BU DG ET E X PEN D ITU R E S

[Fiscal years.

In billions]

1950
actual

1951
actual

M ajor national security............................
Veterans’ services and benefits...............
Interest.........................................................
O ther............................................................
Adjustment; to daily Treasury state­
ment .........................................................

$17.8
6 .6
5.8
9. 6

$26.4
5.3
5.7
7. 9

$47.2
4. 9
5 .9
9 .0

+ .3

- .7

- .9

T o ta l................................................

40. 1

44. 6

66. 1

Program

4




1952
actual

1954
1953
estimated estimated
$53.2
4. 5
6. 5
10.4

$57.3
4. 6
6 .4
10. 3

74.6

78.6

BUDGET RECEIPTS AND EXPENDITURES
F is c a l Y e a r s

SURPLUS OR DEFICIT
Billions of Dollars
100

1954
Estimated

RECEIPTS

Receipts are estimated
under present tax laws

E X PENDI TURE S
1953
Estimated

RECEIPTS
EXPENDI TURE S

1952
RECEIPTS
E X PENDI TURE S

1951
RECEIPTS
EXPENDI TURE S

1950
RECEIPTS
EXPENDI TURES

1949
RECEIPTS
E X PE N D I TU RE S

1945
RECEIPTS
E X PE N D I TU RE S




5

BUDGET RECEIPTS
B udget receipts under present tax
laws are estim ated at 68.7 billion
d ollars in the fiscal year 1954, the
sam e as the estim ated total for this
year.
D irect taxes on in dividuals and
corporations are the m ajor sources of
the G overnm ent’s incom e. In the
fiscal year 1954 they will provide 81
percent of B ud get receipts. An a d d i­
tional 14 percent will com e from
excise taxes on liquor, tob acco,
gasoline, and other products and
services.
M an y of the increases in tax rates
enacted by the Congress after K o re a
are scheduled to expire before the
end of the fiscal year 1954. T h e
excess profits tax on corporations
will expire on Ju n e 30, 1953. U n d er
the R even ue A ct o f 1951, the rate
increases on in dividu als5 incom e will
expire on D ecem b er 31, 1953, and
the increases in norm al tax rates on
6




corporations on M arch 31, 1954.
V irtu ally all o f the excise tax rate
increases under this act will also
expire on M arch 31, 1954. T h e
purpose o f C ongress in setting these
term ination d ates w as to assure early
i eview o f the p o st-K o rean tax in ­
creases.
T h e scheduled reductions in tax
rates will cause a loss in revenue
estim ated at ab ou t 2 billion d ollars in
the fiscal year 1954. T h eir full-year
effect will be a revenue loss ap p ro x i­
m ately four tim es this am ount.
In his B u d get M essage the Presi­
dent said th at in view of the large
deficit in prospect for 1954, these tax
reductions pose an im m ediate and
serious problem in tax policy. H e
said, “ T h e course o f prudence and
wisdom w ould be to continue to
strive for a b alan ced B udget and a
pay-as-w e-go policy in our re arm a­
m ent p ro g ra m .”

BUDGET RECEIPTS
Billions of Dollars

Where the Budget Receipts W ill Come From in 1954
5.0

10.0

15.0

20.0

2 5 .0

r

3 0 .0

Note: Receipts are estimated under present tax laws
and are shown after deduction of refunds

3.7
Customs and O th er Receipts

Total Budget Receipts
Fiscal Y e a r

1954

E s t.

Billions

1953 Est.

68. 7

1952

62.1

1951

48.1

1950

37 . 0

1949

38.2

1945

44.8




CUSTOMS and OTHER RECEIPTS

$68. 7

5%

Direct Taxes on INDIVIDUALS
47%

Direct Taxes on
CORPORATIONS
34%

1954 Budget

7

B U D G E T E X P E N D IT U R E S

By far the largest item in the B u d get
is the cost of strengthening an d
m ain tain ing
our
arm ed
forces.
These expenditures for m ilitary serv­
ices are estim ated at 46.3 billion
dollars, 59 percent o f total B u d get
expenditures in the fiscal year 1954.
T h ey include not only the p ay and
allow ances o f m ilitary personnel and
the operation and m ain ten an ce o f the
m ilitary establishm ent, b u t also the
purchase o f m ilitary eq u ip m en t and
w eapons, research an d developm ent,
and the stockpiling o f strategic and
critical m aterials.
Expenditures for in ternation al se­
curity an d foreign relations, m ost of
which are for m ilitary an d econom ic
assistance to our allies under the
m utual security p rogram , are esti­
m ated at 7.9 billion dollars, 10 p er­
cent of the Budget.
Interest paym ents, largely a result
of the fivefold increase in the public
debt that took p lace d u rin g W orld
W ar II, are estim ated at 6.4 billion
dollars. T h e cost of benefits an d
services to our 20 m illion veterans is
expected to be 4.6 billion dollars.
Program s for the developm ent,
conservation, and use of our n atu ral
resources are estim ated to cost 4.1
billion dollars. A bou t two-thirds of
this am ount will be for the atom ic
energy program . M o st of the re­
m ainder will be for flood control,
irrigation, and hydroelectric pow er
projects.
8




O f the 2.6 billion dollars of esti­
m ated expenditures for social secu­
rity p rogram s, m ore than 60 percent
will be for gran ts to States, m ainly
for p ublic assistance p aym ents to the
blind, the aged, the perm anently
and totally d isabled , an d dependent
children.
In the field o f tran sportation an d
com m unication, m ore than h alf of
the 2.0 billion d ollars o f estim ated
expenditures is for highw ay gran ts
to the States an d for th at p art of
the cost o f ou r postal system which
is not m et by postal revenues.
Fed eral agricu ltu re p ro g ram s will
cost ab ou t 1.8 billion dollars in 1954.
N early h alf o f this am ou n t will be for
agricu ltu ral price su p po rts and re­
lated p ro g ram s aim ed at stabilizing
farm prices an d incom e.
Expenditu res of 1.5 billion dollars
for general governm ent are largely
for collecting taxes, m an agin g the
public debt, adm inisterin g Federal
property an d records, an d for the
G overnm ent’s paym ents to the civil
service em ployees’ retirem ent system.
Fed eral p rogram s in the fields of
housing, education, labor, and com ­
m erce are expected to cost a total
of 1.4 billion dollars.
The

follow ing

p ages

contain

a

m ore detailed discussion of G overn­
m ent program s, classified accordin g
to the broad purposes or functions
they are designed to serve.

BUDGET EXPENDITURES
Where the M oney W ill G o in 1954

Billions of Dollars

Total Budget Expenditures
Fiscal Y e a r

Billions

INTEREST

1954

E s t.

$78.6

VETERANS 6%

1 953 E s t.

74.6

1952

66.1

1 9 51

44.6

M ILIJARY SERVICES

1950

40.2

59%

1949

40.1

1945

98.7

OTHER
17%,

1954 BUDGET

236685 0 — 53— — 2




9

M I L I T A R Y S E R V IC E S

N early 38 percent of the 46.3
billion dollars to be spent for m ilitary
services in the fiscal year 1954 will be
for the purchase of w eapons and
equipm ent for the arm ed forces.
M ost of these procurem ent expendi­
tures will be for aircraft. T h e rest
will be for ships, guns, am m unition,
e le c tro n ic e q u ip m e n t, a n d o th e r
items.
M odern w eapons and m ilitary
equipm en t are very com plex and
very expensive.
In some aircraft,
for exam ple, the electronic eq u ip ­
ment alone now costs m ore than
an entire W orld W ar II plane d e­
signed for the sam e type of m ission.
Because the w eapons and eq u ip ­
m ent are so com plex, it takes m any
m onths to design, order, produce,
and deliver them. T h e high rates of
delivery now being achieved reflect
the efforts m ad e since the attack on
K o re a to expan d the flow of p ro­
duction. Expenditures for the p ro­
curem ent of w eapons and equipm en t
are expected to reach a peak in the
fiscal year 1954. T hereafter, as the
current build-up of our m ilitary
strength is com pleted, they are ex­
pected to decline grad ually to the
am ount necessary to m ain tain the
arm ed forces in a state of readiness.

10




E xpenditures for active duty m ili­
tary personnel am ount to 24 percent
of total m ilitary spending.
T hese
expenditures are largely for pay,
food, clothing, and tran sportation.
T h e num ber of m en and women
in our arm ed forces has m ore than
doubled since the attack on K o rea.
T h e 1954 Budget provides for an
average strength of m ore than 3.6
m illion, slightly above theN average
provided for in the 1953 B udget.
H ow ever, the President proposed no
change in the goals recom m ended in
the 1953 B u d get— an A rm y of 21
divisions, an A ir Force of 143 w ings,
a N avy of 408 m ajor com bat ships
and 16 large carrier air groups, and
a M arin e C orps of 3 divisions.
A bout 23 percent of the expendi­
tures for m ilitary services is for
operating and m ain tain in g m ilitary
installations and equipm ent.
O ther expenditures in the m ilitary
services category are for bu ilding
and m odernizing m ilitary bases and
installations, for research and devel­
opm ent of new and im proved w eap ­
ons,

for stockpiling

strategic

an d

critical m aterials, an d for strength en­
ing

and

m odernizing

the

reserve

forces and N atio n al G u a rd units.

MILITARY SERVICES
Billions of Dollars

Where the M oney W ill G o in 1954

20

n .6
| Research and Development

I*9
Stockpiling— Strategic and C ritica l M a te ria ls

|

8

I N a tio n a l G u a rd , O rg a n ized Reserves, R O T C

B

1 1

P a y of Retired Personnel, and O th er

Total Expenditures
Fiscal Y e a r

1954
1953

Billions

Est. $ 4 6 . 3
Est. 4 4 . 4

MILITARY SERVICES
% of Budget

59.0
59.5

1952

39.7

60.0

1 9 51

20.5

45.8

1950

12.3

30.6

1949

11.9

29.7




PERCENT OF 1954 BUDGET

11

I N T E R N A T I O N A L S E C U R IT Y A N D

D uring fiscal year 1954 m ore than
95 percent of the estim ated expendi­
tures for international security and
foreign relations will be for m ilitary,
economic, and technical assistance
to friendly nations overseas. T h e
greatest p art of this assistance will be
for the purpose of helping our allies
develop stronger m ilitary forces.
Since the m ilitary assistance program
was in augurated in 1950 m ore than
3 billion dollars’ worth of m ilitary
equipm ent has been delivered, and
these deliveries are continuing to
increase.
M ost of the m ilitary aid will be for
W estern Europe, and will be in the
form of weapons to help expan d and
m odernize the land, sea, and air
forces of the N orth A tlantic T reaty
countries. An increasing proportion
of the required m ilitary equipm ent
will be purchased in E urope under
U nited States contract. T h is off­
shore procurem ent is designed to
help expan d European m ilitary pro­
duction capacity and reduce the
need for direct econom ic aid from
the U nited States. Som e European
countries, nevertheless, will still re­
ceive direct econom ic aid to enable
th em to su p p o r t la r g e d efen se
program s.
In non-European areas m ilitary
assistance will help to equip the
forces of countries like Indochina
which are directly engaged in com ­

12




F O R E IG N

R E L A T IO N S

batin g aggression, and will help other
countries to exp an d and im prove
their defenses.
In the N e a r E ast, F a r E ast, and
L atin A m erica econom ic an d te c h ­
nical assistance will be provided to
perm it essential econom ic develop ­
m ent to be carried forw ard. F or
exam ple, the B u d get provides funds
to help lelieve the pligh t o f thou­
san ds of hom eless A rab refugees, to
help In d ia and Pakistan solve press­
ing econom ic problem s an d to a s­
sist L atin A m erican countries in the
developm ent o f their econom ies.
U n d er the Point F ou r p ro g ram
m any countries will be p rovided
with technical know-how to help
them overcom e poverty, hunger,
an d disease.
E xpenditures for the con d u ct of
foreign affairs in 1954 are esti­
m ated at 302 m illion dollars. O f
this am ount, ab ou t 40 percent will
be for the V oice of A m erica and
other overseas inform ation activities
designed to expose com m unist false­
hoods and to carry the truth ab ou t
the U nited States to people in all
parts o f the w orld— including those
behind the Iron C u rtain . M o st o f
the rem ain der will be for our share
o f the expenses o f in ternation al o r­
ganizations, for the j operation of
em bassies and consulates, and for
other activities of the S tate D e p a rt­
m ent.

INTERNATIONAL SECURITY AND FOREIGN RELATIONS
Millions of Dollars

Expenditures for Fiscal Years
4,000

6, 0 0 0

8,0 00

6,459

Expenditures INTERNATIONAL SECURITY AND FOREIGN RELATIONS
Millions

% of Budget

1 9 54 E s t.

$7,861

10.0

1953 E s t.

6,035

8.1

1952

5,268

8.0

1951

4,72 7

10.6

1950

4,805

12.0

1949

6,459

16. 1

Fiscal Y e a r




13

F IN A N C E , C O M M E R C E , A N D

IN D U S T R Y

F in an cial assistance to exp an d de­
fense production accounts for alm ost
three-quarters of the
estim ated
275 m illion dollars of expenditures
for finance, com m erce, and industry
program s in the fiscal year 1954.
T hese expenditures will be su b stan ­
tially less than the am ount being
spent this year, as the expansion of
productive cap acity nears com ple­
tion and defense production starts
to level off.
T h e G overnm ent has offered a
wide variety of incentives to private
industry to exp an d the productive
cap acity that is needed for the
current defense build-up and for a
possible future m obilization effort.
Producers of m aterials and products
needed for defense have received
assistance through F ed eral purchase
com m itm ents, loans and loan g u a r­
antees, grants, subsidies, and tax
allow ances. In the case of alu m i­
num , productive cap acity is being
expanded to twice the 1950 level.
Sim ilar but sm aller increases are
being achieved in the supply of
copper and of scarce alloying m etals.
R isin g m achine tool deliveries, stim u ­
lated by G overnm ent purchase com ­
m itm ents, have greatly reduced the
delays
in
tooling
for
defense
production.

14




D urin g the p ast two years, controls
have been necessary to help direct
the flow of critical m aterials to
defense and essential civilian p rod u c­
tion, and to prevent inflationary
price, w age, and rent increases.
M o st controls over the use of critical
m aterials, except for certain scarce
m etals, will have been suspended or
relaxed by the end of the fiscal year
1953. L egislative auth ority for p ro­
duction and stab ilization controls
will expire this year. T h e President
recom m ended th at this auth ority be
extended, and included funds in the
B udget to carry on these p rogram s
on a reduced scale through the fiscal
y ear 1954.
T h e Sm all Defense Plants A dm in is­
tration and other F ed eral agencies
are helping sm all businesses m ake
their full contribution to the defense
effort by assisting them to obtain
defense contracts and ad eq u ate
financing.
O ther expenditures for finance,
com m erce, and industry include
those for the antitrust activities of
the G overnm ent and other p rogram s
to help m ain tain a com petitive
econom y, the loans by the R eco n ­
struction F in an ce C orporation to
assist business, an d the ad m in istra­
tion of the paten t laws.

FINANCE, COMMERCE, AND INDUSTRY
W here the M oney W ill G o in 1954

Millions of Dollars
50

Total Expenditures
Fiscal Y e a r

Millions

150

FINANCE, C OM M ERCE, A N D

200

INDUSTRY

% of Budget

1 9 5 4 Est .

$275

.3

1 9 5 3 Est .

458

.6

1952

241

.3

1 9 51

176

.4

1950

213

.5

1949

127

.3




I00

PERCENT OF 1954 BUDGET

15

T R A N S P O R T A T IO N

A N D

C O M M U N IC A T IO N

M ost Fed eral expenditures for
tran sportation and com m unication
are for operation of the postal serv­
ice, for gran ts to States for highw ays,
and for air and w ater n avigation
aids and facilities.
W ith presently authorized postal
rates, the postal deficit for the fiscal
year 1954 is estim ated at 669 m illion
dollars. T h is large deficit results
from the fact that during the p ost­
w ar p eriod — despite increased effi­
ciency and reduced services— o p erat­
ing costs, such as salaries an d tran s­
portation charges, have increased
faster than postal revenues.
A l­
though first-class m ail will show a
profit, heavy losses will be incurred
on m agazin es and other second-class
m ail and on advertising circulars and
other third-class m ail.
F ed eral gran ts to the S tates for
highw ay im provem ent are generally
m atch ed on an eq u al basis by State
funds. T h ey are used to develop and
m ain tain our system of Fed eral-aid
highw ays which now totals 673,000
miles. O ther F ed eral highw ay p ro­
gram s include road construction in
national forests and in A laska. T h e
F ed eral G overnm ent is also b uild in g
access roads to defense plants, m ili­
tary installations, and sources of
strategic m aterials.
T h e C oast G u ard , which is resp on ­
sible for prom oting safety o f life at
sea an d enforcing m aritim e laws, has
16




recently exp an d ed its operations in
order to protect ports again st sa b o ­
tage, an d to increase its readiness to
assist the N avy in the event o f a
future em ergency. M ore than h alf
of the expenditures for river and
h arb or navigation im provem ents by
the C orp s of E ngineers in 1954 will
be for m ain tenance activities on
existing projects. T h e President also
in cluded funds in the B u d get to start
five new construction projects, re­
qu ired for the efficient h an dlin g of
essential w ater-borne traffic.
T h e Civil A eronautics A dm in is­
tration operates air n avigation aid s
an d furnishes various services w hich
are essential to the safe op eration of
both civil and m ilitary aircraft. T o
overcom e in adequ acies in the N a ­
tion’s airport system , the President
recom m ended increased am ou n ts for
grants-in-aid to States an d m u n ici­
palities for airp ort construction.
In addition to its norm al program s
for prom oting an active m erch ant
m arin e through ship construction
an d operating subsidies, the G overn ­
m ent is now bu ilding 35 fast cargo
ships to m eet special defense req u ire­
m ents. T h is em erg en cy p ro g ra m
will be largely com pleted d u rin g the
fiscal year 1954. Provision is m ad e
in the B udget for the construction of
four passenger-cargo ships to be sold
to private operators for service on
essential trade routes.

TRANSPORTATION AND COMMUNICATION
Where the M oney W ill G o in 1954

Millions of Dollars
200

Total Expenditures
Fiscal Y e a r

Millions

400

600

TRANSPORTATION AND COMMUNICATION
% of Budget

1 954 E s t.

$2,016

2.6

1953 E s t.

2,056

2.8

1952

1,923

2.9

1 951

1,685

3.8

1950

1,703

4.2

1 949

1,600

4.0

PERCENT OF 1954 BUDGET

230685 0 — 53---------- 3




17

N A TU R A L

RESO URCES

In the fiscal year 1954, alm ost
two-thirds o f the expenditures clas­
sified under n atu ral resources will be
for the developm ent of atom ic energy.
T w o m ajo r expansions o f the
cap acity for producing fissionable
m aterials and atom ic w eapons have
been authorized by the Congress
since the attack on K o rea, the first in
the fall o f 1950 and the second
early in the sum m er o f 1952. As a
result of these expansions, construc­
tion expenditures under the atom ic
energy p rogram are expected to rise
su bstantially in the fiscal year 1954.
In addition, the 1954 B u d get p ro­
vides increased am ounts for the p ro­
curem ent of uran ium ores and
concentrates, for the production of
fissionable m aterials and atom ic
w eapons, and for the developm ent
and testing of im proved w eapons.
Increased em phasis will be placed on
research lead in g to the developm ent
of atom ic reactors for the production
of electric power and for the p ro­
pulsion o f ships and aircraft.

The

B udget also provides for con tin ua­
tion o f research in other peacetim e
applications o f atom ic energy, such
as those in biology and m edicine.
18




M ost of the rem ain ing expenditures
for n atu ral resources will be for river
basin developm ent projects now
under construction. T h ese projects
will provide local flood protection
an d irrigation, as well as m ultiplepurpose reservoirs for flood control,
irrigation, n avigation , an d hydro­
electric pow er developm ent. T h e
President recom m ended th at funds
be provided for startin g eigh t new
projects and five additions to exist­
ing projects w hich are needed for
flood protection and for the p ro d u c­
tion o f electric pow er for defense
and industrial purposes.
T h e B udget also includes funds for
intensive m ineral exploration , for
expan d ed research in m ining tech­
nology to help conserve existing
m etal supplies, and for increased
developm en t of substitutes for m etals
in short supply.
O ther resource p rogram s are for
m anagem ent, developm ent, and use
of the m illions of acres of n ation al
forests and other lands w hich the
G overnm ent owns. T h ese lan d s con­
tain v alu ab le tim ber, ran ge, and
m ineral resources. T h ey also include
the n ation al parks, which h ad
41,500,000 visitors last year.

NATURAL RESOURCES
Where the M oney W ill G o in 1954

Millions of Dollars
1, 0 0 0

Total Expenditures
Fiscal Y e a r

Millions

% of Budget

Est. $ 4 , 0 9 7
Est. 3 , 3 7 0

4.5

1952

2,948

4.5

1 9 51

2, 051

4.6

1950

1,624

4.0

1949

1,536

3.8




3,000

NATURAL RESOURCES

1953

1954

2,000

5.2

19

A G R IC U L T U R E A N D

A G R IC U L T U R A L R ESO U R C ES

E xpenditures for farm price su p ­
port an d related program s will
account for nearly h alf the total
expenditures for agriculture and
agricu ltu ral resources in the fiscal
year 1954. O utlays for farm price
support depend m ainly on factors
affecting the supply an d dem an d
for farm com m odities, such as a c re ­
age planted, w eather conditions, and
food needs. As a result, net exp en d i­
tures for this p rogram vary consider­
ab ly from year to year. M ost of the
estim ated 1954 expenditures will be
for the acquisition of w heat and corn
by the C om m odity C redit C o rp o ra­
tion for future sale.
In order to help conserve our
agricu ltural land and w ater re­
sources, the Federal G overnm ent
provides technical assistance to farm ­
ers in soil conservation districts,
m akes paym ents to farm ers to en­
cou rage soil conservation practices,
and undertakes upstream flood pre­
vention projects. T he 1954 B udget
provides for an increase in exp en d i­
tures for upstream flood prevention

20




to start work in several new w ater­
sheds and to accelerate work now
under w ay in other w atersheds.
T h e rural electrification p ro g ram
has m ade great strides since its
inception in 1935. A t that tim e less
than 11 percent of the N a tio n ’s
farm ers had central station electric
service; on Ju n e 30, 1952, m ore than
88 percent had this service. A s the
electrification p rogram is ap p ro ac h ­
ing com pletion, the loan p rogram
for rural telephones established in
1950 is expandin g.
Provision is
m ad e in the 1954 B u d get for this
expansion.
O th er loan program s of the D e­
partm en t of A griculture help farm ­
ers to develop and o p e ra te efficient
fam ily-size farm s.

T h e D ep artm en t

also conducts a wide variety of re­
search program s, assists in the control
o f pests and plan t and an im al d is­
eases, and m akes gran ts to States for
extension

work

an d

research— all

designed to increase the efficiency of
A m erican agricu ltu re.

AGRICULTURE AND AGRICULTURAL RESOURCES
Where the M oney W ill G o in 1954

Millions of Dollars
200

400

600

800

Total Expenditures AGRICULTURE AND AGRICULTURAL RESOURCES
Fiscal Y e a r

Millions

% of Budget

$1,827

2.3

1, 943

2.6

1952

1, 045

1.6

1951

650

1.5

1950

2, 783

6.9

1949

2,512

6.3

1954

E s t.

1953

Est




PERCENT OF 1954 BUDGET

21

LA B O R

Four-fifths of all F ed eral exp en d i­
tures for labor program s are in the
form of gran ts to the States for a d ­
m inistration of the em ploym ent serv­
ice an d unem ploym ent insurance
program s. E m ploym ent offices give
first priority to the recruiting of
workers for defense plants an d other
essential work. T h e D ep artm en t of
L a b o r supplem ents the S tate em ­
ploym ent services by helping to
achieve orderly interstate recruitm ent
of m anpow er when such recruitm ent
is necessary.
Even though the level of u n em ­
ploym ent rem ains low, m ore claim s
for unem ploym ent insurance are
expected in 1954. T h is increase in
w orkload will occur because S tates
have exp an d ed the coverage of their
unem ploym ent insurance laws and
because the F ed eral G overnm ent
has set up a new unem ploym ent
insurance p rogram for veterans who
do not find em ploym ent im m ediately
after d isch arge from the aim e d
forces.
T h e D ep artm en t of L a b o r con ­
ducts apprentice training p rogram s
to help m eet shortages of skilled
workers, and cooperates w ith S tate
agencies in carrying out safety train ­
ing cam paign s to reduce the num ber

22




of accidents to workers on the jo b .
It also enforces m inim um -w age an d
child-labor laws, an d determ ines
m inim um w ages to be paid by
G overnm ent contractors.
T h e Fed eral M e d iation an d C o n ­
ciliation Service, d ealin g w ith in du s­
tries generally, an d the N atio n al
M ediation B oard, serving the tran s­
portation industries, assist lab or an d
m an agem en t in reach in g earlier
settlem ent of disputes affecting in ter­
state com m erce. T h e N atio n al L a ­
bor R elation s B o ard holds elections
to designate the representatives of
em ployees for b arg ain in g purposes,
and enforces F ed eral laws with
respect to unfair lab o r p ractices by
unions and em ployers.
T h e B ureau of L a b o r Statistics
collects and publishes inform ation on
current

em ploym ent

levels,

occu ­

p ation al shortages, hours of work,
in dustrial accidents, an d w age and
price trends.

In ad d ition to m eeting

a w idespread public need, this infor­
m ation

is

helpful

in

form ulatin g

occup atio n al deferm ent policies u n ­
der

Selective

Service,

in

placing

defense contracts, an d in deciding
on the location of new in dustrial
plants.

LABOR
Where the M oney W ill G o in 1954

Millions of Dollars
200

250

M ed iatio n and Regulation of La b o r Relatio ns

! Lab or Information, Statistics, and G e n e ral A dm inistration

Total Expenditures
Fiscal Y e a r

Millions

LA BO R
% of Budget

1954 Est.

$268

.3

1953 Est.

252

.3

1952

243

1951

228

.4
.5

1950

262

.7

1949

193

.5




P E R C E N T OF 1954 B U D G ET

23

H O U S IN G

A N D

C O M M U N IT Y D E V E L O P M E N T

M ore th an h alf the estim ated net
expenditures for housing and com ­
m unity d evelopm en t p rogram s in the
fiscal year 1954 will be for aids to
private housing, largely in the form
o f m ortgage purchases. T h e Federal
N atio n al M o rtg ag e A ssociation ex­
pects to buy m ore than 40,000 m ort­
gages to help finance p riv ate housing
in critical defense areas, an d about
the sam e n u m ber of other m ortgages,
chiefly for veteran s’ housing. In
addition, the F ed eral H ousin g A d ­
m inistration will insure m ortgages
for the construction and purchase of
ap p ro xim ately 400,000 hom es. E x ­
penditures for F N M A m o rtg ag e p u r­
chases will su bstan tially exceed ex­
pected receipts from sales and am or­
tization o f m ortgages on hand.
H ow ever, F H A receipts from m ort­
g ag e insurance prem ium s should
m ore than cover current expenses
and losses, an d thus ad d to reserves
again st possible futu re losses.
In som e defense areas, chiefly near
m ilitary bases, the p erm an en t need
for housing is so un certain that p ri­
vate builders can n o t provide all of
the needed housing. In these areas,
the F ed eral G overnm ent is now su p ­
plying 19,000 tem po rary dw elling
units, an d the President recom ­
m ended ad d ition al funds for another
16,000 units.

raid w arning system in the 191 cities
which are likely to be p rin cipal ta r­
gets in the event o f an enem y attack
on the U n ited States. T h ey will
also pay for ad d ition s to the stockpiles
of m edical an d engineering supplies
and equipm ent. T h ese m easures,
supplem ented by technical gu id an ce
and lim ited gran t-in-aid program s,
are designed to help S tate and local
governm ents organ ize an effective
voluntary system o f civil defense.
T h e Public H ousin g A dm in istra­
tion m akes loans an d gran ts to local
authorities for construction of lowrent public housing for low-incom e
families. T h e 1954 B u dget provides
for starting 75,000 dw elling units,
considerably m ore than the 35,000
being started in 1953, but well below
the annual av erage of 135,000 units
authorized by law. T h e local a u ­
thorities expect to sell su bstan tial
am ounts of long-term bonds to

F ed eral expenditures for civil d e­
fense in 1954 will com plete the air

to colleges to help provide needed

24




private investors an d use p art o f the
proceeds to rep ay short-term con­
struction

loans

Governm ent.

from

the

F ed eral

In 1954, Fed eral re­

ceipts for this p rogram are expected
to exceed expenditures.
T he Federal G overnm ent m akes
loans and gran ts to assist cities in
elim inating slum s an d redeveloping
blighted areas.

It also m akes loans

student and faculty housing.

HOUSING AND COMMUNITY DEVELOPMENT
Where the M oney W ill G o in 1954

Millions of Dollars

100

0

100

200

Total Expenditures HOUSING AND COMMUNITY DEVELOPMENT
Fiscal Y e a r

Millions

% of Budget

1954 Est.

$509

.6

1953 Est.

7 57

1.0

1952
1951

735
602

1.3

1950

262

.7

1949

282

.7




1.1

PERCENT OF 1954 BUDGET

25

E D U C A T IO N

A N D

G EN ER A L

RESEARC H

N early two-thirds of estim ated F ed ­
eral expenditures for ed ucation and
general research m the fiscal year
1954 will be for p aym ents to help
com m unities w here F ed eral activi­
ties— especially defense activities—
h ave im posed heavy burdens on the
schools. U n d er this program , the
F ed eral G overnm ent is helping local
com m unities to build schools in
nearly 1,000 school districts and to
m eet school o p eratin g costs in ab ou t
2,600 districts.
M o st of the rem ain in g expendi­
tures for ed ucation are in the form
o f gran ts to the States for vocational
ed u catio n and for lan d -gran t col­
leges. In addition, the F ed eral G o v­
ernm ent helps su p p o rt a few selected
ed u catio n al institutions, including
H ow ard U niversity, C olu m b ia In ­
stitution for the D eaf, and the A m eri­
can Printing H ouse for the Blind.
T h ro u g h the Office of Edu cation,
the G overnm ent also provides pro­
fessional advice an d inform ation to
ed u cators throughout the country.
Expenditures for general-purpose
research are for the activities of the
N atio n al Science F ou n d ation , the
Census B ureau, an d the N ation al
B u reau of S tan d ard s.
T h e N atio n al Science Foun d ation

26




was established two years ago to
develop a scientific research policy
for the N ation, to evalu ate the re­
search program s now u nder w ay, to
help rem edy gap s in our know ledge,
and to help overcom e shortages of
skilled scientific w orkers. It aw ards
grad u ate fellowships to prom ising
young scientists an d gives support to
selected basic research projects in u n i­
versities and other scientific centers.
D uring the fiscal year 1954, the
Census B ureau will take the censuses
of business, tran sportation, m an u ­
factures, and m ineral industries,
which are taken every fifth year, and
will begin prelim inary work on the
1954 census of agriculture.
G eneral libraries an d m useum s o p ­
erated by the F ed eral G overnm ent
include the L ib rary of C ongress, the
Sm ithsonian Institution, the N atio n al
G allery of Art, an d the B otan ic
G ardens.
O ther activities closely related to
education and general research are
discussed elsewhere in this booklet.
M ajor items, involving m uch larger
expenditures than the general-pur­
pose activities discussed in this sec­
tion, are m ilitary research, atom ic
energy research, an d educational
benefits for veterans.

EDUCATION AND GENERAL RESEARCH
Millions of Dollars

Where the M oney W ill G o in 1954

1 87

Lib rary and Museum Services

Total Expenditures EDUCATION AND GENERAL RESEARCH
Fiscal Ye ar

Millions

% of Budget

1954 Est.

$288

.4

1953 Est.

272

.4

1952

171

.3

1951

115

.3

1950

123

.3

1949

75

.2




PERCENT OF 1954 BUDGET

27

S O C I A L S EC U R IT Y , W E L F A R E , A N D

M ore than 60 percent of Fed eral
expenditures for social security, wel­
fare, an d health are in the form of
grants-in-aid to the S tates to help
them provide public assistance bene­
fits, low-cost lunches for school
children, public health and v o ca­
tional reh ab ilitation services, and
hospitals.
Public assistance gran ts alone
am oun t to 1.3 billion dollars. T hese
F ed eral gran ts, in com bin ation with
S tate and local funds, are used to
p ay benefits to ap p ro xim ately 5 m il­
lion needy people m ost of whom are
either dependen t children or are
over 65 years of age. T h is program
should not be confused with old-age
an d survivors insurance, which is
financed through a trust fund and is
not included in B u d get expenditures.
N early 5 m illion people now receive
benefits from the old -age an d sur­
vivors in surance trust fund.
T h e G overnm ent also operates a
retirem ent an d insurance system for
railroad workers, financed by payroll
taxes. T h e transfer o f these taxes
to a trust fund ap p e ars as a Budget
expenditure.
Public health expenditures include
28




H EA LTH

grants to States for hospital construc­
tion, m atern al and child health
services, and the control an d preven­
tion of tuberculosis, venereal disease,
cancer, and m en tal illnesses. O ther
public health expenditures are pri­
m arily for m edical research, p ro ­
fessional assistance to S tate and local
health agencies, and for the o p era­
tion of Public H ealth Service hos­
pitals. A large new research hospital
will be opened d u rin g 1953, to
develop d a ta on the causes, treat­
m ent, and cure of such serious dis­
eases as cancer an d h eart trouble.
Federal gran ts to S tates u nder the
school lunch p rogram o f the D ep art­
m ent of A griculture are com bined
with State, local, and p rivate funds
to provide low -priced lunches for
8 million school children throughout
the country.
O ther expenditures for social secu­
rity, welfare, an d health are p rin ci­
pally for services to In d ian s, acciden t
com pensation for G overnm ent w ork­
ers, grants to assist S tate an d local
governm ents in the reh ab ilitation of
physically h an d icap p ed people, and
operation of the F ed eral prisons and
probation system .

SOCIAL SECURITY, WELFARE, AND HEALTH
W here the M oney W ill Go in 1954

Millions of Dollars

200

400

600

800

1,000

1,200

1,400

Total Expenditures SOCIAL SECURITY, WELFARE, AND HEALTH
Fiscal Y e ar

Millions

% of Budget

1954

E s t.

$2, 579

3.3

1953

Est

2, 594

3.5

1952

2,491

1951

2,296

3.8
5.1

1950

2, 142

5.3

1949

1,843

4.6




29

V E T E R A N S ’ S E R V IC E S A N D

B E N E F IT S

Exp en d itures for benefits and serv­
ices to veterans are estim ated at
4.6 billion d ollars in the fiscal year
1954, ab o u t the sam e as in 1953.
T h is is a decline of 38 percent from
the peak of 7.4 billion d ollars spent
in 1947, but the outlook is for in­
creases in future years as new vet­
eran s are being d isch arged from our
ex p an d ed arm ed forces at a rate of
a b o u t one m illion a year.
C om p en sation an d pensions, which
accou n t for the m ajo r p art of all
expenditures for veteran s’ program s,
•are in creasin g steadily. In the fiscal
y e ar 1954 it is estim ated that an
av erag e of 3,348,000 in dividu als and
fam ilies will receive paym ents to tal­
ing m ore th an 2.5 billion dollars.
T h is is an increase since 1947 of
504,000 cases an d 617 million d o l­
lars in an n u al expenditures.
R ead ju stm e n t benefits for veterans
of the current em ergency, sim ilar to
those provided W orld W ar II vet­
erans, were enacted by the Congress
in 1952. T h e 1954 B u d g et includes
expenditures of 809 m illion d ollars
to provide ed u catio n and training
benefits for an av erage of 715,000
veterans, in clu d in g 475,000 veterans

30




of the K o re an conflict. Betw een
1945 and the end o f 1954 m ore than
8.500.000 veterans will have received
school, jo b , or farm train in g benefits.
U nder the new V eteran s’ R e a d ­
justm en t A ssistance A ct, it is expected
that a weekly av erag e o f 55,000
veterans will receive unem ploym ent
allow ances in 1954. A n estim ated
368.000 veterans o f W orld W ar II
and the K o re an conflict will also
obtain G overnm ent-guaranteed loans
for homes, farm s, an d businesses.
T h e G overnm ent p ay s p art of the
first year’s interest on these loans and
pays for losses on gu aran teed loans.
T h e 1954 B u d get provides for an
average d aily beneficiary load of
136,250 in V eteran s A dm in istration
facilities and con tract hospitals and
in State hom es.

T h e B u d get p ro ­

vides also for bu ild in g the last four
hospitals in the current veterans’
hospital construction p rogram .
O ther expenditures are for d eath
claim s under the servicem en’s in­
dem nity p rogram , for paym ents to
veterans’ insurance trust funds for
deaths traceable to w ar h azard s, and
for the costs o f adm inistration.

VETERANS SERVICES AND BENEFITS
Where the M oney W ill Go in 1954

Millions of Dollars
500

1, 00 0

1,50 0

2 , 0 0 0 _______ 2 , 5 0 0

Readjustment Benefits: Lo a n G u a ra n te e , Unem ploym ent, O th er

Other Services and Adm inistration

Total Expenditures VETERANS' SERVICES AND BENEFITS

1953

m

CO
cn

iscal Y e a r

Millions

% of Budget

$4,564

5.8

4,546

6.1

1952

4,863

7.4

1951

5,342

12.0

1950

6,647

16.6

1949

6, 726

16.8

Est




P E R C E N T OF 1954 B U D G ET

31

G EN ER A L G O V ER N M EN T

N early one-third of the expen di­
tures for general governm en t repre­
sents the costs of tax collection and
financial m an agem en t.
M ost of
these activities are carried on by the
T re asu ry D ep artm en t, which col­
lects taxes an d custom s duties, m an ­
ages the p u blic d ebt, m ints coins,
prints currency, an d p ays the G o v ­
ernm ent’s bills. T h e G en eral A c­
counting O ffice au d its the accounts
of G overn m en t agencies.
A n ad d itio n al 28 percent of the
expen d itures for general governm ent
will be for the G overn m en t’s p ay ­
m ents tow ard the retirem en t of civ ilservice em ployees. A b o u t two-thirds
of all F ed eral civilian em ployees are
m em bers of the civil-service retire­
m ent and d isab ility system , which is
financed through sum s collected from
em ployees an d from the G overnm ent
as em ployer.
T h e G en eral Services A dm in istra­
tion is the central property and
record s-m an agem en t agency of the
G overnm ent. It buys an d stores
supplies an d equ ipm en t, m an ages
pu blic buildings, op erates the N a ­
tional A rchives, an d supervises the
storage of G overnm ent records. T h e
G overnm ent P rinting O ffice is one
of the largest p rin tin g establishm ents
in the w orld. It prints for G overn ­
m ent use an d for sale to the public a
d aily record of the proceedings of
C ongress, other congressional d ocu ­

32




ments, and m aterials p repared by
G overnm ent agencies in the p er­
form ance of their functions.
T h e Fed eral B u reau of In v estig a­
tion is responsible for in vestigatin g
and obtaining evidence in cases in­
volving espionage, sab o tag e, treason,
and other m atters p ertain in g to the
internal security of the U n ited States.
It also investigates such crim in al
activities as bank robbery, k id n ap ­
ing, and m otor-vehicle thefts.
T h e Im m igration and N a tu ra liz a ­
tion Service adm inisters law s govern­
ing the adm ission, exclusion, and
deportation o f aliens, and the n atu ­
ralization of can d id ates for U nited
States citizenship. It also p atrols
the borders o f the U n ited S tates to
prevent the unlaw ful entry o f aliens.
T h e D ep artm en t o f the Interior
supervises our territories, island p os­
sessions, and the Pacific islan ds for
which we are responsible under a
U nited N ations m an d ate. T h e F e d ­
eral G overnm ent also m akes an
annual contribution to help finance
local governm ent in the D istrict of
Colum bia.
T h e W eather B u reau m ain tain s
368 local offices located a t cities and
airports throughout the continental
U nited States an d in A laska, Puerto
R ico, and som e Pacific islands.
These offices m ake the observations
required for w eather forecasting and
issue local forecasts an d w arnings.

GENERAL GOVERNMENT
Millions of Dollars

Where the M oney W ill G o in 1954
400

500

I Territories, Possessions, and District of C olum bia

I W eather Bureau, Paym ent of C laim s, and O th er

Total Expenditures GENERAL GOVERNMENT
Fiscal Y e ar

Millions

1954 Est. $1, 547

% of Budget

2.0

1953 Est.

1,385

1.9

1952

1,411

2.1

1951

1,290

2.9

1950

1, 164

2.9

1949

1, 070

2.7




PERCENT OF 1954 BUDGET

33

IN T E R E S T

M ost o f the expenditures for inter­
est result from the larg e increase in
the public debt which occurred
d u rin g W orld W ar II. Interest p ay ­
m ents in the current fiscal year and
in the fiscal year 1954 will be con­
siderably higher than in 1952,
because of the increase in the total
interest-bearing debt an d the rise in
the av erage interest rate.
E xpenditures in the fiscal year 1953
will be un usually high, because in
th at year ab ou t 20 m on th s’ interest
falls due on m ore than 15 billion
d ollars in obligations. T h e decrease
o f 100 m illion dollars in 1954 from
the estim ated paym ents in 1953,
therefore, does not in dicate a rever­
sal in the general u p w ard trend of
interest expenditures.
N early h alf the interest on the
public debt is p aid on m arketable
obligations. M ost o f these securities
are held by banks, insurance com ­
panies, and other financial institu­
tions. T h e higher levels o f interest
rates prevailing d u rin g the p ast two
years are causin g a g rad u al rise in
expenditures as outstan d in g issues
m ature an d are refunded at new
rates.

34




Interest on savings bonds represents
about 25 percent of total interest
paym ents.

T hese bonds are owned

by nearly 40 percent o f all A m eri­
can families.

Interest rates on new

issues of savings bonds and on out­
standing bonds held beyond m aturity
were increased last spring, but these
changes will have little effect on
expenditures in the fiscal year 1954.
M ost of the rem aining interest is
paid on special issues sold to G o vern ­
m ent trust funds. T h e interest rate
on those issues is generally fixed by
law and is u sually higher th an the
average rate on the total debt.
O ther nonm arketable securities on
which interest is p aid consist m ostly
of investm ent bonds held by insur­
ance com panies and other private
institutions for long-term investm ent,
and of short-term savings notes gen­
erally bought by corporation s for
tem porary investm ent of tax reserves.
Interest paym ents are fixed obli­
gations of the F ed eral G overnm ent.
Unlike most B udget expenditures,
they do not require an n u al a p p ro ­
priations by the C ongress.

INTEREST
liions of Dollars
Where the M oney W ill G o in 1954

3.0

Interest on Public Debt— O th er N on m arketable O b lig atio n s

Interest on Refunds and Uninvested Trust Funds

T o t a l E x p e n d itu re s

CO
CXI

Fiscal Year

Millions

IN T E R E S T
% of Budget

8.2

6,520

8 .7

1952

5,934

8.9

1951

5 ,7 1 4

12.8

m

$6,420

1953

E s t.

1950

5 ,8 1 7 *

14.5

1949

5,445

13.6

'

P E R C E N T OF 1954 B U D G ET
^Includes approxim ately $225 million resulting from change in reporting methods.




35

B U D G ET

E X P E N D IT U R E S

AS

A

PER C EN TAG E

O F

N A T IO N A L

IN C O M E

F ed eral B ud get expenditures in the
fiscal year 1954 will be equal in
am ou n t to 26 percent of the national
incom e in th at year, as com pared to
18 percent in 1950, the last fiscal year
before the attack on K o rea. In
1945, the peak year of W orld W ar II
e x p e n d it u r e s , F e d e r a l s p e n d in g
am ounted to m ore than 52 percent
of the n ation al incom e.
E xpenditures for m ilitary and in­

ternational program s alone will be
alm ost the sam e proportion of the
national incom e as all Fed eral ex­
penditures represented in 1950.
Expenditures for all other program s
of the

Federal

G overnm ent

will

represent 8 percent of the national
income in 1954 com pared with 10
percent in 1950 and 11 percent in
1939.

B U D G E T E X P E N D IT U R E S PER C A P IT A

D u rin g the fiscal year 1954, Fed eral
expenditures will am oun t to 488
d ollars for each m an, w om an, and
child in the country. T h is is 221
d ollars m ore than per c ap ita expend­
itures in 1950. In 1945, the peak
year of W orld W ar II expenditures,
G overnm ent spending am ounted to
709 dollars per cap ita.
T h e increase since 1950 has been

36




in program s to exp an d the arm ed
forces and to help strengthen our
allies overseas.

In

1954,

m ilitary

and international p rogram s will cost
336

dollars

per

c ap ita

with 114 dollars in 1950.

com pared
E x p en d i­

tures per cap ita for all other program s
com bined are expected to be ab ou t
the sam e in 1954 as in 1950.

BUDGET EXPENDITURES

AS A PERCENTAGE OF NATIONAL INCOME
Percent

$

13

1939

1945

1950

1951

1952

1953

Peak War Year

1954

Estimatali

BUDGET EXPENDITURES

PER CAPITA

709

Dollars

mummi

'¡a2
488

4 71
425

292

267

JuuuiM
.2.jiiiimS SB

69

mmm
mim»'in. '

J ü J fc




1945
P#a* War Year

195D

1951

1952

i iiUAMm

jjmmm ..

1953

miummm
: i:

»u»i»hi^.^

1954

Estim ated

37

Direct Taxes
on I n d i v i d u a l s

32.1

E stim ated
in b i l l i o n s
of dollars

Direct Taxes
on C o r p o r a t i o n s

23.1

Excise
Taxes

C u s t o ms and
Other Taxes

9.8

3.7

FEDERAL BUDGET

i n r r „ „ in„
Borrow,ni

9.9

* B a s e d on
pre se nt ta x laws

Receipts.............$68.7*
Expenditures . . . . 78.6
Deficit.............
9.9*
__________________ ___________________ 4
DWfljj
Hous ing, E du c at i o n ,
L a b o r , a n d Commerce

General Go ve r nme nt

1.5

1.4
Ag r iculture

1.8

Transportation
and Co mmunication

Social S e cur i t y ,
W e l f a r e a nd H e a l t h

2.6
N at ur al Resour ce s

4.1

Veter ans

4.6

Inter national

Military Services

Interest

7.9

— 46.3 —

6.4

38




A P P E N D IX E S

U p to this point, this booklet has discussed B u d get receipts and exp en d i­
tures. T h ree other aspects of F ed eral financial operation s are described in
the appendixes which follow.
A ppen dix A shows the receipts and expenditures of trust funds.
A pp en d ix B presents a sum m ary of the total cash tran sactions between the
F ed eral G overnm ent and the public.
A pp en d ix C shows the relationship between au th orization s to incur ob li­
gations on behalf of the G overnm ent and B u dget expenditures.




39

A P P E N D IX A

TRUST FU N D S

M o st of the financial transactions
of the G overnm ent are directly
reflected in B u d get receipts and
expenditures.
Several
im portant
program s, however, are operated
th rou gh trust funds with the F ederal
G overnm ent actin g as trustee. T h e
tran saction s of these trust funds are
not in cluded in the totals of B udget
receipts and expenditures.
M o n ey held in trust by the G overn ­
m ent is not av ailab le for ordinary
G overnm ent expenditures. It m ay
be spent only for the special purposes
o f the trust. T ru st fund m oney in
excess o f current spending require­
m ents is invested largely in special
issues o f G overnm ent bonds.
A t the end of the fiscal year 1952,
a b o u t 40 billion d ollars in U nited
S tates securities w as held by G overn ­
m ent trust funds. T h e receipts of
each trust fund include interest
earn ed on its investm ents in G o v­
ernm ent bonds. T o ta l receipts of the
trust funds are currently higher than
expenditures, an d the funds are
accu m u latin g betw een 3 and 4
billion d o llars a year.
Im p o rtan t p rogram s conducted
through trust funds include old-age
and survivors insurance, unem ploy­
m ent in surance, railro ad retirem ent,
F ed eral em ployees’ retirem ent, and
veteran s’ life insurance.

40




T h e old-age and survivors in su r­
ance program is financed p rim arily
by a special payroll tax. U n d e r
existing law, this tax is scheduled to
rise on Ja n u a ry 1, 1954, from one
and one-half percent to two percent
each on covered em ployers an d
em ployees. E xpen ditu res from this
trust fund consist of m onthly benefits
to retired workers, benefits to their
survivors,

an d

the

ad m in istrative

costs of the program .
T h e railroad retirem ent fund and
the

Federal em ployees’ retirem ent

fund

are

operated

in

a

sim ilar

m anner.
T h e unem ploym ent in surance trust
fund is financed by payroll taxes
which the States collect from em ­
ployers and tran sm it to the F ed eral
G overnm ent.

T h e fu n d ’s ex p en d i­

tures consist m ostly of w ith draw als
by the States to p ay unem ploym ent
com pensation benefits to workers.
L ife

insurance

for

W orld W ars I and

veterans

of

I I is p rovided

through the veteran s’ life in surance
trust funds.

R eceip ts consist largely

of prem ium s paid by those who are
insured, and expenditures are p ri­
m arily paym ents to beneficiaries of
policyholders and paym ents of d iv i­
dends.

APPENDIX A

TRUST FUNDS

RECEIPTS AND EXPENDITURES

Fiscal Year 1954 Estimated
4

Billions of Dollars
5

r

Railroad
Rttiremenf

Total Trust Fund
RECEIPTS AND EXPEWITURES-i* Billma o f Dollar,
Fiscal Y e ar

Vetétant
Lift Irtturance

Receipts

Expenditi

1954

E s t.

9.5

1953

E s t.

9.1

5. 7

1951

8.8
7.8

5.3
3. 7

1950

6. 7

6.9

1949

5. 7

3.9

1952

6.3

A|! Other
Trust funds




41

APPENDIX B

RECEIPTS FROM AND PAYMENTS TO THE PUBLIC
Fiscal Year 1954 Estimated

Millions of Dollars

T O T A L R EC EIPT S F R O M THE P U B L IC

7 5 .2

EXCESS PAYMENTS OVER RECEIPTS

T O T A L P A Y M E N T S T O THE P U B L IC

To show the total flow of money
between the public and the Federal
Government, a statement of “ re­
ceipts from and payments to the
public” has been developed. This
statement has also been called the
“ consolidated cash budget” and
“ cash income and outgo of the
United States Treasury.”
The figures showing the total flow
of money between the Federal Gov­
ernment and the public are useful for
many purposes, particularly in help­
ing to describe the economic impact
of Federal financial transactions.
In order to derive the total of re­
ceipts from and payments to the pub­
lic, it is necessary to consolidate
Budget and trust fund transactions.
Transactions between Government
agencies and trust funds, such as
the Government payment to the civilservice retirement fund, are elimi­
nated in this consolidation, since these
are not cash transactions between the
Government and the public.
Certain other noncash transactions
are also eliminated in the consolida­
tion. For example, interest which
accrues on savings bonds is counted
42




è' l//////////A
ô .ô f
8 1 .8

as a Budget expenditure at the time
of accrual. But the interest is not
paid in cash until the bonds are
redeemed. Hence, the consolidation
eliminates the interest accruals and
includes the interest paid at the time
of redemption.
The table below shows how the
totals of receipts from and payments
to the public are derived from Budget
receipts and expenditures.
Fiscal year 1954, estimated. In billions

Budget receipts...................................
Trust fund receipts............................
Intragovernmental transactions. . . .
Seigniorage on silver.........................

$68. 7
9.6
—3. 0
—0.1

Total receipts from the public.

75. 2

Budget expenditures..........................
78.6
Trust fund expenditures...................
6 .3
Intragovernmental transactions. . . . —3. 0
Net accrued interest and other non­
cash transactions............................ —0.1
Total payments to the public. .

81.8

Excess of payments over receipts. . .

6.6

APPENDIX C

BUDGET AUTHORIZATIONS

RELATED TO EXPENDITURES

Fiscal Year 1954 Estimated

Billions of Dollars

41.1

31.8

NEW
OBLIGATIONAL A
AUTHORITY
T

To be spent in 1954

F e d e ra l agen cies can n o t in cu r
obligations or spend m oney until
the C ongress authorizes them to do
so. Su ch authorization is usually
m ade in the form of appropriations.
Since it takes time to place orders
for goods and services, there is an
interval between the time Congress
gran ts the authorization and the
tim e the agencies incur obligations.
T h ere is a further interval before the
ob ligated funds are actually spent,
since it takes time for goods to be
produced and delivered. As a result,
the am oun t of new obligational
auth ority gran ted for any year is not
entirely spent in that year. Also,
the expenditures m ade in any one
fiscal year com e in p art from new
ob ligatio n al authority granted for
that year and in p art from authority
gran ted in prior years.
In the fiscal year 1954, 48 percent
of the 78.6 billion dollars of estim ated
expenditures will be from o b lig a­
tional auth ority which was m ade
av ailab le in prior years. T h e re­
m ain in g expenditures will com e from
authorizations for the fiscal year
1954.




To be spent after 1954

729

T h e President recom m ended en­
actm ent of 72.9 billion dollars of
authority to incur new obligations in
1954. O f this am o u n t 41.1 billion
d ollars w ould be spent in 1954 and
31.8 billion d ollars in later years.
Because of the long lead-tim e in­
volved in m ilitary procu rem ent— the
time required to design, order, p ro­
duce, test, and deliver w eapons and
equipm en t— expenditures have nec­
essarily lag g ed far behind new obli­
gation al authority in the p ast few
years.
F o r the three-year period
1951 through 1953, new ob ligation al
authority is expected to exceed
expenditures by 72.3 billion dollars.
A sm all p art o f this excess w ill be
unspent auth ority w hich will be
turned back to the T reasu ry . M o st
of it represents the valu e of m ilitary
equipm en t w hich h as been ordered
but not yet delivered and com pletely
paid for.
In the fiscal year 1954, this trend
will be reversed because deliveries
of m ilitary equ ip m en t ordered in
earlier years are expected to exceed
the am ou n t o f new eq u ip m en t p laced
on order.

43

BUDGET RECEIPTS AND EXPENDITURES AND PUBLIC DEBT
Fiscal years 1915 through 1954
[In m illions]

F iscal
year

T o ta l
B u d g et
receipts

T o ta l
Budget
expen di­
tures

S u rp lu s
or
deficit

$683
762
1,100
3,630
5,085
6,649
5, 567
4,021
3,849
3,853
3,598
3, 753
3,992
3,872
3,861
4,058
3,116
1,924
2,022
3,065

$746
713
1,954
12, 662
18, 448
6, 357
5,058
3,285
3,137
2,890
2,881
2,888
2,837
2,933
3,127
3,320
3,578
4,659
4,623
6,694

-$ 6 3
+48
-8 5 3
-9 ,0 3 2
-1 3 ,3 6 3
+291
+509
+736
+713
+963
+717
+865
+ 1 ,1 5 5
+939
+734
+738
-4 6 2
- 2 , 735
- 2 ,6 0 2
- 3 , 630

1915_____
1916_____
1917_____
1918_____
1919_____
1920_____
1921_____
1922
1923_____
1924_____
1925 ____
1926_____
1927_____
1928_____
1929
1930_____
1931_____
1932.
1933
1934

P u b lic
d eb t at
end of
year
$1,191
1,225
2,976
12, 455
25, 485
24,299
23,978
22,963
22, 350
21, 251
20, 516
19, 643
18, 512
17, 604
16, 931
16,185
16, 801
19, 487
22, 539
27,053

F iscal
year

T o tal
B u d get
receipts

T o tal
Budget
expen di­
tu res

S u rp lu s
or
deficit

1935
1936.
1937_____
1938
19391940
1941
1942
1943.
1944
1945.
1946
1947_____
1948_____
1949_____
1950_____
1951.
1952_____
1953(est.)_
1954(est.)_

$3, 729
4,069
4, 979
5,803
5,104
5, 264
7,227
12, 696
22, 201
43, 892
44, 762
40,027
40,043
42, 211
38, 246
37,045
48,143
62,128
» 68, 697
i 68, 665

$6, 521
8,494
7, 758
6,979
8,966
9,183
13, 387
34,187
79, 622
95,315
98, 703
60, 703
39, 289
33, 791
40,057
40,156
44, 633
66,145
74, 593
78, 587

—$2, 791
- 4 , 425
- 2 , 777
-1 ,1 7 7
- 3 , 862
- 3 ,9 1 8
-6 ,1 5 9
-2 1 , 490
-5 7 ,4 2 0
-5 1 ,4 2 3
-5 3 , 941
- 2 0 , 676
+754
+ 8 ,4 1 9
—1,811
- 3 , 111
+ 3 , 510
- 4 ,0 1 7
-5 ,8 9 6
- 9 ,9 2 2

P u b lic
debt at
en d of
year
$28, 701
33,779
36, 425
37,165
40,440
42,968
48, 961
72,422
136, 696
201,003
258, 682
239,422
258, 285
252, 292
252, 770
257,357
255, 222
259,105
253,990
273, 800

1 E stim a te d on b asis of present tax law s.

BUDGET EXPENDITURES BY FUNCTION
Fiscal years 1945 through 1954
[In m illions of dollars]
F u n ctio n

1945

1946

1947

1948

1949

1950

M ilita ry services 1____________ ____ . . 84, 570 45,134 14, 316 10,963 11,915 12, 281
In tern atio n al secu rity an d foreign rela­
tio n s 1_______________________ ________
677 1,463 6, 541 4, 781 6, 459 4,805
236
112
9
132
127
F in an c e, com m erce, an d in d u stry ______
213
T ra n sp o rta tio n an d com m u n ication ____ 3,364
786
546 1, 213 1,600 1,703
254
628 1,113 1,536 1,624
247
N a tu ra l reso u rces______________________
574 2, 512 2, 783
A griculture an d agricu ltu ral re so u rc e s... 1,602
743 1,243
174
194
L a b o r __________________________________
204
183
193
262
2 199
H o u sin g an d com m u n ity d e v e lo p m e n t.. 2 193
348
82
282
262
66
E d u c a tio n an d general re se a rc h ________
158
85
65
75
123
994 1,263 1,806 1,843 2,142
Social secu rity , w elfare, an d h e alth _____
988
V e teran s’ services an d b en efits. _. _____ 2,096 4, 416 7,381 6, 654 6, 726 6, 647
G en eral g o v ern m e n t___________________
840
951 1,334 1,366 1,070 1,164
In te re st________________________________ 3,662 4, 816 5,012 5,248 5, 445 5,817
R eserve for con tin gen cies... _____
. ..

1951

1952

1953
(est.)

1954
(est.)

20,462 39, 727 44,380 46,296
4, 727
176
1,685
2,051
650
228
602
115
2,296
5, 342
1,290
5, 714

5,268
241
1,923
2,948
1,045
243
735
171
2,491
4,863
1,411
5,934

6,035
458
2,056
3, 370
1,943
252
757
272
2,594
4, 546
1, 385
6,520
25

7,861
275
2,016
4,097
1,827
268
509
288
2, 579
4,564
1,547
6, 420
40

T o t a l ____________________________ 98, 451 59,626 38,983 34,179 39, 785 39,826 45, 338 67,000 74, 593 78, 587
A d ju stm en t to d aily T re a su ry state ­
m e n t. . ._ _____________ . . . _______ + 2 5 2 + 1 , 077 + 305 -3 8 8 + 2 7 2 + 3 3 0 - 7 0 5 - 8 5 5
T o ta l B u d g e t ex p en d itu res_______ 98, 703 60, 703 39, 289 33, 791 40,057 40,156 44, 633 66,145 74, 593 78, 587
1 M ilita ry an d econom ic aid to foreign countries, now classified under “ In tern atio n al secu rity an d foreign
relatio n s,” w as in cluded a s “ M ilitary services” during the years 1941-47, w hen h e av y ex p en d itu res for these
pu rp oses were being m ade un der the L en d -Lease A ct. On a gross basis (th at is, w ith o u t ded u ctin g reciprocal
aid an d p o stw ar settlem en ts), aid p rovided un der the lend-lease program totaled m ore th an 50 billion dollars
du rin g the y ears 1941-47, an d reached a peak of ab ou t 16 billion dollars in 1944.
2 D e d u c t, excess of re p a y m e n ts an d collections over expenditures.

N ote .—D etail may not add to totals because of rounding.

44
U .S . GOVERNMENT PRINTING OFFICE : 0 — 1953

F o r sale b y the Su perinten den t of D ocum ents, U . S. G overnm ent P rin tin g Office
W ashington 25, D . C . - P rice 20 cents




EXECUTIVE

I

J

TEMPORARY AGENCIES

Seives also os the Dnector of the Mutual Security Agency




B R A N C H

THE

GOVERNMENT