Full text of Mid-Session Review of the Budget : Fiscal Year 2000

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MID-SESSION REVIEW

EXECUTIVE
BUDGET OF THE
OFFICE OF THE
UNITED STATES GOVERNMENT
PRESIDENT
OFFICE OF
FiscalBUDGET
Year 2000
MANAGEMENT AND
WASHINGTON, D.C. 20503

TABLE OF CONTENTS
Page

TABLE OF CONTENTS................................................................................................................................

i

LIST OF TABLES..........................................................................................................................................

ii

EXECUTIVE SUMMARY .............................................................................................................................

1

ECONOMIC ASSUMPTIONS.......................................................................................................................

5

RECEIPTS ......................................................................................................................................................

9

SPENDING.....................................................................................................................................................

11

FRAMEWORK FOR SOCIAL SECURITY AND MEDICARE REFORM .................................................

15

CURRENT STATUS OF ENFORCEMENT PROCEDURES.....................................................................

19

SUMMARY TABLES .....................................................................................................................................

25

GENERAL NOTES
1. All years referred to are fiscal years unless otherwise
noted.
2. All totals in the text and tables display both on-budget
and off-budget spending and receipts unless otherwise
noted.
3. Details in the tables and text may not add to totals
because of rounding.
4. Web address: http://www.gpo.gov/usbudget

i

LIST OF TABLES
Page

Table 1.0 Receipts, Outlays, and Surplus—Pending Social Security and Medicare Reform..................

3

Table 2.0 Economic Assumptions................................................................................................................

8

Table 3.0 Change in Receipts ......................................................................................................................

10

Table 4.0 Change in Outlays.......................................................................................................................

13

Table 5.0 Framework for Social Security and Medicare Reform .............................................................

16

Table 6.0 Allocation of Budget Resources, 2000–2014 ..............................................................................

17

Table 7.0 Current Status of Discretionary Spending Limits....................................................................

20

Table 8.0 Net Cost of Pay-as-you-go Legislation Enacted as of June 20, 1999.......................................

23

Table 9.0 Estimated Spending from 2000 Balances of Budget Authority: Discretionary Programs.....

25

Table 10.0Outlays for Mandatory Programs Under Current Law............................................................

25

Table 11.015 Year Budget Totals .................................................................................................................

26

Table 12.0Mandatory and Revenue Proposals............................................................................................

27

Table 13. Tax Relief Proposals Including Social Security and Medicare Reform ...................................

30

Table 14. Effect of Proposals on Receipts...................................................................................................

31

Table 15. Outlays by Category....................................................................................................................

35

Table 16. Receipts by Source ......................................................................................................................

36

Table 17. Outlays by Agency.......................................................................................................................

37

Table 18. Outlays by Function....................................................................................................................

38

Table 19. Discretionary Budget Authority by Agency ..............................................................................

39

Table 20. Discretionary Budget Authority by Function ...........................................................................

41

Table 21. Federal Government Financing and Debt with Social Security and Medicare Reform ........

42

Table 22. Federal Debt with Social Security and Medicare Reform........................................................

43

ii

EXECUTIVE SUMMARY
Last year, after five consecutive years of
declining deficits, the Federal budget was
brought into balance. In fiscal year 1998,
an unprecedented sixth consecutive year of
improved fiscal results, the Federal Government produced its first budget surplus in
29 years. Fiscal year 1999 will mark the
seventh consecutive year of improved fiscal
balance the longest such series in history
with an even larger surplus than in 1998.
These will be the first back-to-back surpluses
since the mid-1950’s. Moreover, next year’s
budget is projected to show a modest onbudget surplus (over-and-above the amount
of the Social Security surplus) for the first
time in 40 years.
In his first budget, submitted in the Administration’s first days in 1993, President Clinton
confronted the then-record deficit with a
program of budget savings totaling $505
billion over five years more than half of
which came from spending cuts. This program
initiated a virtuous cycle in which deficit
reduction caused interest rates to fall and
investment to boom, leading to an unprecedented combination of declining inflation, sustained growth and further budgetary improvement.
The Administration now projects that the
overall surplus for 1999 will be $99 billion,
the largest surplus ever in dollar terms,
and the largest as a percentage of GDP
since 1951. The projections in this Review
show the surplus growing to $142 billion
in fiscal year 2000. Indeed, improvements
in the outlook just in the five months since
the President’s February budget submission
have added $179 billion to projected budget
surpluses for the next five years, over half
a trillion dollars to surpluses projected for
the next ten years, and over a trillion
dollars to surpluses projected for the next
15 years.
A large portion of this impressive improvement in the budget outlook stems from improvements in economic performance overand-beyond what was projected in the Feb-

ruary budget. The U.S. economy continued
to outperform projections with strong, noninflationary growth and further declines in
unemployment, despite the expectation that
economic activity would slow. The robust
economy produced higher incomes that in
turn generated stronger revenue growth. Technical reestimates added to the increase in
projected receipts and also reduced outlays.
Thus over the next ten years surpluses
are now projected to total $517 billion more
than was expected in February.
With our fiscal house in order for the
first time in two generations, we now have
the means and the opportunity to address
the long-term solvency problems of the Social
Security and Medicare programs. We have
solved the structural deficit, and thereby
laid the necessary groundwork to eliminate
the generational deficit that remains. We
are now in a position where we can—if
we so choose—address the watershed issue
of the long-term soundness of Social Security
and Medicare in a timely fashion, and from
a position of fiscal strength, rather than
continuing to postpone action until the costs
mount further.
The major elements of the Administration’s
framework to save and reform Social Security
and Medicare are:
• Social Security. The framework includes
a strong and effective Social Security
lockbox to ensure that Social Security surpluses are not used for other purposes.
This lock-box would provide a double protection, not only ensuring that all of the
off-budget surplus is locked away for Social Security, but also dedicating the resulting interest savings to strengthening
the solvency of Social Security. The solvency of Social Security would be extended
by allocating general funds to Social Security from the on-budget surplus to reflect
savings in interest costs resulting from reduction in Federal debt, and by investing
a limited share of the general funds that
1

2

MID-SESSION REVIEW

are transferred in corporate equities to
earn a higher return.
• Medicare. The framework would invest
$794 billion to strengthen Medicare over
the next 15 years. It would provide a new
prescription drug benefit that would modernize Medicare, increasing efficiency in
the overall health care system and relieving a significant out-of-pocket burden on
much of the senior population. It would
provide additional resources to extend the
solvency of the Hospital Insurance trust
fund well beyond the current law date of
2015.
• Investment in national needs. The
framework provides an additional $522
billion for discretionary programs over the
next fifteen years, $41 billion more than
was proposed in February. This increase
is proposed to occur in the later years of
the fifteen-year period when budgetary
conditions permit, and is necessary to keep
discretionary spending close to the pace
of inflation. Increased resources for military readiness would ensure that the Nation’s defense forces maintain high levels
of performance. Investments in other priorities for a secure future would ensure
sufficient funding for essential government
functions such as veterans affairs, environmental protection, health research, farm
security, and protecting Americans at
home and abroad. Finally, a new trust
fund for children and education would
strengthen the Nation’s ability to raise
educational achievement and improve the
health and well-being of children.
• Universal Savings Accounts (USAs).
The framework includes targeted tax relief
through Universal Savings Accounts
(USAs) that will make retirement savings
universal. The USAs would be phased in,
and would subsidize Americans’ retirement savings through tax breaks totaling

$540 billion over fifteen years. The USAs
are in addition to the Administration’s
other tax relief proposals contained in the
February budget that provides an additional $76 billion of fully offset tax cuts
over ten years to make health and child
care affordable, provide incentives for
school construction, extend expiring provisions of the tax law, and advance other
important goals. Over the next ten years,
the Administration proposes a total of
$327 billion in tax relief.
• Debt reduction. The Administration’s
budget framework reserves the off-budget
surplus for Social Security through a
lockbox mechanism which ensures that the
off-budget surplus is used to reduce publicly held debt. Reducing publicly held debt
reduces future interest costs on that debt.
Reducing interest payments creates onbudget resources which can be transferred
to the Social Security Trust Fund to extend its solvency. The transfers to the
Medicare lockbox also reduce debt held by
the public.
The Administration’s framework for Social
Security and Medicare reform allocates the
total budget surplus over the next fifteen
years to extend the solvency of Social Security
and Medicare; create Universal Savings Accounts to boost private retirement saving
through tax cuts; and invest in military
readiness, education, and other critical national needs. The framework breaks new
ground in proposing an on-budget balance
year by year, for each of the next 15
years, even after the additional initiatives
proposed by the President. This approach
represents an historic step toward further
safeguarding the Social Security surpluses,
and ensuring that they add to national savings, and thereby help prepare the Nation
for the retirement of the baby-boom generation.

RECEIPTS, OUTLAYS, AND SURPLUS—PENDING SOCIAL SECURITY AND MEDICARE REFORM
(Dollar amounts in billions)
1998
Actual

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

February Budget estimate:
Receipts ..............................................................................
Outlays ...............................................................................
Reserve Pending Social Security and Medicare Reform..
Surplus ...............................................................................

1,721.8
1,652.6
69.2
0.0

1,806.3
1,727.1
79.3
0.0

1,883.0
1,765.7
117.3
0.0

1,933.3
1,799.2
134.1
0.0

2,007.1
1,820.3
186.7
0.0

2,075.0
1,893.0
182.0
0.0

2,165.5
1,957.9
207.6
0.0

2,265.3
2,034.0
231.3
0.0

2,364.3
2,081.5
282.8
0.0

2,474.0
2,153.5
320.5
0.0

2,588.3
2,234.3
354.0
0.0

2,707.7
2,314.7
393.1
0.0

Mid-Session estimate:
Receipts ..............................................................................
Outlays ...............................................................................
Reserve Pending Social Security and Medicare Reform..
Surplus ...............................................................................

1,721.8
1,652.6
69.2
0.0

1,826.3
1,727.5
98.8
0.0

1,914.2
1,771.7
142.5
0.0

1,963.4
1,795.2
168.2
0.0

2,034.4
1,814.8
219.6
0.0

2,112.7
1,889.9
222.8
0.0

2,205.7
1,952.0
253.6
0.0

2,312.6
2,026.1
286.5
0.0

2,419.5
2,076.2
343.3
0.0

2,536.1
2,147.4
388.7
0.0

2,656.8
2,229.2
427.6
0.0

2,784.3
2,310.9
473.3
0.0

20.5
19.7

20.6
19.5

20.7
19.2

20.4
18.7

20.3
18.1

20.1
18.0

20.0
17.7

20.0
17.6

20.0
17.2

20.0
16.9

20.0
16.8

20.0
16.6

0.8
0.0

1.1
0.0

1.5
0.0

1.7
0.0

2.2
0.0

2.1
0.0

2.3
0.0

2.5
0.0

2.8
0.0

3.1
0.0

3.2
0.0

3.4
0.0

Memorandum:
Mid-Session estimates as a percent of GDP:
Receipts ...........................................................................
Outlays ...........................................................................
Reserve Pending Social Security and Medicare
Reform .........................................................................
Surplus ...........................................................................

EXECUTIVE SUMMARY

Table 1.

3

ECONOMIC ASSUMPTIONS
Introduction
The Nation’s recent economic performance
is the best in over a generation, combining
strong growth and low unemployment with
low inflation and low interest rates. The
economic expansion that began in April 1991
is now the second longest on record. Job
opportunities abound as businesses continue
to expand their payrolls month after month.
The overall unemployment rate has fallen
to the lowest level in 29 years. Despite
rapid growth, inflation remains subdued. The
‘‘Misery Index’’—the sum of the unemployment
and inflation rates—is at the lowest level
since the 1960s.
In this extraordinarily healthy economic
environment, there is great optimism. Surveys
of consumers reveal the highest level of
confidence in three decades. Business optimism is evident in the continued robust
growth of investment. Domestic and foreign
financial investors’ confidence in the future
of the U.S. economy is apparent from their
eagerness to invest in the United States.
The economy’s outstanding performance in
recent years has been fostered by prudent
fiscal and monetary policies. The Omnibus
Budget Reconciliation Act of 1993 (OBRA)
and the Balanced Budget Act of 1997 (BBA)
ended an era of large and growing budget
deficits and in its place created the prospect
of large and growing surpluses. The budget
balance has swung from a $290 billion deficit
in 1992 to a $69 billion surplus last year—
the first surplus since 1969. In 1999, the
surplus is estimated to rise to $99 billion,
or 1.1 percent of GDP. As a percent of
GDP, that would be the largest surplus
since 1951. Together, OBRA, the BBA, and
the continuing extraordinary performance of
the economy are estimated to have improved
the budget balance compared with the preOBRA 1993 baseline by a cumulative total
of $4.4 trillion over 1993–2002.
Monetary policy has also played a crucial
role in the economy’s superb performance
by reducing inflation without impeding eco-

nomic growth. During this expansion, the
Federal Reserve has tightened monetary policy
when inflationary pressures threatened, and
relaxed policy when growth appeared to be
in jeopardy. Last fall and winter, when
turmoil in financial markets restricted credit
to even financially sound borrowers, the Federal Reserve swiftly cut the Federal funds
rate target by three-quarters of a percentage
point to 43⁄4 percent. By year-end, this prompt
action had restored stability to the markets
and confidence to investors, consumers and
businesses—and the economy expanded in
the fourth quarter at the fastest pace in
two and a half years.
The combination of healthy growth, low
inflation and sound fiscal and monetary policies bodes well for the future course of
the economy. If the expansion continues
through February 2000—as virtually all
private- and public-sector forecasters expect—
it will become the longest running expansion
ever. There is every reason to believe that
the expansion will continue well beyond that
record-setting date.
Recent Developments
Real Gross Domestic Product (GDP) expanded at a robust 4.3 percent annual rate
in the first quarter of this year, following
a 6.0 percent rate in the previous quarter
and a 4.3 percent increase over the four
quarters of 1998. Growth in the first quarter
of this year continued to be led by business
capital spending and residential investment.
Growth of consumer spending, which was
also strong last year, increased further this
year. Thanks to the enormous gains in households’ stock market wealth during the past
four and a half years, consumers have been
willing and able to spend more out of their
after-tax incomes. In fact, in the first quarter,
high consumer spending sent the savings
rate into negative territory. Although low
saving is not desirable on a long-term basis,
it is an indication of high consumer confidence
and the strength of the economy. State and
local government spending also grew rapidly
5

6
in the first quarter, as governments continued
to use part of their unexpectedly large budget
surpluses to supplement outlays in high priority areas.
Robust growth in private and State and
local spending in the first quarter more
than offset a decline in Federal Government
spending and a significant widening of the
net export deficit. Partial information for
the second quarter suggests that the economy
continues to expand, although GDP growth
probably slowed from the first quarter’s pace.
(The first official estimate of second quarter
GDP growth will be available on July 25th.)
The Consumer Price Index (CPI) rose at
a 2.6 percent annual rate during the first
five months of 1999, compared with a 1.6
percent increase during 1998. The acceleration
was entirely due to a bounceback in energy
prices this spring, following their precipitous
drop during the prior two years. Excluding
the volatile food and energy components,
the core CPI rose at only a 1.8 percent
annual rate during the first five months
of 1999, down from the 2.4 percent increase
during 1998. The GDP chain-weighted price
index, a broader measure of inflation than
the CPI, rose at a 1.6 percent annual rate
in the first quarter, not much faster than
the 0.9 percent rise during all of 1998.
Not since the early 1960s has overall inflation
been this low.
During the first five months of this year,
the Nation’s payrolls expanded by almost
1 million new jobs, bringing the total job
creation since this Administration took office
to 18.7 million. Although manufacturing and
mining payrolls continued to shrink this year
because of recessions and weak demand overseas, and the resultant stiff competition from
imports, this restraint on overall payroll
job growth was more than made up by
large gains in construction and service sector
payrolls.
Strong job growth has pulled the unemployment rate down further this year. In May,
it was just 4.2 percent. The last time the
unemployment rate was lower than this was
in January 1970. Unemployment rates have
fallen to low levels for all demographic groups.
The unemployment rates so far this year
for Blacks and for Hispanics are the lowest

MID-SESSION REVIEW

since record keeping began over a quarter
century ago.
Tight labor markets have resulted in sizeable gains in workers’ paychecks, even after
adjusting for inflation. Over the past twelve
months, average hourly earnings have risen
3.6 percent, 1.6 percentage points in excess
of the rise in the CPI over the same period.
Despite falling unemployment, nominal earnings gains have moderated this year from
the 4 percent increases of a year or two
ago, even as real gains have continued.
Interest rates, especially at the long end
of the maturity spectrum, have risen this
year. The three-month Treasury bill rate
edged up from 4.4 percent in December
to 4.6 percent in late June. The yield on
the 10-year Treasury bond rose from 4.6
percent in December to 6.0 percent recently.
Despite rising interest rates, there was
evidence of continued confidence in the future
course of the economy. The major equity
markets have more than tripled in the last
six and a half years. This is the best
market performance in the postwar period.
Revised Economic Assumptions
Economic developments this year have generally been more favorable than envisaged
in December when the Administration formulated its economic assumptions for the Budget.
Real growth so far this year has been stronger
than projected in the Budget assumptions.
As a consequence, the unemployment rate
has fallen further this year, rather than
rising slowly as expected. Productivity growth
has also been higher than expected, exceeding
its long-term trend even taking into account
the strong growth of demand. Despite the
tighter labor market this year, the core
CPI inflation rate has slowed from its 1998
pace. Interest rates, however, have moved
up somewhat more than was forecasted in
the Budget, perhaps in part because growth
has been faster than expected and the unemployment rate has been lower.
The economic assumptions underlying the
budget projections presented in the MidSession Review have been revised to incorporate these recent developments. While the
overall contour of the economic assumptions

ECONOMIC ASSUMPTIONS

has not changed, notable revisions have been
made to the projections of real GDP growth,
productivity growth, the unemployment rate,
and inflation and interest rates. The Administration, like most forecasters, still expects
the pace of economic activity to moderate
to a rate that can be maintained over the
long run without provoking higher inflation,
according to mainstream, conservative estimates.
The Mid-Session assumptions are similar
to those of the Blue Chip consensus (an
average of 50 private sector forecasts). As
such, the economic projections provide a reasonable, prudent basis for projecting the budget.

7
offset by slightly slower growth of the participation rate.
Potential GDP growth during 2003–2004
is projected to be just under 2.6 percent
per year. That is slightly lower than during
1999–2002—when trend productivity growth
is expected to be boosted by the ongoing
capital spending boom—but higher than the
2.4 percent growth in the Budget assumptions.
Trend productivity growth is now assumed
to slow to 1.4 percent beginning in 2003.
In the Budget, trend productivity growth
was assumed to be 1.3 percent yearly throughout the projection horizon. Total labor input
during 2003–2004 is projected to rise 1.2
percent annually, the same pace as during
the earlier years of the projection period.

In light of the ongoing strength of the
economy, indications that trend productivity
growth may have risen, and evidence that
labor force growth may be a bit higher
than projected previously, the Administration
has revised upward its projections of both
actual and potential real GDP growth. Measured from the fourth quarter of 1998 to
the fourth quarter of 1999, real GDP growth
is now projected to be 3.2 percent, compared
with 2.0 percent in the Budget. During
the following years through 2004, the average
annual GDP growth is projected to be about
one-tenth percentage point higher than previously projected. During the six years
1999–2004, growth is now projected to average
2.5 percent annually, instead of 2.2 percent.

Real GDP growth during the next few
years is projected to be slightly below the
growth of potential GDP, which would be
consistent with a gradual rise in the unemployment rate. Beginning in 2002, the unemployment rate is projected to remain on
a plateau of 5.2 percent, the center of the
range the Administration now estimates is
consistent with stable inflation. This rate,
which is one-tenth percentage point lower
than that assumed in the Budget, reflects
the recent experience of historically low unemployment, slowing nominal wage growth, and
continued low core inflation. The economy
now appears to be able to operate at a
slightly lower unemployment rate without
triggering higher inflation.

The long-run, sustainable noninflationary
growth rate of the economy—potential GDP
growth—can be decomposed into the trend
growth of labor productivity plus the growth
of total labor hours. The Administration’s
estimate of potential GDP growth is now
2.8 percent per year during 1999–2002, up
from 2.5 percent in the Budget assumptions.
The revision is due to a higher rate of
trend productivity growth, now estimated to
be 1.6 percent annually through 2002, compared with 1.3 percent previously. The growth
rate of total labor input, which combines
the growth rates of the population, labor
force participation and the workweek, is projected to be 1.2 percent per year, unchanged
from the Budget assumptions. Slightly faster
growth of the population is assumed to be

The CPI inflation rate has been raised
by one-tenth or two-tenths of a percentage
point annually. During the next few years,
the gap between the projected unemployment
rate and the estimate of the sustainable
rate is expected to be larger than projected
previously, implying slightly higher inflation
than previously. The projection of the GDP
chain-weighted price index has also been
revised up slightly. Even after these upward
revisions, the projected inflation rates are
very low by historical standards: in the
outyears, the CPI is expected to increase
just 2.5 percent annually, while the GDP
chain-weighted price index is projected to
rise 2.2 percent.
The Mid-Session Review interest rate projections have been revised up to reflect the

8

MID-SESSION REVIEW

higher inflation rate projection. Adjusted for
inflation, interest rates are unchanged from
those in the Budget. The 90-day Treasury
bill rate is projected to be around 4.6 percent
throughout most of the projection period.
The yield on the 10-year Treasury note
is projected to be around 5.6 percent.

Table 2.

Taxable incomes as a share of nominal
GDP are expected to be slightly lower than
in the Budget assumptions, primarily because
of lower projected pre-tax book profits. The
revision reflects new, higher estimates of
corporate depreciation which reduce pre-tax
profits, all other things equal. The shares
of other components of taxable income in
GDP are essentially unchanged.

ECONOMIC ASSUMPTIONS

(Calendar years; dollar amounts in billions)
Actual
1998

Gross Domestic Product (GDP): 1
Levels, dollar amounts in billions:
Current dollars ...........................................................
Real, chained (1992) dollars ......................................
Chained price index (1992 = 100), annual average
Percent change, fourth quarter over fourth quarter:
Current dollars ...........................................................
Real, chained (1992) dollars ......................................
Chained price index (1992 = 100) .............................
Percent change, year over year:
Current dollars ...........................................................
Real, chained (1992) dollars ......................................
Chained price index (1992= 100) ..............................

Projections
1999

2000

8,511 8,953 9,333
7,552 7,844 8,028
112.7 114.1 116.2

2001

2002

2003

2004

9,724 10,154 10,639 11,145
8,196 8,374 8,587 8,801
118.7 121.3 123.9 126.6

5.2
4.3
0.9

4.8
3.2
1.5

4.2
2.1
2.0

4.2
2.1
2.1

4.6
2.3
2.2

4.8
2.6
2.2

4.8
2.5
2.2

4.9
3.9
1.0

5.2
3.9
1.3

4.2
2.4
1.8

4.2
2.1
2.1

4.4
2.2
2.2

4.8
2.5
2.2

4.8
2.5
2.2

Incomes, billions of current dollars: 1
Corporate profits before tax ......................................
Wages and salaries .....................................................
Other taxable income 2 ...............................................

718
750
722
4,150 4,388 4,578
1,768 1,839 1,891

743
4,764
1,946

763
4,964
2,007

797
5,203
2,074

830
5,451
2,151

Consumer Price Index (all urban): 3
Level (1982–84 = 100), annual average ....................
Percent change, fourth quarter over fourth quarter
Percent change, year over year .................................

163.1 166.6 170.6
1.5
2.4
2.4
1.6
2.2
2.4

174.7
2.4
2.4

179.0
2.5
2.5

183.5
2.5
2.5

188.1
2.5
2.5

Unemployment rate, civilian, percent:
Fourth quarter level ...................................................
Annual average ...........................................................

4.4
4.5

4.3
4.3

4.7
4.5

5.1
4.9

5.2
5.2

5.2
5.2

5.2
5.2

Federal pay raises, January, percent:
Military 4 .....................................................................
Civilian 5 ......................................................................

2.8
2.8

3.6
3.6

4.4
4.4

3.9
3.9

3.9
3.9

3.9
3.9

3.9
3.9

Interest rates, percent:
91-day Treasury bills 6 ...............................................
10-year Treasury notes ..............................................

4.8
5.3

4.5
5.4

4.5
5.5

4.5
5.5

4.5
5.6

4.6
5.6

4.6
5.6

1 Based

on information available as of May 1999.
interest, dividend and proprietor’s components of personal income.
for all urban consumers. Two versions of the CPI are published. The index shown here is that currently used, as
required by law, in calculating automatic adjustments to individual income tax brackets. Projections reflect scheduled
changes in methodology.
4 Beginning with the 1999 increase, percentages apply to basic pay only; adjustments for housing and subsistence allowances will be determined by the Secretary of Defense.
5 Overall average increase, including locality pay adjustments.
6 Average rate (bank discount basis) on new issues within period.
2 Rent,
3 CPI

RECEIPTS
The current estimates of receipts for 1999
and 2000 exceed the budget estimates by
$20.0 billion and $31.2 billion, respectively.
The estimates for subsequent years have
been revised upward by $27.3 billion to
$40.1 billion. These changes result primarily
from revised economic projections and technical reestimates.
Revised economic projections increase receipts by $16.6 billion in 1999, $19.4 billion
in 2000, and $20.0 billion to $33.2 billion
in each subsequent year. Higher levels of
wages and salaries and other sources of
personal income increase collections of individual income taxes and payroll taxes by amounts
rising annually from $11.5 billion in 1999
to $40.3 billion in 2004. Higher levels of
nominal and real GDP, which affect excise
taxes, and higher interest rates, which affect
deposits of earnings by the Federal Reserve,
also contribute to the increase in receipts
in each year. Beginning in 2001, lower shares
of corporate profits in GDP reduce collections
of corporation income taxes by amounts rising
annually from $3.9 billion in 2001 to $7.1
billion in 2004. Customs duties are reduced
in each year, reflecting lower levels of imports
than forecast in January.
Net technical adjustments increase receipts
by $3.4 billion in 1999, $9.9 billion in 2000,
and $6.7 billion to $11.5 billion in each
subsequent year. These net increases are
in large part attributable to higher-than-

anticipated collections of individual income
taxes and estate and gift taxes, which are
partially offset by lower-than-anticipated collections of corporation income taxes. The
technical revisions in individual income taxes
and estate and gift taxes primarily reflect
the continued strength of the stock market
and its effect on capital gains and the
asset value of estates and gifts.
Administrative actions and revisions in the
Administration’s proposals have a small effect
on receipts in each year. The largest change
is due to a new proposal to modify the
individual income tax prior-year safe-harbor
thresholds. This proposal increases receipts
by $1.8 billion in 2000 and $0.1 billion
in 2001, reduces receipts by $1.9 billion
in 2002, and has no impact in other years.
Table 3 does not include the effects of
the Administration’s framework for Social
Security and Medicare reform. The Universal
Savings Accounts proposed in that framework
would reduce receipts by $26.3 billion over
2000–2004. This is in addition to the $32.9
billion in fully offset tax relief in the Administration’s basic budget proposals. Over the
next ten years, the Administration proposes
a total of $327 billion in tax relief, for
USAs, and to make health and child care
more affordable, provide incentives for school
construction, extend expiring provisions of
the tax law, and advance other important
goals.

9

10

MID-SESSION REVIEW

Table 3.

CHANGE IN RECEIPTS
(In billions of dollars)
1999

2000

2001

2002

2003

2004

February estimate ..................................
Changes since February:
Revised economic assumptions ..........
Technical reestimates ........................
Administrative actions .......................
Revised proposals ...............................

1,806.3

1,883.0

1,933.3

2,007.1

2,075.0

2,165.5

16.6
3.4
–*
*

19.4
9.9
–*
1.9

20.2
9.7
–*
0.3

20.0
8.9
—
–1.6

25.9
11.5
—
0.2

33.2
6.7
—
0.2

118.7
46.7
–0.1
1.0

Total changes ..................................
Mid-Session estimate .............................

20.0
1,826.3

31.2
1,914.2

30.1
1,963.4

27.3
2,034.4

37.6
2,112.7

40.1
2,205.7

166.4

Note: Excludes Social Security and Medicare framework proposals.
* $50 million or less.

2000–2004

SPENDING
The current estimate of total 1999 outlays
is $1,727.5 billion, $0.4 billion higher than
the February budget estimate. The higher
estimate arises largely from increases enacted
in the Emergency Supplemental Appropriations Act of 1999, offset by revised economic
and technical assumptions for mandatory programs.

estimates increase by a net total of $3.9
billion due to economic assumptions. Outlays
are increased by higher interest rates in
all years and slightly higher inflation rates
in the outyears. These increases are partly
offset by the impact of lower unemployment
rate projections and the debt service impact
of higher receipts.

The Administration now estimates total
outlays for 2000 at $1,771.7 billion, $6.1
billion higher than the February estimate.
This increase is largely due to increases
enacted in the Emergency Supplemental Appropriations Act of 1999 and a recent request
for additional funds needed for the census.
For 2000, lower outlays from revised economic
assumptions nearly offset technical reestimates.

Technical changes

Discretionary policy changes
The Emergency Supplemental Appropriations Act of 1999 provided discretionary funding for recent natural disasters in Central
America, military operations and humanitarian relief in Kosovo, economic stability
in Jordan after the transition of power,
and assistance for agricultural relief in the
United States. The current estimates also
reflect a recently transmitted request for
additional funds needed for the census in
2000, which the Administration proposes to
offset largely by changes in revenues and
mandatory outlays. The current estimates
also reflect the release of previously enacted
contingent emergency funds, largely for agency
preparation for year 2000 computer problems.
Outlays for emergencies of $4.8 billion and
other offsetting changes cause a $4.1 billion
increase from the Budget in 1999, and outlays
for emergencies account for $4.8 billion of
the $6.0 billion increase in 2000.
Economic changes
Revisions in economic assumptions, discussed earlier in this report, reduce estimated
outlays by $1.4 billion in 1999 and $1.2
billion 2000. However, over the five-year
budget window from 2000 to 2004, outlay

For 1999, estimated outlays are $2.3 billion
lower than in February for technical reasons.
For 2000, technical changes increase outlays
by $1.3 billion. The following changes in
outlay projections all arise from technical
factors.
Discretionary programs.—Estimated outlays
for discretionary programs in 1999 are $1.8
billion above the budget estimates, reflecting
higher-than-anticipated actual outlays for a
number of non-defense programs, most notably
the violent crime reduction fund. For 2000,
estimated outlays are $0.6 billion below the
February estimate, largely because a portion
of the outlays for the grants to school districts
program (Title I) in the education for the
disadvantaged account occurs in 1999 rather
than in 2000, as estimated in the Budget.
Medicare.—Current estimates of Medicare
outlays are lower than the February estimates
by $5.1 billion in 1999. Over the five-year
budget window from 2000 to 2004, Medicare
outlays are projected to be $17.2 billion
lower than the Budget due to technical
reasons. The lower Medicare baseline is a
result of lower estimates for severity of
inpatient hospital cases, which reduces estimates for inpatient hospital spending, and
revised estimates for home health spending.
Further, the Department of Health and
Human Services and the Health Care Financing Administration’s continuing efforts to root
out fraud, waste, and abuse in the Medicare
program have contributed to the decline in
Medicare expenditures. For example, in the
1998 Audited Financial Statement, the Office
of the Inspector General estimated that improper payments were reduced by $7.7 billion
11

12
from the prior year. While Medicare spending
is down over the five-year budget window,
spending for 2000 is projected to be slightly
higher than the budget estimate. This oneyear increase is due to a catch-up of backlogged home health claims from 1999 that
will be paid in 2000.
Social Security.—The revised estimates for
Social Security are lower than the budget
estimates by $2.0 billion in 1999, $2.1 billion
in 2000, and a total of $12.4 billion from
2000 to 2004 largely due to lower projected
growth in number of beneficiaries, mostly
dependents and survivors.
Commodity Credit Corporation.—Spending
on farm programs through the Commodity
Credit Corporation is projected to increase
by $0.2 billion in 1999 and $1.7 billion
in 2000, relative to the February budget.
These changes largely reflect increases in
projected demand for USDA commodity loans
and payments due to forecasted continuing
low commodity prices.
Federal Housing Administration mortgage
insurance. The current estimates of outlays

MID-SESSION REVIEW

for mortgage insurance are $1.7 billion higher
than the February estimate in 1999, $0.4
billion lower than the budget estimate in
2000, and a total of $3.4 billion lower than
the estimate over five years from 2000 to
2004. The 1999 increase includes an upward
reestimate of subsidy for the cost of loans
guaranteed by the mutual mortgage insurance
(MMI) fund. This increase is partially offset
by lower than anticipated claims on precredit reform loans in the MMI Fund and
reduced estimates of claims in the general
and special risk insurance fund. The decreases
in 2000 to 2004 are largely due to higher
estimates of loan volume in the MMI Fund,
bringing in larger subsidy receipts.
Temporary Assistance for Needy Families
(TANF).—The revised TANF estimates for
1999 are $1.0 billion higher than the budget
estimate due to higher actual spending by
States for the year to date. Accelerated
spending is expected to continue in 2000,
increasing estimated outlays by $0.5 billion
above the February estimate.

13

SPENDING

Table 4.

CHANGE IN OUTLAYS
(In billions of dollars)
2000–
2004

1999

2000

2001

2002

2003

2004

February estimate ..............................................................
Revisions due to:
Discretionary policy changes:
Discretionary programs ............................................
Welfare to work ........................................................
FHA mortgage insurance .........................................
Debt service ...............................................................

1,727.1

1,765.7

1,799.2

1,820.3

1,893.0

1,957.9

4.9
—
–0.8
0.0

6.4
–0.1
–0.5
0.3

2.0
–0.2
–0.1
0.4

–1.1
0.1
—
0.5

0.7
0.2
—
0.6

0.4
0.0
—
0.6

8.4
0.0
–0.6
2.5

Subtotal, discretionary .........................................
Economic assumptions:
Unemployment insurance ........................................
Medicare and Medicaid ............................................
Social Security ..........................................................
Food stamps ..............................................................
Other mandatory programs .....................................
Net interest:
Interest rate ..........................................................
Debt service ...........................................................

4.1

6.0

2.1

–0.4

1.4

1.1

10.3

–1.1
0.0
0.1
–0.7
–0.4

–2.5
–0.1
0.0
–0.5
–0.5

–1.3
0.2
–0.1
–0.2
–0.4

–0.0
0.7
0.3
0.3
–0.5

0.1
1.2
0.7
0.6
–0.3

0.1
1.7
1.7
0.6
0.0

–3.6
3.7
2.6
0.7
–1.6

1.0
–0.2

3.7
–1.4

4.3
–2.4

3.6
–3.4

3.8
–4.5

4.2
–5.9

19.6
–17.6

–1.4

–1.2

0.1

1.0

1.6

2.4

3.9

Subtotal, economic assumptions ..........................
Technical reestimates:
Discretionary programs ............................................
Mandatory:
Medicare ................................................................
Social Security .......................................................
Commodity Credit Corporation ............................
FHA mortgage insurance .....................................
TANF .....................................................................
Other mandatory programs 1 ...............................
Net interest ...............................................................

1.8

–0.6

–0.5

–0.3

–0.4

–0.3

–2.0

–5.1
–2.0
0.2
1.7
1.0
–1.3
1.3

0.1
–2.1
1.7
–0.4
0.5
1.5
0.6

–4.2
–2.3
1.1
–0.9
0.4
1.0
–0.8

–3.7
–2.8
0.6
–0.8
0.1
0.8
–0.1

–4.5
–2.7
1.0
–0.7
–0.3
0.6
0.8

–5.0
–2.4
0.0
–0.6
–0.8
0.6
–0.9

–17.2
–12.4
4.4
–3.4
–0.1
4.5
–0.3

Subtotal, technical reestimates ............................

–2.3

1.3

–6.2

–6.1

–6.2

–9.4

–26.6

Total, changes ...............................................................
Mid-Session estimate ..........................................................
Memorandum:
Discretionary budget authority:
February estimate ........................................................
Defense ......................................................................
Non-Defense ..............................................................

0.4
1,727.5

6.1
1,771.7

–4.0
1,795.2

–5.5
1,814.8

–3.1
1,889.9

–5.9
1,952.0

–12.4

575.0
11.7
–2.8

555.0
1.8
2.8

540.3
—
0.1

547.2
—
–1.8

578.0
—
0.1

585.5
—
–0.0

—
1.8
1.1

Total, change .........................................................
Mid-Session estimate ...................................................

8.8
583.8

4.6
559.6

0.1
540.4

–1.8
545.4

0.1
578.0

–0.0
585.5

3.0

Note: Excludes Social Security and Medicare framework proposals.
1 $4.4 billion of the outlay increase over five years is offset by a corresponding increase in receipts.

FRAMEWORK FOR SOCIAL SECURITY AND
MEDICARE REFORM
The Administration’s framework for Social
Security and Medicare reform allocates the
total budget surplus over the next fifteen
years to extend the solvency of Social Security
and Medicare; create Universal Savings Accounts to boost private retirement saving
through tax cuts; and invest in military
readiness, education, and other critical national needs.
In this Mid-Session Review, the total budget
surplus over 2000 through 2014 is estimated
at $5.9 trillion, a $1.1 trillion increase from
the 15-year surplus estimated in the February
budget. This total surplus consists of two
components: a cumulative $3.1 trillion surplus
in the off-budget accounts—almost entirely
the Social Security trust fund—and a cumulative $2.9 trillion surplus in the on-budget
accounts. The framework reserves the entire
off-budget surplus for Social Security. A
lockbox mechanism would ensure that this
Social Security surplus is not used for any
other purpose.
The framework would allocate the $2.9
trillion on-budget surplus for four purposes,
as follows:
• Transfers to extend Social Security solvency. The framework would transfer $543
billion from the available on-budget surplus to extend the solvency of the Social
Security trust fund. These transfers would
equal the interest savings to the Government earned by the cumulative debt reduction made possible by the lock-box protection for the Social Security surplus.
Thus, the transfers would begin in 2011
after a decade of fiscal discipline and
would continue beyond the 15-year period;
they would be in addition to the $3.1 trillion in off-budget surpluses reserved for
Social Security. The transfers would be invested in private equities until equity
holdings reach a limited share of trust
fund holdings and then be invested in
Government securities.

• Transfers to strengthen and extend Medicare. The framework allocates $794 billion
over 2000 through 2014 to strengthen and
extend Medicare. The great bulk of general fund appropriations would be transferred to the Medicare Hospital Insurance
trust fund to extend the solvency of the
fund. The transfers would be invested in
Federal securities, and would be backed
dollar-for-dollar by reductions in publicly
held debt. The remaining resources would
fund the net costs of a new Medicare prescription drug benefit. This new benefit
will modernize Medicare, increase efficiency in our overall healthcare system,
and relieve a significant out-of-pocket burden on much of our senior population.
• Universal Savings Accounts (USAs). The
framework includes targeted tax relief
through Universal Savings Accounts
(USAs) that will make retirement savings
universal. The Administration’s proposed
USAs include a flat annual credit per
worker and a 50%–100% matching contribution on a worker’s own contributions,
up to a specified annual contribution limit.
Both the credit and the matching rate
would be reduced for those with higher
incomes. Costs of USAs are estimated at
$540 billion over fifteen years. The estimates reflect a phased-in implementation
schedule to allow time to develop the necessary systems to administer the accounts.
The USAs are in addition to the Administration’s other tax relief proposals contained in the February budget that provide an additional $76 billion of fully offset
tax cuts over ten years to make health
and child care more affordable, provide incentives for school construction, extend expiring provisions of the tax law, and advance other important goals. Over the next
ten years, the Administration proposes a
total of $327 billion in tax relief.
15

16

MID-SESSION REVIEW

Table 5.

FRAMEWORK FOR SOCIAL SECURITY AND MEDICARE
REFORM
(Dollar amounts in billions)
Subtotal
2000–2004

Subtotal
2000–2009

Total
2000–2014

Reserve pending Social Security and Medicare reform ................
Off-budget .....................................................................................
On-budget .....................................................................................

1,007
776
231

2,926
1,843
1,083

5,935
3,067
2,868

Social Security and debt reduction lockbox (off-budget) ..............

776

1,843

3,067

Allocation of on-budget surplus:
Transfer to extend Social Security solvency and reduce debt
(based on interest savings) ......................................................
Transfers to strengthen Medicare and reduce debt ..................
Universal Savings Accounts .......................................................
Discretionary investments:
Military readiness ....................................................................
Investments for a secure future ..............................................
Children and education trust fund .........................................

0
50
26

0
374
250

543
794
540

55
55
28

127
127
74

183
183
156

Total discretionary investments ..........................................
Financing costs ............................................................................

138
16

328
132

522
469

Total on-budget allocation .......................................................

231

1,083

2,868

Total allocation of reserve ..............................................................
Off-budget .....................................................................................
On-budget .....................................................................................

1,007
776
231

2,926
1,843
1,083

5,935
3,067
2,868

Remaining on-budget surplus ........................................................

0

0

0

720

2,028

4,238

Memorandum, net debt

reduction 1

...............................................

1 Net

debt reduction includes Social Security surplus, Medicare transfers, and other means of financing. See Table 21.

• Investment in national needs. The framework would allocate $522 billion over fifteen years for investments in critical national needs. Increased resources for military readiness would ensure that the Nation’s defense forces maintain high levels
of performance. Investments in other priorities for a secure future would ensure
sufficient funding for essential government
functions such as veterans affairs, environmental protection, health research, farm
security, and protecting Americans at
home and abroad. Finally, a new trust
fund for children and education would
strengthen the Nation’s ability to raise
educational achievement and improve the
health and well-being of children. These
investments would begin in 2001. Like the
other components of the program, these
funds are contingent on Social Security
and Medicare reform. The Administration

is committed to ‘‘save Social Security first’’
by maintaining existing budget rules that
will reserve the entire surplus both offbudget and on-budget until the enactment
of Social Security and medicare reform.
Social Security and Medicare Transfers,
Debt Reduction, and Trust Fund Solvency
The Administration’s budget framework reserves the off-budget surplus for Social Security through a lockbox mechanism which
ensures that each dollar of off-budget (i.e.
Social Security) surplus is used to reduce
publicly held debt by one dollar. By reducing
publicly held debt, the lockbox also reduces
future interest costs on that debt. Reducing
interest payments over time frees up onbudget resources which can be transferred
to the Social Security Trust Fund to extend
its solvency.

17

FRAMEWORK FOR SOCIAL SECURITY AND MEDICARE REFORM

Table 6.

ALLOCATION OF BUDGET RESOURCES, 2000–2014
(Dollar amounts in billions)
Mid-Session Review
Surplus
Amount

Percent of
Total

Amount of surplus available:
Off-budget ..............................................................................
On-budget ..............................................................................

3,067
2,868

Total ...................................................................................

5,935

Allocation for debt reduction and equity purchase through
Social Security:
Off-budget ..............................................................................
On-budget ..............................................................................

3,067
543

Total ...................................................................................

3,609

66%

Allocation of remaining on-budget surplus:
Transfers to strengthen Medicare and reduce debt ...........
Universal Savings Accounts .................................................
Discretionary investments ...................................................

794
540
522

15%
10%
10%

Total ...................................................................................

1,856

Total allocation of surplus excluding financing costs:
Off-budget ..............................................................................
On-budget ..............................................................................

3,067
2,399

Total ...................................................................................

5,466

Financing costs ......................................................................

469

Total allocation of surplus including financing costs:
Off-budget ..............................................................................
On-budget ..............................................................................

3,067
2,868

Total ...................................................................................

5,935

The transfers to Social Security begin in
2011. The Administration’s policy to reserve
off-budget surpluses will yield $543 billion
in interest savings which will be transferred
to Social Security between 2011 and 2014.
Cumulative debt reduction of $3.7 trillion
will reduce net interest costs by $189 billion
each year by 2015. Therefore, the $189 billion
will be transferred to Social Security in
2015 and every year thereafter. Budget enforcement rules will ensure that these onbudget transfers, and the corresponding transfers for Medicare, reduce the measured onbudget surplus and cannot be used for other
purposes.

100%

As proposed in the budget in February,
these transfers to Social Security will be
invested in corporate equities, until equity
holdings reach a limited share of the trust
fund. Although the transfers invested in equities do not reduce the publicly held debt,
the corporate equities are nonetheless an
economic asset that will be used to finance
future benefits. Transfers above the equity
limit will reduce debt held by the public,
giving the Social Security Trust Fund a
claim against future general revenues. We
will be able to meet this claim precisely
because we are reducing the publicly held
debt and future Federal interest obligations
by an equal amount.

CURRENT STATUS OF ENFORCEMENT
PROCEDURES
The Budget Enforcement Act of 1990 (BEA
of 1990) was enacted as part of the Omnibus
Budget Reconciliation Act of 1990. The BEA
of 1990 established, through fiscal year 1995,
annual limits, or ‘‘caps,’’on discretionary
spending, and a pay-as-you-go requirement
that, in total, legislation affecting direct spending or receipts not result in a net cost.
The Budget Enforcement Act of 1997 (BEA
of 1997), which was enacted as part of
the Balanced Budget Act of 1997 (BBA of
1997), extended, through 2002, BEA requirements for discretionary spending and payas-you-go legislation. The Transportation Equity Act for the 21st Century (TEA–21)
further modified the discretionary caps by
creating new caps for highway and mass
transit outlays.
The BEA requires that OMB issue reports
1) seven working days after enactment of
individual bills, and 2) three times a year
on the overall status of discretionary and
pay-as-you-go legislation. This section discusses the status of the discretionary limits
and enacted legislation subject to pay-asyou-go.
Discretionary spending
Generally, discretionary programs are those
whose program levels are established annually
through the appropriations process. The
scorekeeping guidelines accompanying the
BEA identify accounts with discretionary resources. The BEA limits budget authority
and outlays available for discretionary programs each year through FY 2002. OMB
monitors compliance with the discretionary

limits throughout the fiscal year. Appropriations that would cause either the budget
authority or outlay limits to be exceeded
would trigger a sequester to eliminate any
such breach. The BEA permits certain adjustments to the discretionary limits, some of
which are discussed below.
Since the President submitted the budget
in February, Congress enacted P.L. 106–31,
the FY 1999 Emergency Supplemental Appropriations Act, which contained emergency supplemental appropriations requested for Department of Defense operations associated with
the NATO-led Operation Allied Force in
Kosovo. The bill also included emergency
supplemental appropriations to provide economic and humanitarian assistance to the
victims of hurricanes Georges and Mitch,
to address agricultural disasters in the US,
and to help ensure economic stability in
Jordan after the transition of power.
Further, the President has authorized the
release of additional emergency appropriations
that were previously enacted to support the
Administration’s efforts in addressing the
year–2000 computer conversion problem, natural disasters, security for Americans abroad,
and the funding of a $525 million enriched
plutonium purchase from Russia.
As required by law, the discretionary spending limits will be adjusted for these emergency
appropriations. Table 7 shows the current
status of the discretionary spending limits
and the FY 2000 President’s request for
discretionary spending.

19

20

MID-SESSION REVIEW

Table 7.

CURRENT STATUS OF DISCRETIONARY SPENDING LIMITS
(In millions of dollars)
FY 1999
BA

Defense Discretionary Preview Report Spending Limit ...........................................................
Enacted Emergency Spending including P.L.
106–31 ...............................................................
Release of Contingent Emergency Funding ......

FY 2000

OL

276,047 270,420

BA

FY 2001

OL

BA

FY 2002

OL

BA

OL

N/A

N/A

N/A

N/A

N/A

N/A

4,066
5,907

3,018
2,233

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

9,973

5,251

N/A

N/A

N/A

N/A

N/A

N/A

Current Estimate, Defense Discretionary
Spending Limit ............................................. 286,020 275,671

N/A

N/A

N/A

N/A

N/A

N/A

Anticipated Other Adjustments:
Expected Release of Contingent Emergency
Funding .........................................................

2,215

440

N/A

N/A

N/A

N/A

N/A

N/A

Subtotal, Anticipated Other Adjustments ..

2,215

440

N/A

N/A

N/A

N/A

N/A

N/A

Estimate of Discretionary Spending Limit,
Including Anticipated other Adjustments ............................................................... 288,235 276,111

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Subtotal, Adjustments .....................................

Non-Defense Discretionary Preview Report
Spending Limit ................................................
Enacted/Released Emergency Spending included in P.L. 106–31 ......................................
Release of Contingent Funding ..........................

284,533 274,324
1,265
3,451

634
1,607

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

4,716

2,241

N/A

N/A

N/A

N/A

N/A

N/A

Current Estimate, Non-Defense Discretionary Spending Limit .............................. 289,249 276,565

N/A

N/A

N/A

N/A

N/A

N/A

Subtotal, Adjustments .....................................

Anticipated Other Adjustments:
Expected Release of Contingent Emergency
Funding .........................................................
EITC Tax Compliance .....................................
Continuing Disability Reviews .......................
Adoption Incentive Payments .........................
C/J/S arrears ....................................................
Wye River .........................................................
Re-base Mandatory Emergency Appropriations ...............................................................

538
..............
..............
..............
..............
800

192
..............
..............
..............
..............
614

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A

–246

–243

N/A

N/A

N/A

N/A

N/A

N/A

Subtotal, Anticipated Other Adjustments ..

1,092

563

N/A

N/A

N/A

N/A

N/A

N/A

Estimate of Discretionary Spending Limit,
Including Anticipated other Adjustments ............................................................... 290,341 277,128

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

26,219 ..............

26,663

Violent Crime Reduction Trust Fund Preview
Report Spending Limit ....................................
5,800
4,953
4,500
5,554
Enacted/Released Emergency Spending including P.L. 106–31 ................................................ .............. .............. .............. ..............
Current Estimate, Violent Crime Reduction Trust Fund Trust Fund Spending
Limit ................................................................

5,800

Highway Category Preview Report Spending
Limit ................................................................. ..............

4,953

4,500

21,991 ..............

5,554

24,574 ..............

21

CURRENT STATUS OF ENFORCEMENT PROCEDURES

Table 7.

CURRENT STATUS OF DISCRETIONARY SPENDING LIMITS—Continued
(In millions of dollars)
FY 1999
BA

FY 2000

OL

BA

FY 2001

OL

BA

FY 2002

OL

BA

OL

Enacted/Released Emergency Spending including P.L. 106–31 ................................................ .............. .............. .............. .............. .............. .............. .............. ..............
Current Estimate, Highway Category
Spending Limit ............................................. .............. 21,991 .............. 24,574 .............. 26,219 .............. 26,663
Mass Transit Category Preview Report Spending Limit ........................................................... ..............
4,401 ..............
4,117 ..............
4,888 ..............
5,384
Enacted/Released Emergency Spending including P.L. 106–31 ................................................ .............. .............. .............. .............. .............. .............. .............. ..............
Current Estimate, Mass Transit Category
Spending Limit ............................................. ..............
Other Discretionary Preview Report Spending
Limit .................................................................
Enacted/Released Emergency Spending including P.L. 106–31 ................................................
Release of Contingent Emergency Funding ......

4,401 ..............

4,117 ..............

4,888 ..............

5,384

N/A

N/A 531,771 536,700 541,324 539,940 550,382 534,972

N/A
N/A

N/A ..............
N/A ..............

1,129 ..............
3,289 ..............

292 ..............
1,458 ..............

160
526

Subtotal, Adjustments .....................................

N/A

N/A ..............

4,418 ..............

1,750 ..............

686

Current Estimate, Other Discretionary
Spending Limit .............................................

N/A

N/A 531,771 541,118 541,324 541,690 550,382 535,658

Anticipated Other Adjustments:
Expected Release of Contingent Emergency
Funding .........................................................
EITC Tax Compliance .....................................
Continuing Disability Reviews .......................
Adoption Incentive Payments .........................
C/J/S arrears ....................................................
Wye River .........................................................
Re-base Mandatory Emergency Appropriations ...............................................................

N/A
N/A
N/A
N/A
N/A
N/A

N/A
2,601
3,209 ..............
N/A
144
144
145
N/A
405
373
405
N/A
20
2
20
N/A
409 .............. ..............
N/A ..............
62 ..............

N/A

N/A ..............

Subtotal, Anticipated Other Adjustments ..

N/A

N/A

Estimate of Other Discretionary Spending
Limit, Including Anticipated other Adjustments ........................................................

N/A

N/A 535,350 544,905 541,894 543,602 550,953 536,604

Total Discretionary Preview Report Spending
Limit .................................................................
Enacted Emergency Spending including P.L.
106–31 ...............................................................
Release of Contingent Emergency Funding ......
Subtotal, Adjustments .....................................

3,579

890 ..............
345
145
146
146
405
405
405
13
20
20
409 .............. ..............
50 ..............
30

–3 .............. .............. .............. ..............
3,787

570

1,912

571

946

566,380 576,089 536,271 570,945 541,324 571,047 550,382 567,019
5,331
9,358

3,652 ..............
3,840 ..............

1,129 ..............
3,289 ..............

292 ..............
1458 ..............

160
526

14,689

7,492 ..............

4,418 ..............

1,750 ..............

686

Current Estimate, Total Discretionary
Spending Limit ............................................. 581,069 583,581 536,271 575,363 541,324 572,797 550,382 567,705
Anticipated Other Adjustments:
Expected Release of Contingent Emergency
Funding .........................................................
EITC Tax Compliance .....................................
Continuing Disability Reviews .......................
Adoption Incentive Payments .........................
C/J/S arrears ....................................................
Wye River .........................................................

2,753
..............
..............
..............
..............
800

632
2,601
3,209 ..............
..............
144
144
145
..............
405
373
405
..............
20
2
20
..............
409 .............. ..............
614 ..............
62 ..............

890 ..............
345
145
146
146
405
405
405
13
20
20
409 .............. ..............
50 ..............
30

22

MID-SESSION REVIEW

Table 7.

CURRENT STATUS OF DISCRETIONARY SPENDING LIMITS—Continued
(In millions of dollars)
FY 1999
BA

FY 2000

OL

BA

Re-base Mandatory Emergency Appropriations ...............................................................

–246

–243 ..............

Subtotal, Anticipated Other Adjustments ..

3,307

1,003

3,579

FY 2001

OL

BA

OL

FY 2002
BA

OL

–3 .............. .............. .............. ..............
3,787

570

1,912

571

946

Estimate of Total Discretionary Spending
Limit, Including Anticipated other Adjustments ........................................................ 584,376 584,584 539,850 579,150 541,894 574,709 550,953 568,651

Pay-as-you-go legislation
Pay-as-you-go enforcement covers all direct
spending and receipts legislation. The BEA
defines direct spending as entitlement authority, the food stamp program, and budget
authority provided by law other than in
appropriations acts. The following are exempt
from pay-as-you-go enforcement: Social Security, the Postal Service, legislation specifically
designated as an emergency requirement, and
legislation fully funding the Federal Government’s commitment to protect insured deposits.
The BEA requires that, in total, receipts
and direct spending legislation not result
in a net cost. If such legislation yields
a net cost, and if the President and Congress
do not fully offset it by other legislative
savings, the law requires that a sequester
of non-exempt direct spending programs offset
the net cost.
The BEA requires that, within seven working days of the enactment of direct spending
or receipts legislation, OMB submit a report
to Congress that estimates the resulting
change in outlays or receipts for the current
year, the budget year, and the following

four fiscal years. The estimates, which must
rely on the economic and technical assumptions underlying the most recent President’s
budget, determine whether the pay-as-yougo requirement is met. The pay-as-you-go
process requires that OMB maintain a ‘‘scorecard’’ that shows the cumulative net cost
of such legislation.
Table 8 presents OMB estimates of payas-you-go legislation enacted as of June 20,
1999. These are the same balances shown
in the February budget. At the end of
this session of Congress, OMB will determine
the need for sequestration. The 1999 impact
of legislation enacted this year will be added
to the year 2000 balances in the end-ofsession report that OMB is to issue 15
days after the first session of the 106th
Congress adjourns sine die. In total, payas-you-go legislation already enacted has saved
$2.9 billion for 2000. The Administration
has proposed to remove the year 2000 balances
from the pay-as-you go scorecard and to
use the savings to offset defense spending.
Under current estimates, no sequester is
projected for 2000. The table also shows
the CBO estimate for the one Act this
year that CBO scored as pay-as-you-go.

23

CURRENT STATUS OF ENFORCEMENT PROCEDURES

Table 8.

NET COST OF PAY-AS-YOU-GO LEGISLATION ENACTED AS OF JUNE 20, 1999
(In millions of dollars)

Report
Number

Act Number

Act Title

1999

2000

2001

2002

2003

2004

1999–04

Pay-as-you-go balances in FY 2000 Preview Report:
OMB estimate ........................
CBO estimate .........................

0 –2,927
0
587

–833
337

–164 –1,092
2,759
2,426

0
0

–5,016
6,109

Legislation enacted in 1st session—106th Congress:
N.A.

P.L. 106–25
H.R. 800

Education Flexibility Partnership Act of 1999
OMB estimate ........................ OMB does not believe this bill is subject to pay-as-you-go.
CBO estimate .........................
0
32
–11
–16
–5
0
0
Subtotal, legislation enacted in 1st session—106th Congress
OMB estimate ........................
0
0
0
0
CBO estimate .........................
0
32
–11
–16
Total, balances
OMB estimate ........................
CBO estimate .........................

0 –2,927
0
619

–833
326

0
–5

0
0

0
0

–164 –1,092
2,743
2,421

0
0

–5,016
6,109

* Net costs or savings of $500,000 or less.
Note: OMB also scored the following bills as PAYGO, but none had an impact greater than $500,000 in any year: Nursing Home Resident Protection Amendments of 1999 (P.L. 106–4, H.R. 540), Family Farmer Bankruptcy Extension Act
(P.L. 106–5, H.R. 808), Interim Federal Aviation Administration Authorization Act (P.L. 106–6, S. 643), Crop Insurance
Application Deadline Extension (P.L. 106–7, H.R. 1212), and Tax Relief for Personnel Involved in Operation Allied Force
(P.L. 106–21, H.R. 1376).

SUMMARY TABLES
Table 9. ESTIMATED SPENDING FROM 2000
BALANCES OF BUDGET AUTHORITY: DISCRETIONARY PROGRAMS 1
(In billions of dollars)

Total
Total balances end of 2000 ..........................................................
Spending from 2000 balances:
2001 ............................................................................................
2002 ............................................................................................
2003 ............................................................................................
2004 ............................................................................................
Expiring balances 2001 through 2004 ........................................
Unexpended balances at the end of 2004 ...................................

685.4
256.8
149.4
92.9
63.6
............
122.7

1 This table is required by section 221(b) of the Legislative Reorganization Act of 1970.

Table 10.

OUTLAYS FOR MANDATORY PROGRAMS UNDER CURRENT LAW 1
(In billions of dollars)
1998
Actual

Human resources programs:
Education, training, employment and social services ...
Health ...............................................................................
Medicare ...........................................................................
Income security ................................................................
Social security ..................................................................
Veterans’ benefits and services ......................................

Estimate
1999

2000

2001

2002

2003

2004

12.4
106.6
190.2
192.3
376.1
23.3

12.9
115.1
197.0
199.8
387.2
24.8

14.5
122.9
214.9
212.3
403.1
24.9

13.7
132.1
225.1
222.5
421.1
26.0

12.6
142.4
230.0
232.7
441.4
26.8

14.7
153.8
247.5
241.4
462.9
28.3

15.7
166.2
261.1
250.2
486.5
29.3

Subtotal, human resources programs .........................
Other mandatory programs:
International affairs. .......................................................
Energy ..............................................................................
Agriculture .......................................................................
Commerce and housing credit ........................................
Transportation .................................................................
Undistributed offsetting receipts ....................................
Other functions ................................................................

900.9

936.7

992.7

1,040.3

1,086.0

1,148.5

1,209.1

–5.0
–2.4
7.9
–2.2
2.1
–47.2
0.4

–4.6
–3.0
17.3
–1.8
2.1
–40.4
3.8

–3.9
–5.1
12.7
1.0
2.4
–42.2
2.6

–3.7
–4.4
9.8
4.0
2.0
–45.5
1.3

–3.4
–4.3
7.9
6.2
1.4
–51.5
0.9

–3.2
–4.2
7.0
6.7
1.9
–46.1
1.1

–3.1
–4.3
6.2
7.2
1.8
–46.9
2.8

Subtotal, other mandatory functions ..........................

–46.4

–26.5

–32.6

–36.6

–42.8

–36.8

–36.2

Total, outlays for mandatory programs under current law ..................................................................

854.5

910.2

960.1

1,003.8

1,043.1

1,111.7

1,172.9

1 This

table is required by Section 221(b) of the Legislative Reorginizations Act of 1970.

25

26

Table 11.

15–YEAR BUDGET TOTALS
(In billions of dollars)
Projections 1

Budget Estimates
2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Total

2013

2014

00-04

00-09

00-14

February Budget Policy Pending Social Security and Medicare Reform:
Receipts ..................................
Outlays ...................................
Unified surplus ......................
On-budget ...........................
Off-budget ...........................

1,883 1,933 2,007 2,075 2,166 2,265 2,364 2,474 2,588 2,708 2,828 2,950 3,072 3,197 3,325 10,064 22,464 37,835
1,766 1,799 1,820 1,893 1,958 2,034 2,081 2,154 2,234 2,315 2,399 2,486 2,578 2,676 2,789 9,236 20,054 32,981
117
–12
129

134
0
134

187
44
142

182
31
151

208
50
158

231
58
173

283
103
179

320
131
190

354
156
198

393
188
205

429
221
208

464
253
211

495
284
211

520
312
208

536
333
203

828
114
714

2,409
750
1,659

4,854
2,153
2,701

Mid-Session Policy Pending Social Security and Medicare Reform:
Receipts ..................................
Outlays ...................................
Unified surplus ......................
On-budget ...........................
Off-budget ...........................

1,914 1,963 2,034 2,113 2,206 2,313 2,420 2,536 2,657 2,784 2,908 3,035 3,165 3,299 3,437 10,230 22,940 38,783
1,772 1,795 1,815 1,890 1,952 2,026 2,076 2,147 2,229 2,311 2,386 2,464 2,558 2,659 2,768 9,224 20,013 32,849
142
5
137

168
24
144

220
65
154

223
58
165

254
79
175

286
94
193

343
142
202

389
174
215

428
203
225

473
240
233

522
279
243

571
324
246

608
360
248

640
394
246

669
428
241

1,007
231
776

2,926
1,083
1,843

5,935
2,868
3,067

Changes from the February Budget to the Mid-Session:
Receipts ..................................
Outlays ..................................

31
6

30
–4

27
–6

38
–3

40
–6

47
–8

55
–5

62
–6

69
–5

77
–4

80
–13

85
–21

93
–20

103
–17

112
–20

166
–12

476
–41

949
–132

Unified surplus ......................
On-budget ...........................
Off-budget ...........................

25
17
8

34
24
10

33
21
12

41
26
14

46
29
17

55
36
19

61
38
22

68
43
25

74
47
27

80
52
29

93
58
34

106
71
35

113
76
36

119
82
38

133
94
39

179
117
62

517
333
183

1,081
715
366

Mid-Session Policy with Social Security and Medicare Reform:
Receipts ..................................
Outlays ...................................
Social Security lockbox 2 ........
Medicare lockbox ...................

1 Projections
2 Includes

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

for 2010 through 2014 are an OMB extension of detailed agency budget estimates through 2009
earnings.

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

MID-SESSION REVIEW

Available unified surplus ......
On-budget ...........................
Off-budget ...........................

1,914 1,963 2,034 2,110 2,183 2,284 2,372 2,488 2,608 2,732 2,852 2,977 3,107 3,240 3,378 10,204 22,689 38,243
1,772 1,818 1,867 1,940 2,001 2,082 2,140 2,215 2,301 2,386 2,467 2,555 2,652 2,758 2,869 9,399 20,523 33,824
137
144
154
165
175
193
202
215
225
233
243
356
386
417
451
776 1,843 3,696
5
0
12
5
7
10
29
59
83
113
142
67
68
65
58
30
324
723

27

SUMMARY TABLES

Table 12.

MANDATORY AND REVENUE PROPOSALS
(In millions of dollars)
Estimate
1999

Initiatives:
Agriculture:
Increase Environmental Quality Incentive Program ...
Forest Service payments to States de-coupling ............
Wildlife Habitat Incentive Program (WHIP) ................
Farmland Protection Program (FPP) ............................
Cooperator Export Program/Quality Samples ..............
Reallocate rural development and research funds .......
EZ/EC economic development grants ............................
Extend CCC computer funding ......................................
Restore Food Stamp benefits for elderly legal immigrants ...........................................................................
Education:
Extend loan consolidation ..............................................
HHS:

Subtotal, Health care ..............................................
HUD:
Fund new urban Empowerment Zones .........................
Elderly housing vouchers ...............................................
Interior:
BLM timber payments to States delinkage ..................
Recreation/entrance fees ................................................
Finance land purchases with sales of surplus land .....
Transfers to retired miner’s health benefits .................
Expand cover-over of distilled spirits tax to Virgin Islands .............................................................................
Labor:
Reauthorize NAFTA-TAA through 9/30/01 and other
TAA amendments ........................................................
PBGC: raise guarantee cap for multi-employer pensions and other ............................................................
UI reform proposal .........................................................
Extend welfare to work ..................................................
Transportation:
Shift St. Lawrence Seaway to mandatory ....................
Treasury:
Expand cover-over of distilled spirits tax to Puerto
Rico ...............................................................................
Long-term care tax credit (outlay portion) ...................
Veterans:
Pay full compensation benefits for Filipinos residing
in the U.S. ....................................................................

2001

2002

2003

Total
2000–2004

2004

............
20
............
27
............
3
............
1
............
30
............ ..............
............ ..............
............
35

41
41
5
6
30
11
5
35

53
55
7
20
30
27
12
35

65
64
8
28
30
42
14
35

74
72
8
27
30
43
14
35

253
259
31
82
150
123
45
175

............

20

25

30

35

130

91 .............. .............. .............. ..............

91

133

Education and child care:
Child care ..................................................................... ............
Establish Early Learning Fund ................................. ............
Subtotal, education and child care .........................
Foster care/independent living ...................................
Health care:
Medicare buy-in, health costs ....................................
Disability health options ............................................
Cancer clinical trials ...................................................
Covering children ........................................................
Long-term care eligibility expansion, Medicaid costs
Immigrant proposals, Medicaid/CHIP costs ..............
Other ............................................................................

2000

20

828
372

1,085
516

1,333
603

1,525
624

1,904
612

6,675
2,727

1,200
6

1,601
31

1,936
43

2,149
49

2,516
51

9,402
180

............ ..............
322
406
372
336
............
20
75
169
250
342
............
10
190
250
300 ..............
............
79
619
601
85
25
............
5
15
25
30
35
............
31
57
107
187
285
............
59 .............. .............. .............. ..............

1,436
856
750
1,409
110
667
59

............

204

1,278

1,558

1,224

1,023

5,287

............
............

3
8

51
46

114
77

138
78

144
80

450
289

............
............

............
9
12
15
17
17
70
............ .............. ..............
–24
29
74
79
............ .............. .............. .............. .............. .............. ...................
............
42 .............. .............. .............. ..............
42
............

12

12

12

12

12

60

............

101

150

65

16 ..............

332

............
............
............

1
90
15

1
190
294

2
260
450

3
20
207

3
40
34

10
600
1,000

............

12

12

13

14

14

65

............
............

34
6

34
123

34
127

34
146

34
156

170
558

............

5

5

5

5

5

25

28

MID-SESSION REVIEW

Table 12.

MANDATORY AND REVENUE PROPOSALS—Continued
(In millions of dollars)
Estimate
1999

Charge fees to lenders participating in VA’s home
loan program to fund information technology improvements:
Increased technology spending ...............................
Fees ...........................................................................
Department of Defense—Civil:
Retirement reform ..........................................................
EPA:
Provide funding for Superfund orphan shares .............
FEMA:
Flood map modernization ...............................................
SSA:
Return to work proposals (SSI portion) ........................
Restore SSI benefits for disabled legal immigrants .....
United Mine Workers of America:
Interior transfers for retired miner’s health benefits ..
Health benefits ................................................................
Revenues:
Provide tax relief and extend provisions ......................
Subtotal, initiatives ...........................................................
Offsets not designated for discretionary:
Agriculture:
Cut conservation farm option to fund WHIP and FPP
Reduce EEP .....................................................................
Charge fair market value for timber/Forest Service ....
12% commodity provisions .............................................
Forest service recreation fees ........................................
Education—student loans:
Advance recall of reserves ..............................................
Recall additional federal fund reserves ........................
Implement a 90-day non-interest accruing curing period before lenders file default claims .......................
Eliminate GA complement at 95% on new loans .........
Reduce guaranty agency retention rate to 18.5% ........
Reduce lender subsidy to 20 basis points on tax exempt lenders ................................................................
HHS:
Eliminate child support hold harmless payments and
conform paternity match with administrative
match rate ....................................................................
Health care savings ........................................................
Adjustment of child support orders ...............................
Cap TANF transfer to SSBG .........................................
Interior:
Hardrock mining production fee on public lands .........
Filming and photography on public lands ....................
Treasury:
Extend customs user fees ...............................................
Simplification of foster child credit (outlay portion) ....
Veterans:

2000

2001

2002

2003

Total
2000–2004

2004

............
............

5
–5

5
–5

............

1

1

1

1

2

6

............

200

200

200

200

200

1,000

............

26

53

61

64

66

270

............ .............. ..............
............ .............. ..............

–5
77

–5
180

–5
328

–15
585

–42 .............. .............. .............. ..............
57
14
13
12
12

–42
108

............
8

5 .............. ..............
–5 .............. ..............

15
–15

670

4,287

7,795

6,619

6,892

7,333

32,926

811

6,504

12,097

11,917

11,801

12,477

54,796

............
–3
–16
............
–85
–106
............
–17
–17
............
–95
–104
............ .............. ..............

–21
–118
–17
–93
–24

–27
–130
–17
–111
–7

–29
–139
–17
–125
–17

–96
–578
–85
–528
–48

–142
–23 .............. .............. .............. ..............
............ ..............
–234
–262
–159
–65

–23
–720

............
–17
............ ..............
............
–483

–24
–60
–64

–27
–65
–66

–29
–70
–72

–31
–74
–77

–128
–269
–762

............ ..............

–205

–218

–264

–96

–783

............
–74
–67
–61
–63
............
–226 –1,111 –1,266 –1,545
............ ..............
33
–5
–43
............
–600 .............. .............. ..............

–59
–1,615
–70
100

–324
–5,763
–85
–500

............ ..............
–8
–26
–26
–26
–86
............ .............. .............. .............. .............. .............. ...................
............ .............. .............. .............. ..............
............
–2
–36
–37
–39

Extend expiring OBRA VA provisions:
Round down to the next lower dollar COLA adjustments to disability compensation and DIC ........... ............ .............. .............. ..............
Limit pension benefits to Medicaid eligible beneficiaries in nursing homes (includes Medicaid offset) ............................................................................ ............ .............. .............. ..............

–1,522
–40

–1,522
–154

–15

–24

–39

–110

–117

–227

29

SUMMARY TABLES

Table 12.

MANDATORY AND REVENUE PROPOSALS—Continued
(In millions of dollars)
Estimate
1999

2000

2001

2002

2003

2004

Total
2000–2004

Verify income of pension beneficiaries with the IRS
and SSA ....................................................................
Collect higher loan fees and reduce resale losses .....
SSA:
Program integrity proposal (SSI portion) .....................
Fed/FDIC:
State bank exam fee (non-Fed members) .....................
Allowances:
Tobacco recoupment policy .............................................
Revenues:
State bank exam fees .....................................................
FEMA mortgage transaction fees ..................................
United Mine Workers premiums ...................................
Clergy open season for OASDHI coverage (on-budget
portion) .........................................................................
UI solvency incentive .....................................................
Eliminate unwarranted benefits ...................................

............
............
–8
............
............
–372

Subtotal, offsets not designated for discretionary ....

–522

Subtotal, proposals subject to pay-as-you-go ..............

289

–596

–498

–280

–240

–397

–2,011

............

468

–110

–111

–97

–80

70

............

–299

–99 .............. .............. ..............

–398

............

–118

–160

–160

–160

–160

–758

............
10
............
–7
............ ..............

25
–11
64

41
–13
113

45
–12
144

46
–13
153

167
–56
474

Proposals not subject to pay-as-you-go:
Education:
Family education loans modification transfer ..............
Housing and Urban Development:
Increase in FHA MMI commitment limitation ............
Labor:
UI integrity .....................................................................
Social Security Administration:
Return to work proposals (DI portion) ..........................
Program integrity proposal (DI portion) .......................
Impact of Medicare buy-in on OASI ..............................
FDIC:
Interest payments related to State exam fees .............
Morris K. Udall Scholarship Foundation:
Receipt of federal payments to the foundation ............
Undistributed offsetting receipts:
Redefine wage base for military pay covered by Social
Security ........................................................................
Revenues:
Clergy open season for OASDHI coverage (off-budget
portion) .........................................................................

............ .............. .............. ..............
............ .............. .............. ..............

–3
–188

–3
–190

–6
–378

............

–14

–18

–59

–65

–46

–202

............

–84

–88

–91

–95

–100

–458

............ ..............

–2,824

–2,123

–1,235

–690

–6,872

–82
–58
–15

–86
–59
–14

–90
–62
–13

–94
–65
–12

–98
–68
–12

–450
–312
–66

–2
–224
–4,996

–1
–312
–7,174

–1
–1
–1
–96 .............. ..............
–7,356 –7,556 –7,623

–6
–632
–34,705

–7,100 –12,595 –12,197 –12,041 –12,874

–56,807

............

–2

–7

–12

–17

–23

–61

............

–3

–3

–3

–3

–3

–15

............

264

271

261

260

261

1,317

............

–3

–7

–9

–9

–10

–38

Subtotal, proposals not subject to pay-as-you-go ............

310

–37

107

151

171

702

–286

–535

–173

–89

–226

–1,309

............
............
............

–876
–19
–25
–26
–25
–868 .............. .............. .............. ..............
–41 .............. .............. .............. ..............

–971
–868
–41

............

–132 .............. .............. .............. ..............

–132

SUBTOTAL, proposals not designated for discretionary ...............................................................................
Offsets designated for discretionary:
Outlays:
Education—student loans:
NDNH savings .............................................................
Recall additional federal fund reserves .....................
Eliminate GA complement at 95% on new loans .....
Reduce lender subsidy to 20 basis points on tax exempt lenders ............................................................
HHS:
Health care savings ....................................................
Freeze TANF supplemental growth at FY99 level ...

289

............
............

–1,100
–45

–920
–87

–1,030
–48

–980
–41

–1,070
–20

–5,100
–241

30

MID-SESSION REVIEW

Table 12.

MANDATORY AND REVENUE PROPOSALS—Continued
(In millions of dollars)
Estimate
1999

Corps of Engineers:
Harbor services fund user fees ...................................
Undistributed offsetting receipts:
Change in military retirement ...................................
Allowances:
Tobacco recoupment policy .........................................
Revenues:
Superfund tax extensions ...............................................
Repeal of existing harbor maintenance excise tax .......
FAA user fees ..................................................................
Modify individual estimated tax safe harbors ..............
Federal tobacco taxes .....................................................

2000

2001

2002

2003

2004

Total
2000–2004

............

–966

–963

–960

–996

–1,014

–4,899

............

–849

–1,058

–1,159

–1,231

–1,270

–5,567

............ .............. ..............

–1,794

–3,318

–3,998

–9,110

–109
............
............
............
77

–1,219 –1,242 –1,259
–6,459
541
578
619
2,715
–1,091 –1,007
–910
–5,314
1,871 .............. .............. ...................
–6,589 –6,418 –6,400
–34,499

–1,532
472
–1,122
–1,800
–7,987

–1,207
505
–1,184
–71
–7,105

Subtotal, offsets designated for discretionary ...........

–32 –16,846 –12,109 –11,503 –14,681 –15,347

–70,486

TOTAL, mandatory and revenue proposals ................

257 –17,132 –12,644 –11,676 –14,770 –15,573

–71,795

MEMORANDUM:
Total tobacco recoupment policy savings shown above ... ............ ..............
Total health care savings shown above ............................ ............ –1,326

Table 13.

–2,824
–2,031

–3,917
–2,296

–4,553
–2,525

–4,688
–2,685

–15,982
–10,863

TAX RELIEF PROPOSALS INCLUDING SOCIAL SECURITY AND
MEDICARE REFORM
(In billions of dollars)
1999

2000

2001

2002

2003

2004

2000–
2004

2000–
2009

Provide tax relief and extend expiring provisions:
Make health care more affordable ...........................
Expand education initiatives ....................................
Make child care more affordable ..............................
Extend expiring provisions .......................................
Other tax relief provisions ........................................

..........
–0.1
..........
–0.4
–0.2

–0.1
–0.5
–0.4
–1.7
–1.6

–1.3
–1.4
–1.7
–1.7
–1.8

–1.3
–1.3
–1.5
–0.6
–1.9

–1.5
–1.2
–1.6
–0.3
–2.3

–1.6
–1.2
–1.6
–0.2
–2.7

–5.8
–5.6
–6.8
–4.6
–10.2

–14.7
–11.6
–15.7
–5.3
–29.1

Subtotal, provide tax relief and extend expiring
provisions ............................................................

–0.7

–4.3

–7.8

–6.6

–6.9

–7.3

–32.9

–76.3

Create Universal Savings Accounts .............................

..........

..........

–0.8

–0.6

–2.6

–22.3

–26.3

–250.4

Total effect of tax relief proposals ............................

–0.7

–4.3

–8.6

–7.2

–9.5

–29.6

–59.2

–326.7

31

SUMMARY TABLES

Table 14.

EFFECT OF PROPOSALS ON RECEIPTS
(In millions of dollars)
Estimate
1999

Provide tax relief and extend expiring provisions:
Make health care more affordable:
Provide tax relief for long-term care needs ................................. ............
Provide tax relief for workers with disabilities ........................... ............
Provide tax relief to encourage small business health plans ..... ............
Subtotal, make health care more affordable ............................
Expand education initiatives:
Provide incentives for public school construction and modernization ....................................................................................
Extend employer-provided educational assistance and include
graduate education .....................................................................
Provide tax credit for workplace literacy and basic education
programs .....................................................................................
Encourage sponsorship of qualified zone academies ...................
Eliminate 60-month limit on student loan interest deduction ...
Eliminate tax when forgiving student loans subject to income
contingent repayment ................................................................
Provide tax relief for participants in certain Federal education
programs .....................................................................................

............

Subtotal, provide incentives to revitalize communities ..........
Promote energy efficiency and improve the environment:
Provide tax credit for energy-efficient building equipment ........
Provide tax credit for new energy-efficient homes ......................
Extend electric vehicle tax credit; provide tax credit for fuel-efficient vehicles ............................................................................
Provide investment tax credit for CHP systems .........................
Provide tax credit for rooftop solar systems ................................
Extend wind and biomass tax credit and expand eligible biomass sources ...............................................................................

2001

2002

2003

2004

–52 –1,107 –1,144 –1,312 –1,408
–21 –151 –169 –187 –196
–1
–5
–10
–15
–13

–5,023
–724
–44

–74 –1,263 –1,323 –1,514 –1,617

–5,791

............

–146

–570

–939 –1,035 –1,045

–3,735

–72

–267

–719

–236 ............ ............

–1,222

............
............
............

–3
–22
–18

–18
–43
–61

–25
–55
–62

–38
–55
–24 ............
–67
–73

–139
–144
–281

............ ............ ............ ............ ............ ............ ..............
............

Subtotal, expand education initiatives .....................................
–72
Make child care more affordable:
Increase, expand and simplify child and dependent care tax
credit ........................................................................................... ............
Provide tax incentives for employer-provided child-care facilities ............................................................................................... ............
Subtotal, make child care more affordable ..............................
Provide incentives to revitalize communities:
Increase low-income housing tax credit per capita cap ..............
Provide Better America Bonds to improve the environment .....
Provide New Markets Tax Credit .................................................
Expand tax incentives for SSBICs, ..............................................
Extend wage credit for two new EZs ............................................

2000

Total
1999–
2004

............

–3

–6

–30

–459 –1,418 –1,324 –1,171 –1,179

–5,551

–338 –1,585 –1,426 –1,471 –1,503

–6,323

–40

–7

–84

–7

–114

–7

–131

–140

–509

–378 –1,669 –1,540 –1,602 –1,643

–6,832

............
–46 –186 –330 –474 –620 –1,656
............
–8
–49 –127 –205 –284
–673
............
–12
–88 –207 –297 –376
–980
–*
–*
–*
–*
–*
–*
–*
............ ............ ............ ............ ............ ............ ..............
............

–66

–323

–664

–976 –1,280

–3,309

............
............

–230
–60

–407
–109

–376
–92

–393
–72

–127
–96

–1,533
–429

............ ............ ............
–1
–64
–99
............
–9
–19

–4
–110
–25

–178
–52
–34

–712
–7
–45

–894
–332
–132

–48

–73

–88

–94

–323

–682
–204

–680
–218

–817 –1,081
–213 –218

–3,643
–997

–707 ............ ............ ............
–164
–81
–38
–16
–36
–21
–9
–2
–656 –281 –133
–53

–1,386
–415
–87
–2,056

............

–20

Subtotal, promote energy efficiency and improve the environment ...................................................................................
–1 –383
Promote expanded retirement savings, security and portability ...
–27 –144
Extend expiring provisions:
Allow personal tax credits against the AMT ...............................
–67 –679
Extend work opportunity tax credit .............................................
–23 –116
Extend welfare-to-work tax credit ................................................
–3
–19
Extend R&E tax credit ..................................................................
–311 –933
Make permanent the expensing of brownfields remediation
costs ............................................................................................. ............ ............

–106

–170

–168

–167

–611

32

MID-SESSION REVIEW

Table 14.

EFFECT OF PROPOSALS ON RECEIPTS—Continued
(In millions of dollars)
Estimate
1999

Extend tax credit for first-time DC homebuyers .........................

2000
1

2001

–1

2002

–10

2003

Total
1999–
2004

2004

–1 ............ ............

–12

Subtotal, extend expiring provisions ........................................
–403 –1,748 –1,679
Simplify the tax laws ........................................................................
–64 –141 –159
Miscellaneous provisions:
Make first $2,000 of severance pay exempt from income tax .... ............
–42 –168
Allow steel companies to carryback NOLs up to five years .......
–19 –190
–28

–554
–154

–348
–104

–238
–41

–4,567
–599

–173
–30

–133 ............
–24
–20

–516
–292

Subtotal, miscellaneous provisions ...........................................
–19
Electricity restructuring:
Deny tax-exempt status for new electric utility bonds except
for distribution related expenses; repeal cost of service limitation for determining deductible contributions to nuclear
decommissioning funds; clarify the 15-year life of distributed
power property ............................................................................ ............
Subtotal, electricity restructuring .............................................
Modify international trade provisions:
Extend and modify Puerto Rico economic-activity tax credit .....
Extend GSP and modify other trade provisions 1 ........................
Levy tariff on certain textiles/apparel produced in the CNMI 1
Expand Virgin Island tariff credits 1 ............................................
Subtotal, modify international trade provisions ......................
Subtotal, provide tax relief and extend expiring provisions 1 .........................................................................................
Eliminate unwarranted benefits and adopt other revenue
measures:
Limit benefits of corporate tax shelter transactions:
Deny tax benefits resulting from non-economic transactions;
modify substantial understatement penalty for corporate tax
shelters; deny deductions for certain tax advice and impose
excise taxes on certain fees, rescission provisions and provisions guaranteeing tax benefits ................................................
Preclude taxpayers from taking tax positions inconsistent with
the form of their transactions ...................................................
Tax income from corporate tax shelters involving tax-indifferent parties ...................................................................................
Require accrual of income on forward sale of corporate stock ...
Modify treatment of built-in losses and other attribute trafficking ................................................................................................
Modify treatment of ESOP as S corporation shareholder ..........
Prevent serial liquidation of U.S. subsidiaries of foreign corporations .....................................................................................
Prevent capital gains avoidance through basis shift transactions involving foreign shareholders .....................................
Limit inappropriate tax benefits for lessors of tax-exempt use
property .......................................................................................
Prevent mismatching of deductions and income exclusions in
transactions with related foreign persons ................................
Restrict basis creation through Section 357(c) ............................
Modify anti-abuse rule related to assumption of liabilities .......
Modify COLI rules .........................................................................

–232

–196

–203

–157

–20

–808

3

10

18

27

38

96

3

10

18

27

38

96

............
–24
–84 –641
............ ............
............ ............

–46
–353
187
–*

–71
–93
187
–*

–106
–96
187
–2

–141
–99
187
–1

–388
–1,282
748
–3

–212

23

–17

–54

–925

............

–84

–665

–670 –4,287 –7,795 –6,619 –6,892 –7,333 –32,926

............

11

76

162

194

214

657

5

50

52

55

58

62

277

15
1

150
4

155
9

165
13

175
21

185
31

830
78

9
17

113
64

185
102

192
145

200
183

208
202

898
696

............

12

20

19

19

19

89

65

301

114

64

45

27

551

1

35

79

119

147

163

543

............
3
1
............

60
9
2
240

104
19
4
366

108
28
5
398

112
39
7
427

117
50
9
451

501
145
27
1,882

Subtotal, limit benefits of corporate tax shelter transactions
117
Other proposals:
Require banks to accrue interest on short-term obligations ...... ............

1,051

1,285

1,473

1,627

1,738

7,174

72

2

3

4

4

85

33

SUMMARY TABLES

Table 14.

EFFECT OF PROPOSALS ON RECEIPTS—Continued
(In millions of dollars)
Estimate
1999

Require current accrual of market discount by accrual method
taxpayers .....................................................................................
Limit conversion of character of income from constructive ownership transactions with respect to partnership interests ......
Modify rules for debt-financed portfolio stock .............................
Modify and clarify certain rules relating to debt-for-debt exchanges ........................................................................................
Modify and clarify straddle rules .................................................
Conform control test for tax-free incorporations, distributions,
and reorganizations ....................................................................
Tax issuance of tracking stock ......................................................
Require consistent treatment and provide basis allocation
rules for transfers of intangibles in certain nonrecognition
transactions ................................................................................
Modify tax treatment of downstream mergers ............................
Modify partnership distribution rules ..........................................
Deny change in method treatment to tax-free formations .........
Repeal installment method for accrual basis taxpayers .............
Deny deduction for punitive damages ..........................................
Apply uniform capitalization rules to tollers ...............................
Provide consistent amortization periods for intangibles ............
Clarify recovery period of utility grading costs ...........................
Require recapture of policyholder surplus accounts ...................
Modify rules for capitalizing policy acquisition costs of life insurance companies .....................................................................
Subject investment income of trade associations to tax .............
Restore phaseout of unified credit for large estates ...................
Require consistent valuation for estate and income tax purposes ............................................................................................
Require basis allocation for part sale/part gift transactions ......
Conform treatment of surviving spouses in community property States ...................................................................................
Expand section 864(c)(4)(B) to interest and dividend equivalents .............................................................................................
Recapture overall foreign losses when CFC stock is disposed ...
Modify foreign tax credit carryback and carryforward rules .....
Increase elective withholding rate for nonperiodic distributions
from deferred compensation plans ............................................
Increase section 4973 excise tax for excess IRA contributions ..
Limit pre-funding of welfare benefits for 10 or more employer
plans ............................................................................................
Subject signing bonuses to employment taxes ............................
Expand reporting of cancellation of indebtedness income ..........
Require taxpayers to include rental income of residence in income without regard to the period of rental ............................
Repeal lower-of-cost-or-market inventory accounting method ...
Defer interest deduction and OID on certain convertible debt ..
Modify deposit requirement for FUTA .........................................
Reinstate Oil Spill Liability Trust Fund tax 1 .............................
Deny DRD for certain preferred stock .........................................
Disallow interest on debt allocable to tax-exempt obligations ...
Repeal percentage depletion for non-fuel minerals mined on
Federal and formerly Federal lands .........................................
Modify rules relating to foreign oil and gas extraction income
Increase penalties for failure to file correct information returns ............................................................................................
Tighten the substantial understatement penalty for large corporations .....................................................................................

2000

2001

2002

2003

2004

Total
1999–
2004

3

7

11

15

20

25

78

19
1

30
5

37
9

32
14

32
20

35
26

166
74

15
16

76
40

109
50

108
48

107
47

106
49

506
234

7
40

18
105

22
128

22
127

21
127

21
127

104
614

2
14
–28
6
............
16
............
............
9
............

66
42
131
94
685
88
25
–219
30
134

83
55
162
64
757
124
39
–189
49
222

86
59
173
65
438
130
40
48
61
219

90
63
162
67
114
137
42
255
69
217

95
67
147
70
16
143
21
435
75
215

420
286
775
360
2,010
622
167
330
284
1,007

............
............
............

379
172
27

977
294
61

946
309
66

914
325
72

880
341
76

4,096
1,441
302

............
............

3
2

8
3

13
4

17
5

22
6

63
20

3

15

33

46

59

72

225

............
............
38

9
6
252

15
6
315

16
6
266

16
6
253

17
7
233

73
31
1,319

............
............

42
1

2
12

2
12

2
13

2
14

50
52

............
............
............

92
5
7

156
3
7

159
3
7

150
3
7

149
3
7

706
17
35

............
4
11
11
12
12
50
18
422
525
431
433
201
2,012
2
9
20
32
44
55
160
............ ............ ............ ............ ............ ............ ..............
26
254
256
257
261
264
1,292
4
13
26
38
52
66
195
4
11
17
23
28
33
112
............
............

92
5

94
65

96
107

97
112

99
118

478
407

............

6

12

15

19

13

65

............ ............

25

42

43

37

147

34

MID-SESSION REVIEW

Table 14.

EFFECT OF PROPOSALS ON RECEIPTS—Continued
(In millions of dollars)
Estimate
1999

Require withholding on certain gambling winnings ...................
Simplify foster child definition under EITC ................................
Replace sales-source rules with activity-based rules ..................
Repeal tax-free conversions of large C corporations into S corporations .....................................................................................
Eliminate the income recognition exception for accrual method
service providers .........................................................................
Modify structure of businesses indirectly conducted by REITs
Modify treatment of closely held REITs ......................................
Impose excise tax on purchase of structured settlements ..........
Amend 80/20 company rules .........................................................
Modify foreign office material participation exception applicable to inventory sales attributable to nonresident’s U.S. office ...............................................................................................
Stop abuse of CFC exception to ownership requirements of section 883 .......................................................................................
Include QTIP trust assets in surviving spouse’s estate ..............
Eliminate non-business valuation discounts ...............................
Eliminate gift tax exemption for personal residence trusts .......
Increase proration percentage for P&C insurance companies ...
Subtotal, other proposals ...........................................................

2000

2001

............
17
............ ............
............
310

2002

2003

2004

Total
1999–
2004

4
6
540

1
7
570

1
7
600

1
7
630

24
27
2,650

............

10

32

46

56

68

212

1
4
............
6
28

32
27
24
8
48

44
27
10
6
49

46
27
12
3
51

48
28
14
1
52

50
28
15
–2
53

220
137
75
16
253

1

7

10

10

11

11

49

............
4
............ ............
............
206
............
–1
............
–4

9
2
425
–1
49

7
2
443
–1
64

5
2
477
3
87

5
2
494
12
107

30
8
2,045
12
303

255

3,945

5,889

5,883

5,929

5,885

27,531

372

4,996

7,174

7,356

7,556

7,623

34,705

............
109

794
738

460
747

463
756

476
766

481
778

2,674
3,785

............
–77

1,122
7,987

1,184
7,105

1,091
6,589

1,007
6,418

910
6,400

5,314
34,499

............

82

86

90

94

98

450

8

15

14

13

12

12

66

............
............

58
1,800

............

–472

–505

–541

–578

–619

–2,715

............

5

8

10

10

11

44

............

224

312

96 ............ ............

632

40 12,353

9,541

6,758

8,270

8,139

45,061

Total effect of proposals 1 .........................................................
–258 13,062
(Paygo proposals) 1 .................................................................
–290 1,090
(Non-paygo proposals) ........................................................... ............
3
(Discretionary offsets) ...........................................................
32 11,969

8,920
–149
7
9,062

7,495
999
9
6,487

8,934
836
9
8,089

8,429
469
10
7,950

46,840
3,245
38
43,557

Subtotal, eliminate unwarranted benefits and adopt
other revenue measures 1 .....................................................
Other provisions that affect receipts:
Reinstate environmental tax on corporate taxable income 2 ..........
Reinstate Superfund excise taxes 1 ..................................................
Convert Airport and Airway Trust Fund taxes to a cost-based
user fee system 1 ............................................................................
Receipts from tobacco legislation 1 ...................................................
Assess fees for examination of bank holding companies and
State-chartered member banks (receipt effect) 1 .........................
Restore premiums for United Mine Workers of America Combined Benefit Fund ........................................................................
Assess mortgage transaction fees for flood hazard determination 1 .......................................................................................
Modify individual estimated tax safe harbors ................................
Replace Harbor Maintenance tax with the Harbor Services User
Fee (receipt effect) 1 .......................................................................
Allow members of the clergy to revoke exemption from Social Security and Medicare coverage 1 .....................................................
Create solvency incentive for State unemployment trust fund accounts 1 ............................................................................................
Subtotal, other provisions that affect receipts 1 ................

* $500,000 or less.
1 Net of income offsets.
2 Net of deductibility for income tax purposes.

59
62
65
68
312
71 –1,871 ............ ............ ..............

OUTLAYS BY CATEGORY
(In billions of dollars)
February estimate

1999
Without Social Security and Medicare Reform:
Discretionary:
Defense ...........................................................................
Non-defense ....................................................................

277.5
303.6

2000

2001

2002

Mid-Session estimate
2003

2004

1999

2000

2001

2002

2003

2004

274.8
316.7

282.7
329.7

292.8
329.7

304.7
331.6

314.4
334.9

283.0
304.9

280.3
317.0

284.4
324.6

293.3
332.9

304.9
331.7

314.5
334.9

Subtotal, discretionary ...............................................
581.2
591.5
Resources contingent on Social Security and Medicare reform .................................................................. .............. ..............

612.4

622.6

636.3

649.3

587.9

597.3

609.0

626.2

636.6

649.4

–26.3

–40.9

–36.5

–34.1 .............. ..............

–21.3

–45.9

–36.5

–34.1

Mandatory:
Social security ................................................................
Medicare .........................................................................
Medicaid .........................................................................
Other ...............................................................................

389.2
202.0
108.5
218.9

405.2
213.7
114.7
225.4

423.6
227.7
122.2
233.7

444.1
231.7
131.1
237.1

465.1
249.6
141.6
253.6

487.4
263.4
152.9
266.1

387.2
197.0
108.6
217.5

403.1
213.7
114.8
224.4

421.2
223.6
122.6
232.7

441.6
228.5
131.7
237.2

463.1
245.8
142.4
254.5

486.7
259.3
154.1
265.7

Subtotal, mandatory ..................................................
Net interest ........................................................................

918.6
227.2

959.0
215.2

1,007.1
205.9

1,043.9
194.7

1,109.9
183.2

1,169.7
173.0

910.2
229.4

956.0
218.5

1,000.0
207.4

1,039.0
195.5

1,105.8
183.9

1,165.7
171.0

Total, outlays .....................................................................

1,727.1

1,765.7

1,799.2

1,820.3

1,893.0

1,957.9

1,727.5

1,771.7

1,795.2

1,814.8

1,889.9

1,952.0

With Social Security and Medicare Reform:
Discretionary ......................................................................
Mandatory ..........................................................................
Net interest ........................................................................

581.2
918.6
227.2

591.5
959.0
215.5

612.4
1,007.1
207.6

622.6
1,043.9
199.0

636.3
1,109.9
190.7

649.3
1,169.7
183.6

587.9
910.2
229.4

597.3
956.3
218.5

609.0
1,001.2
208.0

626.2
1,043.1
197.9

636.6
1,114.1
189.0

649.4
1,172.8
179.3

Total, outlays .....................................................................

1,727.1

1,766.0

1,827.2

1,865.5

1,936.9

2,002.6

1,727.5

1,772.1

1,818.3

1,867.7

1,939.7

2,001.4

SUMMARY TABLES

Table 15.

35

36

Table 16.

RECEIPTS BY SOURCE
(In billions of dollars)

1998
Actual
Individual income taxes .......................................
Corporation income taxes ....................................
Social insurance and retirement receipts ..........
Excise taxes ..........................................................
Estate and gift taxes ............................................
Customs duties .....................................................
Miscellaneous receipts .........................................
Total without Social Security and Medicare Reform ..................................................
Memorandum:
Total with Social Security and Medicare Reform .................................................................

828.6
188.7
571.8
57.7
24.1
18.3
32.7

February estimates
1999
868.9
182.2
608.8
68.1
25.9
17.7
34.7

2000
899.7
189.4
636.5
69.9
27.0
18.4
42.1

2001
912.5
196.6
660.3
70.8
28.4
20.0
44.9

2002
942.8
203.4
686.3
72.3
30.5
21.4
50.3

Mid-Session estimates
2003
970.7
212.3
712.0
73.8
31.6
23.0
51.7

2004
1,017.7
221.5
739.2
75.4
33.9
24.9
53.0

1999
886.7
179.5
608.0
70.7
28.4
18.0
35.1

2000
921.1
187.5
641.1
72.1
31.4
17.2
43.9

2001
934.0
191.8
666.8
73.0
32.8
18.3
46.8

2002
961.1
197.9
694.4
73.8
35.1
20.0
52.1

2003
996.1
205.9
723.8
75.2
36.6
21.5
53.6

2004
1,043.8
213.5
754.5
76.8
39.2
22.9
55.0

1,721.8 1,806.3 1,883.0 1,933.3 2,007.1 2,075.0 2,165.5 1,826.3 1,914.2 1,963.4 2,034.4 2,112.7 2,205.7

1,721.8

1,806.3

1,869.0

1,917.4

1,985.2

2,054.1

2,141.9

1,826.3

1,914.2

1,962.6

2,033.8

2,110.1

2,183.4

MID-SESSION REVIEW

OUTLAYS BY AGENCY
(In billions of dollars)

1998
Actual
Legislative Branch ...............................................
2.6
Judicial Branch ....................................................
3.5
Agriculture ............................................................
53.9
Commerce .............................................................
4.0
Defense—Military ................................................
256.1
Education ..............................................................
31.5
Energy ...................................................................
14.4
Health and Human Services ...............................
350.6
Housing and Urban Development ......................
30.2
Interior ..................................................................
7.2
Justice ...................................................................
16.2
Labor .....................................................................
30.0
State ......................................................................
5.4
Transportation ......................................................
39.5
Treasury ................................................................
390.1
Veterans Affairs ...................................................
41.8
Corps of Engineers ...............................................
3.8
Other Defense Civil Programs ............................
31.2
Environmental Protection Agency ......................
6.3
Executive Office of the President .......................
0.2
Federal Emergency Management Agency ..........
2.1
General Services Administration ........................
1.1
International Assistance Programs ....................
9.0
National Aeronautics and Space Administration ......................................................................
14.2
National Science Foundation ..............................
3.2
Office of Personnel Management ........................
46.3
Small Business Administration ..........................
–0.1
Social Security Administration ...........................
408.2
Other Independent Agencies ...............................
11.0
Allowances ............................................................ ..............
Undistributed Offsetting Receipts ......................
–161.0
Total without Social Security and Medicare Reform ..................................................
Memorandum:
Total with Social Security and Medicare Reform .................................................................

February estimates
1999

2000

2001

2002

Mid-Session estimates
2003

2004

1999

2000

2001

2002

2003

2004

2.8
3.9
63.4
4.8
263.6
34.4
15.5
375.5
32.3
8.4
16.5
34.9
6.8
41.9
386.0
43.5
4.2
32.3
6.7
0.4
2.7
0.3
10.1

3.1
4.1
55.2
6.6
260.8
35.0
15.8
400.3
32.5
8.5
19.8
38.7
7.0
45.5
377.9
44.0
3.1
33.2
7.3
0.3
2.7
0.4
10.4

3.0
4.3
55.0
5.2
268.6
39.2
16.0
426.7
32.7
8.6
20.9
40.6
7.3
48.2
376.6
45.3
3.0
34.1
7.6
0.3
2.4
0.4
10.7

3.1
4.3
54.7
4.7
278.3
38.2
16.0
443.1
29.2
8.6
19.7
41.2
7.3
49.5
374.3
46.0
3.0
35.0
7.4
0.3
1.8
–0.1
11.4

3.2
4.4
54.7
4.7
290.2
39.8
15.9
474.1
27.8
8.7
19.7
41.9
7.0
51.2
372.4
46.8
2.9
35.8
7.3
0.3
1.5
0.3
11.5

3.2
4.4
56.7
4.7
300.0
40.4
15.6
501.6
26.1
8.8
19.5
43.2
7.1
52.8
372.1
47.9
2.9
36.7
7.3
0.3
1.3
0.2
11.5

2.9
3.9
62.7
4.8
268.6
34.3
15.5
371.3
33.0
8.6
18.6
32.9
7.0
41.9
388.4
43.9
4.2
32.3
6.7
0.4
3.1
0.4
10.5

3.1
4.1
56.2
8.2
263.8
33.8
15.8
401.0
31.8
8.6
20.4
36.8
7.2
45.5
382.8
44.0
3.1
33.2
7.3
0.3
3.2
0.4
10.9

3.0
4.3
55.6
5.6
269.6
38.7
16.0
423.5
31.7
8.7
20.8
39.8
7.5
48.3
381.5
45.3
3.0
34.1
7.6
0.3
2.7
0.4
10.8

3.1
4.3
55.3
4.8
278.6
37.7
16.0
440.6
28.4
8.6
19.8
41.8
7.5
49.5
380.2
46.0
3.0
35.0
7.4
0.3
2.0
–0.1
11.5

3.2
4.4
55.9
4.7
290.3
39.3
15.9
470.7
27.0
8.8
19.8
42.7
7.1
51.2
380.1
46.8
2.9
35.9
7.3
0.3
1.5
0.3
11.5

3.2
4.4
57.0
4.7
300.0
40.1
15.6
497.9
25.5
8.8
19.6
43.7
7.3
52.8
379.2
47.9
2.9
36.8
7.3
0.3
1.3
0.2
11.5

14.0
3.3
48.3
–0.9
422.4
6.3
3.1
–160.4

13.4
3.6
50.5
0.3
439.0
14.8
2.6
–170.8

13.4
3.8
52.9
0.3
458.2
17.2
–26.6
–177.0

13.5
4.0
55.4
0.5
479.9
21.2
–40.2
–191.0

13.7
4.0
57.8
0.7
502.0
22.1
–33.9
–195.5

13.7
4.0
60.6
0.7
525.4
23.1
–28.9
–205.0

14.0
3.3
48.3
–0.8
420.5
6.5
0.6
–160.8

13.4
3.6
50.5
0.3
436.9
15.1
3.1
–172.5

13.4
3.8
52.9
0.3
455.8
17.8
–26.8
–180.9

13.5
4.0
55.4
0.5
477.4
21.8
–42.2
–196.7

13.7
4.0
57.9
0.7
500.0
22.7
–33.8
–203.0

13.7
4.0
60.7
0.7
524.7
23.6
–28.8
–214.6

SUMMARY TABLES

Table 17.

1,652.6 1,727.1 1,765.7 1,799.2 1,820.3 1,893.0 1,957.9 1,727.5 1,771.7 1,795.2 1,814.8 1,889.9 1,952.0

1,652.6

1,727.1

1,766.0

1,827.2

1,865.5

1,936.9

2,002.6

1,727.5

1,772.1

1,818.3

1,867.2

1,939.7

2,001.4

37

38

Table 18.

OUTLAYS BY FUNCTION
(In billions of dollars)

1998
Actual
National defense ..................................................
268.5
International affairs ............................................
13.1
General science, space, and technology ..............
18.2
Energy ...................................................................
1.3
Natural resources and environment ...................
22.4
Agriculture ............................................................
12.2
Commerce and housing credit .............................
1.0
Transportation ......................................................
40.3
Community and regional development ..............
9.7
Education, training, employment, and social
services ...............................................................
54.9
Health ...................................................................
131.4
Medicare ...............................................................
192.8
Income security ....................................................
233.2
Social Security ......................................................
379.2
Veterans benefits and services ...........................
41.8
Administration of justice .....................................
22.8
General government ............................................
13.4
Net interest ..........................................................
243.4
Allowances ............................................................ ..............
Undistributed offsetting receipts ........................
–47.2
Total without Social Security and Medicare Reform ..................................................
Memorandum:
Total with Social Security and Medicare Reform .................................................................

February estimates
1999

2000

2001

2002

Mid-Session estimates
2003

2004

1999

2000

2001

2002

2003

2004

276.7
15.5
18.5
*
24.3
21.4
0.5
42.6
10.4

274.1
16.1
18.6
–2.0
23.7
15.1
6.4
46.4
10.2

282.1
17.0
19.0
–1.1
24.4
12.8
7.7
48.8
10.0

292.1
17.8
19.1
–1.1
24.0
11.4
9.3
49.6
9.6

304.0
17.7
19.3
–1.1
24.3
10.2
9.5
51.8
9.3

313.8
17.9
19.3
–1.2
24.3
10.3
9.9
53.4
9.1

282.2
15.9
18.5
0.2
24.6
22.0
1.6
42.7
10.7

279.6
16.9
18.6
–2.0
24.0
16.9
7.2
46.4
10.8

283.8
17.3
19.0
–1.1
24.5
13.8
7.6
48.8
10.4

292.6
18.1
19.2
–1.1
24.1
12.0
9.0
49.6
9.8

304.2
17.9
19.3
–1.1
24.5
11.1
9.3
51.8
9.4

313.8
18.1
19.3
–1.2
24.5
10.3
9.8
53.4
9.1

60.1
143.1
205.0
243.1
392.6
43.5
24.5
14.9
227.2
3.1
–40.0

63.4
152.3
216.6
258.0
408.6
44.0
27.5
14.5
215.2
2.6
–45.7

67.8
162.8
230.6
267.3
426.9
45.3
28.8
14.7
205.9
–26.6
–45.0

66.9
173.3
234.6
274.7
447.3
46.0
27.6
14.5
194.7
–40.2
–51.1

68.7
184.7
252.5
282.3
468.3
46.8
27.7
14.6
183.2
–33.9
–47.0

70.0
196.6
266.3
291.2
490.6
47.9
27.5
14.7
173.0
–28.9
–47.9

59.5
142.8
199.9
240.7
390.7
44.0
26.7
15.7
229.4
0.2
–40.4

62.3
152.5
216.6
255.5
406.4
44.0
28.2
14.6
218.5
0.5
–45.6

67.3
163.3
226.5
266.2
424.5
45.3
28.7
14.6
207.4
–27.4
–45.2

66.6
174.0
231.4
274.9
444.8
46.0
27.7
14.5
195.5
–42.4
–51.3

68.5
185.5
248.7
282.6
466.3
46.8
27.8
14.5
183.9
–33.9
–47.2

69.6
197.8
262.2
291.2
489.9
47.9
27.6
14.6
171.0
–28.8
–48.1

1,652.6 1,727.1 1,765.7 1,799.2 1,820.3 1,893.0 1,957.9 1,727.5 1,771.7 1,795.2 1,814.8 1,889.9 1,952.0

1,652.6

1,727.1

1,766.0

1,827.2

1,865.5

1,936.9

2,002.6

1,727.5

1,772.1

1,818.3

1,867.2

1,939.7

2,001.4

* $50 million or less.

MID-SESSION REVIEW

DISCRETIONARY BUDGET AUTHORITY BY AGENCY 1
(In billions of dollars)

Agency

1998
Actual

February estimates
1999

Legislative Branch ...............................................
2.3
2.6
Judicial Branch ....................................................
3.2
3.4
Agriculture ............................................................
15.8
15.8
Commerce .............................................................
4.2
5.1
Defense—Military ................................................
259.8
263.5
Education ..............................................................
29.8
28.8
Energy ...................................................................
16.8
17.9
Health and Human Services ...............................
37.1
41.3
Housing and Urban Development ......................
22.4
25.5
Interior ..................................................................
8.1
7.8
Justice ...................................................................
17.6
18.1
Labor .....................................................................
10.7
11.0
State ......................................................................
5.6
7.6
Transportation ......................................................
15.0
12.5
Treasury ................................................................
11.5
12.7
Veterans Affairs ...................................................
18.9
19.2
Corps of Engineers ...............................................
4.2
4.1
Other Defense Civil Programs ............................
0.1
0.1
Environmental Protection Agency ......................
7.4
7.6
Executive Office of the President .......................
0.2
0.4
Federal Emergency Management Agency ..........
2.4
0.8
General Services Administration ........................
0.1
0.5
International Assistance Programs ....................
11.4
31.2
National Aeronautics and Space Administration ......................................................................
13.6
13.7
National Science Foundation ..............................
3.4
3.7
Office of Personnel Management ........................
0.2
0.2
Small Business Administration ..........................
0.7
0.7
Social Security Administration ...........................
5.5
5.5
Other Independent Agencies ...............................
6.2
6.2
Allowances ............................................................ ..............
7.6
Undistributed Offsetting Receipts ...................... .............. ..............

2000

2001

2002

Mid-Session estimates
2003

2004

2 1999

2.7
3.9
15.2
7.2
268.2
32.8
17.8
41.5
23.8
8.6
18.4
11.5
6.4
12.9
12.0
19.2
3.9
0.1
7.2
0.3
0.9
0.2
12.7

2.7
3.9
15.6
5.1
287.4
34.7
18.7
43.5
28.0
8.6
18.5
11.5
6.3
13.5
12.7
19.2
3.9
0.1
7.2
0.3
0.9
0.4
12.7

2.7
3.9
15.4
4.6
289.3
34.7
18.6
43.4
28.0
8.6
18.6
11.5
6.4
14.0
12.5
19.2
3.9
0.1
7.2
0.3
0.9
0.3
12.2

2.8
4.0
15.4
4.6
299.7
34.7
18.5
43.4
28.0
8.6
18.4
11.5
6.6
14.7
12.6
19.2
4.0
0.1
7.2
0.3
0.9
0.3
12.2

2.8
4.0
15.4
4.5
308.5
34.7
18.5
43.4
28.0
8.6
18.4
11.5
6.8
15.2
12.6
19.2
4.0
0.1
7.2
0.3
0.9
0.2
12.2

13.6
3.9
0.2
0.8
5.6
6.6
–0.3
–2.8

13.8
4.0
0.2
0.8
5.6
6.9
–47.7
1.1

13.8
4.0
0.2
0.8
5.6
6.8
–41.6
1.1

13.8
3.9
0.2
0.8
5.6
6.8
–20.5
–0.2

13.8
13.7
3.9
3.7
0.2
0.2
0.8
0.8
5.6
5.5
6.8
6.3
–22.5
2.8
–0.2 ..............

2000

2.6
3.4

2.7
3.9

3 16.5

3 15.2

5.1
273.0
28.8
17.9
41.5
25.2
7.9
18.2
11.0
8.2
12.6
12.8
19.2
4.1
0.1
7.6
0.4
2.3
0.5
8 32.2

2001

2002

2003

2004

17.8
41.5
6 23.8
8.6
18.4
11.5
6.7
12.9
12.0
7 19.2
3.9
0.1
7.2
0.3
0.9
0.2
12.7

2.7
3.9
15.6
5.1
287.4
34.7
18.7
43.5
28.0
8.6
18.6
11.5
6.4
13.5
12.7
19.2
3.9
0.1
7.2
0.3
0.9
0.4
12.7

2.7
3.9
15.4
4.6
289.3
34.7
18.6
43.4
28.0
8.6
18.7
11.5
6.6
14.0
12.5
19.2
3.9
0.1
7.2
0.3
0.9
0.3
12.2

2.8
4.0
15.4
4.6
299.7
34.7
18.5
43.4
28.0
8.6
18.5
11.5
6.8
14.7
12.6
19.2
4.0
0.1
7.2
0.3
0.9
0.3
12.2

2.8
4.0
15.4
4.6
308.5
34.7
18.5
43.4
28.0
8.6
18.5
11.5
6.9
15.2
12.6
19.2
4.0
0.1
7.2
0.3
0.9
0.2
12.2

13.6
3.9
0.2
0.8
5.6
6.5
2.3
–2.8

13.8
4.0
0.2
0.8
5.6
6.7
–47.7
1.1

13.8
4.0
0.2
0.8
5.6
6.6
–43.5
1.1

13.8
3.9
0.2
0.8
5.6
6.5
–20.5
–0.2

13.8
3.9
0.2
0.8
5.6
6.5
–22.5
–0.2

9.0
4 268.2
5 32.8

Total without Social Security and Medicare Reform ..................................................

534.2

575.0

555.0

540.3

547.2

578.0

585.5

583.8

559.6

540.4

545.4

578.0

585.5

Memorandum:
Total with Social Security and Medicare Reform .................................................................

534.2

575.0

555.0

590.9

594.8

607.4

619.9

583.8

559.6

586.0

598.0

607.5

619.9

39

1 The 2001–2004 budget projections for discretionary spending, with the exceptions of the Department of Defense and some capital intensive long-term projects and advance appropriations, do not represent a policy projection, but an aggregate freeze at the 2000 policy levels. The estimates in the aggregate, including a reserve for priority initiatives, show the discretionary program levels the Administration will support if Social Security and Medicare are reformed.
2 Includes emergency funding.

SUMMARY TABLES

Table 19.

40

3 In addition to the appropriated discretionary budget authority, $5.8 billion was appropriated in 1999 for emergency funding for agricultural disasters classified as
mandatory.
4 The 2000 program level is adjusted by $3.1 billion in advance appropriations requested for 2001 for family housing and military construction projects and base realignment and closure (BRAC) activities.
5 The budget provides a total program level of $34.8 billion, $1.3 billion (four percent) above the 1999 level on comparable terms.
6 The budget provides HUD $28.0 billion in budget authority including $4.2 billion in advance appropriations.
7 The budget provides a total program level of $20.0 billion when expected medical collections for veterans programs are added, $124 million over the 1999 enacted level.
8 Includes $18.4 billion for the International Monetary Fund quota increase and the New Arrangements to Borrow.

MID-SESSION REVIEW

DISCRETIONARY BUDGET AUTHORITY BY FUNCTION
(In billions of dollars)
1998
Actual

February estimates
1999

National defense ..................................................
272.4
277.0
International affairs ............................................
19.0
40.8
General science, space, and technology ..............
18.0
18.8
Energy ...................................................................
3.1
2.9
Natural resources and environment ...................
23.5
23.4
Agriculture ............................................................
4.3
4.3
Commerce and housing credit .............................
3.1
3.7
Transportation ......................................................
16.0
13.3
Community and regional development ..............
10.3
8.9
Education, training, employment, and social
services ...............................................................
46.7
46.6
Health ...................................................................
26.4
30.1
Medicare ...............................................................
2.7
3.0
Income security ....................................................
29.7
32.8
Social Security ......................................................
3.2
3.2
Veterans benefits and services ...........................
18.9
19.3
Administration of justice .....................................
24.8
26.2
General government ............................................
12.1
13.2
Allowances ............................................................ ..............
7.6
Undistributed offsetting receipts ........................ .............. ..............

2000

2001

2002

Mid-Session estimates
2003

2004

1999

2000

2001

2002

2003

2004

281.6
21.3
19.2
2.8
23.8
4.1
5.4
13.5
8.9

301.3
21.2
19.4
3.2
24.0
4.1
3.3
14.2
8.9

303.2
20.8
19.4
3.0
23.9
4.2
2.9
14.7
8.9

313.6
21.0
19.3
3.0
23.9
4.1
2.9
15.3
8.9

322.3
21.1
19.3
3.0
24.0
4.1
2.9
15.8
8.9

288.6
42.6
18.8
2.9
23.7
4.5
3.6
13.4
10.5

283.4
21.6
19.2
2.8
23.9
4.1
7.0
13.5
8.9

301.3
21.3
19.4
3.2
24.0
4.1
3.1
14.2
8.9

303.2
21.0
19.4
3.0
23.9
4.2
2.6
14.7
8.9

313.6
21.1
19.3
3.0
24.0
4.1
2.6
15.4
8.9

322.3
21.3
19.3
3.0
24.0
4.1
2.6
15.8
8.9

52.1
30.6
2.9
30.2
3.2
19.3
26.4
12.7
–0.3
–2.8

54.2
31.0
2.9
36.4
3.2
19.3
26.8
13.5
–47.7
1.1

54.2
30.8
2.9
36.2
3.2
19.3
26.9
13.2
–41.6
1.1

54.1
30.8
2.9
36.2
3.2
19.3
26.7
13.3
–20.5
–0.2

54.0
46.6
30.8
30.2
2.9
3.0
36.2
32.6
3.2
3.2
19.3
19.3
26.8
26.3
13.2
13.5
–22.5
0.5
–0.2 ..............

52.2
30.6
2.9
30.2
3.2
19.3
26.4
12.7
0.5
–2.8

54.2
31.0
2.9
36.4
3.2
19.3
26.9
13.5
–47.7
1.1

54.2
30.8
2.9
36.2
3.2
19.3
27.0
13.2
–43.5
1.1

54.1
30.8
2.9
36.2
3.2
19.3
26.8
13.3
–20.5
–0.2

54.0
30.8
2.9
36.2
3.2
19.3
26.9
13.2
–22.5
–0.2

Total without Social Security and Medicare Reform ..................................................

534.2

575.0

555.0

540.3

547.2

578.0

585.5

583.8

559.6

540.4

545.4

578.0

585.5

Memorandum:
Total with Social Security and Medicare Reform .................................................................

534.2

575.0

555.0

590.9

594.8

607.4

619.9

583.8

559.6

586.0

598.0

607.5

619.9

SUMMARY TABLES

Table 20.

41

42

MID-SESSION REVIEW

Table 21.

FEDERAL GOVERNMENT FINANCING AND DEBT WITH SOCIAL
SECURITY AND MEDICARE REFORM 1
(In billions of dollars)
1998
Actual

Financing:
Surplus or deficit (–) ............................................
(On-budget) .......................................................
(Off-budget) .......................................................
Means of financing other than borrowing from
the public:
Medicare solvency transfers ............................
Changes in: 2
Treasury operating cash balance .................
Checks outstanding, etc. 3 ............................
Deposit fund balances ..................................
Seigniorage on coins .........................................
Less: Net financing disbursements:
Direct loan financing accounts ...................
Guaranteed loan financing accounts ...........

Estimates
1999

2000

2001

2002

2003

2004

69.2
–29.9
99.2

98.8
–24.8
123.6

137.4
—
137.4

144.1
—
144.1

154.2
—
154.2

165.1
—
165.1

175.0
—
175.0

—

—

4.8

0.3

12.3

5.2

6.9

4.7
–10.5
–0.8
0.6

–6.1
–1.6
–1.7
1.0

—
–1.2
—
1.0

—
—
—
1.0

—
—
—
1.0

—
—
—
1.0

—
—
—
1.0

–11.5
–0.5

–25.2
1.6

–21.2
0.9

–20.1
1.8

–19.6
1.8

–19.2
1.8

–17.7
2.0

Total, means of financing other than borrowing from the public ..........................

–18.0

–32.0

–15.8

–17.0

–4.4

–11.2

–7.8

Total, repayment of the debt held by
the public ............................................
Change in debt held by the public ......................

51.3
–51.3

66.8
–66.8

121.6
–121.6

127.1
–127.1

149.8
–149.8

154.0
–154.0

167.2
–167.2

Debt Outstanding, End of Year:
Gross Federal debt:
Debt issued by Treasury ..................................
Debt issued by other agencies .........................

5,449.3
29.4

5,586.7
28.6

5,675.9
27.7

5,754.3
26.7

5,840.5
25.7

5,924.1
24.3

6,006.8
23.0

Total, gross Federal debt ..............................
Held by:
Government accounts .......................................
The public .........................................................
Federal Reserve Banks 4 ..............................
Other ..............................................................

5,478.7

5,615.3

5,703.6

5,781.0

5,866.1

5,948.4

6,029.8

1,758.8
3,719.9
458.1
3,261.7

1,962.2
3,653.0

2,172.2
3,531.4

2,376.6
3,404.4

2,611.6
3,254.5

2,847.9
3,100.5

3,096.5
2,933.3

Debt Subject to Statutory Limitation, End of
Year:
Debt issued by Treasury ......................................
Less: Treasury debt not subject to limitation 5 ..
Agency debt subject to limitation .......................
Adjustment for discount and premium 6 ............

5,449.3
–15.5
0.2
5.5

5,586.7
–15.5
0.1
5.5

5,675.9
–15.5
0.1
5.5

5,754.3
–15.5
0.1
5.5

5,840.5
–15.5
0.1
5.5

5,924.1
–15.5
0.1
5.5

6,006.8
–15.5
0.1
5.5

Total, debt subject to statutory limitation 7 ...

5,439.4

5,576.7

5,665.9

5,744.3

5,830.5

5,914.1

5,996.8

1 Treasury securities held by the public and zero-coupon bonds held by Government accounts are almost entirely measured at sales price plus amortized discount or less amortized premium. Agency debt is almost entirely measured at face
value. Treasury securities in the Government account series are measured at face value less unrealized discount (if any).
2 A decrease in the Treasury operating cash balance (which is an asset) is a means of financing the deficit and therefore
has a positive sign. An increase in checks outstanding or deposit fund balances (which are liabilities) would also be a
means of financing the deficit and therefore would also have a positive sign.
3 Besides checks outstanding, includes accrued interest payable on Treasury debt, miscellaneous liability accounts, allocations of special drawing rights, and as an offset, cash and monetary assets other than the Treasury operating cash balance, miscellaneous asset accounts, and profit on sale of gold.
4 Debt held by the Federal Reserve Banks is not estimated for future years.
5 Consists primarily of Federal Financing Bank debt.
6 Consists of unamortized discount (less premium) on public issues of Treasury notes and bonds and unrealized discount
on Government account series securities, except, in both cases, for zero-coupon bonds.
7 The statutory debt limit is $5,950 billion.

FEDERAL DEBT WITH SOCIAL SECURITY AND MEDICARE REFORM
(In billions of dollars)
Estimates

17:08 Jul 19, 1999

2000

Jkt 000000
PO 00000

Debt held by the public:
Debt held by the public, beginning of period ...............................
Debt reduction from:
Off-budget surplus:
Surplus pending Social Security and Medicare reform .......
Social Security solvency transfers .........................................
Returns on investment of transfers 1 ....................................
Medicare solvency transfers ......................................................
Less purchase of equities by Social Security trust fund 1 ..........
Other financing requirements 2 ....................................................
Total changes ..........................................................................

Frm 00043

Debt held by the public, end of period .........................................
Less market value of equities .......................................................
Debt held by the public, less equity holdings, end of period ......

Fmt 3620
Sfmt 3620

Debt held by Government accounts:
Debt held by Government accounts, beginning of period ...........
Increase prior to Social Security reform ......................................
Social Security and Medicare solvency transfers ........................
Earnings on solvency transfers .....................................................
Less purchase of equities by Social Security trust fund 1 ..........
Total changes ..........................................................................

2001

2002

2003

2004

2005

Projections
2006

2007

2008

2009

2010

2011

2012

2013

2014

3,653 3,531 3,404 3,255 3,101 2,933 2,744 2,525 2,262 1,964 1,625 1,249

944

637

335

–137
0
0
–5
0
21

–144
0
0
–0
0
17

–154
0
0
–12
0
17

–165
0
0
–5
0
16

–175
0
0
–7
0
15

–193
0
0
–10
0
13

–202
0
0
–29
0
12

–215
0
0
–59
0
11

–225
0
0
–83
0
9

–233
0
0
–113
0
8

–243
0
0
–142
0
8

–246
–107
–3
–67
110
8

–248
–125
–14
–68
139
8

–246
–145
–27
–65
172
9

–241
–166
–43
–58
209
9

–122

–127

–150

–154

–167

–189

–219

–263

–298

–339

–376

–305

–307

–302

–291

3,531 3,404 3,255 3,101 2,933 2,744 2,525 2,262 1,964 1,625 1,249
0
0
0
0
0
0
0
0
0
0
0
3,531 3,404 3,255 3,101 2,933 2,744 2,525 2,262 1,964 1,625 1,249

944
–110
834

637
–248
388

335
–420
–85

44
–629
–585

SUMMARY TABLES

VerDate 11-SEP-98

Table 22.

1,962 2,172 2,377 2,612 2,848 3,096 3,363 3,667 4,012 4,394 4,823 5,299 5,712 6,136 6,562
205
204
222
230
240
254
271
280
289
299
310
315
318
317
314
5
0
12
5
7
10
29
59
83
113
142
173
193
210
224
0
0
1
1
2
2
3
6
11
17
25
35
52
71
93
0
0
0
0
0
0
0
0
0
0
0 –110 –139 –172 –209
210

204

235

236

249

266

304

345

382

429

476

414

424

426

422

MSR0719.00

Debt held by Government accounts, end of period .....................
Plus market value of equities .......................................................

2,172 2,377 2,612 2,848 3,096 3,363 3,667 4,012 4,394 4,823 5,299 5,712 6,136 6,562 6,984
0
0
0
0
0
0
0
0
0
0
0
110
248
420
629

Debt and equities held by Government accounts, end of period

2,172 2,377 2,612 2,848 3,096 3,363 3,667 4,012 4,394 4,823 5,299 5,822 6,384 6,982 7,614

prw___

1 Includes

accrued capital gains.
credit programs.
Note: Projections for 2010 through 2014 are an OMB extension of detailed agency budget estimates through 2009.
2 Primarily

PsN: prw___

43

EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503