Full text of Budget in Brief : Fiscal Year 1964
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THE GOVERNMENT DOLLAR
W W
it goes . . ,
Fiscal Y e a r 1 9 6 4 Estimate
For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington 25, D.C. - Price 25 cents
Foreword
The Federal budget is more than a compilation of figures. It
is a program of action which the President presents to the Congress
and to the Nation to meet our continuing responsibilities at home
and abroad. The budget affects not only our pocketbooks, but also
our security and well-being as a Nation.
The Budget in Brief is designed to present the highlights of the
budget in a clear and nontechnical way.
It is my hope that the Budget in Brief will help an increasing number of citizens to obtain a better understanding of the processes of the
Federal Government, its activities and its responsibilities.
JANUARY
17,1963.
1
THE BUDGET PROCESS
THE
PRESIDENT
Proposes
THE
the
Budget
CONGRESS
Considers the Budge*
Authorizes Programs
Appropriates Funds
Enacts Tax Laws
FEDERAL
AGENCIES
Make Contracts
Purchase G o o d s a n d Services
Employ Workers
Pay Pensions, Benefits, Etc.
THE
TREASURY
Collects Taxes
Pays t h e Bills
Contents
Page
Foreword
Introduction
Part 1. M E E T I N G N A T I O N A L N E E D S
The budget program for 1964
Efficiency and economy
Receipts of the Federal Government
The budget and the economy
The budget and the Nation's growth
Investments on behalf of the Nation
The public debt
Part 2.
i
5
7
7
11
13
15
17
18
19
F E D E R A L A C T I V I T I E S BY F U N C T I O N
21
National defense
International affairs and
Space research and technology
Agriculture and agricultural resources
Natural resources
Commerce and transportation
Housing and community development
Health, labor, and welfare
Education
Veterans benefits and services
General government
Interest
22
25
28
29
31
33
36
39
42
44
46
47
Part 3.
finance
B U D G E T FACTS AND F I G U R E S
49
Measures of Federal spending
The budget process
Tables on the budget
50
54
59
Note.—All years referred to are fiscal years, unless otherwise noted. Detail in the tables
and charts of this booklet may not add to the totals because of rounding.
3
Introduction
W H A T IS T H E B U D G E T ?
The budget serves several purposes. It is both a financial report and
a plan for the future. It is also a request for legislation, since congressional action is necessary if the proposals in the budget are to be
carried out. Further, it is an important aid in the management and
administration of the Government's activities. Finally, it is an economic document, for it must take into account the many ways in
which Government taxation and spending affect the efficiency with
which our economic system operates.
The budget is presented to the Congress each January, six months
before the start of the fiscal year, which runs from July i to June 30 and
is designated by the calendar year in which it ends. Congress considers the budget and votes new obligational authority and new
revenue measures. Once granted this authority, Federal agencies may
obligate the Government to make the payments necessary to carry out
the authorized programs. However, considerable time may elapse between the time Congress votes the spending authority and the time
the payments are actually made.
Beginning this year the totals emphasized in the budget are shown
on a more comprehensive basis than was the practice in past years.
The totals this year include not only the amounts contained in the
administrative budget (explained in part 3) but also the money which
goes into and out of the Government trust funds (such as social
security and Federal aid to highways).
The budget is often discussed in terms of its effect on the economy
or the gross national product. The gross national product is the total
value of all goods and services that the Nation produces in a single
year. It includes purchases of goods and services by consumers, businesses, foreigners, and Federal, State, and local governments.
More information on the budget process and the relation of the
budget to the economy is provided in this booklet.
5
Part
1
Meeting National Needs
THE BUDGET P R O G R A M FOR 1964
The Nation faces unprecedented challenges at home, abroad, and
in outer space. The budget of the United States for 1964 presents
the President's proposals for meeting the Government's share of these
responsibilities during the coming year.
In 1964, the Federal Government will continue to build a defensive
and retaliatory power designed to deter aggression. At the same time,
it will seek to strengthen the foundations of freedom around the world;
to serve a wide range of vital and ever-changing domestic needs; to
press forward with the Nation's response to the scientific challenge
of the vast and mysterious frontier of space; and to support all of these
efforts by promoting a strong and growing economy.
It is of great importance for the years ahead that we act
boldly now if we are to assure more jobs for an ever growing
labor force, if we are to achieve higher standards of living, and
if we are to continue to provide the leadership required of us
in the free world community. I am convinced that the program encompassed in this budget represents a proper use of
fiscal tools for achieving these important goals.—From the
budget message of the President.
7
The Jobs To Be Done
The Federal Government's foremost responsibility is to help safeguard the peace and security of the free world. This is our largest
category of expenditures. Complementing the defense effort, international programs support the cause of freedom around the world in
many ways.
We have mounted an accelerated effort to explore space, an effort
which will give top priority to a manned landing on the moon during
this decade.
Expenditures devoted to national security needs, to space programs,
and to paying for the continuing costs of past wars amount to 79% of
the administrative budget and 63% of total Federal payments, including trust funds.
At home, we face new or changing needs in education, community
development, transportation, and manpower. We must also meet the
Federal Receipts and Payments
FEDERAL RECEIPTS FROM AND PAYMENTS T O THE
PUBLIC
[Fiscal years. In billions]
1962
actual
Description
FEDERAL
1963
estimate
1964
estimate
RECEIPTS
$81.4
Administrative budget receipts
$85.5
26.9
$86.9
3.9
29.5
4.2
101.9
108.4
112.2
Administrative budget expenditures
Trust fund expenditures (including Government-sponsored
87. 8
94.3
98. 8
enterprises)
Deduct: Intragovernmental transactions and other
25.2
27.3
28.4
53
4.8
4.7
Total payments to the public
107.7
116. 8
122.5
Excess of receipts ( + ) or payments ( — )
-5.8
-8.3
Trust fund receipts
Deduct: Intragovernmental transactions
24.3
3.8
Total receipts from the public
FEDERAL
PAYMENTS
adjustments
-10.3
continuing responsibilities of developing natural resources, conquering
disease, encouraging commerce, maintaining a strong farm economy,
and improving the social security system.
For at least 5 years, our economy has operated well below its potential. If the Nation is to provide jobs for its growing labor force and
realize the economic abundance of which it is capable, it must eliminate
the slack in the economy and increase the rate of growth. To assist in
achieving a more prosperous economy, the Federal budget for 1964
incorporates proposals for tax reduction and revision.
How the Budget Meets
the Country's
Needs
The 1964 budget calls for total Federal payments of $122.5 billion.
This represents an increase of $5.7 billion over 1963. Total receipts
of the Government in 1964 are estimated to be $112.2 billion, $3.8
billion more than in 1963. 'Both receipts and payments figures include
the activities of the social security, highway, and the other trust funds
which finance a large and important part of the activities of the Government. The totals also take into account both existing laws and
legislation which the President plans to submit to Congress, including
legislation for the new tax program.
671570 O - 63 - 2
9
S Billion*
125
Composition of Federal Payments
-
Total Payments
N a t i o n a l Defense, Space,
} a n d Interest H
I Security andi^^Hi:
Other Tru«t Fund Expenditure!
Expenditures recommended for 1964 are described in part 2 of
this booklet.
Briefly, the expenditures include: 1
• $69.7 billion in the administrative budget for national defense,
space activities, and interest payments, up $4.5 billion from 1963.
• $28.4 billion for the self-financed social security, highway, and
other trust funds, up $1.1 billion from 1963.
• $29.4 billion in the administrative budget for the rest of the activities carried out by the Government, down $0.3 billion from 1963.
Thus, substantial increases in 1964 are proposed for further strengthening our defenses, for the exploration of space, and for unavoidable
interest charges on the public debt. Aside from trust fund expenditures, the total for all other programs, taken together, is expected to be
somewhat less than in 1963. Within this total, however, increases are
recommended in areas important to the Nation's current welfare and
future growth. These increases are offset by decreases estimated in
expenditures for such activities as the postal service, housing and international lending programs, and farm price supports.
1 Largely because it includes intragovernmental payments, the sum of the following figures exceeds the net
total of Federal payments to the public.
10
EFFICIENCY A N D ECONOMY
The budget for 1964 reflects actions taken to increase efficiency and
economy in Government operations. Our rapidly changing technology affects a broad array of governmental activities—from the launching of spacecraft, to the issuing of checks, to the typing of letters. The
search for greater efficiency is a never ending one.
Through improved management techniques, installation of
modern equipment, and better coordination of agency programs, important productivity gains have already been realized, and further advances will be forthcoming. I mean to
insure that in each of the various Federal programs, objectives
are achieved at the lowest possible cost.—From the budget
message of the President.
Management
Improvement
and Cost
Reduction
Efficiency is increasing as a result of a Governmentwide program
to improve organization, eliminate unnecessary procedures and paperwork, and adopt more efficient techniques and equipment. So far
this program has resulted in gains such as:
• A decrease since 1950 from 17,000 to 3,000 in the number of Veterans Administration employees handling the same number of insurance policies.
• A threefold increase in the number of checks and bonds being
issued per employee over the last 10 years in the Treasury Department.
• A 35% increase in 2 years in the number of loans processed per
employee in the Farmers Home Administration.
As a result of these and other improvements, the public continues to
receive an increasing amount of service from each Federal employee.
Along with the increased productivity of Federal employees, the Government's program of cost reduction is achieving other solid results.
These results include:
11
Savings of $750 million this year alone in the Defense Department supply and other logistic operations. The Department's goal is
to reduce these costs over the next 5 years by at least $3 billion annually
without affecting combat strength.
Savings of $40 million from more efficient practices by the Post
Office.
Organization improvements in the Army Corps of Engineers resulting in annual savings of $13 million.
• Greater efficiency in the production of special nuclear material by
the Atomic Energy Commission, with savings of $7 million this
year.
• The consolidation of traffic control centers by the Federal Aviation
Agency, saving $7 million over a period of years.
• Increased output per worker in the Bureau of Old-Age and Survivors Insurance, without which the agency would have required
1,700 more employees at a cost of about $10 million.
These examples are among the many efforts throughout the Federal
Government to reduce costs.
Federal Receipts
12
Government
Pay
Reform
A major reform has been made in the Government's pay system.
The legislation passed by Congress last year changing Federal pay
scales was based on two principles: ( i ) Federal employees should
be paid at rates comparable with those paid by private employers for
similar work, and (2) Federal employees should receive equal pay for
equal work, with differences in pay reflecting differences in work and
performance. Together, these principles provide the needed yardstick
to determine an equitable pay scale for Federal employees.
RECEIPTS OF THE FEDERAL GOVERNMENT
The largest source of Federal receipts is the individual income tax;
second largest is the income tax paid by corporations. In addition,
however, social security taxes, gasoline and other excise taxes, customs
receipts, deposits for unemployment insurance, and estate and gift
taxes are all important sources of revenues.
FEDERAL RECEIPTS FROM THE
[Fiscal years.
Source
1962
actual
ADMINISTRATIVE BUDGET
$45.6
Total, administrative budget receipts
1964
estimate
20.5
9.6
5-7
$47. 3
21.2
9.9
7.1
$45.8
23-8
10.4
81.4
85.5
86.9
12.6
16.6
8. 8
14.8
3.2
8 8
24.3
26.9
29-5
3.8
3.9
4.2
101.9
108.4
112.2
6.9
RECEIPTS
Social security receipts
Gasoline and other highway excise taxes
Other
Total, trust fund receipts
Deduct: Intragovernmental transactions
Total, receipts from the public
1963
estimate
RECEIPTS
Individual income taxes
Corporation income taxes
Excise taxes
Other
TRUST FUND
PUBLIC
In billions]
2.9
3-3
9-6
13
Tax Rates and the Economy
Tax rates are established by law. The amount actually collected,
however, will vary from year to year even without any changes in tax
laws. For example, in periods of high employment, receipts will be
high because more workers will be earning wages and will be paying
higher income and social security taxes. Thus, the level of economic
activity is a major factor in determining the level of Federal receipts
in a given year. Since the major taxes are levied as a proportion of
income, the receipts of the Government will grow as the economy
grows.
Lower Taxes for Faster Growth
The tax system itself has an important influence on the level and
rate of growth of economic activity. In recent years it has become
clear that purchases of consumers and business firms have been excessively restrained by Federal, State, and local tax collections.
In order to lighten this burden, the President is proposing this year
a major tax program, including substantial reductions in every bracket
of individual income tax rates. A reduction of the corporation income
tax rate is also proposed, along with a reform of the tax structure to
eliminate inequities, strengthen productive incentives, and spur economic growth.
The tax cut will result in revenue losses to the Government in 1964
and thus contribute to the deficit for the year. However, taking a
longer view, as the economy responds to the stimulus of a tax cut,
rising economic activity will produce greater revenues in the future.
Other Revenue Measures
The President is requesting the Congress to extend the present
Federal excise tax rates on distilled spirits, beer, wine, cigarettes, passenger automobiles, automobile parts and accessories, and general
Our present choice is not between a tax cut and a balanced
budget. The choice, rather, is between chronic deficits arising
out of a slow rate of economic growth, and temporary deficits
stemming from a tax program designed to promote fuller use
of our resources and more rapid economic growth.—From the
budget message of the President.
14
telephone service.
Under present law, these rates would be reduced
July i, 1963.
He is also renewing the recommendations lie made last year for the
enactment of a series of user charges for commercial and general aviation and for transportation on inland waterways. These user charges
are designed to insure that beneficiaries pay a more equitable share of
the expense of Government programs that provide benefits to particular groups or individuals.
THE BUDGET A N D THE ECONOMY
Federal fiscal policies can contribute significantly to the health of the
economy. This was recognized by the Congress in the Employment
Act of 1946, in accordance with which the Government undertook
specific responsibility for the promotion of maximum employment,
production, and purchasing power.
Government
expenditures
and the
economy
The discussion of the tax program, above, emphasized the important
relationship between Federal receipts and the economy. Federal
expenditures are similarly important.
To understand best the impact of Federal activities, it is helpful to
use a special set of figures. These figures (which represent the Federal
sector of the national income accounts) amount to a presentation
of Federal receipts and expenditures in terms which help clarify their
effect on the economy.
The figures show, for example, that the Federal Government
will make total outlays (on a national income basis) of $119.0 billion
in 1964. Only $68.2 billion, however, will actually be used to buy
goods and services directly needed to carry out the Government's programs. The remainder will be paid out to meet other commitments.
For example, when the Government pays out social security benefits
to individuals, it will not "buy" anything itself, and therefore it will
not use up resources produced by the economy. It will simply transfer social security funds to eligible beneficiaries who will purchase
goods and service for themselves.
Similarly, the Federal Government will grant significant amounts
of Federal funds to the States to use for such purposes as highway
15
The gap between economic performance and potential
which opened up in ig^y has not yet been closed. Unutilized
productive capacity remains too large, and unemployment remains too high. Our rate of economic growth lags behind
our capability. We must not allow the progress of the last 2
years to blunt the recognition that our economy can produce
both more jobs and greater abundance than it is now doing.—
From the budget message of the President.
construction and public assistance payments. Thus, the amount of
expenditures that represent actual use of the current output of the
economy by the Federal Government directly is significantly smaller
than total Federal expenditures.
The Budget, Prices, and the Balance of
Payments
In 1964, estimated Federal payments will exceed receipts by $10.3
billion. In the present state of our economy, this deficit does not
raise the threat of inflation. Government deficits could indeed contribute to inflationary pressures if they were incurred during periods
of full employment, when the economy was already producing at full
capacity. The Nation's current problem, however, is not that it is
overstraining its productive capacity, but that capable workers and efficient factories are idle for want of markets. Moreover, the tools of
monetary policy and debt management can be used promptly to correct
any tendency—which now seems highly unlikely—for economic expansion to overshoot the limits of productive capacity.
Budgetary policy must also take account of the Nation's balance of
payments problem. During recent years this country has paid more
abroad (for imports, investments, military expenditures, and other
Government programs) than it has received from abroad (for exports,
earnings on its investments, and repayments of loans). Measures have
been taken to reduce this gap, and our balance of payments position
has been improving.
In the long run, however, a healthy balance of payments depends
upon a healthy economy. Current budgetary policies are aimed at
16
restoring full employment and increasing the rate of economic growth.
But many of the developments which accompany full employment and
rapid growth also contribute to an improved balance of payments position. Higher rates of investment and more rapid gains in productive
efficiency will strengthen the competitive position of American exports,
while an increase in the profitability of American firms will encourage
the investment of both domestic and foreign capital in the United
States.
THE BUDGET A N D THE NATION'S GROWTH
In 1941 this country had a population of 133 million. In 1964, the
population will be about 191 million. In calendar year 1941 the
total output of goods and services of the Nation—the gross national
product—amounted to $279 billion in 1962 dollars (that is, adjusted to reflect the purchasing power of the dollar). In calendar
year 1963 it is expected to reach $578 billion of current purchasing
power—more than twice as much. These figures provide a very
rough idea of how this country has grown.
They do not indicate, however, how much more complicated our
society has become. In 1940, about 32 million motor vehicles were
registered in the United States. In 1961, over 75 million were
registered. In 1940, there were 32,000 miles of Federal airways.
In 1961, there were 135,000. In 1940, 56% of the population of the
United States lived in urban areas. Today, 70% of the population lives
in urban areas. These figures help illustrate the changing character and problems of American life.
Growth
of the Federal
Government
As the Nation has grown, Federal expenditures have grown as well,
as have State and local government expenditures. This growth has
helped provide not only for the Nation's defense, but also for the
services necessary to a complex and growing society.
Put in perspective, the trend of Federal payments is better understood. For example, from 1952 to 1962, payments to the public increased $40 billion, but the gross national product increased as well, by
$200 billion. Actually, total payments to the public have been approximately 20% of the gross national product throughout this period.
671570
O - 63 - 3
17
Percent
50
Federal Payments
-
as a Percent of Gross National Product
at
40
I
30
•mm S I
'S'lill
•ISP1
30
:ftft^'ftft-^ftft^-ftv'ft.:
S*8§1
L3
10
J
1
;
1942
1944
Fiscal Years
:
i
1946
i
1
1948
i.
I
1950
1952
I I 1 I 1
1954
1956
—i.
>958
(960
1962
1964
Estimate
INVESTMENTS O N BEHALF OF THE N A T I O N
Many businesses and State, local, and foreign governments budget
separately for capital investments and for current outlays. The United
States Federal budget does not follow this practice but combines both
capital and current operating expenses. However, data are made
available in the budget to show the sizable expenditures for loans,
public works, and similar assets of an investment nature. Other
expenditures for developmental purposes—expenditures for education,
training, and research—are also shown in the budget.
T o understand the impact of these two types of expenditures on the
Nation's growth and development, it is useful to consider them
apart from the other expenditures in the budget. The budget includes
payments of $17.6 billion in fiscal year 1964 for civilian programs and
activities which will help the Nation directly or indirectly to increase
its output and accelerate long-run economic growth. This is about
one-seventh of total Federal payments, and about 25% of nondefense
outlays.
These expenditures are for Federal civil public works, for highways,
and similar additions to the Nation's physical assets, and for loans for
18
such activities as rural electrification, home ownership, farm operations, college dormitory construction, and small business operations.
Also included are expenditures which contribute to the economic
growth of our country through programs for the promotion of education, training, and health and through scientific research and
development.
Such programs are investments in the development of the people
and the technology of the Nation.
During 1964 the public debt is estimated to increase by about $12
billion. This represents the amount of Government bonds and other
securities which will be issued to finance the deficit. In order to make
this possible, the Congress will be asked to enact an increase in the
debt limit for fiscal 1964.
Since 1947, the Federal debt has risen by 17%. The gross national
product, however, has increased by 135% o v e r these years. Thus,
as a ratio to GNP, the Federal debt has fallen from 110% in 1947 to
55% currently, and this ratio is expected to continue its decline in the
next fiscal year. During the postwar period, when Federal debt was
THE PUBLIC DEBT
Public Debt
Percent of Gross National Product
19
rising by 17%, business firms increased their gross debt by 230%, consumers by 390%, and State and local governments by 330%.
At the end of calendar 1962 the Federal debt was $303.5 billion.
About 29% of this was held by the social security and other trust funds,
Federal agencies, and the Federal Reserve banks. The remainder, in
the form of Government bonds and other types of securities, was held
by the general public. Individuals directly owned more than $65
billion, and, in their role as depositors and stockholders in banks,
shareholders in savings institutions, and owners of insurance policies,
shared in the interest earnings on the approximately $95 billion held
by these institutions. State and local governments owned $20 billion
of Government securities, as did business corporations, while another
$15 billion was held by foreign owners.
20
Part 2
F e d e r a l A c t i v i t i e s b y Function
As an aid to understanding, the wide variety of activ-
ities carried on by the Federal Government are grouped
according to the functions shown on the chart below.
All programs which serve the same general function are
shown together, even if they are carried on by different
agencies.
Expenditures for the 12 major functions of the Government are summarized in this section.
1964 Expenditures by Function
S BiUioni
Notional Defense
Health, Labor,, and
Welfare
Interest
Commerce and
Transportation
Agriculture
Veterans
Space Research and
Technology
International
Natural Resources
General Government
Education
Housing a n d Community
Development
21
N A T I O N A L DEFENSE
r
I..
/Administrative Budget. .
1 9 6 4 Expenditures [ j ^
F u ( | d $
*
< < U J
$ 5 5 . 4 Billion
$ Q 6
Bj|,jon
The effectiveness of our national defense effort rests on a balanced
combination of forces able to respond to forms of aggression ranging
from nuclear attack to guerrilla warfare. Expenditures for national
defense in 1964 are estimated at $56.0 billion—an increase of $2.6
billion over 1963 and about $10 billion more than i960. These
expenditures include $51.0 billion for the military activities carried on
by the Department of Defense, $2.0 billion for military assistance to
foreign countries (including $0.6 billion in trust fund expenditures),
$2.8 billion in the field of atomic energy, and $133 million for defenserelated services.
Department
of
Defense—Military
The Department of Defense carries out eight major programs
which provide the diversity and flexibility required for modern defense:
( 1 ) Strategic retaliatory forces, including manned bombers, intercontinental ballistic missiles, Polaris missile-launching submarines,
and the varied facilities, such as communications, needed to control
these forces.
(2) Continental defense forces, which combine warning systems against missile or manned aircraft attack with the means to resist
an attack, such as interceptor aircraft and ground-to-air missiles.
(3) General purpose forces, which combine ground, air, and sea
forces equipped and trained to cope with limited or brush-fire wars.
(4) Sealift and airlift capability to insure that our combat forces
can be quickly dispatched wherever they are needed.
(5) Reserve forces, designed to provide swift additional strength
to the regular forces when needed.
(6) Research and development activities on which the continued
effectiveness of all the defense forces rely.
(7) General support activities which include training, intelligence
and security, defensewide supply, and housing and medical care for
military personnel.
(8) Civil defense activities including the development of warning
and fallout shelter facilities to increase the chances of survival after
nuclear attack.
22
To carry out these programs, the Department of Defense will make
expenditures for such items as purchases of equipment, military personnel, operation and maintenance of equipment and facilities, research and development, and construction.
Purchase of weapons and equipment.—The
1964 budget provides for additional purchases of intercontinental ballistic missiles
and for six more Polaris submarines which, with our long-range
bomber force, form a strong deterrent against nuclear attack. Stress
is also being placed on improving the effectiveness and mobility of
the nonnuclear general purpose forces through the procurement of
conventional weapons, vehicles, ammunition, helicopters, and tactical
and reconnaissance aircraft. More naval ships will be built, and additional military air transports purchased, to increase the mobility of our
fighting forces.
N a t i o n a l Defense
DEPARTMENT
Administrative
; Trust
Budget
$
& M
M
Purchme of Weapon* and Military Equipment
Funds
MILLIONS
B
16,350
114,255
MilftSwry ^mQWHtl
: 11,«
Operation cmd Maintenpne*9 of Equipment ond Focilitivs
•NMMHMHMMMM 7 ' 1 2 8
1,386
Construction and Other
1210
Gvil Offense
TOTAL PAYMENTS
MILITARY A S S K f t t t K I
2,021
ATOMIC ENE
2 850
DEFENSE- REL J E D 'fRVIC€S
1133
1954
1959
1964
Estimate
Military personnel.—Members of the Armed Forces on active duty
at the end of 1964 are expected to number 2.7 million. The reserve
components of the Army, Navy, Marine Corps, and Air Force will
have a combined strength of 969,900 men. The reorganization of
the Army Reserve and Army National Guard now taking place is
intended to streamline and increase the readiness of these forces.
To help retain well trained and dedicated personnel in the Armed
Forces, the President is recommending to the Congress increases in
military compensation rates, expected to be effective October i, 1963.
The estimated 1964 cost of this proposal is $885 million.
Operation and maintenance.—Military bases and equipment must
be kept in efficient working order for use in training or combat. In
1964, expenditures will increase somewhat to provide for the modernization of existing equipment, expansion of supply activities, and
the higher cost of operating aircraft and ships.
Research and development.—Technical improvements in the Nation's defenses must be designed, tested, and developed for production
well in advance of the time when they can contribute to the strength
and efficiency of our defense forces. Among the development projects to start or continue in 1964 are a new general purpose booster
rocket for the national space program, ballistic missile defense systems, a variety of antisubmarine warfare projects, a new tactical
fighter aircraft, the Defense Communications Satellite system, and
the Mobile Mid-Range Ballistic Missile.
Military construction and other.—The 1964 budget provides for
construction of additional troop housing, research and development
facilities, additional numbers of protected missile-launching sites,
and protective facilities for aircraft. Funds are included for the
construction of 12,100 new family housing units for Armed Forces
personnel.
Civil defense.—The budget provides for the continued expansion
of the Nation's civil defense program. Progress will continue in providing fallout protection for our population in the event of enemy
attack. Work on warning systems will continue, and training will
be provided in the measures which individuals and communities can
take for their protection.
Military
Assistance
This program continues our efforts to help other nations maintain
effective forces against external aggression or internal subversion and
24
thus aid the common defense of the free world. With most of the
Western European nations now providing full financial support for
their own military forces, the emphasis in our military assistance program has shifted to helping the less developed nations build forces
trained and equipped to maintain internal order, and to contribute to
the strengthening of the local economies supporting those forces.
Atomic
Energy
In addition to developing and producing atomic weapons, and
other military applications of nuclear energy, the Atomic Energy
Commission is responsible for finding ways to use nuclear energy
for peaceful purposes and supporting basic nuclear research. In 1964
special effort will be devoted to propulsion and power sources for use in
the national space program. Work to develop reactors which produce more nuclear fuel than they consume ("breeders") will be emphasized as a necessary step in making nuclear energy an important
future source of electric power for the Nation. The Atomic Energy
Commission will make further contributions to the advancement of
science through its support of nuclear research in the physical sciences
and research in the effects of radiation on biological structures and
processes.
Defense-Related
Services
These programs include the Selective Service System, the stockpile
of strategic and critical materials, the expansion of defense production,
and the emergency preparedness programs of agencies other than the
Department of Defense.
INTERNATIONAL AFFAIRS A N D FINANCE
1 9 6 4 Expenditures
^
The purpose of the international programs of the United States is to
strengthen the security of this country and the free world. Together with our friends and allies, we are carrying forward a variety
of programs to foster close and mutually beneficial international relations which are essential to the achievement of this objective.
6 7 1 5 7 0 ( ) - 63 - 4
25
Of the Government's expenditures for international affairs and
finance, the major part—$2.1 billion—is for economic and financial
programs, which strengthen the economies of the developing nations.
The other major expenditure categories are for the conduct of foreign
affairs and overseas information and exchange activities.
Economic and Financial
Programs
Throughout the world, millions of people live in extreme poverty
and in an atmosphere of social unrest. Many less developed nations
are seeking to provide their people with improved economic and social
opportunities. However, most of these nations do not have adequate
resources to do the job, and must, therefore, find assistance abroad if
they are to succeed in their goals. For such countries, the United
States conducts a variety of programs which, in combination with
adequate self-help measures taken by the countries themselves, provide
the basis for a stronger and more secure free world, as well as a more
stable and prosperous future for those countries. The Agency for
International Development administers most of these programs.
Development loans and grants.—The United States provides longterm loans at very low rates of interest in connection with the development programs and projects of friendly countries. Development
grants are provided largely in the form of technical advice and cooperation, particularly in the fields of health, agriculture, and education. Grants also finance a small number of capital projects in countries unable to accept the burden of a loan. A further important means
of stimulating economic development is through financing U.S. exports
and guaranteeing private American investments in the developing
countries.
Alliance for Progress.—The Alliance for Progress is an historic
cooperative effort of the United States and the countries of Latin
America to bring social and economic progress to the people of Latin
America. The rate at which our loans and grants are extended must
take into account the progress made by the Latin American countries
in achieving the economic and social reforms necessary to insure their
efficient use. It is contemplated that the accomplishments of the Latin
American countries will warrant the provision of a total of more than
$1 billion of United States funds in 1964.
26
International Affairs and Finance
%
MILLIONS
D e v e l o p m e n t Loans
Economic a n d
Financial
Programs
Foreign Information and Exchange Activities
1959
1964
Esrimote
Supporting assistance.—This program provides funds for countries
facing serious and immediate problems of economic and political
stability, and for countries which need help in maintaining defense
forces.
Other programs.—The Federal Government carries on a variety
of programs which support our main economic and financial efforts.
In 1964, the Peace Corps will provide 13,000 volunteers to help developing countries; the Export-Import Bank will continue to finance U.S.
exports; the Food for Peace program will make surplus agricultural commodities available for disaster relief and support of development projects; and international organizations such as the International
Development Association and the Inter-American Development Bank
will continue to receive our support for their programs which help
finance economic development.
Conduct of Foreign
Affairs
The Department of State, which maintains our official representatives in countries throughout the world, accounts for most of the
expenditures in this category. Also included are expenditures for the
U.S. Arms Control and Disarmament Agency—now in its first full
fiscal year of operation—which is conducting studies to lay the basis
for international negotiations on disarmament and arms control.
Foreign Information
and Exchange
Activities
Through its information and exchange activities, the United States
seeks to provide information abroad about this country's goals and
policies, and to establish closer relations with foreign countries.
In 1964, the U.S. Information Agency will seek to reach broader
audiences, particularly among students and young people. It will
expand and improve television and radio programing, motion picture
activities, and the book translation program.
SPACE RESEARCH A N D TECHNOLOGY
1 9 6 4 Administrative Budget Expenditures: $ 4 . 2 Billion
The United States is striving to maintain a position of world leadership in the exploration and utilization of space. Expenditures in 1964
for our civilian space programs are estimated at $4.2 billion, an increase of 75% over 1963. Launch vehicles, spacecraft, and ground
facilities are being developed to make possible manned flight to the
moon in this decade. In 1964, we will also continue to launch
satellites and other unmanned vehicles to report on space phenomena. Many of these efforts produce technical knowledge which
will have application in other, still more advanced, space missions.
Space Research and Technolosy
Adminiitratlvt
1
[
Budqtt
MILLIONS
I M a n n e d Space Flight
TOTAL PAYMENTS
jHHHIH593
I U n m a n n e d Investigations in S p a c e
I Meteorology ond
f H N H H H N H H
Communications
7
7
r
0
I O t h e r Research, T e c h n o l o g y a n d S u p p o r t i n g O p e r a t i o n s
.
1954
1
1959
f
H
1964
Eitlmat*
Manned space flight.—For the manned lunar landing program,
current plans call for the launching of an Advanced Saturn rocket to
place the Apollo spacecraft in orbit around the moon. A two-man craft
will be ^ p a t c h e d to the surface of the moon from the Apollo. The
craft will then return to the Apollo for the return trip to earth.
28
Developing the capacity for this mission and other manned space
flights preliminary to it will continue as the top priority program
of the National Aeronautics and Space Administration.
Meteorology and communications.—Recent test flights of satellites for weather observation and for use as part of communications systems spanning the globe have been conspicuously successful. Further
development of these satellites will be continued during the coming
year. Emphasis will be on the development of the Nimbus, a meteorological satellite for eventual operational use, and on the techniques for
placing communications satellites over the equator with an orbiting
period exactly equal to the 24-hour earth day. These communications
satellites will be able to maintain a constant position over a given place
on earth, and will therefore not move out of range of ground stations
using them for relaying communications.
Unmanned investigations in space.—Unmanned space exploration, such as the recent highly successful flight by a Mariner spacecraft
to within approximately 21,000 miles of Venus, has taught us much
about the earth and surrounding space. In 1964, experiments will
emphasize large satellites which can carry a variety of devices to help
further our knowledge of space. Work will continue on the unmanned
Ranger and Surveyor spacecraft, which will be capable of reporting
on lunar surface conditions affecting the first manned lunar landing.
Further interplanetary missions similar to the flight to Venus will be
carried out to obtain scientific information hitherto unavailable.
AGRICULTURE A N D AGRICULTURAL RESOURCES
1 9 6 4 Expenditures {
^
^
^
V
.
g;J
^
American agriculture has rapidly increased its efficiency in recent
years. Because productive capacity has grown more rapidly than
demand, surplus production has resulted in large Federal expenditures
under the price support system.
Farm income stabilization and Food for Peace.—About 75% of
total expenditures for agriculture and agricultural resources in 1964 will
29
be for these purposes. Part of the excess production has been put
to good use through distribution to our low-income families and
through the Food for Peace program. Further legislation is being
proposed to improve our programs for feed grains, cotton, and dairy
products.
The food stamp program has helped improve the diets of lowincome groups and is being expanded in 1963 to include 44 counties
and 3 large cities in 23 States. It will be continued at the same level in
1964.
Under the Agricultural Trade Development and Assistance Act,
surplus farm commodities are sold abroad for foreign currencies or
for dollars on long-term credit. These programs comprise the major
portion of the Food for Peace program, which makes food available
to meet the needs of hungry people and to enable underdeveloped
countries to divert manpower and other resources to economic development.
Rural electrification and telephone loans.—The 1964 budget provides for continuing the loan programs of the Rural Electrification
Administration at the same level as for 1963.
Agriculture and Agricultural Resources
Administrative
Budget
I
^ ^
Trust
Funds
MILLIONS
Form Income Stabilization and Food for Peoce
Fanning and Rural Housing Loan*
TOTAL PAYMENTS
Agricultural Land a n d W a t e r Resources
Rural Electrification and Rural Telephone Loans
Research and O t h e r Agricultural Services
Farming and rural housing loans.—Legislation enacted by the
last Congress broadened the authority of the Farmers Home Administration to include loans to finance housing for the elderly in rural
areas and the development of the recreation potential of the countryside. Increased loans for these purposes in 1964 will be more than
offset by the reduced outlays for the older rural housing program
30
under legislation proposed to permit substitution of private financing
for Government financing.
Agricultural land and water resources.—The budget will permit
the Government to continue, through the agricultural conservation
program, to share with farmers in the cost of a substantial number
of conservation practices that are in the long-run public interest. The
budget includes funds to start a new program of loans and grants to
rural communities to promote conservation and development of land
and water resources on an areawide basis.
Expenditures in 1964 for the upstream watershed protection program of the Soil Conservation Service include funds for beginning
construction on 36 new projects.
Research and other agricultural services.—The budget
a moderate increase in 1964 expenditures to carry on the
educational, and regulatory activities of the Department of
ture. Continued improvements in management are being
reduce the costs of these and other activities.
proposes
research,
Agriculmade to
NATURAL RESOURCES
i p
1..
/ A d m i n i s t r a t i v e Budget.
. $ 2 . 5 Billion
3
1 9 6 4 Expenditures ( J r u s t F u n d s
$ Q A
Bj„ion
4ftil
Natural resources development is a key requisite to the present and
future economic growth of the Nation.
Land, water, and power resources.—Most of these expenditures
will be to continue construction of projects for flood control, navigation, irrigation, water supply, and hydroelectric power. Related
developments of recreational facilities and fish and wildlife resources
will be carried forward. These projects represent investments which
will yield benefits for years to come.
With funds requested for 1964 the Corpfc of Engineers will initiate
construction of 32 projects, the Bureau of Reclamation 8 new projects,
and the Tennessee Valley Authority 2 new projects.
Water resources studies will emphasize comprehensive development
of river basins through coordinating the planning activities of the
Departments of the Interior, Army, Agriculture, and Health, Educa-
3i
N a t u r a l Resources
I Administrative
Budget
I
Trust Funds
MILLIONS
HMHlHM11,750
Lcrt
<
Development
of:
8
• -r tees, urces
Forests
Conservation
and
^cJ*,*
TOTAL P A Y M E N T S
Pr
135
H
Reciteoifon Resource!
BR 108
Pmh a n d Wildlife
Minerals
I n d i a n A f f a i r s and Oilier
I I. L
1954
1959
1964
Estimate
tion, and Welfare. Basic research on ways to reduce the cost of converting saline water to fresh water will continue.
Funds are included to construct extra-high-voltage interconnections
between the electric systems of the Pacific Northwest and Pacific
Southwest.
The Federal Power Commission will complete its national power
survey in 1964. This study will provide a broad perspective in
planning for future power supplies and encourage full use of the
Nation's fuel, equipment, and technology.
With proceeds from the sale of electric power and borrowings, the
Tennessee Valley Authority will continue the construction of steamelectric power units started in earlier years.
Forest resources.—The budget provides for the management and
protection needed to enhance the value of forest resources on Federal
lands. Sales of timber from Federal land will be increased in 1964.
Recreation resources.—Our national parks and forests and water
resource projects provide enjoyment for an ever increasing number of
people. Last year the Bureau of Outdoor Recreation was established
in the Department of the Interior to provide a focal point for Federal
recreation programs and technical assistance to States in promoting
recreational opportunities. Legislation is being recommended to
establish a fund for planning grants and the purchase of land for outdoor recreation, both by the States and the Federal Government.
32
Indian affairs and other.—Programs designed to raise the standard
of living and the educational opportunities of Indians will be expanded with funds included in the 1964 budget. Expenditures are
included for construction of needed schools to accommodate the
Indian school-age children not now in school. Funds are also requested to start construction of an irrigation project for the Navajo
Indians.
The major increase in 1964 expenditures for mineral resources will
be for the acquisition of helium which is found in combination with
other gases and, if not extracted, would be wasted.
COMMERCE A N D TRANSPORTATION
in/,, r
...
/ A d m i n i s t r a t i v e Budget.
. $ 3 . 4 Billion
3
1 9 6 4 Expenditures
Funds
$ 3 2 Bj||ion
The common purpose of these programs is to strengthen our economy through creating opportunities for private business, encouraging
innovation, improving transportation and communication facilities,
and fostering competition.
Transportation
The national transportation policy recommended last year by the
President emphasized the goal of relying more heavily on competition
to assure fast, safe, and efficient transportation to the Nation at the
lowest economic and social cost. To achieve these objectives, less
reliance should be placed on the use of Federal regulation and subsidies.
Users of transportation will be expected to pay more of the costs of
the services provided by the Government, not only in the interest of
economy but also to assure that resources invested in transportation
are used efficiently.
Highways.—By far the largest single expenditure for commerce
and transportation is for the highway program, which is financed predominantly through the highway trust fund. As the accompanying
chart shows, trust fund expenditures for highways have been growing
steadily since the fund was established in 1956. The fund's receipts
come from taxes on gasoline and other items purchased by highway
users. As these receipts come in, they are available to pay for highway
construction, thus putting Federal aid for highways on a pay-as-you-
33
Commerce and Transportation
Trust Fund Expenditures,
M a i n l y Highways
build basis. Trust fund expenditures are expected to rise by $391
million to $3.4 billion in 1964. The major part of expenditures are
for the Interstate Highway System, scheduled for completion in 1972.
Over 13,000 miles of this 41,000-mile system have been completed and
another 15,700 miles are in various stages of development. Federal
aid for primary and secondary highways accounts for about one-quarter
of the total.
Aviation.—Expenditures
by the Federal Aviation Agency for the
operation of the Federal airways system will continue to rise as traffic
control services are improved and new equipment is developed and
installed to meet the needs of growing air traffic. Legislation is being
proposed to extend the Federal grant-in-aid program for airport construction beyond 1964 at the present level of $75 million per year.
Water transportation.—Expenditures
by the Department of Commerce to maintain the U.S. merchant fleet will help start construction
of 17 ships. Continuance of this program at the present level will
permit replacement of vessels in the subsidized fleet by the time they
reach 25 to 30 years of age. The Coast Guard will accelerate its
replacement of ships, planes, and obsolete shore facilities.
34
Advancement
of Business
The Trade Expansion Act, which the Congress passed last year,
makes possible a major revision in our foreign trade policy and expands the President's authority to negotiate tariff reductions. Its
enactment and the need to improve our balance of payments make it
essential to augment substantially the activities of the Department
of Commerce in promoting U.S. exports. Loan guarantees and
direct loans will be provided mainly by the Small Business Administration to help firms adjust to the challenge posed by import
competition.
The Small Business Administration will also continue its program
of providing loans to small businesses unable to obtain loans from
private sources at reasonable terms.
The Weather Bureau provides the observations and forecasts used
by farming, aviation, construction, and other enterprises. Increased
expenditures are estimated in the 1964 budget to procure and launch
weather satellites and to provide improved weather services to aviation.
The 13,400 federally insured commercial and mutual savings banks
each year pay premiums to the Federal Deposit Insurance CorporaCommerce and Transportation
H
Administrative
Budget
Trust
Funds
$ MILUONS
13,433
TOTAL PAYMENTS
1521
Area Redevelopment
' -162
Federal D e p o s i t Insurance C o r p o r a t i o n
R e g u l a t i o n o f Business a n d O t h e r
*
1954
1959
1964
Estimate
Excess of r e c e i p t s e x p l a i n e d in t e x t
35
tion. The excess of receipts, including investment income, over outlays, is added to the Corporation's insurance reserves.
Area
Redevelopment
The Area Redevelopment Administration helps communities faced
with continued problems of unemployment to attract new industries
which can utilize their available resources. By the close of 1964, the
economic development plans of an estimated 900 areas will have received approval and these areas will be benefitting from the Federal
program. The loans, grants, and technical aids will help to furnish
new employment opportunities for an estimated 130,000 workers in
the redevelopment areas.
Funds made available by the last Congress to help finance additional
public works projects in areas of substantial unemployment are already
largely committed and a large backlog of applications has been received
for eligible projects in these areas.
Postal
Service
Expenditures of the postal service are estimated to exceed revenues
by $554 million in 1964. The largest part of the revenue deficiency
represents the cost of providing public services; the remainder, $104
million, is the loss sustained by the post office in its regular operations.
Additional revenues are expected to reduce the postal deficit in subsequent years as successive stages of the postal rate increases enacted in
1962 become effective.
HOUSING A N D COMMUNITY DEVELOPMENT
1 9 6 4 Expenditures
*
;;
The Federal Government extends financial support in a number
of forms to Jielp private builders and local communities provide the
housing and community facilities needed by our people. These programs are permitting an increasing number of Americans to own their
own homes and are improving the quality and convenience of housing
available for the elderly, and for families of low and moderate incomes.
36
To minimize Federal outlays for these programs, the budget includes
proposals for increased substitution of private for public financing.
Urban Renewal
and Community
Facilities
Expenditures for urban renewal and other community development
programs will continue to rise in 1964, as projects undertaken in earlier
years move toward completion. Federal expenditures contribute materially to the long-run economic growth of many cities, large and
small, throughout the Nation.
Both long-range and emergency Federal assistance is needed to
revitalize urban mass transportation. Legislation to authorize such
assistance is again being proposed to the Congress. Meanwhile, demonstration programs will continue to be used to explore new methods
of meeting urban transportation requirements.
Aids to Private
Housing
The Federal Government assists private housing mainly by assuring
the availability of credit on favorable terms by a variety of methods—
all of which are largely or wholly self-supporting.
Federal Savings and Loan Insurance Corporation.—Savings invested in the 4,300 federally insured savings and loan associations
Housing and Community Development
N e t Receipts
N a t ional
Renewal
Public
Housing
Feder al
N e t Expenditures
Capital
Urban
Administrative
Nationa
Home
Federal
Savings
Federal
Housing
Community
Mortgage
Loan
and
xplained in I
%%ZTrust
$
MILLIONS
Funds
Region
and
Federal
Budget
Association
H150
Banks
Loan
Insurance
Administration
I
Facilities
and
TOTAL P A Y M E N T S
Corporation
Other
1959
1964
Estimate
37
provide the largest single source of funds for private housing. Advance payments by the associations of their insurance premiums will
result in very substantial receipts in 1964 and increase insurance
reserves of the FSLIC.
Federal Housing Administration.—In 1964 the Federal Housing
Administration will insure the loans used to finance construction or
purchase of an estimated 550,000 homes and modernization and improvement of 900,000 houses. Receipts from insurance premiums,
and from sales of acquired properties and loans, will substantially
exceed expenditures.
Federal National Mortgage Association.—The Federal Government aids the supply of funds for private housing by buying federally
insured or guaranteed mortgages. The Federal National Mortgage
Association will substantially increase purchases of mortgages to support urban renewal activities and housing for low and moderate income families, but sales and repayments of older mortgages will increase even more, causing receipts in the administrative budget to be
higher than expenditures. Purchase of mortgages by its secondary
market trust fund, made at market prices, will considerably exceed
estimated sales and repayments in 1964.
Federal home loan hanks.—The 11 Federal home loan banks,
which provide a credit reserve for their member savings and loan
associations, are expected to make a somewhat larger volume of net
advances for this purpose in 1964.
Other aids to private housing.—Increased expenditures are anticipated for direct loans to provide housing for elderly families or
individuals.
Public Housing
Programs
Annual contributions by the Public Housing Administration to local
housing authorities will continue to rise as more housing units built
for low-income families under earlier contracts are completed and
occupied.
38
National
Capital
Region
The District of Columbia government provides both State and local
government services for the businesses and residents of the National
Capital City. The Federal Government recognizes a special responsibility to bear its proper share of the costs of these services, as well as to
provide long-term loans needed to carry out an orderly program of
capital improvements. These are included in the administrative
budget. Expenditures by the District government, predominantly
from local revenues, are included in trust fund expenditures.
HEALTH, LABOR, A N D WELFARE
insLA c
J x
/ A d m i n i s t r a t i v e Budget.
3
1 9 6 4 Expenditures | T n | f | F u n d $
$ 5 . 6 Billion
$ 2 2 8
Bj||jon
The Federal Government provides a wide range of health, manpower, and welfare services which meet important human needs and
strengthen our society.
Social insurance.—The social insurance and retirement programs of
the United States provide individuals and their families with support
when income is lost because of the retirement, disablement, death,
or unemployment of the family member who has been its chief support.
They are financed through trust funds, which depend for their receipts
on payroll contributions made by employers and employees and by
interest earned through the investment of surplus income. The benefit
payments made by the trust funds have been steadily growing, as
indicated on the accompanying chart.
Trust funds account for about four-fifths of the outlays for all
health, labor, and welfare programs. In 1964 benefit payments under
the old-age, survivors, and disability insurance trust funds, which go to
the retired, the disabled, and their survivors, are estimated at $15.9 billion. The railroad retirement system will provide similar benefits
totaling Si.1 billion in 1964 to railroad employees and their families.
The expansion of the social security system to cover the costs of
hospital and nursing home care for the aged is again being proposed. Benefits to those now aged and ineligible for social security
or railroad retirement benefits would be financed from the administrative budget.
39
Health, Labor, and W e l f a r e
Trust Fund Expenditures,
M a i n l y Social Security
Eitfmete
The unemployment trust fund, which finances the Nation's system
of unemployment insurance, is estimated to provide $2.9 billion in
benefit payments in 1964. Legislation to strengthen this system will
be proposed.
Most Federal civilian employees are provided with retirement, disability, and survivor benefits through the Federal employees retirement
trust funds. These funds are financed by employee contributions
matched by the Federal Government. Total payments by the funds
are estimated at $1.4 billion in 1964.
Public assistance.—The major portion of expenditures for public
assistance will continue to be for basic current needs—food, shelter,
and medical care. Legislation enacted last year provided a new emphasis on helping needy individuals achieve economic independence.
This new program calls for Federal grants matched by State
expenditures for counseling, guidance, and rehabilitation services.
Health services and research.—More than half of the total Federal
expenditures for health services and research are for the activities of
the National Institutes of Health for research, training, and facilities.
40
Of the Nation's total outlay of $1.5 billion for health research in the
current year more than $1 billion is supported by the Federal
Government.
Legislation is again recommended to authorize Federal grants to
assist in construction of new medical, dental, and public health schools,
and to provide aid to students. These schools are needed to provide
the number of doctors and other health personnel needed to care for
our growing population.
The need to renovate and modernize the older general hospitals,
most of which are in large urban centers, is not being adequately met.
Facilities to meet the rapidly increasing needs for the long-term care of
the chronically ill and aged are also inadequate. The budget contains
funds for proposed legislation to broaden the Hill-Burton Act to
stimulate the needed construction.
Rapid advances of science and technology and the growing variety
of new foods, drugs, and cosmetics will continue to increase the responsibilities of the Food and Drug Administration for protecting
consumers.
Mental health and mental retardation.—The
great majority of
the mentally ill in our society, unfortunately, receive too little treatment and receive it too late. Many mental hospitals serve merely as
custodial institutions when, in fact, modern psychiatry can diagnose
Health, Labor, and W e l f a r e
•
Administrative
Budget
$
S o c i a l Security, U n e m p l o y m e n t , e n d R e t i r e m e n t
^ ^
Twit
Fundi
MILLIONS
Benefit*
3,023
1954
1959
1964
Etfimett
41
and treat the mentally disturbed with more and better resources in the
patients' own communities, and with greater likelihood of recovery.
The budget includes provision for increased funds for the first phase
of a national plan to combat mental illness, as well as increased funds
to improve health, education, rehabilitation, and welfare services for
the mentally retarded and to help prevent retardation. Legislation will
be proposed in a special message relating to both these afflictions.
Labor and manpower.—New emphasis is being given to the need
to increase the opportunities of unemployed workers and youth. The
budget provides funds to permit training services for approximately
140,000 workers in 1964, double the estimated number in 1963. A
new program is being proposed to create employment and training
opportunities for youth.
The Federal-State employment service system, with 1,900 offices, will
increase its activities in matching the skills needed by employers with
the abilities of workers.
Other welfare services.—The budget provides Federal matching
funds for the cooperative Federal-State vocational rehabilitation program which in 1964 will provide job capability to about 126,500
persons. Grants to States through the school lunch and special milk
programs of the Department of Agriculture are estimated at $284
million in fiscal 1964, an increase of $18 million over 1963.
EDUCATION
1 9 6 4 Administrative Budget Expenditures . . . $ 1 . 5 Billion
Education enriches the life of the individual and is essential to the
freedom, economic growth, and welfare of our society. Although advances have been made in expanding educational opportunities for the
Nation, there are serious inadequacies in our educational system which
need to be overcome.
The 1964 budget proposes $3 billion in aid for education—double
the amount for 1963—including $1.2 billion for new legislation.
Actual expenditures, however, will lag behind these authorizations.
They are estimated to increase by $165 million over the level in 1963,
largely for new proposals to be outlined in a special message on
education.
42
The new program in education is designed to help solve selected
critical educational problems. It will: ( i ) improve the quality of
education at all levels; (2) help break crucial bottlenecks 111 our educational system by providing funds for expansion of facilities; and
(3) increase opportunities for education and training by facilitating
access to colleges and providing an expanded range of technical, vocational, and professional training opportunities for teachers and
students.
Since funds for the new program will be spent mainly in the years
after 1964, the following sections relate primarily to programs conducted under existing legislation.
Assistance for elementary and secondary education.—The 1964
budget provides $361 million for continued assistance to schools in
areas where enrollments are swelled by Federal employment, including $148 million under legislation to extend portions of law expiring
June
15(63. Aid to elementary and secondary education under the
National Defense Education Act will cost S61 million, slightly above
the current level. These amounts are small when related to the $20
billion which States and localities will spend for public schools in
1964.
Assistance for higher education.—To make possible the expected
doubling of college enrollments during the 1960's there is an urgent
need for expansion of capacity and for aid to students. The 1964
budget provides net expenditures of $218 million for loans to colleges
for dormitories and $90 million for National Defense Education Act
loans to students.
Education
m
Administrative
Budget
$
Trust
Funds
MILLIONS
12
Assistance -for Elementary a n d Secondary Education
370
Assistance for Higher Education
343
Assistance t o Science Education a n d Basic Research
1402
N e w Program a n d O t h e r A i d t o Education
1954
1959
1964
Eitimote
43
Assistance to science education and basic research.—A significant
expansion of National Science Foundation programs is proposed in
the 1964 budget. It will help overcome the shortage of trained scientists, engineers, and mathematicians, increasing expenditures by $105
million. Appropriations for the Foundation would be increased 80%
to $589 million. Continued emphasis will be given to basic research,
although the largest growth will be in the promotion of education in
the sciences and related fields. Funds are increased for teacher training institutes, curriculum development, and grants for graduate and
undergraduate facilities.
Other aid to education.—The Office of Education will develop
expanded programs in educational research, including development of
improved teaching materials. The 1964 budget provides for a substantial increase for this purpose.
VETERANS BENEFITS A N D SERVICES
in** c
J-*
/ A d m i n i s t r a t i v e Budget.
. $ 5 . 5 Billion
3
1 9 6 4 Expenditures ( T r u s t F u n d s
$Q 6 BjNion
The total Federal payments of about $6 billion for veterans programs in 1964 will be $389 million less than in 1963. The bulk of
this decline will occur because special and accelerated life insurance
trust fund dividends are being paid in 1963.
Compensation.—Expenditures for compensation benefits to veterans disabled in the service are estimated at $2,061 million in fiscal
year 1964, $24 million less than in 1963. Included is $98 million to
provide for the cost-of-living adjustments in compensation rates enacted last year. About 2,332,000 service-disabled veterans or families
of deceased veterans will be receiving compensation payments in 1964,
a decline of about 22,000 from the number in 1963.
Pensions.—This category provides payments for disability or death
from causes not related to military service. Expenditures for pensions
are expected to rise by $64 million in 1964, based on an estimated
increase of 85,000 in the number of veterans and survivors receiving
payments. An average of 2,052,000 veterans or families of deceased
44
veterans will receive pensions in 1964. As they advance in age, World
War I veterans are becoming eligible for pensions, and by 1964 about
45% of all living veterans in this group will be receiving pensions.
Hospitals and medical care.—The budget estimates expenditures
of $1,120 million for hospital and medical services in 1964, an increase
of $33 million over 1963. Hospital and domiciliary care will be
provided for an average of 139,055 beneficiaries per day; an estiVeterans Benefits and Services
H
Administrative Budget
Funds
mated total of 3,728,000 visits will be made by veterans to outpatient
clinics or to private physicians.
An appropriation of $81 million for veterans hospital construction
is proposed for 1964, the fourth step in carrying out a 15-year, $1.2
billion hospital modernization program begun in 1961. Under this
long-range program, expenditures for hospital construction are estimated to increase slightly to $67 million in 1964.
Readjustment
and other benefits.—Expenditures for veterans
education and training are estimated to decline by $34 million from
1963 to 1964, because of the continuing reduction in the number of veterans of the Korean conflict receiving these benefits. Peacetime exservicemen with severe service-connected disabilities will be aided in
1964 by the vocational rehabilitation program enacted by the 87th
Congress. The number of guaranteed and direct loans made will decline slightly as the number of eligible veterans falls. Budget expenditures for the loan guarantee program will be lower because fewer
defaults are anticipated on home loans.
45
Improvements in efficiency and consolidation of certain regional
and field offices will result in substantial savings in the administration
of the compensation, readjustment, and insurance programs.
GENERAL GOVERNMENT
1 9 6 4 Administrative Budget Expenditures: $ 2 . 2 Billion
Expenditures for general government provide for general service
activities of a governmentwide nature, for executive direction and
financial management, and for the costs of the Congress and the Federal court system.
Expenditures in 1964 for such general administrative and law enforcement activities of the three branches of the Federal Government
are estimated at $2.2 billion, $153 million higher than the estimate
for 1963. The increase is principally to strengthen tax collection and
to carry forward construction of Government buildings. New management techniques are continually being introduced to achieve savings
in the conduct of these operations.
Tax collection and central fiscal operations.—The Treasury collects the Government's taxes and other revenues, and issues the checks
that pay the bills. The Internal Revenue Service will increase its expenditures by an estimated $69 million in 1964, mainly to improve
compliance with the system under which we pay our taxes. This
improvement entails a substantial expansion of personnel and automatic data processing equipment over the next several years.
General property and records management.—Funds are included
in the budget to finance acquisition of sites, planning, and construction of new buildings as part of the continuing program to provide
more efficient facilities for Government operations. Other increases
in expenditures are needed to operate and maintain Government
facilities.
Protective services and alien control.—The Federal Bureau of
Investigation will carry out its increased responsibilities in the drive
against organized crime. The Bureau of Prisons will build needed
facilities with funds included in the budget.
46
General Government
| Administrative
Budge
$
"ax CdllecHo-
Propert\
.
Trust
Funds
MILLIONS
Cent- .-5 Fitcol Operations
d Records Management
\>?-.
Legislativ
t
Alien Conl
TOTAL PAYMENTS
a n a Judicial f unctions
Central Personnel Management
1964
Territories and Possessions, and Other
Estimate
Central personnel management.—The administrative costs of the
Civil Service Commission are included under this heading, together
with costs of accident compensation and health benefits for Federal
employees.
Territories and possessions.—The United States provides Government services for the Canal Zone Government and financial assistance
to the Virgin Islands, the Ryukyu Islands, and other areas. A comprehensive developmental program has been initiated in American Samoa
and is proposed for the Trust Territory of the Pacific Islands.
INTEREST
1 9 6 4 Administrative Budget Expenditures: $ 1 0 . 1 Billion
Administrative budget expenditures for interest on the public debt
are expected to be $320 million more in 1964 than in the current year.
This increase is primarily due to the increase in the size of the public
debt.
Several of the major trust funds and Government enterprises invest
their reserves in Government securities which earn interest and are
part of the public debt. Of the total interest expenditures in fiscal
1964, about $1.8 billion will be paid to such funds, mainly to the social
security and Federal employees retirement funds.
47
Part
3
Budget Facts a n d Figures
The budget necessarily involves a great many numbers,
usually with dollar signs attached.
In order for them to
have meaning, they must be related to programs, to policies, to the process of Government, to the size of the
economy, and so on.
In the first two sections of this
booklet, an effort was made to present the budget in
understandable, nontechnical terms, and to minimize the
use of statistics.
A fuller understanding of the budget, however, requires some knowledge of the detail that supports the
major budget figures, the historical statistics that show
how current totals have developed, and the processes involved in running our Government's finances.
In order to introduce the reader to some of the more
technical aspects of the budget, this section presents
briefly the following:
—Measures of Federal spending
—The budget process
—Tables on the budget
49
MEASURES OF FEDERAL SPENDING
No single set of figures adequately represents the economic and
financial activities of the Federal Government. In the budget (as well
as this booklet) Government activities are discussed in terms of the
administrative budget, the trust funds, total receipts from (or payments to) the public and so on. Technical and sometimes complicated
distinctions have to be made to clarify these various concepts.
The administrative budget and trust funds.—For an understanding of the different concepts used to measure Federal financial transactions, it is helpful to consider at the outset two basic sets of accounts
used by the Government. The first covers the administrative budget
funds; the second covers the trust funds. Together they comprise the
financial books of the Government, which record in detail each
agency's expenditures, as well as the revenues of the Government.
They are the indispensable tools of sound management of the Government's finances.
Most of the tax and other receipts of the Government go into a
general fund; small amounts are deposited in funds for special purposes. These funds finance the activities included in the administrative budget after they are approved by Congress. The receipts of these
funds are owned by the Federal Government—just as land and
equipment are owned. The administrative budget also encompasses
the transactions of wholly owned Government enterprises, such as the
postal service, the Small Business Administration, the Export-Import
Bank, and the Public Housing Administration.
In some cases, however, Congress has designated certain taxes and
contributions to be held by the Federal Government in trust for benefit
payments or special programs. These receipts, which are not federally
owned, go into trust funds and can be used only to finance the activities
for which they are set aside. For example, premiums paid by World
War'I and II veterans on their Government life insurance policies are
held in a trust fund and used only to pay insurance claims.
50
T r u s t F u n d Estimates for 1 9 6 4
O l d A g e a n d Survivors Insurance
Social Security
Programs
4,288
3,770
U n e m p l o y m e n t Insurance
mh,177
dpi,319
D i s a b i l i t y Insurance
Federal-aid
Highways
Federal Employees
Retirement
Railroad
Retirement
Veterans
Life Insurance
F N M A and
All
Other
11,219
11,099
5728
[546
Receipts
m
Expenditures H I
910
1,573
Most of the major trust funds finance insurance-type activities such
as social security (retirement, disability, and unemployment insurance),
Federal employees retirement, and veterans life insurance. Trust
funds also finance Federal grants for highway construction and the
secondary market activities of the Federal National Mortgage Association ( F N M A ) .
Receipts of the trust funds come from sources related to their activities. For example, the employers and the workers covered by oldage and survivors insurance pay the taxes that finance the OASI trust
fund. Similarly, Federal gasoline and other taxes related to highway
use provide the receipts for the highway trust fund, and veterans life
insurance policyholders pay premiums which account for the bulk of
veterans life insurance trust fund receipts. The chart on this page lists
the major trust funds and indicates their estimated receipts and expenditures for 1964.
Trust fund receipts are often greater than their expenditures, and
reserves are accumulated to meet anticipated future benefit payments
or other outlays. This excess is usually invested in U.S. securities
and earns interest for the trust funds.
51
Federal receipts from and payments to the public.—Basically,
receipts from the public and payments to the public (often called the
consolidated cash statement) are a consolidation of the administrative
budget and trust fund receipts and expenditures. In this consolidation, payments between the administrative budget and trust funds
(such as the payment of interest from the budget to the trust funds
on the latter's investments in U.S. securities) are eliminated, since they
do not involve a flow of money between the Federal Government and
the public.
Adjustments are made for certain expenditures which are recorded
on an accrual basis so that all Federal payments to the public are placed
on a "checks paid" basis. The table on page 53 summarizes the relationship between the administrative budget, trust funds, Federal receipts from and payments to the public, and the Federal sector of the
national income accounts.
Federal sector, national income accounts.—Like the consolidated
cash statement, the Federal sector of the national income accounts
includes the transactions of the trust funds. However, it excludes
those transactions which do not directly affect current income or
production. Thus, it excludes administrative budget and trust fund
transactions of a purely financial nature (such as loans and mortgages)
as well as purchases and sales of previously existing assets (such as land
and secondhand items).
The national income accounts also differ from the consolidated cash
statement with respect to the time when receipts and payments are
recorded. While the consolidated cash statement is on a checks-paid
basis, the national income accounts are on an accrual basis. Thus,
tax receipts in the income accounts are recorded as tax liabilities build
up, rather than on the actual date the Treasury receives the money.
Similarly, expenditures are recorded at the time goods are delivered
or services performed, rather than when the checks in payment for the
goods and services are issued or cashed.
Total expenditures of the Federal sector, national income accounts,
are divided into four basic components that provide information on
the economic nature of Federal expenditures. As the following table
indicates, the largest is purchases of goods and services. This category
represents that part of the Nation's current production of goods and
services which the Government uses for public purposes—Federal
52
SUMMARY
OF FEDERAL RECEIPTS AND
[ F i s c a l years.
Description
FEDERAL
PAYMENTS
In billions]
19(12
actual
RECEIPTS
Administrative budget receipts
Trust fund receipts
Deduct: Intragovernmental transactions
T o t a l c a s h r e c e i p t s f r o m the p u b l i c
101.9
108.4
Add: Adjustment from cash to accrual basis
2.5
1.4
Deduct: Receipts
adjustments
0.4
1.0
National
from loans, property
income account
sales, and other
receipts—Federal
sector
104. 0
FEDERAL
PAYMENTS
Administrative budget expenditures
Trust fund expenditures
Deduct:
Intragovernmental
adjustments ( n e t )
87. 8
25.2
transactions
and
94.3
27.3
other
5.3
T o t a l c a s h p a y m e n t s t o the p u b l i c .
Add: Adjustment from cash to accrual basis
Deduct: Disbursements for loans,
other adjustments
National income
Federal sector
108.
land
account
purchases,
107.7
116. 8
0.9
0.3
2.9
3.9
105.7
113.2
-6.4
-5.8
-1.7
-8.3
and
expenditures—
EXCESS OF RECEIPTS ( + )
PAYMENTS ( - )
OR
Administrative budget
Receipts f r o m and payments to the public
National income accounts—Federal
sector
— 8. 8
-4.3
N o t e — R e c e i p t s , including t h o s e on a n a t i o n a l i n c o m e a c c o u n t basis, reflect r e t r o a c t i v e l y to
J a n u a r y 1, 1962, r e v e n u e losses o c c a s i o n e d by b o t h t h e R e v e n u e A c t of 1 9 6 2 a n d the 1961 a d m i n istrative depreciation reform.
T o this e x t e n t , r e c e i p t s s h o w n for fiscal 1 9 6 2 differ f r o m t h o s e
p u b l i s h e d to d a t e by the D e p a r t m e n t of C o m m e r c e in t h e n a t i o n a l i n c o m e a c c o u n t s .
53
employees' services, military equipment, Government buildings, other
direct public works, and so on.
NATIONAL INCOME ACCOUNT EXPENDITURES—FEDERAL
[Fiscal years.
SECTOR
In billions]
Description
Purchases of goods and services
1962
actual
1963
estimate
1964
estimate
$59.8
$64.4
$68.2
Transfer payments
27.8
Grants-in-aid to State and local governments. . .
7.3
10.8
29.7
7.8
30.9
8.8
11.3
11.1
113.2
119-0
Net interest and other
Total national income account expenditures—Federal sector
105.7
The second category, transfer payments, covers Federal expenditures
for which there are no current services rendered—veterans pensions,
unemployment benefits, old-age and survivors insurance benefits, and
other benefits (sometimes based on contributions made and on
eligibility obtained in previous years). When the Government makes
transfer payments, it does not use up resources itself, but rather channels purchasing power to the retired, the unemployed, and others.
Grants-in-aid to State and local governments also represent the
transfer of funds to other economic groups to use for a nationally
desirable purpose. The State and local governments may use the
grants for purchases of goods and services (such as highway construction) or they may in turn make transfer payments to individuals (for
example, through public assistance payments).
The last category includes net interest (that is, interest paid by the
Federal Government less the interest it receives on loans it has made
to others) and such other transactions as subsidies to farm and nonfarm businesses.
T H E B U D G E T PROCESS
Each January the President recommends to the Congress a budget
representing his judgment as to the kind and size of Government programs required to meet the Nation's needs during the coming fiscal
year.
54
The budget contains estimates of the expenditures to be made in
carrying out these programs and the revenues to be collected. By the
time the fiscal year ends, nearly 18 months after the budget is presented,
many figures will inevitably have changed: international and domestic
conditions may vary from the assumptions on which the budget was
made; the President may amend some of his proposals; and the Congress may modify the President's requests or add new proposals of its
own.
The basis for budget control: New obligational
authority.—
Since no Federal funds can be spent without specific authority from
the Congress, the budget presents the President's recommendations
as to the amounts of budget authorizations (new obligational authority) necessary to carry out the planned programs. The Congress then
considers and acts on these requests for new obligational authority.
New obligational authority is composed of three kinds of authorizations which allow Federal agencies to incur obligations requiring the
payment of money.
Appropriations are the most common form of new obligational
authority; they authorize the agencies not only to order goods and
services but also to draw funds from the Treasury and make expenditures to pay for the goods and services when delivered.
Contract authorizations are occasionally given to agencies which
allow them to contract for the delivery of goods and services but not
to make expenditures to pay for them. An appropriation to
liquidate the contract authorization must later be enacted by the Congress before money may actually be spent to pay the bills incurred
under a contract authorization.
Authorizations to expend from debt receipts permit agencies to
borrow money (usually through the Treasury), to contract for its use,
and to pay the amounts authorized.
In most cases, new obligational authority becomes available each
year only as voted by the Congress. In some cases, however, the Congress has voted permanent authority under which additional sums
55
become available annually without further congressional action. The
chief example in the administrative budget is the permanent appropriation to pay interest on the public debt. Most trust fund appropriations are also permanent.
Obligations.—Obligations are commitments made to pay out
money. They include employment of personnel by Federal agencies
requiring salary payments, the approval of loan agreements, and
the entering into contracts for equipment or construction. They
are authorized by the obligational authority granted by the Congress
and precede expenditures.
Expenditures.—Expenditures generally consist of checks issued and
cash paid. Government agencies (such as the Post Office) which carry
on business-type operations with the public usually have their receipts deducted from their disbursements to arrive at the amount included in the expenditure totals; when receipts exceed disbursements,
the result is shown as a negative payment.
Relationship between new obligational authority and expenditures.—Not all of the obligational authority enacted for a fiscal year
is spent in the same year. Appropriations to pay salaries or pensions
are usually spent almost entirely in the year for which they are
enacted. On the other hand, the bulk of appropriations to buy
ballistic missiles or to construct an airfield are likely to be spent 2 or
3 or more years after enactment, because of the time required to
prepare designs, arrange contracts, complete production or construction, and finally pay the bills.
Therefore, when the Congress reduces or increases the amount
of new obligational authority requested by the President for a given
year, it does not necessarily change the budget expenditures in that year
by the amount of the increase or decrease. Such a change may spread
its total effect on expenditures over a period of several years. The
relationship between new obligational authority and expenditures estimated for the coming fiscal year is illustrated in the accompanying
chart.
56
1964 A d m i n i s t r a t i v e B u d g e t - R e l a t i o n
of A u t h o r i i a t i o n s to Expenditures
$ Billiom
New
Authority
^
Recommended
T
to Congreis
107.9
T o Be U s e d in 1 9 6 4
56.4
in 1 9 6 4
98.8
#
Unspent Authorizations
Unspent Authorizations
for Expenditures in
E n a e t e d in Prior Y e a r s
87.2
Unexpended
Expenditures
|
T o Be
in L a t e r Y e a r s
balances,—The
Future Y e a r s
43>5
I
95.0
amounts of enacted obligational au-
thority that have not been spent at the end of a fiscal year and
are still available for expenditure in future periods, are called unexpended balances.
These balances do not represent cash on hand,
but authority to enter into contracts or to make payments under
earlier contracts.
Most of the unexpended balances are obligated;
that is, the amounts are committed to pay bills which will come due
upon the completion of contracts already signed, or when bills for
services or goods are received.
Often, any authority which is not obligated by the time the year
closes is no longer available; that is, the authority to obligate expires. In some cases, such as programs for construction of public works,
the unobligated part of the unexpended balances continues available
f r o m year to year, because the Congress has made the appropriation
available until expended.
In a few cases, such as the authorization for
the Federal Deposit Insurance Corporation to borrow from the Treasury, the balances carried forward represent standby authority for possible emergencies—authority which the Government does not anticipate
having to use in the foreseeable future.
57
Receipts.—Receipts are moneys received by the Treasury from
taxes and customs and miscellaneous sources such as collections on
certain loans, rents,fines,fees, and sales.
Surplus or deficit.—A surplus results when receipts exceed expenditures; a deficit results when expenditures exceed receipts.
A surplus is usually used to retire part of the Government's outstanding borrowing from the public. A deficit is normally financed
by new borrowing.
58
TABLES O N THE BUDGET
A d m i n i s t r a t i v e Budget a n d Trust Fund Expenditures b y Function 1 9 5 7 - 6 4
The following two tables show administrative budget and trust fund expenditures since 1957,
according
to the functions
they serve.
The functional
categories provide a meaningful
historical comparison because all expenditures for activities of a similar nature are grouped
together even if they are made by different agencies, or if—through reorganizations or
otherwise—they are shifted from one agency to another over the years.
ADMINISTRATIVE BUDGET EXPENDITURES BY FUNCTION
[Fiscal years. In millions of dollars]
Actual
Description
1957
National
1968
1959
Estimate
1960
1962
1963
1964
defense:
Department of Defense—military:
Purchase of military equipment
Military personnel
Operation and maintenance
Research and development
Military construction and other
Subtotal, military functions
Military assistance- _
Atomic energy
Defense-related services
13,488 14,083 14,409 13, 334 13,095 14,532 15,521 16,350
11,409 11,611 11,801 11, 738 12,085 13,032 13,100 14,255
9,487 9,761 10, 378 10, 223 10,611 11,594 11,500 11,690
2,406 2, 504 2, 866 4,710 6,131 6,319 6,599 7,120
1,645 1, 110 1,769 1,210 1, 305 1,248 1,370 1,375
90
210
210
38,436 39,070 41, 223 41,215 43,227 46,815 48,300 51,000
2, 352 2,187 2, 340 1,609 1,449 1,390 1,750 1,450
1,990 2, 268 2, 541 2,623 2, 713 2,806 2,870 2,850
133
582
709
104
84
387
244
92
43, 360 44,234 46,491 45,691 47,494 51,103 53,004 55,433
Subtotal
International
affairs and finance:
Economic and financial programs:
Development loans
Supporting assistance
Development grants
Other
Foreign information and exchange activities
Conduct of foreign affairs
Subtotal
Space research and
169
685 -
347
618
155
272
980
625
500
280
244
613
704
420
401
270
322
137
217
158
216
197
249
217
396
237
326
1, 832
2, 500
2,817
2,874
2,679
237
216
16
547
337
61
1,376
441
82
2,713
593
124
1,296
2
1,103
66
1,138
202
995
115
272
136
669
i46
2,053
149
131
133
157
149
173
139
237
1, 973
2, 231
3,780
technology:1
Other research, technology, and supportSubtotal
Agriculture and agricultural
Subtotal
resources:
Land, water and power resources
Forest resources
Recreational resources
Fish and wildlife resources
Minerals resources
Other
Subtotal
258
1,013
275
312
501
770
76
89
145
401
744
1,257
2,400
4,200
3,430
374
267
248
227
3, 284
315
297
269
255
5, 297
376
315
311
291
3,602
368
330
289
293
3,801
397
301
349
324
4,591
426
303
234
341
5,256
414
340
320
401
4,367
414
270
230
415
4,546
4,419
6,590
4,882
5,173
5,895
6,731
5,696
925
163
59
51
62
38
1,139
174
69
60
59
44
1,184
201
85
68
71
61
1, 235
220
74
68
65
51
1, 394
331
91
73
61
55
1,564
280
94
81
68
60
1,691
319
114
97
85
73
1,750
326
135
108
107
76
1,298
1, 544
1,670
1, 714
2,006
2,147
2,380
2,503
resources:
F a r m income stabilization and Food for
Peace..
Agricultural land and water resources
R u r a l electrification and telephone loans . _
Farming and rural housing loans
Research and other agricultural s e r v i c e s . .
Natural
1961
2
Breakdown not available on a comparable basis prior to 1961.
1ncludes Indian land and water resources.
1
1
59
ADMINISTRATIVE BUDGET EXPENDITURES BY
[Fiscal years.
FUNCTION—Con.
In millions of dollars]
Actual
Description
1957
Commerce and transportation:
Aviation
Water transportation
Advancement of business
Postal service
Area redevelopment
Regulation of business
Highways
Subtotal.
1958
Federal Housing Administration and
other
National capital region
Subtotal.
Health, labor, and welfare:
Public assistance
Health services and research
Labor and manpower
School lunch and special milk
Vocational rehabilitation and other.
Subtotal
:
Education:
Elementary and secondary education
Higher education
Science education and basic research
New program and other aid to education.
Subtotal
Veterans benefits and services:
Compensation
Pensions
Hospitals and medical care
Readjustment benefits
Other benefits and services
Subtotal.
1960
1961
1962
219
365
127
518
315
392
170
674
494
436
226
774
568
508
265
525
716
569
271
914
781
654
427
797
7
74
33
1, 313
1,631
2,017
1,963
2,573
2,774
108
97
130
134
162
150
261
163
Housing and community development:
Urban renewal and community facilities..
Public housing
Aids to private housing:
Federal Savings ana Loan Insurance
Corporation
Federal National Mortgage Associa-
1959
Estimate
-33
-38
-41
-20
-35
-237
-188
-32
842
-30
75
-123
-32
27
-56
26
-69
33
-122
30
-84
51
211
74
-118
30
970
122
320
349
1,558
461
397
155
61
1, 797
540
488
167
67
1,969
700
924
218
66
2,061
815
510
234
70
2, 170
938
809
241
85
2,437
1,128
591
261
108
2, 632
3,059
3, 877
3,690
4, 244
4,524
174
110
46
108
189
178
50
124
259
225
106
141
327
261
120
156
332
286
143
181
337
350
183
207
437
541
732
866
943
1,076
1,876
951
801
977
266
2, 024
1,036
856
1,026
242
2, 071
1, 153
921
864
280
2,049
1,263
961
725
266
2,034
1,532
1,030
559
259
2,017
1,635
1,084
388
279
4,870
5,184
5, 287
5, 266
5, 414
5,403
476
201
219
130
602
112
502
245
233
133
566
295
255
149
95
107
558
372
263
158
84
108
607
372
289
170
140
131
653
419
300
192
153
158
General government:
T a x collection and central fiscal operations
Property and records management
Protective services and alien control
Legislative and judicial functions
Central personnel management
Territories and possessions, and other
Subtotal
Interest
1,738
1,284
1,466
1, 542
1,709
1,875
7, 307
7,689
7, 671
9,266
9,050
9,198
69, 433
467
71,936
567
80,697
355
77,233
694
82, 169
654
? ,419
633
68,966
71,369
80,342
76,539
81,515
87,787
Allowances:
Comparability pay adjustment.
Contingencies
Subtotal
Deduct interfund transactions.
Total administrative
penditures
60
budget
ex-
TRUST FUND EXPENDITURES BY FUNCTION
[Fiscal years. In millions of dollars.]
Actual
Description
1957
1958
1959
Estimate
1960
1961
1962
1963
1964
National defense
International affairs and finance
Agriculture and agricultural resources.
Natural resources
Commerce and transportation
Housing and community development
Health, labor, and welfare
Education
Veterans benefits and services
General government
Deposit funds
Deduct interfund transactions
344
93
229
256
366
576
196
440
1
13
21
48
15
123
13
47
426
357
645
458
432
392
417
425
83
99
92
118
112
126
122
185
866 1,401 2,493 2,831 2,505 2,662 2,854 3,235
1,044
- 2 9 5 1,263 1,439
1,522
539 1,036
-273
9,585 12,775 14,306 16,358 19,236 20,381 21,812 22,802
Total trust fund expenditures..
12,938 15,265 19,573 21,185 22,780 25,201 27,275 28,382
1
608
8
219
10
1
1
671
10
651
10
11
135
-88
1
673
17
-107
908
- 6
1
1
811
733
186
-517
528
17
515
20
1
879
19
628
491
1
555
19
-29
454
Receipts From a n d Payments to the Public, 1 9 5 7 - 6 4
The following table presents total receipts from the public by source and payments to the
public by function.
These data combine the administrative budget and trust fund figures,
and eliminate transactions taking place entirely within the Government.
A few other adjust-
ments are also made to shift data recorded on an accrual basis to a cash basis.
(Fiscal years.
In millions of dollars]
Actual
Description
1957
Receipts from the public:
Individual income taxes
Corporation income taxes
Excise taxes
Employment taxes
Estate and gift taxes
Customs
Deposits by States, unemployment
insurance
Veterans life insurance premiums
Other budget and trust receipts
Total, receipts from the public.,.
Payments to the public:
National defense
International affairs and finance
Space research and technology
Agriculture and agricultural resources.
Natural resources
Commerce and transportation
Housing and community development
Health, labor, and welfare
Education
Veterans benefits and services
Interest
General government
Deposit funds (net)
Undistributed adjustments
Total, payments to the p u b l i c . . .
1958
1959
1960
1961
1962
1963
1964
35,620 34,724
21,167 20,074
10,534 10,638
7,520 8,565
1,365 1,393
735
782
36,719
17,309
10,578
8,767
1,333
925
40,715
21,494
11,676
11,067
1,606
1,105
41,338
20,954
11,860
12,405
1,896
982
45,571
20,523
12,534
12,561
2,016
1,142
47,300
13,112
14,805
2,060
1,278
45,800
23,800
13,736
16,630
2,125
1,390
1,501
485
3,730
1,701
478
3,851
2,167
482
4,766
2,398
504
4,905
2,729
501
4,310
2,775
516
5,385
2,770
513
5,432
1,542
452
3,171
82,105 81,892
21,200
81,660 95,078 97,242 101,887 108,431 112,196
43,434 44,552 46,681 45,915 47,685 51,462 53,438
2,637 2,651
2,398 1,574 2,153 2,492 2,467
145
401
89
76
744 1,257 2,400
4,627 4,347
7,052 4,877 5,183 5,977 6,830
1,752 1,824 2,103 2,223 2,479
1,377 1,639
2,208 3,060
4,537 4,819 5,107 5,487 6,233
1,690
874
2,141 1,440
842 - 3 1 9
-103
12,108 15,757
18,017 19,107 22,364 23,961 25,799
733
867
542
439
945 1,052 1,330
5,448 5,828
5,910 5,907 6,187 6,092 6,367
5,350 7,233 7,257 6,940 7,496
5,266 5,884
1,744 1,293
1,475 1,559 1,724 1,882 2,044
-517
628
- 6
-107
-88
219
186
- 4 2 0 - 1 , 8 2 3 - 1 , 3 8 2 - 1 , 1 1 4 -2,006 - 2 , 2 8 9 - 1 , 6 1 2
80,006 83,412
56,006
2,743
4,200
5,764
2,596
6,677
1,124
27,424
1,495
5,978
7,723
2,197
-29
-1,422
94,804 94,301 99,528 107,709 116,774 122,477
Excess of receipts ( + ) or payments ( —). + 2 , 0 9 9 - 1 , 5 2 0 - 1 3 , 1 4 4
Estimate
+777 - 2 , 2 8 6 - 5 , 8 2 2 -8,343 - 1 0 , 2 8 1
6i
Administrative Budget Totals a n d Public D e b t , 1 7 8 9 - 1 9 6 4
The administrative budget surplus or deficit during a given year does not alone determine
the change in the public debt.
Changes in the Federal Government's cash balance and a
few other factors influence the change in the debt.
A significant part of the public debt is
held by Federal Government trust funds.
As explained in this booklet, the administrative budget totals do not show as complete
a portrayal of Federal transactions as do total Federal receipts from and payments to the
public.
However, for most years prior to the beginning of social security in 1938, the
differences are insignificant.
Administrative
budget
receipts
Fiscal
year
[In millions of dollars]
Ad min- Surplus
istrative ( + ) or
budget
deficit
expend(-)
itures
Public
debt at
end of
year
1789-1849...
1,160
1,090
+70
63
1850-1899...
13,895
14,932
-1,037
1,437
1900
1901
1902
1903
1904
567
588
562
562
541
521
525
485
517
584
+46
+63
+77
+45
-43
1,263
1,222
1,178
1,159
1,136
1905
1906
1907
1908
1909
544
595
666
602
604
567
570
579
659
694
-23
+25
+87
-57
-89
1,132
1,143
1,147
1,178
1,148
1910
1911
1912
1913
1914
676
702
693
714
725
694
691
690
715
725
-18
+11
+3
1,147
1,154
1,194
1,193
1,188
1915
1916
1917
1918
1919
683
762
1,100
3,630
5,085
-63
746
713
+48
1,954
-853
12,662
-9,032
18,448 -13,363
1,191
1,225
2,976
12,455
25,485
—
1920
1921
1922
1923
1924
6,649
5,567
4,021
3,849
3,853
6,357
5,058
3,285
3,137
2,890
+291
+509
+736
+713
+963
24,299
23,977
22,963
22,350
21,251
1925
1926
1927
1928
1929
3,598
3,753
3,992
3,872
3,861
2,881
2,888
2,837
2,933
3,127
+717
+865
+1,155
+939
+734
20,516
19,643
18,512
17,604
16,931
Administrative
budget
receipts
Administrative
budget
expenditures
Surplus
( + ) or
deficit
(-)
1930...
1931...
1932...
,1933...
1934 . . .
4,058
3,116
1,924
1,997
3,015
3,320
3,577
4,659
4,598
6,645
+738
-462
-2,735
-2,602
-3,630
1935...
1936...
1937...
1938...
1939...
3,706
3,997
4,956
5,588
4,979
6,497
8,422
7,733
6,765
8,841
-2,791
-4,425
-2,777
-1,177
-3,862
1940...
1941...
1942...
1943...
1944...
5,137
7,096
12,547
21,947
43,563
9,055
13,255
34,037
79.368
94,986
-3,918
-6,159
-21,490
-57,420
-51,423
1945...
1946...
1947...
1948...
1949...
44,362
39,650
39,677
41,375
37,663
98,303
60,326
38,923
32,955
39,474
-53,941
-20,676
+754
+8,419
-1,811
1950...
1951...
1952...
1953 . . .
1954...
36,422
47,480
61,287
64,671
64,420
39,544
43,970
65,303
74,120
67,537
-3,122
+3,510
-4,017
-9,449
-3,117
1955...
1956.1957...
1958...
1959...
60,209
67,850
70,562
68,550
67,915
64,389
66,224
68,966
71.369
80,342
1960...
1961...
1962.1963 est
1964 est
77,763
77,659
81,409
85, 500
86,900
76,539
81,515
87, 787
94, 311
98, 802
Fiscal
year
-4,180
+1,626
+1,596
-2,819
-12,427
+1,224
-3,856
- 6 , 378
-8,811
-11,902
"Less than one-half million dollars.
Notes.—Refunds of receipts are excluded from administrative budget receipts and expenditures starting
in 1913; comparable data are not available for prior years.
Certain interfund transactions are excluded from administrative budget receipts and expenditures starting in 1932. For years prior to 1932 the amounts of such transactions are not significant.
62
Federal Finances and the Gross N a t i o n a l Product
Since the gross national product ( G N P ) is the total of all the goods and services produced
by the economy in a given year, its trend is a useful measure of the growth of economic
performance.
By
calculating
annual
Federal
possible to tell at a glance how Federal
expenditures
financial
as a percentage of G N P ,
it is
transactions have changed over a period
of time in relation to the change in the economy as a whole.
Only
Federal
purchases
of goods
and
services represent
the use of currently
produced
resources by the Federal G o v e r n m e n t — i n effect the Government's direct share of the G N P .
In
contrast,
both
administrative
budget
expenditures
and Federal
payments
to the public
include funds lent or transferred to others, or given to State and local governments, which
do not represent the use of current economic resources by the Federal Government.
[Amounts In billions of dollars]
Gross
national
product
Administrative
budget
expenditures
Cash payments
to the public
Federal purchases of goods
and services
Public debt
Amount Perccnt Amount! Percent Amount Percent Amount Percent
of G X P
of G X P
of G X P
of G N P
1942
140.5
34.0
24.2
34.5
24.6
30.0
21.4
72.4
51.5
1943.
178.4
79.4
44.5
78.9
44.2
72.4
40.6
136.7
76.6
1944
202.8
95.0
46.8
94.0
46.4
85.6
42.2
201.0
99.1
1945.
218.3
98.3
45.0
95.2
43.6
90.0
41.2
258.7
118.0
1946.
202.8
60.3
29.7
61.7
30.4
41.3
269.4
132 8
1947.
223.3
38.9
17.4
36.9
16.5
1948
246.6
33.0
13.4
36.5
14.8
16.8
16.6
20.4
1949.
261.6
39.5
15.1
40.6
15.5
1950.
263.8
39.5
15.0
43.1
1951.
310.8
44.0
14.2
45.8
7.5
258.3
115.7
6.7
252.3
102.3
21.8
8.3
252.8
96.7
16.3
20.0
7.6
257.4
97.6
14.7
26.4
8.5
255.2
82.1
1952.
338.8
65.3
19.3
68.0
20.1
47.8
14.1
259.1
76.5
1953.
359.7
74.1
20.6
76.8
21.4
56.8
15.8
266.1
74.0
1954.
362.0
67.5
18.6
71.9
19.9
54.0
14.9
271.3
75.0
11.9
274.4
72.8
272.8
66.8
1955
377.0
64.4
17.1
70.5
18.7
45.0
1956.
408.5
66.2
16.2
72.6
17.8
45.1
11.0
1957
433.0
69.0
15.9
80.0
18.5
48.3
11.2
270.5
62.5
1958.
440.2
71.4
16.2
83.4
19.0
50.5
11.5
276.3
62.8
1959.
466.5
80.3
17.2
94.8
20.3
53.9
11.6
284.7
61.0
57.8
1960
494.8
76.5
15.5
94.3
19.1
53.2
10.8
286.3
196 1
505.5
81.5
16.1
99.5
19.7
54.8
10.8
289.0
57.2
196 2
539.0
87.8
16.3
107.7
20.0
59. 8
11.1
298.2
55.3
564.5
94.3
16.7
116.8
20.7
64.4
11.4
303.5
53.8
1963
(estimate)
63
Expenditures a n d N e w O b l i g a t i o n a l A u t h o r i t y b y A g e n c y
The following table indicates the expenditures estimated in 1964 for the major agencies
of the Federal Government.
for each agency.
It also shows the amount of spending authority being requested
Because of the long lead time required to design, order, produce, and
deliver such complex goods as military and space equipment, and for other reasons, not
all the new obligational authority granted will result in expenditures during the same year.
[Fiscal year 1964 estimate.
In millions of dollars]
Expenditures
New obligational authority
Description
Administrative
budget
funds
Legislative Branch
Administrative
budget
funds
Trust
funds
155
149
The Judiciary
69
69
Executive Officc of the President
Funds appropriated to the President:
Foreign assistance:
31
33
Military
Economic
Public works acceleration program
Other
Department of Agriculture
Department of Commerce
Department of Defense:
Military functions
Civil functions
Department of Health, Education, and Welfare
Department of the Interior.
Department of Justice
Department of Labor
Post Office Department
Department of State
Treasury Department
Atomic Energy Commission
Federal Aviation Agency
General Services Administration
Housing and Home Financc Agency
National Aeronautics and Space Administration
Veterans Administration
Other agencies
District of Columbia
Allowances:
1,450
2,300
400
225
6,565
895
51,000
1,140
5,742
1,165
337
433
554
361
11, 232
2,850
801
594
695
571
1,480
3
3, 465
48
244
8,144
981
3,401
5
28
16, 650
84
57
3, 770
22
485
4,200
5,470
355
86
52,181
1,146
7,158
1,279
355
527
565
374
11, 297
2,893
810
659
829
5,712
548
2,753
5,580
400
67
1,481
Comparability pay adjustment
200
200
Contingencies
175
250
Subtotal
Deduct interfund transactions
Total
99,482
28, 835
679
454
98,802
28,382
107,927
107,927
* Less than one-half million dollars.
1 Of which $11.8 billion in administrative budget funds and $30.4 billion in trust funds do not require
current action by the Congress.
64
U.S. GOVERNMENT PRINTING OFFICE: 1 9 6 3
O—671570
EXECUTIVE
BRANCH
OF
THE
GOVERNMENT
i
^ ^ E X E C U T I V E ^
@FedFRASER