Full text of Budget in Brief : Fiscal Year 1974
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THE BUDGET DOLLAR
Fiscal Year .974 Estimate
Other
_'-
--.....
Physical
Resources
~--r--~
WHere it II"(S . ..
Human R~Jouru$ include; Education & Manpower, Heal"', Income $ecurity1 ond Vetcrons Be"c~tt and Services.
Physical Resourus indude; Ag riculture and Rural Development, Natural Resources ond Environment, Commerce and Transportation .
and Community Development & Houlin,.
O'~cr includes: General Revenue Shoring. General Government, 'ntcrnational ArEairs and Finonce, Space Research and Technology,
the Federal Government shot. of Fed.ral Emplo.,. ... Retirement and Allowonces.
'"'crcst il net of: 'nter.st paid to the Trult FundI .
CONTENTS
Page
PART 1. FROM THE PRESIDENT'S MESSAGE .. . ... .. .... .
PART 2. PERSPECTIVES ON THE BUDGET .. ............ .
Restructuring the Executive Office of the President .... . .... .
The Budget Outlook for 1975 and Beyond . .. . ............. .
Program Reduction and Terminations ...... . ............. .
The Federal Debt . ... . ................................ . .
PART 3. THE BUDGET PROGRAM BY FUNCTION ....... .
National Defense ... .. .. .. .......... . ....... . . .. ...... . .
International Affairs and Finance ............. .. .. . . . .... .
Space Research and Technology ............ . .. . .... . .... .
Agriculture and Rural Development. .. . .. .. ... . . .... . . .. '.'
Natural Resources and Environment ................ . .. .. .
Commerce and Transportation. . . . ...................... .
Community Development and Housing .. . ................ .
Education and Manpower ..................... ... ...... .
Health ................... . .. ..... . ... . . ... .. . . .. . .. . . .
Income Security . ............................... . ...... .
Veterans Benefits and Services . ...... . .............. . .... .
General Government .................... . ..... .. ....... .
Interest. . . ....... . ....................... ... ........ .
General Revenue Sharing. . . . . . . .......... . ............. .
PART 4. THE BUDGET SYSTEM .............. . .... .. ... .
The Federal Budget Cycle ................ ... .......... . .
Relation of Budget Authority to Outlays .................. .
PART 5. BUDGET TABLES . ............ .. ............... .
1. Budget Receipts, Outlays, Financing and Debt, 1964-1974 .
2. Budget Receipts by Source and Outlays by Function,
1964-1974 .. .................... .. .............. ..
3. Budget Outlays by Subfunction, 1964-1974 ............. .
4. Budget Authority and Outlays by Agency, 1972-1974 ... .
5. Outlays and Receipts of Trust Funds, 1972-1974 ...... . .
6. Summary of Full-Time Permanent Employment in the
Executive Branch, 1972-1974 ...................... ..
7. Federal Finances and the Gross National Product, 19541973 ............ . ....................... .. . .. ... .
8. Budget Receipts and Outlays, 1789-1974 .... " . .. .. .... .
GLOSSARy . .................... .. ...................... ..
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30
33
35
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38
40
42
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46
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50
52
54
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57
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60
61
62
63
64
68
68
69
69
70
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1
INTRODUCTION
In July 1972 the President instructed me to prepare a. budget for fiscal year
1974 which would serve the real needs of the American people, and be
balanced on a full employment basis.
He also directed me to submit recommendations to reduce and terminate
programs which were not working well or wasting money, so that we could
reduce outlays for fiscal 1973 to $250 billion, and have better programs.
This budget achieves these Presidential goals.
By so doing it eliminates the twin threats of a tax increase and another
punishing round of inflation caused by excessive Federal spending.
This budget goes farther. It contains a budget for fiscal year 1975 which
also demonstrates that we will not need a tax increase through that fiscal
year, for the spending recommended for 1975 should be well within the
normal growth of our revenues.
If the President's instructions had not been issued and followed, we would
have had tax-increasing, inflation-producing deficits of about $30 billion
in each of fiscal years 1973, 1974 and 1975. That could still happen if the
President's recommendations are disregarded in the days ahead.
The Budget in Brief is published to help us understand the complex and
technical problems set forth at length in The Budget of the United States
Government, also published today.
This booklet will have served its purpose if it makes us all aware of the
great issues now before us. For only if we know what our Government is
trying to do and why, can we hope to participate significantly in these
decisions which affect us all so vitally.
CASPAR W. WEINBERGER,
Director, Office of Management and Budget.
Note.-All years referred to are fiscal years, unless otherwise noted. Details
in the tables, text, and charts of this booklet may not add to totals because
. of rounding.
2
PART 1
FROM THE PRESIDENT'S BUDGET MESSAGE
"The 1974 budget fulfills my pledge to hold down Federal
spending so that there will be no need for a tax increase.
"This is a budget that will continue to move the Nation's economy toward a goal it has not achieved in nearly two decades: a
high-employment prosperity for America's citizens without inflation and without war.
"Rarely is a budget message perceived as a dramatic document. In a real sense, however, the 1974 budget is the clear
evidence of the kind of change in direction demanded by the great
majority of the American people. No longer will power flow
inexorably to Washington. Instead the power to make many
major decisions and to help meet local needs will be returned to
where it belongs-to State and local officials, men and women
accountable to an alert citizenry and responsive to local conditions
and opinions.
"The 1974 budget proposes a leaner Federal bureaucracy, increased reliance on State and local governments to carry out
what are primarily State and local responsibilities, and greater
freedom for the American people to make for themselves fundamental choices about what is best for them.
"This budget concerns itself not only with the needs of all the
people, but with an idea that is central to the preservation of democracy: the 'consent of the governed.'
"The American people as a whole-the 'governed'-will give
their consent to the spending of their dollars if they can be provided a greater say in how the money is spent and a greater
assurance that their money is used wisely and efficiently by government. They will consent to the expenditure of their tax dollars
as long as individual incentive is not sapped by an ever-increasing
percentage of earnings taken for taxes.
3
"Since the mid-1950's, the share of the Nation's output taken
by all governments in the United States-Federal, State, and
local-has increased from a quarter to a third. It need not and
should not go higher.
"The increase in government claims on taxpayers was not for
defense programs. In fact, the defense share of the gross national
product declined by one-quarter while the share for civilian activities of all governments grew by three-fourths, rising from
14% of the gross national products in 1955 to about 25% in
1972.
"During the past 2 years, with the economy operating below
capacity and the threat of inflation receding, the Federal budget
provided fiscal stimulus that moved the economy toward full
employment. The 1974 budget recognizes the Federal Government's continuing obligation to help create and maintainthrough sound monetary and fiscal policies-the conditions in
which the national economy will prosper and new job opportunities will be developed. However, instead of operating primarily as a stimulus, the budget must now guard against
inflation.
"The surest way to avoid inflation or higher taxes or both is for
the Congress to join me in a concerted effort to control Federal
spending. I therefore propose that before the Congress approves
any spending bill, it establish a rigid ceiling on spending, limiting
total 1974 outlays to the $268.7 billion recommended in this
budget.
"I do not believe the American people want higher taxes any
more than they want inflation. I am proposing to avoid both
higher taxes and inflation by holding spending in 1974 and 1975
to no more than revenues would be at full employment.
1975 PROJECTIONS IN THE 1974 BUDGET
"This year's budget presents, for the first time, a detailed preview of next year's. I have taken this step to demonstrate that
if we stay within the 1974 and 1975 estimated outlays presented
in this budget, we will prevent a tax increase-and that the 1974
budget is a sound program for the longer range future, not
simply for today. This innovation in budget presentation is a
blueprint for avoiding inflation and tax increases, while framing
4
more responsive instruments of government and maintaining
prosperity.
"Our ability to carry out sound fiscal policy and to provide the
resources needed to meet emerging problems has been limited by
past decisions. In 1974, $202 billion in outlays, or 75% of the
budget, is virtually uncontrollable due to existing law and prioryear commitments. But just as every budget is heavily influenced
by those that have preceded it, so it strongly influences those that
follow.
"Control over the budget can be improved by projecting future
available resources and the known claims on them, and then making current decisions within the constraints they impose. That is
why this budget projects, in agency and functional detail, the
outlays in 1975 that will result from the major program proposals
in 1974 budget, including the outlay savings that can be realized
from program reductions in 1973 and 1974. In so doing, it takes
into consideration the longer range effect of each of our fiscal
actions.
"Most importantly, this budget shows the narrow margin between projected outlays and full-employment revenues in 1975,
despite the economy measures that are recommended. Program
reductions and terminations of the scale proposed are clearly
necessary if we are to keep control of fiscal policy in the future.
"The 1974 budget program implies 1975 full-employment
outlays of about $288 billion, $19 billion (7%) more than in
1974. This is within our estimate of full-employment revenues of
$290 billion for 1975. There is, however, very little room for the
creation of new programs requiring additional outlays in 1975
and no room for the postponement of the reductions and terminations proposed in this budget. The program reductions and terminations I have proposed will result in more significant savings
in 1975 and later years than in 1973 and 1974. It is for this reason,
too, that I have included the 1975 projections in my budget this
year. The Federal spending pipeline is a very long one in most
cases, and the sooner we start reducing costs the better for the
Nation.
"The estimated 1975 outlays for the various Federal agencies
are, of course, tentative. The outlay total, however, is the approximate amount that will represent appropriate Federal spending
in 1975 if we are to avoid new taxes and inflation.
5
FISCAL POLICY
~ND
THE BUDGET PROCESS
"Fiscal policy.-In July 1970 I adopted the full-employment
. budget principle in order to make the budget a tool to promote
orderly economic expansion.
"Consistent with this principle, the budget that I submitted to
the Congress last January proposed fiscal stimulus as part of a
balanced economic program that included sound monetary policy and the new economic policy that I launched on August 15,
19 71. My confidence that the American economy would respond
to sensible stimulus in this context has been fully justified. During 1972, employment increased by 2.3 million persons, real
output rose by 712 % , business fixed investment was almost 14%
higher, and the rate of increase in the consumer prices has
declined.
"From 1971 through 1973, the full-employment budget principle permitted and called for substantial actual budget deficits.
For this reason, some people have forgotten the crucial point that
the full-employment principle requires that deficits be reduced
as the economy approaches full employment-and that it estab-
Full Employment Budget-Surplus or DeFicit
----------------------------~
Surplus
(+)
5
rln
LFiscal Ycars 1964 1965
.9
n
F
1966
1967
1968 1969
1970 1971
=o.i
-5
-10
(-)
::u
-
1973 197.
rt
1975 I
L tJ
-
.3
1972
,
-10:7
Dctic:1t
- 15
-10
-15
6
- U.3
.......
lishes the essential discipline of an upper limit on spending at all
times.
"The full-employment budget principle permits fiscal stimulation when stimulation is appropriate and calls for restraint
when restraint is appropriate. But it is not self-enforcing. It signals
us what course to steer, but requires us to take the actions necessary to keep on course. These steps are not taken for us, and they
are rarely easy.
"As we look ahead, with the economy on the upswing, the
full-employment budget principle-and common sense-prescribe a shift away from fiscal stimulus and toward smaller budget
deficits. We must do what is necessary to make this shift.
"Holding 1973 spending to $250 billion and achieving fullemployment balance in 1974 and in 1975 will be difficult. Reduction of some activities and termination of others are necessary
and are proposed in this budget. Nonetheless, the budget provides
significant increases for many important programs.
"If we did not budget with firm restraint, our expenditures in
1973 would be over $260 billion. The ballooning effect of one
year's expenditures on the next would in tum have meant that
1974's expenditures would be about $288 billion, far beyond fullemployment receipts, and 1975's expenditures would be approximately $312 billion, leading to a huge inflationary deficit.
"If spending is to be controlled, the Congress must establish
a spending ceiling promptly. Otherwise, the seeds sown in individual authorization and appropriation actions will produce evergrowing Federal spending not only in the coming fiscal year but
in the years beyond.
"Should the Congress cause the total budgeted outlays to be
exceeded, it would inescapably face the alternatives of higher
taxes, higher interest rates, renewed inflation, or all three. I
oppose these alternatives; with a firm rein on spending, none of
them is necessary.
"Reforming congressional budget procedures.-Delay in congressional consideration of the budget is a major problem. Each
time I have submitted a budget, the Congress has failed to enact
major portions of it before the next budget was prepared. Instead,
it has resorted to the device of continuing resolutions to carryon
the activities for which it has not made appropriations. Such
delay needlessly compounds the complexities of budget prepara-
7
tion, and frustrates the potential of the budget as an effective
management and fiscal tool.
"The complexity of the budgeting process is another problem.
Because of modifications made to reflect the desires of the more
than 300 congressional committees and subcommittees that influence it, the process has become more complicated and less
comprehensible.
"The fragmented nature of congressional action results in a
still more serious problem. Rarely does the Congress concern itself
with the budget totals or with the effect of its individual actions
on those totals. Appropriations are enacted in at least 15 separate
bills. In addition, 'backdoor financing' in other bills provides
permanent appropriations, authority to contract in advance of
appropriations, authority to borrow and spend without an appropriation, and program authorizations that require mandatory
spending whether or not it is desirable in the light of current
priorities.
"At the same time, a momentum of extravagance is speeded by
requirements created initially by legislative committees sympathetic to particular and narrow causes. These committees are
encouraged by special interest groups and by some executive
branch officials who are more concerned with expansion of their
own programs than with total Federal spending and the taxes
required to support that spending.
"Last October, the Congress enacted legislation establishing a
joint committee to consider a spending ceiling and to recommend
procedures for improving congressional control over budgetary
outlay and receipt totals.
"I welcome this effort and pledge the full cooperation of my
Administration in working closely with the committee and in
other efforts of the Congress toward this end.
"Specific changes in congressional procedures are, of course,
the business of the Congress. However, the manner in which the
Congress reviews and modifies the budget impinges so heavily
on the management of the executive branch that I am impelled
to suggest a few subjects that deserve high priority in the committee's deliberations, including:
-adoption of a rigid spending ceiling to create restraint on
the total at the beginning of each annual review;
-avoidance of new 'backdoor financing' and review of existing legislation of this type;
8
-elimination of annual authorizations, especially annual authorizations in specific amounts; and
-prompt enactment of all necessary appropriation bills before the beginning of the fiscal year.
"The Congress must accept responsibility for the budget totals
and must develop a systematic procedure for maintaining fiscal
discipline. To do otherwise in the light of the budget outlook is
to accept the responsibility for increased taxes, higher interest
rates, higher inflation, or all three.
"I will do everything in my power to avert the need for a tax
increase, but I cannot do it alone. The cooperation of the Congress in controlling total spending is absolutely essential.
SUMMARY OF THE 1974 BUDGET
"The 1974 budget proposes an approximate balance in fullemployment terms and an actual deficit that is about one-half
the 1973 deficit. The 1975 budget totals I propose here would
also yield a balance in full-employment terms.
THE BUDGET TOTALS
[Fiscal years. In billions)
Description
1972
actual
1973
estimate
1074
estimate
1975
estimate
$208.6
231. 9
$225.0
249.8
$256.0
268.7
Deficit (- ) ......... . ..............
-23.2
-24.8
-12.7
Full-c-mployment receipts ...........
Full-employment outlays 1 . . . . . . . . . . .
225.0
228.9
245.0
247. 3
268.0
267. 7
$290.0
288.0
Full-employment surplus or
deficit (- ) ....... .... .... .. ......
-3.9
-2. 3
+0.3
+2.0
Budget authority .. . . . ........ . .....
248. 1
280.4
288.0
313.5
Budget receipts ....... .............
Budget outlays ..... . ...............
--
*
*
*
-Estimates of actual receipts and outlays have not been made at this time.
1 In these estimates, outlays for unemployment insurance benefits and the Emergency Employment Act
program are calculated as they would be under conditions of full employment.
"The full-employment budget balance in 1974 assures support for continuation of the economy's upward momentum without rekindling inflation. Greater stimulus in 1974 would be dangerous, and would put an unsupportable burden on future
budgets.
((B.udget receipts in 1974 are estimated to be $256 billion.
This is an increase of $31 billion over 1973, reflecting growing
510-400 0 - 73 - 2
9
prosperity, higher personal income, and rising corporate profits.
The receipts estimates also reflect the impact of tax cuts resulting
from the Tax Reform Act of 1969, the new economic policy
and the Revenue Act of 1971, as well as the payroll tax increases
enacted to finance higher social security benefits.
((Budget outlays in 1974 are expected to be $268.7 billion. The
total would have been substantially greater-probably about
$288 billion-had my Administration not made an extraordinary effot t to hold to the fiscal guidelines of a $250 billion maximum in 1973 rather than the nearly $261 billion which otherwise
would have occurred, and to full-employment balance in 1974.
"Even so, this budget proposes an increase in outlays of $19
billion, or nearly 8% over the previous year. It provides amply
for America's security and well-being in the year ahead.
"The 1974 budget program projects full-employment outlays
of $288 billion in 1975, which together with the receipts that
would be produced under existing law, will mean full-employment balance in that year.
"About $288 billion of budget authority-the new authority
to make commitments to spend-is requested for 1974. Of
the total, about $173 billion will require new action by the
Congress. "
BUDGET RECEIPTS
The basic economic assumptions underlying the estimates of
receipts in 1973 and 1974 are summarized in the following table.
ECONOMIC ASSUMPTIONS
[Calendar years. In billions of dollars]
Description
Gross national product ......... . ... .. . ... .. ... . . .
Personal income .................... .. .. .. .. .. . .
Corporate profits before tax ... . ....... .... .. .... .
197\
actual
1,050
861
83
1972
estimate
1,152
936
94
1973
estimate
1,267
1,018
108
Total budget receipts in 1974 are estimated at $256 billion,
compared with $225 billion in 1973, an increase of $31 billion. .
10
BUDGET RECEIPTS
[Fiscal years. In billions of dollars]
Source
1972
actual
1973
estimate
1974
estimate
Individual income taxes . .... ....... . .. . .. . .. . .
Corporation income taxes . . ........ ... .. .....
Social insurance taxes and contributions .. . .....
Excise taxes .. . .. .. . .. .. ... .... . . .. . . . . ... . ..
Other receipts ... . . . . .... .. . .. . . .. . . . ....... .
94. 7
32.2
53. 9
15.5
12.4
99.4
33.5
64. 5
16.0
11. 6
Ill. 6
37.0
78.2
16.8
12. 4
Total budget receipts ... . ..... . ... .. ....
208.6
225.0
256.0
The Federal tax system relies heavily on income taxes, with
58% of total budget receipts coming from this source in 1974.
Individual income tax receipts are estimated at $111.6 billion
in 1974, $12.2 billion more than in 1973. The increase results
largely from growth in taxable personal income. Corporate income tax receipts are estimated at $37.0 billion in 1974, an increase of $3.5 billion. This increase reflects the rising share of
corporate profits in gross national product that normally occurs
whenever the economy expands toward full employment.
Social insurance taxes and contributions are expected to total
$78.2 billion in 1974, up by $13.6 billion from 1973. This category includes payroll taxes to finance social security and hospital
insurance; unemployment insurance taxes; contributions to the
railroad retirement system; civil service retirement contributions
by Federal employees and premiums for supplementary medical
insurance. The relatively large increase in receipts from this
source reflects:
• The increase in the combined employer-employee social
payroll tax rate from 10.4% to 11. 7% that became effective
January 1, 1973;
• Increases in the taxable earnings base under social security
from $9,000 to $10,800 effective January 1, 1973, and from
$10,800 to $12,000 effective January 1,1974; and
• Legislation to provide the increased receipts required to
finance the present level of benefits under the railroad retirement system.
11
Excise taxes levied on a variety of products, actIvIties, and
services, are expected to provide 7 % of total budget receipts in
1973. Excise tax receipts in both 1973 and 1974 reflect the start
of phasing out the telephone excise tax. This tax rate is reduced
from 10% to 9% on January 1, 1973, and to 8910 on January 1,
1974.
All other receipts, including estate and gift taxes, customs
duties, and miscellaneous receipts, will amount to 5% of total
receipts in 1974.
IMPROVIN'G GOVERNMENT
"The role of government.-The last article of the Bill of Rights
says:
'The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the
States respectively, or to the people.'
"The philosophy of the Founding Fathers embodied in this
amendment is also my philosophy. I believe that a, larger share
12
of our national resources must be retained by private citizens and
State and local governments to enable them to meet their individual and community needs.
"Our goal must not be bigger government, but better government-at all levels. Our progress must not be measured by the
amount of money we put into programs, but by the accomplishments which result from them.
"One of my first acts as President was to direct that an intensive review be made of our federal system of government. We
found that:
-the executive branch was poorly organized to accomplish
domestic program objectives;
-State and local governments often could not meet the basic
needs of their citizens; and
-Federal programs to assist State and local governments had
become a confusing maze, understood only by members of
a new, highly specialized occupation-the grantsmen.
"M y Administration has developed a comprehensive strategy
for dealing with these problems through restructuring the executive departments and revitalizing the federal system.
"A restructured Federal Government.-A thorough overhaul
of the Federal bureaucracy is long overdue, and I am determined
to accomplish it.
"As the role of government has grown over the years, so has the
number of departments and agencies which carry out its functions. Unfortunately, very little attention has been given to the
ways in which each new unit would fit in with all the old units.
The consequence has been a hodgepodge of independent, organizationally unrelated offices that pursue interrelated goals.
"To help remedy this situation, I proposed to the Congress in
1971 that the executive branch be restructured by consolidating
many functions now scattered among several departments and
agencies into four new departments. These new departments
would be organized around four major domestic purposes of
government: community development, human resources, natural
resources, and economic affairs-thus consolidating in a single
chain of command programs that contribute to the achievement
of a clearly stated mission. Under this arrangement, we will be
able to formulate policy more responsibly and carry out that
policy more effectively. I welcome congressional cooperation in
this important endeavor and will seek it in the weeks ahead. I
13
plan now to streamline the executive branch along these lines
as much as possible within existing law, and to propose similar
legislation on departmental reorganization to the 93d Congress.
"Meanwhile, I have already taken the first in a series of steps
that will increase the management effectiveness of the Cabinet
and the White House staff. I hope the smaller and more efficient
Executive Office of the President will become a model for the
entire executive branch.
"Reorganization of the executive branch is a necessary beginning but reorganization alone is not enough.
"Increased emphasis will also be placed on program performance. Programs will be evaluated to identify those that must be
redirected, reduced, or eliminated because they do not justify
the taxes required to pay for them. Federal programs must meet
their objectives and.costs must be related to ,!chievements.
"The Federal Assistance Review program, which I began in
1969, has made important progress in decentralizing and
streamlining Federal grant programs. To speed the process of
decentralization, improve program coordination, and eliminate
unnecessary administrative complications, I have strengthened
the Federal Regional Council system. These councils, working
with State and local governments, have played an impressive
and growing role in coordinating the delivery of Federal seIVices.
"A revitalized federal system.-Restructuring of the Federal
Government is only one step in revitalizing our overall federal
system. We must also make certain that State and local governments can fulfill their role as partners with the Federal Government.
"On October 20,1972, I signed a program of General Revenue
Sharing into law. This program provides State and local governments with more than $30 billion over a 5-year period beginning
January 1,1972. This historic shift of power away from Washington will help strengthen State and local governments and permit
more local decisionmaking about local needs.
"Although final congressional action was not taken on my special revenue sharing proposals, I remain convinced that the
principle of special revenue sharing is essential to continued
revitalization of the federal system. I am, therefore, proposing the
creation of special revenue sharing programs in the 1974 budget.
"These four programs consist of broad-purpose grants, which
will provide State and local governments with $6.9 billion to
14
use with considerable discretion in the areas of education, law
enforcement and criminal justice, manpower training, and urban
community development. They will replace over 70 outmoded,
narrower categorical grant programs and will, in most cases,
eliminate matching requirements.
"The funds for special revenue sharing will be disbursed according to formulas appropriate to each area. In the case of manpower revenue sharing, an extension of existing law will be proposed. Current administrative requirements will be removed so
that State and local governments can group manpower services
in ways that best meet their own local needs.
"The inefficiency of the present grant systems makes favorable
action on special revenue sharing by the Congress an urgent
priority.
"The federal system is dynamic, not static. To maintain its
vitality, we must constantly reform and refine it. The executive
branch reorganization and special revenue sharing programs that
I am proposing, along with continued decentralization of Federal
agencies, are essential to that vitality.
CONCLUSION
"The respect given to the common sense of the common man
is what has made America the most uncommon of nations.
"Common sense tells us that government cannot make a habit
of living beyond its means. If we are not willing to make some
sacrifices in holding down spending, we will be forced to make a
much greater sacrifice in higher taxes or renewed inflation.
"Common sense tells us that a family budget cannot succeed
if every member of the family plans his own spending individually-which is how the Congress operates today. We must set
an overall ceiling and affix the responsibility for staying within
that ceiling.
"Common sense tells us that we must not abuse an economic
system that already provides more income for more people than
any other system by suffocating the productive members of the
society with excessive tax rates.
"Common sense tells us that it is more important to save tax
dollars than to save bureaucratic reputations. By abandoning
programs that have failed, we do not close our eyes to problems
that exist; we shift resources to more productive use.
15
"It is hard to argue with these common sense judgments; surprisingly, it is just as hard to put them into action. Lethargy,
habit, pride, and politics combine to resist the necessary process
of change~ but I am confident that the expressed will of the
people will not be denied.
"Two years ago, I spoke of the need for a new American
Revolution to return power to people and put the individual self
back in the idea of self-government. The 1974 budgets moves us
firmly toward that goal."
16
PART 2
PERSPECTIVES ON THE BUDGET
This part discusses some special aspects of the budget that are
not elaborated in Part 1 : the restructuring of the Executive Office
of the President, a detailed preview of the 1975 budget with a
discussion of the longer range outlook, program reductions and
terminations, and the national debt.
RESTRUCTURING THE EXECUTIVE OFFICE OF THE PRESIDENiT
Two major changes are being made in the Executive Office
of the President to enable the President to discharge his duties
more effectively. First, the organizational units in the Executive
Office are being reduced in size and number; second, the personal staff of the President is being reduced and restructured to
msure more effective communication with departments and
agencIes.
Executive Office structure.-Steps have already been taken to
reduce personnel levels below those authorized in the 1973
budget. Additional reductions are now proposed for 1974. As
experience is gained with revised staffing arrangements, further
reductions or abolitions may be possible. Based upon actions now
being taken, six staff offices will be discontinued, and personnel
will be reduced by 60%. The six staff offices include: the Office of
Science and Technology; the National Aeronautics and Space
Council; the Office of Emergency Preparedness; the Office of
Intergovernmental Relations; the Office of Consumer Affairs;
and the Office of Economic Opportunity. Most of the functions
of th~se staff offices will be transferred to the appropriate
agencIes.
The table below shows the change in the full-time permanent
personnel level in the Executive Office of the President between
the level in the 1973 budget and the 1974 level.
5 10 - 400 0 - 73 - 3
17
Full·time permanent
positions
i973 in 1973
budget
1974
510
480
75
The White House .... . .. .. . . .............. . . .. . .......... .
Executive Residence . . . ...... . ... . ....... . . . . .. .. . ... .. ... .
Special Assistance to the President. ......................... .
Council of Economic Advisers .. .. ........ . .. . ... .. ..... . ... .
Council on Environmental Quality and Office of Environmental
Quality .... . .. .. . .......... . ........ .. ................ .
Council on International Economic Policy ............... . ... .
Domestic Council .. . .. . . .. ... .. .. .... .. .. . . ..... . ... .. ... .
National Aeronautics and Space Council! ............ . .... . . . .
National Security Council. . .... .. . . ....... . .. . ............ .
Office of Consumer Affairs 2 ••• • •••••• • •••••••••• •• ••• •• ••••
Office of Emergency Preparedness 3 ••• • . . • . • . . . . • . . . . • . . . • • ..
Office of Intergovernmental Relations •... . . . . . .......... ... ..
Office of Management and Budget. ................. .. .. ... . .
Office of Science and Technology 3 . ••••. . • • • . . • . • . . . . .• .. ••.•
Office of Telecommunications Policy ........ . .... . ....... .. . .
Special Action Office for Drug Abuse Prevention ... . .... . .. .. .
Special Representative for Trade Negotiations .............. . . .
Office of Economic Opportunity 3 •..•. . • • . . • • . . • • . • . • . • • .. • . .
50
65
174
46
1,935
110
Total full-time permanent personnel. .... . .... . .... . . .
4,250
1,686
75
39
57
30
46
65
50
29
29
66
16
79
30
o
79
323
9
o
o
o
660
660
52
o
52
45
o
Abolition proposed by reorganization plan.
• Transferred to HEW in 1973 .
• Functions to be transferred and office abolished or discontinued .
• Combined with Domestic Council in 1973.
I
Presidential staff realignment.-In order to insure more effective coordination of programs and better identification and solution of policy problems, a new staff arrangement is being
implemented.
The revised staff is comprised of five assistants with designated
areas of responsibility-the White House Office, executive management, foreign and defense matters, economic affairs, and domestic affairs. In addition, three departmental secretaries will
serve simultaneously as Counsellors to the President with coordinating responsibilities in three broad areas: human resources,
community development, and natural resources.
These changes will eliminate the need for numerous White
House staff organizations, facilitate communication, permit a
more comprehensive analysis of problems presented to the President, and provide for a more responsive congressional channel
to the President.
18
THE BUDGET OUTLOOK FOR 1975 AND BEYOND
This year's budget decisions establish program trends that
will help shape the level and composition of budgets for years
into the future. This Administration has emphasized the longer
range implications of current decisions. The last three budgets
have each presented a 5-year projection of the outlook for Federal outlays and receipts. This budget presents, for the first time,
a detailed preview of next year's budget.
Careful consideration of the longer range impli"cations of
budget decisions is essential if we are to insure a reasonable
degree of continuity of policy from one year to the next, avoid
becoming prisoners of the unintended consequences of past decisions, and maintain consistency between fiscal and other policies in the longer run. The exercise of such foresight provides
a corrective to the temptations of expediency that could lead
to program increases that the Nation can ill afford. A sober
examination of the budgetary realities we will face in 1975 will
serve as advance notice to all concerned as to the general direction programs must take if inflation, higher interest rates, and tax
increases are to be avoided. Unrealistic expectations and aspirations of advocates of special interests must be set aside if the
overriding public interest in a noninflationary prosperity and
stable tax rates is to prevail.
, Budget policy.-The momentum of program and expenditure
growth in the Federal Government is extremely powerful. Unchecked, it would quickly lead to renewed inflation, tax increases,
or both, and a boom-and-bust cycle in the economy.
This Administration is committed to orderly economic expansion without the stimulus of war and to price stability without
the burden of tax increases. If these objectives are to be met, the
upward momentum of Federal spending must be reduced and
the Federal house kept in order through effective budget discipline. The 1974 budget imposes a firm fiscal discipline on 1973
and 1974 outlays.
Heading off renewed inflation and tax increases are problems
not just for 1973 and 1974, however, butfor the longer run future
19
as well. Fiscal restraint will be necessary during the next few
years if we are to keep the economy from overheating, without
resorting to tax increases.
The budget in 1975.-Continued strong expansion is moving
the Nation's economy to full employment. If the Administration's
goal of maintaining the delicate balance of prosperity with price
stability is to be sustained, the 1975 budget must adhere to the
full employment budget principle. Accordingly, this year's budget
has been carefully designed so that it could assure a full employment balance in 1975, as well as in 1974.
These projections below indicate that the 1973 and 1974 program proposals in this budget are consistent with a sound fiscal
policy in 1975 as well as in the current year. The projections
should also stand as a warning and challenge to anyone who
would change the budget recommendations-particularly the
recommendations for program reductions and terminationsthat they must consider the 1975 and subsequent implications
of such proposals, as this Administration has done.
THE 1975 OUTLOOK
[In billions of current dollarsl
Item
1972
1973
1974
1976
Total outlays, unconstrained basis . . ....... . .
Savings projected in this budget ( - ) :
Program reductions and terminations . . . .
Other ..... . . . .... .. ..... .. .. .... ....
AdJustment to full employment basis 1 • • . . .
232
261
288
312
-17
-2
-1
-22
-2
-3
-7
-5
-2
Total, full employment outlays . . . . . .. . ... ...
Total, full employment receipts . .. . . .. ..... .
229
225
247
245
268
268
288
290
Full employment surplus or deficit (- ) ......
-4
-2
2
I Consists mainly of excess of unemployment insurance benefits over the amount payable at a national
unemployment rate of 4%.
The Administration firmly intends to hold spending in 1975 to
the outlay total projected here-$288 billion. Changing conditions during the coming year will make increases necessary in
some areas and decreases necessary in others. But the 1975 total
is presented as an upper limit, or ceiling, that should not be
breached.
20
The projections show that 1974 budget recommendations represent a workable plan, under current conditions, for achieving
the Administration's fiscal policy objectives for the longer run.
Full employment outlays projected for 1975 are 7% higher than
1974 outlays. The average rate of increase over the 3 years, 1973
through 1975, will be 712 %, which is the same growth rate as the
average over the past two decades. This is the maximum rate at
which outlays should be permitted to grow during the next few
years if steady economic growth is to be maintained.
Budget Trends
$ Billions
$ Billions
I~-.--~----------------~----~-----------,- I~
120
120
100
100
National D.f.n ••
~~--~~~----------~
60
I ....I ••
.
..................
.
, ........ l
'(1:1o"t"""'f""~
. . . . 111 . . 11 . . . . . . . . . .
'-'··~ . . . .
~
................. ,..
..,............."
Other
60
40
20
20
O~~----~----~----~------~
1969
1970
1971
1972
1973
____ ____
~
~O
197.
1975
Estimate
Outlays for human resources programs are projected to increase in 1975 by 7Y2 % over their 1974 level. In contrast, outlays
for national defense are projected to increase by only 512IJo. As
the chart above indicates, outlays for human resources programs
are expected to more than double between 1969 and 1975, while
national defense outlays will increase less than 6IJo in the same
period. These relative changes reflect the shift in national priorities toward peacetime domestic concerns that has been underway
since this Administration took office.
21
These projections demonstrate that we can afford to continue
worthwhile ongoing programs, and to increase spending for the
most important, within the constraints of responsible fiscal policy. We can maintain a strong defense posture and yet permit
high priority domestic programs to grow. To make this possible, however, some lower priority programs will have to be cut
back or eliminated. Our national priorities must be carefully ordered to insure that our total available resources are used most
effectively to meet national objectives.
CONTROLLABILITY OF BUDGET OUTLAYS
[In billions of dollars]
Description
Relatively uncontrollable under present law:
Social insurance trust funds .. ....... .
Interest. . . ; .............. ... ..... .
Other open-ended programs and fixed
costs ......................... . .
Subtotal, open-ended programs
and fixed costs ... ........... .
Outlays from prior-year contracts and
obligations ...... .. .......... .. . .
Relatively controllable outlays ..... . . .
Undistributed intra governmental
transactions and allowance for
contingencies ................ . ... .
Total budget outlays ... .. . ... .
I
1972
actual
1973
estimate
1974
estimate
1975
estimate
61. 7
20.6
71. 7
22. 8
80.4
24. 7
187.6
25.4
37. I
46. 7
47. 5
50.8
119.3
141. 3
152.6
163.8
39.2
81. 2
40.6
75. 8
-7.9
-7.9
-8.4
-8.3
231. 9
249. 8
268. 7
288.0
49.2}
75.2
132.5
Estimated on full-<lmployment basis.
As in past years, outlays in 1975 will increase due to factors
beyond the control of the executive branch. These factors include
growth in the number of people eligible by law for various types
of Federal benefits, and various increases in costs. Increases in
open-ended programs and fixed costs alone are expected to
account for $11 billion (58 %) of the $19 billion total increase
in outlays between 1974 and 1975. This provides a measure of
the acute fiscal problem confronted in the 1974 budget. The
terminations and reductions of existing programs, will reduce
1975 outlays by about $24 billion below the excessive level$312 billion-they would attain in that year if these essential
economies were not made. As a result of these economy measures,
22
outlays classified as relatively controllable will decline by about
$6 billion between 1972 and 1974, from $81.2 billion to $75.2
billion. This decrease affects both defense and nondefense
programs.
The longer range outlook.-If the recommendations presented in this budget are followed, and if this disciplined approach to Federal spending is firmly adhered to in the years
ahead, it will be possible for the Federal Government to live
within its income for the foreseeable future, without resorting to
tax increases. The social security taxable earnings base will be
adjusted automatically under current law as wage levels rise and
benefit payments increase. Increases in income tax rates or enactment of new taxes, however, can be avoided.
Projections of outlays based on the recommendations contained in this budget, and of full-employment receipts based on
current tax law, indicate future budget margins growing from
$2 billion in 1975 to $35 billion in 1978. The margIns
projected for these years are potential Federal surpluses, assuming current and proposed tax legislation, and continuation of
all current and proposed expenditure programs, but no new
Federal initiatives beyond those proposed in the 1974 budget.
The projections also assume that all recommended program
economies are carried out. Thus the projected margin for 1978
is an estimate of the fiscal resources that would be available
under current tax law to cover all new proposals over and above
those presented this year-including tax reduction:;, reductions
in the public debt, and new programs.
As indicated in the table below, built-in increases in ongoing
programs would average about $16 billion a year between
1974 and 1978, if we ignore the impact of recommended program
reductions. The costs of new programs proposed in this budget
are expected to add $1 billion in 1978 for a total unconstrained
1978 outlay level of $352 billion. The outlay impacts of program
terminations and reductions, however, will offset $25 billion of
this amount, so that net outlays projected for 1978, $327 billion,
will be $35 billion less than full-employment revenues in that
year ($362 billion) .
While the proposed program terminations and reductions are
desirable in their own right, since benefits from these programs
no longer justify the added taxes that would be required to pay
for them, fiscal policy considerations make them imperative.
23
All of the recommended economy measures have been weighed
against the only responsible alternative-that of a tax increase. In each case, the benefits to be derived from continuation
of the program at its current level have been judged insufficient
to justify an increase in the current tax burden. It is imperative
that all future proposals for program expansion not budgeted
this year be weighed against the only real alternatives open: tax
increases, or offsetting terminations or reductions in costs of existing programs that are being proposed for continuation.
PROJECTED BUDGET MARGINS
[In billions of current dollars]
Item
1974
1975
1978
Total outlays, unconstrained basis . . . . . ... ... . . . . . .
Savings projected in this budget (-) :
Program reductions and terminations . .. . . . . . . .
Other .. . .. . . . ... . . . . . . .. . . . . .. . .. . .. .. .. . .
Adjustment to full employment basis 1 . . . . .. . . . . .
288
312
352
-17
--2
-1
-22
-2
... . ... .
-25
Total, full employment outlays ....... . .. .. . . . . ... .
Total, full employment receipts . . ... . . . . . .. . . .. . . .
268
268
288
290
327
362
Margin . ... .... .. .. .. .. . . . . .. . . ... . . . .. . . ... . . .
. .. . . . . .
2
35
1 Consists mainly of excess of unemployment Insura nce benefits over the amount payable
at a national unemployment rate of 4 % .
The projected budget margins for 1975-78 are relatively small
and quite precarious. Nevertheless, enormous expenditure demands will inevitably be made upon them. Most of these demands will have to be successfully resisted, · and the stringent
economies and program terminations proposed in the budget will
have to be adopted if budget margins are to be realized.
PROGRAM REDUCTIONS AND TERMINATIONS
A responsive government continually adjusts its activities to
changing national needs. New programs are often required to
meet emerging problems. At the same time, some existing programs prove to be ineffective, become obsolete, outmoded,
achieve their purposes or decline in relative importance. Further,
there is a need for a continuing evaluation of the proper Federal
role in all program areas.
Unless vigorous and determined efforts are made in programs
which should be restructured, reduced, or terminated they continue-and even grow. In so doing, they prevent the most effi24
cient of governments from operating within the limits of sound
fiscal policy.
The 1974 budget incorporates the results of an intensive effort
to identify programs that could be reduced, terminated, or reformed. One major criterion used to identify such programs
was: Would they justify an increase in present tax rates to pay
for their continuation? The 1974 budget proposes reducing or
eliminating programs that do not meet this criterion:
There is no responsible alternative to reductions and terminations. Unchecked spending would result in substantial
full-employment deficits in 1973, 1974, and beyond-and loss of
effective control over Federal spending.
Avenues to outlay reduction.-To minimize as much as possible the need for sharp cuts in ongoing Federal programs, the
first effort was directed to making reductions through such
means as the disposal of additional materials from the Government stockpile, the development of non-Federal financing for
various credit programs (mainly through the sale of loan and
mortgage paper) , and the increase of those Federal receipts that
are offset against each agency's outlays.
However, most of these budget savings were nonrecurring and
did not slow the expenditure impact in future years of the 1973
program momentum. Therefore, individual Federal programs
had to be examined and evaluated. Ineffective activities and
those that had already served their purposes had to be terminated, marginal activities reduced or slowed and excessively
costly ones restructured. The resulting reconciliation of 1973 outlays from the unconstrained $261 billion level estimated last fall
to the current estimate of under $250 billion is shown here:
B illions
Unconstrained estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
Savings from:
Additional stockpile disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $-0.4
Additional non-Federal financing for Federal credit programs. . . .
-1. I
Deferral of var;,ous payments:
General Revenue Sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- I. 5
Other ..... . . . .......... . ............. . ........ .. ... . ...
-0. 5
Additional offshore oil receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-1. 0
Increases in user charges and other actions . . . . . . . . . . . . . . . . . . . .
- O. 2
Program reductions and terminations ....... . . . ..... . ... . . .. . 1 -6. 5
$261. 0
Total savings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
- 11. 2
Current estimate .. ... ... . . .. .... . ..... . ........... . ............ .. .. . .. . 249.8
1 Includes $2.3 billion of savings accomplisbed by enactment of Administration-supported limitation on
open-end social services grant program.
5 10- 400 0 - 73 - 4
25
The actions to reduce the 1973 budget, when combined with
1974 budget proposals, will reduce Federal outlays by $17 billion in 1974 and by $22 billion in 1975. More broadly, if the
Administration had accepted 'the $261 billion level for 1973 and
had allowed this program momentum to proceed on course, then
the unconstrained total of outlays would have been $288 billion
in 1974 and about $312 billion in 1975. Totals of this size are
simply inconsistent with the effective management or control of
the budget.
THE fEDERAL DEBT
The Federal debt is largely an internal debt, owed by the Nation primarily to our own citizens. In a very real sense, then, we
owe the debt to ourselves .
.
Ownership of the Federal Debt
SBiliions
~-.--------------------------------------~
c::::::::J Federal Go-.t....at Accoullts
IkwilM Debt held by the Public
500
300
100
o
1954
1959
1964
1969
RNa/V.....
The chart above shows gross Federal debt separately held by
Federal Government accounts and debt held by the public. The
debt held by the public is further separated between that held
by the Federal Reserve System and that held by other sectors,
which comprise commercial banks, foreign central banks, other
financial institutions, and individuals. Between 1964 and 1974,
26
gross Federal debt is projected to increase by $189 billion, or
60%. Debt held by the public other than the Federal Reserve, on
the other hand, is projected to increase by $71 billion, or 32%.
The concept of debt held by the public other than the Federal
Reserve is important for budget purposes, because only this debt
has a significant effect on the unified budget surplus or deficit.
Interest on debt held by Government accounts has offsetting entries in other parts of the budget, and most of the interest on
securities held by the Federal Reserve System is returned to
Treasury and shows up as receipts. A more detailed discussion
of interest on the public debt can be found in the functional discussion in Part 4.
27
PART 3
THE BUDGET PROGRAM BY FUNCTION
The outlays of the Federal Government are grouped into 14 functional categories according to the
general purpose served, regardless
of the administering agency. This
section describes the trends and administrative initiatives in the major
programs under each of these
functions.
In addition to the outlays estimated in the functional categories,
the budget includes $1.8 billion for
pay raises for civilian agencies and
unforseen contingencies and for programs on which detailed proposals
have not yet been completelyformulated. The national defense total
includes a similar allowance of $2.7
billion for military and civilian pay
raises in the Defense Department.
The size and composition of
budget outlays have Changed substantially over the last three decades
as shown in the table below.
1970-74.-Reform of Federal
programs and a continued shift in
budget priorities mark these years.
Total outlays grew at an average
annual rate of 8% during this period, compared to an average rate
of 10% during the previous 4-year
period. Human resources outlays are
estimated to grow at an average annual rate of 15% from 1970 to 1974,
considerably faster than other
spending. As a result, human resource programs are estimated to
rise to 47% of the 1974 budget. Defense will drop to an estimated 30%
of total spending in 1974.
CHANGING COMPOSITION OF THE BUDGET
IDoliars in billionsl
Percent of total budget
Function
1945
1950
1955
1960
1965
Dutlals
1970
National defense ••••. • ••...•.•.•.•.••• ••.••
International affairs and finance ••••••.• .•.•.
Space research and technology ••• ••• • .•.•.••.
85.7
3. 5
30. 4
11.1
.1
58.7
3. 0
.1
49.8
3.3
.4
41. 9
3. 7
4.3
40. 8
1.8
1.9
Physical resources .••••• ••...•••.•.•.•.•..•
6. 2
13. 7
8. 3
10. 9
12. 3
10.7
Agriculture and rural development. •••.•.• •
Natural resources and environment. •• • •• •••
Commerce and transportation •••• •• • . • .•.•.
Community development and housing ••••..
1.7
5. 9
.7
1.6
3. 6
1.1
5.2
1.1
4.1
.3
4. 4
- .2
6. 5
2. 9
3. 9
.6
6.2
.2
1.7
3.2
1.3
4.7
1.5
Human resources •••• •..• . •. ••.. •••...•••.•
2.9
32. 5
21.1
27.6
29. 9
37. 0
Education and manpower. ••••• .••••••••••
Health ...••• • ...•. • .•....•.•••••.•••••••
I ncome security •••• .. •.••• .• •.... •.• .••. •
Veterans benefits and services.. ••••.•.•.•.
.2
.2
1.2
1.2
.5
.6
10. 9
20.5
.8
.4
13.3
6.6
1.1
.8
19.7
5. 9
1.9
1.5
21.7
4.8
3. 7
6.6
22.3
4.4
General government. .•.•. • .•.•...•. • .•.•.•.
I nteres!.. •••••.•.••.• •• •..•..••.•...••. . .•
General Revenue Sharing ••• •.•• • • . .••••••• • .
Allowances • • . •.•.... • . • ..••...•. • .•.•.•.••
Undistributed deductions •• ..••• •.•.•..•••. • •
.8
3.7
2.7
13.3
8. 8
1.7
1.4
9.0
1.9
8.7
9.3
-2. 8
-3.9
-1.8
-2.5
-2.6
·:":3:2
TotaL •• •..•••. ••..•.•.•. •...•• •• •••
100.0
100.0
100.0
100.0
100. 0
100.0
-
-
1.7
197
1974
30.2
1. 4
1.2
=
9. 6
--
2. 1
1.4
4.3
1.8
$81.1
3. 8
3.1
=
25. 7
--5.6
3.7
11.6
4.9
=
=
46.7
125.5
----3.8
8.1
30.5
4. 4
10.1
21. 7
82.0
11.7
9.2
2.2
.6
-3.4
24.7
6. 0
1.8
-9.1
100.0
268.7
=
=
2.2
6. 0
-----
-Less than 0.05 %.
29
NATIONAL DEFENSE
National Defense Outlays
--------~----~----~~~~-
SBiDl_
SlIIlhDIII
9O,-------------------~--------------------------_r 90
80
70
Procurement, and Other
60
30
20
/
10
_ _ _. . . . . ._ _ _ 0
1965
1966 .
1967
1968
1969
1970
1971
1972
1973
1974
F'-IY_
Note.-The amounts above do not reflect offsetting receipts deducted by function. Detailed outlay
numbers for the function are shown in part 5. table 3.
Our national security strategy is
designed to moved us toward the
goal of a generation of peace
through strength, partnership with
our allies, and the willingness to
negotiate.
We have improved our relations
with the Soviet Union and the People's Republic of China. These developments and the increased effectiveness of modern weapon systems
have enabled us to reduce our military forces without jeopardizing our
strength or abandoning our commitments. Further force adjustment,
however, depends upon achieving
effective arms limitation agreements.
Program Highlights
• Provided a sufficient nuclear deterrent while seeking permanent
30
mutual limitations in strategic
offensive forces.
• Initiated modernization of the
general purpose forces.
• Conducted a vigorous research
and development program.
Budget Proposals
• Maintain military strength as a
foundation for negotiations.
• Increase total national defense
outlays from $76.4 billion in 1973
to $81.1 billion in 1974 and $85.5
billion in 1975 primarily due to
pay and price increases.
• Offset selected increases necessary
to maintain the strength and
readiness of our combat forces
by savings and reductions.
• Achieve an All-Volunteer Force.
Increases required in 1974 to
maintain our combat forces have
been offset by savings and reductions. Total outlays increase primarily as a result of an additional $4.1
billion required for increases in
military and civilian pay, pay and
benefit raises sufficient to achieve an
All-Volunteer Force, normal price
increases, and higher military retirement annuities. National defense
outlays are expected to increase in
1975 also primarily due to pay and
price increases.
Department of Defense-Military
The DOD budget continues to
provide the strong defense essential
for our security and for the support
of negotiations.
The surge in manpower costs experienced over the past few years is
being curbed by holding pay and
benefit increases to much lower
levels than those of recent years, by
further reductions in personnel, and
by other means. Through these actions defense military and civilian
manpower strengths will be budgeted at the lowest level since 1950.
Strategic forces.-Our nuclear
forces must be sufficient to deter
nuclear attack against the United
States and our allies. In accord
with the terms of the SALT treaty,
we have reduced the planned deployment of our ABM system. The
SALT talks also resulted in an interim agreement to limit offensive
nuclear forces and have led to further negotiations aimed at achieving
an equitable and effective treaty on
offensive force limitations. However,
until such a treaty is negotiated, we
will maintain our current strength
to insure the viability of our deterrent and to provide the Soviet
Union an incentive for meaningful
negotiations. We will: ( 1) continue development of the Trident
sea-based ballistic missile system;
(2) further develop the B-1 advanced manned strategic bomber;
(3) continue the conversion of
ballistic missile forces to the
Minuteman III and Poseidon systems; and (4) begin development
of a strategic submarine-launched
cruise missile.
General purpose Jorces.-The
improvement in our relations with
the Warsaw Pact countries and the
People's Republic of China is encouraging evidence that further
progress toward a relaxation of international tension may be possible. Diplomatic efforts to achieve
balanced force reductions are underway. But, until mutual reductions are achieved, we will continue
to maintain the strong and ready
general purpose forces needed to
provide, in conjunction with the forces of our allies, a realistic and
credible deterrent to aggression at
any level.
Our land forces will be modernized and maintained at a high state
of readiness. Armored capability
will be increased and field Army and
Marine Corps defenses against low
and medium altitude supersonic
aircraft will be improved.
The United States relies on
naval forces to preserve our right
to use the seas. We plan to support a
more ready and capable, though
smaller, fleet through the retirement
or modernization of existing ships
and a vigorous shipbuilding program. This budget provides for
procurement of five nuclear-powered submarines, construction of a
nuclear-powered aircraft carrier,
and the modernization of three
guided-missile frigates.
31
Aircraft development and procurement provided for in this budget will assure continued air superiority for the tactical air forces. For
the Air Force, additional quantities
of F-15 fighters will be purchased
and development will continue on
the A-X close air-support system.
The Navy will initiate deployment
of its new fleet fighter, the F-14.
Modernization of the Marine Air
Wings will be accomplished with
procurement of the F-4 Phantom,
A-4 aircraft, and vertical takeoff
and landing aircraft.
Research and development.-A
vigorous research and development
program is essential K> maintain
force effectiveness. At a time when
high manpower costs and the transition to an All-Volunteer Force
place greater emphasis on effective
manpower usage, investment in military technology is necessary to assure increasing individual effectiveness.
manufacturing nuclear weapons
and improving nuclear power reactors for propulsion of naval vessels. AEC also develops designs of
improved nuclear powerplants and
enriches nuclear fuels for commercial powerplants. It pursues other
peaceful applications of atomic
energy and conducts basic and applied research in the physical and
biomedical sciences.
The 1974 outlays of $2.4 billion
reflect primarily increases in military
programs, accelerated development
of the "fast breeder" power reactor
concept, and expansion of AEC's
capability to enrich nuclear powerplant fuels. These program increases
will be partly offset by an increase
in retained revenues.
National Defense
Fiscal year
Total
Percent of
outlays
total budget
(In millions)
outlays
Military Assistance
Military assistance and credit
sales programs help other countries provide for their own defensea fundamental requirement for the
success of the Nixon doctrine. Outlays will be $600 million in 1973 and
$800 million in 1974.
Atomic Energy
The Atomic Energy Commission
is responsible for developing and
32
1974 estimate .. . .
1973 estimate . .. .
1972 ........... .
1971 ........... .
1970 ......... . . .
1969 ........... .
1968 .... .. ..... .
1967 ........... .
1966 . . ...... . . . .
1965 . ... .. . .... .
1964 ........... .
1963 ........... .
$81,074
76,435
78,336
77,661
80,295
81,232
80,517
70,081
56, 785
49,578
53,591
52,257
30. 2%
30.6
33. 8
36. 7
40.8
44.0
45.0
44. 3
42.2
41. 9
45.2
46.9
INTERNAnONAL AFFAIRS AND FINANCE
SBililons
6
SBlliions
6
5
5
o
0
1964
1965
1966
1961
1968
1969
1910
1911
1912
Fiscal Years
1913
1974
Estimate
Note.-The amounts above do not reflect offsetting receipts deducted by {unction. Detailed outlay
numbers for the function are shown in part 5. table 3.
The United States is moving to
end the postwar era of confrontation and build a durable structure
of peace in which all nations will
share both burdens and benefits.
International programs and expenditures for 1974 thus reflect not only
our own steadfastness of purpose,
but also the growing involvement
of our partners in peace. Outlays
will be $3.8 billion in 1974 and
are also expected to be $3.8 billion
in 1975.
Program Highlights
• Concluded initial strategic arms
limi ta tionagreements.
• Began progress toward a new international monetary system.
• Streamlined . administration of
foreign economic assistance.
• Expanded international narcotics
control programs.
• Provided relief assistance to Bangladesh and the Philippines.
Budget Proposals
• Continue security assistance to
friendly nations.
• Concentrate bilateral economic
aid on critical development
problems.
• Share in funding international
development institutions.
• Contribute to a new United Nations Environment Fund.
• Expand cultural exchange programs.
33
http://fraser.stlouisfed.org/
5 10-400 0 - 73 Federal Reserve Bank of St. Louis
5
Economic and
Financial Assistance
International security assistance.-Security assistance actively
encourages friendly countries to
strengthen their own defense. The
Secretary of State determines security assistance policy and coordinates the military and supporting
assistance components.
Military assistance, classified in
the national defense function, includes grants for training and
equipment as well as credit sales.
Recent improvements in the economies of grant recipients will allow
increased emphasis on credit sales
in 1974.
S ecurity supporting assistance
provides financial and technical aid
to promote economic and political
stability abroad. Outlays are estimated at $708 million in 1974.
Multilateral development assistance.-Through contributions to
international development institutions, the United States shares
equitably with other industrialized
countries the responsibility for assisting developing nations. Outlays are
estimated at $682 million in 1974.
Bilateral development assistance.-The Agency for International Development administers
bilateral development loans and
technical assistance. Loans support
the development efforts of lowerincome countries by financing specific projects and general import
programs. Outlays are estimated to
be $871 million in 1974.
The Overseas Private Investment
Corporation facilitates U .S. investments in developing countries.
The President's foreign assistance
contingency fund.- This fund is
34
used to meet unforeseen circumstances requiring security, development, or humanitarian assistance.
Food for Peace
The United States donates and
sells agricultural commodities on favorable terms to friendly nations to
combat hunger and malnutrition,
promote economic growth in developing nations, and expand export
markets for U.S. commodities. Outlays will be $766 million in 1974.
Foreign Information and
Exchange Activities
Important mutual benefits flow
from widened contacts among the
people of the world. Cultural and
educational exchange activities of
the State Department will be expanded. Activities of the U.S. Information Agency, Radio Free Europe
and Radio Liberty will continue at
current levels.
Conduct of Foreign Affairs
Overseas operating costs of the
State Department and assessed contributions to international organizations will increase.
Internati onal Affairs and Finance
F iscal year
1974 estimate . . . .
1973 estimate . . . .
1972 ... . ........ .
1971. . . . . . . .. . . .
1970 .. .. .. . . . .. .
1969 ... . ....... .
1968 . .. . . .. . ... .
1967 . . . .. ... . . .
1966 ...... .. . .. .
1965 ...... .. . .. .
1964 .... . . . .. . . .
1963 .... . . . .. . . .
Total
outlays
(In millions)
$3, 811
3,341
3, 726
3,095
3, 570
3, 785
4,619
4, 547
4,490
4, 340
4,117
4, 115
P ercent of
total budget
outlays
1.4%
1.3
1.6
1.5
1.8
2. 1
2.6
2.9
3. 3
3. 7
3. 5
3. 7
SPACE RESEARCH AND TECHNOLOGY
Space Research and Technology Outlays
SBillio",
SBillio",
6
6
3
~~_.o
1965
1966
1967
1968
AKOI Veon
1969
1970
1971
1972
1973
1974
Estimote
Note.-The amounts above do not reflect offsetting receipts deducted by function. Detailed outlay
numbers for the function are shown in part 5. table 3.
The 1974 budget provides for a
balanced space program with steady
progress in science, applications,
and aeronautics. Outlays will be
$3.1 billion in 1974 and are expected to be $3.2 billion in 1975.
Program Highlights
• Completed Apollo lunar landings.
Budget Proposals
• Develop manned reusable space
shuttle transportation system.
• Conduct manned docking mission with Soviet spacecraft.
Manned space flight.- The last
planned manned visit to the moon
was completed in December 1972.
In 1973, Skyla:b, an experimental
space station, will obtain data about
man in space, solar astronomy, and
earth resources. In 1975, the United
States and the U.S.S.R. will con
duct a joint mission with manned
spacecraft. By about 1980, the space
shuttle will begin to reduce the cost
of operations in earth orbit.
Space science and applications.Development will continue on spacecraft for the unmanned exploration of the planets. A new weather satellite will also be developed.
Space and aeronautical technology.-Technology will be advanced to provide improved capabilities for future space systems.
Aeronautical technology will emphasize reductions in aircraft noise
and exhaust pollution and improvements in performance. Advanced
supersonic transport research will
be continued. The space program as
a percentage of total budget outlays
has declined from 4.4% in 1966 to
1.2% in 1974.
35
AGRICULTURE AND RURAL DEVELOPMENT
SBllh_
S8IIII_
8,-----------------~------------------------__r8
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
Note.-The amounts above do not rellect offsetting receipts deducted by function. Detailed outlay
numbers for the function are shown in part 5. table 3.
Agriculture and rural development programs improve income opportunities and living conditions for
farmers and rural residents, help
assure reasonably priced and wholesome food supplies for the consumer, and provide food assistance to
the poor. Outlays for these programs will be $5.6 billion in 1974
and are expected to be $5.8 billion
in 1975. Excluding the impact of
changes in asset sales, outlays in
1974 will be $1.1 billion less than in
1973.
Program Highlights
• Maintained high levels of {arm
income through increased emphasis on market opportunities and
exports.
• Started implementation of the
Rural Development Act.
36
Budget Proposals
• Strengthen rural development
efforts through greater private
participation and State and local
control over programs.
• Reduce outlays for commodity
price support, in line with rising
farm marketing incomes.
• Shift rural electrification loan financing from subsidized direct
loans at 2% interest to insured
loans.
• Reduce unnecessary Federal subsidization of normal farm conservation practices.
• Expand meat and poultry inspection.
Farm income stabilization.-A
primary objective of agricultural
programs is to improve private sector income opportunities for Amer-
ican farmers and reduce dependence on Government subsidies.
Under the Agricultural Act of
1970, farmers have greater freedom
to utilize their land to best advantage, and farm income and farm exports are at record levels. In 1973, a
larger part of the total productive
capacity of American agriculture
will be used to meet foreign and domestic needs. A third of the land
idle in 1972 will be returned to production. Increased incomes from
sales of commodities in the private
marketplace will reduce farmers'
dependence on Government subsidies. As a result, total outlays for
price support and related programs
will decline by $694 million in 1974,
to $2.7 billion.
Agricultural programs continue
to contribute to the elimination of
hunger and malnutrition through
the donation of foods to needy families, institutions and schools. Donations are expected to decline somewhat as more areas convert to the
food stamp program.
Rural housing and public facilities.-The Rural Development Act
of 1972 authorizes a wide range of
new Federal programs for the development of rural communities.
These programs are being administered by the Department of Agriculture and will strengthen State
and local control over investment
decisions.
The unsubsidized portions of the
rural housing program will be continued in 1974. However, the subsidized housing programs of the Department of Agriculture have been
temporarily suspended in order to
permit consideration of more effective approaches to housing problems.
Loans for electric and telephone
service 'in rural areas will be shifted
from direct loans to guaranteed or
insured loans, beginning in 1973, under the terms of the Rural Development Act of 1972. This will make
possible an expanded loan program
of about $760 million in both 1973
and 1974 at reduced Federal cost.
In addition, lending by the
telephone bank and the private
electric bank is expected to increase by about $110 million over
the 1973 level.
Agricultural land and water resources.-Programs to encourage
conservation practices on private
land originated many years ago and
have generally achieved their objectives. Therefore, subsidies under
the rural environmental assistance
program are being terminated.
Research and other agricultural
services.-Total outlays for reresearch and extension will decrease
by $14 million to $471 million in
1974 as research is redirected toward meeting the most pressing
problems. The Federal meat and
poultry inspection program will be
expanded.
Agriculture and Rural Development
Fiscal year
1974 estimate... .
1973 estimate... .
1972 ... . ... . . .. .
1971. . .. . . . . ... .
1970 . ........ .. .
1969 .... .. ... . . .
1968 . . . . . .... .. .
1967 . . . . . ...... .
1966 .. . .... . .. . .
1965 . . .. . .. .. . . .
1964 ........ ... .
1963 . ... .. ..... .
Total
Percent of
outlays
total budget
(in millions)
outlays
$5, 572
6,064
7,063
5;096
6,201
6,218
5,940
4,373
3,676
4,805
5, 184
5, 138
2.1%
2.4
3.0
2.4
3.2
3.4
3. 3
2.8
2. 7
4. 1
4.4
4.6
37
NATURAL RESOURCES AND ENVIRONMENT
Natural Resources and Environment Outlays
SBiliion.
7~----------------------------------------------~
6
5
2
2
o
o
1964
1965
1966
1967
1968
Fiscal Y.an
1969
1970
1971
1972
1973
1974
Estimate
Note.-The amounts above do not re/lect offsetting receipts deducted by function. Detailed outlay
numbers for the functio n are shown in part 5, table 3.
Natural resources and environment programs serve both to protect
and enhance the quality of the environment and to further the conservation and wise use of resources .
Gross outlays will rise to $6.9 billion in 1974 and are expected to be
$8.4 billion in 1975. After deducting offsetting receipts, net outlays in
1974 will be $3.7 billion.
Program Highlights
• Provided $8.9 billion in 1972 and
1973 for grants for construction
of sewage treatment facilities.
• Assisted State and local governments in acquiring 134,000 acres
of recreation lands in 1973.
Budget Proposals
• Increase outlays for municipal
sewage treatment facilities 120 %.
38
• Increase by $34 million outlays for
grants to State and local governments for parks.
• Purchase about 346,000 acres
of lands for Federal parks and
recreation areas in 1973 and
1974.
• Start construction of facilities for
the American Revolution Bicentennial Celebration.
• Accelerate research on obtaining
clean energy from coal.
Pollution control and abatement.- These programs involve air
and water pollution control and
other environmental concerns, including pesticides, radiation, and
noise. Outlays for all pollution control and abatement programs will
increase by $980 million to a level
of $2.1 billion in 1974. Allotments
to the States from contract authority for construction of waste
treatment facilities total $5 billion.
Outlays for these facilities will total
$727 million in 1973 and $1.6 billion in 1974. Additional outlays of
$317 million for abating pollution
at Federal facilities are classified
under other budget functions.
Recreational resources.-Recreation programs involve purchase,
development, and operation of nationally significant natural areas
and historic sites, and grants to State
and local governments for purchase
and development of park and recreation areas. Outlays for these programs will increase by $60 million
over the 1973 level to $701 million
in 1974. Outlays for grants to State
and local governments will increase
by $34 million in 1974, to a level of
$160 million. Outlays for Federal
purchases of park and recreation
lands will decline from $104 million
in 1973 to $80 million in 1974.
Water resources and power.Water resources projects provide irrigation, water supplies, electric
power, and recreation. They also
help control floods, erosion and
water pollution, and aid navigMion.
Outlays for construction projects
will be $1.3 billion in 1974 compared to $1.5 billion in 1973 and
$1.3 billion in 1972. Construction
on projects scheduled for completion in 1974 will continue at optimal
rates. Delays are expected on some
projects due to opposition on environmental grounds. Outlays for
power programs will decrease from
$598 million in 1973 to $518 million
in 1974. Total outlays for water resources and power programs will
decline by $269 million to $2.8 billion in 1974.
Land management.-These programs provide for use and protection of public lands and national
forests. Outlays will decline by $78
million in 1974 due to unusually
high fire fighting costs in 1973 and
a reduction in Federal road construction. Funds are provided to
implement proposed legislation on
land use control.
Mineral re,S'Ources.-Mineral resources programs include research
on conservation and development
of minerals and fuels and research
in metallurgy and mining. Outlays
for research on producing lowpollution energy from coal and on
magnetohydrodynamic generation
of electricity will increase substantially, as will total outlays for energy
research and development.
Other natural resources programs.-These programs include
water resources investigations, geological and mineral resource surveys,
and topographic mapping. The
budget provides funds for evaluation of the experimental earth resources satellite, earthquake prediction and control efforts, and investigation of geothermal resources.
Natural "Resources and Environment
Fiscal year
1974 estimate ... .
1973 estimate . .. .
1972 ........ ... .
1971. .. ..... .. . .
1970 .... . .... .. .
1969 ...... .. ... .
1968 .. . ..... . .. .
1967 ...... .. ... .
1966 . .. .... ... . .
1965 . .... ... . .. .
1964 ........... .
1963 ... .. ..... . .
Total
outlays
(in millions)
$3,663
876
3,761
2,716
2,568
2, 169
1,722
1,878
2,036
2,056
1,966
1,498
Percent of
total budget
outlays
1.4%
.4
1.6
1.3
1.3
1.2
1.0
1.2
1.5
1.7
1.7
1.3
39
COMMERCE AND TRANSPORTATION
Commerce and Transportation Outlays
S8IIII_
SBllho..
14,---------------------------------------------------.14
1965
1966
1967
1968
1969
Fiscal Yean
1970
1971
1972
1973
1974
Estimate
Note.-The amounts above do not reBect offsetting receipts deducted by function. Detailed outlay
numbers for the function are shown jn part 5, table 3.
Program Highlights
• Expanded the role of smaIl businesses and minority businessmen
in the Nation's economy.
• Revitalized rail passenger service
through Amtrak.
Budget Proposals
• Propose urban transportation legislation to increase State and
local flexibility.
• Continue rail passenger service
beyond the experimental period
ending June 30, 1973.
• Increase funds for weather prediction and warning programs.
Outlays for commerce and transportation will be $11.6 billion in
1974 and are expected to be $12.4
billion in 1975.
40
Ground transportation.--A major Administration proposal will be
submitted to provide State and local
governments with needed flexibility
in making and implementing local
transportation decisions. The present system of categorical highway
grants restricts outlays according to
source, as in the case of the Highway
trust fund . This proposal will ensure that cities and States can make
capital investments in highways, bus,
or rail rapid transit systems without
the present Federal restrictions.
To support this legislation, the Administration is proposing 1974 outlays of about $650 mi1lion for urban
highways and $494 million for urban mass transit programs. Outlays
for other Federal-aid highway
grants, primarily for the Interstate
System, will be $3.9 billion in 1974.
Revitalization of rail passenger
service will continue. Amtrak's operating charter will be extended beyond June 1973 and a new high
speed improved passenger train will
be demonstrated in 1975.
Air transportation.-The Administration will propose new legislative and administrative user
charges, so that the costs of the national aviation system are borne by
its direct beneficiaries. These charges
will cover the increasing costs of an
enlarged and safer system without
sacrificing fiscal responsibility. An
improved and more automated air
traffic control system will be fully
operational in 1974.
Water transportation.-The Administration will continue the merchant ship construction subsidy at
the current overall level. Emphasis
will be placed on energy ships, including liquid natural gas carriers
and large tankers.
The Coast Guard will concentrate
in 1974 on improved safety for mariners. Vessel traffic systems will be
established in New York and New
Orleans along with a radar system
for Puget Sound. New technology
permits the elimination of the international ocean station vessel program at an annual savings of
approximately $25 million.
Postal Service.- The Postal Reorganization Act of 1970 created the
Postal Service as an independent
agency within the executive
branch. Only the Federal payment
now appears in the budget. This
subsidy covers public service costs,
reductions in revenue associated
with free and reduced-rate mail,
and transition costs resulting from
reorganization. The 1974 subsidy of
$1.4 billion is $172 million less than
authorized in expectation of full
rather than subsidized rates for
regular-rate third-class mail.
Advancement of business.-Outlays in this area will significantly
decrease in 1974 because CYf smaller
outlays for disaster relief. Increased
financial and management assistance by the Small Business Administration and the Department of
Commerce will help expand the role
of small businesses and minority
businessmen in the Nation's economy. Additional funding for the National Oceanic and Atmospheric
Administration (NOAA) will permit improved weather prediction.
A rea and regional development.-Programs of the Economic
Development Administration are
being replaced with better integrated and less costly programs for
stimulating rural development and
encouraging private investment in
economic development. Funding
for the regional planning commissions will be shifte<\. from the Department of Commerce to the Department of Housing and Urban
Development, thus consolidating
all major programs of planning and
management assistance to States
and regions.
Commerce and Transportation
Fiscal year
1974 estimate ... .
1973 estimate . .. .
1972 ....... .. .. .
1971. ..... ..... .
1970 . ...... . .. . .
1969 . . . ........ .
1968 .... ...... . .
1967 . ... .. .. ... .
1966 . . .. .. ... . . .
1965 . .. .... . . . . .
1964 .. .. ... . ... .
1963 . .......... .
Total
Percent of
outlays
total budget
(In millions)
outlays
$11,580
12,543
11,201
11,310
9,310
7,921
8,094
7,594
7,171
7,399
6,511
5, 765
4.3%
5.0
4. 8
5. 3
4. 7
4. 3
4.5
4. 8
5. 3
6.2
5.5
5.2
41
- COMMUNITY DEVELOPMENT AND HOUSING
Community Development and Housing Outlays
~--~------------------~
SBlIIioM
SBilIIoM
6~-------------------------------------------,- 6
5
3
t
o
1965
Fical V_
1966
1967
1968
1969
1970
1971
197t
1973
1974
EatIooote
Note.-The amounts above do not reflect offsetting receipts deducted by function. Detailed outlay
numbers for the function are shown in part 5. table 3.
The objectives of the Administration's policies for community development and housing are to: ( 1 )
insure that the private market is able
to meet the Nation's housing needs;
(2) help State and local governments solve their own development
problems; and (3) focus the Federal role on those activities it can do
more effectively than others.
Program Highlights
• Provided the economic and institutional climate needed for record
housing production levels.
• Focused Federal support on programs to strengthen State and
local government capabilities.
• Provided support for over 2.5 million subsidized housing units.
42
Budget Proposals
• Resubmit legislation for: (a)
Planning and management assistance to States and local governments ; (b ) major flood insurance
amendments; and (c) urban
community development revenue
sharing, to be effective July 1,
1974.
• Halt new project approvals under seven outmoded urban development programs.
• Temporarily suspend new commitments under four ineffective
housing programs pending a review of program deficiencies.
Budget outlays in 1974 for community development and housing
will total $4.9 billion, an increase
of $1.0 billion over outlays in
1973. Most of these outlays result
from commitments made in prior
years; but commitment reductions
will substantially reduce outlays
over time. Outlays for 1975 are estimated at $5.4 billion.
Maintenance of the housing
mortgage market.-A stable mortgage market is a major goal of
fiscal and monetary policies. The
Home Loan Bank system, the Home
Loan Mortgage Corporation, and
the Federal National Mortgage Association continue as major supporting mechanisms for housing finance.
Low - and moderate - income
housing aids.- The Federal Government has, to date, committed itself to long-term housing assistance
payments on behalf of over 2.5 million families at an estimated cost of
between $57 and $82 billion, as well
as additional sums for various tax
subsidies, over the life of the projects. The results of these programs
have not justified their high cost.
The Administration is evaluating
alternative means of enabling families to afford adequate housing, and
will: (a ) continue efforts to bring
down the cost of housing through
research and development of improved building techniques; (b) enforce laws against discrimination
which prevent families from obtaining decent housing; and (c) continue insuring low down payment
mortgages.
While commitments already made
under the low-rent public housing,
rent supplement, homeownership
assistance, and rental housing assistance programs will be honored,
further commitments have been
halted pending review of program
deficiencies.
Community planning, management, and development.-In 1974,
HUD will not approve any new
projects wlder seven programs.
Instead, support will center on
strengthening the capacity of communities to meet their own development needs. Legislation for urban
community development revenue
sharing will be resubmitted to start
July 1, 1974, with first-year funding
of $2.3 billion. Planning and management assistance legislation to
help State and local , governments
strengthen managerial capabilities
will be resubmitted, and 1974 commitments of $110 million will be
made.
In 1974, certain programs now
funded through the Office of Economic Opportunity will be assumed
by other agencies. In addition, legislation will be submitted to establish a Legal Services Corporation,
effective July 1, 1973. No 1974
funds are requested for OEO, and
new funding for Community Action
Agencies will be at the discretion of
local communities.
In 1974, domestic volunteer
programs administered by Action
will continue at their current levels
using an estimated 5,000 full-time
and 70,600 part-time volunteers.
Community Development and Housing
Fiscal year
1974 estimate . . . .
1973 estimate ... .
1972 . . . ...... .. .
1971. . . . ...... . .
1970 ........... .
1969 ........ .. . .
1968 . . ........ . .
1967 . .. ....... . .
1966 . ... . . . .... .
1965 ........... .
1964 . .. ....... . .
1963 ........... .
Total
outlays
(in milllons)
$4,931
3,957
4,282
3,357
2,965
1, 961
4, 076
2,616
2, 644
288
-185
-880
Percent of
total budget
outlays
1.8%
1.6
1.8
1.6
1.5
1. 1
2. 3
1.7
2.0
0.2
43
EDUCATION AND MANPOWER
Education and Manpower Outlays
S8IIIIo.
SIIIIII_
II-r------~--------~~------------------------_._It
1965
1966
1967
1968
1969
1970
1971
1972
1973
Note.-The amounts above do not reflect offsetting receipts deducted by function. Detailed outlay
numbers for the function are shown in part 5. table 3.
Education, general science, and
manpower programs increase the
Nation's general scientific knowledge, improve the educational process, and help people acquire skills
and find jobs. Outlays will be $10.1
billion in 1974, and $10.2 billion
by 1975.
Program Highlights
• Established new Student Loan
Marketing Association to expand
the guaranteed student loan program.
• Increased
welfare
recipients
placed in jobs under revised work
incentive program from 150,000
in 1973 to 165,000 in 1974.
• Increased Federal occupational
safety and health inspections from
55,000 in 1973 to 80,000 in 1974.
44
Budget Proposals
• Implement education and manpower revenue sharing to enable State and local governments
to decide uses of Federal funds.
• Provide $948 million in basic education opportunity grants to more
than 1,500,000 needy post-secondary students.
• Strengthen basic and problemrelated research .
• Expand the role of the new National Institute of Education.
• Increase enforcement of occupational safety and health laws.
• Discontinue emergency employment assistance.
Elementary, secondary and
vocational education.-The Administration's
education
revenue
sharing proposal will allocate nearly
$2 billion to State and local government officials who will decide
how to spend the funds for education programs. New legislation will
be proposed to aid parents of students enrolled in nonpublic elementary and secondary schools.
Awards for emergency school assistance will be made to assist school
districts that are desegregating,
pending enactment of legislation to
be proposed to enhance equal educational opportunities.
Higher education.-The Administration accords the greatest funding priority in higher education to
achieving equal access to post-secondary education. Proposed funding is increased and other on-going
programs are reordered so that
every eligible student needing financial aid will receive his full basic opportunity grant of up to $1,400 by
the 1974--75 school year.
Other education aids.-The new
National Institute of Education will
fund and manage research and development efforts designed to
achieve national educational goals.
The National Foundation for the
Arts and the Humanities will expand preparation for the American
Revolution Bicentennial.
General science.-The Administration's initiatives to strengthen
basic and problem-related research
in the National Science Foundation
will be continued in 1974. Emphasis
will be given to research related to
national needs in areas such as environment, natural hazards, and
energy.
Manpower training and employment services.-Outlays for manpower training and employment
services will be $3.3 billion in
1974. Using existing law, manpower
revenue sharing will be instituted
administratively, giving greater authority to States and local governments to design and execute manpower programs. The emergency
employment assistance program,
under which States and localities
have hired the unemployed to provide needed public services, will be
discontinued in 1974, consistent
with the increase in new jobs in the
private sector·
The work incentive program will
be expanded to help more welfare
recipients prepare for and find work.
In 1974, about 165,000 welfare
recipients will be placed in jobs and
an average of 132,000 will be in
training programs.
Other manpower aids.-Outlays
for occupational safety and health
programs will increase as more
workplaces are inspected and grants
are made to States to -reduce workrelated accidents and disease. The
Equal Employment Opportunity
Commission and the Office of Federal Contract Compliance will expand efforts to assure all an equal
chance for employment.
Education and Manpower
Fiscal year
Total
Percent of
outlays
total budget
m!1llons)
outlays
(In
1974 estimate ... .
1973 estimate .. . .
1972 .... .. .... . .
1971 .... . ... . .. .
1970 .... .... . . . .
1969 ....... .. .. .
1968 . .. .. .. . ... .
1967 ..... . ... .. .
1966 ... .... . ... .
1965 .. . . .... . .. .
1964 . .... .. . . . . .
1963 ......... . . .
$10, 110
10,500
9,751
8, 226
7,289
6,525
6,739
5,853
4,258
2,284
1,751
1,502
3.8%
4.2
4. 2
3.9
3. 7
3. 5
3. 8
3. 7
3.2
1.9
1.5
1.3
45
HEALTH
Health Outlays
20
16
16
Prevention and Control of Health
12
12
8
8
1 ....
olii!l
4
0
1964
1965
1966
1967
1968
1969
FltealYean
1970
1971
1972
1973
1974
ElI...ate
Note.-The amounts above do not reflect offsetting receipts deducted by function. Detailed outlay
numbers f or the function are shown in part 5, table 3.
The 1974 budget increases funds
for cancer and heart disease research, continues funding of vital
health manpower programs, and
provides protection for the individual consumer of health services.
Program Highlights
• Increased funding for cancer and
heart disease research.
• Increased protection for health
consumers through cost controls,
quality review of medical care,
and consumer safety activities.
• Extended financial support for
health service to 5 million additional poor, aged, and disabled
persons.
Budget Proposals
• Target Federal health manpower
46
support on highest priorities areas
including training of physicians
and dentists.
• Terminate Federal support for
medical facilities construction and
the regional medical program.
• Reform Medicaid and Medicare
to assure greater effectiveness.
• Recommend national health msurance legislation.
Outlays for Federal health programs are estimated at $21.7 billion in 1974, a rise !?f $3.7 b'illion
(21 %) from 1973. Health programs
will account for 8.1 % of the total
Federal budget in 1974. Outlays in
1975 are expected to be $25.1 billion.
Health resources.-Outlays will
increase by $34 million in 1974
over 1973. Research on cancer and
heart disease-the two leading
causes of death in the United
States-will be stressed. Other significant research areas include sickle
cell anemia, family planning, aging,
venereal disease, drug addiction,
and environmental health factors.
Health manpower programs will
be targeted on high priority fields,
primarily physicians and dentists.
Efforts will continue to develop new
types of manpower and improve access to health professions education
by the minorities and the disadvantaged. New scholarships will be
available in return for commitments
to public service.
Federal grants and guaranteed
loans for construction and modernization of health care facilities have
met their objectives and are being
terminated. The current national
oversupply of hospital beds has been
a contributory factor in inflationary
medical care costs.
Major changes are planned for
Federal health planning and development activIties. Legislation
will be submitted to strengthen
State and local comprehensive
health planning. The regional medical program will be terminated because of its limited effectiveness.
Providing or financing medical
services.-In 1974, outlays for programs to finance medical services
will rise to $18.4 billion, or 84% of
total Federal health outlays. Current financing mechanisms-Medicaid and Medicare--cover the needy,
the elderly, and the disabled. National health insurance proposals
will be submitted.
Quality and appropriateness of
medical services will be improved by
expansion of utilization review
in Medicare and Medicaid and by
establishment of a national system of
Professional Standards Review Organizations. Reform of the deductible and copayment provisions in
Medicare will reduce financial burdens of lengthy, unnecessary, and
expensive hospitalization.
Prevention and control of health
problems.-Outlays for all prevention and control activities are estimated to increase by $54 million to a level of $656 million in
1974, an increase of 9%. Consumer safety activities in the Food
and Drug Administration and the
new Consumer Product Safety Commission will be stressed.
The intensified drug abuse program will approach its goal of providing the capacity to treat every addict who seeks treatment. Support
for community mental health centers will be replaced by financing
essential mental health services under the national health insurance
proposals.
Health
Fiscal year
1974 estimate ... .
1973 estimate .. . .
1972 ........... .
1971. ......... . .
1970 .. ..... .. .. .
1969 ........... .
1968 ..... . ... .. .
1967 .. ........ . .
1966 .. .. ....... .
1965 ........... .
1964 ........... .
1963 ........... .
Total
Percent of
outlays
total budget
(in millions)
outlays
$21,730
17,991
17, 112
14,463
12,907
11,611
9,608
6,667
2,509
1,704
1,716
1,379
8.1%
7.2
7.4
6.8
6.6
6. 3
5.4
4.2
1.9
1.4
1.4
1.3
47
INCOME SECURITY
Income Security Outlays
----~------------------------------------~
SBlllions
so
70
70
60
60
50
50
30
30
20
20
10
o
0
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
Note.- The amounts above do not reflect offsetting receipts deducted by function. Detailed outlay
numbers for the function are shown in part 5. table 3.
Federal income security programs, which provide benefits to
millions of Americans, are designed
to provide income assistance to those
families whose income has been lost
or impaired by retirement, disability,
illness, unemployment, poverty, or
death. The major policy thrusts in
recent years have been to reform income security programs to provide
for more equitable treatment of recipients, to eliminate inefficient
management of welfare programs,
and assure an equitable sharing of
the Nation's economic output ~o its
older citizens. Outlays for 1974 will
be $82 billion and are expected to
be $87.6 billion in 1975.
48
Program Highlights
• Increased cash benefits for social
security from $27 billion in 1969
to $54 billion in 1974.
• Transferred administration of
welfare - benefits for 6 million
adult recipients to the Federal
Government beginning on January 1, 1974, with benefits totaling
$1. 7 billion in the second half of
1974.
• Decreased unemployment insurance benefit outlays from $5.7
billion in 1973 to $5.1 billion in
1974.
• Continued special emphasis on
assistance for older Americans.
Budget Proposals
• Require more effective and economical management of welfare
benefit and service programs at
all levels of government.
• Phase down unneeded and narrowly focused training programs
for social work and related fields.
Retirement and social insurance.-The social security system is
the largest social insurance system in
the world. Net outlays for cash benefits are estimated to total $54 billion
in 1974, more than one-fifth of all
Federal budget outlays. Retired or
disabled railroad workers and Federal civil servants receive benefits
under separate systems, for which
outlays are expected to total $7.3
billion in 1974.
Total outlays for the unemployment insurance program exceeded
$5.7 billion in 1973, but are expected to decline to $5.1 billion in
1974 as the unemployment rate continues to decline.
Public
assistance.-Beginning
January 1, 1974, the Federal Government under the new supplemental security income program
will provide a basic cash payment
for the aged, blind, and disabled.
Benefits will total $1.7 billion for
the second half of 1974, aiding
about 6 million people. The program of aid to families with dependent children, however, remains
a State administered program. Reflecting management reforms begun
in 1973, the Federal costs will be
$4.0 billion in 1974, up only $100
million from 1973.
Welfare recipients and other lowincome families also receive benefits
under many other programs. Federal outlays for food and nutrition
programs, for example, are expected
to be $4 billion in 1974.
Social and individual services.The cost of social services for welfare recipients grew rapidly until a
ceiling of $2.5 billion was placed on
the program in 1973. Efforts are
now devoted to management reforms which will assure effective and
prudent use of available funds.
There will be continued s-pecial
emphasis on programs for the aging
and further growth in the . vocational rehabilitation program. Outlays for these and related service
programs will rise from $906 million
in 1973 to $984 million in 1974.
Within this total, however, research
activity will be slightly reduced and
training will be substantially phased
down in 1974. The latter reflects a
determination to rely more heavily
on general student aid in lieu of
specialized training programs.
Outlays for disaster relief activities are expected to decline to $250
million in 1974, well under the
$325 million estimated for 1973.
The high 1973 outlays reflect the
heavy impact of tropical storm
Agnes and other natural disasters.
Income Security
Fiscal year
1974 estimate ... .
1973 estimate .. . .
1972 ........... .
1971. .. .... . . .. .
1970 ......... . ..
1969 ......... .. .
1968 ........... .
1967 ..... ... .. ..
1966 ......... . . .
1965 ........ ... .
1964 .... . . . .... .
1963 ...... ..... .
Total
P ercent of
outlays
total budget
(in millions)
outlays
$81,976
75,889
64,876
56,140
43,790
37,699
34, !O8
31, 164
29,016
25, 702
25,110
24,084
30. 5%
30. 4
28.0
26.6
22. 3
20.4
19. 1
19.7
21. 5
21. 7
21. 2
21. 6
49
VETERANS BENEFITS AND SERVICES
Veterans Bene~ts and Services Outlays
------------------------------------~
SIIilhoDl
1965
A-IV_
1966
1967
1968
1969
1970
1971
1972
1973
Estu.ate
Note.-The amounts above do not retlect offsetting receipts deducted by function. Detailed outlay
numbers for the function are shown in part 5, table 3.
The 1974 budget reaffirms the
Administration's commitment to
help veterans reenter civilian life
and aid those disabled in service.
Outlays will be $11.7 billion-in
1974 and are expected to be $11.9
billion in 1975.
Program Highlights
• Increased compensation and pension benefits.
• Improved medical care through
addition of over 19,000 staff, 544
specialized medical units, and
seven new hospitals since 1969.
• Broadened eligibility and mcreased education benefits.
Budget · Proposals
• Improve the effectiveness and
equity of compensation, pension,
.50
and burial programs by administrative and legislative reforms.
• Increase hospital patient turnover and improve the quality of
medical care through greater
managerial efficiency.
• Provide educational benefits,
counseling, and job assistance.
• Improve services to veterans
through new organizational and
management arrangements.
Income security for veterans.Income benefits are provided to veterans and their dependents when
disability or death of a veteran reduces family earning ability. Outlays
for these programs will total $6.2
billion in 1974.
Veterans receive compensation
for disability resulting from military
service. The amount of payment is
based on the extent to which the
veteran's earning ability becomes
impaired. Veterans compensation
payments were increased by an average of 10%, effective August 1,
1972. In 1974, 2.6 million beneficiaries will be paid $3.8 billion in
compensation. Survivors may also
receive special compensatory payments when a veteran's death results
from military service.
Veterans may qualify for monthly
pensions if they served during periods of war, are totally disabled,
and demonstrate financial need.
Widows and surviving children may
also qualify for pensions based on financial need. In 19'74, 2.3 million
beneficiaries will be paid $2.4 billion in pensions.
In 1974, 8.9 million veterans and
families of servicemen will be provided protection under several veterans life insurance programs, with a
total of $90.8 billion in coverage.
Veterans education, training,
and rehabilitation.-The G I bill
provides assistance for education,
training, and rehabilitation to enable returning veterans (and dependents) to reenter civilian life. In
1974, an estimated 2.0 million veterans and 91,000 dependents will re- .
ceive a total of $2.5 billion in education and training benefits.
Veterans housing.-The Veterans Administration will assist nearly
360,000 veterans to purchase homes
in 1974 by guaranteeing privately
financed mortgages. As a result of
efforts to help veterans secure
mortgage loans from private lenders, only 3,700 veterans will have
to resort to the Government for a
VA direct loan in 1974. This represents a reduction· of almost 67 %
from the volume of direct loans
committed in 1969.
Hospital and medical care for
veterans.-Comprehensive medical
services are provided to eligible veterans. Outlays for veterans medical
care will increase by $133 million
over 1973 to an eS.t imated $2.7 billion. An estimated 1.1 million veterans will be treated in hospitals and
extended care facilities, with an additional 14 million outpatient visits.
The quality and management of
VA medical programs will be improved by:
• Increasing the patient turnover in
VA hospitals;
• Expending $100 million to upgrade existing facilities and modernize or replace 5 hospitals; and
• Eliminating duplicative and underutilized services through the
medical regionalization program.
Other veterans benefits and services.-The cooperation of Federal
agencies, State and local governments, voluntary agencies, and private employers will be continued in
a special "six-point program" to assist Vietnam veterans to obtain job
training and employment.
Veterans BeneFits and Services
Fiscal year
1974 estimate ... .
1973 estimate ... .
1972 ........ .. . .
1971 . . . . . .... .. .
1970 .... ... . ... .
1969 ........ . .. .
1968 . .. . .... ... .
1967 ........... .
1966 .... ....... .
1965 .... . .. . ... .
1964 . .. .. . .. . .. .
1963 ..... .... .. .
Total
outlays
(in millions)
$11,732
11,795
10,731
9, 776
8,677
7,640
6,882
6,897
5,920 '
5, 722
5,681
5,520
P ercent of
total budget
outlays
4.4%
4. 7
4.6
4.6
4.4
4. 1
3.8
4.4
4.4
4.8
4.8
5.0
51
GENERAL GOVERNMENT
General Government Outlays
SIIdII_
S_ _
7,---------------------~--------~--~--------__.7
6
6
5
5
4
3
2
O~
__
~~
1964
____
. .________. .
~
~
1967
Fiscal Y.""
-
______
1970
~
____
1971
~
1972
__
~
__
1973
~O
1974
Estimate
N ote.- The amounts above do not rellect offsetting receipts deducted by function. Detailed outlay
numbers for the function are shown in part 5. table 3 .
Effective law enforcement, an orderly and fair judicial system, full
protection of civil rights, effective
collection of revenues and provision
of governmentwide support programs are the major objectives of
general government programs. Total outlays for these programs will
be $6.0 billion in 1974 and are expected to be $6.4 billion in 1975.
Program Highlights
• Created the new Office of National Narcotics Intelligence.
• Initiated the Office for Drug
Abuse Law Enforcement, a program aimed at street-level drug
traffic.
• Extended the life of the Commission on Civil Rights for 5 years
and expanded its jurisdiction to
cover sex discrimination.
52
Budget Proposals
• Provide State and local governments increased resources to fight
crime through law enforcement
revenue sharing.
• Increase resources for Federal
civil rights activities.
Law enforcement and justice.Outlays for law enforcement and
criminal justice programs will total
$1.9 billion in 1974, a 15% increase over 1973. Program improvements will upgrade the quality of
law enforcement, judicial processes,
and criminal rehabilitation at the
Federal, State, and local levels of
government. Law Enforcement Assistance Administration grants to
strengthen State and local criminal
justice systems will be reorganized
into law enforcement revenue shar-
ing, and outlays are expected to
increase by one-third from $590
million in 1973 to $790 million in
1974. The fight against illegal drug
trafficking will be strengthened and
supported by outlays of $245 million in 1974. Strike forces in 17
cities will continue to coordinate
Federal enforcement efforts against
organized crime. Three new Federal
correctional facilities are expected
to be opened in 1974.
The civil rights enforcement efforts of the Federal Government
will be substantially strengthened
to assure that there is no discrimination against minorities and women.
The Commission on Civil Rights
will receive expanded resources. The
Department of Justice will also continue to expand efforts to assure the
basic rights of all Americans in exercising their franchise and assuring
that- Federal assistance is rendered
in a nondiscriminatory manner.
Outlays for these purposes will grow
by 62% in 1974. Under the emergency school assistance , program
$204 million will be given to local
communities to help them desegregate schools.
Central fiscal operations.-Outlays for the operations of the Internal Revenue Service will be over
$1.1 billion in 1974, enabling IRS
to process 117 million tax returns.
Executive direction and management.-The Executive Office of the
President is being streamlined; staff
units will be reduced by 6 and personnel by 60 % .
General property and re{:.orAs
management.-The 1974 Ibudget
proposes a reduction in the GSA
guard force at Federal buildings,
partially offsetting the 1971-72
buildup of protective services which
was occasioned by a high level of
militant demonstrations. Such demonstrations have decreased significantly in the last year.
General Services Administration
warehouse supply inventories are
being reduced. Direct shipment of
more goods from manufacturer to
Federal agencies will permit lower
inventory levels'.
National Capital region.-The
transportation service in the District of Columbia region will be
improved by public acquisition of
area bus companies, funded on a
two-thirds Federal---one-third local
sharing basis.
Plans and construction in preparation for the 1976 'bicentennial
commemoration are moving forward. Legislation will be proposed to
strengthen the District's financial
management by placing.the Federal
payment to the District on a predictable basis and granting the District bonding authority, effective in
1975.
General Government
Fiscal year
1974 estimate . . . .
1973 estimate ... .
1972 .. ........ . .
1971 .... .... , .. .
1970 .... ... . . , . .
1969 .. .... . .... .
1968 . ....... , .. .
1967 .. .. . .. . . . . .
1966 ...... .. .. . .
1965 ........... .
1964 .... . .. . ... .
1963 ......... , . .
Total
Percent of
outlays
total budget
(in m!llions)
outlays
$6,025
5,631
4,891
3,970
3,336
2,866
2,561
2,510
2, 292
2,210
2,040
1,810
2.2%
2. 2
2. 1
1.9
1.7
1.6
1.4
1.6
1.7
1.9
1.7
1.6
53
INTEREST
Interest Outlays
SBlIIlons
25-.-----------------------------------------------,-25
20
15
10
5
Fiscal Yean
Interest costs, predominantly interest on the public debt, will rise by
$2.2 billion in 1973 and by another
$1.9 billion in 1974 reaching $24.7
billion. By 1975 these costs are expected to reach $25.4 billion.
Of the estimated net interest outlays of $24.7 billion in 1974, $6.0
billion will be paid to trust funds
and other Government investment
accounts on Government securities
held by them. In addition $3.7 billion ,o f the interest paid on securities
held by the Federal Reserve banks
will be returned to Treasury as miscellaneous receipts. Hence, the net
impact on the 1974 unified budget
54
deficit of the interest paid on the
public debt will be $15.0 billion.
Interest
Total
Percent of
outlays
total budget
millions)
outlays
Fiscal year
(in
1974 estimate .. , ,
1973 estimate . . . .
1972 .. ....... , ..
1971 .......... , .
1970 ........ , " .
1969 .... . , ..... .
1968 /.. ......... .
1967 ...........
1966 ... . .......
1965 ........ , ..
1964 ..... ......
1963 ...... ' ....
.
,
.
.
.
$24,672
22,808
20,582
19,609
18,312
15,791
13,744
12,588
11,285
10,357
9,810
9,215
9.2%
9. !
8. 9
9. 3
9. 3
8. 6
7. 7
8.0
8. 4
8. 7
8. 3
8.3
GENERAL REVENUE SHARING
General Revenue Sharing, enacted into law in October 1972, is a
major reform of the federal system
which enhances the relationship between the Federal Government and
State and local governments. Federal revenues are shared with States
and localities with a minimum of
restrictions, thus moving spending decisions closer to the people.
This demonstrates the Administration's belief that State and local governments are in the best position to
identify and solve local problems.
General Revenue Sharing authorizes payments of $30.2 billion from
mid-1972 to mid-1977. Outlays of
$6.8 billion in 1973 contain retroactive payments for 1972 and thus are
larger than subsequent annual payments. These funds will help States
and localities provide needed services, helping to avoid tax increases
and permitting tax reductions.
General Revenue Sharing funds
are distributed among States on the
basis of one of two ' formulas. The
"three-factor" formula distributes
the funds on the basis ~f population, tax effort, and per capita income. The "five-factor" formula includes two additional factors, urbanized population and State income
tax collections. Each State amount
is determined by the formula that
maximizes its share. If the total of
the shares is greater than the available authorization, all shares are reduced proportionally.
Within the State one-third of all
funds go to the State government,
two-thirds to local governments.
Distribution among local governments is based on the three-factor
formula.
The essence of revenue sharing
is Federal aid with few strings attached. The legishi.tion, howeve~,
contains some minimal restrictions.
• Local governments must spend
their allotments within a wide
grouping of "priority" areas:
public safety, environmental protection, public transportation,
health, recreation, libraries, social
services for the poor and aged,
financial administration, and "ordinary and necessary" capital expenditures. This restriction does
not apply to State governments;
• Discrimination on the basis of
race, color, national origin, or
sex is not permitted in any program financed with revenue sharing funds;
• Funds may not be used by State
and local governments to match
Federal funds provided under
other grant programs;
• Construction workers paid with
revenue sharing funds must be
paid at least the wage prevailing
in similar construction activities
in the locality; and
• State and local governments must
account for the use of revenue
sharing funds.
GENERAL REVENUE SHARING
[Billions of dollars]
Budget
authority
Estimated
outlays
1977 . ...... .... .
1976 ...... ... . . .
1975 ........... .
1974 ........... .
1973 .......... . .
3. 3
6.4
4. 9
8. 3
6. 3
6. 2
6.0
6.8
Total . ... .
30.2
30.2
6.2
6. 1
55
PART 4
THE BUDGET SYSTEM
The budget sets forth the President's financial plan of operation
and thus serves as an important
vehicle for determining national
priorities. In the raising of tax revenues and the making of various
payments, the Federal Government
allocates resources between the pri-
vate and public sectors of the economy. Within the public sector, the
distribution of outlays among individual programs reflects the priorities that are determined through
the inferaction of the President, the
executive agencies, and the Congress.
THE FEDERAL BUDGET PROCESS
The budget process has four identifiable phases: (1) Executive formulation and submission; (2) congressional authorization and appropriation; (3) budget execution
and control; and (4) review and
audit. Each of these phases interrelates and overlaps with the others.
The budget process is described
below.
Executive formulation and submission.-The President's transmission of his budget proposals to the
Congress each year climaxes many
months of planning and analysis
throughout the executive branch.
Formulation of the 1974 budget,
which covers the fiscal year beginning July 1, 1973, and ending
June 30, 1974, began in the spring
of 1972. About 10 months later, in
January 1973, the budget was formally transmitted to Congress.
During the period when a budget
is being formulated in the executive
branch, there is a continuous exchange of information, proposals,
evaluations, and policy determina-
tions among the President, the
Office of Management and Budget,
and the vanous Government
agencies.
In the spring, each agency evaluates its programs, identifies policy
issues, and makes budgetary projections, giving attention both to
important modifications, reforms,
and innovations in its programs, and
to alternative long-range program
plans. After review in the agency
and by the Office of Management
and Budget, preliminary plans are
presented to the President for his
consideration. The President also
receives projections of the economic
outlook and revenue estimates prepared jointly by the Treasury Department, the Council of Economic
Advisers, and the Office of Management and Budget.
Following a review of both sets
of projections, the President establishes general budget and fiscal
policy guidelines for the fiscal year
that will begin about 12 months
later: Tentative policy determina-
57
tions and planning targets are then
given t~ the agencies as guidelines
for the preparation of their budgets.
Individual budgets are formulated by each agency, reviewed in
detail by the Office of Management
and Budget throughout the fall and
early winter and then presented to
the President. Overall fiscal policy
problems-relating to total budget
receipts and outlays-are also reviewed again. Thus, the budget
process involves the consideration
simultaneously of individual program levels, and total budget outlays and receipts appropriate to the
needs of the economy. The budget
submitted to Congress reflects both
of these considerations.
Congressional authorization and
appropriation.-Congressional review starts when the President sends
his budget to the Congress. The
Congress can change programs,
eliminate them, or add programs
not requested by the President. It
can Increase or decrease the
amounts recommended by the President to finance existing and proposed new programs. I t also
legislates the means of raising
revenues.
The Congress does not vote on
budget outlays directly. Rather it
provides the authority to commit
the Government to do certain things
that usually require the future
spending of money.
Under the traditional procedures,
the Congress first enacts legislation
which authorizes an agency to carry
out a particular program and, in
many cases, sets a limit on the
amount that can subsequently be
appropriated for the program.
Many programs are authorized for
a specified number of years, or even
indefinitely; other programs, including atomic energy and space ex-
58
ploration, require annual authorizing legislation.
The granting of budget authority-which permits an agency to
enter into obligations requmng
either immediate or future payment
of money-usually is a separate, subsequent action. Most budget authority is enacted in the form of appropriations, which may not exceed any
limit established in the basic authorizing legislation for the program. In
addition to appropriations, smaller
amounts of budget authority are
granted in the form of contract authority and authority to spend debt
receipts.
In most cases, budget authority
becomes available each year only as
voted by the Congress. For example,
this year $172.8 billion of the recommended $288.0 billion of new budget authority for 1974 is dependent
upon action by the Congress. However, in some cases, the Congress has
voted "permanent" budget authority, under which funds become
available annually without further
congressional action. Most trust
fund appropriations are "permanent," as is the appropriation to
pay interest on the public debt.
The consideration of requests for
changes in revenue laws and for
appropriations follows an established pattern in the Congress.
These requests are considered first
in the House of Representatives.
The Ways and Means Committee
reviews all proposed revenue measures; the Appropriations Committee, through its 13 subcommittees,
studies the proposals for appropriations and examines in detail each
agency's performance. Each committee then recommends the action
to be taken by the House of Representatives.
As parts of the budget are approved by the House, the bills are
forwarded by the House to the
Senate, where a similar process is
followed . In case of disagreement
between the two Houses of Congress, a conference committee (consisting of Members of both bodies)
meets to resolve the issues. The conference report is returned to both
Houses for approval and the measure is then transmitted to the President, in the form of an appropriation or tax bill, for his approval or
veto. (When the Congress fails to
complete action on appropriations
by the beginning of the fiscal year,
the Congress may enact a "continuing resolution" to provide authority
for the affected agencies to continue
operations until their regular appropriations are enacted.)
Budget execution and control.Once approved, the budget becomes
the basis for the program operations
of each agency during the fiscal year.
Central control over most of the
budget authority made available to
the executive branch is maintained
through a system of "apportioning"
the authority. Under the law, the
Director of the Office of ~anage
ment and Budget must distribute or
apportion appropriations and other
budget authority to each agency by
time periods (usually quarterly) , or
by activities. Obligations may not be
incurred in excess of the amounts
apportioned. The objective of the
apportionment system is to plan the
effective and orderly use of available
authority and-for annual appropriations-to prevent the need for
requesting additional or supplemental authority where possible.
It is, of course, necessary to insure flexibility in case circumstances
change. Under certain circumstances (for example, if develop-
ments indicate that an agency will
not require all the authority made
available during the immediate
fiscal year, or if use of the authority
might conflict with other laws),
"reserves" are established by the
Director of Office of Management
and Budget (under authority delegated by the President) to withhold
some of these amounts not needed.
Such reserves may be released subsequently, if necessary, but only for
the purposes of the appropriation.
On the other hand, changes in laws
or other factors may indicate the
need for more authority, and supplemental requests may have to be
made of the Congress.
Review and audit.-This is the
final step in the budget process. The
individual agencies are responsible
for assuring-through their own review and control systems-that the
obligations they incur and the resulting outlays are in accordance
with the provisions of the authorizing and appropriating legislation.
The Office of Management and
Budget reviews substantive and financial reports keeping abreast of
agency progress in attainment of
program objectives. In addition, the
General Accounting Office conducts
a continuing program of auditing,
examination, and evaluation of Government activities and their administration, with particular attention
to aspects which appear to be in
need of improvement. Its findings
and recommendations for corrective
action are made to the Congress, to
the Office of Management and
Budget, and to the agencies concerned.
The purpose of all these reviews
is to assure that programs are carried out in an effective, efficient, and
economical manner.
59
RELATION OF BUDGET AUTHORITY TO OUTLAYS
The budget authority appropriated by the Congress for a fiscal
year is more than the obligations or
outlays within that year because:
• Budget authority for some major
procurement and construction
covers estimated full cost at the
time programs are started, even
though outlays take place over a
number of years as the programs
move toward completion.
• Budget authority for many loan
and guarantee or insurance programs also provides financing for
a period of years or represents a
contingency backup.
• Budget authority for trust funds
represents mainly receipts from
special taxes, which are used as
needed over a period of years
for purposes specified in the law.
As a result, substantial unspent
budget authority is always carried
over from prior years. Most of it is
earmarked for specified purposes,
and is not available for new programs.
As shown in the chart below,
$94.8 billion-over 35% of 1974
outlays will be made under budget
authority enacted in earlier years.
Conversely, almost half of 1974
budget authority will be used in
fu ture years.
Therefore, when the Congress
increases or decreases the budget
authority requested by the President for a given year, budget outlays
in that year are not necessarily
changed by the same amount. The
full effect of the change in budget
authority on outlays will be felt over
a period of years.
Relation of Budget Authority to Outlays-1974 Budget
Fi9urcs in brockch represent Federal funds only
SBiliion,
To be spent in 1974
New Authority
Recommended
For 1974
288.0
[202.9]
173.9
Outlays
in 1974
268.7
[156.7]
[199.1]
JIll
~Tob..
' Pe", ill t:.
"'''''I!
"Or,
•
Unspent Authority
Enacted in
. , Prior Years
IlL
298.5
Authority written
[163.6]
60
off and ••pired
12.2[12.2J
it..
.,.
~~~
h~~j,
...
.,.
To be 'pent
in Future Years",
191.6
[109.0]
.,.
U t A h'
...
nspen
ut orlty .,.
For Outlays in
Future Years
305.7
•
t
[155.3]
PART 5
BUDGET TABLES
Page
1. Budget Receipts, Outlays, Financing and Debt, 1964-74______
2.
3.
4.
5.
6.
Budget Receipts by Source and Outlays by Function, 1964-74____
Budget Outlays by Subfunction, 1964-74_____________________
Budget Authority and Outlays by Agency, 1972-74____________
Outlays and Receipts of Trust Funds, 1972-74________________
Summary of Full-Time Permanent Employment in the Executive
Branch,1972-74____ ___________________________________
7. Federal Finances and the Gross National Product, 1954-73______
8. Budget Receipts and Outlays, 1789-1974_____________________
62
63
64
68
68
69
69
70
61
C1l
J\j
Table I. BUDGET RECEIPTS, OUTLAYS, FINANCING, AND DEBT 1964-74 (in millions of dollars)
Actual
Description
Estimate
1965
1966
1967
1968
1969
87,205
28,518
-3,061
90, 943
29, 230
- 3,339
101, 427
32,997
-3,568
111, 835
42,935
-5,218
114, 726
44,716
-5,771
143,321
52,009
-7,547
143, 158 133,785 148,846 154, 250 171,308
66, 193
72,959
91,952 105,471
59,362
-8,778 -11,586 -13,156 -21, 218 -20,797
112,662
116, 833
130, 856
149, 552
153, 671
187,784
193,743
Trust funds __________________ ___________ ____________ ___ _____________
I ntragovernmental transactions ________________________________________
95,761
25,884
-3, 061
94, 807
26,962
- 3, 339
106,512
31,708
-3,568
126,779
36, 693
-5,218
143, 105
41,499
-5,771
148, 811
43,284
-7, 547
156,301 163, 651 177,959 188,390 199,108
90,354
59,361
67,073
82,624
49,065
-8,778 -11,586 -13,156 -21,218 -20, 797
Total budget outlays _______________________________________________
118,584
118, 430
134, 652
158,254
178, 833
184,548
Surplus
or fun
deficit
(-) :
Federal
ds _______________________________________________________
Trust funds _________________________________________________________
-8,556
2,634
-3,864
2,268
-5,085 -14,944 -28, 379
6, 242
1, 289
3, 217
Total budge!. ________________________________________________ _____
-5,922
-1,596
-3, 796
Budget financlnr,=
Net borrowing rom the public or repayment of borrowing (-) ______________
Other means of financin g______ _________________________________________
3,092
2, 830
4, 061
-2,465
3,076
720
2,838
5, 863
23,100
2,061
-1, 044
-2,192
3,814
-969
19, 448
3, 585
19, 442
3,785
25, 000
-188
16,500
-3,817
5,922
1,596
3, 796
8,702
25, 161 1 - 3, 236
12,845
23, 033
23, 227
24,812
12,683
316, 763
323, 154
329,474
341,348
369,769
367, 144
382, 603
409, 467
437,329
473, 325
505,453
59,210
257, 553
61,540
261, 614
64, 784
264, 690
73, 819
267, 529
79, 140
290, 629
87, 661
279, 483
97,723
284, 880
105, 140
304,328
113,559
323,770
124, 555
348, 770
140,183
365,270
34,794
222, 759
39, 100
222,514
42,169
222, 521
46,719
220,810
52, 230
238,399
54,095
225, 388
57,714
227,166
65, 518
238, 810
71,426
252, 344
Receipts and outlays:
Re~::ret:;1 fund L _____________________________________________________
Trust fu nds_________________________________________________________
I ntragovernmental transactions _______________________________________ _
Total budget receipts ______________________________________________
OU:~J:;al fu ndL ____ _________________ ____ __ _____________ ______ _______
Total means of financing ______________________ _____________ _____
Outstanding debt, end of year :
Gross Federal debt. ___________________________________________________
Held by :
Government agencies ______________________________________________
The public ________________________________ _________ _________________
Debt held by the public:
Held by :
The Federal Reserve System ______________________________________
Others _________________________________________________________
-,- -
-8,702 -25,161
1970
--196,588
1971
188,392
211, 425
1972
1974
1964
208,649
231, 876
1973
--224,984
--249,796
255, 982
---
268, 665
-5,490 -13,143 -29,866 - 29, 114 -34,140 -27,800
8,725
10, 297
6, 832
5, 886
9,328
15, 117
3, 236
---
---
-2,845 -23,033 -23,227 -24, 812 -12,683
1 Excludes changes due to reclassification and to conversion of mixed-ownership enterprises to private ownership_ See footnotes to table 9 in the 1971 budget and table 10 in the 1972 budget.
Table 2. BUDGET RECEIPTS BY SOURCE AND OUTLAYS BY FUNCTION 1964- 74 (in millions of dollu.)
Description
Actual
Estimate
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
RECEIPTS BY SOURCE
Individual income texes . _.. ____ _______ __ ____ ____ ____ _____________________
Corporation income taxes ______________ .. ___ ______________ _________________
48,697
23,493
48,792
25,461
55, 446
30,073
61,526
33,971
68,726
28,665
87,249
36, 678
90, 412
32, 829
86,230
26, 785
94,737
32,166
99,400
33, SOO
111,600
Social insurance taxes and contributions (trust funds):
Employment taxes and contributions ________________________________ _____
Unem&IOyment insurance __ ____________ ____ ___ ___ ___ ____________________
Contri utions for other insurance and retiremenL ___________ __ ___________
16, 959
4, 045
1,008
17, 359
3, 819
1,081
20, 662
3, 777
1, 129
27,823
3, 659
1, 867
29, 224
3, 346
2, 052
34,236
3, 328
2, 353
39, 133
3, 464
2, 701
41,699
3, 674
3, 205
46,120
4,357
3, 437
55, 610
5,262
3,667
67, 866
6,267
4,029
22, 012
22, 258
25, 567
33, 349
34, 622
39,918
45,298
48, 578
53, 914
64, 540
78,162
10, 211
3, 519
10, 911
3, 659
9, 145
3, 917
9, 278
4, 441
9,700
4, 379
10, 585
4, 637
10, 352
5,354
10,510
6, 104
9, 506
5, 971
9, 683
6,287
10,198
6,600
13, 731
14, 570
13, 062
13, 719
14, 079
15, 222
15, 705
16, 614
15, 477
15, 970
16,798
2, 394
1,252
2, 716
1,442
3, 066
1,767
2, 978
1, 901
3,051
2, 038
3, 491
2, 319
3, 644
2,430
3, 735
2, 591
5,436
3, 287
4,600
3, 000
5,000
3, 300
Miscellaneous receipts :
Deposit of earn ings by the Federal Reserve System __________________ ______
Other miscellaneous receipts 1 __________________________________________
947
138
1, 372
222
1, 713
162
I, S05
303
2, 091
400
2, 662
247
3, 266
158
3, 533
325
3, 252
381
3, 350
625
3, 700
422
Total miscellaneous receipts ___ ___ ___ ____ ____ __________ __ ___ ________
Tot.1 recelpts ____________________________________________________
1, 084
1, 594
1, 875
2, 108
2, 491
2, 908
3,424
3, 858
3, 633
3, 975
4, 122
112, 662
116, 833
130, 856
149, 552
153, 671
187,784
193,743
188,392
208,649
224,984
255,982
53, 591
49, 578
70, 081
SO, 517
56, 785
81,232
SO, 295
77, 661
4,117
4, 340
4, 490
4, 547
4, 619
3, 785
3, 570
3, 095
4,170
5, 091
5, 933
5,423
4, 721
4,247
3,749
3, 381
5, 184
4, S05
3, 676
5, 940
6, 218
5, 096
4, 373
6, 201
1, 966
2,056
1, 878
1, 722
2, 169
2, 568
2, 716.
2,036
6, 511
7, 171
7,594
8, 094
7, 399
7, 921
9,310
11,310
-185
288
2, 644
2, 616
4, 076
1, 961
2, 965
3, 357
1, 751
2, 284
4,258
5,853
6, 739
6, 525
7, 289
8,226
1, 716
1, 704
2, 509
6, 667
11, 611
9, 608
12, 907
14, 463
25,110.
25, 702
29, 016
31, 164
34, 108
37, 699
43, 790
56, 140
5,681
5, 722
5,920
6, 897
6,882
7,640
9, 776
8,677
Interest. _____ ___ ______ _________ ______ __________ ___ _____ ______ ____ __ ____
9, 810
10, 357
11,285
12,588
13, 744
15,791
18, 312
19, 609
General government. __ __________________________ ______________________ __
2, 292
2, 510
2,
040
2,
210
2,
561
2,
866
3,
336
3,970
General revenue sharing______ ______________________________________ _________________________________ ____ _________________________________________________
78, 336
3,726
3, 422
7,063
3, 761
11, 201
4, 282
9,751
17,112
64,876
10,731
20, 582
4,891
81,074
3,811
3, 135
5,572
3,663
11,580
4, 931
10,110
21,730
81,976
11,732
24,672
6,025
6,035
1,750
-9,130
268,665
Total social insurance taxes and contributions __ _____________________ __
Excise taxes :
Federal funds ___________________________ __ ___________ __-______________
Trust funds ___________________________________________________________
Total excise taxes _____________________________________________ ____
Estate and gift taxes __________________ ___________________________________
Customs duties __________________________________ ________________________
- --
OUTLAYS BY FUNCTION 1
National defense ________________________________________________________
International affairs and finance_________________ __________________________
Space research and technology _________ __________ ________________ _____ ____
Agriculture and rural development. _____ __ _____________ __________________ _
Natu ral resources and environment. _______________________________________
Commerce and transportation __ _______________________ ________ __ ________ __
Community development and housing ______ _________ _____________ __________
-~2;sjj
- 3,109
-3, 364
-3, 936
-4, 499
- 5, 117
-6, 3SO
- 7, 376
-::j;S58
76,435
3,341
3,061
6, 064
876
12,543
3,957
10,500
17, 991
75,889
11, 795
22,808
5,631
6,786
500
-8, 381
118,584
118,430
134,652
158,254
178,833
184,548
196,588
211,425
231,876
249,796
~:~ff~~~~~_n_d_ ~~~~~~_e_r~::::::::::::::::::::::::::::::::::::::::::::::::
~~~~~~:e;~~!Wis-aiid-seivices::::::::::::::::::::::::::::::::::::::::::::
O'l
t.>;l
Allowances for contingencies and civilian agency pay raises ___________________
Undistributed intragovernmental transactions _________ _____________________ _
Total outlays ___________________ _______ ________________ ___________
1
Includes both Federal funds and trust funds.
---
1974
37,000
en
~
Table 3. BUDGET OUTLAYS BY SUBFUNCTION, 1964-74 (in miIIiona of dollara)
Actual
Estimate
Function and subfunction
National defense:
Department of Defense- Military : 1
Military personneL .• __ ••••• _••• _. _•••••••••.• _•••.•.••.••••••.••••.•
Retired military personneL • ••• ___ .....••••..• • ••.•.•••.• _•••••••••.••
Operation and maintenance •• •••• _. _••• _•. • _•.•.•••••••..••...•••.•.••
Procurement. • . .•.. _•.• _. _•••• ____ . _. _• .• ___ . __ •••. __.• __ ••• __. _•• _.
Research and developmenL_. ___ •• _. _. _. _• •• •• .•••••.••• _•• •• ••• . ••• _
Military construction and otheL •••.• _. _. _•••..•• ' •• ________ • _. _. _. ___
Allowances ' •• ___ _____ __ ___ __• _________ • • •• ____ • ____ ______________ ••
Deductions for offsetting receipts , ____ _________ • _____ • ____ •• _____ • __ •• _
1964
1965
1966
1967
1968
1969
1970
1971
1972
12,986
1,209
11,932
15,351
7,021
1,236
13,387
1,384
12, 349
11,839
6, 236
928
15,162
1,591
14,710
14,339
6,259
2,279
17,956
1,830
19,000
19,012
7,160
2,636
19,859
2,095
20, 578
23,283
7, 747
3,975
21,374
2,444
22,227
23,988
7,457
525
23,031
2,849
21,609
21,584
7,166 •
1,059
22,633
3,386
20,941
18,858
7,303
1,552
23,036
3,885
21, 675
17,131
7, 881
1,655
- - -- - 1973
1974
22,500
4,706
21 , 662
16,490
8,069
1,684
3,190
-101
-159
-150
-160
---:":: i38
-164
-143
---:":: i48
-126
-113
23, 085
4,442'
21,540
15, 600
7,622
1,312
710
-lll
Subtotal, Department of Defense ___ • _____ • • __ ._ •••• ___ • _____ ._. __ •
49,577
45,973
54,178
67,457
77,373
77,872
77, 150
74,546
75,151
74,200
78,200
Military assistance I . . . . . _ _ __ . _ _ ____ _ ____ . ___ . _ . _._._ . . . . . _ . . . . . _. . . _ . .
Atomic energy 1 ••• • __ _ ._. _ • • _. __ ._. _ • ••• ••• • ••••••• •• _ ••••• _•• ••• _ ••••
Defense·related activities .••.__ • _.• _. __• _. _••••.•••••• _••••••••• •• _. _••••
Deductions for offsetting receipts 3 ••••• ____ • _. _. _. _ •• __ • •• _. _ ••• _. _•• ••• _
1,209
2,764
-130
1,125
2, 625
136
-281
I , OC3
2,403
-62
-738
858
2, 264
-17
-481
654
2,466
139
-116
789
2,450
260
-138
731
2,453
79
-118
999
2,275
-70
-89
806
2, 392
95
-108
600
2,194
192
-751
800
2,374
83
-382
Total national defense .• _••. __ • __ •••.•• _._ • ••• • •• _. __ •• _••• ••.••• _
53,591
49,578
56,785
70, OBI
80,517
81,232
80,295
77,661
78,336
76,435
81, 074
International affairs and finance:
Conduct of foreign affairs I . . . . . . . __ . _ . . . . . . . _ . . . . . . . _. . . . . . . _. . . . . _ . . . .
Economic and financial assistance •••• ••. • •• _• ••. ••• •••• _. _••••• _••••• •.•
Forei,n information and exchange activities • •• •••••••••••••• • •• .••• _••••••
Food or Peace _•. _._._ .•• _•••.• _._ • . •••.•••••••• • •••• _••••• _. _••• _••.•
Deductions for offsetting receipts 3•••••. ___ • _ .•.•••.•.•.•.•••. • ••• _ •• _ •••
296
1,756
207
2,049
-191
347
2, 041
223
1, 852
-123
315
2,329
227
1,784
-165
336
3, 057
245
1,452
-542
354
3,053
253
1,204
-245
371
2,420
237
975
-217
398
2,231
235
937
-232
405
1,807
242
918
-276
452
2,287
274
993
-280
503
2,273
294
847
-575
538
2,408
312
766
-213
172
Total International affairs and flnance ••• ••••••••• • •••• _••• _••••••
4,117
4,340
4,490
4,547
4,619
3,785
3,570
3,095
3,726
3,341
3,811
Space research and technolollY:
Manned space f1i~ht. •.• _••••••• •• _•••• •• __ .•••••••••••• _••• _. _••• _••••
Space science an applications __ •• _••• •••.• •• _•.••••••••••••••••••••••••
Space technology . _.•• _•.•• __ ••••••• _••••.•••• •••• •••••• •••• ••••••• ••••
Aeronautical technology .•••.••••••.•• • •• _•.•.••• ••. ••• _. _••• _. _• .• _. _••
Supporting space activities ••••• ••• __••••• •••••• ••••• •• •• •••••••••• ••••• •
Deductions for offsetting receipts • ••••• •• •• •• •.••• _••••••••••••••••• _••••
2,768
754
432
40
178
-1
3,538
751
484
58
262
-2
4,210
778
435
75
435
-1
3,649
796
440
89
452
-2
3,096
700
410
128
390
-3
2,781
569
344
168
390
-6
2,209
656
328
188
374
-6
1,885
661
272
210
365
-11
1, 740
890
228
227
349
-13
1, 417
943
156
249
307
-11
1,450
966
139
269
313
-1
Total space research and technoloKY ••••••• ••••• •• ••••••••• _• •• ••.
4,170
5,091
5,933
5,423
4,721
4,247
3,749
3,381
3,422
3,061
3,135
Allrlculture and rural development:
Farm income stabilization •••• ••• • __ ••• •• ••••••••••• _••••• ••••••••••••••
Rural housing and public facilities •••• _•••••••.•••••••••••• ••••••• ••••••
Agricultural land and water resources ••••••••••• • •••••••••••• _•• •••••• •••
4,134
513
325
3, 667
!l69
342
2, 536
468
347
3,167
4,542
678
351
5,000
490
343
4,589
754
344
3, 651
503
346
5, 146
877
354
4, 251
657
394
3,920
717
217
511
353
Resezrch 2nd other agricultural services __________________________________
Deductions for cffsetting receipts _____________ ___ _______________ _____ __ __
440
-228
483
-257
528
-203
567
-224
615
-246
642
-258
730
-216
813
-217
916
-230
1,001
-239
971
-253
Total agriculture and rural develo~menL ------- - - - - ----- --- ------
5,184
4,805
3,676
4,373
5,940
6,218
6,201
5,096
7,063
6,064
5,572
1,703
459
46
1,761
509
59
134
215
79
-701
1, 940
556
62
158
241
90
-1 , 011
2,025
618
73
190
285
93
-1,408
2,070
639
85
249
331
102
-1,754
2,042
643
71
303
372
107
-1,369
1,984
754
94
350
370
122
-1,106
2,390
837
130
701
479
136
-1,959
2,664
892
112
763
524
153
-1,347
3,065
1,008
151
1,148
641
174
-5, 310
2,795
929
131
2,128
701
191
-3,214
2,056
2,036
1,878
1,722
2,169
2,568
2,716
3,761
876
3,663
835
658
3, 686
578
252
538
91
-128
875
728
4,092
B05
405
557
98
-160
879
708
4,043
888
351
315
99
-112
945
773
4, ('93
1,141
332
318
119
-127
951
852
4, 367
I , OBO
447
472
99
-173
1,042
870
4,413
920
152
584
1,602
1,049
5,070
2,183
738
717
181
-230
1,685
1,106
5, 210
1, 772
645
818
168
-203
1, 760
1,200
5,564
1,710
1,476
901
175
-244
1,877
1,282
5,536
1,373
-170
1,223
909
4, 632
1,510
487
590
121
-162
Total commerce and transportation __ ___ ___________________________
6,511
7,399
7,171
7,594
8,094
7,921
9,310
11,310
11,201
12,543
11,580
Community development and housinl:
Community planninl!, mana~ement, a~d developmenL ______ ____ __ ________ _
Low- and moderate-Income ouslng a'ds ________________ _________________
Maintenance of the housing mortgage markeL _____________ _____ __________
Deductions for offsetting receipts __________________ __ ____________________
320
37
-511
-31
460
81
-237
-16
721
391
1,545
-13
1,023
478
1,133
-19
1, 277
948
1,863
-12
1, 509
871
-406
-13
2, 171
1,2BO
-487
2,486
1,243
-319
-53
2,878
1,595
-191
2,822
1,120
15
2,590
2,009
332
Total community development and houslnl ___________________ _____
-185
288
2,644
2,616
4,076
1,961
2,965
3,357
4,282
3,957
4,931
Education and manpower:
Elementary and secondary education _____ ______ ______________ ____________
Higher education __________________________ ____ __ __________ ________ ____
Vocational education _______________________________ ____________________
566
645
414
132
I , B04
705
136
2,441
1,159
250
'2, 596
1,392
265
2,481
1,231
262
2, 968
1,382
289
3,164
1,429
415
3,490
1, 434
521
3,262
1,496
557
Natural
andpower
environment:
Water resources
resources and
__ ____ __________ ______ ___ _____ ____ ___ ________
Land managemenL ___________________________________________ -- _______
Mineral resources ____ ___________________________ ___ ____________ -- -- --Pollution control and abatement , ______________________ __________________
Recreational resources ___ ___ ___ ______ _______ ______ __________ _____ ______
Other natural resources programs ___________________________________ ___ _
Deductions for offsetting receipts' ________________________________ ---____
Total natural resources and environmen'- ________________________
Commerce
and transportation:
Air transportation
, ______________________________________________ _____ _
Water transportation ______________ _______ ___________________ _______ ____
Ground transportation ______________________________ __ __________________
Postai Service _____________________________________ __ __________________
Advancement of business _______________________________________________
Area and regional deveiopmenL ____________________ __________ __________
Regulation of business ___________ ____________________________________ __
Deductions for offsetting receipts •_______________________________________
~~~~:~~~::;i~~ua~Jsh_~~i~~~~:::::::::::::::::::::::::::::::::::::::::::
General
science ____________________ __ ___________ __ __ __ _______ _________:
Manpower training and employment services ______ ___ ______________ ______
Other manpower aids ______ ____________________________________________
Deductions for offsetting receipts ____ ______ ______ __ __ ___ ___ ______________
Total education and manpower ______ ___ _______ _______ ______ ______
See footnotes at end of table,
O'l
<.11
117
202
70
-632
=
1,966
383
41
---
lOB
-----iiO -----158 -----155 ----- 264 -----334 -----373
.
310
299
49
-5
309
534
100
-9
368
989
112
-11
415
1,236
100
-14
449
1,587
132
-16
490
1,560
142
-15
429
464
1,602
169
-15
1,751
2,284
4,258
5,853
6,739
6,525
7,289
548
1,050
168
-254
. _. _.
522
1, 952
223
-13
567
2,894
318
-13
573
3,486
393
-15
1,739
1, 635
308
1, 693
906
586
2,847
4ll
-15
8,226
9,751
10,500
10,110
-----534 -----s4i --- --749
O'l
O'l
Table 3. BUDGET OUTLAYS BY SUBFUNCTION, 1964-74 (in millions of dollars)-Continued
Actual
Estimate
Function and subfunction
1964
Health :
Providi ng or financing medical services:
Medicare (HI, SMI) __________________________________________________
Medicaid ____ ____ ___________________________________________________
Other' ____ _____________ ___ ______ ______ _____________________________
1966
1965
1967
1968
1969
1970
1971
1972
1973
1974
183
221
64
170
331
3,411
1, 173
410
5,347
1, 806
363
6,598
2,285
533
7, 149
2, 727
608
7, 875
3,362
689
8, 819
4,601
824
9,573
4,301
833
12, 096
5,236
1,027
Subtotal, providing or financing medical services ______________________
Development of health resources _________ __ _________ __________________
Prevention or controt of health problems _______________________________
Deductions for offsetting receipts 3 _____ _ _ ______________________________
393
1, 163
161
-1
493
1, 023
189
-1
1, 165
1,140
204
- 1
4, 994
1, 4'24
252
-2
7, 516
1,829
265
-3
9,416
1, 920
217
-2
10,484
2,122
307
-6
11,926
2, 221
319
-3
14,245
2,479
391
-3
14,707
2,688
602
-6
18, 358
2, 722
656
-7
-----iiiJ ----- iji
Total health __________________ ___________________________________
1,716
1,704
2,509
6, 667
9,608
11,611
12,907
14,463
17,112
17, 991
21,730
Income security :
Retirement and social insurance:
Social security (OASDI) , _______________ __________ ____________________
Unemployment insurance __________________ ___ ___ ______ _______________
Other retirement programs _______ __________________ ____ _____________ _
16, 203
3,530
2,501
17, 000
2, 937
2,592
20, 237
2, 429
2,897
21, 374
2,567
3, 410
23, 214
2,308
4, 044
26,791
2,458
3,291
29, 685
3,190
4, 400
35, 247
5, 758
5, 743
39, 409
6, 547
6, 772
48, 547
5, 731
8, 745
54,232
5,102
8,672
Subtotal , retirement and social insurance _______________ __ ____________
Public assistance _________________________ ____________________________ _
Social and ind ivid ual services ___________________________ ________________
Deductions for offsetting receipts 3_______________________________________
22,234
3,085
199
-409
22,53'0
3,119
249
-196
25, 563
3, 151
410
-109
27, 351
3, 180
692
- 59
29,566
3, 726
831
- 16
32, 540
4, 272
888
-1
37, 275
5,186
1,331
-1
46,749
7, 175
1, 617
-1
52,728
9, 313
2,838
-3
63,023
9,073
3, 800
-6
68,006
10,665
3,321
-16
Total income security _______________________________________ _____
25,110
25,702
29,016
31,164
34,108
37,699
43,790
56, 140
64,876
75, 889
81,976
4, 646
77
4,710
58
44
1, 231
185
-502
1,271
179
-497
4, 700
54
169
1,320
196
-518
5,209
305
304
1,393
195
-509
4, 997
478
210
1,472
218
-492
5, 528
701
102
1,566
237
-493
6, 021
1, 015
54
1, 802
260
-477
6, 448
1,659
-179
2,038
294
-484
6,833
1,960
-317
2,428
318
-491
7,025
2,597
-449
2,741
363
-483
6, 814
2,521
-269
2,792
360
-486
Total veterans benefits and services ______ __________ ______ ________
5,681
5,722
5,920
6,897
6,882
7,640
8,677
9,776
10,731
11,795
11, 732
Interest:
Interest on the public deb!. ___________________________________ ___ ______
Interest on refunds of receipts _________________ _________________________
Interest on uninvested funds ___________ ___ ___ ___ ___ ___ __________________
Deductions for offsetting receipts __________ _________________ ____ _______ __
10,666
88
11
-955
11,346
77
12
-1,078
12,014
104
14
-846
13,391
120
13
-936
14, 573
120
10
-959
16,588
120
7
-925
19, 304
113
6
-1,110
20, 959
132
6
-1, 487
21,849
182
6
-1,455
24,200
175
5
-1,573
26, 100
175
5
-1,608
9,810
10,357
11,285
12,588
13,744
15,791
18,312
19,609
20,582
22,808
24,672
Veterans benefits and services:
Income security for veterans ______________ ______ __________ __ ____________
Veterans education, training, and rehabilitation ___________________________
Vetera ns housing _____ ___ ___ _______ _____ ____ ___________________________
Hospital and medical care for veterans _______ _____________________ __ ___ __
Other veteran s benefits and services _________________ ___ ___________ ______
Deductions for offsetting receipts ______________ ___ _______________ _____ ___
Total interesL _________ __________ _______ __ _______________________
.
---
General Government:
}~~:~i:mnfc~~c~~o_n~::::::::::::::::::::::::::::::::::::::::::::::::::
:
Executive direction and managemenL ___________________________________
Central fiscal operations ___________________________________ _____________
General property and records managemenL _________ __________________ __ _
Central personnel management 1 __ _______ ______________________ _________
Law enforcement and justice ______ ________ __ ___ _________ ____________ ____
National capital region ________ ___ ____________ __ _________________ _____ __
Other general government. _______________________ ______________________
Deductions for offsetting receipts a_____________ ____ _____________________
Total leneral lovernmenL ______________ _______________________ __
126
66
22
S08
576
110
335
58
189
-249
142
76
23
844
606
107
366
61
190
- 206
2,040
2,210
ISO
585
107
385
73
192
-197
94
27
1, 024
591
140
452
143
243
- 333
192
110
31
1, 094
590
146
534
205
268
-305
229
133
37
1, 271
619
166
666
265
273
- 322
256
146
45
1, 414
640
218
959
275
341
-324
1, 647
725
275
1,233
450
345
-335
2, 292
2, 510
2, 561
2, 866
3,336
3, 970
4, 891
886
General Revenue Sharlng ______________________________________ _____ ___
Allowances for contingencies and civilian agency pay raises __ _________________
Undistributed Intralovernmental transactions:
Employer share , employee retiremenL ____ _______________________ _____ ___
Interest received by trust funds _________________________________________
Total outlays ____ ________________________________________________
-1 , 256
- 1, 621
-1, 329
- 1.780
-1 , 447
-1,917
-1 , 661
-2,275
-1 , 825
-2, 674
-2, 018
-3, 099
- 2,444
-3, 936
-2,611
- 4, 765
118,584
118, 430
134, 652
158,254
178,833
184,548
196, 588
211,425
MEMORANDUM ___________ _________________
Federal funds ____ ___________ ________________
Trust funds __ __ ___ ___ ______________________________________________ _____
Intragovernmental transactions ____________________ _________ ____ ___________
95,761
25, 884
-3,601
94, S07
26, 962
-3, 339
106, 512
31 , 708
-3, 568
126, 779
36, 693
- 5, 218
143, 105
41, 499
-5, 771
148, 811
43,284
-7, 547
156, 301 163, 651
49, 065
59, 361
-8, 778 -11 , 586
1 Entries net of offsetting receipts_
• Includes allowances for All-Volunteer Force, retirement systems reform , and civilian and military pay raises for Department of Defense_
a Excludes offsetting receipts which have been distributed by subfunction above_
' Less than $500 thousand_
3ll
167
87
25
969
658
116
426
87
218
-243
159
79
24
173
68
329
194
138
1, 774
902
327
1, 630
506
406
-576
383
206
148
1, 852
917
347
1,877
634
429
- 768
5,631
6, 025
6,786
500
6,035
1, 750
-2, 768
-5,089
-2,980
-5,401
- 3, 157
-5,974
231, 876
249, 796
268, 665
177, 959 188,390 199, 108
67,073
82,624
90, 354
-13, 156 -21 , 218 -20, 797
Table 4. BUDGET AUTHORITY AND OUTLAYS BY AGENCY
(in miUions of dollars)
Budget authority
Department or other unit
legislative branch ____________________________ __
The Judiciary __ _______________________________ _
Executive Office of the President.. _________ _____ _
Funds appropriated to the Presiden!.. __________ __
Agriculture ___________________________________ _
Commerce ______ • _______ ___ ___ _______________ _
Defense-Military ,_______ _______________ ______ __
Defense- Civil. ___ ______________ __________ ____ _
Health, Education , and Welfare __ ___ ______ _____ __
Housing and Urban Developmen!.. ____ _________ __
Interior ___ ____ _______________________________ _
Justice __ __ _____ __ __________________ _____ _____ _
labor__ ____ ______ ________________ __ ____ ______ _
State _______________ ______ ___________________ _
Transportation _____________________________ ___ _
l;~~i~rtnergy
-Commjssion~:::::::::::::::::::::
Environmental Protection Agency ____ __ ____ ____ __
General Services Administration ________________ _
National Aeronautical and Space Administration ___ _
Veterans Administration _______________ __ ______ _
Other Independent AgencieL __________________ _
Allowances for contingencies and civilian agency
pay raises __ ____ _________________ ______ _____ _
Undistributed intragovernmental transactions:
Employer share, employee reti remen!.. ________ _
Interest received by trust funds _____ __ ________ _
Total budget authority and outlays ____ __
Outlays
1972
actual
1973
estimate
1974
estimate
1972
actual
1973
estimate
1974
estimate
577
178
60
7, 158
12, 825
1, 479
75,084
1,625
75, 708
4, 081
1, 652
1, 571
9,354
553
8,658
22, 198
2, 293
2, 447
790
3, 307
11, 292
13, 064
581
194
11!
5, 756
11, 532
1, 826
77, 804
1,881
87, 859
5, 048
-2, 067
1, 774
9, 268
683
11, 327
32,744
2, 633
7, 420
96
3, 407
12, 566
15,553
590
205
121
5,115
10, 400
1, 242
83,481
1, 514
101, 880
3,713
- 356
1, 834
8,952
648
9, 025
32,612
2, 429
589
175
3, 015
12, 209
15,765
487
173
54
4,276
10,935
1, 250
75, 151
1, 530
71 . 780
3, 642
1, 256
1,180
10, 033
536
7,531
22, 124
2, 392
763
589
3,422
10, 710
9, 919
527
192
96
3,872
10, 124
1, 318
74, 200
1,753
83,580
3,364
-2, 247
1,496
9,563
621
8,042
31,250
2, 194
1, 148
40
3, 061
11,758
11,726
750
2,000
500
1,750
-2,768
-5,089
-2, 980
-5, 401
-3, 157
-5, 974
-2, 768
-5, 089
-2,980
-5,401
-3,157
-5,974
248,097
280,366
288,029
231,876
249,796
268,665
607
204
89
3,936
9, 562
1,431
78,200
1, 623
93,822
4, 768
5
1, 737
8,115
654
8, 139
32,577
2,374
2,127
499
3,135
11,703
10,738
MEMORANDUM
Portion
through current _______
action _____
by Congress ,available
_______________________
__ _ 164, 806 182, 844 172, 820 115, 353 120,346
40, 813
66, 431
Portion available without current action by Congress 102,793 131,653 146,477
Outlays from obligated balances _____ ___________ _
51,398
48, 401
Outlays from unobligated balances .. ______ ______ _
45,753
46, 812
Deductions for offseting receipts :
I ntrabudgetary transactions __ ___ _____________ _ -14, 980 -23, 285 -23, 002 -14,980 -23,285
Proprietary receipts from the public __________ __
- 4,523 -10, 846 -8, 266 -4, 523 - 10,846
Total budget authority and outlays .. ___ _
248,097
280,366
288,029
231,876
249,796
120,615
74, 074
55,715
49, 528
-23,002
-8,266
268,666
, Includes allowances for All-Volunteer Force, retirement system s reform . and civilian and military pay raises for
DepMtment of Defense_
2 Budget authority excludes appropriations to liquidate contract authorizations_ Outlays from such appropriations are
included as outlays from balances below.
Table 5. OUTLAYS AND RECEIPTS OF TRUST FUNDS (in mimons of dollars)
Outlays
Description
1972
actual
Funds to which receipts are appropriated :
Federal old-age and survivors and disability
ir.surance trust funds __ ____________________ _
Health insurance trust funds __________________ _
State and local government fiscal assista nce
trust fund .. ____ __________________________ _
Unemplo~mcnt trust fund _____ ____ __________ __
Railroad employees retirement funds .. ________ _
Federal employees retirement funds .. ________ __
Airport and airway trust fund s.. ____ _______ ___ _
Highway trust funds ________ ___________ ______ _
Foreign military sales trust fund .. ___ ________ __
Veterans life insurance funds __ _____ __________ _
Other trust funds (nonrevolving) ____ ____ _____ __
Trust revolving funds (table B--6) __ _____________ _
Su btotal. ___ ___________________________ _
Interfund transactions _________________ _______ __
Proprietary receipts from the public _____________ _
TotaL .. __ _____________________________ _
68
Receipts
1973
estimate
1974
estimate
1972
actual
1973
estimate
1974
estimate
40, 157
8, 819
49, 376
9, 573
55,229
12, 096
43, 207
8,765
50, 030
11,505
58, 278
16, 196
----(926
6,786
6, 100
2,459
4, 535
567
4, 839
2, 140
568
379
-812
6, 035
5, 500
2,631
5,127
563
4,712
2,500
658
488
-950
-- --5.-4'38
2,039
6, 763
1,551
5, 528
1,097
813
347
8,295
5, 973
2, 283
7,620
844
5, 751
2,298
823
417
6, U~5
2, 139
3, 805
1, 389
4, 690
1,184
801
362
-612
69,662
-768
-1 , 821
86,510
-855
-3,031
94,588
-1 , 021
-3,214
75, 548
-768
-1,821
95,839
-855
-3,031
109,705
-1,021
-3,214
67,073
82,624
90,354
72,959
91,952
105,471
6,7b8
3,187
8, 637
851
6,041
2,491
836
366
Table 6. SUMMARY OF FULL-TIME PERMANENT CIVILIAN
EMPLOYMENT IN THE EXECUTIVE BRANCH
As of June I
1973 estimate
Agency
1972
actual
In 1973
budget
Current
1974
estimate
Agriculture ___ __ ___ _______ ___ __ ____ __ _________________
82.511
83. 400
78.800
83. 400
Commerce ___ _____ _______ ___ ____ ____ ________ _________
28,412
28,200
28,400
29,700
Defense-military functions , ____ ________________ _______ 1,009,562 1,005,800
956,000
980,000
Defense-civil functions _____ _______ ____ ___ ______ ____ __
32, 400
30,800
30,585
31,300
Health, Education , and Welfare' ___ ____ ______ ___________
105,764
99, 500
110, 200
101,800
Housing and Urban DevelopmenL ______________________
15,200
16, 000
15, 800
13, 900
Interior ____ ___ ______ _______ ______ ____ ______ __ ________
57,000
56,900
56,892
56,900
Justice ______________ _______ __ _____ ________ ___________
47, 200
45,446
46, 300
47, 100
labor ___ ____ __ __________ _____________________________
12, 800
12, 400
12, 339
12. 600
State __ ___ __ __ ______ _______ _____ _______ __ _____ ____ ___
23,400
23,200
22,699
22, 800
Transportation _____ ________ ______ ______ ____ ___________
69, 400
67,700
67, 232
69, 200
Treasury __________________________ ___________________
\04, 000
95,728
99, 200
103,000
Atomic Energy Commission ___ ___ _____________________ __
7,400
7,000
6,836
6, 900
Environmental Protection Agency ____ ___ ____ __ ____ __ ____
8, 900
8, 500
9,200
7, 835
General Services Administration __ _______ ________ _______
36,002
37, 800
39,400
38, 100
National Aeronautics and Space Administration ___________
25,000
26,800
27, 428
26,800
Veterans Administration ___ ___ ______ ___ ____ ___ _________
171, 600
170,000
163, 179
174, 100
Other agencies :
Agency for International DevelopmenL _____ ___ ______ __
11,719
11, 800
10, 800
9,900
Civil Service Commission __________________ _________ __
5,260
6, 000
6, 000
6.000
Selective Service System ________________________ ____ _
6, 100
3,900
5.700
5, 791
Small Business Administration ______________ __________
4,200
4, 100
4,000
3,916
14,000
Tennessee Valley Authority ___ ______ ___ ___ ____________
14, 001
14, 000
14,000
Panama CanaL __ __ ___ ___ __ ____ ___ ____ __ __ _______ ___
14, 000
14,000
13, 777
14, 000
United States Information Agency _______________ __ __ __
9,100
9, 400
9,255
9,400
Miscellaneous agencies ________ _____ ______ __ ___ ______
33, 494
34,600
35,800
35,800
Subtotal ______ ______________ __ ______ __ _____ ____ 1,910,863 1,928, 300 1,913, 200 1, 869,100
Allowance for contingencies , ___ ___ _____ ____ ____ ________
5, 000
5, 000
2,000
Subtotal ____ __ __ _____ ________ _____________ ____ _ 1,910,863 1, 933,300 1, 915, 200 1,874,100
Postal Service ___ ________ _______ ___ ____ ____ __________ _
594,834
618,500
569, SOD
564, SOD
TotaL ___ __ ___ ______ __________ _____ __ __ _______
2.505.697 2.551.800 2.484.700 2. 438. 600
Change
1973-74
-4,600
200
-24,000
-1, 600
-8,400
-1, 900
-100
-100
-400
200
1,700
1,000
400
300
-300
-1,800
-1,600
-900
--:':i;soo
-100
___ ______
__ _______
-300
--.- -----44, 100
3,000
-41, 100
-5,000
-46.100
Excludes disadvantaged worker-trainees in the Public Service Careers program _
Excludes civilianization program of 5,000 in 1973 and 31,000 in 1974.
oro maintain comparability, excludes increases of approximately 9,000 in 1973 and 15,000 in 1974 for preparation and
transfer of adult welfare categories to the Federal Government under Public law 92-603 (effective Jan. I, 1974); does
reflect phasedown of Public Health Service hospitals and transfer of Saint Elizabeths Hospital to the District of Columbia
during 1974.
'Subject to later distribution.
I
2
Table 7. FEDERAL FINANCES AND THE GROSS NATIONAL PRODUCT,
1954-1973 (dollar amounts in billiona)
Budget receipts
Fiscal year
Gross
national
product
Budget outlays
Federal debt, end of year
Held by the public
Total
Amount
Percent
of GNP
Amount
Percent
of GNP
Amount
Percen't
of GNP
Amount
Percent
of GNP
195L ______ ____ _
195L __________ _
362. 1
378. 6
69.7
65. 5
19.3
17. 3
70. 9
68. 5
19. 6
18.1
270. 8
274. 4
74. 8
72. 5
224. 5
226.6
62. 0
59.9
1956 __ __________ _
195L __________ _
195L ___ ____ __ __
195L ______ ____ _
196L ______ __ __ _
409. 4
431. 3
440. 3
469.1
495. 2
74.5
80.0
79. 6
19. 2
92. 5
18. 2
18. 5
18. 1
16.9
18. 7
70. 5
76.7
82. 6
92.1
92. 2
17. 2
17. 8
18.8
19. 6
18. 6
272- 8
272. 4
279. 7
287.8
222. 2
219. 4
226.4
235. 0
237.2
54.3
SO. 9
51. 4
290. 9
66.6
63. 1
63.5
61. 3
58. 7
196L _____ __ ____
1962 _____ ____ ___ _
196L _________ __
196L ____ ______ _
196L __________ _
506.5
542.1
573. 4
612. 2
654. 2
94. 4
99. 7
106. 6
112. 7
116. 8
18.6
18. 4
18. 6
18. 4
17. 9
97.8
106. 8
111.3
118.6
118. 4
19.3
19. 7
19. 4
19. 4
18. 1
292. 9
303. 3
3\0. 8
316.8
323. 2
57.8
55. 9
54. 2
51.7
49. 4
238. 6
248. 4
254. 5
257.6
261. 6
47. 1
45. 8
44. 4
42.1
40. 0
721. 2
769. 8
826. 0
898.3
955. 0
130.9
149.6
153.7
187. 8
193. 7
18. 1
19. 4
18. 6
20. 9
20.3
134. 7
158. 3
178.8
184. 5
196. 6
18. 7
20.6
21. 6
20. 5
20. 6
329. 5
341. 3
369. 8
367.1
382.6
45. 7
44. 3
44. 8
40. 9
40. 1
264. 7
267.5
36. 7
34. 8
35. 2
279. 5
284. 9
31.1
197L ___ ________ 1, 010. 4
197L_ __________ 1. 093.1
1973 estimate_ ___ _ 1, 209.9
188.4
208.6
225.0
18. 6
19. 1
18.6
211. 4
20. 9
21. 2
20.6
409. 5
'437. 3
473. 3
40. 5
40. 0
39.1
304. 3
323. 8
348.8
30. 1
29. 6
28.8
1966 __ ______ ___ __
196L ____ __ ____ _
196L __________ _
196L _____ _____ _
1970 ______ ______ _
231. 9
249. 8
290. 6
SO. 1
47.9
29. 8
69
Table 8. BUDGET RECEIPTS AND OUTLAYS, 1789-1974 (in millions of dollars)
Re·
ceipts
Fiscal year
Outlays
SU~lus
or efi·
cit (-)
I
Fiscal year
Re·
ceipts
Outlays
SU~lus
or efi·
cit (-)
ADMINISTRATIVE BUDGET
178H849.•••••.•........
1850-1900.......•........
1,160
14,462
1,090
15,453
1901. •. .••...............
1902 .......... ... ... ....•
1903 ....•.....•..........
1904........ ............•
1905....................•
588
562
562
541
544
525
485
517
584
567
1906 ....... ..............
1907......• . ..... .......•
1908 .............. .. , ....
1909 .....................
1910 ....... ..............
595
666
602
604
676
570
579
659
694
694
1911 .....................
1912 . ...................
1913 ................ ....
1914 ... .................
1915 .... ................
702
693
714
725
683
691
690
1916 ....... .. ...........
1917 .... ................
1918 ..... .... . ...... ... ..
1919 ....................
1920 ....................
761
1,101
3,645
5,130
6,649
715
726
746
+70 1921. ••.. ..............•
-991 1922 .•. .................
1923 •................. : .
+63 1924 ••.................•
+77 1925 ....................
+45
-43
-23 1926 ... .................
1927 ... .............•...
+25 1928 ..•................•
+87 1929 ...................•
-57 1930...... ......... .....
-89
-18
1931. ...................
+11 1932•...................
.............. ......
+~ 1933
1934 ..... ....... ... ... ..
1935
...............
. ....
-"
-63
713
+48
1,954
-853
12,677 -9,032
18, 493 -13,363
6,358
+291
1936 ... ............. ....
1937 ....... ... ..........
1938 .... ................
1939,. .................•
5,571
4,026
3,853
3,871
3,641
5,062
3,289
3,140
2,908
2,924
+509
+736
+713
+963
+717
3,795
4,013
3, 900
3,862
4,058
2,930
2,857
2,961
3, 127
3, 320
+865
+1,155
+939
+734
+738
3,116
1,924
1,997
3,015
3,706
3,577
4,659
4, 598
6,645
6, 497
-462
-2, 735
-2,602
-3,630
-2, 791
3, 997
4,956
5, 588
4,979
8,422
7,733
6,765
8,841
-I,m
-3, 862
-4,425
-2,777
CONSOLIDATED CASH STATEMENT
1940 .................... 6,879
9,202
1941 ............ ........
1942 ... ......... ........ 15,104
1943 ... ................. 25, 097
9,589 -2,710
13, 980 -4,778
34,500 -19,396
78,909 -53, 812
1947 ...... ........ .....•
1948 ....................
1949 ....................
1950............... . ....
43,531
45, 357
41, 576
40,940
36, 931
36, 493
40, 570
43,147
+6, 600
+8,864
+1,006
-2,207
1944 ................ . ... 47,818
1945 ........ .... ........ 50, 162
1946 ......... ........... 43, 537
93,956 -46,138 1951. • •................•
95, 184 -45,022 1952 .... ... . ............
61,738 -18,201 1953 ... ...... . ..........
53, 390
68,011
71, 495
45,797
67,962
76, 769
+7,593
+49
-5, 274
UNIFIED BUDGET
1954 ....................
1955 ....................
69,719
65, 469
1956 ............. ..... ..
1957 ..... ........... ....
1958 ... .... .............
1959 .......... ...... ....
1960 .... . ..... ... . ......
74, 547
79,990
79,636
79,249
92, 492
1961. .. .................
1962 .......... ... .......
1963 ... .................
1964 ....................
1965 ... .. ...............
94,389
99, 676
106,560
112,662
116, 833
-1,170 1966 ... . ................
-3,041 1967 ...... ....... .......
1968 ... ............ ... . .
70,460 +4,087 1969 ....................
76,741 +3,249 1970 ...... ..... .........
82,575
-2,939
92,104 -12,855 197L. ..................
92,223
+269 1972 ......... .... ... ....
1973 estimate ...... . .....
97,795 -3,406 1974 estimate.. ...... . ....
106,813 -7,137
-4,751
111, 311
118,584 -5, 922
118,430 -1,596
70, 890
68, 509
130,856
149,552
153, 671
187,784
193,743
134,652 -3, 796
158,254 -8,702
178, 833 .,25,161
184,548 +3,236
196,588 -2,845
188, 392
208, 649
224,984
255, 982
211,425 -23,033
231 , 876 -23,227
249, 796 -24,812
268,665 -1'2,683
"less than $500 thousand.
Notes.-Certain interfund transactions are excluded from receipts and outlays starting in 1932. For years prior to 1932
the amounts of such transactions are not significant.
Refunds of receipts are excluded from receipts and outlays starting in 1913; comparable data are not available for prior
years.
70
GLOSSARY
FISCAL YEAR-Year running from July 1 to June 30 and designated by the calendar
year in which it ends.
I
AUTHORIZATION-Basic substantive legislation enacted by Congress which sets up
a Federal program or agency either indefinitely or for a given period of time. Such
legislation sometimes sets limits on the amount that can subsequently be appropriated, but does not usually provide budget authority.
BUDGET AUTHORITY (BA)-Authority provided by the Congress, mainly in the
form of appropriations, which allows Federal agencies to incur obligations to
spend or lend money. Most budget authority is voted each year. Some budget
authority is available from prior year balances, and occasionally some becomes
available automatically under permanent laws, such as that which is needed to
pay interest on the public debt.
OBLIGATIONS-Commitments made by Federal agencies to payout money for
products, services, or other purposes-as distinct from the actual payments. Obligations incurred may not be larger than the budget authority.
OUTLAYS-Checks issued, interest accrued on the public debt, or other payments
made, net of refunds and reimbursements.
BUDGET RECEIPTS-Money collected because of the sovereign or other compulsory
powers of the Government, net of refunds. (See offsetting receipts.)
BUDGET SURPLUS OR DEFICIT-The difference between budget receipts and
outlays.
FEDERAL FUNDS-Funds collected and used by the Federal Government, as owner.
The major federally owned fund is the general fund, which is derived from general taxes and borrowing and is used for the general purposes of the Government.
Federal funds also include certain earmarked receipts, such as those generated by
and used for the operations of Government-owned enterprises.
TRUST FUNDS-Funds collected and used by the Federal Government, as trustee,
for specified purposes, such as social security and highway construction. Receipts
held in trust are not available for the general purposes of the Government. Trust
fund receipts which are not anticipated to be used in the immediate future are
generally invested in Government securities and earn interest.
OFFSETTING RECEIPTS-Composed of (1) proprietary receipts from the public
derived from Government activities of a business-type or market-oriented nature
which are offset against related budget authority and outlays; and (2) intrabudgetary transactions between Federal funds and trust funds which are offset
to avoid double counting.
UNDISTRIBUTED INTRAGOVERNMENTAL TRANSACTIONS-Composed of
( 1) payments to trust funds by Government agencies, as employer, for their
employee's retirement; and (2) interest paid to trust funds on their investments
in Government securities. To avoid double counting, these transactions are deducted from the budget totals.
71
The White House Office
Council of Economic Advisers
Council on Economic Policy
Council on Environmental Quality
Council on International Economic Policy
Domestic Council
National AeronauHcs and Space Council 1
National Security Council
ACTION
Administrative Conference of the
United States
Advisory Commission on Intergov~
ern mental Relations
American Battle Monuments Commission
Appala,chian Regional Commission
Atomic Energy Commission
Canal Zone Government
Central Intelligence Agency
Civil Aeronautics Board
Commission on Fine Arts
Commission on Civil Rights
Consumer Product Safety Commission
Cost of Living Council
District of Columbia
Environmental Protection Agency
Equal Employment Opportunity Commission
Export-Import Bank of the United States
Farm Credit Administration
Office of Economic Opportunity 2
Office of Emergency Preparedness 3
Office of Management and Budget
Office of Science and Technology 3
Office of Telecommunications Policy
Special J\ction Office for Drug Abuse
Preverltion
Special Representative for Trade Negotiations
Federal Communication~ Commission
Federal Deposit Insurance
Corporation
Federal Home Loan Banr130ard
Federal Maritime Commis,sion
Federal Mediation and C;)rlciliation
Service
Federal Power Commission
Board of Governors of the ,Federal
Reserve System
Federal Trade CommissiOn
Foreign Claims SettlemEJ1t
Commission
General Services Admin's~ration
Indian Claims Commisson
Interstate Commerce ccmmission
National Aeronautics an I Space
Administration
National Capital Housin, Authority
National Capital Plannil"'€" Commission
National Credit Union Adrflinistration
National Foundation on \he Arts
and Humanities
National Labor Relations Board
National Mediation Board
National SCience Foundation
Panama Canal Company
Railroad Retirement Board
Renegotiation Board
Securities and Exchange Commission
Selective Service System
Small Business Administration
Smithsonian Institution
Subversive Activities Control Board
Tennessee Valley Authority
U.S. Arms Control and Disarmament
Agency
U.S. Civil Service Commission
United States Information Agency
United States Postal Service
United States Tariff Commission
Veterans Administration
Water Resources Council
@FedFRASER