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INTRODUCTION
The budget presentation and concepts used in most
of this document are the traditional ones used in presenting a President's budget. In many respects the concepts and presentation are legally required and are effective tools for Federal budgeting.
There is, however, no single "right" way of looking
at Federal receipts and outlays and therefore no single
"right" structure for the Federal budget.
• The dividing line between the Federal Government and the private sector cannot be delineated
unequivocally.
• Some Federal activities may not be quantifiable
or at least not quantifiable in a way that is commensurate with budget receipts and expenditures.
• Federal finances may be presented according to
alternative conceptual structures for specialized
purposes other than budgeting.
• Budget data may be organized in alternative ways
to view spending or receipts from complementary
perspectives.
• As the Government, the economy, the political
process, and the technical capability of budgeting
change over time, the appropriate scope and organization of the budget may also change.
The form of the budget is therefore continually being
adjusted to the needs of the President and the Congress
for establishing priorities and controlling Federal receipts, expenditures, and borrowing; the needs of the
Federal agencies for a workable system of effective program management based on legal requirements and
policy guidelines; and the needs of the public, including
the press and independent researchers, for information
with which to judge Federal operations. The change
in budgeting for credit in the present budget is a major
example of such a development.
The current budget concept, known as the "unified
budget," was developed in conformance with the recommendations of the President's Commission on Budget
Concepts (1967). While various adaptations have occurred over the years, the Commission's report continues to provide the basic framework for Federal budget
concepts and presentations. The unified budget is intended to be comprehensive, including the full scope
of Federal programs. It encompasses a diverse array
of activities—most unique to government and others
similar to business operations—and must accommodate
extensive and sometimes inconsistent legal requirements. It is based primarily on the Government's cash
receipts and outlays.
The Comptroller General and some Members of Congress, accountants, corporate leaders, and others have
criticized the current budget presentation. Some, notably the General Accounting Office, believe the budget's
primary focus on obligation controls and cash flows distorts decisionmaking, prejudicing investment and un-
http://fraser.stlouisfed.org/
280-000 0 - 9
Federal Reserve Bank of St. Louis
derstating liabilities. Others decry the artificiality, even
gimmickry, of certain distinctions between on-budget
and off-budget, and the practice of classifying certain
Federal entities (such as REFCORP) as non-budgetary
Government-sponsored enterprises. On the other hand,
some argue that the budget should be more like State
budgets that separate activities financed by general
funds from those financed by earmarked funds; some
argue that the current practice of including businesstype income as an offset to outlays should be replaced
by including such income in receipts and showing outlays on a gross basis; and others argue that the retirement trust funds and the debt and interest portions
of the budget should be separately displayed.
There is no dispute that receipts and spending should
be viewed in more than one way. Some standard alternatives have been used longer than the unified budget
and were taken for granted or strongly endorsed by
the President's Commission on Budget Concepts. And
there is a degree of merit in many of the criticisms
of the unified budget. Accordingly, this part of the
budget document provides a selection of alternative
budget presentations—in order to view Federal finances
in different ways, to display alternatives to those who
have not previously considered them, and to allow those
who criticize the conventional approach to examine the
effects of alternatives.
The alternative budget presentations are considered
in the next six chapters. The first of these chapters
describes the Federal sector as measured in the national income and product accounts, which are an integrated set of measures of aggregate economic activity,
including the gross national product, prepared for many
years by the Department of Commerce, The following
two chapters present longstanding alternative ways of
dividing up the budget totals that complement the normal presentation. One divides the budget between trust
funds and Federal funds; the other focuses on physical
capital.
The final three chapters in this part of the budget
document show alternative presentations that could replace the unified budget, rather than complement it.
These presentations and the unified budget all contain
similar information but are arranged differently. The
principal difference is in the focus, that which is highlighted for decision makers and the public. The focus,
in turn, may affect the incentive to make one budgetary
decision rather than another. The alternative presentations are not exact but rather are approximations
that illustrate the general concepts and some of the
key considerations. These three presentations are:
• The proposal made by the General Accounting Office, which focuses separately on operating and
capital uses, on Federal, trust, and enterprise
funds, and on aggregate totals.
Part Six-1
1 - 1 (PART 6)
Part Six-2
• A budget cast in the form of the State of California's budget, which, like most State budgets, focuses on individual funds rather than consolidated
totals.
THE BUDGET FOR FISCAL YEAR 1992
• A budget divided threefold among an operating
fund, a retirement fund, and a debt and interest
fund.
The three presentations are compared with each
other and the unified budget at the end of the chapter
discussing the last of these presentations, Chapter 5QQ.
XVI.
NATIONAL INCOME AND PRODUCT ACCOUNT
PRESENTATION
Part Six-3
XVI. NATIONAL INCOME AND PRODUCT ACCOUNT PRESENTATION
The National Income and Product Accounts (NIPAs)
are an integrated set of measures of aggregate economic
activity that are prepared by the Department of Commerce. One of the many purposes of the NIPAs is to
measure the Nation's total current production of goods
and services, known as gross national product (GNP),
and the incomes generated in its production. Because
the NIPAs are widely used in economic analysis, it
is important to show the NIPA presentation of Federal
transactions.
GNP is the sum of the net products of the household,
business, government, and foreign sectors. Federal
transactions are included in the NIPAs as part of the
government sector. The concepts for the Federal sector
have been designed to measure certain important economic effects of Federal transactions in a way that
is consistent with the conceptual structure of the entire
set of integrated accounts. The NIPA Federal sector
is not itself a budget, for it is not a financial plan
for proposing, determining, and controlling the fiscal
activities of the Government. Rather, it is an accounting
translation of the budget to meet specialized and important needs, chiefly the measurement of the impact of
Federal receipts, outlays, and the deficit on the national
economy. NIPA concepts differ in many ways from
budget concepts, and therefore the NIPA presentation
of Federal finances is significantly different from that
of the budget.
GNP is a measure of final output which excludes
intermediate product to avoid double counting. Government purchases of goods and services are included in
GNP as part of final output, together with personal
consumption expenditures, gross private domestic investment, and net exports of goods and services. Other
Federal expenditures—transfer payments, grants to
State and local governments, subsidies, and net interest
payments—are not part of final output. Rather, they
are transfers of income to others, whose consumption,
investment, purchases, or transactions with foreigners
are part of final output. An entire set of receipt and
expenditure transactions of the Federal Government is
prepared as one sector of the NIPAs; however, when
the accounts for all the sectors are consolidated into
a summary account for the Nation as a whole, transfer
payments, grants, subsidies, and net interest expenditures are canceled out by receipt of those payments
as income in other sectors. This leaves only purchases
to be included in final output.
Differences Between the NIPAs and the Budget
Federal transactions in the NIPAs are measured according to NIPA accounting rules in order to be compatible with the purposes of the NIPAs and other transactions recorded in the NIPAs. As a result they differ
from the budget in netting, timing, and coverage. These
differences cause total receipts and expenditures in the
NIPAs to differ from total receipts and outlays in the
budget. Differences in timing and coverage also cause
the deficit to differ. Netting differences have the same
effect on both receipts and expenditures and thus have
no effect on the deficit. Besides these differences, the
NIPAs combine transactions into different categories
from those used in the budget.
Netting differences arise when the budget records
certain transactions as offsets to outlays while they
are recorded as receipts in the NIPAs (or vice versa).
The budget treats all income that comes to the Government due to its sovereign powers—mainly, but not exclusively, taxes—as Governmental receipts. However,
any intragovernmental income from one account to another is offset against outlays rather than being recorded as a receipt. Government contributions for employee retirement is one example. The budget offsets
these payments against outlays while the NIPAs treat
the Federal Government as any other employer and
show contributions for employee social insurance as expenditures by the employing agencies and receipts to
the appropriate social insurance funds. The NIPAs also
include certain imputations which the budget does not.
For example, unemployment benefits for Federal employees are financed by direct appropriations rather
than social insurance contributions. The NIPAs impute
social insurance contributions by employing agencies to
finance these benefits.
The budget also offsets against outlays any income
that arises from voluntary business-type transactions
with the public. The budget classifies Medicare Part
B premiums as business-type transactions, whereas the
NIPAs record them as receipts.
Timing differences occur for receipts because the
NIPAs generally record personal taxes and social insurance contributions when they are paid and business
taxes when they are accrued, while the budget records
all receipts when they are received. The principal timing difference between NIPA expenditures and budget
outlays occurs because purchases are recorded on a delivery basis in the NIPAs, but when cash is disbursed
in the budget. This difference can be large for major
defense purchases because progress payments are recorded as outlays in the budget, while the NIPAs do
not record expenditures until delivery is made. The
NIPAs count work in progress as part of business inventories until delivery is made to the Government.
The budget and the NIPAs also have coverage differences. The NIPAs include off-budget Federal entities
and exclude transactions with U.S. territories. The
NIPAs also exclude the proceeds from the sales of assets such as land. Bonuses paid on Outer Continental
Shelf oil leases are shown as offsetting receipts in the
budget and are deducted from budget outlays. In the
Part Six-5
Part Six-6
THE BUDGET FOR FISCAL YEAR 1992
NIPAs these transactions are excluded as an exchange
of assets.
Financial transactions such as loans, loan repayments, loan asset sales, and loan guarantees are excluded from the NIPAs on the grounds that such transactions involve an exchange of assets with no production involved. Through 1991, in contrast, the budget
recorded loans as outlays when disbursed and as offsets
to outlays when repaid or sold. With the enactment
of the Federal Credit Reform Act of 1990, the budget
will make a fundamental change in the way that it
records lending transactions. For direct loan obligations
and loan guarantee commitments made after 1991, the
budget will record the estimated subsidy cost of the
direct loan or loan guarantee when the direct load or
guaranteed loan is disbursed. The nonsubsidized cash
flows will be recorded in nonbudgetary accounts as a
means of financing the budget deficit rather than as
budgetary transactions themselves. The new treatment
recognizes that part of a Federal direct loan is an exchange of assets with equal value but that part is normally a subsidy to the borrower. The new treatment
also recognizes the subsidy normally granted by loan
guarantees. (For further discussion, see Chapter VIII.A,
"Recognizing and Reducing Federal Underwriting
Risks"). In the NIPAs, neither the subsidies nor the
loan transactions are included; however, the NIPAs will
continue to include all interest transactions with the
public, including interest paid to the new financing accounts.
Deposit insurance outlays for resolving failed banks
and thrift institutions are similarly excluded from the
NIPAs on the grounds that there are no offsetting current income flows from these transactions. For the 1992
budget, this exclusion is the largest difference between
the NIPAs and the budget.
Federal Sector Receipts
Tables XVT-1 and XVI-3 show Federal receipts in
the four major categories used in the NIPAs, which
are similar to the budget categories but with significant
differences.
Personal tax and non-tax receipts is the largest category. It is composed primarily of personal income
taxes, but also includes estate and gift taxes, fees, fines,
and other receipts.
Corporate profits tax accruals differ in classification
from the corresponding budget category primarily because the NIPAs include the deposit of earnings of the
Federal Reserve System as corporate profits taxes,
while the budget treats these collections as miscellaneous receipts. The timing difference between the NIPAs
and the budget, as discussed above, is especially large
for this category of receipts.
Indirect business tax and nontax accruals are composed of excise taxes, customs duties, royalties, fines,
and other receipts.
Contributions for social insurance differ from the corresponding budget category primarily because: (1) the
NIPAs include Federal employer contributions for employee retirement in this category as a Government
receipt, while the budget offsets the contributions
against outlays as undistributed offsetting receipts; (2)
the NIPAs include premiums for social insurance programs including Part B of medicare as Government
receipts, which the budget also nets against outlays;
and (3) the NIPAs include imputations for Federal employees' unemployment insurance and workers' compensation.
Table XVI-1. FEDERAL TRANSACTIONS IN THE NATIONAL INCOME AND PRODUCT ACCOUNTS, 1981-1992
(In billions of dollars)
uescripuon
Actual
1981
1982
1983
289.6
69.4
53.4
211.4
310.0
52.1
50.0
231.1
292.5
55.7
50.2
247.3
623.8
643.3
231.8
(160.7)
(71.1)
281.3
(274.6)
(6.7)
90.1
66.7
1984
Estimate
1985
1986
1987
1988
1989
1990
1991
1992
302.5
75.3
54.9
279.2
340.4
74.6
55.9
305.8
357.0
81.1
50.9
326.1
400.8
99.1
53.5
345.9
411.3
108.1
55.6
382.6
457.6
113.8
57.8
412.6
483.0
113.6
58.8
439.6
503.2
113.4
70.4
461.5
543.7
120.0
74.8
498.6
645.7
711.9
776.8
815.2
899.4
957.6
1,041.9
1,094.9
1,148.4
1,237.2
264.4
(187.3)
(77.1)
312.8
(305.6)
(7.2)
83.4
82.2
287.4
(210.4)
(77.0)
347.5
(339.8)
(7.7)
85.7
90.6
297.2
(228.5)
(68.7)
352.2
(342.2)
(9.9)
90.7
109.7
341.5
(252.7)
(88.8)
374.0
(360.6)
(13.4)
97.8
128.3
368.6
(275.4)
(93.2)
394.6
(380.4)
(14.3)
107.4
134.6
375.4
(290.0)
(85.4)
411.1
(399.3)
(11.8)
103.1
139.3
377.8
(296.3)
(81.5)
433.2
(420.5)
(12.8)
108.3
148.8
399.0
(301.3)
(97.7)
462.0
(448.5)
(13.5)
115.8
167.7
416.1
(309.1)
(107.0)
504.7
(488.2)
(16.5)
128.3
182.1
449.9
(327.6)
(122.3)
536.4
(535.0)
(1-4)
148.1
199.1
438.9
(308.3)
(130.6)
590.9
(573.5)
(17.4)
160.2
209.3
12.5
-0.1
13.0
*
20.9
0.4
23.3
-0.1
20.7
0.1
22.8
31.1
-0.1
33.6
0.1
27.7
22.0
18.6
19.7
Total expenditures
682.4
755.9
832.4
873.0
962.3
1,028.0
1,060.0
1,101.8
1,172.2
1,247.9
1,353.0
1,419.4
Deficit ( - )
-58.5
-112.6
-186.7
-161.0
-185.5
-212.8
-160.7
-144.1
-130.3
-158.2
-203.6
-181.8
RECEIPTS
Personal tax and nontax receipts
Corporate profits tax accruals
Indirect business tax and nontax accruals
Contributions for social insurance
Total receipts
EXPENDITURES
Purchases of goods and services
Defense
Nondefense
Transfer payments
Domestic ("to persons")
Foreign
Grants-in-aid to State and local governments
Net interest paid
Subsidies less current surplus of Government enterprises
Wage disbursements less accruals
*$50 million or less.
N o t e — T h e estimates for 1 9 9 0 - 9 2 are preliminary; revisions will be published in the February 1991 issue of the Survey of Current
Business.
XVI.
Part Six-7
NATIONAL INCOME AND PRODUCT ACCOUNT PRESENTATION
Table XVI-2. RELATIONSHIP OF THE BUDGET TO THE FEDERAL SECTOR, NIPA
(In billions of dollars)
1987
1986
1988
1989
1990
1991
1992
Receipts
854.1
35.4
13.9
-2.5
-1.7
0.1
909.0
38.6
16.3
-4.7
-1.6
0.1
990.7
41.3
19.9
-8.4
-1.8
0.1
1,031.3
44.5
19.1
2.0
-2.0
1,091.4
48.4
20.5
-9.8
-2.2
1,165.0
52.0
21.6
0.8
-2.3
815.2
899.4
957.6
1,041.9
1,094.9
1,148.4
1,237.2
990.3
33.7
12.6
-14.0
3.2
4.1
1.0
-5.4
2.1
0.4
1,003.8
35.4
13.9
1.4
-3.0
6.8
6.4
-5.4
1.6
-0.8
1,064.1
38.6
16.3
-0.4
-12.8
4.8
-3.1
-5.5
1.3
-1.5
1,144.1
41.3
19.9
1.3
-23.4
-4.9
0.4
-6.0
0.9
-1.4
1,251.7
44.5
19.1
-7.2
-57.1
5.3
2.8
-6.2
0.7
-0.4
1,409.6
48.4
20.5
-8.5
-110.2
-0.9
-0.4
-6.8
1.1
-0.7
1,445.9
52.0
21.6
-10.6
-83.8
-0.4
0.2
-7.1
0.5
0.7
1,028.0
1,060.0
1,101.8
1,172.2
1,253.2
1,352.1
1,419.0
Unified budget receipts
Government contributions for employee retirement (grossing)
Other netting and grossing
Timing adjustments
Geographic exclusions
Other
769.1
33.7
12.6
1.3
-1.5
NIPA receipts
*
Expenditures
Unified budget outlays
Government contributions for employee retirement (grossing)
Other netting and grossing
Lending transactions
Deposit insurance and other financial transactions
Defense timing adjustment
Other timing adjustments
Geographic exclusions
Bonuses on outer continental shelf land leases
Other
NIPA expenditures
Federal Sector Expenditures
Tables XVI-1 and XVI-3 show expenditures in the
six major NIPA categories, which are very different
from the budget categories.
Purchases of goods and services include the goods
and services purchased by the Federal Government, including employee compensation. This category is divided into defense and non-defense components.
Transfer payments is the largest expenditure category. Domestic transfer payments are mainly for income security programs, such as social security and
medicare. Foreign transfer payments include grants to
foreign governments and payments under social security and other similar programs to individuals living
abroad.
Grants-in-aid to State and local governments are designed to help finance a range of programs. Grants
are for income security, capital expenditures for infrastructure, and other purposes.
Net interest paid is the interest paid by the Government on its borrowing, less interest received on its lending.
Subsidies less current surplus of Government enterprises consists of two elements: (1) subsidy payments
for resident businesses (including farms); and (2) the
current surplus (or deficit) of "Government enterprises",
such as the Postal Service, which are business-type operations of Government that usually appear in the
budget as public enterprise revolving funds. NIPA subsidies do not include the imputed credit subsidies estimated as part of credit reform in the budget. Rather,
they are categorized as financial transactions and are
excluded from the NIPAs.
Wage disbursements less accruals is an adjustment
that is necessary when wages are earned in a different
period than they are paid.
Differences in the Estimates.
Since the introduction of the unified budget in January 1968, NIPA receipts have exceeded budget receipts
in each year, due principally to the imputed employer
contributions for employee retirement. NIPA expenditures have usually been higher than budget outlays
for the same reason. However there are two components
of budget outlays that are sometimes sufficiently large
to overwhelm the grossing adjustments. These are financial transactions and payments to U.S. territories.
Budget outlays were greater in 1980, 1989, and 1990.
With the enactment of credit reform, effective in 1992,
lending activity with the public as recorded in the budget will be treated in a way that is closer to the NIPA
treatment. Disbursement and repayment of loans will
occur outside the budget as in the NIPAs, and only
imputed credit subsidies will remain as budget outlays.
However, this narrowing of differences in lending activity is likely to be overwhelmed by large increases in
other financial transactions, principally outlays for the
resolution of failed financial institutions.
Since 1968, the consolidated on-budget plus off-budget surplus or deficit has exceeded the Federal surplus
or deficit as measured in the NIPAs in all but three
years. In 1992, the consolidated budget deficit is estimated to be $280.9 billion, while the NIPA deficit is
estimated to be $181.8 billion.
Table XVI-1 displays Federal transactions using
NIPA concepts with actual data for the years
1981-1990 and estimates for 1991 and 1992 consistent
with the Administration's budget proposals. Table
Part Six-8
THE BUDGET FOR FISCAL YEAR 1992
XVT-2 displays the reasons for differences between the
data using budget concepts and NIPA concepts. Table
XVI-3 displays quarterly data using NIPA concepts beginning in October 1989. Annual NIPA data from
1947-1992 are published in Part Seven, tables 14.1
and 14.2. Additional details will be published in the
February 1991 issue of the Department of Commerce
publication, Survey of Current Business.
Table XVI-3. FEDERAL RECEIPTS AND EXPENDITURES IN THE NIPAs, QUARTERLY, 1990-92
(In billions of dollars; seasonally adjusted at annual rates)
Actual
Description
Oct.-Dec.
1989
Jan-Mar.
1990
Estimate
Apr.-June
1990
July-Sept.
1990
Oct.-Dec.
1990
Jan.-Mar.
1991
Apr.-June
1991
July-Sept.
1991
Oct.-Dec.
1991
Jan.-Mar.
1992
Apr.-June
1992
July-Sept.
1992
RECEIPTS
469.6
101.3
473.6
106.5
492.1
109.2
500.0
114.2
507.1
111.9
495.9
118.0
503.9
109.7
515.1
113.9
525.9
118.4
534.7
120.0
546.1
119.4
557.5
122.4
58.7
426.1
60.6
439.9
60.5
444.0
61.0
450.6
64.9
452.2
72.7
464.2
72.7
468.2
72.7
474.5
73.3
482.5
75.0
497-1
75.3
504.7
75.6
512.2
1,055.7
1,080.6
1,105.8
1,125.9
1,136.1
1,150.8
1,154.5
1,176.1
1,200.0
1,226.7
1,245.4
1,267.6
399.9
(299.2)
(100.7)
487.9
(470.5)
(17.3)
410.6
(307.2)
(103.4)
503.4
(490.3)
(13.1)
421.9
(309.6)
(112.3)
510.4
(491.4)
(18.9)
425.8
(312.6)
(113.2)
513.2
(496.1)
(17.0)
438.5
(326.5)
(112.0)
509.7
(508.7)
(1.0)
470.9
(350.5)
(120.4)
532.8
(536.8)
(-4.0)
463.0
(336.2)
(126.8)
546.1
(544.5)
(1.6)
431.2
(301.4)
(129.8)
556.1
(549.1)
(7.0)
427.0
(297.1)
(129.9)
573.6
(554.7)
(18.9)
438.6
(307.5)
(131.1)
592.7
(575.8)
(16.9)
442.6
(311.8)
(130.8)
596.0
(579.1)
(16.9)
447.6
(317.2)
(130.4)
599.4
(582.5)
(16.9)
121.5
175.2
128.5
178.1
131.5
184.3
129.8
189.8
132.5
193.1
146.3
197.5
154.3
201.5
159.0
204.3
158.8
206.3
159.4
208.3
160.5
210.3
161.8
212.3
21.3
28.3
23.8
13.1
26.1
16.6
15.9
15.5
20.1
19.0
19.9
19.5
Total expenditures
1,205.8
1,248.8
1,271.7
1,271.6
1,299.9
1,364.1
1,380.8
1,366.1
1,385.8
1,418.0
1,429.3
1,440.6
Deficit
-150.1
-168.3
-166.0
-145.7
-163.8
-213.4
-226.2
-190.0
-185.8
-191.2
-183.8
-172.9
Personal tax and nontax receipts
Corporate profits tax accruals
Indirect business tax and nontax accruals
Contributions for social insurance
Total receipts
EXPENDITURES
Purchases of goods and services
Defense
Nondefense
Transfer payments
Domestic ("to persons")
Foreign
Grants-in-aid to State and local governments
Net interest paid
Subsidies less current surplus of Government enterprises
Wage disbursements less accruals
Note—Because of the methods normally used to seasonally adjust NIPA data, the average of seasonally adjusted data for the 4 quarters of a fiscal year may not be equal to the unadjusted fiscal
year total.
XVII.
TRUST FUNDS AND FEDERAL FUNDS
PRESENTATION
Part Six-9
XVII. TRUST FUNDS AND FEDERAL FUNDS PRESENTATION
The budget consists of two major groups of funds:
Federal funds and trust funds.
The Federal funds group, which comprises the larger
part of the budget, includes all transactions not classified by law as being in trust funds. The main component of the Federal funds group is the general fund,
which is used for the general purposes of the Government instead of being restricted by law to a specific
program. It consists of all receipts not earmarked by
law to finance other funds, including virtually all income taxes, and all outlays financed by these receipts
and by general Treasury borrowing.
The Federal funds group also includes special funds
and revolving funds. Special funds are financed by earmarked receipts. Where the law requires that Federal
fund receipts from a specified source be earmarked to
finance a particular program, such as the license fees
deposited into the land and water conservation fund,
the receipts and associated outlays are recorded in special receipt and expenditure accounts. Revolving funds,
such as the Postal Service fund, conduct continuing
cycles of business-type activity. They charge for the
sale of products or services and use the proceeds to
finance their spending. The proceeds are credited to
the fund that makes the expenditure.
Trust funds are accounts that are financed by taxes
and other receipts earmarked by law for specific purposes and that are designated by law as "trust funds."
The predominant trust fund activity is social insurance,
such as social security, medicare, and unemployment
compensation. Other major trust funds are for Federal
employee retirement, highway construction, and airport
and airway development. These programs are not trust
funds in the private sector meaning of assets held in
a fiduciary capacity for someone else. The Federal Government owns the assets and, by enacting a law, can
change the future receipts and the terms under which
a fund's resources are spent. Trust funds are like special funds (or, in a few cases, like revolving funds)
except that they are designated a "trust fund" by law.
Table XVII-1 shows the receipts, outlays, and surplus
or deficit by fund group and whether the transactions
are on-budget or off-budget. The total on-budget receipts and outlays are the sum of the on-budget Federal
fund and trust fund receipts and outlays, respectively,
minus a deduction for the interfund transactions between the two groups. Interfund transactions are outlays of a fund in one group and receipts of a fund
in another group, such as the payment of interest by
the general fund to the hospital insurance trust fund
on its holdings of Treasury debt. Since the receipts
from interfund transactions are not receipts from the
public and the outlays are not outlays to the public,
these transactions must be subtracted when Federal
fund and trust fund amounts are added so that the
budget totals for receipts and outlays will record only
transactions with the public.
The off-budget Federal entities, discussed in the previous section, consist of the social security trust funds
and the Postal Service fund (which is a Federal fund).
Total off-budget receipts and outlays are added together
in the same way as on-budget receipts and outlays.
The on-budget and off-budget totals may themselves
be added together, as shown in table XVII-1, to arrive
at the total receipts, outlays, and surplus or deficit
of the Federal Government. The latter totals generally
represent the net fiscal transactions of the Federal Government with the public.
The on-budget and off-budget amounts are added
without any adjustment for interfund transactions. This
is because the interfund transactions between on-budget and off-budget are treated in a special way so that
the on-budget and off-budget amounts can be added
into a consolidated total without any further adjustment. Interfund payments from on-budget to off-budget,
such as the interest paid to social security on its holdings of Treasury debt, are not included in off-budget
receipts; instead they are subtracted in deriving offbudget outlays. Interfund payments from off-budget to
on-budget are treated symmetrically.
This treatment is displayed in the bottom panel of
table XVII-2. The first line shows the cash income and
outgo of the social security trust funds. The next line
shows the interfund receipts from on-budget: interest,
a transfer from the general fund equal to the income
tax collected on social security benefits, the employer
share of the social security contribution for Federal employees, and a small amount from other sources. The
final line shows receipts and outlays, both net of these
interfund transactions. These are the off-budget trust
fund receipts and outlays in table XVII-1. Social Security outlays are considerably less than cash outgo: an
estimated $35.8 billion in 1992. More detail and more
years are shown in Part Seven, "Historical Tables,"
table 13.1, where the estimated difference is shown to
grow to $61.2 billion in 1996.
Table XVII-2, besides its detail on social security,
displays the receipts, outlays, and balances of the major
trust funds or groups of closely related trust funds.
The trust fund balances are primarily invested in
Treasury securities.
Part Six-11
Part Six-12
THE BUDGET FOR FISCAL YEAR 1992
Table XVII-1. RECEIPTS, OUTLAYS, AND SURPLUS OR DEFICIT BY FUND GROUP
(In billions of dollars)
1990 actual
Receipts:
On-budget:
Federal funds
Trust funds
Interfund transactions
Total, on-budget receipts
Off-budget:
Federal funds
Trust funds
Total, off-budget receipts
Total, Federal Government receipts
Outlays:
On-budget:
Federal funds
Trust funds
Interfund transactions
Total, on-budget outlays
Off-budget:
Federal funds
Trust funds
Total, off-budget outlays
Total, Federal Government outlays
Surplus or deficit (-):
On-budget:
Federal funds
Trust funds
Total, on-budget surplus or deficit ( - )
Off-budget:
Federal funds
Trust funds
Total, off-budget surplus
Total, Federal Government surplus or deficit (-)
1991 estimate
1992 estimate
1993 estimate
1994 estimate
1995 estimate
1996 estimate
634.1
255.2
-139.6
667.9
273.1
-147.8
712.4
293.4
-156.0
764.4
313.2
-163.6
838.8
333.5
-172.5
906.6
359.1
-188.2
968.0
380.5
-204.9
749.7
793.2
849.8
914.0
999.8
1,077.5
1,143.5
281.7
298.3
315.3
338.7
365.5
389.8
417.2
281.7
298.3
315.3
338.7
365.5
389.8
417.2
1,031.3
1,091.4
1,165.0
1,252.7
1,365.3
1,467.3
1,560.7
973.2
193.1
-139.6
1,104.2
215.3
-147.8
1,119.1
231.1
-156.0
1,104.8
246.6
-163.6
1,058.5
264.3
-172.5
1,087.9
284.1
-188.2
1,139.1
311.9
-204.9
1,026.6
1,171.7
1,194.2
1,187.8
1,150.2
1,183.8
1,246.1
1.6
223.4
0.1
237.8
-1.1
252.8
1.0
265.4
0.7
276.2
0.5
286.0
-0.7
295.4
225.1
237.9
251.7
266.4
276.8
286.5
294.7
1,427.1
1,470.3
1,540.8
1,251.7
1,409.6
1,445.9
1,454.2
-339.0
62.1
-436.3
57.8
-406.8
62.3
-340.4
66.5
-219.7
69.2
-181.3
75.0
-171.1
68.6
-277.0
-378.5
-344.4
-273.8
-150.4
-106.3
-102.6
-1.6
58.2
-0.1
60.4
1.1
62.4
-1.0
73.3
-0.7
89.3
-0.5
103.9
0.7
121.8
56.6
60.4
63.6
72.3
88.7
103.4
122.5
-220.4
-318.1
-280.9
-201.5
-61.8
-2.9
19.9
XVII.
Part Six-13
TRUST FUNDS AND FEDERAL FUNDS PRESENTATION
Table XVII-2. RECEIPTS, OUTLAYS, AND BALANCES OF TRUST FUNDS
(In billions of dollars)
Receipts
Description
On-budget:
Airport and airway trust fund
Federal employees retirement funds
Foreign military sales trust fund
Health insurance trust funds
Highway trust funds
Military retirement fund
Railroad retirement trust funds
Unemployment trust fund
Veterans life insurance trust funds
Other trust funds
1990 actual
1991
estimate
Outlays
1992
estimate
1990 actual
1991
estimate
Balances1
1992
estimate
1991
estimate
1992
estimate
4.9
53.0
10.3
125.2
15.4
34.0
10.3
25.9
1.5
5.2
6.3
56.5
10.3
134.1
18.3
35.6
11.3
25.3
1.5
6.4
6.9
59.8
10.0
148.4
19.4
36.9
11.3
26.8
1.4
6.1
3.5
31.5
9.3
109.7
15.3
21.5
9.7
20.3
1.2
1.6
5.4
34.0
10.1
116.3
15.6
23.0
10.1
28.4
1.3
3.5
5.8
35.5
10.3
126.7
16.8
24.7
10.7
28.7
1.3
4.4
14.4
240.7
5.7
92.7
16.3
77.7
8.5
45.1
12.4
25.5
15.3
263.1
6.0
92.7
18.9
90.2
9.0
42.0
12.6
28.8
16.4
287.4
5.7
92.8
21.2
102.4
9.0
40.1
12.7
30.9
285.7
-0.1
-3.0
-3.9
-23.5
305.5
327.1
247.7
264.8
539.0
578.6
618.8
-3.6
-5.0
-23.9
-3.3
-5.4
-24.9
223.6
-0.1
-3.0
-3.9
-23.5
-3.6
-5.0
-23.9
-3.3
-5.4
-24.9
255.2
273.1
293.4
193.1
215.3
231.1
539.0
578.6
618.8
307.9
-26.3*
329.8
-31.5
351.1
-35.8
249.7
-26.3
269.4
-31.5
288.6
-35.8
214.9
272.5
335.0
Total, off-budget (social security)
281.7
298.3
315.3
223.4
237.8
252.8
214.9
272.5
335.0
Total
536.8
571.3
608.7
416.6
453.1
483.9
753.9
851.1
953.8
Subtotal
Intrafund receipts from on-budget
Intrafund receipts from off-budget
Interfund from off-budget
Proprietary receipts from the public
Total, on-budget
Off-budget:
Social security trust funds:
Cash income and outgo
Interfund receipts from on-budget
Proprietary receipts from the public
* $50 million or less.
1
1990 actual
Balances available on a cash basis (rather than an authorization basis) at the end of the year. Balances are primarily invested in Federal debt securities.
XVIII.
PHYSICAL CAPITAL PRESENTATION
Part Six-15
XVIII-
PHYSICAL CAPITAL PRESENTATION
FEDERAL PHYSICAL CAPITAL AND OTHER CAPITAL OUTLAYS
The importance and role of Federal and private investment for the future of the Nation are discussed
broadly in Chapter IV, "Investing in the Future." In
contrast this section classifies Federal outlays into several more technically defined categories of physical and
other capital. As noted in the introduction to Part Six,
this presentation is an alternative way of dividing up
the unified budget totals, as opposed to a replacement
of the existing structure. This presentation has been
a part of the budget for a number of years.
The major categories for physical and other capital
are: major public physical capital, conduct of research
and development, conduct of education and training,
financial capital outlays, and other capital. The technical presentation in this section provides continuity
with previously published analyses, is consistent with
physical capital and research and development data
extending back to the 1940s that appear in Part Seven,
"Historical Tables," presents detailed data by program,
and estimates nondefense physical capital net of depreciation.
The section that follows this one, "Supplemental
Physical Capital Information," is provided in accordance
with the requirements of the Federal Capital Investment Program Information Act of 1984. It uses definitions specified in the Act, which are different from
those in this section or elsewhere in the budget.
Capital outlays are outlays that yield long-term benefits. They take several forms and are made for many
purposes. They are in the form of grants to State and
local governments and direct Federal outlays. They can
be for physical capital, which yields a stream of services
over a period of years; and for research, development,
education, and training, which is less tangible but also
provides long-term benefits. They can also be for loans,
which yield monetary returns, although the loans usually provide subsidies to the borrowers as well and
therefore the face amount of the loans overstates the
value of these assets.
Inherent in the classification of these data are two
problems, one involving grants to others, and one involving spending that could be shown in more than
one category.
• For some grants to State and local governments,
the recipient jurisdiction, not the Federal Government, ultimately determines whether the money
is used to finance capital or current programs.
This analysis classifies all of the outlays in the
category where the recipient jurisdictions are expected to spend most of the money. Hence, shared
revenues are classified as current spending, although some may be spent by recipient jurisdictions on physical capital. Community development
block grants are classified as physical capital, although some may be spent for current purposes.
• Some spending could be classified into more than
one category. For example, grants for construction
of education facilities finance the acquisition of
physical assets, but they also contribute to the
provision of education and training. To avoid double counting, the outlays are classified in the category that is most commonly recognized as capital.
Consequently the conduct of education and training does not include the cost of education facilities,
because these facilities are included in the category of construction and rehabilitation of physical
assets. Similarly, the purchase of equipment for
research and development is included as acquisition of equipment, not conduct of research and
development.
This section is organized in three parts:
• the composition of Federal capital outlays;
• nondefense physical capital outlays net of depreciation; and
• detailed tables.
Composition of Federal Capital Outlays
The composition of Federal capital outlays consistent
with the Administration's 1992 budget is shown in
Table XVTII-1. These outlays are estimated to be
$241.1 billion in 1992, $1.4 billion or 0.6 percent more
than the 1991 estimate. This section initially discusses
physical capital, such as construction, rehabilitation,
and the acquisition of major equipment, and discusses
the more marginal categories (in terms of classification)
at the end, such as purchases of agricultural commodities and international development activities.
Outlays for major public physical capital (hereafter
referred to as physical capital in the text) are estimated
to be $129.6 billion in 1992, $0.8 billion less than the
1991 estimate of $130.4 billion. This capital includes
primarily outlays for construction, rehabilitation, and
major equipment. Direct physical capital outlays by the
Federal Government are estimated to be $102.4 billion
in 1992, and grants to State and local governments
for physical capital are estimated to be $27.2 billion.
Direct physical capital outlays by the Federal Government are primarily for national defense, estimated to
be $82.3 billion in 1992. Almost all of this, or an estimated $75.2 billion, is for the procurement of weapons
and other military equipment, and the remainder, $7.1
billion, is primarily for construction of military bases
and family housing for military personnel.
Outlays for direct physical capital for nondefense purposes are estimated to be $20.1 billion in 1992, $2.5
billion more than the 1991 estimate. The 1992 outlays
Part Six-17
Part Six-18
THE BUDGET FOR FISCAL YEAR 1992
Table XVIII-1. COMPOSITION OF FEDERAL CAPITAL OUTLAYS
(In billions of dollars)
1992
estimate
1990 actual
Major public physical capital:
Direct:
National defense
Nondefense
87.7
15.1
85.8
17.6
82.3
20.1
102.8
25.8
103.5
26.9
102.4
27.2
128.6
130.4
129.6
3.7
6.5
8.1
41.1
22.7
39.1
24.6
41.6
27.0
Subtotal, conduct of research and development .
Conduct of education and training:
Direct
Grants to State and local governments
63.8
63.8
68.6
12.2
14.9
14.8
16.7
17.2
17.9
Subtotal, conduct of education and training
Loans and other financial capital
Commodity inventories
Other
27.1
2.7
-1.3
7.0
31.4
1.9
35.1
-5.9
-0.1
-0.6
Subtotal, major public direct physical capital
Grants to State and local governments
Subtotal, major public physical capital
Other physical capital (nondefense, direct)
Conduct of research and development:
National defense
Nondefense
Total, Federal capital outlays
5.9
6.3
231.6
239.7
241.1
129.5
102.1
125.5
114.2
124.3
116.8
MEMORANDUM
National defense
Nondefense
include $12.9 billion for construction and rehabilitation.
These outlays are largely for water, power, and natural
resources projects of the Corps of Engineers, the Department of Interior, the Tennessee Valley Authority
and the power administrations in the Department of
Energy, and the construction and rehabilitation of veterans hospitals and Postal Service facilities. Outlays
for the acquisition of major equipment are estimated
to be $7.2 billion in 1992. The largest items are for
the space program, the air traffic control system, and
the Postal Service.
Grants to State and local governments for physical
capital are estimated to be $27.2 billion in 1992, $0.3
billion more than the 1991 estimate. More than half
of these outlays, or $14.8 billion in 1992, are grants
to assist with construction of the Interstate Highway
System and other major highways. Other major grants
for physical capital are for sewage treatment plants,
community development, airports, and mass transit. Information on total grants to State and local governments, both for capital and for other purposes, is available in this volume in Chapter VLC, "Providing Federal
Aid to State and Local Governments."
Outlays for other physical capital (nondefense, direct)
are estimated to be $8.1 billion in 1992. This category
includes conservation programs for the improvement of
land, the purchase and sale of assets, and other activities.
Outlays for the conduct of research and development
are estimated to be $68.6 billion in 1992, $4.8 billion
more than the 1991 estimate. These outlays are devoted
to increasing our basic scientific knowledge and promot-
ing related research and development activities. They
increase our national security, improve the marginal
productivity of capital and labor for both public and
private purposes, and enhance the quality of life. More
than three-fifths of the outlays for the conduct of research and development, an estimated $41.6 billion in
1992, are for national defense.
Physical capital for research and development is included in the physical capital category.
Nondefense outlays for the conduct of research and
development are estimated to be $27.0 billion in 1992,
$2.4 billion or 10 percent more than the 1991 estimate.
This is almost entirely direct spending by the Federal
Government, and is largely for the space programs, the
National Science Foundation, health research, and research for nuclear and non-nuclear energy facilities.
These programs as well as others are discussed in
Chapter IV.C., "Enhancing Research and Development
and Expanding the Human Frontier."
Outlays for the conduct of education and training
are estimated to be $35.1 billion in 1992, $3.7 billion
more than the 1991 estimate. These outlays add to
the stock of human capital by developing a more skilled
and productive labor force. Grants to State and local
governments for this category are estimated to be $17.9
billion in 1992, more than half of the total. They are
primarily for the disadvantaged and the handicapped,
and for vocational and adult education. Direct education
and training outlays by the Federal Government are
estimated to be $17.2 billion in 1992, $2.4 billion more
than the 1991 estimate. Programs in this category are
primarily aid for higher education through student fi-
XVIII.
PHYSICAL CAPITAL PRESENTATION
nancial assistance, guaranteed student loan subsidies,
the veterans GI bill, and health training programs. This
category does not include outlays for education and
training of Federal civilian and military employees.
Physical capital for education and training is included
in the physical capital category.
Loans1 and other financial capital include direct loan
disbursements for new loans, repayments of previous
loans, the sale of loan assets, and related activities.
Because of new credit reform legislation, loan data in
this category include activity only for loans obligated
in 1991 or earlier. Repayments, sales, and other adjustments are expected to exceed disbursements by $5.9
billion in 1992. The major loan activities are for the
sale of military equipment to foreign countries, promotion of exports and housing, and assistance to farmers and college students. The Federal Credit Reform
Act of 1990 has changed the treatment of loans obligated or guarantees committed in 1992 or later. For
these direct and guaranteed loans, only the estimated
subsidy value of the assistance is included as budget
outlays. The subsidies are not classified in this loan
category but are classified according to their program
purpose, such as for construction, education and training, or non-capital outlays. The unsubsidized cash flows
are not included in the budget. More information on
the new credit reform concepts is available in Chapter
VTII.A., "Recognizing and Reducing Federal Underwriting Risks".
Sales of commodity inventories are estimated to exceed purchases by $0.6 billion in 1992. These are entirely for direct Federal nondefense purposes. Almost
all outlays in this category are for the purchase or
sale of agricultural products pursuant to farm price
support programs. Net sales of these commodities in
1992 are estimated to be $0.7 billion. Other outlays
in the category are for purchases of oil for the strategic
petroleum reserve.
Other capital outlays are for the collection of information, such as by the Bureau of the Census, and for
foreign economic assistance grants for general economic
development or humanitarian needs. These outlays are
estimated to be $6.3 billion in 1992.
Nondefense Physical Capital Outlays Net of
Depreciation
This section presents data on physical capital assets
and estimates of the depreciation on these assets, which
is the reduction in value due to wear and tear, obsolescence, and other factors. The difference between total
(or gross) capital formation and depreciation is net capital formation. These data are presented in constant
fiscal year 1982 dollars. Estimates have not been made
of net defense capital formation.
For many years, current and constant-dollar data on
the value of most forms of both public and private
physical capital—e.g., roads, factories, and housing—
have been estimated by the Department of Commerce
includes offsets for writeoffs of defaulted loans, which do not directly affect outlays.
In such cases, there is an offsetting adjustment in the category that is not for capital
outlays.
Part Six-19
and published in the Survey of Current Business. (See
pp. 31-32 of the October 1990 issue and the references
therein.) These data include estimates of depreciation
of defense capital. However, the Commerce data are
not directly linked to the Federal budget and do not
include estimates for the yfcars covered by the budget.
For budgetary purposes, OMB had to prepare separate
estimates.
The estimates were developed first of all from the
OMB historical data base for Federal nondefense physical capital outlays and grants to State and local governments for physical capital. These are the same
nondefense physical capital outlays presented in the
previous section. This data base extends back to 1940
and was supplemented by rough estimates of such
spending during 1915-1939.
The resulting series of physical capital outlays in current dollars was adjusted to constant fiscal year 1982
dollars using price deflators for Federal nondefense capital purchases. The resulting constant dollar series is
shown as gross capital formation in Table XVIII-2.
These constant dollar historical data were then depreciated on a straight-line basis over the following assumed useful lives: 40 years for capital financed by
grants (primarily highways); 46 years for water and
power projects; 30 years for other nondefense construction and rehabilitation; and 16 years for major equipment. The difference between gross capital formation
and depreciation is shown as net capital formation.
These data should be viewed as rough approximations. They have substantial margins of estimating
error and provide only a basis for broad generalization.
The sources of error include:
• The extended historical outlay series.—The historical data series was extended back from 1940 to
1915 using data from selected sources. There are
no consistent outlay data on nondefense physical
capital for this period, and the estimates are approximations.
• Price adjustments.—The replacement cost of the
Federal stock of nondefense physical capital has
increased through time, but the rate of increase
is not known exactly. An estimate of replacement
costs in fiscal year 1982 prices was made through
the application of the National Income and Product Accounts deflator series for Federal, State, and
local purchases of durables and structures indexed
to fiscal year 1982 prices. There are no specific
price indices for public purchases of durables and
structures for 1915 through 1939, and estimates
were made on the basis of Census Bureau historical statistics on constant price public capital formation.
• Depreciation estimates.—The useful lives of
nondefense physical capital are very uncertain.
This is compounded by using estimated lives for
broad classes of assets, which do not apply uniformly to all the components of each group. The
depreciation rate is also very uncertain, and
straight-line depreciation may not be the most accurate method.
Part Six-20
THE BUDGET FOR FISCAL YEAR 1992
The data in Table XVIII-2 show that net physical
capital outlays, measured in constant dollars, generally
increased between 1960 and 1970. It also generally increased during the 1970s, when depreciation was largely based on the relatively low physical capital spending
of the 1940s and 1950s, so gross capital outlays primarily added to the capital stock rather than replaced
capital. However, with the passage of time, the capital
stock became larger, and consequently depreciation
grew. More and more gross physical capital outlays
were required just to maintain the size of the capital
stock. Since the early 1980s, gross physical capital outlays have remained relatively constant. Depreciation
continued to rise because of capital outlays in earlier
years. As a result, net capital outlays declined in the
1980s.
The composition of nondefense public physical capital
outlays—on both a gross and a net basis—has changed
substantially. Before the mid-1950s, direct nondefense
physical capital outlays exceeded grants for physical
capital outlays, on both a gross and a net basis. However, by the end of the 1950s, after construction of
the Interstate Highway System had begun, grants for
physical capital substantially exceeded direct physical
capital outlays. This relationship has continued on a
gross basis, but the trend on a net basis has changed.
With increasingly higher depreciation relative to gross
physical capital outlays for assets financed by grants,
net physical capital outlays for grants are estimated
to be less than net direct physical capital outlays in
1992.
Detailed Tables
Tables XVIII-3 and XVIII-4 provide detail on the
composition of physical and other capital outlays. They
provide two basic displays. Table XVIII-3 shows data
on national defense and nondefense capital outlays, and
Table XVIII-4 shows data on capital grants for State
and local governments and for direct Federal capital
outlays.
Table XVIII-2. COMPOSITION OF GROSS AND NET FEDERAL AND FEDERALLY FINANCED NONDEFENSE PUBLIC PHYSICAL CAPITAL OUTLAYS
IN CONSTANT (1982) PRICES
(In billions of dollars)
Direct Federal capital
Total nondefense capital
Year
Five-year intervals:
1960
1965
1970
1975
1980
Annual data:
1985
1986
1987
1988
1989
1990
1991 estimate
1992 estimate
* $50 million or less.
Capital financed by Federal grants
Composition of net
capital
Gross
Depreciation
Net
Gross
Depreciation
Net
Water
and
power
Composition of net capital
Gross
Other
Depreciation
Net
Transportation
(mainly
highways)
Community and
regional
development
Natural
resources
and environment
Other
18.1
26.0
25.4
26.4
33.6
7.5
9.8
12.1
14.9
17.8
10.6
16.2
13.3
11.5
15.8
5.9
8.7
6.1
8.2
9.1
4.1
4.7
4.9
5.7
6.6
1.8
4.0
1.2
2.5
2.6
1.2
1.9
0.9
2.1
1.7
0.6
2.1
0.2
0.5
0.9
12.2
17.3
19.3
18.2
24.5
3.4
5.1
7.2
9.3
11.3
8.8
12.2
12.1
8.9
13.2
9.0
10.8
7.5
3.3
5.3
-0.3
1.2
3.3
2.5
4.2
-0.2
0.3
2.9
4.2
0.3
0.2
1.0
0.3
-0.5
34.3
34.5
33.4
35.4
33.4
34.8
36.2
36.5
21.3
22.1
22.8
23.7
24.6
25.4
26.4
27.3
13.0
12.4
10.6
11.7
8.9
9.4
9.8
9.2
11.4
11.0
12.3
14.3
13.3
14.0
15.6
16.7
7.5
7.8
8.0
8.4
8.8
9.2
9.7
10.3
3.9
3.2
4.3
5.9
4.4
4.8
5.9
6.4
0.6
0.3
0.7
0.9
0.3
0.8
0.3
0.9
3.3
2.9
3.6
5.0
4.1
4.0
5.6
5.6
22.9
23.5
21.1
21.1
20.2
20.9
20.6
19.8
13.8
14.4
14.8
15.3
15.7
16.2
16.7
17.1
9.1
9.1
6.3
5.8
4.4
4.7
3.9
2.8
5.8
6.5
4.6
4.7
3.9
4.4
3.7
2.9
2.0
1.4
0.8
0.6
0.3
1.7
1.7
1.3
0.9
0.6
0.6
0.5
0.3
-0.4
-0.4
-0.4
-0.4
-0.3
-0.4
-0.3
-0.1
*
-0.3
- *
XVIII.
Part Six-21
PHYSICAL CAPITAL PRESENTATION
Table XVIII-3 DETAIL OF FEDERAL CAPITAL OUTLAYS BY DEFENSE
AND NONDEFENSE
Table XVIII-3. DETAIL OF FEDERAL CAPITAL OUTLAYS BY DEFENSE
AND NONDEFENSE—Continued
(In millions of dollars)
(In millions of dollars)
1990 actual
CAPITAL OUTLAYS:
NATIONAL DEFENSE:
Major public physical capital:
Construction and rehabilitation:
Military construction
Family housing
Atomic energy defense activities
and other
Subtotal, construction and rehabilitation
1991 estimate
1992 estimate
Other
Subtotal, acquisition of major
equipment
4,575
607
4,019
490
4,020
440
1,268
1,745
2,669
6,451
6,255
7,129
80,858
79,098
74,300
545
682
908
Subtotal, acquisition of major
equipment
81,403
79,779
75,208
Subtotal, major public physical
capital
87,854
86,034
82,337
Acquisition of major equipment:
Procurement
Atomic energy defense activities
and other
Other capital outlays:
Conduct of research and
development
Defense military
Atomic energy and other
Subtotal, defense research and
development
Other outlays
Subtotal, other capital outlays
Subtotal, national defense capital
outlays
NONDEFENSE:
Major public physical capital:
Construction and rehabilitation:
Highways
Mass transportation
Rail transportation
Air transportation
Water transportation
Community development block
grants
Urban development acton grants ..
Other community and regional development
Pollution control and abatement....
Water resources
Other natural resources and environment
Energy
Veterans hospitals and other
health
Postal Service
Other programs
Subtotal, construction and rehabilitation
Acquisition of major equipment:
Air transportation
Other transportation
Space flight, control, and data
communications
General science and basic research
Postal Service
38,247
2,831
36,363
2,785
38,655
2,919
41,078
39,148
41,574
555
356
383
41,634
39,504
41,957
129,488
125,539
124,293
13,972
3,142
36
1,312
99
14,116
3,371
91
1,567
126
14,837
3,051
149
1,723
124
2,818
209
3,073
210
3,097
200
834
3,163
2,669
895
3,438
2,925
790
3,403
2,906
926
2,557
1,111
2,081
1,203
2,956
879
1,070
1,309
892
1,361
1,886
1,088
926
2,974
34,995
37,145
39,426
1,344
340
1,688
420
1,761
452
1,793
2,009
1,869
148
247
241
494
199
784
Other physical assets (grants)
Subtotal, major public physical
capital
Other capital outlays:
Other physical assets (direct)
Conduct of research and
development:
General science, space, and
technology:
NASA
National Science Foundation ....
Other general science
Subtotal, general science,
space, technology
Energy
Transportation:
Department of Transportation ...
NASA
Subtotal,transportation
Health:
National Institutes of Health
All other health
Subtotal, health
1990 actual
1991 estimate
1992 estimate
1,293
1,761
2,094
5,165
6,613
7,160
585
587
641
40,745
44,345
47,227
3,676
6,524
8,057
5,624
1,520
784
6,158
1,702
897
6,859
1,936
1,076
7,927
8,757
9,872
2,342
2,435
2,813
272
701
365
816
407
908
973
1,181
1,315
7,092
1,162
7,320
1,408
7,736
1,528
8,253
8,728
9,264
Agriculture
Natural resources and environment
All other research and development
937
1,220
987
1,376
1,022
1,434
1,081
1,157
1,325
Subtotal, conduct of research
and development
22,732
24,620
27,044
7,795
9,737
11,797
9,559
412
11,095
436
12,275
398
17,766
Conduct of education and training:
Department of Education:
Higher education
Elementary, secondary, and vocational education
Other
Subtotal, Department of Education
21,269
24,470
Veterans readjustment benefits
Training and employment programs
Health training
Other education and training
441
495
574
3,890
1,176
3,783
3,954
1,313
4,344
4,133
1,337
4,518
Subtotal, conduct of education
and training
27,056
31,374
35,031
-398
-4,446
3,034
-2,195
-743
-3,229
2,945
-807
-5,512
-2,258
91
-114
-358
-562
401
-179
39
-36
-170
166
-424
264
3,288
234
1,336
259
692
Loans and other financial capital:
Loans:
International affairs
Agriculture
Mortgage credit
Deposit insurance
Other advancement of commerce
Transportation
Disaster relief
Other community and regional
development
Education
Part Six-22
THE BUDGET FOR FISCAL YEAR 1992
Table XVIII-3. DETAIL OF FEDERAL CAPITAL OUTLAYS BY DEFENSE
AND NONDEFENSE—Continued
Table XVIII-3. DETAIL OF FEDERAL CAPITAL OUTLAYS BY DEFENSE
AND NONDEFENSE—Continued
(In millions of doflars)
(In millions of dollars)
Other
Subtotal, loans
Other financial capital:
International development
Other
Subtotal, other financial capital
Subtotal, loans and other financial capital
Commodity inventories:
Agriculture
1990 actual
1991 estimate
1992 estimate
2,866
892
-232
1,894
452
-7,503
688
130
1,307
164
1,484
148
818
1,471
1,632
2,713
1,922
-5,871
-1,622
-184
-666
1990 actual
1991 estimate
1992 estimate
268
33
51
-1,355
-151
-614
International development
2,926
3,591
2,093
3,468
1,979
3,951
Subtotal, other outlays
6,517
5,561
5,930
61,339
69,852
69,577
Subtotal, nondefense capital outlays
102,084
114,197
116,803
Total, capital outlays
231,572
239,735
241,097
Strategic petroleum reserve
Subtotal, commodity inventories
Other outlays:
Collection of information
Subtotal, other capital outlays
XVIII.
Part Six-23
PHYSICAL CAPITAL PRESENTATION
Table XVIII-4. DETAIL OF FEDERAL CAPITAL OUTLAYS BY GRANTS AND
DIRECT FEDERAL PROGRAMS
Table XVIII-4. DETAIL OF FEDERAL CAPITAL OUTLAYS BY GRANTS AND
DIRECT FEDERAL PROGRAMS-Continued
(In millions of dollars)
(In millions of dollars)
1990 actual
GRANTS:
Major public physical capital:
Construction and rehabilitation:
Highways
Mass transportation
Rail transportation
Air transportation
Pollution control and abatement
Other natural resources and environment
Community development block grants
Urban development action grants
Other community and regional development
Other construction
Subtotal, construction and rehabilitation
Other physical assets
Subtotal, major public physical capital
1991 estimate
1992 estimate
Other
13,961
3,142
16
1,220
2,533
14,059
3,371
20
1,434
2,673
14,798
3,051
31
1,575
2,559
165
2,818
209
195
3,073
210
143
3,097
200
712
446
753
547
640
442
25,220
26,334
26,537
585
587
641
25,805
26,922
27,177
Other capital outlays:
Conduct of research and development..
Conduct of education and training:
Training and employment
Elementary and secondary education
Other
345
370
393
3,042
9,281
2,589
3,049
10,742
2,859
3,149
11,853
2,899
Subtotal, conduct of education and
training
14,912
16,650
17,901
Collection of information
68
85
56
Subtotal, other capital outlays
15,326
17,105
18,351
Subtotal, grants for capital outlays
41,131
44,026
45,528
DIRECT FEDERAL PROGRAMS:
Major public physical capital:
Construction and rehabilitation:
National defense
Water resource projects
Other natural resources and environment
Energy
Transportation
Veterans hospitals and other health
facilities
Postal Service
Other construction
Subtotal, construction and rehabilitation
Acquisition of major equipment:
National defense
NASA
Postal Service
Subtotal, acquisition
equipment
of
6,048
2,795
7,092
2,824
Subtotal, major public physical capital
Other capital outlays:
Other physical assets
Conduct of research and development..
Conduct of education and training:
Veterans benefits and services
Higher education
Elementary and secondary education
Employment and training
Health training
Other
Subtotal, conduct of education and
training
Loans and other financial capital:
Loans:
International affairs
Energy supply
Agriculture
Mortgage credit
Deposit insurance
Other advancement of commerce
Transportation
Disaster relief and insurance
Higher education
Veterans benefits and services
Housing assistance
Other
Subtotal, loans
Subtotal, loans and other financial
capital
1,514
2,557
223
1,811
2,081
389
1,986
2,956
429
Commodity inventories:
Strategic petroleum reserve
Commodity Credit Corporation
Other
841
1,070
1,178
850
1,361
1,730
1,042
926
2,765
Collection of information
International development
16,226
17,065
20,018
81,403
1,793
247
79,779
2,009
494
75,208
1,869
784
1991 estimate
1992 estimate
3,125
4,110
4,506
major
Other financial capital
6,296
2,547
1990 actual
Subtotal, commodity inventories ....
Subtotal, other capital outlays
86,568
86,392
82,368
102,794
103,457
102,386
3,676
63,465
6,524
63,399
8,057
68,225
573
7,704
521
848
1,152
1,374
643
9,636
748
905
1,296
1,531
729
11,739
801
984
1,320
1,617
12,172
14,759
17,190
-398
116
-4,446
3,034
-2,195
-358
-562
401
3,288
2,648
-26
344
-743
1,429
-3,229
2,945
-807
-179
39
-36
1,336
67
99
-516
-5,512
-57
-2,258
91
-114
-170
166
-424
692
-493
-53
581
1,846
403
-7,551
818
1,471
1,632
2,664
1,874
-5,919
268
-1,622
89
33
-184
4
51
-666
3
-1,266
-147
-611
2,857
4,078
2,008
3,834
1,923
4,319
87,647
92,252
93,183
Subtotal, direct Federal capital outlays
190,441
195,709
195,569
Total, capital outlays
231,572
239,735
241,097
Part Six-24
THE BUDGET FOR FISCAL YEAR 1992
SUPPLEMENTAL PHYSICAL CAPITAL INFORMATION
Introduction
The Federal Capital Investment Program Information
Act of 1984 (Title II of Public Law 98-501; hereafter
referred to as the Act) requires that the budget include
projections of Federal physical capital spending and information regarding recent assessments of public civilian physical capital needs. This section is submitted
to fulfill that requirement.
Data on historical trends going back to 1940 for Federal public physical capital spending, using the definitions in the previous section, "Federal Physical Capital
and Other Capital Outlays," can be found in the Historical Tables in Part Seven of this volume.
This section is organized in two major parts. The
first part projects Federal outlays for public physical
capital and the second part presents information regarding public civilian physical capital needs.
Projections of Federal Outlays For Public
Physical Capital
Summary of projections.—Federal public physical
capital spending as defined for this report was $61.3
billion in 1990 and, for current services estimates,2 is
projected to increase to $77.0 billion by 1996. The largest components are for roads and bridges and for federally assisted housing, which together account for
about two-fifths of Federal public physical capital
spending.
On a Presidential policy basis, the 1992 budget is
proposing $68.7 billion for physical capital spending for
1992, $0.9 billion less than the current services level
of $69.6 billion.
Definitions.—Federal public physical capital spending is defined in this report as specified in the Act.
It covers spending for construction and rehabilitation,
acquisition of major equipment, and spending for all
other physical assets, such as the purchase and improvement of land and structures. The data for physical
capital spending are generally the same as those used
for the previous section "Federal Physical Capital and
Other Capital Outlays", with two major exceptions required by the Act. They concern housing and military
physical capital spending. In the case of the Department of Defense, this report includes only military construction and family housing, and excludes other capital
spending, such as for military weapons, aircraft, and
ships. Second, this report includes considerable
amounts of spending for federally assisted housing that
is at least indirectly associated with housing construction. Most of this is considered current spending (i.e.,
not for capital) in deriving the data for the previous
section "Federal Physical Capital and Other Capital
Outlays," because it is to pay off loans for public housing rather than to finance the housing construction directly.
2 In this chapter, current services estimates are consistent with the caps enacted as
part of the Budget Enforcement Act of 1990. For a discussion of current services estimates,
see Chapter XV, "Current Services Estimates."
This report excludes financial capital, such as loans,
and outlays for human capital, such as the conduct
of education, training, and research. The data in this
report generally exclude offsetting collections that finance the spending, such as collections from the sale
of energy.
Projections.—Table XVTII-5 shows projected current
services outlays for Federal physical capital by the
major categories specified in the Act. Total Federal outlays for transportation-related physical capital were
$20.2 billion in 1990, and current services outlays are
estimated to increase to $28.7 billion by 2000. Outlays
for nondefense housing and buildings were $13.5 billion
in 1990 and are estimated to increase to $22.8 billion
by 2000. Physical capital outlays for other nondefense
categories were $22.9 billion in 1990 and are projected
to be $32.6 billion by 2000. For national defense, this
spending was $4.8 billion in 1990 and is estimated to
increase to $5.9 billion in 2000.
Table XVIII-6 shows current services projections adjusted for inflation on a constant dollar basis to 1996,
using fiscal year 1982 as the base year.
Table XVIII-7 compares the current services and
Presidential policy projections from 1990 to 1996 in
current and constant dollars.
For outlay details for most programs, see the items
included in major public physical capital in "Federal
Physical Capital and Other Capital Outlays," especially
tables XVIII-3 and XVTII-4. For major programs that
are formula grants to States, information on the estimated distributions by State for 1990-1992, consistent
with Presidential policy estimates, can be found in a
separate publication entitled Budget Information for
States, prepared by the Office of Management and
Budget.
Public Civilian Capital Needs Assessments
The Act requires information regarding the state of
major Federal infrastructure programs, including highways and bridges, airports and airway facilities, mass
transit, railroads, federally assisted housing, hospitals,
water resources projects, and space and communications investments. Funding levels, long term projections, policy issues, needs assessments, and critiques,
are required for each category.
Much of the needs assessment material formerly presented in the Supplement to Special Analysis D has
been incorporated in the discussions of individual programs in other parts of the budget. Indeed, this budget
focuses far more on the need to maintain our capital
stock and improve national productivity than has been
the case in past years, obviating the need for separate
discussion.
Capital needs assessments change little from year
to year, in part due to the long term nature of the
facilities themselves, and in part due to the consistency
of the analytical techniques used to develop the assessments and the comparatively steady but slow changes
XVIII.
Part Six-25
PHYSICAL CAPITAL PRESENTATION
Table XVIII-5. CURRENT SERVICES OUTLAY PROJECTIONS FOR FEDERAL PHYSICAL CAPITAL SPENDING
(In billions of dollars)
1990
actual
Nondefense:
Transportation-related categories:
Roadways and bridges
Airports and airway facilities
Mass transportation systems
Railroads
Estimate
1991
1992
1994
1993
1995
1997
1996
1998
1999
2000
14.3
2.7
3.1
0.1
14.5
3.3
3.4
0.2
15.3
3.4
3.2
0.3
16.4
3.7
3.1
0.4
16.5
3.9
2.9
0.3
16.7
4.0
2.7
0.4
17.0
4.2
3.0
0.4
17.7
4.4
3.1
0.4
18.4
4.5
3.2
0.4
19.2
4.7
3.3
0.4
19.9
4.9
3.5
0.4
Subtotal, transportation
Housing and buildings categories:
Federally assisted housing
Hospitals
Public buildings1
20.2
21.3
22.1
23.6
23.6
23.8
24.5
25.5
26.5
27.6
28.7
11.5
1.0
1.0
12.2
1.2
1.8
12.8
1.3
2.4
13.7
1.4
3.4
14.0
1.5
3.4
14.6
1.6
3.3
15.0
1.6
2.9
15.6
1.7
3.0
16.2
1.7
3.1
16.8
1.8
3.3
17.5
1.9
3.4
Subtotal, housing and buildings
Other nondefense categories:
Wastewater treatment and related facilities
Water resources projects
Space and communications facilities
Energy programs
Community development programs
Other nondefense
13.5
15.1
16.5
18.5
18.8
19.5
19.5
20.3
21.1
21.9
22.8
2.4
3.3
3.7
2.8
3.3
7.3
2.5
3.5
4.6
2.4
3.6
8.2
2.4
3.6
4.6
3.3
3.4
8.6
2.4
3.8
5.1
4.1
3.6
9.1
2.3
3.8
5.1
4.4
3.4
9.1
2.3
3.9
5.0
3.9
3.4
9.1
2.3
4.0
5.0
3.7
3.5
9.3
2.4
4.1
5.2
3.9
3.7
9.7
2.5
4.3
5.4
4.0
3.8
10.1
2.6
4.5
5.6
4.2
4.0
10.5
2.7
4.7
5.9
4.3
4.1
10.9
22.9
24.8
25.9
28.1
28.0
27.6
27.9
29.0
30.1
31.4
32.6
56.5
4.8
61.2
4.8
64.6
5.0
70.2
5.2
70.4
5.2
70.9
5.1
71.9
5.2
74.8
5.4
77.8
5.5
80.9
5.7
84.2
5.9
61.3
66.0
69.6
75.4
75.6
76.0
77.0
80.1
83.3
86.6
90.1
Subtotal, other nondefense
Subtotal, nondefense
National defense
Total
1
Excludes outlays for public buildings that are included in other categories in this table.
Table XVIII-6. CURRENT SERVICES OUTLAY PROJECTIONS FOR FEDERAL PHYSICAL CAPITAL SPENDING (IN CONSTANT (1982) DOLLARS)
(In billions of dollars)
Actual
1990
Nondefense:
Transportation-related categories:
Roadways and bridges
Airports and airway facilities
Mass transportation systems
Railroads
Subtotal, transportation
Housing and buildings categories:
Federally assisted housing
Hospitals
Public buildings1
Subtotal, housing and buildings
Other nondefense categories:
Wastewater treatment and related facilities
Water resources projects
Space and communications facilities
Energy programs
Community development programs
Other nondefense
Subtotal, other nondefense
Subtotal, nondefense
National defense
Total
1
Excludes outlays for public buildings that are included in other categories in this table.
http://fraser.stlouisfed.org/
280-000 0 - 9 1 - 2
Federal Reserve Bank of St. Louis
(PART 6 )
Estimate
1991
1992
1993
1994
1995
1996
11.7
2.3
2.6
0.1
11.2
2.7
2.6
0.2
11.2
2.7
2.3
0.3
11.5
2.8
2.2
0.3
11.0
2.9
1.9
0.3
10.7
2.9
1.7
0.3
11.4
2.9
1.8
0.3
16.6
16.7
16.4
16.8
16.1
15.6
16.4
10.6
1.0
0.9
10.8
1.0
1.6
10.9
1.1
2.0
11.2
1.2
2.8
11.0
1.2
2.7
11.1
1.2
2.5
11.0
1.2
2.1
12.5
13.4
14.0
15.1
14.8
14.8
14.3
2.0
3.1
3.4
2.6
2.7
6.6
1.9
3.1
4.1
2.1
2.8
7.1
1.7
3.1
3.9
2.8
2.5
7.2
1.6
3.1
4.2
3.4
2.5
7.3
1.5
3.0
4.0
3.5
2.3
7.0
1.5
3.0
3.9
3.0
2.2
6.8
1.4
2.9
3.7
2.7
2.2
6.7
20.4
21.1
21.2
22.1
21.3
20.2
19.7
49.5
4.7
51.2
4.5
51.7
4.5
54.0
4.5
52.2
4.3
50.6
4.1
50.4
4.0
54.1
55.7
56.2
58.5
56.5
54.7
54.4
Part Six-26
THE BUDGET FOR FISCAL YEAR 1992
Table XVIII-7. PROJECTIONS OF FEDERAL OUTLAYS FOR PHYSICAL CAPITAL: CURRENT SERVICES AND PRESIDENTIAL POLICY
(In billions of dollars)
Actual
1990
In current dollars:
Current services:
Federal physical capital:
Nondefense
National defense
Estimate
1991
1992
1993
1994
1995
1996
56.5
4.8
61.2
4.8
64.6
5.0
70.2
5.2
70.4
5.2
70.9
5.1
71.9
5.2
Total
Presidential policy:
Federal physical capital:
Nondefense
National defense
61.3
66.0
69.6
75.4
75.6
76.0
77.0
56.5
4.8
61.2
4.5
64.2
4.5
68.7
4.7
70.8
4.9
69.6
5.1
71.0
5.3
Total
In constant 1982 dollars:
Current services:
Federal physical capital:
Nondefense
National defense
61.3
65.8
68.7
73.4
75.7
74.7
76.3
49.5
4.7
51.2
4.5
51.7
4.5
54.0
4.5
52.2
4.3
50.6
4.1
50.4
4.0
54.1
55.7
56.2
58.5
56.5
54.7
54.4
49.5
4.7
51.2
4.2
51.4
4.0
52.8
4.1
52.4
4.1
49.5
4.1
48.6
4.1
54.1
55.4
55.4
56.9
56.5
53.6
52.7
Total
Presidential policy:
Federal physical capital:
Nondefense
National defense
Total
in underlying demographics. As a result, the practice
has arisen in previous Supplements to refer to earlier
discussions, where the relevant information had been
carefully presented and changes had been minimal.
In order to present this budget as a focused statement of current Administration policy, the needs assessment material in Supplements of earlier years is
incorporated this year largely by reference to earlier
editions of the Supplement and by reference to other
needs assessments. The needs analyses, their major
components, and their critical evaluations have been
fully covered in past Supplements, such as the 1990
Supplement to Special Analysis D. Supporting tables
are presented below, and the reader is referred both
to the individual program summaries in Part Two of
the budget for policy matters and to previous reports
for methodological discussions.
Significant Factors Affecting Infrastructure Needs Assessments
Significant Factors
Amount
Highways
1. Projected annual growth in travel to the year 2005
2-3 percent
2. Annual cost to maintain overall 1985 highway conditions on
the Federal-aid systems
$19.6 billion to $23.5 billion (1989 dollars)
3. Annual cost of eliminating all existing and future bridge deficiencies to the year 2005 for Federal-aid system
$4.1 billion (1989 dollars)
Airports and Airway Facilities
1. Airports in the National Plan of Integrated Airport Systems
with scheduled passenger traffic
568
2. Air traffic control towers
400
3. Airport development eligible under airport improvement
program for period 1986-1995
$40.5 billion ($28.2 billion for capacity) (1989 dollars)
XVIII.
Part Six-27
PHYSICAL CAPITAL PRESENTATION
Significant Factors Affecting Infrastructure Needs Assessments—Continued
Significant Factors
Amount
Mass Transportation Systems
1. Yearly cost to restore existing rail facilities over a period of
10 years
$1.5 billion-$2.2 billion (1989 dollars)
2. Yearly cost to replace and maintain the urban, rural, and
special services bus fleet
$1,505 million (1989 dollars)
Wastewater Treatment
$83.5 billion (1989 dollars)
1. Total needs of sewage treatment facilities
2. Total expenditures since 1972 under the Clean Water Act of
$54 billion
1972
3. Percent of population served by centralized treatment facilities that benefits from at least secondary sewage treatment
95%
systems
51
4. States and territories served by State Revolving Funds
Housing
1. Total unsubsidized very low income renter families:
A. In severely substandard units
B. With a rent burden greater than 50%
0.4 million
3.4 million
Indian Health (IHS) Care Facilities
1.
2.
3.
4.
5.
IHS hospital occupancy rates (1988)
Average length of stay, IHS hospitals (days) (1988)
Hospital admissions (1988)
Outpatient visits (1988)
Population (1988)
50%
4.5
105,000
4,990,000
1,040,000
Department of Veterans Affairs (VA) Hospitals
1.
2.
3.
4.
5.
6.
7.
Hospitals
Outpatient clinics
Domiciliaries
Outreach centers
VA owned nursing home beds
VA owned nursing home beds needed in 2000
VA owned nursing home beds needed in 2005
172
369
35
195
14,349
17,042
17,664
Part Six-28
THE BUDGET FOR FISCAL YEAR 1992
Significant Factors Affecting Infrastructure Needs Assessments—Continued
Significant Factors
Amount
Water Resources
1.
2.
3.
4.
5.
6.
7.
8.
Navigation (deepwater ports & inland waterway)
Flood control and Storm Damage Protection.
Irrigation.
Hydropower.
Municipal and Industrial Water Supply.
Recreation.
Fish and Wildlife mitigation and enhancement.
Soil conservation.
Needs data are not regularly collected by the
Federal Government. Most recent estimates of
the need for navigation, flood control and
shoreline storm damage protection, and municipal and industrial (M&I) water are found in
the National Council on Public Works Improvement, 1987. Meeting M&I needs as well as certain other water resource needs estimated in
this report (e.g., urban storm water management and dam safety) is primarily a non-Federal responsibility. Program reforms have emphasized non-Federal cost sharing which encourages reexamination of needs.
Investment Needs Assessment References
Highways and Bridges
1.
Report of the Secretary of Transportation to the U.S. Congress. The Status of the Nation's Highways and
Bridges: Conditions and Performance and Highway Replacement and Rehabilitation Program 1989. June,
1989.
Airports and Airways Facilities
1.
Federal Aviation Administration. The National Plan of Integrated Airport Systems Report 1987.
Mass Transportation Systems
1.
Urban Mass Transportation Administration. Rail Modernization Study Final Report April, 1987.
2.
Urban Mass Transportation Administration. Public Transportation in the United States: Performance and
Conditions. January 1991.
Indian Health Care Facilities
1.
Indian Health Service. Priority System for Health Facility Construction (Document Number 0820B or
2046T). September 19, 1981.
2.
Office of Audit, Office of Inspector General, U.S. Department of Health and Human Services. Review of
Health Facilities Construction Program. Indian Health Service Proposed Replacement Hospital at
Shiprock, New Mexico (CIN A-06-88-00008). June, 1989.
3.
Office of Audit, Office of Inspector General, U.S. Department of Health and Human Services. Review of
Health Facilities Construction Program. Indian Health Service Proposed Construction Project for the
Alaska Native Medical Center at Anchorage Alaska (CIN A-09-89-00096). July, 1989.
4.
Office of Technology Assessment. Indian Health Care (OTA-H-290). April, 1986.
Wastewater Treatment
1.
Environmental Protection Agency, Office of Municipal Pollution Control. Assessment of Needed Publicly
Owned Wastewater Treatment Facilities in the United States (EPA Y30/09-001). February, 1989.
Water Resources
1.
Frederick, Kenneth G. The Nation's Water Resources: Past Trends and Current Challenges. Washington,
D.C., Resources for the Future, Discussion Paper ENR 90-02, 1989.
2.
National Council on Public Works Improvement. The Nation's Public Works, Washington, D.C., May, 1987.
see "Defining the Issues—Needs Studies," Chapter II; Report on Water Resources, Shilling et al., and Report on Water Supply, Miller Associates.
XIX. GENERAL ACCOUNTING OFFICE PREFERRED
PRESENTATION
Part Six-29
XIX. GENERAL ACCOUNTING OFFICE PREFERRED PRESENTATION
The Comptroller General has in recent years become
increasingly concerned that the unified budget's almost
exclusive focus on obligation controls and cash transactions prejudices investments and understates liabilities. The General Accounting Office stated in its October 1989 Report (entitled "Managing the Cost of Government: Proposals for Reforming Federal Budgeting
Practices") that consolidation into a single unified budget of trust and non-trust receipts and outlays, and of
the accounting for operating and capital needs, has permitted financing other parts of the budget through trust
fund receipts (especially from Social Security); prevented appropriate budgetary treatment of the special
needs of the Government's business-type entities (e.g.,
the U.S. Postal Service and the Tennessee Valley Authority); biased decisionmaking against capital investment by requiring the recording of the entire cost of
an asset in the year of acquisition; and failed to distinguish operating deficits from capital financing requirements.
To address its concerns with the unified budget, GAO
has proposed to divide the budget into three separate
fund groups: Federal funds (less enterprise funds), trust
funds, and enterprise funds. The fund groups would
themselves be aggregated separately in an operating
budget and a capital budget. The data in Table XIX-1
show an approximation of the 1992 budget totals on
a basis consistent with GAO recommendations.
As compared with the unified budget, which focuses
primarily on aggregate totals (although it provides details by fund group and separately identifies trust funds
and revolving funds), the GAO proposal focuses separately on operating and capital needs; disaggregated
Federal, trust and enterprise funds; and aggregate totals.
Capital and Operating Budgets.—GAO's proposed
capital budget separates disbursements for physical
capital and credit flows (i.e., credit financing excluding
credit subsidies) from the operating budget. The cost
of newly acquired assets would be recorded in the capital budget and as assets on the balance sheet, with
most forms of capital subjected to depreciation charges
recorded as operating budget outlays (with concomitant
reduction in the value of capital assets on the balance
sheet). Aggregate totals of the capital and operating
budgets would be provided (as in the unified budget),
but the distinctions between the two uses of funds
would be set out in all summary presentations.
The GAO proposal includes only physical and loan
capital in its capital budget. The failure to treat R&D
and human capital on a par with physical and loan
capital has been criticized in Congress and elsewhere,
and GAO is studying the issue. In Table XIX-1, expend
itures for R&D and human capital—education, for example—is retained in the operating budget.
The GAO proposal would also include in the capital
budget the value (or cost) of State and local physical
facilities financed by Federal grants. These would be
recorded on Federal balance sheets as Federal assets
financed but not owned by the Federal Government.
The GAO proposal, like the unified budget, would
record Federal highway and airport and airway trust
fund collections as receipts, but the GAO proposal
would include them as receipts to finance the capital
budget. A problem with the GAO proposal is that its
allocation of depreciation cannot be charged to the trust
funds which finance these investments through earmarked taxes. Recording both earmarked receipts and
depreciation would require double counting with respect
to assets acquired after the GAO proposal went into
effect.
The GAO proposal would tend to reduce the impediments to Government investment and, as a result, could
encourage the Government to make those cost-effective
purchases required to meet longer term needs. The portion of the Federal budget attributable to investment
in physical capital has declined in recent years as a
percentage of GNP—from 4.4 percent in 1960 to 2.2
percent in 1992. While most of this decline is attributable to Defense and NASA, there is a question of
whether infrastructure needs have been adequately attended to.
On the other hand, GAO's proposal could also reduce
the impediments to "pork barrel" spending in that
charges to the operating budget would switch from the
point at which they can be controlled—the time of acquisition—to the later time at which they cannot be
controlled when depreciation charges would be recorded. Additionally, GAO's attempt to reduce the disincentives to physical capital expenditures would favor
physical over human capital.
Treatment of Sovereign and Business-Type Income.—The GAO proposal would abolish the distinction
between sovereign and business-type income from the
public. Most collections from the public would be recorded as Federal fund, trust fund, or public enterprise
fund operating budget receipts and outlays, and outlays
would be recorded gross rather than net of offsetting
collections. The issue here is the degree to which the
budget aggregates should focus on receipts arising from
the exercise of Government's sovereign power as opposed to total Government revenues and spending (including business-type activities). GAO would focus on
the total of Government activity; current budget concepts treat as receipts only those which the Federal
Government collects in its role as a government.
Part Six-31
Part Six-32
THE BUDGET FOR FISCAL YEAR 1992
vestment. Defense depreciation of $53.8 billion,
Allocations by Function.—Table XIX-1 shows most
also offset in the capital budget, is included in
of the GAO adjustments by function. Line 14 (Addithe amounts on line B(l).
tional Operating Costs Not Currently Allocated by
• Line 14(b) records a lump sum $28.7 billion imFunction), however, includes estimates of two items for
puted payment from the general fund to amortize
which a distribution by function is unavailable. Specifiunfunded pension liabilities.
cally:
• Line 14(a) records a lump sum estimate of $20.3
Comparison with Other Alternatives.—The GAO
billion as a non-defense "asset consumption
proposal is compared with the alternatives discussed
charge" (depreciation) and a corresponding reducin Chapters XX and XXI, and with the unified budget,
tion of $20.3 billion in the capital budget net in- at the end of Chapter XXI.
Table XIX-1. GAO FEDERAL BUDGET PRESENTATION (COMPARED TO UNIFIED BUDGET PRESENTATION)
(1992, in billions of dollars)
UNIFIED
BUDGET
A. RECEIPTS/REVENUES
Governmental Receipts:
(1) Income, Estate, Gift, Customs
Duties
(2) Social Insurance Taxes and
Contributions
(3) Excise taxes and miscellaneous
receipts
TOTAL RECEIPTS, Federal
Budget Basis
Offsetting Collections Converted to
Receipts:
(4) Proprietary Receipts from the
Public
(5) Reimbursements to Appropriations
TOTAL GAO REVENUES
B. OUTLAYS, EXPENSES, AND
INVESTMENTS
Outlays by Function:
(1) Defense/International (050,150) ...
(2) Science, Space, Technology (250)
(3) Energy, Natural Resources,
Agriculture (270, 300, 350)
(4) Commerce and Housing Credit
(370)
(5) Transportation (400)
(6) Education, Training, Employment,
and Social Services (500)
(7) Health and Medicare (550,570) ....
(8) Income Security (600)
(9) Social Security (650)
(10) Veterans Benefits and Services
(700)
(11) Other (450,750,800,870,920)
(12) Net Interest (900)
(13) Undistributed Offsetting Receipts
(950)
TOTAL OUTLAYS
Trust
GAO OPERATING BUDGET
Enterprise
Total
General
Trust
GAO CAPITAL BUDGET
Enterprise
Total
General
Trust
Enterprise
662.9
429.4
429.4
45.9
25.8
47.1
45.9
1.3
42.8
190.7
1,398.5
17.3
114.4
840.4
24.9
6.3
487.5
0.6
69.9
70.6
41.9
173.1
1,354.4
17.2
99.8
825.7
24.0
6.3
460.9
0.6
67.1
67.7
1.0
17.6
44.1
0.1
14.6
14.7
340.9
327.8
17.6
10.7
2.4
325.0
15.0
312.6
14.9
10.7
1.7
15.9
2.6
15.1
54.8
3.5
13.9
46.0
35.0
0.8
10.2
26.2
19.8
2.7
3.7
169.8
10.5
0.4
22.7
51.1
0.5
210.2
11.6
162.8
7.7
0.4
3.4
47.0
0.5
11.0
22.1
6.9
2.8
19.4
4.1
44.3
213.0
180.7
288.6
43.2
82.6
87.1
1.1
130.4
92.8
288.6
0.8
2.5
0.4
10.2
2.5
0.4
10.2
34.1
36.9
212.5
31.7
35.7
212.5
2.3
0.3
2.5
8.0
-3.3
2.5
7.9
-3.3
-36.8
-36.8
20.3
20.3
28.7
-20.3
-20.3
-28.7
78.0
-3.3
47.2
22.1
-3.3
664.0
429.4
429.4
71.7
71.7
662.9
662.9
1.1
1.1
24.5
24.5
429.4
1,165.0
1,165.0
313.1
17.5
38.5
17.6
72.3
92.8
32.7
221.2
33.7
45.5
195.0
184.8
288.6
46.8
213.4
190.9
288.6
45.7
83.0
97.3
33.0
38.8
206.3
36.6
44.9
209.2
34.1
43.6
209.2
-40.8
-36.8
-36.8
1.1
130.4
92.8
288.6
0.8
2.3
0.3
0.2
1.1
0.2
0.9
0.9
0.1
26.6
2.9
2.9
0.8
2.6
0.1
1,445.9
TOTAL OUTLAYS/AMOUNT TO
BE FINANCED
*$50 million or less.
General
1.1
664.0
(14) Additional Operating Costs Not
Currently Allocated by Function:
(a) Asset Consumption
(b) Pension liabilities
(15) Total Expenses and Investments
Before Transfers
(16) Interfund Transfers
C. SURPLUS/DEFICIT/FINANCING
GAO COMPREHENSIVE BUDGET
Total
-280.9
28.7
-28.7
1,679.4
1,085.3
190.1
524.1
-190.1
70.0
1,601.4
3.3
1,038.1
190.1
502.1
-186.8
61.3
1,679.4
1,275.4
334.0
70.0
1,604.7
1,228.2
315.2
61.3
74.7
47.2
18.8
8.7
-280.9
-434.9
153.5
0.6
-250.3
-402.4
145.7
6.4
-30.5
-32.5
7.8
-5.8
8.7
XX. STATE-TYPE PRESENTATION
Part Six-33
XX. STATE-TYPE PRESENTATION
California offers a fairly typical example of a State
budget presentation. The California budget (Table
XX-1) differs significantly from the other alternatives
in this Part. It focuses on separate general, special,
and capital funds, although it also provides aggregate
totals (albeit inflated through double counting) of these
funds. The separate State GAAP (Generally Accepted
Accounting Principles) presentation includes proprietary and fiduciary funds excluded from the California
budget (i.e., public enterprise and working capital revolving funds, self-financing bond funds, employee retirement funds, and certain funds deemed to be held
in trust).
When the California approach combines fund groups,
it leaves the inter-fund collections in receipts, thereby
overstating total collections from, and payments to, the
public. Additionally, when capital expenditures are financed by bond funds, they are double counted, because
the bond spending and debt amortization are both included in combined total spending. The bottom line is
that the California and State GAAP presentations are
the least consolidated and most disaggregated of the
alternatives discussed in this part of the budget document. In California, the individual funds matter most.
The standard California budget presentation has a
two-way distribution of income and a three-way distribution of spending. Receipts go to the general and
special funds, whereas outlays/expenses and investments are spent from these funds plus the capital fund.
The norm for California's special funds is that they
should have cash in hand before they spend (similar
to the norm for Federal trust funds). At the same time,
both the California general and special funds can spend
more in a year than they take in by reducing carry
over balances; this is not deemed to create a deficit.
Balanced Budget Requirement.—California's constitutional requirement of balanced budgets, combined
with constitutional limitations on taxes and spending,
result in procedures different from Federal procedures.
These include appropriated allowances for contingencies, with payments charged back to the activity
for which the payment is made, and "encumbrances"
(similar to obligations in the Federal budget) for which
the spending is charged to the year in which the encumbrance occurs.
The California budget document has information tables on total State indebtedness (akin to the Federal
display of total Federal debt). In contrast to the Federal
Government, however, California's ability to borrow is
subject to several restrictions: borrowing can normally
occur only for capital projects (whether general or selfliquidating); and debt normally cannot be issued unless
approved by both the legislature and the voters.
Capital Projects Fund.—The Capital Projects Fund
is displayed only on the spending side, since bond fund
spending is financed by borrowing, which is not income.
The California capital fund only includes bonds that
are to be amortized by the general fund. "Self-liquidating" bonds (such as for toll bridges, the California
water plan, and college dormitories) are excluded from
the regular budget altogether, but are displayed in the
budget documents for information purposes (similar to
the way the Federal budget displays GSEs but leaves
them out of the totals).
The estimate of the Capital Projects Fund in Table
XX-1 (and the associated amortization) was based on
several imputations. First, Federal fund (i.e., non-trust)
capital outlays (other than those made by the public
enterprise funds and other than for grants) are identified as equivalent to the investment that California
finances through its Capital Projects Fund. Second, an
estimate of amortization of prior debt was made and
allocated as expenditures of the general fund. There
is currently no solid basis for amortizing total debt,
much less for amortizing debt by function. However,
Table XX-1 assumes an amortization by function equal
to new debt-financed capital investment. It does not
provide for a distribution of interest back to the functions charged with the borrowing.
Sovereign Versus Business-Type Operations and
Employee Retirement.—The California budget excludes both business operations and employee retirement and related funds from the budget. So, in the
reconstruction of the Federal budget in the form of
the California budget, most of the public enterprise
funds—plus the civil service, military, and foreign service retirement funds—were excluded from the budget
totals (although payments to these funds were left in
the budget figures). Thus, the general fund coverage
in Table XX-1 is less comprehensive than the Federal
fund group in the unified budget, and the special fund
coverage is less comprehensive than the trust fund coverage in the unified budget.
While the California procedure excludes business operations from the budget, any incidental non-tax income
to the State (such as rents, royalties, and interest) is
included in budget receipts.
State GAAP Basis —Table XX-1 also includes a
presentation that approaches a State GAAP presentation. While the State is moving toward GAAP, this
will take years to accomplish. The GAAP presentation
in the California budget is an auxiliary display of
spending only. Table XX-1, on the other hand, reconstructs the total budget on a State GAAP equivalent
basis. The GAAP display adds "proprietary funds" (i.e.,
business operations) and "fiduciary funds" (which inPart Six-35
Part Six-36
THE BUDGET FOR FISCAL YEAR 1992
elude the pension funds and the funds the State collects
and spends from Federal grants) to the normal California presentation.
Comparison with Other Alternatives.—The California budget is compared with the alternatives discussed in Chapters XIX and XXI, and with the unified
budget, at the end of Chapter XXI.
Table XX-1. CALIFORNIA PRESENTATION OF THE FEDERAL BUDGET (COMPARED TO UNIFIED BUDGET PRESENTATION)
(1992, in billions of dollars)
NORMAL CALIFORNIA BUDGET PRESENTATION
UNIFIED
BUDGET
A. RECEIPTS
Governmental Receipts:
(1) Income, Estate, Gift, Customs Duties
(2) Social Insurance Taxes and Contributions
(3) Other Governmental Receipts
General
Revenue
Funds
Fiduciary
Funds
GRAND
TOTAL
706.7
453.7
1,160.4
1,160.4
11.4
92.1
3.6
21.1
0.2
100.6
32.4
92.3
104.2
32.4
92.3
104.2
1,165.0
813.7
575.6
1,389.4
313.1
17.5
423.1
20.2
0.1
423.1
20.3
83.3
2.6
506.5
22.9
12.9
519.4
22.9
38.5
92.8
32.7
59.9
138.3
11.3
7.7
0.3
24.6
67.6
138.6
35.9
4.2
2.9
0.8
71.8
141.5
36.7
13.4
89.1
0.5
85.2
230.6
37.3
45.5
195.0
184.8
288.6
33.0
38.8
206.3
-40.8
45.7
121.8
111.2
5.8
36.1
63.2
286.7
1.1
126.8
36.1
288.6
0.5
3.2
-0.3
46.8
248.7
147.3
294.5
36.6
66.3
286.4
0.1
0.3
10.0
46.9
249.0
157.3
294.5
37.7
68.8
286.4
0.4
3.6
0.8
47.3
252.5
218.2
294.5
40.1
69.6
286.4
1,445.9
1,323.5
488.7
1,812.1
107.9
1,920.1
123.8
60l~
2,104.0
-280.9
-509.7
87.0
-422.8
-107.9
-530.7
-11.1
36.5
-505.3
TOTAL RECEIPTS, California basis
Proprietary
Funds
4&9
1,165.0
* $50 million or less.
ADDITIONAL TRANSACTIONS FOR GAAP
PRESENTATION
664.0
424.8
71.7
TOTAL RECEIPTS, Federal Budget Basis
Offsetting Collections Converted to Receipts:
(4) Proprietary Receipts from the Public
(5) Reimbursements to Appropriations
(6) Interfund Transfers
C. SURPLUS/DEFICIT
Total
Including
Bond Funds
664.0
424.8
71.7
662.9
TOTAL OUTLAYS
Budget
Total
Capital
Projects
Funds
1.1
424.8
27.8
664.0
429.4
71.7
B. OUTLAYS, EXPENSES, AND INVESTMENTS
Outlays by Function:
(1) Defense and International (050,150)
(2) Science, Space, Technology (250)
(3) Energy, Natural Resources, Agriculture (270, 300,
350)
(4) Commerce & Housing Credit (370)
(5) Transportation (400)
(6) Education, Training, Employment, and Social Services
(500)
(7) Health and Medicare (550, 570)
(8) Income Security (600)
(9) Social Security (650)
(10) Veterans Benefits and Services (700)
(11) Other (450, 750, 800, 920)
(12) Net Interest (900)
(13) Undistributed Offsetting Receipts (950)
Special
Revenue
Funds
1.1
2.5
4.6
664.0
429.4
71.7
1,165.0
Z Z
10.4
101.3
1.1
92.0
42.8
193.6
197.3
112.7
96j6
1,598.7
60.1
2.3
0.7
XXI.
OPERATING, RETIREMENT, AND DEBT AND
INTEREST PRESENTATION
Part Six-37
XXI. OPERATING, RETIREMENT, AND DEBT AND INTEREST PRESENTATION
In 1990, Senator Sanford introduced a bill, the "Balanced Budget and Debt Reduction Act of 1990" (S. 101),
which proposed another budget presentation. As shown
in Table 3DQ-1, the unified budget would be subdivided
into three budgets—the operating budget, the retirement funds budget, and the debt and interest budget.
The President's budget would present the unified
budget totals, as well as totals for the three separate
budgets. The social security trust funds and the Postal
Service would be included in the unified budget totals
and the appropriate component totals. However, the
presentation would focus on the deficit or surplus for
only the operating budget; this and other requirements
are quite different from the unified budget concept.
The operating budget would include the receipts and
expenditures not included in the other two budgets.
The operating budget would have to be balanced in
the President's budget; legislation that would cause an
operating budget deficit would be subject to a point
of order in the Congress. (In Table XXI-1, which presents 1992 President's budget numbers, the operating
budget is not balanced.) If, in spite of these requirements, the deficit exceeded the maximum deficit
amount (defined in the Congressional Budget Act of
1974, as amended by the Budget Enforcement Act of
1990, Public Law 101-508), the next year's operating
budget would include an expenditure equal to the previous year's deficit excess. This would result in budgeting for an excess of receipts over current expenditures
in the operating budget if the previous year's deficit
target is not met.
The retirement funds budget would include the receipts and expenditures of the social security and medicare trust funds, the civilian and military retirement
Table XXI-1. OPERATING, RETIREMENT, AND DEBT AND INTEREST PRESENTATION OF THE FEDERAL BUDGET (COMPARED TO UNIFIED BUDGET
PRESENTATION)
(FY 1992, in billions of dollars)
ALTERNATIVE PRESENTATION
Unified
Budget
Total
Budget
Operating
Budget
Debt and
Interest
Budget
Retirement
Funds Budget
A. RECEIPTS
Governmental Receipts:
(1) Income, Estate, Gift, Customs Duties
(2) Social Insurance Taxes and Contributions
(3) Other Governmental Receipts
664.0
429.4
71.7
664.0
429.4
71.7
664.0
22.8
71.0
406.6
0.6
TOTAL RECEIPTS, Federal Budget Basis
1,165.0
1,165.0
757.8
407.2
1,165.0
1,563.5
757.8
313.1
17.5
38.5
92.8
32.7
45.5
195.0
184,8
288.6
33.0
38.8
206.3
-40.8
313.1
17.5
38.5
92.8
32.7
45.5
195.0
184.8
288.6
33.0
38.8
206.3
-40.8
324.8
17.5
38.5
92.8
32.7
45.5
119.8
119.8
5.8
33.0
58.2
-28.5
-4.0
1,445.9
1,445.9
1,445.9
-280.9
Proceeds from Borrowing Converted to Receipts:
(4) Increase in the non-Retirement Funds Debt
TOTAL RECEIPTS, Alternative Basis
B. OUTLAYS, EXPENSES, AND INVESTMENTS
Outlays by Function:
(1) Defense and International (050, 150)
(2) Science, Space, Technology (250)
(3) Energy, Natural Resources, Agriculture (270, 300, 350)
(4) Commerce and Housing Credit (370)
(5) Transportation (400)
(6) Education, Training, Employment, and Social Services (500)
(7) Health and Medicare (550, 570)
(8) Income Security (600)
(9) Social Security (650)
(10) Veterans Benefits and Services (700)
(11) Other (450, 750, 800, 920)
(12) Net Interest (900)
(13) Undistributed Offsetting Receipts (950)
TOTAL OUTLAYS, Federal Budget Basis
398.5
398.5
407.2
-11.7
75.2
65.0
282.8
304.0
-19.3
-69.2
-36.8
856.0
304.0
286.0
1,445.9
856.0
304.0
286.0
117.6
-98.2
94.5
121.3
Repayment of Borrowing Converted to Outlays:
(14) Previous Year Excess Over Maximum Deficit
TOTAL OUTLAYS, Alternative Basis
C. SURPLUS/DEFICIT
Part Six-39
Part Six-40
THE BUDGET FOR FISCAL YEAR 1992
trust funds, the railroad retirement trust funds, and
such other funds or accounts that OMB, in cooperation
with GAO and the Congress, agree upon. The estimates
in Table XXI-1 also include the black lung disability
trust fund in the retirement funds budget.
The debt and interest budget includes "receipts and
expenditures" for reductions or increases in the public
debt, and interest on the public debt. During time of
declared war or declared recession, Treasury borrowing
would be permitted in the debt and interest budget.
Borrowed funds would then be transferred to the operating budget as receipts to maintain the operating
budget in balance. This definition of "receipts and expenditures" would treat the proceeds of borrowing as
receipts and the repayment of borrowing as outlays.
Under current budget concepts, borrowing is treated
as a means of financing a deficit, not as a part of
the calculation of the deficit; the repayment of borrowing is treated as the use of a surplus. Apart from other,
relatively small means of financing the deficit, the
treatment of borrowing and repayment of borrowing as
receipts and outlays in the alternative proposal would
balance the sum of the operating and debt and interest
budgets by definition. If transfers to the operating
budget are treated as expenditures of the debt and
interest budget, it follows that they are to be treated
as receipts of the operating budget. The operating budget would also, therefore, be balanced during time of
war or a recession, by definition.
In the Sanford proposal, the budget deficit would be
redefined to mean the amount by which the combined
outlays of the operating and debt and interest budgets
exceed their receipts. The retirement funds budget
would be completely excluded. The President's budget
and budget legislation would have to stay within the
maximum deficit amounts, as well as balancing the
operating budget. With the operating and debt and interest budgets in balance by definition, the unified
budget would have the same surplus or deficit as the
retirement funds budget.
The debt and interest budget would also include a
new "trust fund for the reduction of the deficit and
the public debt." A special tax could be established
for this fund.
SOME DIFFERENCES AMONG THE ALTERNATIVE PRESENTATIONS
A comparison of the GAO, California, and Sanford
presentations with each other, and with the unified
budget, is presented below.
• The GAO and California budget presentations reflect, primarily, the concerns of financial accounting. The Sanford budget proposal is primarily designed to protect the retirement trust funds and
to direct attention to controlling the newly defined
operating budget.
• Employee retirement funds are included by GAO
as part of its trust fund grouping, and by Sanford
as part of his retirement funds budget. The California approach moves these funds into the fiduciary funds category outside the normal budget
presentation (but inside the GAAP presentation).
The unified budget includes these funds in the
consolidated budget totals.
• Enterprise funds are included as part of the operating budget in the Sanford proposal. GAO carries
the enterprise funds as one of three separate
groupings, together with the general funds and
trust funds. The California budget excludes enterprise funds from the normal budget displays but
includes them in the GAAP presentation. The unified budget includes these funds in the consolidated budget totals.
• GAO, the Sanford proposal, and the unified budget
handle interfund transfers as adjustments on the
outlay side; they cancel out in deriving the consoli-
dated totals. The California approach adds them
to the receipts of each fund group, and does not
net them out in combined totals.
• GAO has a capital budget that includes all capital
expenditures for physical and loan assets, no matter how financed. It does not have a bond fund.
In the main, the GAO capital budget is financed
by depreciation charges and earmarked receipts
(mainly highway and airport and airway excise
taxes). The California approach has a capital fund
but includes only those capital expenditures financed by borrowing to be repaid from the general
fund on an amortization basis. The Sanford proposal and the unified budget do not distinguish
capital expenditures in the budget aggregates. The
President's budget, however, does have an auxiliary tabulation of outlays for both physical and
intangible capital (see Chapter XVIII).
• GAO includes grants to State and local governments for physical capital investment in its capital
budget. The Sanford proposal and the unified
budget do not distinguish these grants in the
budget aggregates, but the President's budget does
include grants for capital investment in its auxiliary tabulation of Federal capital expenditures
(see Chapter XVIII). The California budget does
not include grants to localities for capital projects
in its capital fund.
@FedFRASER