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THE

BUDGET
OF THE
UNITED STATES
GOVERNMENT

FISCAL YEAR

1980

ADDENDA TO: THE BUDGET OF THE UNITED STATES GOVERNMENT,
FISCAL YEAR 1980

Page 515 of this volume is out of sequence and should follow page 517. The budget total
for budget authority in 1979, shown on page 515 of this volume should be $559,657,906,000
rather than $559,557,906,000. The total for budget authority in 1979, including offbudget entities, that immediately follows should be $574,975,157,000 rather than
$574,875,157,000.

THE BUDGET DOCUMENTS
Data and analyses relating to the budget for 1980 are published
in four documents:
The Budget of the United States Government, 1980 contains the
information that most users of the budget would normally need,
including the Budget Message of the President. The Budget presents an overview of the President's budget proposals and includes
explanaticms of spending programs in terms of national needs,
agency missions, and basic programs, and an analysis of estimated
receipts including a discussion of the President's tax program. This
document also contains a description of the budget system and
various summary tables on the budget as a whole. (Price $4.25.)
The Budget of the United States Government, 1980—Appendix
contains detailed information on the various appropriations and
funds that comprise the budget. The Appendix contains more detailed information than any of the other budget documents. It
includes for each agency: the proposed text of appropriation language, budget schedules for each account, explanations of the work
to be performed and the funds needed, proposed general provisions
applicable to the appropriations of entire agencies or groups of
agencies and schedules of permanent positions. Supplemental, and
rescission proposals for the current year, and new legislative proposals, are presented separately. Information is also provided on
certain activities whose outlays are not part of the budget totals.
(Price $12.00.)
Special Analyses, Budget of the United States Government, 1980
contains 12 special analyses that are designed to highlight specified
program areas or provide other significant presentations of Federal
budget data. This document includes analytical information about:
alternative views of the budget, i.e., current services and national
income accounts; economic and financial analyses of the budget
covering Government finances and operations as a whole, and Government-wide program and financial information for Federal civil
rights, environment, and research and development programs.
(Price $3.25.)
The United States Budget in Brief, 1980 provides a more concise,
less technical overview of the 1980 budget than the above volumes.
Summary and historical tables on the Federal budget and debt are
also provided, together with graphic displays. (Price $2.00.)
Each of these documents is for sale by the Superintendent of
Documents, U.S. Government Printing Office, Washington, D.C.
20402. (Paper covers only.)
GENERAL NOTES
1. All years referred to are fiscal years, unless otherwise noted.
2. Detail in the tables, text, and charts of this volume may not add to the
totals because of rounding.

TABLE OF CONTENTS
Page

PART 1. THE BUDGET MESSAGE OF THE PRESIDENT
PART 2. BUDGET SUMMARY
,
Overview of the budget
Major budget proposals
Fiscal policy
Budget authority
Federal civilian employment and pay
Federal debt and lending
Better management of the Federal Government
PART 3. ECONOMIC ASSUMPTIONS AND LONG-RANGE BUDGET PROJECTIONS
Economic assumptions
The long-range budget outlook
Population change and long-range effects on the budget
PART 4. BUDGET RECEIPTS
Summary
Enacted legislation
Receipts proposals
Changes in budget receipts
Receipts by source
PART 5. MEETING NATIONAL NEEDS: THE FEDERAL PROGRAM BY
FUNCTION
Introduction
National defense
International affairs
General science, space and technology
Energy
Natural resources and environment
Agriculture
Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, and social services
Health
Income security
Veterans benefits and services
Administration of justice
General government
General purpose fiscal assistance
Interest
Allowances
Undistributed offsetting receipts
PART 6. PERSPECTIVES ON THE BUDGET
Relationship of budget authority to outlays
Fiscal activities outside the Federal budget
Budget funds and the Federal debt
Reconciliation of actual and estimated receipts and relatively uncontrollable outlays
PART 7. THE BUDGET SYSTEM AND CONCEPTS
The budget process
Coverage of the budget totals
Budget authority and related transactions
Collections
Other transactions
Basis for budget
figures

1
11
12
17
23
24
25
25
26
33
34
41
52
59
60
61
68
74
75
79
80
88
102
115
124
141
159
166
179
192
208
231
248
265
274
283
290
296
299
301
303
304
307
321
327
337
338
342
345
348
350
351

CONTENTS

PART 8. THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
Explanatory note
Legislative branch
The Judiciary
Executive Office of the President
Funds appropriated to the President
Department of Agriculture
Department of Commerce
Department of Defense—Military
Department of Defense—Civil
Department of Energy
,
Department of Health, Education, and Welfare
Department of Housing and Urban Development
Department of the Interior
Department of Justice
,
Department of Labor
Department of State
Department of Transportation
Department of the Treasury
Environmental Protection Agency
General Services Administration
National Aeronautics and Space Administration
Veterans Administration
Other independent agencies
Allowances
Budget totals
Off-budget Federal entities
PART 9. SUMMARY TABLES
Explanatory note relating to the summary tables
Table 1. Budget summary
Table 2. Budget receipts, outlays, and budget authority
Table 3. Budget authority and outlays by agency
Table 4. Budget authority and outlays available through current action by
Congress
Table 5. Relation of budget authority to outlays
Table 6. Obligations incurred, net
Table 7. Balances of budget authority
Table 8. Summary of full-time permanent civilian employment in the executive branch
Table 9. Budget financing and outstanding debt
Table 10. Budget receipts by source
Table 11. Offsetting receipts by type
Table 12. Budget authority by function and agency
Table 13. Outlays by function and agency
Table 14. Controllability of budget outlays, 1970-80
Table 15. Legislative proposals for major new and expanded programs in
the 1980 budget, projection of
Table 16. Budget receipts by source, 1970-80
Table 17. Budget outlays by function, 1970-80
Table 18. Federal transactions in the national income accounts, 1969-80
Table 19. Federal finances and the gross national product, 1958-82
Table 20. Composition of budget outlays in current and constant (fiscal year
1972) prices: 1958-82
Table 21. Budget receipts and outlays, 1789-1982
INDEX

353
354
355
364
367
370
377
389
396
405
409
414
429
433
445
448
452
456
464
470
472
476
478
481
514
516
515
519
521
522
523
524
525
526
527
528
529
530
531
534
537
548
560
562
566
568
576
577
578
579
581

PART 1

THE BUDGET MESSAGE
OF THE
PRESIDENT

THE BUDOCT DOLLAR

Wkw it comes from.. >
Corporation
fatcom* Taxes

Direct
Benefit
Payments
for Individuals

BUDGET MESSAGE OF THE PRESIDENT
To the Congress of the United States:
This budget for fiscal year 1980 is lean and austere. It recommends a spending level well below that suggested by the recent
momentum of Federal spending. It will disappoint those who seek
expanded Federal efforts across the board. It meets my commitment to a deficit of $30 billion or less.
This policy of restraint is not a casual one. It is an imperative if
we are to overcome the threat of accelerating inflation.
If that threat is realized, it would severely disrupt our economy
and the well-being of our society. Americans with low and fixed
incomes would suffer the most. Restraint would eventually become
an inescapable necessity. But the longer we wait, the more severe
and costly the inevitable restraint will be. By contrast, this budget
supports a balanced fiscal policy. It is sufficiently restrained to ease
inflationary pressures, but it will permit continued economic growth.
The Federal Government cannot overcome inflation by itself.
Success will require cooperation from business, from labor, from
consumers, from State and local governments—in short, from
everyone. I have called for that cooperation as part of my antiinflation program. However, only through its leadership and its
example can the Federal Government secure this cooperation. This
budget provides that leadership. It restrains Government's demand
on the economy. At the same time, it makes the Federal dollar
work harder and better.
The key to effective Federal leadership against inflation, unemployment, and poverty lies in more effective allocation and management of available resources. We must reduce the growth of total
Federal spending while protecting the security of our Nation and
the well-being of the American people.
This budget provides the necessary discipline over Federal spending by:
—eliminating programs that are unworkable;
—improving programs to make them more effective;
—focusing assistance on the disadvantaged and the poor; and
—reorganizing and consolidating Federal activities to improve
efficiency and avoid waste,' abuse, or mismanagement.
I believe this discipline represents an opportunity to reassess and
build strong foundations for future Government activity, an oppor-

THE BUDGET FOR FISCAL YEAR 1980

tunity to change Government for the better. It is my firm intention
to continue these policies in future years, to reduce the size of the
deficit, and to achieve a balanced budget as soon as economic
conditions permit.
THE BUDGET TOTALS
[in billions of dollars]
1978
actual

Budget receipts
Budget outlays
Surplus or deficit ( - )
Budget authority

1979
estimate

1980
estimate

1981
estimate

1982
estimate

402
451

456
493

503
532

577
578

653
615

-49

-37

-29

-1

502

560

616

651

696

My budget provides for total outlays in 1980 of $532 billion, an
increase of $38 billion, or 7.7%, over 1979, and receipts of $503
billion. For 1981 and 1982, it provides for total outlays of $578
billion and $615 billion, respectively. Budget outlays will decrease
as a share of the Nation's gross national product from 22.1% in
1978 to 21.2% in 1980 and 20.3% in 1982. This reduction in the
share of our national product spent by the Federal Government is
a fundamental goal of my policy, equally as important as reducing
the deficit.
The expenditures I recommend are specifically focused on overcoming our Nation's crucial problems. Through rigorous zero-base
analyses, priorities have been established to help us get the best
Government possible for the resources we can afford. Careful attention to efficiency and productivity will enable Federal managers to
achieve our most important priorities with less money and fewer
people.
The spending restraint in this budget means that in some areas
the Government will simply not be able to do as much as it has in
the past. Inevitably, real sacrifices must be made if we are to
overcome inflation. In formulating this budget, I have made every
effort to spread that burden fairly and objectively. Restraint has
not been applied arbitrarily.
However, there are areas where we cannot make major reductions. I have sought to reconcile the need for extraordinary restrictions on Government spending with the need to maintain a strong
defense; to implement a national energy policy; to assist people in
need; and to continue important public services and investments.
First, as President, it is my central responsibility to ensure that
our defense forces are strong enough to deter aggression. This
budget does that.

THE BUDGET MESSAGE OF THE PRESIDENT

In May of 1977 I met with our NATO allies and urged that we
work together to strengthen our common defense. They are meeting the goal that we agreed upon. We must and will do our share.
In total, the 1980 defense budget provides for growth in outlays
in real terms of 3% above the current year's spending. Most of this
increase will be for strengthening our NATO forces and maintaining the strategic balance. The budget continues my policy of steady
modernization of our strategic forces, and improved combat readiness of our tactical forces. It also emphasizes research and development to meet future challenges to our security. At the same time,
however, it restrains defense costs by introducing important economies in purchasing, supply management, and personnel costs and
numbers.
Second, the 1980 budget recognizes the vital importance of
energy to the Nation. Because of our dependence on foreign oil, we
continue to be in danger of having supplies disrupted as they were
5 years ago. It is essential that we continue to move forward with
an effective national energy program that will decrease our
demand for foreign oil and protect against disruption of foreign oil
supplies.
The 1980 budget provides for the continued buildup of the strategic petroleum reserve. It continues to assist in the development of
technologies to tap our domestic energy resources more effectively.
I have given special emphasis to developing advanced solar power
technologies. The budget proposals give increased attention to more
efficient use of uranium, to nuclear proliferation and environmental problems, and to effective measures to deal with nuclear waste.
Third, even when budget restraint is essential, we will continue
as a compassionate society to meet our commitments to the disadvantaged. Therefore, I have ensured that my budget include adequate funds for programs that help those Americans most truly in
need. To make these funds as effective as possible, the budget
includes recommendations for adjustments in direct payment programs, better targeting of existing programs, and improved management so that funds are not wasted but go to the people for
whom they were intended.
My administration is developing a national health plan. Consistent with the development of that plan, the budget emphasizes
programs to address critical health needs. As early steps toward
this plan, my proposals extend health services to 2 million more
low-income children and pregnant women who cannot afford
health care that they need, and bring new health care resources to
people who live in medically-underserved areas. The budget includes new and expanded programs to reduce activities that cause
ill health, such as drug and alcohol abuse, as well as to protect
individuals and communities from pollution and other toxic sub-

THE BUDGET FOR FISCAL YEAR 1980

stances; increased funding for mental health research; and expanded health-related services such as nutrition programs for lowincome mothers and children.
I am again proposing legislation to contain the exorbitant nationwide rise in hospital costs. The 320% rise in these costs in the past
10 years has been a major inflationary force and an unacceptable
drain on family incomes. The Congress must act on this problem.
Curbs on hospital costs will benefit State and local budgets—and
those of private citizens—as well as the Federal budget. They will
strike directly at inflation in a sector where price increases have
been chronically high.
The budget recommends a number of changes in the social security system to streamline it and eliminate unnecessary benefit
payments. They will reduce the future costs of this largest of all
Federal programs—and, ultimately, hold down the taxes imposed
on workers and employers. I will consider future social security tax
reductions in conjunction with these savings.
In the past 2 years, total employment in the U.S. has increased
by 7.4 million jobs. This is an average rate of 4.1% per year, one of
the most rapid expansions in our history. The proportion of our
civilian population employed is higher, at almost 60%, than it has
ever been before. But despite these gains, unemployment, particularly among the disadvantaged and minorities, remains too high.
Continued high structural unemployment in an inflationary
economy requires a redirection of our efforts. Programs targeted to
employ the truly disadvantaged are continued at their current
high levels as established by this administration. More
general employment programs, not directed specifically to those
most in need, must be reduced to reflect improvements in the
economy and our need to establish priorities. Our youth employment and CETA programs reflect my continued strong commitment to fight unemployment of the needy. The employment tax
credit enacted last year is encouraging the private sector to provide
increased employment opportunities for the disadvantaged, primarily youth. This incentive will be reinforced by a private sector
employment initiative, for which I am requesting a $400 million
supplemental appropriation for 1979.
This budget also provides strong support for economic development programs, and again proposes a National Development Bank
to help fund these efforts. The budget provides for a 36% increase
in assistance to minority business enterprises.
Finally, I believe that the Federal Government must lead the
way in investing in the Nation's future. This budget, therefore,
continues my policy of providing real growth in Federal support of
basic research. This support amounts to a relatively small part of
the total budget—$4.6 billion in 1980—but it is vital to the future

THE BUDGET MESSAGE OF THE PRESIDENT

of our Nation. The knowledge created through basic research holds
the potential for breakthroughs to the solution of problems we face
or may face in such critical areas as agriculture, health, environment, energy, defense, and the overall productivity of our economy.
Higher productivity gains in the future, moreover, will make an
important contribution to reducing inflation.
Meeting the essential needs of the Nation, while restraining
growth in overall spending, makes efficient management not just
desirable, but essential.
In 1977 I proposed—and the Congress approved—a Cabinet-level
Department of Energy, a streamlined Executive Office of the President, and a consolidation of our international information
activities.
In 1978 I proposed—and the Congress approved—reorganizations
of the Federal civil service system, emergency preparedness and
disaster relief programs, civil rights enforcement, and the pension
plan insurance system in order to make them more responsive and
effective.
In 1979 I will resubmit my proposal to establish a Department of
Education and propose further reorganization and consolidation in
economic development assistance, natural resources management,
and surface transportation.
For the second year, my budget reflects detailed, Governmentwide, zero-base budgeting. Agency programs were explicitly ranked
by priority, and programs were ranked across agencies, in a new
interagency, zero-base budgeting process.
For the first time, the budget reflects the 3-year budget planning
system I have instituted to gain better control of the longer-range
effects and direction of Government policies.
In this budget I am proposing a new system to control the
growth of Federal credit activities, particularly federally-guaranteed credit.
Other important steps will be taken to improve the way the
Government operates and the way it affects the private sector. To
increase the efficiency of the private sector, the administration will
eliminate unnecessary regulation where possible, and will minimize the redtape involved in necessary environmental and safety
regulation. Further efforts will be made to reduce excessive paper
work. State and local governments, private institutions, and citizens will benefit from simplified conditions for receiving Federal
assistance. In particular, a number of programs have been consolidated to simplify the grant system, and more will be proposed in
the future. The Government's own management will be improved
through more effective cash management, application of the Civil

THE BUDGET FOR FISCAL YEAR 1980

Service Reform Act, and use of new offices of Inspectors General to
identify waste and search out fraud and corruption.
Preparing this budget reminds me once more of the overwhelming demands upon the Federal budget and of the limits on our
resources.
I believe that we must firmly limit what the Government taxes
and spends. We must balance public and private needs. We must
set priorities more carefully. We must change some old priorities
and establish new ones. We must defer some of our demands if we
are to meet adequately today's most critical needs.
These principles have guided my actions in shaping this budget
and they will continue to do so in the future:
—the budget must be kept within the bounds of what is appropriate in today's economic circumstances;
—the Government has no resources of its own, its only resources
are those it collects from the taxpayer;
—Government action must be limited to those areas where its
intervention is more likely to solve problems than to compound
them; and,
—we have an obligation to manage with excellence and to maintain proper priorities within the $532 billion proposed in this
budget.
I know that the Congress shares these beliefs. You, as well as the
executive branch, are sensitive to the American people's concerns
about the scope of Government, the burdens of taxes, the needs of
our citizens, and the efficiency of public management. Indeed, the
Congress in the last few years has taken important steps—in particular, through the establishment of the congressional budget
process—to improve its own means of establishing priorities. I have
worked closely with the Congress, and will continue in this spirit of
cooperation.
I look forward to working with the Congress and its leadership
on this budget.
The decisions I have made are difficult ones. They involve, not
figures on a balance sheet, but the lives and future of the American people. I have chosen restraint in Government spending because inflation must be controlled. I have tried to be equitable in
ordering priorities. Yet I have continued to support those programs
that represent our most pressing needs. To do so I have terminated,
reduced, or deferred other programs.
It is difficult to maintain a sense of strong national purpose
when we do not face a clear and immediate crisis. But it is equally

THE BUDGET MESSAGE OF THE PRESIDENT

important. These are times when responsible leadership means
anticipating those day-to-day actions that enable us to avoid crises
and to build toward the future. This has been the fundamental
purpose behind the decisions considered here, and that is the
intent of this budget.
JIMMY CARTER.
JANUARY 22,

1979.

PART 2

BUDGET SUMMARY

BUDGET SUMMARY
This part of the budget summarizes the President's major budget
proposals and discusses significant changes in the way the Government conducts its business.
OVERVIEW OF THE BUDGET

This is an austere budget. The serious inflation facing the Nation
today requires restraint on the growth of Federal spending.
This budget provides that restraint. It proposes a significant
deceleration in the growth of Federal spending. Budget outlays
increase by 9.4% in 1979, 7.7% in 1980, 8.7% in 1981 and 6.4% in
1982—compared to a 12.1% average annual rate of increase from
1973 through 1978.
This deceleration involves a general reduction in program
growth throughout the Government. Some initiatives high on the
administration's list of priorities have been deferred. Aggressive
efforts have been made to achieve program efficiencies. Reductions
or terminations of lower priority programs have been proposed.
Routine increases are not requested.
The application of restraint has not been mechanical. Rather,
the zero-base budget process has been used to establish priorities so
that the best Government services possible will be obtained with
the strictly limited fiscal resources that can safely be made available in today's inflationary environment.
The budget total increases by $38 billion between 1979 and 1980.
Benefit payments under retirement, disability, and health care
programs will rise because of cost-of-living adjustments and because of the normal annual increases in eligible beneficiaries. Purchases of materiel for essential defense modernization—primarily
to strengthen NATO-related capabilities—are proposed to increase
somewhat in real terms. Interest on the public debt will increase
because debt outstanding will rise. The remainder of the budget,
however, is reduced in real terms. Federal employment levels will
be reduced during 1979, and restraint on the salaries of Federal
employees is proposed, in line with the national wage-price standards. Overall, this budget, adjusted for inflation, provides for about
the same level of real Federal activity in 1980 as in 1978 and 1979.
Throughout the 1978-1982 period, proposed outlays grow at a
rate that is substantially less than the rate of growth of gross
national product (GNP), so that outlays would decline as a percentage of GNP from 22.1% in 1978 to 21.2% in 1980 and 20.3% in
12

BUDGET SUMMARY

1982. Receipts would rise from 19.7% of GNP in 1978 to 20.1% in
1980; and, in the absence of future tax cuts, would reach 21.6% in
1982.
Budget Outlays and Receipts as a Percent of GNP
25
Outlays

Receipts

•

J
1970

I
'

This budget meets the President's commitment to hold the deficit
to $30 billion or less in 1980 and to move in the direction of a
balanced budget. The declining deficit symbolizes the administration's determination to hold down the growth of spending. Holding
down spending growth (reflected in the reduction in outlays as a
percentage of GNP, noted above) is, in the administrations^ view,
equal in importance to a declining deficit. Because receipts are
strongly affected by economic circumstances, the administration
believes that the restrained outlay levels planned in the 1980
budget are objectives as important in themselves as the estimated
deficit.

280-000

O—79—2

THE BUDGET FOR FISCAL YEAR 1980
EFFECTS OF BUDGET PROPOSALS
[In billions of dollars]
Estimates

Current services
Proposed reductions
Proposed increases
Budget receipts
Outlays:
Current services
Proposed increases
Proposed reductions
Budget outlays
Surplus or deficit ( - ) :
Current services basis
Budget
(-)

Projections

1978
actual

1979

1980

1981

402.0

456.0

504.5
-2.3
3

571.3

502.6

1983

1984

5.5

646.6
-*
6.1

715.3
-.1
3.0

777.8
-.1
2.5

1982

402.0

456.0

576.8

652.6

718.3

780.2

450.8

491.3 536.1 577.8
1.9
7.0 14.8
.1 - 1 1 . 6 - 1 4 . 7

610.6
22.2
-17.9

640.2
27.0
-21.6

667.1
32.3
-25.6

450.8

493.4

578.0

614.9

645.6

673.7

-48.8 -35.4 -31.6 -6.5

36.0

75.1

110.7

-48.8 -37.4 -29.0

37.8

72.7 106.5

531.6

surplus or deficit
-1.2

*$50 million or less.

The major policy changes in the budget can be highlighted by
comparing the administration's budget recommendations with current services estimates. Current services estimates are projections
of the costs of existing programs under existing law, including
outlay changes that result from increased numbers of beneficiaries
entitled to receive payments and (where required by law) higher
benefit levels due to increases in the cost-of-living.
The current services estimates do not, however, adjust all programs for the effects of anticipated inflation. Adjustment of all
programs except those limited in dollar amount by statute would
add nearly $8 billion to the 1980 current services outlay total and
about $22 billion to the 1984 total. Thus, the $4.6 billion by which
the 1980 budget outlay total falls short of the more narrowlydefined current services level understates the full degree of restraint in the 1980 budget. Similarly, the fact that the budget
projections are somewhat higher than the more narrowly-defined
current services projections over the 1981 to 1984 period could be
misleading. Current services estimates and projections with full
price adjustments added provide an alternative base against which
to assess the degree of restraint incorporated in the projected
budget figures.

BUDGET SUMMARY

Increases in Bucket Outlays from 1979
$ Billion,

Current services estimates provide a basis for distinguishing
between built-in changes in program levels and the effects of policy
changes recommended in the budget. Policy changes include both
proposed legislation and discretionary increases or decreases in
program levels. Special Analysis A, which accompanies this budget,
provides a more detailed comparison between the 1980 budget estimates and the current services estimates.
The budget recommendations would result in 1980 outlays of
$531.6 billion—$4.6 billion less than the current services level. On
a current services basis, total outlays would increase from $536.1
billion in 1980 to $667.1 billion in 1984. By 1984 the program
changes recommended in this budget would result in projected
total outlays of $673.7 billion, $6.7 billion above the projected current services level for that year. The following table identifies
major program increases and reductions, relative to current services levels, in the 1980 program.

THE BUDGET FOR FISCAL YEAR 1980
MAJOR OUTLAY INCREASES AND DECREASES RELATIVE TO CURRENT SERVICES
(In billions of dollars)
Program

Increases:
Defense, excluding pay, including atomic energy
International
Energy, excluding supply
National Development Bank
Transportation, excluding rail
Elementary and secondary education
Social services
Health services
Medicare and medicaid increases
Veterans compensation
Welfare reform allowance
Allowance for other contingencies
Other
Total, major increases
Decreases:
Proposed decreases requiring substantive legislation:
Hospital cost containment:
Medicare
Medicaid
Other health financing cost-savings
Veterans medical care
School lunch and related
Social security and railroad retirement
Public assistance
Other
Subtotal, requiring substantive legislation
Decreases not requiring substantive legislation:
Energy supply
Agricultural price supports
National forests
Rail transportation
Impact aid
Higher education
Public service employment
Pay restraint, Defense
Pay restraint, Civilian agencies
Other

1979

1980

0.8
.1
.1
*
*
*
.1

A
1.9

-.4
-.1

2.2
.3
.1
.2
.1
.3
.4
.2
.4
.5
.5
U
7.0

1981

4.1
1.0
.4
.8
.3
.5
.5
.3
.6
.9
1.5
3.0
L0
14.8

1982

6.4
1.4
.4
1.0
.4
.5
.5
.4
.8
1.3
5.5
3.0
7
22.2

-1.5
-.2
- .4
-.3
-.4
-.7
- .2
-^

-2.8
-.4
-.5
-.3
-.4
-1.8
-.2
-.2

-4.3
-.6
-.5
-.3
-.4
-3.1
-.3
-.2

—.4

—3.8

-6.6

-9.7

- *
.3
.1
.3

- .3
-.7
-.3
- .5
-.2
-.4
-.6
-1.8
—1.2
-1.6

-.5

-.3
.2
-.3
-.3
-1.5
-2.8
-1.8
-7

-.2
-.3
-.3
-.1
-.4
-3.7
-2.4
-.5

-8.1

-8.2

*
*

Subtotal, not requiring substantive legislation..

-7.7

Total, major decreases

-11.6

-12.8 -17.2

*$50 million or less.

Major reduction proposals are discussed in a separate section,
below.
Receipts under the tax proposals in this budget are expected to
be $502.6 billion in 1980, a decrease of $2.0 billion from the current
services level. This reflects the tax proposals in the budget. In the
absence of any future changes in the tax law beyond those specifically proposed in this budget, receipts would grow to $780.2 billion

BUDGET SUMMARY

in 1984, $2.4 billion above the current services level of $777.8
billion. However, because tax receipts tend to grow more rapidly
than the economy as a whole, raising tax burdens and restraining
growth, the administration will carefully consider further reductions between now and 1984. Further reductions—when economically prudent—would permit everyone to share the benefits of expenditure restraint in the form of a reduction of tax burdens below
the levels that would result from continuation of current law.
The 1980 budget proposals are intended to place us on a long run
path toward reduced inflation, relatively full employment, and a
balanced budget. The fiscal policy underlying this budget represents a balanced approach to current economic conditions. Monetary and fiscal policy together should create an environment in
which inflationary pressures will ease. While it is sufficiently restrained to help ease inflationary pressures, this policy is not so
restrictive that it will prevent continued growth in the economy.
The relatively low rate of real growth during 1979 is expected to
result in a small rise in the unemployment rate to about 6.2% by
the end of the calendar year. The unemployment rate is expected
to remain at about that level throughout 1980. The rate of inflation, which was over 9% during 1978, is expected to decline to
about 6% by the end of 1980. The budget deficit dropped from $66
billion in 1976 to $49 billion in 1978, and the budget proposes a
further decline to $29 billion in 1980.
The budget margins projected beyond 1981 on both a Presidential
budget basis and the current services basis do not imply that
surpluses of such magnitudes will in fact occur. The feasibility of
achieving future surpluses depends on economic conditions too far
in the future to forecast, on the need to expand or contract programs, and on the need for further tax cuts. These projected margins do indicate that uncommitted resources are likely to be available for
discretionary budgetary decisions—tax reductions, new or expanded
programs, or debt reduction—in the years ahead.
MAJOR BUDGET PROPOSALS

Tax proposals.—The budget estimates reflect the real wage insurance proposal announced in October as an integral part of the
President's anti-inflation program. This proposal is designed to
encourage compliance with the wage standard in that program.
Under the proposal, employees whose compensation increases are
within the anti-inflation guidelines will be eligible for a refundable
tax credit if inflation exceeds 7% for the program year. The cost of
the real wage insurance proposal is estimated to be $2.5 billion in
1980.
The multi-year budget planning estimates reflect administrative
actions and proposals to increase the efficiency with which the

THE BUDGET FOR FISCAL YEAR 1980

Federal Government handles the large flows of money to and from
the Treasury. These cash management initiatives will require that
tax payments be made closer to the time that liabilities occur.
Under current law, some taxpayers, particularly large corporations, are able to defer payments of taxes well beyond the period
when liabilities accrue or when they collect withheld taxes. Such
deferrals amount to interest-free loans from the Federal Government. These initiatives will increase receipts by $5.0 billion in 1981
and by $5.3 billion in 1982. (See Part 4 for a more detailed description of these and other tax proposals).
Budget Outlays —Constant 1980 Dollars
$ Billions
-600

$ Billion,

-500

Payments for
Individuals
and Grants

-200

200-

-100

100National Defense

I IIIIIII11III I1I I II1I I1II11I II I
1950
Fi»calYt<

1955

»970

1980 '82

Defense and international.—The budget proposes significant increases in defense spending. Outlays would be $125.8 billion in
1980, compared to $114.5 billion in 1979. Both strategic and conventional forces would be strengthened—particularly our ground
forces in Western Europe. Overall, under the budget proposals,
defense spending would increase by about 3% in real terms in
1980.
The administration is negotiating a stragetic arms limitation
treaty with the Soviet Union. The budget includes provisions for
intelligence capabilities necessary to assure compliance with the
treaty.

BUDGET SUMMARY

The budget proposes increases in foreign aid with emphasis on
long-term development of poor countries, and reducing widespread
poverty. A significant increase in funds for the Export-Import Bank
is proposed to help strengthen our foreign trade situation. Total
outlays for international programs would increase from $7.3 billion
in 1979 to $8.2 billion in 1980.
Energy.—Outlays for energy programs in 1980 are estimated at
$7.9 billion, somewhat less than in 1979. This decrease is largely
because of delays in building up the Strategic Petroleum Reserve.
Increases are proposed for research and development to tap domestic energy resources more effectively. Particular emphasis is given
to long-range research and development efforts in promising areas
that private industry is unlikely to explore on its own, especially in
solar energy.
The 1980 budget also provides for carrying out the recentlyenacted National Energy Act. The Act prohibits construction of oiland gas-fired boilers where coal can be used more economically,
and allows the price of natural gas to rise to encourage domestic
production. In addition, the Act encourages the conservation of
energy used in homes and industry.
The administration's nuclear energy policy calls for deferring
indefinitely commercial reprocessing of the spent fuel from nuclear
power plants and cancellation of the liquid metal fast breeder
reactor demonstration project at Clinch River. As part of this
policy, the 1980 budget provides for continued research and development on efforts to improve the efficiency of current nuclear
power plants and to examine new alternative reactor concepts.
Substantial increases are provided for nuclear waste management
programs.
Income security.—The budget proposals for income security programs, would simplify program administration, reduce fraud and
abuse, and target benefits more specifically on the needy. Social
security reforms are proposed to eliminate certain windfall and
special benefits that are no longer appropriate or can be provided
more effectively under other existing programs. A 36% increase in
funding for the Women, Infants and Children food program is
proposed, to help assure the sound development of growing children. Legislation will be proposed to direct school meal subsidies
more specifically toward children from low-income families and to
eliminate fraud and abuse, and to improve management in the food
stamp and public assistance programs. Legislation will also be
proposed to put the Railroad Retirement system on a sound financial footing and to provide a 7.8% cost-of-living increase in compensation benefits paid to veterans for service-incurred disabilities.

THE BUDGET FOR FISCAL YEAR 1980

Health.—The administration is developing a National Health
Plan. The 1980 budget proposes health initiatives that will be
consistent with that plan. They emphasize the provision of better
access to medical care and mental health services for those most in
need, prevention of disease, biomedical and mental health research,
control of health care cost inflation, and reduction of fraud and
abuse in Federal health programs. Increases in 1980 outlays of $451
million over 1979 would support improved delivery of services,
including expanded medicaid eligibility to an additional 2 million
low income children and pregnant women, and improved mental
health systems. Federal savings from proposals to control health
care costs are estimated to be $3.1 billion in 1980, including $1.7
billion from hospital cost containment legislation. Outlays would
increase by $44 million in 1980 for preventive health initiatives for
fluoridation, health education, and programs to reduce smoking,
alcohol abuse, and mental illness. The budget proposals also emphasize control of toxic substances and other environmental health
hazards.
Community and economic development—The budget proposes
creation of a National Development Bank to provide grants, loan
guarantees, interest rate subsidies and other financial assistance to
businesses willing to locate or remain in economically depressed
areas. Increased funding is requested for community development
block grants, neighborhood self-help development grants, the livable-cities program and the housing rehabilitation activities of the
recently established Neighborhood Reinvestment Corporation. Substantial increases are proposed in assistance to minority businesses.
Creation of an inland energy impact program is proposed, to provide funds to alleviate adverse effects stemming from the development of noncoastal energy resources.
A Federal Emergency Management Agency has been established
to bring together the major Federal programs for emergency preparedness, flood insurance, disaster relief, civil defense, and hazard
mitigation.
Education and employment.—The budget requests a supplemental appropriation of $258 million for 1979 and $400 million in
budget authority for 1980 for compensatory elementary and secondary education services for counties with especially high concentration of low-income children. These funds will be used to overcome
the learning impediments associated with poverty. Increased funding is also requested to improve the teaching of basic skills and for
bilingual education.
A 1979 supplemental appropriation of $400 million is requested
for the Private Sector Initiative authorized in legislation enacted

BUDGET SUMMARY

last year. Under this program, local industry will assist local sponsors with training and placement of workers. This will increase
training opportunities for the disadvantaged. It will also stimulate
private sector job development and increase the number and quality of private sector job placements under employment and training programs. Outlays are expected to be $50 million in 1979 and
$150 million in 1980.
Major Program Reductions..—The
budget restraint necessitated
by the current severe inflation has made it essential to identify the
least effective Federal activities for reduction; otherwise, arbitrary
reductions in all programs would be necessary, and important services seriously curtailed. Zero-base budgeting is well suited to this
task. Had it not been in place this year, achieving the degree of
restraint required in this budget could have been much more disruptive to Federal operations. With the zero-base budgeting process, it has been possible to compare programs and make better
judgments as to where the largest dollar savings could be achieved
with the least sacrifice of program performance and service to the
public.
The most urgent economy measure proposed in the budget is
hospital cost containment for medicare and medicaid. Enactment of
this proposal would serve three objectives. It would reduce Federal
outlays significantly, hold down the costs to State and local governments of providing health care services, and slow the growing
direct burden imposed on consumers by the industry in which price
increases have been highest over the last decade. The limitation on
inpatient revenue increases would force hospital managers to curb
excessive spending for unnecessary equipment, unnecessary facilities expansion, and wasteful operating practices.
Enactment of hospital cost containment legislation would yield
national savings of $24.3 billion over the 1980 to 1982 period,
including $9.8 billion in Federal outlay savings. Other proposals in
the health care area will result in Federal savings of $1.4 billion in
1980, and $1.7 billion in 1982.
The budget proposes a number of changes to the social security
system to eliminate unnecessary and windfall benefits. Together,
they will save $0.6 billion in 1980 and $1.6 billion in 1981.
The Government today spends about $85 billion a year to purchase goods and services. Actions are proposed in this budget to
hold these costs to a minimum. They include:

THE BUDGET FOR FISCAL YEAR 1980

—increased competitive bidding for Government contracts;
—tighter controls on contractor overhead when competition is
not feasible;
—better techniques for determining when purchases are to be
made, and for the distribution of supplies and the delivery of
services; and
—improved business practices in management and control of
inventories.
Altogether, these actions will save over $1.0 billion in 1980, with
larger savings in later years.
The budget proposes that Federal payments to school districts
that are affected by the presence of Federal facilities in the district
be limited, reducing 1980 outlays by $200 million. Payments would
continue to be made for children whose parents both live and work
on federally owned land.
The funding level of the public service employment program was
more than doubled in the spring of 1977. In view of the substantial
increase in total employment since then, the budget proposes that
funds for the portion of this program specifically designed to coun-"
ter cyclical increases in unemployment be reduced in 1980. The
program is not targeted on those with lowest incomes, and the
period of unemployment required before a person becomes eligible
for a subsidized job is relatively short. Although public service jobs
for those with lower incomes and longer periods of unemployment
would remain at the current level of 267,000 in 1980, the level for
the countercyclical program would be reduced from 358,000 jobs at
the end of 1979 to 200,000 at the end of 1980. Outlays in 1980 would
be $592 million below the cost of maintaining 358,000 jobs.
The summer youth employment program employed a million
youths between the ages of 14 and 21 during 1978. The budget
proposes deferring until 1980 part of the 1979 funding now being
provided by continuing resolution, thus holding the 1979 program
to one million jobs. For 1980, regulations will make those under
age 15 no longer eligible for the program. It is proposed that the
total number of jobs be reduced to 750,000. Outlays would be reduced by an estimated $111 million in 1979 and $302 million in
1980 by these actions.
The budget proposals include several reforms and program reductions in the Department of Housing and Urban Development
(HUD) subsidized housing and Federal Housing Administration
(FHA) programs. The number of additional low income families to
receive rental housing assistance from HUD in 1980 will be reduced about 10% from the 1979 level. This reflects the continued
improvement in housing conditions among eligible households and
the substantial backlog of housing assistance already committed
but not yet completed. Current FHA policies on the disposition of

BUDGET SUMMARY

HUD-owned properties would also be changed, under the budget
proposals, to encourage the private sector to undertake necessary
property improvements. This would reduce the costs of repairing
these properties, currently borne by the Federal Government.
Legislation will be proposed to permit the Veterans Administration to collect from medical insurers or other non-Federal sources
reimbursements to which veterans are entitled for medical care
given them in VA medical facilities. Savings from this and other
proposals are estimated at $315 million in 1980 outlays.
The budget recommends that Government exploration of the
National Petroleum Reserve in Alaska be discontinued at the end
of 1979. Adequate information should be available by then to determine what legislation should be recommended to provide for the
future uses of the Reserve. Also, no additional funding is recommended for further development of the Barrow Gas Field pending
completion of a study on alternative fuels.
FISCAL POLICY
The fiscal policy this administration adopted shortly after taking
office has played an important role in supporting economic recovery from the deep recession of 1974-1975. Tax reductions in calendar year 1977 and again this year, together with increased spending for public works, countercyclical revenue sharing, and public
service jobs, have helped employment, production and incomes recover.
Employment has risen rapidly during the past 2 years, from 88.4
million in December 1976 to 95.9 million in December 1978—one of
the most rapid increases in employment the economy has experienced in peacetime. The unemployment rate declined from 7.9% in
December 1976 to 5.9% in December 1978—despite the enormous
number of new entrants to the labor force as the "baby boom"
generation has reached working age, and as the labor force participation of women has continued to rise.
These employment gains were shared by all groups in our society. Employment of blacks and other minorities grew by 11.8%
during this period; that of women by 11.7%; and that of minority
teenagers by an estimated 14.2%. Nevertheless, unemployment for
many of these groups remains unacceptably high. Reduction of this
unemployment will require that we concentrate on reducing structural unemployment—the unemployment of those who have difficulty finding work even in a strong economy. The proposals in this
budget direct our employment and training program efforts toward
that end.
Inflation has worsened recently. The Consumer Price Index rose
63A% during 1977, and by an estimated 9x/4% during 1978. Further
acceleration of inflation would disrupt our economy and the econo-

THE BUDGET FOR FISCAL YEAR 1980

mies of other nations. At home, it would impose particular hardship on those with limited incomes. It could reverse the gains in
employment and in real income that have been won.
The 1980 budget therefore recommends a more restrained fiscal
policy by limiting the growth of outlays and reducing the deficit.
This restraint will help ease inflationary pressures while still permitting continued, moderate growth.
This fiscal policy represents a responsible and necessary first
step on a long run path toward sustainable high employment and
price level stability. It thereby moves us toward the goals established in the Full Employment and Balanced Growth Act of 1978.
BUDGET AUTHORITY
All budget outlays depend on the legal authority to spend money
provided by the Congress. Such "budget authority"—usually in the
form of appropriations—results in outlays, some of which occur
during the fiscal year for which the budget authority is granted
and the rest of which occur in subsequent years. For 1980, the
President is requesting new budget authority of $615.5 billion, $5.3
billion above the current services level of $610.2 billion.
In 1979, outlays are estimated at 88.2% of budget authority for
that year; in 1980 the ratio is expected to be 86.4%. Both percentages are close to the actual ratios of the previous three years. The
ratio falls in 1980 primarily because of a $15 billion request for
borrowing authority for TVA powerplant construction. This authority, last replenished in 1976, is needed once every few years. It
results in outlays over a period of years that are largely offset by
proceeds from the sale of power.
BUDGET AUTHORITY
[In billions of dollars]
Estimates
1978
actual

Available through current action by the Congress
Available without current action by the Congress
Deductions for offsetting receipts
Total, budget authority
MEMORANDUM
Budget authority, current services basis

1979

1980

1981

397.1

1982

326.8

366.6

386.7

420.4

234.3
-59.6

261.5
-68.4

302.3
-73.5

501.5

559.7

615.5

651.0

695.7

501.5

553.7

610.2

637.4

674.0

332.8
359.4
-79.0 -84.1

BUDGET SUMMARY

FEDERAL CIVILIAN EMPLOYMENT AND PAY

In keeping with the President's objective of holding Federal civilian employment to the minimum necessary for the efficient and
effective operation of the Government, full-time permanent employment in the executive branch (excluding the Postal Service) is
held to 1,895,900 for the end of 1980. This is 35,700 below the level
estimated for the end of 1979 in last year's budget. The reduction
in total employment is in keeping with the statutory employment
limitation contained in the Civil Service Reform Act of 1978.
Changes in the Federal personnel system resulting from that Act
are discussed in the section on management improvements, below.
In accordance with the national wage-price standards included in
the administration's anti-inflation program, the budget assumes a
Federal pay increase of 5.5% for 1980. This increase, together with
increases in fringe benefits that are considered in the national
wage standard, would be in conformance with that standard. While
the assumed pay increase is less than would be necessary to maintain overall comparability with non-Federal pay scales under existing procedures, it is vital that the Government set an appropriate
example by remaining within the guidelines that others have been
asked to follow.
The administration will also propose comprehensive legislation
to reform and improve Federal pay-setting systems and procedures.
FEDERAL DEBT AND LENDING
During 1980, Federal debt held by the public is expected to
increase from $651 billion to $690 billion, due largely to the anticipated budget deficit. In addition, however, the activities of the offbudget Federal entities (discussed in Part 6 of this document) add
significantly to the Government's borrowing requirements. Other
factors, such as changes in cash balances held by the Treasury, also
affect the debt.
During 1980 outstanding direct loans of Federal agencies included in the budget are expected to increase by $2.8 billion. Total
Federal lending, however, will be $14.6 billion, since off-budget
Federal entities are expected to increase their loans outstanding by
$11.8 billion. In addition, loans guaranteed or insured by the Federal Government are expected to increase by $25.5 billion. Unlike
direct loans, guaranteed and insured loans do not result in outlays
except in cases of default. They do, however, affect credit markets,
and, thus, the economy as a whole. Loan guarantees are discussed
more fully in Part 6 of the budget and in Special Analysis F of the
accompanying volume of Special Analyses.
An administration proposal to improve the review and control of
Federal credit activities is discussed in the following section.

THE BUDGET FOR FISCAL YEAR 1980
FEDERAL DEBT AND CREDIT
[In billions of dollars]
1978
actual

Debt outstanding, end of fiscal year:
Gross Federal debt
Debt held by the public
Federal and federally assisted loans outstanding,
end of fiscal year.1
Direct loans—on-budget
Direct loans—off-budget
Guaranteed and insured loans2
Government-sponsored enterprise loans3
1
2
3

1979
estimate

780.4
610.9

839.2
650.9

76.5
43.9
193.1
126.8

81.5
55.9
213.9
142.3

1980
estimate

899.0
689.9
84.3
67.7
239.4
160.7

See Table F-9 in Special Analysis F, "Federal Credit Programs," published in the Special Analyses volume of this budget.
Excludes loans held by Government accounts and Government-sponsored enterprises.
Net of loans between Government-sponsored enterprises, and between such enterprises and Federal agencies.

BETTER MANAGEMENT OF THE FEDERAL GOVERNMENT
The effectiveness of the Federal Government in meeting the
needs of the American people depends not only on the level and
type of services the Government provides, but also on how well it
provides them. The administration program includes several
changes in the way the Government is managed. Among them are
improved controls over Federal credit programs, reorganization of
the executive branch, regulatory reform, multi-year budget planning, and zero-base budgeting.
Control of Federal credit activities.—Federal lending and Federal
guarantees of loans are a large and growing means of meeting the
objectives of Federal programs. Direct loans and loan guarantees
by the Federal agencies and Government-sponsored enterprises are
estimated to be $61 billion in 1980, and total Federal loans and
guaranteed loans outstanding are estimated to be $552 billion at
the end of 1980—compared to $381 billion outstanding at the end of
1977. Of the $320 billion of credit advanced in U.S. credit markets
in 1977, 11.5% was advanced under Federal auspices. Plans for
direct and guaranteed lending under individual Federal credit programs are given some review during the annual budget process.
There is, however, no established mechanism for regularly and
closely reviewing total Federal credit activity. Consequently, there
is currently no systematic way to consider the resource allocation
implied by those plans or whether the share of credit transactions
being made or guaranteed by the Federal Government is reasonable. In order for the Government to foster efficiency in the allocation of economic resources, in financial markets, and in the economy as a whole, it must exercise better and more systematic control
over both guaranteed loans and direct loans—and over the ways in
which credit activities are financed.

BUDGET SUMMARY

To achieve these ends, the administration proposes to establish a
system of control over Federal credit programs. The control system
will be based on annual limitations on gross loan activity for both
direct lending and loan guarantee programs. These limitations
would be established separately from but concurrently with budget
authority in the course of the regular budget and appropriation
process. Limitations would be proposed in the President's budget
for each individual credit program, and for their aggregate total.
Aggregate ceilings would be set in congressional budget resolutions.
The legally binding limitations for each individual budget account
would be set in regular annual appropriation acts. The administration will work with the Congress to develop appropriate legislation
to put the credit control program into effect.
Data on credit programs will be monitored and published on a
more frequent and timely basis than at present. They will be given
more prominent display in a "credit program" section of the
budget. Efforts will be made to improve the analysis of the economic and financial effects of the overall credit program.
The credit control system will integrate Federal credit programs
more completely into the budget process. The budget is the chief
instrument for allocating fiscal resources between public and private sectors and among different functions or needs; it also sets
fiscal policy. Bringing credit programs more fully into the budget
review process will thus help coordinate credit policy with fiscal
policy, and help synchronize the allocative aspects of Federal credit
activity with budget allocations.
Zero-base budgeting.—The 1980 budget is the second that has
used zero-base budgeting. The administration adopted this approach in order to:
—Focus the budget process on a comprehensive analysis of objectives, needs, and activities in order to make more effective use
of the taxpayer's dollar.
—Improve coordination of planning, budgeting, and evaluation.
—Induce managers to evaluate in detail the cost-effectiveness of
their operations.
—Expand management participation in planning and budgeting
at all levels of the Federal Government.
The results of the first two years' efforts have been highly satisfactory. More managers have become directly involved in preparing
initial budget requests. There is now a better understanding
throughout the Federal bureaucracy of the relationship between
policy initiatives, program planning, resource allocation, and effective program execution.
Zero-base budgeting requires managers to articulate objectives.
In many instances it has helped to clarify agencies' functions and

THE BUDGET FOR FISCAL YEAR 1980

roles, and has increased management's opportunities to eliminate
unnecessary activities and operate its programs more successfully.
Zero-base budgeting also requires managers to identify and examine alternative methods of accomplishing their objectives. This
has frequently led to reconsideration of the established ways of
doing things. As a result, a number of agencies have recommended
changes in the way they carry out programs.
Even more important, zero-base budgeting has induced managers
to analyze systematically the effects of various funding levels on
the agency's ability to carry out its mission. It has required them
to rank activities and resources in priority, from those that contribute the most toward achieving the agency mission to those that
contribute least. These rankings indicate how program objectives
can best be achieved at any given level of funding. This year zerobase budgeting has made it easier to compare programs and identify those areas where the greatest monetary savings could be realized with the least sacrifice of program performance and service to
the public.
Results of zero-base budgeting are being continually assessed so
that the budget process may build on past experience. Agencies are
making more extensive use of in-depth zero-base budget reviews
and becoming more sophisticated in their preparation and review
of zero-base budgeting materials. The Government's decisionmaking processes are becoming more orderly and rational, and the use
of public resources more efficient.
The zero-base budget system has permitted significant innovations in central review of the budget. In the review of the 1980
budget, several interagency exercises permitted a more integrated,
systematic examination of programs that have similar or related
objectives. Zero-base packages for such programs from a number of
agencies were combined, reviewed and ranked in priority order.
Decisions were then made on the basis of those rankings.
Similarly, zero-base packages ranked by each agency at the
margin of its budget total were re-ranked on a Government-wide
basis. This provided a more systematic basis for balanced, evenhanded decisions.

BUDGET SUMMARY

Reorganization of the executive branch.—The administration is
committed to making the Federal Government more efficient and
responsive through reorganization of the executive branch. The
principal accomplishment of the past two years has been the comprehensive reform of the civil service system. This reform is designed to provide incentives for Federal employees to do their jobs
better, to improve administration of the Federal labor-relations
program, and to safeguard merit systems from political and other
abuse. In addition, some organizational problems that had been
widely noted have been corrected—in equal employment, emergency preparedness and disaster assistance, and the Employee Retirement Income Security Act programs. The size of the Executive
Office of the President has been reduced and numerous advisory
committees that had outlived their usefulness have been eliminated.
The creation of a Department of Education will again be proposed in 1979, in order to improve the management, efficiency, and
accountability of education programs.
Regulatory reform.—Deregulation of the airline industry last
year marked a successful beginning to efforts to eliminate economic regulation wherever free markets can function more efficiently.
Proposals to substitute competition for regulation of surface transportation will be considered.
In addition to economic deregulation, the administration has
taken major steps to make needed regulations as cost-effective as
possible. Under Executive Order 12044, issued last March, agencies
must publish semiannual agendas of upcoming regulations, and all
regulations must be written in plain language. Administrative requirements must be standardized and a published regulatory analysis must accompany major regulations, setting out compliance
costs, alternatives considered, and reasons for selecting a particular
approach. Agencies must eliminate unnecessary or outdated regulations. A new Regulatory Council has been established to coordinate
this effort.
The administration reduced excessive paperwork burdens this
year by cutting total hours spent filling out forms by over 12%.
Plans are underway to expand these cuts next year. The process by
which agencies write new regulations and reevaluate the need for
existing ones will also be streamlined.
Audit and investigation.—Offices of Inspectors General have
been established by law in 12 major departments and agencies,
bringing the total number of statutory Inspectors General to 14.
Essential features of the legislation creating these offices have been
280-000

O—79—3

THE BUDGET FOR FISCAL YEAR 1980

extended by administrative action to the rest of the executive
branch. This is expected to reduce substantially the amount of
fraud, waste, and inefficiency in Government, and assure that programs achieve their intended purposes.
In addition, steps are being taken to streamline the way departments and agencies audit Federal aid programs. Working with the
General Accounting Office, and the National Intergovernmental
Audit Forum, the administration has developed a standard audit
guide that can be used by auditors from all agencies, as well as by
those from State and local governments, and independent public
accountants. This will help straighten out overlapping responsibilities and permit a single audit of an aid recipient.
The departments and agencies are tightening up their audit
resolution systems to assure that recommendations are acted upon,
overcharges prevented, and unspent grant funds recovered. This is
expected to return millions of dollars to the Treasury.
General management.—Other improvements in agency management have produced significant savings for the taxpayer:
—Cash management: Applying businesslike methods to the Government's cash flow has already saved over $400 million a
year. During the next 2 years further improvements will be
made that will save additional hundreds of millions of dollars
annually. These improvements involve collecting and depositing receipts as soon as possible; paying bills on time—but not
early or late; and obtaining interest on temporarily idle balances.
—Streamlining eligibility requirements for human services: A
major interdepartmental review of eligibility requirements is
being initiated to eliminate unnecessary complexity and duplication in eligibility-determination procedures that add to
waste, fraud, and high error rates.
—Simplification of the grant application process: Planning requirements and other conditions for receiving Federal aid are
being consolidated, and administrative requirements standardized, to reduce State and local governments' costs of applying
for and obtaining Federal financial assistance. Cost accounting
principles under which universities and nonprofit organizations conduct federally assisted programs have also been
strengthened and standardized.
—Funds control: Systems controlling the use of Government
funds in the major departments and agencies have been updated, and agencies are now reviewing and improving their accounting systems.

BUDGET SUMMARY

Multi-year budget planning.—Since 1970 the Federal budget has
shown the longer-range implications of the administration's budgetyear policies by presenting five-year projections of Federal outlays
and receipts. However, explicit plans were rarely made for the
years beyond the budget year. As a result, the budget was difficult
to control and changes in the allocation of resources to meet
emerging priorities were difficult to make. In the near term, the
amount of discretion available to the administration and Congress
is extremely limited.
To help remedy this problem, agencies were directed this year to
prepare budget requests within the context of a planning period
that extends two years beyond the budget year. This innovation
should have several important effects:
—It expands the Government's planning horizon to two years
beyond the budget year and thereby integrates long-range
planning into the executive budget cycle.
—It helps to insure that the long-term consequences of programmatic changes and proposals are identified and taken into
consideration throughout the decisionmaking process.
—It provides a more useful and meaningful structure for review
and analysis of spending and tax policy choices.
—It enables Federal program managers to plan for the future on
the basis of more realistic appraisals of future resources than
they had in the past.
—It gives Congress and the public a more complete statement of
the administration's budgetary and legislative program.
All significant program and tax policy proposals prepared for
budgetary consideration now include an analysis of their fiscal
implications for 2 years beyond the budget year. Thus, this Spring
the administration will begin policy review of budget plans extending through 1983.

PART 3

ECONOMIC ASSUMPTIONS AND
THE LONG-RANGE BUDGET
OUTLOOK

ECONOMIC ASSUMPTIONS AND THE LONGRANGE BUDGET OUTLOOK
This part of the budget discusses the long-range budget outlook
and the economic assumptions underlying that outlook. The first
section presents economic assumptions for calendar years 1978
through 1984, explains the nature of these assumptions, and discusses policies to reduce unemployment and inflation. The second
section examines the budget's multi-year planning base for fiscal
years 1980 to 1982, and the projections for 1983 and 1984.
ECONOMIC ASSUMPTIONS

The economy and the budget are interrelated. Economic conditions significantly affect the budget, and the budget, in turn, influences economic conditions.
Both budget outlays and the tax structure have substantial effects on national output, employment, and inflation. Budget receipts vary with individual and corporate incomes, which respond
both to real economic growth and to inflation. Variations in receipts, as well as some benefit payments, such as unemployment
compensation, serve as "automatic stabilizers" for the economy by
restraining inflation and cushioning economic downturns. Other
activities of Government outside the budget totals, such as loan
guarantees and regulatory requirements, also affect the economy,
although their effect is less direct and less readily measurable.
At the same time, outlays for many Federal programs are directly linked to developments in the economy. For example, most retirement and other social insurance benefit payments are now tied
by law to cost-of-living indexes. Medicare and medicaid outlays are
affected directly by the price of medical services. Interest on the
debt is linked to market interest rates and the size of the budget
surplus or deficit, both of which in turn are influenced by economic
conditions. Outlays for certain benefits such as unemployment compensation and food stamps vary with the unemployment rate and
are thereby linked to the state of the economy.
Because of the complex interrelationships between the budget
and the economy, budget estimates depend to a very significant
extent upon assumptions about the economy. The administration's
economic assumptions are presented to assist in understanding the
budget estimates and projections, and the administration's fiscal
strategy. These economic assumptions are presented on a calendar
year basis, as is customary, whereas the budget estimates are on a
fiscal year basis. The following tables present the underlying economic assumptions that have been used for developing the budget
estimates.
34

OUTLOOK

SHORT-RANGE ECONOMIC FORECAST
(Calendar years; dollar amounts in billions)
Forecast
Item

Major economic indicators:
Gross national product, percent change, fourth quarter
over fourth quarter:
Current dollars
Constant (1972) dollars
GNP deflator (percent change, fourth quarter over fourth
quarter)
Consumer Price Index (percent change, December over
December)1
Unemployment rate (percent, fourth quarter)
Annual economic assumptions:
Gross national product:
Current dollars:
Amount
Percent change, year over year
Constant (1972) dollars.Amount
Percent change, year over year
Incomes:
Personal income
Wages and salaries
Corporate profits
Price level:
GNP deflator:
Level (1972=100), annual average
Percent change, year over year
Consumer Price Index:x
Level (1967=100), annual average
Percent change, year over year
Unemployment rates:
Total, annual average
Insured, annual average2
Federal pay raise, October (percent) 3
Interest rate, 91-day Treasury bills (percent) 4

Actual
1977

1978

1979

11.9
5.5

12.7
4.0

9.8
2.2

9.8
• 3.2

6.1

8.4

7.4

6.4

6.8
6.6

9.2
5.8

7.4
6.2

6.3
6.2

1,887
11.0

2,106
11.6

2,343
11.3

2,565
9.5

1,333
4.9

1,384
3.9

1,430
3.3

1,466
2.5

1,529
984
174

1,707
1,101
202

1,894
1,217
227

2,078
1,335
237

141.6
5.9

152.1
7.4

163.9
7.7

175.0
6.8

181.5
6.5

195.4
7.6

211.4
8.2

225.5
6.7

7.0
3.9
7.0
5.3

6.0
3.3
5.5
7.2

6.0
3.1
5.5
8.8

6.2
3.2
5.25
7.6

1
CPI for urban wage earners and clerical workers. There are now two versions of the CPI published. The index shown here is that currently used, as
required by law, in calculating automatic cost-of-living increases for indexed Federal programs.
2
This measures unemployment under State regular unemployment insurance as a percentage of covered employment under that program. It does not
include recipients of extended benefits under that program.
3
Pay raises become effective in October of each year—the first month of the new fiscal year. Thus the October 1979 pay raise will set new pay
scales that will be in effect during fiscal year 1980.
4
Average rate on new issues within period. In the past, interest rates for the forecast period have been assumed to remain at the levels prevailing at
the time the estimates were made. Because it would be unrealistic to assume continuation of the current unusually high interest rates, these estimates
assume, by convention, that interest rates decline with the rate of inflation.

During 1977 and 1978, employment rose at a 4.1% average
annual rate, a rate virtually unprecedented for peacetime. The
unemployment rate fell from 7.8% in December 1976 to 5.9% in
December 1978—despite the unusually rapid growth of the labor
force. At the same time, however, inflation, as measured by the
increase in the Consumer Price Index (CPI), December over December, rose from 6%% during 1977 to 9V4% during 1978.

THE BUDGET FOR FISCAL YEAR 1980
LONG-RANGE ECONOMIC ASSUMPTIONS
(Calendar years; dollar amounts in billions)
Assumptions

Item

Percent change, year over year
Incomes:
Personal income
Wages and salaries
Corporate profits
Price level:
GNP deflator:
Level (1972=100), annual average
Percent change, year over year
Consumer Price Index:*
Level (1967=100), annual average
Percent change, year over year
Unemployment rates:
Total, annual average
Insured, annual average2
Federal pay raise, October (percent) 3
Interest rate, 91-day Treasury bills (percent) 4

1981

1982

1983

1984

10.0
4.6

8.9
4.6

7.4
4.2

5.8
3.0

5.2

4.1

3.0

2.7

5.1
5.4

4.0
4.6

2.9
4.0

2.7
4.0

2,825
10.1

3,090
9.4

3,336
7.9

3,546
6.3

1,528
4.2

1,599
4.7

1,669
4.4

1,727
3.4

2,288
1,469
264

2,503
1,607
293

2,702
1,734
317

2,872
1,844
337

184.9
5.7

193.2
4.5

199.8
3.4

205.3
2.8

238.4
5.7

249.1
4.5

257.6
3.4

264.7
2.7

5.7
3.2
5.0
6.6

4.9
2.6
4.75
5.4

4.2
2.2
4.5
4.4

4.0
2.1
4.25
3.7

1
CPI for urban wage earners and clerical workers. There are now two versions of the CPI published. The index shown here is that currently used, as
required by law, in calculating automatic cost-of-living increases for indexed Federal programs.
2
This indicator measures unemployment under State regular unemployment insurance as a percentage of covered employment under that program. It
does not include recipients of extended benefits under that program.
3
Pay raises become effective in October of each year—the first month of the new fiscal year. Thus the October 1979 pay raise will set new pay
scales that will be in effect during fiscal year 1980.
4
Average rate on new issues within period. In the past, interest rates for the forecast period have been assumed to remain at the levels prevailing at
the time the estimates were made. Because it would be unrealistic to assume continuation of the current unusually high interest rates, these estimates
assume, by convention, that interest rates decline with the rate of inflation.

The short-range economic assumptions for calendar years 1978
(for which only three quarters of actual data were available when
the forecast was made), 1979, and 1980 are forecasts of probable
economic conditions consistent with the administration's budget
proposals. Growth of real gross national product (GNP) is projected
to average 2.2% during the four quarters of calendar year 1979 and
3.2% during 1980. The relatively low real growth in 1979 will
probably result in a small rise in unemployment during 1979 to

OUTLOOK

about 6.2% by year end. During 1980, the rate of unemployment is
expected to remain at about that level. As a consequence of the
administration's anti-inflation program, including a restrained
budget policy, inflation is projected to decline in 1979 and 1980.
The rate of inflation, which was over 9% during 1978, is expected
to fall to around 7% at the end of calendar year 1979. However,
because price increases in the first half of 1979 are likely to be
higher than this, the increase over the entire 12 months of the
year will be higher than the year-end rate. In 1980 the rate of
inflation is projected to average about 6%% over the 12 months of
the year and to be near 6% at year end.
These economic assumptions for 1979 and 1980 are consistent
with the longer term objectives of simultaneously reducing unemployment and inflation. Inflation increases uncertainty, raises interest rates and discourages investment. By undermining the value
of the dollar, it becomes self-sustaining. The administration's antiinflation policy recognizes that sustained economic growth and further reductions in unemployment are unlikely to be achieved while
inflation remains high.
Economic forecasts for the years 1979 and 1980 are subject to
substantial margins of error. For periods further in the future,
forecasts are subject to even greater uncertainty. Hence, in contrast to the short-range economic forecast, the longer range assumptions for the period 1981 to 1984 are not forecasts of probable

economic conditions. Instead, they are projections that assume progress in moving toward the goals of a more fully employed economy
and greater price level stability. These projections, and in particular the assumptions of 4% unemployment and 3% inflation by the
end of calendar year 1983, are consistent with the goals established
in the Full Employment and Balanced Growth Act of 1978 (the
Humphrey-Hawkins Act). These are very ambitious goals and will
require successful long-run policies to reduce both unemployment
and inflation. The feasibility of achieving these targets and the
types of policies that might be required during the 1981-1984
period to achieve them are discussed in this year's Economic Report
of the President The discussion below summarizes the major
policies directed at unemployment and inflation in the budget
proposals.
Policies to reduce unemployment—A primary requirement for
attacking unemployment is continued economic growth, which will
require appropriate fiscal policies. While 1980 fiscal policy focuses
on the reduction of inflation, it is designed to maintain growth
sufficient to preserve recent employment gains. As explained in the
President's Economic Report, fiscal policy adjustments will probably be required in later years to maintain economic growth and

THE BUDGET FOR FISCAL YEAR 1980

further reduce unemployment. The appropriate magnitude and
timing of such adjustments will depend on future economic developments and cannot be determined now. However, the administration will propose further fiscal actions—in particular further tax
reductions—during the 1981-84 period if such actions are required
to sustain the progress of the economy toward the goals of the
Humphrey-Hawkins Act.
As the Humphrey-Hawkins Act notes, "aggregate monetary and
fiscal policies have been unable to achieve" the economic goals
established in the Act "and therefore must be supplemented by
other measures designed to serve these ends." The pattern of unemployment shows very high rates for youth and for minorities,
who are disproportionately represented among the economically
disadvantaged. The administration is therefore pursuing several
strategies to reduce the sources of structural unemployment without adding to inflationary pressures. The budget proposes maintaining the high level of public service jobs in the program for the
structurally unemployed. This program was revised last year to
enhance the net employment gains from the program and to direct
job opportunities to the disadvantaged and the long-term unemployed. Less emphasis is being placed upon the cyclical public service
employment program, which is not so specifically targeted on the
disadvantaged. In response to an administration proposal, the 1978
CETA legislation authorizes a special program to help move participants, and especially younger workers, into unsubsidized private
sector jobs. A 1979 supplemental appropriation of $400 million is
requested for this program. In addition, the Revenue Act of 1978
included an administration proposal to create a targeted employment tax credit that will increase private sector employment opportunities for specified groups of disadvantaged individuals, primarily youth. The employment tax credit for hiring employees
placed in jobs under the WIN program and for hiring other AFDC
(public assistance) recipients was revised to make it similar to the
targeted employment tax credit. Finally, the administration will
propose a new welfare reform initiative which, if enacted promptly,
would be fully effective in 1982. The plan would reform cash assistance programs, further develop the use of CETA to combat structural unemployment, and direct more of the jobs to principal earners in families eligible for cash assistance. In later years, as the
effectiveness of these services is determined, additional resources
will be requested if necessary.
These employment and training policies are discussed in more
detail in Part 5, and their relationship to the goals of the Full
Employment and Balanced Growth Act is analyzed in the Economic Report of the President.

OUTLOOK

Policies to reduce inflation.—The Full Employment and Balanced
Growth Act specifies that "The President shall initiate specific
policies to reduce the rate of inflation, including recommendations
to the Congress where necessary, and include recommendations
within the Economic Report and the President's budget to the
extent practicable."
The budget proposals help combat inflation in two ways: first,
through overall budget restraint; and second, through measures
that contribute to lowering rates of price increase in specific sectors of the economy.
Budget restraint plays a crucial role in the administration's antiinflationary plan. Fiscal and monetary policies seek to avoid
adding an element of excess demand to existing inflationary pressures. They seek to create an economic environment in which
inflationary pressures will unwind. Some slowing of economic
growth is therefore necessary. Slowing economic growth while
avoiding a recession requires careful coordination and balance between fiscal and monetary policies.
Monetary and fiscal restraint alone will not be sufficient to
unwind inflation. Moderation in private sector wage demands and
pricing behavior is also essential. Therefore, the administration has
established an anti-inflation program with explicit standards for
moderating wage and price increases. The standards include: (1) a
7% per year standard for wage and fringe-benefit increases; (2) a
price deceleration standard for individual firms consistent with the
limitation on wage increases; (3) a program of real wage insurance
to encourage compliance with the standards; and (4) expanded
monitoring and enforcement.
Numerous Federal programs and policies contribute, directly or
indirectly, to holding down rates of price increase in specific sectors
of the economy. Many programs regulate prices directly or promote
competition. Energy policies, including the National Energy Act of
1978, have shielded the economy from large and abrupt price increases that would have severe inflationary impact. Avoiding
undue fluctuations of agricultural commodity prices has long been
a major objective of Federal policy. Regulation of "natural monopolies" such as electric utilities; anti-trust law enforcement; and programs to foster small business and greater competition all contribute to holding down price increases. An effort is now being made to
increase competition for Government contracts, in order to reduce
prices paid on Government purchases of goods and services.
The administration is currently developing policies to reduce
economic regulation in areas—particularly transportation—where
they serve to stifle competition and maintain unnecessarily high
prices. The Airline Deregulation Act was enacted last year. The
administration is considering modifications to trucking industry

THE BUDGET FOR FISCAL YEAR 1980

regulations, and proposals for deregulation of rail and intercity bus
transportation are under development. Another significant policy
directed against inflation is the administration's proposal for hospital cost containment. This will reduce price increases in a sector
that has displayed excessive price behavior for over a decade.
Federal subsidies, tax expenditures, guarantees, insurance, disaster assistance and loans all may help hold down private sector
costs and prices. Housing programs afford examples of each of
these types of assistance. Federal warning and safety programs
(weather service, coast guard and air traffic control, for example)
also help hold down private sector costs by reducing economic
Restraints on Federal pay and employment will help reduce
upward pressure on private sector wage rates. Social security reforms will hold down the costs of this program, and, ultimately, the
taxes it must levy—thus holding down labor costs. Policies to pro
mote exports and stabilize the value of the dollar may help avoid
increases in the costs of imports.
An important set of Federal policies seeks to promote capital
formation and increased productivity, which are explicit goals of
the Humphrey-Hawkins Act. Increased productivity is essential to
reducing inflation in the long run. Federal programs and tax policies that promote productivity growth include investment tax credits and Federal support for research and development. In addition,
Federal employment, training, and education programs, equal opportunity programs, and programs (such as housing) that contribute indirectly to labor mobility all help increase productivity, alleviate structural unemployment, and make it possible to achieve
employment goals with less inflationary pressure.
Some proposals that have anti-inflation aspects are noted or
discussed in more detail in other parts of the budget, particularly
Part 5, and in the Economic Report of the President.

THE LONG-RANGE BUDGET OUTLOOK
The effects of current decisions extend beyond the budget year.
They establish program trends that have important influences on
the size and composition of budgets for years into the future. Just
as the composition and level of the 1980 budget have been largely
determined by past decisions, the decisions and proposals it embodies will shape subsequent budgets. Thus, major proposals in the
1980 budget would significantly reduce the level of outlays in
future years relative to current services levels and thereby improve
the prospects for budgetary balance.
Since 1970, budgets have presented 5-year projections; that is,
projections extending 4 years beyond the budget year. This year, a
multi-year budget planning system has been established. As a

OUTLOOK

result, outlay estimates for the first 2 years beyond the budget year
(1981 and 1982) now receive explicit policy review, and represent
tentative planning bases for executive branch agencies. Projections
for 1983 and 1984 are simple extrapolations for 2 years beyond the
planning base.
The estimates and projections through 1984 are summarized in
this section. Part 5 of the budget displays and discusses in more
detail the budget authority and outlay estimates for each budget
function (or national need) for the 3-year planning period, 19801982.
Basic assumptions.—The receipts projections presented in this
section are consistent with the foregoing economic assumptions,
and with continuation of current tax laws as modified by the
proposals in this budget. The budget authority and outlay estimates indicate the degree to which resources would be committed
by the continuation during 1981-84 of existing and currently proposed programs at the program levels recommended for 1979 and
1980, and planned for 1981 and 1982. These estimates are not
precise forecasts of future budget authority or outlays. Nor are
they intended as detailed, final recommendations as to future
budget levels. They are, however, consistent with the objective of
restraining growth in Federal spending, reducing Federal outlays
as a percentage of GNP to the lowest level consistent with national
needs and priorities, and moving toward a balanced budget as
rapidly as economic conditions permit. The multi-year budget base
figures for 1981 and 1982 represent tentative administration plans
for the long-term scheduling of major new initiatives, and program
reductions or terminations.
These planning base estimates, and the projections to 1984, allow
for future cost-of-living adjustments to most benefit programs, for
anticipated changes in numbers of eligible beneficiaries, for Federal pay raises, and for other built-in cost changes (such as interest)
consistent with the economic assumptions outlined above. They
allow for real growth in certain areas, such as defense, research
and development, and energy. The estimates generally assume that
other programs remain level in current dollars except where there
is an explicit budget recommendation, or planning recommendation, to increase or decrease program levels over time.
The timing, size, and composition of future major tax law
changes will depend on future economic developments—in particular, progress in reducing inflation. Because such future developments are particularly uncertain at this time, no projections of
future tax changes have been made.

THE BUDGET FOR FISCAL YEAR 1980

The budget outlook.—The following table summarizes the budget
outlook from 1979 to 1984 based on current law and proposals in
this budget. Receipts are projected to increase by an average of
11.6% per year from 1980 to 1984, rising from $502.6 billion to
$780.2 billion. Over the same period, outlays are projected to rise
by an average of 6.1% a year, from $531.6 billion to $673.7 billion.
Thus, under these assumptions, the budget is projected to move
into approximate balance in 1981 and into substantial surplus in
1982, with larger surpluses (or budget margins) in subsequent
years.
It should be emphasized that these budget margins projected
after 1981 do not imply that budget surpluses of such magnitude
will in fact occur in those years. These projected surpluses simply
indicate that resources will be available to accommodate future
discretionary fiscal and budgetary policy decisions—tax reductions,
new or expanded programs, and debt reduction. The administration
is committed to achieving a balanced budget as soon as economic
conditions permit. When that will be possible depends upon economic developments, particularly progress against inflation; on the
extent to which further tax cuts are needed to maintain economic
growth; and on the need for future program increases or decreases—none of which can be anticipated with any certainty now.

OUTLOOK

THE BUDGET OUTLOOK, 1978-84
(In billions of dollars)
Projection

Estimate
1978
actual

1979

1980

1981

1982

1983

1984

Outlays on current services basis
Effects of proposed legislation
Effects of discretionary changes

450.8

491.3 536.1 577.8 610.6
1 -1.9 -2.7 -4.7
1.9 - 2 . 7
2.8 8.9

640.2
-6.9
12.3

667.1
-9.3
16.0

Total outlays

450.8

493.4

614.9

645.6

673.7

402.0

456.0

571.3 646.6

715.3
3.0

777.8
2.4

718.3

780.2

72.7

106.5

Receipts on current services basis
Effects of receipts proposals
Total receipts
Budget surplus or deficit
(-)

531.6 578.0
504.5
-2.0

402.0

456.0

502.6

5.5
576.8

6.1
652.6

- 4 8 . 8 - 3 7 . 4 - 2 9 . 0 - 1 . 2 37.8

The estimates of receipts shown in this section are extrapolations
(based on the assumed economic trends) of the receipts that would
result under existing tax law and the tax proposals in this budget.
Projected increases in receipts from 1980 to 1984 are attributable
largely to growth in incomes and increases in social security taxes
scheduled under current law. The table below shows projected receipts by source and the effect on receipts of administration tax
proposals.

THE BUDGET FOR FISCAL YEAR 1980
BUDGET RECEIPTS BY SOURCE
(In billions of dollars)

Individual income taxes
Corporation income taxes
Social insurance taxes and contributions..
Excise taxes
Other
Total

1978

1979

181.0
60.0
123.4
18.4
19.3
402.0

203.6
227.3
70.3 71.0
141.8 161.5
18.4 18.5
21.9 24.3
456.0 502.6

Memorandum: Effect of receipts proposals 1
Individual income taxes
Corporation income taxes
Social insurance taxes
Excise taxes 1
Other
Total

1980

1981

1982

1983 1984

269.1
76.7
185.2
19.4
26.3
576.8

311.2
86.0
208.0
19.5
28.0
652.6

352.2 392.1
92.6 98.6
223.4 237.1
20.0 20.6
30.0 31.8
718.3 780.2

-2.3
*
2
*
A

1.6
2.0
1.2
.3
.3

1.3
3.5
.9
.2
.1

.4
1.8
.5
.2
.1

.3
1.2
.5
.3
A

-2.0

5.5

6.1

3.0

2.4

* $50 million or less.
1
These effects are shown in comparison to current services estimates. They do not include the effect of extending airport and airway taxes (which
are currently scheduled to expire June 30,1980), at their present rates.

Individual income taxes are projected to rise from $227 billion in
1980 to $392 billion in 1984. Corporation income taxes rise by 39%
over this same period, from $71 billion to $99 billion.
Tax proposals included in this budget reduce individual income
taxes by $2.3 billion in 1980, largely as a result of the administration's real wage insurance. Between 1981 and 1984, individual and
corporation income taxes are increased significantly as a result of
accelerations in tax collections due to the administration's cash
management initiatives. For a more detailed discussion of these
and other tax proposals, see Part 4 of this budget.
Social insurance taxes and contributions, which increased from
only 2.5% of GNP in 1958 to 6.0% two decades later, are projected
to increase to 6.8% of GNP by 1984. The social security tax rate,
which increased from 12.1% to 12.26% on January 1, 1979, is
scheduled under current law to increase to 13.3% on January 1,
1981 and to 13.4% a year later. The taxable earnings base is
scheduled to increase annually, rising from its current level of
$22,900 to a projected $36,900 by 1984.
SOCIAL SECURITY TAX RATE AND TAXABLE EARNINGS BASE
(Calendar years)

Tax rate (percent)
Taxable earnings base*

1978

1979

1980

1981

1982

1983

1984

121
17,700

12.26
22,900

12.26
25,900

13.3
29,700

13.4
32,100

13.4
34,500

13.4
36,900

1
The taxable earnings base figures for 1982-84 are estimates based on an automatic adjustment mechanism. The figures for earlier years are
scheduled under current law.

OUTLOOK

Estate and gift taxes, customs, excise taxes, and miscellaneous
receipts are projected at $52.4 billion in 1984, an increase of $9.6
billion from 1980.
PERCENTAGE COMPOSITION OF BUDGET OUTLAYS
Actual
Description

Estimate

Projection

1968

1972

1976

1980

1981

1982

1983

1984

National defense:
Direct Federal payments for individuals
Other

1.2
42.9

1.7
31.3

2.0
22.0

2.2
21.5

2.2
21.9

2.2
22.4

2.3
22.8

Subtotal, national defense

44.0

33.0

23.9

23.7

24.1

24.6

25.1

22.2

31.0

39.6

39.5

39.4

39.7

40.4

40.7

3.5
6.8
6.2
17.2

5.8
9.0
6.7
14.6

5.2
10.6
7.1
13.6

5.3
10.3
8.7
12.6

5.3
10.0
8.1
13.6

5.3
9.6
7.3
13.9

5.4
9.1
6.5
14.0

5.6
8.7
5.8
14.1

56.0

69.0

60.4

76.3

75.9

75.4

74.9

100.0

21.5

20.9

22.6

21.2

21.0

20.3

19.7

19.3

Nondefense:
Direct Federal payments for individuals
Payments for individuals through States
and localities
All other grants to States and localities
Net interest
Other
Subtotal, nondefense
Total budget outlays
Outlays as a percentage of GNP..

The estimates and projections of budget authority and outlays
shown in this section are extrapolations (based on assumed economic trends) of program costs reflecting current administration
policy—including the 1980 budget proposals and multi-year budget
plans for 1981 and 1982. They are estimates of future resources and
of the degree to which those resources are already committed by
current policy. Total budget outlays are projected to increase at an
average annual rate of 6.1%, from $531.6 billion in 1980 to $673.7
billion in 1984. As a percentage of GNP, outlays fall from 22.6% in
1976 to 21.2% in 1980 and 19.3% in 1984.
The major change in the composition of budget outlays over the
last 10 years has been the rapid growth in payments for individuals and the corresponding relative decline in resources devoted to
other programs. Until fairly recently, spending for national defense
(in constant dollars) was declining. This trend was reversed in 1977
and defense spending (measured in constant dollars) is projected to
continue increasing through 1984. This would keep our defense
effort at a fairly constant 5% of gross national product in the late
1970's and early 1980's, compared to about 10% in the late 1950's.
Budget outlays are projected to increase by $141.7 billion between 1980 and 1984. National defense and human resources programs account for 84% of the increase. Most of the increase (in
current prices) results from demographic changes, inflation, and
280-000

O—79—4

THE BUDGET FOR FISCAL YEAR 1980

interest costs rather than expansion of the scope of Federal
activity.
Projections of budget authority and outlays are shown by function and by agency on pages 48 to 50. While total outlays are
projected to increase by 26.7% from 1980 to 1984, outlays for
health, income security, and national defense are projected to increase faster than the total. Outlays for these functions rise by
42.2%, 28.7%, and 34.2%, respectively. By way of comparison, GNP
is projected to rise by 39.5% from calendar year 1980 to 1984.
Trends in the functional composition of the budget are discussed
further in the introduction to Part 5.
The high-employment budget is an analytical concept based on
the budget estimates that would result were the economy continuously operating at a high level of employment. The unemployment
rate at high employment is estimated to be 5.1% currently and to
decline to 4.8% by the end of 1984. These rates are comparable to a
rate of about 4.0% in 1955, adjusted for changes in the composition
of the labor force.
High-employment outlays exclude that portion of regular unemployment insurance benefits that occur because the economy is not
continuously operating at high employment. They thus eliminate
the fluctuations in actual outlays for this program due to year-toyear changes in the unemployment rate. High-employment receipts
are similarly computed on the basis of the estimated yield of the
existing (or proposed) Federal tax system if the economy were
continuously at high employment. The difference between the adjusted receipts and outlay estimates is the high-employment budget
margin. Changes in this margin from one year to the next are a
rough measure of the impact of discretionary fiscal policy (i.e.,
excluding the effects of automatic stabilizers) on the economy.
HIGH-EMPLOYMENT RECEIPTS AND OUTLAYS
(In billions of dollars)

1978

High-employment outlays
High-employment receipts.
High-employment budget margin...

1979

Estimates
1980

1981

1982

Projections
1983
1984

448
417

492
469

529
521

576
592

615
657

647
710

676
765

-31

-23

-8

High-employment outlays are estimated at $529 billion in 1980,
rising to $676 billion in 1984. High-employment receipts are projected to increase from $521 billion in 1980 to $765 billion in 1984.
The high-employment margin increases from $ — 8 billion in 1980 to
$89 billion in 1984.

OUTLOOK

Controllability.—Outlays in any one year are considered to be
relatively uncontrollable by administrative action when the program level is determined by existing statute or by contract or other
obligations. Relatively uncontrollable outlays are grouped into two
major categories: open-ended programs and fixed costs, outlays for
which are generally mandated by law; and payments from prioryear contracts and obligations, outlays for which are required because of previous actions, such as entering into contracts. As recently as 1967, open-ended programs and fixed costs accounted for
only 36% of total outlays. By 1973 they were more than 50% of the
budget and in 1980 they are estimated to be 59.5%. They are
projected to be 59.1% of budget outlays by 1984. The substantial
growth since 1967 has been due primarily to the rapid increase in
benefit payments for individuals.
CONTROLLABILITY OF BUDGET OUTLAYS
(In billions of dollars)

1980

Relatively uncontrollable Open-ended programs
and fixed costs:
Social security and railroad retirement
Medicare and medicaid
Other payments for individuals

1981

1982

120.4
46.2
84.0

133.3
52.4
88.4

145.8
59.2
91.5

1983

1984

157.3 166.5
66.6
74.6
95.1
97.1

Net interest

46.2

46.7

45.0

41.9

39.1

General revenue sharing
Other open-ended programs and fixed costs

6.9
12.6

6.9
13.0

6.9
13.1

6.9
12.5

6.9
13.6

Total, open-ended programs and fixed
costs, current law

316.2

340.6

361.5

380.3

Proposed changes in open-ended programs
and fixed costs
Outlays from prior year contracts and obliga-

-1.8

-3.8

-6.0

-8.3 -10.6

t ons 1
n 1' I

,8™ 1

246.8

265.2

279.5

-5.7
578.0

-5.8
614.9

-5.9
645.6

;•••;

;

Relatively controllable outlays
Undistributed employer share, employee retirement
Total budget outlays

397.9

292.4

134.8 I
-5.5
531.6

-5.9
673.7

1
Outlays from prior year contracts and obligations, which are relatively uncontrollable, cannot be projected beyond the budget year. Historical data for
this category, and estimates for 1979 and 1980 are shown separately in Table 14, Part 9.

Outlays from prior-year obligations amount to an additional 15%
to 20% of the budget and are considered relatively uncontrollable
in the short run. This category is not projected beyond the budget
year because those amounts, for future years, are generally controllable now—before the contracts and other obligations under which
they will occur have been entered into. However, it can be expected
that the total relatively uncontrollable portion of the budget will
continue to comprise about 75% of the total budget.

THE BUDGET FOR FISCAL YEAR 1980

The fact that such a large proportion of the budget is relatively
uncontrollable has obvious policy implications. Without legislative
changes to restrain the growth in uncontrollable programs, the
burden of efforts to control total budget outlays must fall disproportionately on a small and shrinking portion of the budget. The
administration has proposed legislation to change some of the relatively uncontrollable programs. The effects of these proposals are
discussed in detail in Part 5 of the budget. In addition, the President has instituted a multi-year planning system to provide greater
control of the Federal budget. With a longer planning horizon, a
greater portion of the budget can be considered "relatively controllable."

OUTLOOK

BUDGET AUTHORITY BY FUNCTION
(In billions of dollars)
Estimates

National defense
Military personnel
Retired pay
Operation and maintenance
Procurement
Other
International affairs
General science, space, and technology
Energy
Natural resources and environment
Agriculture
Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, and social
services
Education
Training and employment
Social services and other
Health
Medicare
Medicaid
Other
Income security
Social security
Federal employee retirement
Unemployment compensation
Public assistance and related
Other
Veterans benefits and services
Administration of justice
General government
General purpose fiscal assistance
Interest
Allowances:
Civilian agency pay raises
Contingencies for welfare reform
Other contingencies
Undistributed offsetting receipts:
Employer share, employee retirement
Interest received by trust funds
Rents and royalties on the Outer Continen
tal Shelf

1980

1981

138.2
(28.9)
(11.5)
(40.2)
(35.4)
(22.3)
13.7
5.7
19.5
12.9
4.9
8.3
19.1
11.3

148.6
(29.1)
(12.5)
(41.5)
(38.7)
(26.8)
13.8
5.6
5.1
13.7
5.5
6.7
21.5
10.9

30.9
(14.3)
(10.6)
(5.9)
57.6
(35.8)
(12.7)
(9.1)
214.5
(115.8)
(23.0)
(15.7)
(53.9)
(6.1)
21.0
4.3
4.5
8.8
57.0
.9
1.5
—5.5
-10.9

Projections
1982

1983

1984

158.6
(29.2)
(13.5)
(43.6)
(41.5)
(30.8)
15.9
5.3
6.4
13.6
5.2
6.8
20.5
10.5

169.6
(29.2)
(14.5)
(45.0)
(45.7)
(35.1)
16.6
5.0
6.2
13.5
5.4
6.9
20.6
10.6

180.4
(29.3)
(15.4)
(46.8)
(49.1)
(39.9)
17.8
4.7
6.0
13.3
5.9
7.0
20.7
10.5

31.2
(14.4)
(10.8)
(6.0)
68.1
(45.0)
(13.8)
(9.2)
233.6
(132.2)
(24.3)
(15.6)
(55.5)
(6.2)
21.4
4.3
4.7
8.7
59.1

31.6
(14.6)
(11.0)
(6.1)
77.1
(52.7)
(15.1)
(9.4)
252.4
(150.3)
(25.4)
(14.1)
(56.2)
(6.5)
21.7
4.4
4.5
8.7
59.5

30.5
(14.7)
(9.8)
(6.1)
84.7
(58.6)
(16.6)
(9.5)
266.7
(164.6)
(26.4)
(11.9)
(57.2)
(6.7)
22.1
4.4
4.5
8.7
58.9

30.0
(14.7)
(9.2)
(6.1)
92.2
(64.2)
(18.4)
(9.6)
278.4
(177.0)
(27.2)
(10.8)
(56.4)
(6.9)
22.4
4.5
4.5
8.7
58.8

2.3
1.5
5.8

3.5
5.5
7.3

4.7
6.0
8.5

5.9
6.0
9.5

—5.7 —5.8
-12.4 -14.5

-5.9
-17.0

-5.9
-19.7

-2.6

-3.0

615.5

651.0

695.7

728.1

758.7

ntities....
Budget authority, off-budget Federal entities...

15.3

14.2

Budget authority, including off-budget

629.6

665.2

709.9

742.2

772.8

Total budget authority
MEMORANDUM

THE BUDGET FOR FISCAL YEAR 1980
BUDGET OUTLAYS BY FUNCTION
(In billions of dollars)
Estimates

National defense
Military personnel
Retired pay
Operation and maintenance
Procurement
Other
International affairs
General science, space, and technology
Energy
Natural resources and environment
Agriculture
Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, and social
services
Education
Training and employment
Social services and other
Health
Medicare
Medicaid
Other
Income security
Social security
Federal employee retirement
Unemployment compensation
Public assistance and related
Other
Veterans benefits and services
Administration of justice
General government.
General purpose fiscat assistance
Interest
Allowances:
Civilian agency pay raises
Contingencies for welfare reform
Other contingencies
Undistributed offsetting receipts.Employer share, employee retirement
Interest received by trust funds
Rents and royalties on the Outer Continental Shelf

1980

1981

125.8
(28.4)
(11.4)
(38.7)
(25.7)
(21.5)
8.2
5.5
7.9
11.5
4.3
3.4
17.6
7.3

137.0
(28.6)
(12.5)
(40.1)
(30.0)
(25.8)
8.9
5.5
7.8
12.6
5.6
3.4
19.5
8.4

30.2
(13.3)
(11.0)
(5.9)
53.4
(32.1)
(12.5)
(8.8)
179.1
(115.2)
(14.1)
(12.4)
(31.4)
(6.0)
20.5
4.4
4.4
8.8
57.0

31.0
(14.1)
(11.0)
(6.0)
58.8
(35.7)
(13.8)
(9.3)
194.1
(126.8)
(15.7)
(11.9)
(33.5)
(6.2)
21.2
4.4
4.5
8.7
59.1

Projections
1983

1984

148.2
(28.7)
(13.5)
(42.1)
(34.4)
(29.4)
9.5
5.3
6.8
13.3
5.9
3.0
20.0
8.8

158.8
(28.8)
(14.5)
(43.5)
(38.7)
(33.3)
10.5
5.0
7.9
13.6
5.8
2.7
20.4
9.0

168.9
(28.8)
(15.3)
(45.1)
(41.7)
(38.0)
12.3
4.7
8.1
14.1
6.7
2.5
20.5
9.2

31.5
(14.5)
(11.0)
(6.1)
64.2
(39.5)
(15.1)
(9.5)
207.5
(137.9)
(17.3)
(10.8)
(35.3)
(6.2)
21.7
4.4
4.7
8.7
59.5

30.5
(14.6)
(9.8)
(6.1)
69.8
(43.6)
(16.6)
(9.6)
220.7
(148.4)
(18.7)
(9.9)
(37.4)
(6.3)
22.1
4.4
4.5
8.7
58.9

30.0
(14.7)
(9.2)
(6.1)
75.9
(47.9)
(18.4)
(9.6)
230.4
(157.0)
(19.0)
(9.4)
(37.7)
(6.4)
22.3
4.4
4.5
8.7
58.8

1982

2.2
1.5
4.8

3.4
5.5
6.3

4.5
6.0
7.5

5.8
6.0
8.5

-5.5
-10.9

-5.7
-12.4

-5.8
-14.5

-5.9
-17.0

-5.9
-19.7

-2.6

-3.0

531.6

578.0

614.9

645.6

673.7

Outlays, off-budget Federal entities

12.0

11.5

11.1

10.6

Outlays, including off-budget Federal entities...

543.5

589.5

616.0

656.2

684.3

Total budget outlays

.9
.5

MEMORANDUM

OUTLOOK
BUDGET AUTHORITY AND OUTLAYS BY AGENCY
(In billions of dollars)
Projections

Estimates
Department or other unit

1980

1981

1982

1983

1984

1.9
.1
10.3
20.5
3.2
135.0
3.1
7.4
205.2
33.3
4.4
2.4
27.5
1.7
17.8
70.1
5.1
4.7
21.0
23.2
34.0
2.4
-19.0

2.0
.1
9.1
23.0
2.8
145.2
3.3
8.3
232.7
33.7
4.8
2.4
27.3
1.9
20.1
71.8
5.3
4.6
21.4
24.6
18.0
9.6
-21.1

2.0
.1
10.8
23.3
2.8
155.2
3.2
9.6
260.4
33.7
4.9
2.4
26.1
2.0
19.1
72.2
5.3
4.3
21.7
25.8
17.9
16.3
-23.3

2-.0
.1
11.0
24.0
2.8
166.3
2.9
9.2
283.2
33.8
5.0
2.4
22.7
2.1
19.2
71.6
5.3
4.0
22.1
26.9
18.2
19.2
-25.9

2.1
.1
11.7
24.9
2.7
177.2
2.8
9.0
302.2
33.9
5.0
2.4
21.0
2.3
19.3
71.4
5.3
3.7
22.4
27.8
18.6
21.4
-28.6

615.5

651.0

695.7

728.1

758.7

1.9
.1
5.1
18.4
3.3
122.7
2.7
8.9
199.4
10.6
3.8
2.5
24.5
1.7
15.8
69.9
4.8
4.6
20.5
14.4
13.7
1.4
-19.0

1.8
.1
5.0
21.6
2.8
133.7
2.9
9.4
217.8
11.7
4.3
2.5
23.9
1.7
17.9
71.6
5.1
4.6
21.2
16.1
14.8
8.5
-21.1

2.1
.1
5.2
22.4
2.7
144.9
2.9
8.7
235.0
12.8
4.6
2.5
22.8
1.9
18.6
72.0
5.5
4.4
21.7
17.7
14.6
15.2
-23.3

2.0
.1
5.6
22.6
2.7
155.5
2.8
9.0
252.3
13.7
4.8
2.4
20.7
2.0
19.1
71.4
5.8
4.2
22.1
19.2
15.6
18.0
-25.9

2.0
.1
6.5
23.9
2.6
165.7
2.7
9.1
266.0
14.9
4.9
2.4
19.6
2.1
19.2
71.3
6.3
3.9
22.2
20.5
16.0
20.3
-28.6

531.6

578.0

614.9

645.6

673.7

BUDGET AUTHORITY
Legislative and Judicial branches
Executive Office of the President
Funds appropriated to the President
Agriculture
Commerce
Defense-Military
Defense-Civil
Energy
Health, Education, and Welfare
Housing and Urban Development
Interior
Justice
Labor
State
Transportation
Treasury
Environmental Protection Agency
National Aeronautics and Space Administration
Veterans Administration
Office of Personnel Management
Other agencies
Allowances
Undistributed offsetting receipts
Total budget authority
OUTLAYS
Legislative and Judicial branches
Executive Office of the President
Funds appropriated to the President
Agriculture
Commerce
Defense—Military
Defense—Civil
Energy
Health, Education, and Welfare
Housing and Urban Development
Interior
Justice
Labor
State
Transportation
Treasury
Environmental Protection Agency
National Aeronautics and Space Administration
Veterans Administration
Office of Personnel Management
Other agencies
Allowances
Undistributed offsetting receipts
Total budget outlays

THE BUDGET FOR FISCAL YEAR 1980

POPULATION CHANGE AND LONG RANGE EFFECTS ON
THE BUDGET
In past years, the budget has included a presentation of five-year
budget projections to encourage understanding of the future implications of the President's budget policies. This effort has been
augmented by the much more detailed presentation of the threeyear planning estimates that are included for the first time in Part
5 of this budget.
Five-year budget projections are subject to considerable error, as
discussed above. Yet in some respects a five-year planning span is
too short. In such areas as research and development, energy,
retirement policy and education, we need to look further into the
future in order to build strong foundations for a changing society.
With this in mind, the following discussion considers the probable changes in the age profile of American society and some
possible results of those changes, particularly on the budget. The
analysis will be continued and sharpened in future years. The
potential budgetary impacts that are noted are not administration
policy but, rather, an effort to suggest what may be the concerns of
administrations a decade from now. This kind of analysis has never
previously been included in the budget, and is admittedly speculative in nature.
Demographic changes have substantial effects on the budget,
some of which can be anticipated. For example, we can estimate
fairly accurately the number of people reaching retirement age a
few years hence. Other effects may be harder to predict, not least
because demography is only one factor affecting change.
During the Depression of the 1930's relatively few children were
born in the United States—fewer than 2V2 million in most years.
After the Second World War this country experienced a "baby
boom," which peaked in 1957 when 4.3 million children were born.
Now, although there are many more women of prime child-bearing
age (the women born during the boom), their fertility is only half
that of their mothers, and in recent years only about 3 million
children have been born annually. Consequently, the baby boom
generation constitutes a huge "age lump" in our population—a
demographic tidal wave.1
This tidal wave has many important consequences for American
society—and for the budget, which includes many programs that
serve specific age groups. Over the course of the life-cycle, from
youth to old age, people make different demands upon, and contributions to, society, the economy, and government. Children need
support, education, and adult supervision. Young adults seek hous1
In 1970, half our population was age 27 or younger; assuming no further decline in fertility rates by the year
2040 half the population will be age 46 or older.

OUTLOOK

ing of their own and jobs—and it is from this age group that the
armed services recruit. Middle-aged workers are at their peak earning, saving, and tax-paying years. The elderly need pension support
and more health care than younger people generally require.
Fertility.—The severity of the future social and institutional
changes resulting from fluctuations in fertility depends in part on
future fertility—which is difficult to forecast. U.S. fertility rates
have been declining since 1800, with the one exception of the postWorld War II baby boom. Currently, the U.S. fertility rate is significantly below the "replacement rate" needed to maintain a constant population in the long run. "Zero population growth" requires that an average of about 2,100 children be born to each
1,000 women of child-bearing age. In 1976, the rate was 1,760 per
1,000 women. Recent birth rates, if continued indefinitely, would
imply an eventual decline of the U.S. population by about 17% per
generation, in the absence of net immigration. Current net immigration rates only fill half of this "birth gap"; and the gap threatens to widen.
Education.—Between 1950 and 1970 the number of elementary
and high school age children (ages 5-17) increased 70%. The estimated school age population for 1979 is almost 11% lower than in
1970. A further 10% decline could well occur over the next decade.
Despite the decline in the school age population from 1970 to 1979,
Federal spending for elementary and secondary education, adjusted
for inflation, increased by 25%. This amounts to approximately a
35% increase in constant dollars per pupil. In the face of the
decline in the school age population, the long run Federal effort in
education would appear to merit reexamination. However, the targeted approach of Federal aid to education in this budget, with
emphasis on those with special problems or in particular need of
assistance, makes it clear that number of students is not the only
relevant consideration.
Moreover, it is likely that the decline in the school age population will be at least temporarily reversed. This is because, despite
their low fertility rates, the members of the baby boom generation
are so numerous that their children will comprise a mild demographic "echo" of the original boom. That echo will pass through
the schools in the 1990's.
Trends in the college population are more difficult to predict
because attendance is not compulsory. In the last ten years the
number of college enrollments has increased more than 50%.
There are some expectations that college enrollments, unlike those
of elementary and secondary schools, will not decline or will not
decline as much, because colleges will tend to expand their continu-

THE BUDGET FOR FISCAL YEAR 1980

ing education programs for older persons and to attract foreign
students. Whatever the outcome, demographic shifts will need to be
considered in the analysis of Federal budget support to higher
education.
The labor force.—The most rapid rate of growth in the labor
force since World War II is occurring now, in the 1970's, as the
baby boom is reaching working age.2
In the last 13 years the number of new entrants to the labor
force has increased steadily. The largest age group in 1978 was 21year-olds; the size of each annual cohort behind the present-day 21year-olds will be smaller for at least the next 20 years.
Large influxes of young (and inexperienced) new workers into
the labor force may increase the unemployment rate if there are
not enough new jobs in the economy that meet the aspirations of
young people in search of jobs. Productivity may be lower due to
the inexperience of the new workers. Thus, the entry of the baby
boom into the work force may help to account for the high unemployment and low productivity growth of the past decade. Conversely, once the bulk of the baby boom generation is employed the
average age and experience of the work force as a whole will begin
to rise. This may tend to increase productivity and decrease the
unemployment rate. However, nondemographic forces could offset
these influences.
As labor force growth slows in future years, and as the number
of teenagers in the labor force begins to decline, labor markets may
tighten and it is possible that labor shortages will develop. If so,
the Federal investment in training, employment, and labor services
will need to be reexamined. Possibly, there will need to be less
emphasis on youth programs and public sector jobs, and more
emphasis on retraining and retention of older workers, increasing
the mobility of workers and providing services (child care, transportation) to people who otherwise would have difficulty working.
The all-volunteer armed forces.—The future decline in the
number of new entrants to the labor force will be felt by the armed
forces as well as by the civilian labor market. In 1977, males
recruited into the armed forces represented approximately 20% of
that year's cohort of 18-year-olds. Since the draft ended in 1973, the
armed services have had to compete directly with civilian job opportunities for recruits. Except for the Reserves, they have been
relatively successful to date. If the armed forces are to maintain
their present force levels, however, then either the percentage of
2
Not all growth in the labor force is due to population growth. Part can be ascribed to the increasing
participation of women in the labor force. In 1948, 33% of all women age 16 years and over were employed; by
1978 the proportion was up to 49%. This increase in the participation of women in the labor force is both a
cause and an effect of the decline in fertility.

OUTLOOK

each year's cohort of 18-year-old males recruited will have to increase substantially over time as the potential pool shrinks, or
women will have to make up a substantially higher percentage of
recruits. Alternatively, retention rates will have to be increased
substantially. The budget could be affected if adjustments in military pay and benefits relative to private sector compensation
become necessary.
Age and crime.—The national crime rate is generally affected by
both the unemployment rate and the number of people in the highcrime age group. Two-thirds of arrests in 1975 were of people
between the ages of 13 and 29. The absolute size of this high-crime
age group will reach a peak in 1980 and then decline for the rest of
the century. It is by no means clear that the Nation can literally
grow out of its high crime problem. Moreover, recent trends suggest leveling or declining crime rates despite demographic trends.
However, demography may still be a factor in considering anticrime programs.
Population and housing.—The U.S. population contains approximately 80 million households, each occupying one housing unit. In
recent years approximately a million old housing units have been
demolished annually, and a little less than 2 million new ones
constructed. This construction effort has absorbed about 5% of the
Nation's gross national product, on average. Thus, a substantial
segment of our economy is devoted to replacing old houses and
making relatively modest additions to the size of the existing stock
in order to keep up with population growth.
The demand for housing units is partly determined by the
number of new households that are being formed. The children
born during the baby boom are now buying or renting their first
homes and are, therefore, currently contributing to the strong
demand for new housing, which may in turn partly influence the
rapid growth in housing prices. By the 1980's however, the number
of people at what is now the normal age of forming households will
be less than it is today. This needs to be carefully considered, along
with other factors, such as how much income will be available for
housing, in long term planning of housing programs.
If the low fertility rates persist, and are not offset by immigration, one possibility is that the shrinkage in the population may
eventually nearly keep pace with the demolition of worn-out housing units. This would ease the demand on a sector of the economy
that now accounts for 5% of GNP. Alternatively, higher incomes
and changes in preferences could result in larger, more expensive
housing units, thus substituting increased quality for decreased
quantity.

THE BUDGET FOR FISCAL YEAR 1980

Saving, credit, and investment—Young adults have, on average,
low earnings and little savings, yet they need money to set up
housekeeping. They borrow. They acquire mortgages and automobile loans and buy furniture on time.
Middle-age workers, with higher average earnings, already have
a basic set of possessions. They save a substantial percentage of
their large earnings, paying off the debts they incurred earlier,
such as their mortgages, and may build up reserves to be used
during retirement.
Retirees tend to reduce their savings on average, that is, live off
their previous savings.
If current patterns continue into the future, the baby boom
generation will exert an increased demand for consumer and housing credit for many years to come. Once the boom generation
reaches what are now high-earnings, high-saving age levels, borrowing could reverse to net savings for this large group. There is
much that affects credit savings and investment besides the age
profile of the population. Nonetheless, this changing profile is
likely to be one significant—and perhaps generally overlooked—
element.
Retirement and medical programs for the aged.—The elderly pop-

ulation in the United States has grown dramatically in the past
century, not only in absolute terms but as a percentage of the total
population. An increasingly elderly population, rising life expectancy, the distinct trend toward declining average retirement ages,
and the trend toward declining labor force participation by older
people could combine to create a retirement and medical system
funding problem in the 21st century.
Total Federal, State, and local taxes in recent years have
amounted to about 33% of GNP—11% for social insurance programs, including medicare, and 22% for other purposes. If requirements for other purposes remain at 22% of GNP and if the ratio of
the average retirement benefit to the average wage were to remain
at current levels, the total tax burden 50 years hence would have
to be close to 50%. There are alternatives to such high future tax
rates, such as lower benefits and later retirement ages. But these
are not easy choices. In addition, there would be major transition
problems if the terms of retirement programs are to be modified
significantly. This is because there are implicit or explicit understandings between government and private sector employers and
their workers concerning their retirement benefits. Ultimately, the
issue will be how much of the resources produced in 2035 by the
labor force employed at that time will be transferred to the retired
generation.

OUTLOOK

Federalism.—The trends that have been described above are
likely to affect Federal, State, and local sectors of government
differently, and will in turn affect their relationships with each
other. Education is the largest single component of most State and
local budgets. Retirement and disability programs are the largest
component of the Federal budget.
After 1980 the school age population will become a decreasing
proportion of the total population. The retired population will be
the only age group in our society that will still be increasing
absolutely and proportionally after 2000.
With a decreasing number of students to be educated, State and
local governments might assume new responsibilities, run surpluses
or cut taxes. The Federal Government, however, is likely to have
fewer long-term options as the number of aged in our population
grows. Retirement and medical benefits for the elderly are already
37% of the Federal budget. If retirement and related benefits continue to grow faster than the economy, we must face a choice
among such alternatives as reducing other Federal programs in
relative size, increasing the size of the Federal sector, reducing
retirement benefits or raising the retirement age.

PART 4

BUDGET RECEIPTS

THE BUDGET FOR FISCAL YEAR 1980

BUDGET RECEIPTS
This section of the budget describes the major sources of budget
receipts for 1978 to 1982 and discusses the legislative proposals and
administrative actions affecting them. Detailed estimates of budget
receipts by source are shown in table 10 of Part 9. The economic
assumptions underlying the estimates are presented in Part 3 together with estimates of receipts for 1983-84 and estimates of
receipts at high employment. Part 6 analyzes the difference between actual receipts for 1978 and the budget estimates for 1978
made 2 years ago.
SUMMARY
Total budget receipts in 1980 are estimated to be $502.6 billion,
an increase of $46.6 billion from the $456.0 billion in 1979. Receipts
in 1981 and 1982 are estimated to be $576.8 billion and $652.6
billion, respectively. These estimates reflect the effects of:
—the real wage insurance proposed by the President as a part of
the anti-inflation program;
—administrative actions and proposed legislative changes to collect taxes closer to the time when liabilities occur;
—other receipts proposals currently being made; and
—increases in social security taxes scheduled under current law.
The estimates of receipts for 1981 and 1982 do not include provision for tax reductions. The desirability of tax reductions in these
years will depend on the future state of the economy, especially
progress in reducing inflation, and on the need to reduce tax burdens. The administration will consider future tax changes, including social security tax reductions in conjunction with the savings
resulting from benefit reforms and other cost saving proposals.
Composition of budget receipts.—The Federal tax system relies
predominantly on income and payroll taxes. In 1980:
• Income taxes paid by individuals and corporations are estimated at $227.3 billion and $71.0 billion, respectively. Combined, these sources account for 59% of estimated total budget
receipts.
• Social insurance taxes and contributions—composed largely of
payroll taxes levied on wages and salaries, most of which are
paid equally by employers and employees—will yield an estimated $161.5 billion, 32% of the total.
• Excise taxes imposed on selected products, services, and activities are expected to provide $18.5 billion, 4% of the total.
• Estate and gift taxes, customs duties, and miscellaneous receipts are estimated at $24.3 billion, the remaining 5% of the
total.

BUDGET RECEIPTS

Under the tax policy assumptions described earlier, the income
tax share of receipts is projected to rise to 61% by 1982, 1.5 percentage points more than projected for 1980. Social insurance taxes
as a share of total receipts are projected to decline by 0.3 percentage point while the projected share of all other receipts declines by
1.2 percentage points.
BUDGET RECEIPTS BY SOURCE
[In billions of dollars]
1978
actual

Source

1979
estimate

1980
estimate

1981
estimate

1982

Individual income taxes
Corporation income taxes
Social insurance taxes and contributions
Excise taxes
Estate and gift taxes
Customs duties
Miscellaneous receipts

181.0
60.0
123.4
18.4
5.3
6.6
7.4

203.6

227.3

269.1 311.2

70.3
141.8
18.4
5.7
7.5
8.7

71.0
161.5
18.5
6.0
8.4
9.9

76.7
185.2
19.4
6.2
9.5
10.6

86.0
208.0
19.5
6.7
10.2
11.1

Total, budget receipts

402.0

456.0

502.6

576.8

652.6

ENACTED LEGISLATION
Three major acts were passed last year that have significant
effects on receipts in 1979 and beyond: the Revenue Act of 1978,
the Energy Tax Act of 1978, and the Foreign Earned Income Act of
1978. The summary table below shows the effect of these acts on
calendar year liabilities and fiscal year receipts. The subsequent
discussion describes the major provisions of each act.

280-000

O—79—5

THE BUDGET FOR FISCAL YEAR 1980
SUMMARY TABLE—EFFECT OF MAJOR TAX LEGISLATION ENACTED IN 1978 1
(In billions of dollars)

Calendar year liabilities:
Revenue Act of 1978 2 3
Energy Tax Act
Foreign Earned Income Act
Total
Fiscal year receipts:
Revenue Act of 1978 2 3
Energy Tax Act
Foreign Earned Income Act
Total
ADDENDUM
Effect of extending temporary provisions of the Tax Reduction and Simplification Act of 1977 (other than the
jobs credit): 3
Calendar year liabilities
Fiscal year receipts

1979

1980

1981

1982

-20.6
-.8
-.2

-24.3
-.9
-.3

-28.7 -32.0
-1.1 -1.2
-.3
-.3

-21.6

-25.4

-30.1 -33.5

-11.5
-1.0
-.6

-22.8
-.8
-.3

-26.7 -30.6
-1.0 -1.1
-.3
-.3

-13.2

-23.9

-27.9 -32.0

-12.7
-7.5

-13.4
-13.1

- 1 8 . 8 - 20.9
-15.9 -19.8

1
These estimates are based on the direct effect only of legislative changes at a given level of income. They therefore exclude indirect effects caused
by changes in individual and corporation incomes. However, these indirect effects are taken into account when estimating the incomes upon which the
receipts estimates and the estimates of the effects of legislation are based. In this way, the indirect effects are included in the receipts estimates by
major source and in total.
2
The effect of this Act on calendar year tax liabilities and fiscal year receipts is calculated in comparison to the liabilities and receipts that would
have resulted if all the temporary provisions of the Tax Reduction and Simplification Act of 1977 had been extended except the jobs credit.
3
Excludes earned income credit payments in excess of individuals' tax liabilities, which are recorded in the budget as outlays.

THE REVENUE ACT OF

1978

The Revenue Act of 1978 (Public Law 95-600) was enacted November 6, 1978. This Act reduced taxes for individuals and corporations, generally effective January 1, 1979, and included several of
the administration's tax reform proposals. In the absence of this
Act, receipts would have been increased substantially in 1979 because several temporary provisions of the Tax Reduction and Simplification Act of 1977 were scheduled to expire at the end of
calendar year 1978. The effects of the Revenue Act on calendar
year tax liabilities and fiscal year receipts are presented in comparison to the liabilities and receipts that would have resulted if
most of these temporary provisions had been extended.1 This is the
' 'current services" base from which the size of the tax reductions is
generally measured.
Individual income taxes.—The Revenue Act reduces tax liabilities
for individuals by $14.5 billion in calendar year 1979. The largest
reduction results from a widening of tax brackets and a reduction
in the tax rates applicable to several of these brackets. These
1
The only exception is the jobs credit. Unlike the other temporary provisions, which were expected to be
extended or replaced by other provisions, the jobs credit was enacted as a 2-year economic stimulus measure.

BUDGET RECEIPTS

reductions will reduce calendar year 1979 tax liabilities by $10.4
billion.
The personal exemption was increased from $750 to $1,000 and
the general tax credit was allowed to expire. Substitution of the
exemption increase for the general tax credit reduces liabilities in
calendar year 1979 by $1.3 billion. The zero bracket amount (formerly called the standard deduction) was increased from $3200 to
$3400 for taxpayers filing a joint return and from $2200 to $2300
for single taxpayers. These changes reduce tax liabilities by $1.4
billion in calendar year 1979.
The earned income tax credit, which had been scheduled to
expire December 31, 1978, was increased and made permanent. In
1978 the credit was 10% of the first $4,000 of earned income and
was phased out at the rate of $1 for each $10 of income above that
level. For 1979 and later years the credit will be 10% of the first
$5,000 and will phase out at the rate of $1.25 for each $10 of earned
income above $6,000. This expansion of the earned income credit
will reduce tax liabilities in calendar year 1979 by $0.3 billion; it
will also add $0.7 billion to outlays (to be paid in fiscal year 1980)
for individuals whose earned income credit exceeds tax liability.
Capital gains taxes were reduced significantly by the Revenue
Act. Under previous law, 50% of net long-term gains from the sale
of capital assets were excluded from taxable income. Alternatively,
taxpayers could elect to be taxed at a 25% rate on the first $50,000
of gains if that tax was lower than would otherwise apply. Under
the new legislation, which is generally applicable to gains and
losses realized after October 31, 1978, the percentage of capital
gains excluded from taxable income is raised to 60%. However, for
tax years beginning after December 31, 1978, the 25% alternative
tax has been eliminated and the excluded 60% of net long-term
capital gains will no longer be included as a preference item in
computing the minimum tax, although it is subject to a new alternative minimum tax in some instances. The Act also provides, for
taxpayers age 55 and older, a once-in-a-lifetime exclusion on gains
up to $100,000 from the sale of a principal residence. This replaces
a provision under previous law that allowed a taxpayer age 65 or
older a one-time exclusion of gain attributable to the first $35,000
of sales price of a principal residence. These and other changes in
capital gains taxation and the minimum tax reduce liabilities by
$2.7 billion in calendar year 1979. It is estimated that about $0.9
billion of this revenue loss will be offset by taxes on additional
capital gains realizations as a result of the 1978 Act.
These and other smaller tax reductions were partially offset by
higher receipts from reform measures. The two most significant
reforms were repeal of the non-business deduction for State and
local gasoline taxes and taxation of unemployment compensation

THE BUDGET FOR FISCAL YEAR 1980

benefits paid to taxpayers with adjusted gross incomes (including
unemployment compensation) above certain income levels ($20,000
for single taxpayers and $25,000 for married couples filing joint
returns). These two measures increase tax liabilities in calendar
year 1979 by $1.1 billion and $0.3 billion, respectively.
Corporation income taxes.—The Revenue Act of 1978 made several significant changes to corporation income taxes, the largest of
which was a reduction in tax rates. As shown in the following
table, rates were reduced much more for small corporations than
for large ones. The average tax rate on the first $100,000 of income
was reduced by nearly 8 percentage points. For income above
$100,000, the rate was reduced by 2 percentage points, from 48% to
46%. These reductions in tax rates will reduce corporation income
tax liabilities by $5.0 billion in calendar year 1979. In addition to
these rate reductions, the alternative tax rate on capital gains
received by corporations was reduced from 30% to 28%.
CHANGE IN CORPORATION INCOME TAX RATES
[Percent]

Taxable income

First $25,000
Second $25,000
Third $25,000
Fourth $25,000
Above $100,000

1978 tax
law

20
22
48
48
48

1979 tax
law

17
20
30
40
46

The investment tax credit, which had been scheduled to decrease
from 10% to 7% on January 1, 1981, was made permanent at the
10% rate. The percentage of tax liability that can be offset by the
investment credit was also increased. Under prior law, the limit
was generally 100% of the first $25,000 of tax liability and 50% of
tax liability above $25,000. Under the new law, the percentage
applicable to tax liability in excess of $25,000 was increased to 60%
in calendar year 1979 and will increase by an additional 10 percentage points each year until it reaches its permanent level of
90% in 1982. The investment credit was also extended to cover
rehabilitation expenditures on nonresidential buildings in use over
20 years and was liberalized for investments in pollution control
facilities amortized over a 5-year life. These changes in the investment credit reduce corporation income tax liabilities by $0.4 billion
in calendar year 1979.2
The 1978 legislation also included a targeted jobs tax credit to
replace the jobs credit that was in effect in calendar years 1977 and
2
These changes also reduce individual income taxes on unincorporated businesses and sub-chapter S corporations.

BUDGET RECEIPTS

1978. Employers who hire individuals from certain target groups,
primarily disadvantaged youth, are eligible for the targeted jobs
credit. This credit is generally equal to 50% of the first $6,000 of
first-year wages of such an employee and 25% of the first $6,000 of
second-year wages. The Revenue Act also revised the work incentive (WIN) tax credit, which is available to employers of recipients
of aid to families with dependent children (AFDC), to pattern it
more closely after the new targeted jobs credit. These provisions
together reduce corporation income tax liabilities by $0.3 billion in
calendar year 1979.3
THE ENERGY TAX ACT OF 1978

This Act (Public Law 95-618) is an important part of the energy
program enacted in 1978, which will reduce this country's energy
problems. The major components of the 1978 energy tax legislation
are:
—A tax on the sale of automobiles whose fuel economy fails to
meet certain standards. The tax will apply to 1980 and later
model cars and will increase annually from 1980 to 1986.
—Tax credits for purchases of insulation and other energy-conserving items for the principal residence of a taxpayer. This
credit against income tax liability, which applies retroactively
to qualifying expenditures after April 20, 1977, and before
January 1, 1986, is 15% of qualifying expenditures up to a
maximum credit of $300.
—Credits for renewable energy source equipment (e.g., solar and
wind energy equipment) on the principal residence of a taxpayer.
—For businesses, an extra 10% investment credit, in addition to
the regular 10% investment credit, for certain energy conservation or conversion investments, such as shale oil equipment
and solar or wind energy investments.
Together, these and other provisions in the 1978 energy legislation reduce tax liabilities by $0.8 billion in calendar year 1979.
THE FOREIGN EARNED INCOME ACT OF 1978

Prior to 1978, a U.S. citizen was generally able to exclude up to
$20,000 per year of foreign earnings if the taxpayer was a bona fide
resident of a foreign country. After 3 years of foreign residence a
taxpayer could exclude up to $25,000 per year of foreign earnings.
The Foreign Earned Income Act of 1978 (Public Law 95-615) replaced the exclusion provision with one based on the excess cost of
3
These changes also reduce individual income taxes on unincorporated businesses and sub-chapter S corporations.

THE BUDGET FOR FISCAL YEAR 1980

living abroad. Under this new law, the taxpayer may claim a costof-living deduction to reflect the amount by which overseas living
costs other than housing and education exceed living costs for the
most expensive metropolitan area in the continental United States
(except Alaska) as determined by the IRS. Other deductions are
permitted for the excess costs associated with housing, dependents'
elementary and secondary education, and annual home leave for
the taxpayer and dependents, and for employment in certain hardship areas. This Act reduces tax liabilities by an estimated $0.2
billion in 1979.

BUDGET RECEIPTS

EFFECT OF MAJOR 1978 TAX LEGISLATION1
[In billions of dollars]
Calendar year liabilities
1979

1980

Fiscal year receipts
1981

1979

1980

1981

Revenue Act of 1978:
Individual income taxes:

Rate reductions
Exemption increase and expiration of general tax credit
Increase in zero bracket
amount
Expansion of earned income
credit3
Capital gains and minimum tax
revisions4
Repeal of gasoline tax deduction
Taxation of unemployment
benefits
Other

-10.4 -12.5 -15.0

-6.5

-11.7

-14.1

-1.3

-1.4

-1.5

-.9

-1.4

-1.5

-1.4

-1.5

-1.0

-1.4

-1.5

-.3

-.1

-.5

-.3

-1.8

-2.1

-2.5

-.3

-1.8

-2.1

1.1

1.4

1.6

1.2

1.4

.3
- i

.3
-^

.3
-1.0

.3
- 7

.3
-1.0

Subtotal-Individuals
Corporation income taxes:
Rate reductions
Capital gains rate cut
Expansion of investment credit.
Jobs credit provisions
Other

-14.5

-17.0

-19.9

-8.8

-5.0
-.1
-.4
-.3
-.1

-5.5
-.1
-.8
-.6
- 1

-6.0
-.1
-1.8
-.7
- J

-2.3
-.1
-.2
-.2
*

-5.3
-.1
-.6
-.4
- J

-5.7
-.1
-1.3
-.6
-^

Subtotal—Corporations

-6.0
-.1

-7.1
-.1

-8.7
-A.

-2.7
-*

-6.6
- A

-7.8
- J

Other

Total—Revenue Act
The Energy Tax Act of 1978:
Individual income taxes:
Residential energy credits
Other
Corporation income taxes
Other
Total—Energy Tax Act
The Foreign Earned Income Act
of 1978:
Individual income taxes
Total—Major legislation..

-16.1 -18.8

-20.6 -24.3 -28.7 -11.5 -22.8

-26.7

—.4
-.1
-.3
-•

—.5
-.1
-.4
-*

—.5
-.1
-.5
*

—.7
-.1
-.2
-*

—.4
-.1
-.3
-*

—.5
-.1
-.4
*

-.8

-.9

-1.1

-1.0

-.8

-1.0

-.2

-.3

-.6

-.3

-21.6

-25.4

-30.1

-13.2

-23.9 -27.9

* $50 million or less.
'These estimates are based on the direct effect only of legislative changes at a given level of income. They therefore exclude indirect effects caused
by changes in individual and corporation incomes. However, these indirect effects are taken into account when estimating the incomes upon which the
receipts estimates and the estimates of the effects of legislation are based. In this way, the indirect effects are included in the receipts estimates by
major source and in total.
2
The effect of this act on calendar year tax liabilities and fiscal year receipts is calculated in comparison with the liabilities and receipts that would
have resulted if all the temporary provisions of the Tax Reduction and Simplification Act of 1977 were extended except the jobs credit. The estimates
exclude the effect of the Revenue Act on earned income credit payments in excess of individuals' tax liabilities, which are recorded in the budget as
outlays.
3
Excludes the effect on payments in excess of individuals' tax liabilities. These payments are recorded as outlays in the budget.
4
Includes the increases in liabilities and receipts estimated to result from additional captial gains realizations as a result of this act.

THE BUDGET FOR FISCAL YEAR 1980

RECEIPTS PROPOSALS
Real wage insurance.—An integral part of the President's comprehensive anti-inflation program is the real wage insurance proposal announced on October 24, 1978. The purpose of real wage
insurance is to increase compliance with the wage standard in the
President's anti-inflation program and thereby reduce inflation.
Under this proposal, groups of employees whose compensation increases for the program year are within the anti-inflation guidelines will generally be eligible for a tax credit if inflation exceeds
7%. The program year is defined to be the period from October 1,
1978 to September 30,1979.
The rate of the credit will be equal to the difference between the
percentage increase in the consumer price index (CPI) over the
applicable period (October-November 1978 to October-November
1979) and 7 percent, with a maximum credit of 3 percentage points.
The credit will apply to qualified wages up to a limit of $20,000
from any one employer. Since the credit is intended to replace
wages and salaries, it will be included in the taxable income of the
employee.
The cost of real wage insurance, which is based on a projected
increase in the CPI of 7.5% over the applicable period, is estimated
to be $2.5 billion in 1980. Of this amount, $2.3 billion appear as a
reduction in individual income tax receipts; the remaining $0.2
billion are payments over and above individuals' tax liabilities and
therefore are recorded in the budget as outlays.
Cash management—The receipts estimates reflect several initiatives to require taxpayers to make income tax payments closer to
the time when tax liabilities occur and to require employers to
deposit taxes withheld from employees on a more timely basis.
These initiatives, which are described in more detail below, will
increase receipts by $2.2 billion in 1980, $5.0 billion in 1981, and
$5.3 billion in 1982. These estimates reflect a phase-in of the cash
management initiatives over 3 years to minimize the burden on
taxpayers in making the transition to the new collection procedures.
State and local deposits of social security taxes.—The administration has already published regulations to accelerate State and local
deposits of social security taxes. Currently, these deposits are made
quarterly, payable within 45 days after the end of the quarter.
Under the revised system, which will place State and local governments on a basis more like that of private employers, deposits for
the first 2 months of a quarter will be due 15 days after the end of
each month. The deposit for the final month of the quarter will be
due 45 days after the end of the quarter. This change, which was

BUDGET RECEIPTS

announced in November 1978, will become effective in July 1980
and will increase receipts by $2.2 billion in 1980.
Employer deposits of withheld taxes.—Under current law, the
times at which withheld income and payroll taxes must be paid
depend on the amount of such taxes accumulated by the employer.
The larger the amount of accumulated withheld taxes, the sooner
they must be paid. The proposed changes will accelerate the deposits by large employers. At the same time, the changes will give
relief to an estimated 470,000 very small employers (quarterly
withheld taxes of less than $1,000) who will pay the entire liability
with quarterly tax reports. Employers with quarterly withheld
taxes of $1,000 to $13,000 will be required to make only one deposit
per month. These changes, which will be phased in during calendar
years 1981 and 1982, increase receipts by $2.4 billion in 1981 and
$1.5 billion in 1982.
Individuals1 payments of estimated taxes.—Under current law,
individuals whose tax liabilities exceed withheld taxes by $100 or
more are required to make estimated tax payments 4 times a year.
Because these quarterly payments are only estimated, a substantial
deviation is permitted before penalties (in the form of interest) are
applied for underpayment. Generally, there is no penalty so long as
estimated tax payments plus withheld taxes exceed 80 percent of
tax liabilities shown on the tax return.
Taxpayers whose liabilities are paid as estimated taxes pay their
taxes substantially later than those whose liabilities are satisfied
through withholding. In addition, such taxpayers only need to pay
80 percent of their liabilities in the year in which they occur. To
reduce the advantages of paying taxes through estimated payments
and at the same time avoid unduly burdening the taxpayer for
paying small amounts of estimated tax, the following changes are
proposed:
—Increase the minimum percentage of liabilities to be met by
withheld and estimated payments from 80 percent to 85 percent.
—Increase from $100 to $300 the amount by which liabilities
must exceed withheld payments before estimated payments are
required. This change would reduce the number of taxpayers
who are required to make payments of estimated tax.
These changes, which will be phased in during calendar years
1981 and 1982, will increase receipts by $0.1 billion in 1981 and $0.4
billion in 1982.
Corporation income tax payments.— Corporations are generally
required to pay 80 percent of their corporate income tax liability
through estimated tax payments. For calendar year corporations,

THE BUDGET FOR FISCAL YEAR 1980

the estimated tax payments are due on the fifteenth of April, June,
September and December. The remainder of the tax liability is due
in two equal installments after the close of the year, payable on
March 15 and June 15.
The required level of estimated tax payments has several exceptions. A major one is that corporations can make estimated payments on the basis of the previous year's tax liability. Thus, a
corporation with a loss in the preceding year need not make any
estimated tax payments.
The receipts estimates for 1981 and beyond reflect several proposed changes to require tax payments closer to the time the
liabilities occur. These proposals include:
—Raising the required level of estimated tax payments from 80
percent to 85 percent.
—Requiring full payment of the remaining liability in a single
payment due on March 15.
—Modifying the provision described above that allows corporations to make estimated payments on the basis of the prior
year's tax liability. Large corporations will be required to
make estimated payments that are at least 60 percent of the
current year liability, regardless of the prior year liability.
These changes will be phased in during calendar years 1981 and
1982 and will add $1.8 billion to estimated receipts in 1981 and $3.2
billion in 1982.
In addition, to better meet the cash needs of the Treasury, which
are heaviest at the beginning of each month, it is proposed that
estimated corporate tax payments be made on the first of the
month rather than the 15th. This will be achieved by accelerating
two of the estimated payments by one-half month and by delaying
the other two by one-half month.
Other cash management initiatives,—The administration is also
proposing to accelerate the collections of customs duties and tobacco excise taxes in 1981 and 1982. In the case of customs duties,
importers and brokers currently have 10 days to submit such
duties after they have been collected. This lag will be reduced to 3
days by 1982. Tobacco excise taxes from large manufacturers will
also be accelerated. Currently, these taxes are due within 15 days
after each semi-monthly collection period. The revised regulations
will require payment within 3 days after each weekly collection
period. These proposals will increase receipts by $0.4 billion in
1981, but will have no significant effect on receipts in 1982 and
subsequent years.
Other receipts proposals.—The administration is proposing a
number of other proposals to improve resource allocation and the

BUDGET RECEIPTS

overall efficiency and equity of the tax structure. Each of these
proposals is described briefly below.
Modification of carryover of basis provisions.—The administration is proposing changes in the tax treatment of accrued capital
gains on property passing from decedents to estates or heirs. The
income on a sale of property generally is measured by the difference between cost (basis) and selling price. However, prior to 1977,
the basis of property passing from a decedent was the value at the
time of death. Thus, any increase in value during the decedent's
lifetime was never taxed. The Tax Reform Act of 1976 revised this
treatment for decedents dying after December 31, 1976. Under this
provision the heir would have a "carryover basis"; that is, income
on a sale by the heir would be measured by the difference between
selling price and cost to the decedent. Small estates were exempted.
The 1976 provision is complex primarily for two reasons—transitional rules which would forgive tax on gains accrued prior to
December 31, 1976, and adjustments to basis to compensate for the
fact that death taxes are imposed on the value of the estate without taking account of the potential income tax on the sale of
appreciated property held by the estate.
The Revenue Act of 1978 postponed the effective date of the
carryover basis provisions so that they apply only to property
passing from decedents dying after December 31, 1979. The Administration is proposing to continue to require carryover of basis for
decedents dying after December 31, 1979 but would facilitate its
administration by exempting many more smaller estates from its
effect and by simplifying the transitional rules and the adjustment
for death taxes. This proposal will reduce receipts by $35 million in
1982 and by increasingly larger amounts in subsequent years.
Restrictions on tax-exempt housing bonds.—State governments
provide mortgage assistance for low income families through State
housing authorities. Because the interest income on State and local
securities is exempt from Federal taxation, these securities are
financed at interest rates that are well below market rates for
mortgages. Recently, borrowing through the intermediation of
State and local governments has been used in some instances to
provide mortgage assistance for higher income families—heretofore
obtained without use of tax exemption. The administration will
therefore propose legislation to limit the use of tax-exempt funds
for mortgage financing to low and moderate income families or to
other narrowly targeted public policy objectives.
Tax distinction between employees and independent contractors.—
A worker gets favorable withholding and employment tax treat-

THE BUDGET FOR FISCAL YEAR 1980

ment from being classified as an "independent contractor" rather
than as an "employee." Current law offers no clear method to
distinguish between these two classifications. As a result, this distinction has become a frequent source of controversy between taxpayers and the Internal Revenue Service. The administration
therefore will propose legislation, to become effective for taxable
years beginning after December 31, 1979, to clarify this distinction.
The receipts estimates do not include the effects of this proposal.
Taxation of fringe benefits.—The tax law requires fringe benefits
to be included in income subject to tax unless specifically exempted. In practice, however, many fringe benefits that are not specifically exempted have nevertheless been excluded from the tax base.
The two primary types of such fringe benefits are:
—provision to employees, without charge or at a reduced cost, of
products or services that the employer normally sells to the
public; and
—benefits related to an employee's job, such as provision of an
automobile for commuting.
With a view toward later adoption of additional legislative standards, the Congress acted in 1978 to preclude the Treasury from
issuing final regulations prior to 1980 that would govern the
income tax treatment of fringe benefits. The administration is
therefore making proposals to become effective for taxable years
beginning after December 31, 1979 to aid the Congress in the
development of such standards. The receipts estimates do not include the effects of such proposals.
Railroad retirement taxes.—The budget estimates reflect proposed legislation to increase railroad retirement payroll taxes to
alleviate funding problems of the Railroad Retirement trust fund.
The largest part of the increase in receipts results from the elimination of the taxable earnings maximum (currently $1,700 per
month) on the employer portion of the tax. Thus, the employer
portion of the tax will apply to all wages and salaries covered by
this retirement system. This legislation is proposed to become effective January 1, 1980 and would increase receipts by $0.2 billion in
1980.
Airport and airway trust fund taxes.—These taxes are generally
scheduled to expire on June 30, 1980. This budget proposes legislation to extend the current freight waybill and passenger ticket
taxes, and certain other taxes, at their present rates. The legislation would also change the current 7 cents per gallon tax on
aviation fuel to an ad valorem tax of 10% of the price of aviation
fuel. A new 6% tax on new aircraft and avionics is also being
proposed to become effective October 1, 1980.

BUDGET RECEIPTS

Oil pollution liability and compensation.—The administration is
again proposing legislation to establish a fund of up to $200 million
to assure adequate and timely cleanup of oil spills in the Nation's
waterways. A fee of up to 3 cents per barrel of oil is proposed on oil
received at any U.S. refinery or terminal. The proposal is estimated to increase receipts by $0.1 billion in 1980.
Employer social security tax on tips.—Under current law, employers pay social security taxes on only part of the cash tips received
by their employees, whereas employees pay such taxes on all cash
tips. Legislation is being proposed, to become effective January 1,
1981, to require employer social security tax payments on all tips
income now subject to employee social security taxes. This legislation increases estimated receipts by $30 million in 1981 and $43
million in 1982.
EFFECT OF ADMINISTRATIVE ACTIONS AND PROPOSED LEGISLATION*
[In billions of dollars]
1981
Individual income taxes:
Real wage insurance2
Cash management initiatives
Other
Subtotal, individuals
Corporation income taxes:
Cash management initiatives
Other
Subtotal, corporations
Social insurance taxes and contributions:
Acceleration of State and local deposits of social
security taxes (announced Nov., 1978)
Other cash management initiatives
Railroad retirement tax increase
Other
Subtotal, social insurance
Other:
Cash management initiatives
Airport and airway trust fund taxes 3
Oil pollution liability and compensation
Total

1982

- 2.3
*

1.5
*

1.3
*

-2.3

1.6

1.3

1.8
.2

3.2
.4

2.0

3.5

2.2

.3
.9
.2

.2
.6
.3
*

1.5

1.1

*
.1

.4
.2
.1

*
.2
*

5.8

6.2

2.4
~-

* 50 million or less.
1
These estimates are based on the direct effect only of legislative changes at a given level of income. They therefore exclude indirect effects caused
by changes in individual and corporation incomes. However, these indirect effects are taken into account when estimating the incomes upon which the
receipts estimates and the estimates of the effects of legislation are based. In this way, the indirect effects are included in the receipts estimates by
major source and in total.
2
This proposal also increases estimated outlays by $0.2 billion in 1980.
3
These estimates are for increases in airport and airway tax receipts over and above those that would result from extending the current tax rates
beyond their June 30, 1980 expiration date. The extension of current tax rates would add $0.1 billion to receipts in 1980, $0.8 billion in 1981, and
$0.9 billion in 1982.

THE BUDGET FOR FISCAL YEAR 1980

CHANGES IN BUDGET RECEIPTS
Budget receipts are estimated to rise by $54.0 billion in 1979 and
$46.6 billion in 1980. The year-to-year changes can be divided between those due to growth in the tax base and those due to revisions in the tax structure. Under the tax rates and structure in
effect on January 1, 1977, receipts would have risen by $56.9 billion
in 1979 and $46.1 billion in 1980. Thus, the combined effect of
enacted and proposed tax law changes, which is shown in the
accompanying table, decreases the growth in receipts by $2.9 billion in 1979 and increases the growth by $0.5 billion in 1980.
1979

Growth in receipts (in billions of dollars):
Under existing and proposed legislation. .
Under tax rates and structure in effect January 1,1977.
Difference

1980

1981

1982

54.0
56.9

46.6
46.1

74.2
55.9

75.9
64.6

-2.9

18.3

11.3

BUDGET RECEIPTS
CHANGES IN BUDGET RECEIPTS
[In billions of dollars]
1979

1980

408.3

465.2

511.3 567.2 631.7

-10.0

-7.3
-11.5
-1.0
-.6

-5.8
-22.8
- .8
-.3

2.6
3.0

3.1
9.5
1.3

3.7
11.5
4.3
1.4

4.3
13.9
5.3
4.8
8

2.5

3.8
1.1

4.2
1.6

4.7
1.8
8.8

5.1
2.0
13.9
9

1978

Receipts under tax rates and structure in effect January

1,1977

Enacted legislative changes:1
Income taxes:
Tax Reduction and Simplication Act of 1977
Revenue Act of 1978
Energy Tax Act of 1978
Foreign Earned Income Act of 1978
Social insurance taxes and contributions:
Social security taxable earnings base increases-.2
! 16.500 to $17,700 effective Jan. 1,1978
! ;17,7OO to $22,900 effective Jan. 1,1979
i;22f900 to $25,900 effective Jan. l t 1980
S25r900 to $29,700 effective Jan. 1,1981
,
:;29,700 to $32,100 effective Jan. 1,1982
Social security tax rate increases:2
11.7% to 12.1% effective Jan. 1,1978
12.1% to 12.26% effective Jan. 1,1979
12.26% to 13.3% effective Jan. 1,1981
13.3% to 13.4% effective Jan. 1,1982
Social security employer tax on tips effective January 1,

1978

Increase in SMI (medicare) premiums
Surface Mining Control and Reclamations Act....
Black Lung Benefits Revenue Act of 1977
Other
Total, receipts under existing legislation

1981

1982

-5.9
-6.0
-26.7 -30.6
-1.0
-1.1
-.3
-.3

.2
.1
1

.4
.2
.2
-*

.6
.2
.2
*

.8
.2
.3
*

1.1
.2
.3
A

402.0

456.0

502.3

570.9

646.4

.3
4.7
.8

.2
5.1
1.0

502.6

576.8

652.6

Administrative actions and proposed changes:
Real wage insurance
Cash management:
Acceleration of State and local deposits of social security
taxes
Other
Other
Total, receipts under exisiting and proposed legislation

-2.3

2.2

402.0

456.0

*$50 million or less.
1
These estimates are based on the direct effect only of legislative changes at a given level of income. They therefore exclude indirect effects, caused
by changes in individual and corporation incomes. However, these indirect effects are taken into account when estimating the incomes upon which the
receipts estimates and the estimates of the effects of legislation are based. In this way, the indirect effects are included in the receipts estimates by
major
source and in total.
2
Technical note: When the tax rate and the taxable earnings base increase at the same time, dividing up the total effect on receipts is arbitrary to
some smalll extent because of an interaction effect. The increase in receipts due to this interaction effect is attributed to the rate ana base changes in
proportion to the increases in receipts that would occur if the rate and base were each changed separately.

RECEIPTS BY SOURCE
Individual income taxes.—Individual income tax receipts are estimated at $203.6 billion in 1979 and $227.3 billion in 1980, an
increase of $23.7 billion. As discussed earlier, the major proposal
affecting individual income taxes in 1980 is the real wage insurance initiative. This reduces estimated 1980 receipts by $2.3 billion.
Individual income taxes in 1981 and 1982 are projected at $269.1
billion and $311.2 billion, respectively. These figures reflect the
cash management proposals described earlier, which add $1.5 bil-

THE BUDGET FOR FISCAL YEAR 1980

lion and $1.3 billion, respectively, to 1981 and 1982 receipts. They
also reflect a rise in the average tax rate on personal income as
inflation and real growth move taxpayers into higher tax brackets.
As discussed in Part 3, the appropriateness of future legislated tax
reductions to offset some or all of this rise in effective tax rates
will depend on progress against inflation and on the future performance of the economy.
Budget Receipts: 1970-1982
$ Billions

$ Billion,

800

TOTAL
-600

-400

mo *n *»
FisedYem*

Esfimat*

Corporation income taxes,—-Corporation income tax receipts are
estimated at $70.3 billion in 1979 and $71.0 billion in 1980. Corporation income tax receipts in 1981 and 1982 are estimated at $76.7
billion and $86.0 billion respectively. These estimates reflect increases of $1.8 billion in 1981 and $3.2 billion in 1982 from the cash
management proposals described earlier.
Social insurance taxes and contributions.—This category includes
social security and railroad retirement taxes, unemployment insurance taxes and deposits, Federal employee retirement contributions, and premium payments for supplementary medical insurance.
Receipts from this source are expected to be $141.8 billion in
1979 and $161.5 billion in 1980. These figures reflect the increase in
the social security tax rate from 12.1% to 12.26% that became
effective January 1, 1979, and scheduled annual increases in the

BUDGET RECEIPTS

social security taxable earnings base. The 1980 estimate also includes $2.2 billion from the cash management initiative described
earlier to accelerate State and local deposits of social security
taxes.
The estimates for 1981 and 1982 are $185.2 billion and $208.0
billion respectively. These estimates reflect a significant rise in the
social security tax rate—from 12.26% to 13.3%—that is scheduled
to occur in January 1981, and annual increases in the taxable
earnings base.
Excise taxes.—Excise taxes are levied on a variety of products,
services, and activities. Receipts from these taxes are estimated at
$18.4 billion in 1979 and $18.5 billion 1980. These estimates reflect
the continued phase-out of the telephone excise tax that is scheduled under current law. This tax rate was reduced from 4% to 3%
on January 1, 1979, and will be reduced by one percentage point
each following year until the tax expires. These estimates also
reflect proposed legislation to continue in a modified form the
airport and airway taxes that are currently scheduled to expire
June 30, 1980.
Other receipts.—Estate and gift taxes, customs duties, and miscellaneous receipts (the largest of which are deposits of earnings by
the Federal Reserve System) are estimated to be $21.9 billion in
1979 and $24.3 billion in 1980. The 1980 estimate includes $0.1
billion for the proposed legislation described earlier to create an oil
pollution liability and compensation fund.
Proprietary receipts.—In addition to budget receipts, the Government receives significant proprietary income from the public. This
income is derived from various market-oriented activities—such as
interest, rents, royalties, and the sale of Government property,
products, and services. Since this income arises from business-type
transactions rather than from taxation, it is treated as an offset to
related outlays and budget authority rather than as budget receipts. Proprietary receipts from the public are shown by receiving
agency in Part 8 and by source of receipts in table 11 of Part 9.

280-000

O—79—6

PART 5

MEETING NATIONAL NEEDS:
THE FEDERAL
PROGRAM BY FUNCTION

INTRODUCTION
National needs and the functional classification.—This section
discusses the budget in terms of national needs, agency missions,
and major programs. National needs are grouped in 16 broad areas
that provide a coherent and comprehensive basis for analyzing and
understanding the budget. Three additional categories discussed—
interest, allowances, and undistributed offsetting receipts—do not
address specific national needs but are required to include the
entire budget.
The budget resources devoted to meeting national needs are classified by budget functions so that budget authority and outlays of
budget and off-budget Federal entities, loan guarantees, and tax
expenditures can all be grouped in terms of the national needs
being addressed. To the maximum extent feasible, these groupings
are made without regard to agency or organizational distinctions.
They are also the categories used by the Congress in the concurrent resolutions on the budget.
In keeping with the requirements of the Congressional Budget
Act of 1974,1 the national needs presentation is supported by analyses of agency missions and major programs. In general, subfunction
totals that together comprise each major functional category represent the resources devoted to agency missions.
To improve the relationship between national needs and major
functions and between missions and subfunctions, the functional
structure was revised for the 1979 budget. These revisions were
carried out in consultation with the concerned committees of both
Houses of the Congress, the Congressional Budget Office, and the
General Accounting Office. Subsequent consultation, relating to the
1980 budget, indicated a consensus that there should be no changes
in the basic structure. However, it was agreed that a few budget
accounts were misclassified and therefore they have been transferred to the proper functions or subfunctions for this budget. All
historical data by function presented in the budget have been
adjusted so that they are on a comparable basis for all years.
The Full Employment and Balanced Growth Act—Section 4(a) of
the Full Employment and Balanced Growth Act of 1978 provides
that the President's budget shall incorporate the programs and
policies the President deems necessary to achieve the medium-term
annual numerical goals for employment and unemployment, pro1

See Part 7 for a further discussion of this requirement.

MEETING NATIONAL NEEDS

duction, real income, productivity, and prices specified in the act.
These goals are presented in the President's Economic Report and
are discussed in Part 3 of the Budget. Programs and policies to
achieve these goals are discussed throughout this section. The act
also specifically provides that the budget should include recommendations for specific policies to reduce the rate of inflation.
In addition, the act states that policies and programs set forth in
the President's budget shall include, to the extent deemed appropriate by the President, a consideration of a broad range of issues.
Among those specifically mentioned are energy; transportation; the
environment; small business; agriculture; land and water conservation; rural development; urban development; employment; health
care; education and training; child care; social services; housing;
aid to State and local governments; national defense and international programs; the effect on the interregional distribution of jobs
and income of Federal procurement, grants, contracts, and the
closure of military bases; job dislocation resulting from Federal
laws, regulations, and policies; improving the competitiveness of
the United States in international trade; and balancing the budget.
As the national needs sections that follow demonstrate, the
issues listed in the Act were among those weighed carefully in the
process of developing the President's budget recommendations.
Policy conclusions and the reasons for them are put forth in this
part of the budget. No attempt, however, has been made to include
specific references to the Act in each instance where one of the
issues listed above is discussed.
Multi-year budget presentation.—For the first time, this section of
the budget includes detailed data on budget authority and outlays
for 2 years beyond the budget year. This reflects the adoption by
the administration of a 3-year planning and tracking system. This
system provides information on a regular basis on the longer term
effect of current budget decisions. It also provides the means for
phasing in, or phasing out, programs on a systematic basis (e.g.,
welfare reform and the space shuttle).
Major budget trends.—Since the budget resources classified into
major functions are of widely varying magnitudes, it is helpful to
aggregate them into larger clusters for purposes of observing broad
trends in Federal spending. This aggregation is particularly helpful
when comparing Federal spending by major category to the size of
the total economy (as measured by the gross national product or
GNP), as is done in the following chart. The tables on the following
two pages show budget outlays by larger cluster and by the functions comprising each larger cluster at 5-year intervals from 195575, and for each of the years 1978 through 1982. Tables showing

THE BUDGET FOR FISCAL YEAR 1980

budget authority and outlays for each major function, subfunction,
and basic program are included in each of the subsequent sections
of this part of the budget. These tables include data for the last
actual year (1978), the current year (1979), and the multi-year
budget planning period (1980-1982). In addition, tables showing projected budget authority and outlays by agency and major function
for the years 1983 and 1984 appear in Part 3 (Economic Assumptions and the Long-Range Outlook) of this document.
Budget Outlays as a Percent of G N P

Percent

Percent
30

30
Oilier
fjQQuoa Human Resources
I

i National Defense
22.4
5H.2
20.5
xj 4.9 ':•:£•

20 —
18.0

-20

4.7 ::;:i:

: 5.4 ;

-10

to—

8.2
5.0

1970
Fiscal Years

1975

1980
Estimate

For purposes of the functional classification, each Federal activity is classified in the one function that defines its most important
purpose. This permits the budget total to be categorized by mutually exclusive functions. However, many activities serve more than
one national need or major mission. Therefore, the subsections in
this part of the budget contain subsidiary information that identifies, to the extent feasible, those programs whose primary objective
is to meet one category of national needs but that also make
substantial contributions toward meeting other national needs.
Three categories of budget authority and outlays by function are
treated differently in the actual and the estimated years:
• Future increases in Federal pay are not distributed by budget
account, program, or agency. The budget totals are based on
an assumed percentage increase in each year. These are reflected in two allowances for pay increases—one for the De-

MEETING NATIONAL NEEDS

fense Department and one for the rest of the Government.
Hence, the functional total for national defense includes the
pay allowance for the Department of Defense, military functions; the nondefense total includes the nondefense pay allowance, but the allowance is not distributed among the nondefense functions.
• The budget contains an allowance for contingencies to cover
unanticipated requirements. The allowance does not represent
a specific budget request and the Congress does not provide
an appropriation for that purpose. Hence, no actual outlays
are made from the contingency allowance; any contingencies
are financed and fully reported in the appropriate function, so
the contingency allowance for all past periods is always zero.
• Finally, many estimates do not take into account future inflation. Exceptions are major multi-year procurement programs
and benefit payments tied by law to the cost of living. Separate allowances are included for inflation for 1981 and 1982.
As with the allowance for pay, it is divided only between
defense and nondefense.
The succeeding sections of this part of the budget discuss the
basic composition and trends in spending by function, subfunction,
and major programs. The chart in this section is designed to provide the reader with a broad overview of the outlay trends relative
to each other and of the overall magnitude of the budget relative to
the economy (the gross national product). The chart shows several
major points:
• Federal spending relative to the total economy has risen significantly over this period. In 1965, Federal budget outlays
were equal to 18% of the GNP; the total rose to 20V2% in
1970 and 22%% in 1975. Under the President's budget
program, this trend is being reversed. While total outlays are
projected to increase, the rate of increase is projected to be
lower than that of GNP, so budget outlays as a percent of
GNP are projected to drop by more than one percentage point
between 1975 and 1980.

THE BUDGET FOR FISCAL YEAR 1980
BUDGET OUTLAYS BY LARGER CLUSTER AND BY FUNCTION, 1955-1975
(In billions of dollars)
Actual
1955

National defense'
Human resources:
Income security
Social security..
Health
Education, training, employment, and social
services
Veterans benefits and services
Subtotal, human resources
Net interest:
Interest
Interest received by trust funds
Subtotal, net interest
All other.
International affairs
General science, space, and technology
Energy
Natural resources and environment
Agriculture
Commerce and housing credit
Transportation
Community and regional development
Administration of justice
General government
General purpose fiscal assistance
Undistributed offsetting receipts (except interest)
Subtotal, all other
Total budget outlays
1

The national defense function.

I960

1965

1970

1975

39.8

45.2

47.5

78.6

85.6

9.1
(4.4)
(4.7)
0.3

18.3
(11.0)
(7.3)
0.8

25.7
(170)
(8.7)
1.8

43.1
(29.7)
(13A)
13.1

108.6
(63.6)
(45.0)
27.6

0.4
4.7

1.0
5.4

2.1
5.7

8.6
8.7

15.9
16.6

14.6

25.5

35.4

73.4

168.7

6.0
-1.2

8.3
-1.4

10.4
-1.8

18.3
-3.9

30.9
-7.7

4.8

6.9

8.6

14.4

23.2

2.2
0.1
0.3
0.9
3.5
0.1
1.2
0.1
0.3
0.5
0.1

3.0
0.6
0.5
1.6
2.6
1.6
4.1
0.2
0.4
1.0
0.2

5.2

6.9
4.0

1.1
0.5
1.4
0.2

4.3
4.5
1.0
3.1
5.2
2.1
7.0
2.4
1.0
1.9
0.5

—0.2

-1.2

-1.4

-2.6

-6.4

9.3

14.6

27.0

30.2

48.7

68.5

92.2

118.4

196.6

326.2

5.8
0.7
2.5
3.9
1.2
5.7

2.2
7.3
1.7
5.6
10.4
3.7
2.9
3.2
7.2

* 50 million or less.

• The chart reveals major changes in defense spending relative
to the economy. In 1965 national defense spending was equal
to 7.2% of the GNP. Defense spending rose significantly faster
than the economy in the years immediately after 1965 due to
the Vietnam war, and then slackened. In 1980 defense spending is anticipated to be equal to about 5% of the GNP; under
the President's planning guidance, it is expected to stabilize
close to that level at least through 1982.
• While national defense spending was fluctuating relative to
the GNP, human resources programs were expanding rapidly.
Such spending more than doubled relative to the economy

MEETING NATIONAL NEEDS
BUDGET OUTLAYS BY LARGER CLUSTER AND BY FUNCTION, 1978-1982
(In billions of dollars)
Estimate
Actual
1978

National defense»
Human resources:
Income security
Social security
Other
Health
Education, training, employment, and social
services
Veterans benefits and services
Subtotal, human resources
Net interest:
Interest
Interest received by trust funds
Subtotal, net interest
All other:
International affairs
General science, space, and technology
Energy
Natural resources and environment
Agriculture
Commerce and housing credit
Transportation
Community and regional development
Administration of justice
General government
General purpose fiscal assistance
Allowances
Undistributed offsetting receipts (except interest)
Subtotal, all other
Total budget outlays
1

1979

1980

1981

1982

105.2

114.5

125.8

137.0

148.2

146.2
(92.2)
(54.0)
43.7

158.9
(102.3)
(56.5)
49.1

179.1
(115.2)
(63.9)
53.4

194.1
(126.8)
(67.3)
58.8

207.5
(137.9)
(69.6)
64.2

26.5
19.0

30.7
20.3

30.2
20.5

31.0
21.2

31.5
21.7

235.3

259.0

283.2

305.1

324.9

44.0
-8.5

52.8
-9.8

57.0
-10.9

59.1
-12.4

59.5
-14.5

35.4

43.0

46.1

46.7

45.0

5.9
4.7
5.9
10.9
7.7
3.3
15.4
11.0
3.8
3.8
9.6

7.3
5.2
8.6
11.2
6.2
3.0
17.4
9.1
4.4
4.4
8.9

8.2
5.5
7.9
11.5
4.3
3.4
17.6
7.3
4.4
4.4
8.8
14

8.9
5.5
7.8
12.6
5.6
3.4
19.5
8.4
4.4
4.5
8.7
85

9.5
5.3
6.8
13.3
5.9
3.0
20.0
8.8
4.4
4.7
8.7
15 2

-7.2

-8.9

-8.1

-8.7

-8.8

74.9

76.9

76.5

89.1

96.7

450.8

493.4

531.6

578.0

614.9

The national defense function.

between 1965 and 1975. The President's budget calls for a
growth rate in these programs as a group that is roughly equal
to the rate of growth in the total economy. The chart shows a
modest dip (from 11.6% of GNP in 1975 to 11.3% in 1980). The
1980 figure does not include the effects of allowances for pay
raises and contingencies, which are included in the "all other
nondefense" grouping.
The "all other nondefense" aggregation is made up of net
interest and all other outlays, including allowances. There is
no trend relative to the GNP discernible in total. However,
the net interest component of this category rose from 1.3% of
GNP in 1965 to 1.5% in 1970 and 1.6% in 1975; it is estimated
at 1.8% in 1980 but projected to decline relative to GNP in

THE BUDGET FOR FISCAL YEAR 1980

subsequent years as the budget deficit is reduced or eliminated, inflation and interest rates decline and the GNP grows.
Because of space constraints, the historical table on outlays by
function and subfunction (Table 17 in Part 9 of this document)
extends back only to 1970. Data on budget outlays by larger cluster
beginning in 1940, by major function beginning in 1948, and by
subfunction beginning in 1962 are available upon request from the
Office of Management and Budget.
The basic presentation of budget authority and outlays by national need or budget functions is given in this part of the budget.
The budget also contains several other related forms of data, as is
discussed below.
Credit—Federal credit activities—loans, loan repayments and
sales—are shown in each national needs section that has significant credit activity through 1980. Each table shows the total
amounts of direct and guaranteed loans that meet a particular
national need. For direct loans, the tables show both new loans and
offsetting repayments, sales, and adjustments. The resulting figures
on net credit outlays represent the budget outlays for the direct
loans.
The tables also show new guarantees and the net amount of
credit guaranteed. Unlike direct loans, loan guarantees do not
normally result in budget outlays except in the case of default. A
further discussion of loans and loan guarantees may be found in
Parts 2 and 6 of the Budget, and in Special Analysis F in the
Special Analyses volume of the budget.
Because loan guarantees have a relatively small effect on budget
outlays, they have, in the past, received less scrutiny in the executive and legislative branches than other Federal programs. The
administration is proposing a credit control system that would
subject both direct loans and loan guarantees to greater budget
discipline. This proposal is discussed in Parts 2 and 6 of the budget.
Tax expenditures.—Tax expenditures are revenue losses under
the individual and corporate income tax laws that are attributable
to special exclusions, exemptions, or deductions from gross income,
or to special credits, preferential rates of tax, or deferrals of tax
liability. Nearly all tax expenditure provisions are intended either
to encourage particular economic activities or to reduce the tax
liabilities for special classes of taxpayers. They are one means by
which the Federal Government pursues its objectives, and in most
cases can be viewed as alternatives to other instruments of Government policy such as outlays, loan guarantees, regulations, and
other tax law provisions.

MEETING NATIONAL NEEDS

The most important tax expenditures are discussed in the national needs sections that follow so that they may be compared with
the outlays and loan guarantees that serve the same broad purpose. Tax expenditures are discussed further in Part 6 and in
Special Analysis G, "Tax Expenditures/' The latter includes a listing and an analysis of all tax expenditures, along with a discussion
of this definition and measurement.
Other Federal fiscal activities.—The Federal Government allocates resources by means other than those reflected in budget
outlays, tax expenditures, and loan guarantees. Outlays of the offbudget Federal entities, which are federally-owned and controlled,
but excluded from the budget under provisions of laws, are similar
in nature to budget outlays. The regulation of economic activity
has a major impact on the economy in many sectors. Finally,
provisions of the tax law affect the allocation of resources among
private uses and the distribution of income among individuals in
many important ways not covered by tax expenditures. Federal
taxes other than income taxes have economic effects, as do tax
rates, personal exemptions, and other features of the income tax
structure that are not treated as tax expenditures.
The national needs sections that follow include information on
off-budget Federal entities, and discuss major issues regarding economic regulation. Off-budget Federal entities, as well as privately
owned, Government-sponsored enterprises, are also discussed in
Part 6 of the Budget.

THE BUDGET FOR FISCAL YEAR 1980

NATIONAL DEFENSE
National Needs Statement:
• Protect America's people, its institutions, and its lands
from foreign aggression.
• Preserve an overall military balance at least as favorable
as the present one between the United States and its
allies, and the Soviet Union and its allies.
• Deter a nuclear attack on the United States or other
nations whose security is important to us and assure
that should deterrence fail the U.S. can deliver a retaliatory response that inflicts unacceptable damage on the
Soviet Union.
• Maintain, with our allies, sufficient power to defeat any
aggressors.
• Seek international agreements to limit and reduce all
armaments, to prevent proliferation of nuclear technology, to restrict arms trade, to settle disputes by peaceful
means, and to strengthen international stability.
The 1980 budget proposes $138.2 billion in budget authority to
meet these national needs. Outlays for national defense missions
are estimated at $125.8 billion in 1980, increasing to $137.0 billion
in 1981.
Department of Defense—Military.—The military programs of the
Department of Defense provide the capabilities to meet our primary national defense needs. As shown in the following table, total
obligational authority (TOA) proposed for the military missions of
the Department of Defense is $135.5 billion in 1980 and $145.7
billion in 1981. Outlays are estimated at $122.7 billion in 1980, an
increase of $10.8 billion over 1979.
In May of 1977, the members of NATO agreed that all should
increase their defense spending. Increased defense spending
throughout NATO will help maintain the deterrent value of NATO
forces as the Warsaw Pact increases its military capabilities.
Last January, the administration proposed a 1979 military program of $126 billion in total obligational authority (TOA). The
Congress, however, reduced the 1979 program to $123.6 billion. This
budget proposes supplemental 1979 appropriations of $2.2 billion, for
a total program in 1979 of $125.7 billion in TOA.

MEETING NATIONAL NEEDS

NATIONAL NEED: DEFENSE, MILITARY
(Functional code 051; in billions of dollars)
Budget authority
1978
actual

Strategic forces
General purpose forces
Intelligence and communications
Airlift and sealift
Guard and reserve
Research and development1
Central supply and maintenance
Training, medical, and other general personnel
activities
Administration and associated activities
Support of other nations

1979
estimate

1980
estimate

1981
estimate

1982
estimate

9.1
41.3
7.9
1.6
6.9
10.0
12.0

8.6
47.5
8.1
1.8
7.0
11.1
12.5

10.8
50.0
9.1
1.9
7.1
11.8
13.3

11.3
55.0
10.1
2.0
7.1
12.8
14.3

12.1
58.5
10.8
2.1
7.8
13.9
15.1

23.9
2.2
0.3

25.8
2.3
0.4

27.9
2.6
0.6

29.7
2.6
0.3

31.7
2.8
0.4

115.3

125.2

135.0

145.2 155.2

Prior-year funds and other financial adjustments

+1.2

+0.5

Total obligational authority

116.5

125.7

135.5

145.7 155.7

Total, budget authority

+0.5

Excludes R. & D. in other program areas on systems approved for production.

The 1980 budget proposal includes the defense programs essential to meet national security needs. Additional programs were
considered but rejected due to lower priority, technical problems,
schedule slippages, or excessive costs. All programs have been reviewed to identify more efficient ways to conduct them. The resulting proposals provide for the lowest program costs consistent with
our national security needs. Real growth in outlays is estimated to
be about 3% in 1980. The major proposals reflected in the 1980
budget are:
• Maintain sufficient strategic force to make it clearly disadvantageous for the Soviet Union to initiate nuclear war.
• Improve the initial combat capability of our conventional
forces designated for the defense of our NATO (North Atlantic Treaty Organization) allies, in order to make it clearly
disadvantageous for the Soviet Union or its Warsaw Pact
allies to initiate conventional war.
• Maintain sufficient capabilities to deter conflict worldwide,
especially in such critical and potentially unstable areas as
Northeast Asia, the Middle East, and the Persian Gulf.
• Modernize our naval forces to maintain freedom of the seas
and to protect our capability to conduct military operations
wherever we are challenged.
• Maintain reliable capabilities for monitoring foreign military
developments and activities, and for verifying international

THE BUDGET FOR FISCAL YEAR 1980

agreements on arms control—including a new strategic arms
limitation treaty.
• Reform military pay to help attract and retain military personnel in the coming years, as the population of young people
declines in numbers.
• Improve operating efficiency through greater competition in
the acquisition process, supply system reforms, and improved
utilization of civilian manpower.
The 1980 budget includes a variety of programs to improve our
conventional capabilities. These programs strengthen the forces
that deter or stand ready to respond to non-nuclear military
threats against Western Europe or in other areas. These efforts are
being undertaken, in coordination with our NATO allies, as part of
a long-term defense program that was approved at the NATO
summit in May 1977. The budget also includes cooperative programs with our NATO allies, including common purchase and operation of a fleet of airborne warning and control aircraft, coproduction of the new F-16 fighter aircraft, and a common gun for
new tanks. A sizable increase in the purchase of modern equipment
for our ground forces is also proposed. This includes additional
tanks, air defense systems, helicopters, armored personnel carriers,
and ammunition. The budget provides for significantly upgrading
artillery, anti-tank weapons, and combat unit capability for forces
in Europe. In addition, naval capabilities will be strengthened by
the construction of a new conventionally-powered aircraft carrier.
The budget also recommends measures that will improve the
efficiency of defense operations. Actions are being taken to increase
the degree of competition throughout the acquisition process and to
encourage purchase of standard goods and services. Initiatives in
supply management include correcting pricing inequities, disposing
of excess stocks, making greater use of commercially-available
equipment, and earlier identification of potentially obsolete inventories.
Strategic forces.—The principal objective of United States strategic forces is to deter a nuclear attack on the United States and its
allies. They also help deter nonnuclear attack.
Strategic force evaluation involves more than simple numerical
comparisons of United States and Soviet forces. Our forces are
designed to survive and respond to a major Soviet nuclear attack in
adequate numbers and strength. These must be able to penetrate
Soviet defenses and destroy essential targets in a controlled
manner under any circumstances, including a massive Soviet
attack.
Our forces meet these conditions today, but must be improved to
continue meeting them in the future. A supplemental is requested

MEETING NATIONAL NEEDS

for 1979 to pursue full-scale development of a larger, more accurate
intercontinental ballistic missile capable, with modifications, of
being deployed in submarines, aircraft, or land bases. Full-scale
development of a method of basing this missile would commence
following exploration of basing alternatives in 1979. The budget
proposes procurement of the eighth Trident submarine and continued procurement of the Trident I missile. Competitive development
and procurement of air-launched cruise missiles is proposed, with
initial deployment in B-52 aircraft planned for 1982.
Funds are also requested for important improvements to strategic command and control and warning systems. Initiatives are
recommended to provide earlier and more reliable warning of an
attack, and to assure that our deterrent force can respond in a
timely and controlled manner to a wide range of potential threats.
The budget anticipates successful completion of a new strategic
arms limitation treaty that will reduce the danger of nuclear war
and help restrain future increases in strategic spending. While no
treaty will eliminate the danger that nuclear forces pose both to us
and to the rest of the world, a treaty can reduce uncertainty as to
the size and character of future Soviet strategic forces and also
provide a healthier environment for further arms reductions.
For any treaty to be workable, the parties must be able to verify
compliance with its provisions. The administration has confidence
in the U.S. ability to verify compliance with the provisions of the
pending agreement. The U.S. will continue to maintain intelligence
capabilities, such as photoreconnaissance satellites, that provide
this assurance. The treaty will not automatically make our strategic forces secure or end the arms competition. But the agreement,
and the strategic force improvements it will permit, will help make
the Nation more secure.
General purpose forces.—General purpose forces help deter or
counter aggression below the threshold of strategic nuclear conflict.
Most of the defense budget goes for conventional military forces.
Active forces include 16 Army divisions, 3 Marine divisions, 3
Marine air wings, 26 wings of Air Force tactical aircraft and 269
naval warships, including 13 aircraft carriers and 12 carrier air
wings. The 1980 budget proposes $50.0 billion in budget authority
for general purpose programs, a $2.5 billion increase over the 1979
level as amended by supplemental proposals transmitted with this
budget.
A number of initiatives for modernizing existing forces and improving their readiness for combat are proposed. These initiatives
would strengthen the ability of our general purpose forces to maintain the balance of conventional military power, particularly in
Western Europe, and to deter aggression elsewhere in the world.

THE BUDGET FOR FISCAL YEAR 1980

Army forces are designed to meet the most demanding of all
general purpose force challenges—conflict between the members of
NATO and of the Warsaw Pact—but they must also have the
flexibility to meet contingencies that threaten U.S. interests elsewhere.
Improvements in readiness and combat capability proposed in
1980 include:
• adding mechanized infantry and armor battalions to our
forces oriented toward Europe;
• increasing the equipment that is prepositioned in Europe to
outfit NATO reinforcements;
SUMMARY OF ACTIVE MILITARY PERSONNEL AND FORCES
(Year end—i.e., as of September 30)
1978
actual

Military personnel (in thousands):
End strength:
Army
Navy
Marine Corps
Air Force
Total, Department of Defense....
Average strength:
Army..
Navy
Marine Corps
Air Force

estimate

771
530
191
569

774
523
190
563

774
528
189
559

2,061

2,050

771
526
191
572

762
526
188
567

772
526
189
562

2,060

2,043

2,049

1,000
54
656
25

16
3

26
12
3

26
3

26
12
3

13
70
166
64

13
72
170
65

13
75
181
63

4
13
48

CVJ

Total, Department of DefenseStrategic forces:
Intercontinental ballistic missiles:
Minuteman
Titan II
Polaris-Poseidon-Trident
Strategic bomber squadrons
General purpose forces:
Land forces-.
Army divisions
Marine Corps divisions
Tactical air forces:
Air Force wings
Navy attack wings
Marine Corps wings
Naval Forces:
Attack and multipurpose carriers....
Nuclear attack submarines
Other warships
Amphibious assault ships
Airlift and sealift forces:
C-5A airlift squadrons
Other strategic airlift squadrons
Troopships, cargo ships, and tankers..

1979
estimate

MEETING NATIONAL NEEDS

• increasing the readiness of European combat units and selected units in the United States;
• increasing by one-third the number of U.S. artillery pieces in
Europe and deploying additional anti-tank weapons;
• raising the number and readiness of tank crews;
• deploying secure communications for tactical forces; and
• increasing the ability of our forces to withstand nuclear, biological and chemical warfare.
Increases are also proposed in all major Army procurement
areas. For armor, the proposals include continued procurement of
new XM-1 main battle tanks and initial acquisition of the new
Infantry Fighting Vehicle designed to give infantry the mobility
needed to fight along side the XM-1 tank. For Aviation, acquisition
of Black Hawk transport helicopters and further conversions of
Cobra helicopter gun ships to carry anti-tank missiles are proposed.
For air defense, purchase of the Patriot missile system and the
Stinger missile is planned.
The ability of combat and support forces to respond effectively
when required depends on the condition of equipment and the
ability of well-trained combat units to act with confidence, skill,
and coordination. To maintain our military forces in a high state of
readiness, the 1980 budget proposes a 1.4% real increase in budget
authority for operations and maintenance. Part of this increase is
for a national training center to provide a realistic combat environment for training ground forces. To finance this center and other
unit training improvements, the budget provides for an increase in
outlays for unit training.
The main missions of the Air Force tactical aircraft are to gain
sufficient superiority in the air to permit U.S. and allied air forces
to provide support to ground forces and to disrupt enemy forces
behind the lines.
The 1980 budget proposes procurement of the following Air Force
tactical aircraft:
• 144 A-10 attack aircraft for anti-armor missions;
• 60 F-15 fighter aircraft for air superiority missions;
• 175 F-16 multi-role aircraft for both air superiority and
ground attack missions; and
• 3 E-3A AWACS aircraft for better airborne surveillance,
warning and control.
NATO defenses will be strengthened by stationing new A-10
attack aircraft in Europe. Fighter aircraft stationed in the U.S. will
be prepared to deploy to Europe, or elsewhere, on shorter notice
than previously.
Naval general purpose forces have three missions: sea control,
land attack, and peacetime presence. Sea control requires establish-

280-000

O—79—7

THE BUDGET FOR FISCAL YEAR 1980

ing and maintaining naval superiority in ocean areas to protect
vital sea lanes, and to deny their use to the enemy. Land attack is
the use of naval aircraft and gunfire to support land operations
and amphibious assaults. The peacetime presence mission is carried out by deployment of naval forces overseas to deter hositilities,
influence the outcome of crises, and provide a tangible symbol of
American commitment.
To carry out these missions, the 1980 budget provides for the
construction of 14 new general purpose force ships. These include a
conventionally-powered aircraft carrier, a destroyer equipped with
the AEGIS anti-air warfare system, an attack submarine, 6 frigates
for convoy and other escort duties, and 5 towed-array sonar ships
to expand our ability to detect hostile submarines.
In recent years, there has been a trend toward building fewer,
more expensive ships. This trend must be changed or the Navy in
the future will have so few ships that our continued naval superiority may be jeopardized. Although large, expensive ships have impressive capabilities, these are insufficient to offset a substantial
shrinkage in numbers.
As a part of the shift toward less expensive but still highly
capable ships, procurement of conventionally powered rather than
nuclear power AEGIS-equipped ships is proposed. The marginally
higher capabilities of a nuclear power AEGIS-equipped ship are
insufficient to justify the added cost. Also, studies are underway
that examine the potential costs and benefits of procuring attack
submarines that are smaller and less expensive than the Los Angeles class submarines now being built. These efforts to design and
build more numerous and less expensive ships will permit us and
our allies to maintain naval superiority.
The budget proposes procurement of 24 F-14 and 15 F-18 fighter
aircraft. No further production of either A-6 or A-7 aircraft is
proposed. The relatively low-cost F-18 will be purchased in large
quantities over the next several years and will carry out a major
portion of Navy and Marine Corps fighter and attack missions in
the future.
Airlift and sealift forces.—Strategic mobility forces are used for
the day-to-day peacetime resupply of U.S. forces stationed overseas
and the rapid movement of military personnel and equipment to
combat zones. The U.S. and its allies depend upon rapid movement
and resupply to sustain our forces. Aggression against countries
friendly to the U.S. may be deterred by awareness of U.S. capability for rapid reinforcement and supply.
Most of the $1.9 billion in budget authority proposed for airlift
and sealift forces supports day-to-day operations and maintenance.
Modifications are proposed to improve our ability to mobilize and

MEETING NATIONAL NEEDS

transport U.S. forces by extending the service life and increasing
the capability of the C-5A and C-141 aircraft. Additional prepositioning in Europe of equipment for heavy Army units is also
planned. This will facilitate rapid deployment of U.S. forces to
counter threats to Western Europe. A significant increase in the
Civil Reserve Air Fleet program is proposed. This will build cargo
capabilities into commercial wide-bodied aircraft while they are
still in production. Commercial airlift capability can then provide
more support in time of crises, just as we rely upon commercial
ships to augment Navy sealift forces.
Military sealift forces transport petroleum and dry cargo for the
Department of Defense. Civilian crew members now operate these
Navy ships in times of peace and war. This permits greater concentration of trained naval personnel in warship assignment.
Guard and reserve forces,—The mission of guard and reserve
forces is to provide trained units for support and reinforcement of
existing active forces. To fulfill this mission we must recruit and
retain a well-trained, equipped, and motivated force. Units with
early deployment schedules in the event of mobilization receive the
highest priority.
Some improvements in guard and reserve manning levels are
projected for 1980 and beyond. The budget also provides for greater
emphasis on full-time active duty military support to reserve force
units and continued equipment modernization to help train and
increase the capability of these forces. Older C-7, C-123, and F-100
aircraft, for example, will be phased out as newer C-130, F-4, A-10,
and A-7 aircraft become available.
Based on an evaluation of the effectiveness of compensation in
meeting reserve manpower objectives, the budget proposes more
enlistment and reenlistment bonuses and educational assistance. It
also proposes legislation that would: (1) reduce civilian pay for
Federal employees while on annual reserve training; (2) eliminate
administrative duty pay for unit commanders; and (3) eliminate
officers' uniform maintenance allowance. A comprehensive pay
reform package is being developed.
Research and development.—Defense research and development
is needed to maintain the lead in military technology that we enjoy
over potential adversaries and to improve the capabilities of our
combat forces.
The 1980 budget for R&D proposes strengthening our technology
base, vigorous efforts to modernize our strategic forces, and continued development of a number of key tactical programs. Major R&D
efforts for 1980 include:

THE BUDGET FOR FISCAL YEAR 1980

• Technology base.—The 1980 budget proposes real growth in
TOA of 7% in this area overall, with real growth of 10% in
research, and 5% in exploratory development.
• Strategic systems.—Increases are proposed in development
programs to maintain the deterrent capability of strategic
land, sea and air forces, to improve the reliability and survivability of strategic command, control and communications,
and to improve intelligence capabilities.
• Tactical systems.—Systems in the final stages of development
during the transition to production include the XM-1 tank,
the F-18 fighter and the Patriot air-defense system. Major
systems now in development include the Army advanced
attack helicopter, the Pershing II theater-nuclear missile, the
ground and sea-launched cruise missiles, and a family of advanced anti-armor munitions designed to counter the tankheavy forces of the Warsaw Pact.
• Other defense R&D.—Substantial funding is proposed for the
modernization of test and evaluation facilities to ensure that
systems in development will be adequately tested and evaluated before entering production. Development efforts in support
of the space shuttle transportation system will continue. Shuttle operations at Vandenburg Air Force Base in Califormia
are scheduled to begin in 1983.
Military compensation reform.—Legislation to reform the military compensation system will be submitted to the Congress this
spring. The specific proposals will be designed to correct inefficiencies and inequities in pay, benefit and retirement programs that
were highlighted in the April 1978 Report of the President's Commission on Military Compensation.
A key feature of the proposed retirement reform, drawn from the
Commission's plan, would provide new career incentives by giving
active duty personnel special cash payments after ten years of
service. These payments would be charged against their future
pension rights. Members completing 20 years of service would still
be entitled to immediate pensions although benefits would be reduced from current levels until age 60. Personnel separating with
10 to 20 years of service would be entitled to deferred pensions
beginning at age 60. Annuities would be calculated on high 2 years'
average basic pay, rather than final basic pay, and would be offset
by benefits available under the social security system.
Other provisions of the legislation will permit the basic allowance for quarters to be varied according to local housing costs, and
authorize differential pay raises by grade and length of service.
These proposals are expected to lead to substantial cost reductions after a transition period that will protect the interests of

MEETING NATIONAL NEEDS

members of the current active-duty force. At the same time they
will provide major improvements over the current system in
achieving more management flexibility, fairness and cost effectiveness.
Financing military retirement costs on an accrual basis.—Legislation is also proposed to change the way the budget accounts for
military retired pay. The budget now reflects only the annuity
costs of military personnel who have already retired. Under the
proposed legislation, the budget would reflect the retirement benefits being earned by military personnel on active or reserve duty.
This change is designed primarily to improve personnel management by focussing attention on those retirement costs that can be
controlled. Because the proposal involves complex changes in many
parts of the budget that are contingent upon enactment of the
legislation, the changes have not been reflected in the budget
schedules.
Tax expenditures.—The provision of housing and meals for military personnel, either in cash or in kind, is excluded from taxable
income. This results in an estimated 1980 tax expenditure of $1.5
billion. In addition, disability-related military pensions received by
current retirees are largely excluded from taxable income, resulting in a tax expenditure of $130 million for 1980.
National defense summary.—The accompanying national defense
table shows budget authority and outlays by appropriation categories for the three major defense missions: military functions of the
Department of Defense, atomic energy defense activities and the
defense-related activities of other agencies. Most of the increases in
the military programs of the Department of Defense are for procurement and for research, development, test and evaluation.
These accounts support the development and acquisition of new
weapon systems that will replace obsolete ones. The smaller increases in operations and maintenance provide for the support,
readiness and level of training for our forces.

THE BUDGET FOR FISCAL YEAR 1980
NATIONAL DEFENSE
(Functional code 050; in millions of dollars)
Major Missions and Programs

BUDGET AUTHORITY
Department of Defense—Military:
Military personnel
Retired military personnel
Operation and maintenance
Procurement
Research, development, test and evaluation.
Military construction
Family housing
Revolving funds and other
Allowances: Civilian and military pay raises:
Existing law
Proposed legislation
Other legislation
Subtotal, Department of DefenseMilitary
Atomic energy defense activities
Defense-related activities:
Existing law
Proposed legislation
Subtotal, defense, related activities....
Deductions for offsetting receipts
Total, budget authority
OUTLAYS
Department of Defense—Military:
Military personnel
Retired military personnel
Operation and maintenance
Procurement
Research, development, test and evaluation.
Military construction
Family housing
Revolving funds and other
Allowances: Civilian and military pay raises:
Existing law
Proposed legislation
Other legislation
Subtotal, Department of DefenseMilitary
Atomic energy defense activities
Defense-related activities:
Existing law
Proposed legislation
Subtotal, defense related activities
Deductions for offsetting receipts
Total, outlays

1979
estimate

1978
actual

27,246
9,180
34,732
29,529
11,371
1,641
1,346
278

115,322

1980
estimate

28,683
10,318
38,085
31,463
12,774
2,498
1,623
- 235

125,209

1981
estimate

1982
estimate

28,890
11,452
40,222
35,402
13,536
2,158
1,575
- 429

29,058
12,515
41,531
38,682
15,364
2,296
1,649
-455

29,176
13,549
43,619
41,454
15,366
3,534
1,811
-353

2,256
-81
61

4,689
-139
24

7,154
-146
28

135,041

145,215

155,193

3,022

3,206

3,176

2,514

2,614

360
-178

368
-178

371
-178

93
-2

94
-3

183
-3

191
-3

193
-3

138,243

148,609

158,560

28,447
11,435
38,690
25,749
13,015
1,951
1,493
- 295

28,625
12,500
40,145
29,998
14,633
2,079
1,624
-455

28,734
13,535
42,116
34,385
15,365
2,351
1,755
-353

2,234
-80
61

4,665
-138
24

7,129
-145
28

117,926

27,075
9,171
33,578
19,976
10,508
1,932
1,405
- 602

127,915

28,220
10,281
35,905
22,476
11,726
1,854
1,441
- 3

103,042

111,900

122,700

133,700

144,900

2,070

2,509

2,968

3,156

3,099

343
-178

368
-178

372
-178

76
-2

97
-3

166
-3

191
-3

194
-3

125,830

137,043

105,186

114,503

148,190

MEETING NATIONAL NEEDS

Atomic energy defense activities.—Department of Energy responsibilities for national defense include R&D, testing and production
of nuclear weapons, production of special nuclear materials, storage of nuclear wastes from defense programs and design of reactors
for navy vessels. The following table shows the distribution of
funding levels for these programs. Budget authority of $3.0 billion
is requested for 1980, compared to $2.6 billion in 1979.
ATOMIC ENERGY DEFENSE ACTIVITIES
(Functional code 053; in millions of dollars)

Major Missions and Programs

BUDGET AUTHORITY
Weapons research, development, test, and
production
Weapons materials production and waste
management
Naval reactor development
Other research programs
Total, budget authority
OUTLAYS
Weapons research, development, test, and
production
Weapons materials production and waste
management
Naval reactor development.
Other research programs
Total, outlays

1978
actual

1979
estimate

1980
estimate

1981
estimate

1982
estimate

1,397

1,435

1,659

1,692

675
247
195

698
290
191

855
263
245

974
273
268

2,514

2,614

3,022

3,206

3,176

1,142

1,368

1,618

1,696

1,641

530
231
167

679
263
199

945
281
234

933
269
256

2,070

2,509

853
111
225
2,968

3,156

1,700

933
259
284

3,099

Weapons, R&D, testing and production.—This involves the
design, testing and production of nuclear warheads, projectiles, and
bombs for the nuclear weapons stockpile, including quality control
and surveillance of all components of the finished devices. Funding
proposed for 1979 and 1980 supports increased missile warhead
production.
Nuclear materials production.—This entails the production of
special nuclear materials for use in nuclear warheads. Production
at a slightly reduced rate is proposed for 1980.
Defense nuclear waste management.—This program currently
provides interim storage for all defense nuclear wastes. The program also supports R&D toward the goal of permanent storage and
isolation of these wastes. Funding proposed for 1979 and 1980
would support increased efforts to upgrade interim storage, increased R&D on the permanent storage of defense wastes, and
design work and land acquisition for a future underground repository planned in southeastern New Mexico.

100

THE BUDGET FOR FISCAL YEAR 1980

Naval reactor development,—This program includes the R&D
design, procurement, and testing of prototype reactors for current
and future naval vessels.
Other research programs.—The other Department of Energy defense programs include inertial confinement fusion, using intense
laser beams; nuclear materials security and safeguards, providing
protection of Department of Energy nuclear facilities and nuclear
materials; and arms control and verification technology.
Defense-related activities.—Outlays for the activities of the civilian departments and agencies that support national defense are
estimated to rise from $97 million in 1979 to $166 million in 1980.
Federal preparedness planning and crisis management.—The
emergency management program recommended in 1980 includes
planning for relocation during crises, shelter surveys, improved
communications, and emergency planning. This activity will be
part of the responsibility of a proposed new Federal Emergency
Management Agency to be established in 1979. Outlays for the
emergency planning, preparedness, and mobilization functions of
the Federal Emergency Management Agency are estimated at $140
million in 1980 compared to $133 million in 1979.
Stockpile of strategic and critical materials.—To meet our needs
for raw materials during wartime, the Federal Government stockpiles strategic and critical materials. Sales and purchases are proposed in 1980 to adjust the inventory of the stockpile to current
requirements. Outlays are estimated to be $181 million in 1980. In
1979, they are estimated at zero. Receipts from sales are estimated
at $238 million in 1980.
Selective Service.—The Selective Service System is responsible for
maintaining in standby the capability to meet defense personnel
requirements in a future national mobilization. The budget includes $9.8 million in budget authority for 1980 and a 1979 supplemental of $1.7 million. Together with management improvements,
these funds will enable the system to respond to a wide variety of
potential mobilization situations.

101

MEETING NATIONAL NEEDS

CREDIT PROGRAMS—NATIONAL DEFENSE
(In millions of dollars)
1978
actual

Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net credit outlays
Guaranteed loans:
New loans
Net credit guaranteed
*$500 thousand or less.

1979
estimate

1980
estimate

1
-11

-11

-10

1
1

*
-12
-12

102

THE BUDGET FOR FISCAL YEAR 1980

INTERNATIONAL AFFAIRS
National Needs Statement
• Promote a stable international environment that will
reduce conflicts, encourage worldwide economic progress,
and bring greater respect for human rights.
• Support the long-term development of poor countries
with particular emphasis on reducing widespread poverty.
• Support the security and economic and political stability
of allies and friendly governments.
• Advance American foreign policy through diplomacy and
improved communication between the United States and
other nations.
• Support our domestic economy by strengthening international economic institutions.
In international affairs most national needs are met by diplomatic and policy initiatives that require only small amounts of budget
authority and outlays. Foreign assistance is the most significant
budgetary item in international affairs.
Special emphasis is given in the budget to provide for:
• increasing U.S. bilateral development aid to meet the basic
human needs of poor people in poor countries;
• fulfilling past pledges to the World Bank and other multilateral development banks whose programs pool the resources of
all donors in addressing economic problems in the poor countries;
• continuing a high level of security assistance to help bring
about peace in the Middle East;
• continuing to phase down grant military assistance;
• meeting the humanitarian needs of a rapidly increasing
number of refugees; and
• significantly increasing Export-Import Bank funds to take advantage of increased trade opportunities.

103

M E E T I N G N A T I O N A L NEEDS
NATIONAL NEED: CONDUCTING INTERNATIONAL RELATIONS
(Functional code 150; inmillions of dollars)
Major Missions and Programs

1978
actual

1979
estimate

1980
estimate

1981
estimate

1982
estimate

BUDGET AUTHORITY
Foreign economic and financial assistance:
Multilateral development assistance:

Multilateral development banks
International organizations
Agency for International Development
Proposed legislation
P L 480 Food aid
Security supporting assistance (AID)
Refugee assistance
Other foreign economic and financial assistance
Offsetting receipts
Subtotal, foreign economic and financial assistance
Military assistance:
Grant military assistance
Foreign military training
Foreign military credit sales

Offsetting receipts and other
Subtotal, military assistance
Total, foreign aid

3,625
277
1,762
25
719
1,995
152

2,619
315
2,054
40
1,069
1,950
154

4,315
346
2,534
60
1,195
1,950
161

346

162
-370

165
-416

166
-458

6,472

7,013

8,348

7,951

10,269

180
30
676
-277

209
34
654
-244

110
33
656
-239

92
33
647
-238

18
33
649
-236

608

653

560

534

464

1,926
240
1,294

2,515
260
1,544

923
2,219
79

806
1,921
164

127
-336

(7,080)

149

(7,666)

(8,909)

(8,485)

(10,734)

Conduct of foreign affairs:

Administration of foreign affairs
International organizations and conferences.
Other
Proposed legislation

748
461
32

825
479
26

807
503
35
7

966
525
35

1,030
548
36

Subtotal, conduct of foreign affairs....

1,241

1,330

1,352

1,526

1,614

Foreign information and exchange activities

451

508

521

555

618

1,198

829
2,200

1,634
1,800

1,675
1,400

-74

2,400
1,832
60
76

-77

1,124

4,216

2,952

3,357

2,998

-100

-97

-78

-74

-75

9,795

13,622

13,655

13,849

15,890

International financial programs:

Export-Import Bank
Military sales trust fund (net)
International monetary programs
International commodity agreements
Other
Subtotal, international financial programs
Deductions for offsetting receipts
Total, budget authority

104

THE BUDGET FOR FISCAL YEAR 1980
NATIONAL NEED: CONDUCTING INTERNATIONAL RELATIONS—Continued
(Functional code 150; in millions of dollars).

Major Missions and Programs
OUTLAYS
Foreign economic and financial assistance:
Multilateral development assistance:
Multilateral development banks
International organizations
International Fund for Agricultural Development
Agency for International Development
Proposed legislation
P i . 480 food aid
Security supporting assistance (AID)
Refugee assistance
Other foreign economic and financial assistance
Offsetting receipts
Subtotal, foreign economic and financial assistance
Military assistance:
Grant military assistance
Foreign military training
Foreign military credit sales
Offsetting receipts and other
Subtotal, military assistance
Total, foreign aid

1978
actual

1979
estimate

1980
estimate

1981
estimate

1982
estimate

858
210

858
251

1,023
272

986
304

988
337

20
1,007

20
1,175

808
1,908
75

1,055
2,061
111

40
1,316
6
993
1,950
173

40
1,484
20
1,069
1,965
153

40
1,742
26
1,195
1,955
159

78
-336

118
-346

119
-370

125
-416

121
-458

4,629

5,303

5,523

5,730

6,105

169
22
570
- 277

243
25
555
- 246

484

577

200
31
525
-240
516

150
30
525
-240
466

130
30
510
-238
432

(5,879)

(6,038)

(6,195)

(6,536)

924
515
33
1
1,474

1,003
542
34
1
1,581
596

(5,113)

Conduct of foreign affairs:
Administration of foreign affairs
International organizations and conferences.
Other
Proposed legislation

716
382
30

717
466
35

Subtotal, conduct of foreign affairs....

1,128

1,218

843
532
33
1
1,410

Foreign information and exchange activities

423

505

529

561

-106
-341

561

1,036

1,099

-194

91
-100
60
-243

-247

-245

-236

-641

-193

314

791

863

-100

- 97

-78

-74

-75

5,922

7,312

8,213

8,947

9,501

International financial programs:
Export-Import Bank
Military sales trust fund (net)
International commodity agreements
Other
Subtotal, international financial programs
Deductions for offsetting receipts
Total, outlays

MEETING NATIONAL NEEDS

105

Foreign economic and financial assistance.—The main missions

of these programs are to provide humanitarian assistance to needy
people abroad, to promote economic development in the third
world, and to support important foreign policy initiatives of the
United States. The budget places greater emphasis on the development mission. The development assistance programs include the
multilateral banks, international organizations, the International
Fund for Agricultural Development, the Agency for International
Development (AID) and P.L. 480 food aid. Budget authority for
development assistance is proposed to grow substantially, from $5.1
billion in 1979 to $6.4 billion in 1980. In contrast, budget authority
for security supporting assistance is proposed to be $2.0 billion in
1980, which is only slightly above 1979 levels for comparable
programs.
Outlays for the development assistance programs for 1980 grow
slowly, by $291 million, largely because $899 million of the budget
authority growth takes the form of borrowing guarantees for the
multilateral development banks.
The budget enables the United States to meet its formal commitments to a number of multilateral international development and
humanitarian institutions. Many of these institutions were initiated with strong U.S. support, and they have provided a means for
other industrialized countries to assume a gradually increasing
share of the costs of foreign aid. If the continued cooperation of
these countries is to be expected, the United States must make
good on its commitments.
The proposed increase in AID bilateral development assistance is
based on the President's equally strong commitment to assist more
directly the neediest peoples of the world. This assistance will be
focused on the poorest developing countries, which are primarily in
Africa and the Asian subcontinent. It will be allocated with particular attention to supporting the development of countries whose
past and likely future performance shows a strong commitment to
self-help.
For the 1981-82 period, further substantial growth is projected
for development aid in furtherance of the administration's strong
commitment to assist developing countries. An increase of $2.0
billion in budget authority is estimated between 1980 and 1982. By
1982, nearly sixty percent of the amount to be requested for the
multilateral development banks will be in the form of borrowing
guarantees (callable capital) rather than actual expenditures.
While budget authority traditionally has been sought to cover the
full amount of these guarantees, which will not result in budget
outlays, other arrangements may be more appropriate under the
proposals being considered for future control of all Federal credit
programs.

106

THE BUDGET FOR FISCAL YEAR 1980

New organizational arrangements have been adopted to improve
the effectiveness of the development assistance programs and additional measures are currently under consideration. A report on the
results will be provided to the Congress no later than February 1,
1979, as required by law. Among other things the administration
plans to recommend steps to enhance the contribution of U.S.
science and technology to economic development in all developing
countries through a Foundation for International Technological
Cooperation.
Multilateral development assistance,—Most of the funds in this
category are provided to the multilateral development banks comprising the World Bank group and the Asian, African, and InterAmerican development banks. Through their ordinary capital operations, which offer credit at market-related interest rates, these
institutions provide the preponderance of official development lending to the more advanced developing countries. These operations
are primarily financed by borrowings on international capital markets backed by member countries' borrowing guarantees. U.S. subscriptions to ordinary capital are mostly in the form of callable
capital, which have never resulted in and are unlikely to require
budgetary outlays. Each of the multilateral development banks
also has concessional lending operations, which provide funds at
low interest rates and with long-term repayment schedules to the
poorest countries.
Increased U.S. contributions to the concessional lending funds of
the Asian and African development banks are proposed for 1980,
reflecting the poverty of the recipient countries and the growing
capacity of these institutions to manage regional lending programs.
Funds are also requested to replenish the ordinary and concessional funds of the Inter-American Development Bank. A decrease
in the concessional contribution to this bank is more than offset by
a larger ordinary capital subscription. This shift in emphasis recognizes the progress of many Latin American countries toward greater economic self-sufficiency and, hence, their diminished need for
concessional aid.
Approximately $1 billion of the $3.6 billion in 1980 budget authority sought for the multilateral banks represents funds that
were pledged for prior years but which have not yet been appropriated. Because the United States benefits from the system of cooperative international economic relations that the banks promote, it is
particularly important that this country bear its fair share of the
funding responsibility by making good on these past pledges. Outlays for multinational development banks are estimated to rise
from $0.9 billion in 1979 to $1.0 billion in 1980.

MEETING NATIONAL NEEDS

107

The United States makes voluntary contributions to 17 international organizations and programs that effectively carry out important multilateral developmental, humanitarian, and scientific activities. The largest request, $140 million in budget authority for
1980, is for the United Nations development program, the primary
multilateral source of technical assistance for developing countries.
Also included in the 1980 request are sizeable contributions to the
United Nations Children's Fund, the United Nations Relief and
Works Agency for Palestine Refugees, the Organization for American States, and the International Atomic Energy Agency, as well
as contributions to several small development-oriented programs.
Budget authority for the voluntary contributions to these international organizations and programs is proposed to increase through
1982 as part of the administration's policy to increase development
assistance.
AID programs.—These programs are designed principally to help
alleviate critical problems of hunger and malnutrition, population
pressure, disease, and ignorance. They assist developing countries
to meet the basic needs of their poor through programs that promote economic growth and equity. They also reflect the administration's human rights policies.
The administration has taken a number of steps to assure that
the AID program more directly benefits, the neediest people in the
poorest countries and is better coordinated with other assistance
programs. In view of these improvements and AID's efforts to
strengthen program management, the President is recommending
a sizable long-term increase in the program. Budget authority for
AID development assistance programs is proposed to rise from $1.5
billion in 1979 to $1.8 billion in 1980 and to $2.5 billion by 1982.
Outlays are estimated to rise from $1.2 billion in 1979 to $1.3
billion in 1980 and to $1.7 billion by 1982.
Public Law 480 food aid.—Food aid serves a wide range of policy
objectives. It supports U.S. diplomatic objectives, particularly in
the Middle East, promotes economic development, develops agricultural export markets, and constitutes the major U.S. program for
humanitarian relief. The food aid program will continue to emphasize humanitarian concerns, but will place greater emphasis on
encouraging recipient countries to pursue effective economic development policies, particularly under the new food-for-development
program. The 1980 estimate of $1 billion in outlays would permit
shipments of approximately 6.7 million tons of food at projected
prices, approximately equal to the 1979 tonnage. This is about twothirds of the annual worldwide food aid target set by the United
Nations for all donors.

108

THE BUDGET FOR FISCAL YEAR 1980

Security supporting assistance.—This program is managed by
AID under State Department guidance. It provides both balance of
payments support and development project financing to selected
countries of particular importance to the foreign policy of the
United States. Most of the funds will be provided to Middle Eastern countries in support of United States efforts to promote a peace
settlement in the region. Budget authority of $2.0 billion is proposed for 1980, slightly more than the total $1.9 billion appropriated in 1979. Outlays are estimated to drop to $2.0 billion in 1980
from $2.1 billion in 1979.
Refugee assistance.—War, national liberation movements, internal strife, and human rights violations have resulted in sharply
increased demands for refugee assistance for the care, maintenance, and resettlement of Indochinese, African, and Eastern European refugees. This administration has been responsive to the
needs of these refugees and to international appeals to ameliorate
refugee problems by providing assistance through the United Nations, other international organizations, and private voluntary
American organizations. Supplemental 1979 appropriations and increased 1980 appropriations are requested to aid the United Nations in providing care and maintenance for sharply increased
numbers of Indochinese refugees in Southeast Asia and the transportation and placement of the additional refugees recently authorized for entry into the United States by the Attorney General. The
funds will also be used to provide for the increasing flow of refugees from Eastern Europe to this country. The need for additional
funds may have to be considered if the exodus from Indochina and
Eastern Europe continues.
Other foreign economic and financial assistance.—The Peace
Corps, part of ACTION, will continue its programs of developmental assistance in low-income countries with increased focus on basic
human needs and training. In order to meet its goal of improving
international understanding, the Peace Corps will expand its information exchange activities and increase its work with host country
development programs and international voluntary organizations.
The 1980 volunteer level for Peace Corps (about 6,000 volunteer
years in some 65 countries) is approximately the same as in 1979.
Military assistance.—These programs are administered by the
Defense Department under State Department guidance. They provide defense materiel and services to allies and other friendly
governments for their internal security and self-defense, and support participation in regional or collective security arrangements.
This assistance is provided in the form of military assistance

MEETING NATIONAL NEEDS

109

grants, foreign military sales credits, and grants for military training.
Emphasis in military assistance is shifting from grants to foreign
military sales credits as the improving economic situation of some
recipient countries enables them to assume a greater share of the
cost of their defense. It is planned that after 1981 grant military
assistance will be provided only in exceptional circumstances. The
proposed budget authority of $110 million in 1980 for grant military assistance is $99 million less than in 1979, and includes funds
for only 4 countries. No grant military assistance country programs
are currently planned beyond 1981, but the delivery costs of prioryear programs and necessary administrative costs will continue to
be funded under this program.
The proposed budget authority for foreign military credit sales in
1980 is $656 million, $2 million more than in 1979. This amount of
budget authority provides a worldwide program of loans and loan
guarantees totaling $2.1 billion. Of this amount, $500 million is for
direct credits. The remainder of the loans are made by the Federal
Financing Bank and guaranteed by the Department of Defense.
Since the Federal Financing Bank's transactions are excluded from
the budget (see Part 6 of the Budget), only the 10% reserve on the
guarantees is included as budget authority, and no outlays are
estimated.
Budget authority of $32.9 million is requested for international
military education and training in 1980. The budget authority requested includes funds for resuming grant training for Greece and
Turkey.
Conduct of foreign affairs.—With the increasing interrelationship of American domestic and international interests, the activities of many Federal agencies affect United States relations with
foreign governments and international organizations. Nevertheless,
the administration of the foreign affairs of the United States is
primarily conducted, coordinated, and overseen by the Department
of State and American embassies, missions, and consulates abroad.
The President, the Congress, and other policymakers rely on the
State Department's reporting and analysis of important international developments affecting American interests. The Department
also regularly informs the American public about those developments and the administration's views about them. The travel of
Americans abroad is aided through passport and consular services,
and over 5 million visas are now issued annually to foreign nationals to facilitate their visiting or emigrating to the United States.
The Department also provides many administrative services for
other agencies operating abroad. These functions will be carried on

280-000

O—79—8

110

THE BUDGET FOR FISCAL YEAR 1980

by the Department in 1979 and 1980 with slightly fewer employees
than in 1978.
In addition to the voluntary contributions to international organizations discussed under multilateral assistance above, the United
States, as a member government, also makes annual contributions
to the United Nations and 44 other international organizations. As
a member of these multilateral bodies, the United States participates in helping to solve many critical international peacekeeping,
economic, social, and political problems. The United States' share
of the budgets of these organizations, including United Nations
peacekeeping activities, is estimated to require $482 million of
budget authority for 1980, $503 million for 1981, and $525 million
for 1982. For most organizations, the United States proposes to
support only those budget increases needed to maintain the prior
year's level of operations during the 1981-82 period. In the case of
a very few organizations, a 2% increase in real program growth
will be supported. The United States will continue to encourage all
international organizations to meet new and expanded needs from
reductions in low-priority or obsolete activities.
A 1979 supplemental appropriation of $58 million is required to
meet our legally-binding assessments to several international organizations. Of that amount, $27 million is required, because the
Congress prohibited the United States from making assessed contributions to the United Nations or its specialized agencies for technical assistance activities in 1979. This prohibition seriously impairs
the ability of the United States to meet its legal obligations. Therefore, the administration is proposing to lift the prohibition so that
we can continue participating effectively in those organizations.
Although no request is now made for the United States' share of
the proposed United Nations activities aiding the transition of
Namibia to independence, the administration strongly supports the
United Nations' plan for Namibia and will make a request for
funds when as the requirements are known.
The Arms Control and Disarmament Agency continues to play a
central role in arms control negotiations and research. Major elements of the Agency's program include strategic arms limitations,
nuclear nonproliferation, arms trade restrictions and defense analysis. Outlays are estimated to be $17 million for 1980.
Foreign information and exchange activities.—The newly established International Communication Agency (ICA), through its staff
in 126 countries, has a central role in improving international
communication and understanding. It promotes visits of Americans
abroad and foreign nationals to the United States to help both
understand each other's attitudes, aspirations, and opinions. Longterm institutional relationships are encouraged. Such exchanges

MEETING NATIONAL NEEDS

111

can significantly influence long-term United States relations with
foreign nations. In addition the Agency's Voice of America radio
programs, its other media and field staff report world events and
explain United States policies. The Agency also provides the President and other foreign policy officials with assessments of foreign
public opinion and its probable reaction to proposed United States
policies. Except for moderate increases for exchanges, ICA activities are proposed to continue at the current levels through 1982.
An estimated $5 million in budget authority is proposed to initiate
the Humphrey scholarships, named for the late Vice President, to
bring young public servants from developing countries to the
United States for a year of advanced training in their profession.
The scholarships are intended to lead to long-term professional
exchanges between American and foreign individuals and institutions.
The Board for International Broadcasting makes grants to Radio
Free Europe/Radio Liberty, which broadcasts in 22 languages to
Eastern Europe and the Soviet Union. Amounts proposed in the
budget will permit operations throughout the 1979-82 period at
approximately the current annual level.
International financial programs.—The mission of our international financial programs is to advance U.S. interests by improving
the functioning of the international financial system. Since World
War II, the international financial system has been strengthened
by closer cooperation among governments. Nonetheless, problems
and gaps remain that require Government action to facilitate U.S.
commercial exports and military sales. In addition, there is a continuing need to expand the resources of the International Monetary Fund (IMF) to enable it to assist member countries with
balance of payments problems. During 1978, the members of the
IMF agreed on a 50% increase in IMF quotas. Legislation to authorize U.S. participation in the quota increase will be proposed
during calendar year 1979.
Export-Import Bank.—The Export-Import Bank provides direct
loans, refinancing of export credits, loan guarantees and insurance
in order to facilitate the export of U.S. goods and services. These
programs support exports by:
• assuming commercial and political risks that exporters or
private financial institutions are unwilling or unable to undertake;
• overcoming limitations in private sector U.S. export financing;
• assisting U.S. exporters to meet foreign officially supported
export credit competition; and

112

THE BUDGET FOR FISCAL YEAR 1980

• providing guidance in export financing.
By concentrating on areas where private financing is not available and by meeting foreign competition on a case by case basis, the
Bank helps improve the functioning of the international economic
system and the efficient development of resources both at home
and abroad. The Export-Import Bank's programs are generally intended to supplement private credit markets. Terms and conditions
on use of its facilities are set at rates more favorable than those
available in the private sector in order to counteract the special
terms foreign governments provide to support their exporters.
EXPORT-IMPORT BANK AUTHORIZATIONS
(In millions of dollars)
1977
actual

1978
actual

1979
estimate

1980
estimate

1981
estimate

1982
estimate

Direct loan commitments
Discount loan commitments
Guarantees and insurance commitments

747
473

2,927
497

3,750
500

4,188
520

4,400
550

4,750
600

4,379

3,952

5,830

6,815

7,500

8,250

Total commitments
Net Outlays

5,600
340

7,376
-106

10,080
91

11,523
561

12,450
1,036

13,600
1,099

In line with the President's recently announced policy to encourage exports, the Export-Import Bank's direct loans are estimated to
increase significantly—from $0.7 billion in 1977 and $2.9 billion in
1978 to $3.8 billion in 1979 and $4.2 billion in 1980. This increase
will promote U.S. exports and further strengthen the U.S. economy. In addition, the Bank's guarantee and insurance programs are
estimated to increase by 10-20% annually consistent with the
rapid growth in U.S. trade.
Foreign military sales trust fund.—U.S. law requires that certain
types of sales of military equipment and services may be undertaken only by the Federal Government. The foreign military sales
trust fund is the vehicle through which such sales of U.S. military
equipment and services to foreign governments are made. Orders
placed by foreign governments through the trust fund can be combined with orders by U.S. military departments, thereby lowering
the costs for both the United States and foreign governments
through larger volume procurement and shared research and de-

MEETING NATIONAL NEEDS

113

velopment expenses. Net budget authority for the fund is estimated
to decrease from $2.4 billion in 1979 to $2.2 billion in 1980. In 1979,
receipts are estimated to exceed gross outlays, resulting in net
outlays of —$0.1 billion. Receipts and gross outlays are expected to
be in balance in 1980.
Tax expenditures,—A tax expenditure results from the deferral
of tax on one-half of the profits derived from domestic international sales corporation (DISC) sales. In 1980 it is estimated to be $1.3
billion.
Recently enacted changes in the rules for taxing income earned
by U.S. citizens abroad affect tax expenditures. Beginning in 1980,
Americans living and working abroad may deduct living expenses
in excess of the cost of living in the U.S., with an extra $5,000
deductions available for hardship areas. Excess living expense exclusions include deductions for some of the costs for foreign schools
below the college level for dependents, home leave for the taxpayer, spouse and dependents, and liberalized moving expenses. Tax
expenditures for these benefits are estimated to be $555 million in
1980.
International affairs-related programs.—A number of Federal
programs are related to international affairs, although their primary purpose is to meet other national needs and serve other major
missions. Almost every department of the U.S. Government has a
bureau or office that focuses on international affairs. One of the
most important programs that is related to international affairs is
the Commodity Credit Corporation (CCC), which provides credit at
favorable interest rates for periods usually up to 3 years and intermediate credit for 3 to 10 years for agricultural exports. Other
major programs not classified as international, but which have
international aspects, are the National Security Council, the Office
of the Special Trade Representative, the Foreign Agricultural Service of the Department of Agriculture, and the international research programs in the National Institutes of Health.

114

THE BUDGET FOR FISCAL YEAR 1980
CREDIT PROGRAMS—INTERNATIONAL AFFAIRS
(In millions of dollars)
Program

Security assistance:
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net credit outlays
Guaranteed loans:
New loans
Net credit guaranteed
Economic development credit:
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net credit outlays
Guaranteed loans:
New loans
Net credit guaranteed
Public Law 480 Food aid:
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net credit outlays
Export-Import Bank:
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net credit outlays
Guaranteed loans:
New loans
Net credit guaranteed
Other international assistance:
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net credit outlays
1

Includes sale of loan assets.

1978
actual

1980
estimate

1979
estimate

1,624
-687

1,480
-713

937

766

706

1,678
1,359

1,550
970

1,625
925

269
-259

10
101
62

689
-149

248

1,404
-698

267

-274

-300

-27

-34

141
103

723
-145

219
179

632
-160

540

578

472

1,260
-1,249

1,578
-1,338

2,199
-1,468

240

731

4,213
-334

4,845
-89

5,572
54

1
-121

1
-133

1
-136

-120

-132

-135

MEETING NATIONAL NEEDS

115

GENERAL SCIENCE, SPACE AND TECHNOLOGY
National Needs Statement:
• Expand scientific knowledge through support of basic
research in all fields of science.
• Develop a greater understanding of the Earth, the solar
system, and the universe through space exploration.
• Develop and demonstrate practical, economic, and productive applications of space technology.
Even in a period of constrained budget growth, the government
must sustain support of science as a long-term investment in the
Nation's future. Over time, this investment will improve our understanding of the fundamental problems that American society faces
and offer potential solutions to many of these problems.
Through programs of the National Science Foundation and the
Department of Energy, further efforts will be made in 1980 to
spend research dollars in ways that will help mankind survive and
prosper in an increasingly fragile and resource-limited world.
Proposed funding for the space program is carefully targeted
both to maximize the return on investments already made and to
concentrate on those areas of research where maximum scientific
and technical returns can be realized. With manned-orbital flights
of the space shuttle beginning in fiscal year 1980, space program
spending can achieve new and broader benefits from the Nation's
20 years of space research, development, and exploration.
In 1980, proposed outlays for this function total $5.5 billion, an
increase of $231 million over 1979.
Proposed outlays for the National Science Foundation (NSF), the
science programs of the Department of Energy (DOE), and the
space science, applications, and technology programs of the National Aeronautics and Space Administration (NASA) will increase by
approximately 10% between 1979 and 1980. Proposed 1980 outlays
for other NASA space programs are being held to approximately
the same level as in 1979.
Special emphasis is given in this budget to:
• increased funding for basic research as part of a Governmentwide effort to maintain a high level of Federal support for
such research;
• further development and production of the space shuttle for
operations from both east and west coasts;
• continued development of spacecraft, such as those that
will study the polar regions of the Sun and the surface and
atmosphere of Jupiter;

116

THE BUDGET FOR FISCAL YEAR 1980

• initiation of an interagency research program to determine
the value of satellite data in estimating worldwide agricultural production; and
• continued development of an advanced Earth resources satellite, Landsat-D, to enhance the use of and assess further the
value of data obtained from such satellites.
The missions and programs that meet the national needs in
general science represent only a part of the Federal Government's
funding for basic research. Most Federal funding for such research
is included in other functional categories of the budget in such
areas as national defense, energy, health, agriculture, and environment, where it assists in meeting national needs over the long
term, as well as adding to basic scientific knowledge. The table in
this section summarizes total Federal obligations for basic research. More detailed information is provided in Special Analysis
L, "Research and Development," in the Special Analyses volume of
the budget.
Similarly, the NASA space programs included in this functional
category constitute only part of the Government's funding for
space programs. In 1980, outlays for all space programs are estimated to be $7.9 billion, 12% above the 1979 level. Space programs
that address specific national needs in areas such as defense and
natural resources and environment are included in the discussions
of those functions elsewhere in Part 5.
SCIENCE

General science and basic research.—The key programs under
this function that directly support the mission of general science
and basic research are those of the National Science Foundation
and the Department of Energy. This year, the budgets of these
agencies were reviewed concurrently to help minimize potential
duplication and make more effective use of each agency's resources. Outlays for this mission are estimated to total $1.4 billion
in 1980, an increase of $103 million, or 8% over 1979.
The administration has expressed continuing support for an increased basic research effort through these programs and through
the scientific programs included in other budget functions. Total
obligations for the conduct of basic research across all Federal
programs, including basic research funded in other functional categories, are nearly $4.6 billion in 1980. This is an increase of $379
million, 9% over the 1979 level.

MEETING NATIONAL NEEDS

117

NATIONAL NEED: INCREASING BASIC SCIENTIFIC KNOWLEDGE AND USE OF SPACE
(In millions of dollars)

Major missions and programs
BUDGET AUTHORITY
General science and basic research:
National Science Foundation programs
Department of Energy general science programs
Smithsonian scientific information exchange
activities 1
Subtotal, general science and basic
research
Space research and technology:
Space flight
Space science, applications, and technology
Supporting space activities
Subtotal, space research and technology
Deductions for offsetting receipts
Total, budget authority
OUTLAYS
General science and basic research:
National Science Foundation programs
Department of Energy general science programs
Smithsonian scientific information exchange
activities 1
Subtotal, general science and basic
research
Space research and technology:
Space flight
Space science, applications, and technology
Supporting space activities
Subtotal, space research and technology
Deductions for offsetting receipts
Total, outlays

1978
actual

1979
estimate

1980
estimate

1981
estimate

1982
estimate

868

917

1,011

1,007

405

430

474

470

1,275

1,349

1,485

1,477

2,192

2,424

2,332

2,110

1,825

1,065
369

1,227
384

1,404
435

1,467
515

1,490
498

3,626

4,035

4,168

4,092

3,813

- 4

- 2

-2

4,897

5,381

5,651

5,566

5,287

803

880

950

947

355

419

453

463

458

1,160

1,300

1,403

1,409

1,405

2,260

2,371

2,339

2,125

1,868

972
354

1,170
387

1,310
407

1,448
495

1,517
518

3,586

3,928

4,056

4,068

3,903

-4

- 2

4,742

5,226

5,457

5,475

5,305

*500 thousand or less.
'Science information services previously classified in this function will be transferred to function 370, commerce and housing credit, to improve the
coordination and management of those services.

The fundamental knowledge obtained through basic research improves man's understanding of natural laws and phenomena, of the
environment on earth and in space, and of living things. The
special role of universities and colleges in the conduct of basic
research ensures a flow of trained scientists and engineers for the

118

THE BUDGET FOR FISCAL YEAR 1980

future. The results of basic research provide the foundation for
applied research directed toward practical applications. Thus, basic
knowledge is essential for the understanding and long-term solution of problems in many areas of national concern, such as economic growth, health, agriculture, energy, environment, and national defense.
The Federal Government supports about two-thirds of the Nation's basic research. The private sector tends to underinvest in
such research because of its long-term nature and the difficulty in
predicting who will obtain the benefits from such research. Growth
in Federal support, as provided in the 1980 budget, therefore meets
an essential national need. The administration believes, however,
that private investment in basic research is critical to the overall
national effort and that industry also should seek to maintain a
high level of investment.
Federal Obligations (or Basic Research

4.6

4—

—4
3.6
^

Depmtment of
Energy

National Aeronautics
- < and Space
Administration

Actual

EiHmate

National Scienc«

NaHonaf Institotes

- i

mo
Eifimate

National Science Foundation programs.—The primary mission of
the National Science Foundation (NSF) is the support of basic
research. The budget proposes an increase in outlays for the NSF
from $880 million in 1979 to $950 million in 1980. Proposed budget
authority would increase from $917 million in 1979 to $1,011 million
in 1980, or about 10%.

MEETING NATIONAL NEEDS

119

The basic research financed by NSF assists in balancing Federal
support across all scientific disciplines in three broad areas of
responsibility:
• to increase knowlege and understanding of natural laws and
phenomena and to improve understanding of engineering
principles;
• to increase knowledge of the natural environment of earth
and in space; and
• to increase knowledge of life—from the fundamental molecules of living organisms to complex human and social interactions.
The Foundation also funds programs in applied research in selected areas of national need and in science education at all levels
of learning.
In 1980 the NSF plans to emphasize basic studies related to
long-term national problems, such as research on ecosystems and
on fundamental atmospheric phenomena related to weather and
climate. A significant new initiative in submicron science and engineering is proposed. This field of science, which addresses itself to
the study of structures as small as the distance between atoms, is
of considerable potential value to American industry in fields such
as electronics. The program of basic and applied research on earthquakes is proposed to be continued at approximately the same level
as in 1979. Both the submicron program and the earthquake program of the Foundation are part of multi-agency efforts to
strengthen these areas of science and engineering.
Department of Energy general science programs,—An increase in

outlays from $419 million in 1979 to $453 million is estimated in
1980 for research funded by the Department of Energy (DOE) in
high energy physics, nuclear physics, and the biomedical and life
sciences.
The high energy physics program supports studies of the fundamental properties and structure of energy and matter to obtain
knowledge about the underlying forces of nature. High energy
physics research depends primarily upon large accelerator facilities. In 1980 the electron-positron colliding beam storage ring
(PEP), currently under construction at the Stanford Linear Accelerator Center, is scheduled to become operational. This facility will
be used to study a very broad range of fundamental questions in
particle physics. In addition, construction of the intersecting storage accelerator project (ISABELLE), initiated in 1978, will continue
toward projected operation in 1986. This will be the highest energy
colliding beam accelerator in the world and will make possible new
experiments to investigate recent theories dealing with fundamental forces.

120

THE BUDGET FOR FISCAL YEAR 1980

The nuclear physics program of the Department of Energy is
concerned with supporting experimental and theoretical studies of
the properties and dynamics of atomic nuclei and the characterization of the forces that govern their interaction. These investigations are also largely carried out in national accelerator facilities.
In 1980 DOE plans to equip and begin operation of two new experimental areas—one at the Holifield Heavy Ion Research Facility
and one at the Bates Linear Accelerator. The budget provides
funds to initiate three new construction projects in 1980—at Bates,
at the Clinton P. Anderson Meson Physics Facility, and at the
Michigan State University Heavy Ion Accelerator. These projects
are the three highest priority construction projects for nuclear
physics as determined by a joint DOE/NSF Nuclear Science Advisory Committee, and together they have the potential to advance
dramatically the frontiers of research in nuclear physics.
The life sciences and biomedical research program seeks better
understanding of how physical and chemical agents interact with
life processes in ecological systems and in human and animal populations. The 1980 budget request increases funding for efforts to
develop radio-isotope techniques for use in medical diagnosis and
medical research. Support for this research has lagged behind the
Nation's needs in recent years.
Tax expenditures.—In addition to direct Federal funding of basic
research, the tax code encourages private sector research and development, including basic research, by allowing expenditures for
such purposes to be deducted as a current expense. The resulting
tax expenditures are estimated at $1.8 billion in 1980.
Related programs.—As noted above, most of the Federal Government's basic research funds are allocated to other budget functions
since they support other specific national needs or missions. The
following table shows total Federal obligations by agency for the
conduct of basic research. It excludes funds for major facilities,
such as those discussed above under Department of Energy general
science programs.
SPACE RESEARCH AND TECHNOLOGY

As the space shuttle becomes operational in 1981, it will extend
the work environment to space and reduce the cost of manned
operations in space. In preparing for this new era* the administration has developed a policy to meet national needs over the next
decade. The objectives are to obtain social and economic benefits
from the Nation's 20 year investment in space research and development and to exploit new opportunities in an evolutionary
manner. The budget reflects a commitment to a balanced space

121

MEETING NATIONAL NEEDS

program with emphasis on both space science and exploration and
the practical application of space technology. The budget request
maintains the current schedule in the space shuttle development
program, provides for expeditious transition to an operational shuttle transportation system, continues exploration of space, and recommends new initiatives in space applications.
FEDERAL OBLIGATIONS FOR THE CONDUCT OF BASIC RESEARCH
(In millions of dollars)
Functional Code and Agency

Basic Research

—

1979
estimate

1978
actual
Programs in general science, space, and technology function:
250 National Science Foundation
250 Energy

250 National Aeronautics and Space Administration
Subtotal
Programs in other functions:
550 Health, Education and Welfare
270 Energy
050 Defense

350
300
500
370
300
999

Agriculture
Interior .
Smithsonian
Commerce
Environmental Protection Administration
Other agencies

1980
estimate

678

741

828

257

293

320

478

530

630

1,413

1,564

1,778

1,269
157
311
228
156
35
28
5
32

1,561
176
373
252
176
37
32
8
29

1,581
231
436
268
174
39
33
17
31

Subtotal

2,221

2,646

2,811

Total

3,635

4,210

4,589

Space flight—Programs in space flight are carried out to enhance the Nation's capability to operate in space and to provide
space transportation services to Government, commercial, and foreign users. Outlays for these programs are estimated to be $2.3
billion in 1980, compared to $2.4 billion in 1979.
In 1980, outlays of $1.6 billion are recommended for continued
development and production of the space shuttle system with an
expected decrease to $0.7 billion in 1982. The space shuttle will
increase the flexibility and productivity of manned space missions
by making possible the retrieval of payloads from orbit for reuse;
the servicing and repair of satellites in space; and the operation of
space laboratories, such as the European-built Spacelab, for scientific and practical purposes. When fully operational, the shuttle
will replace virtually all expendable launch vehicles currently used
by the Department of Defense and by NASA. Four shuttle orbiters
will meet expected civilian and military needs through the 1980's.

122

THE BUDGET FOR FISCAL YEAR 1980

The space shuttle's first orbital test flight is scheduled for 1979,
with regular operations scheduled to begin in 1981 at Kennedy
Space Flight Center, Florida and in 1983 at Vandenberg Air Force
Base, California.
Space science, applications, and technology.—The Federal Gov-

ernment supports fundamental studies and exploration of the solar
system and the universe and demonstrations of practical applications of space-based systems. It also supports development of space
technology to reduce the cost of operations in space and to develop
new applications. Consistent with the administration's space policy
to emphasize space science and applications, total outlays for such
programs are expected to increase from $1.2 billion in 1979 to $1.3
billion in 1980, an increase of 12%.
Observations from space permit unique studies of the Earth's
space environment, the Sun, the planets, and stars — studies that
are not possible from ground-based observatories because of the
obscuring effects of the atmosphere. The budget request recommends outlays of $672 million for space science and exploration, a
15% increase over 1979. In 1982, outlays are expected to be $778
million, 33% above 1979 expenditures.
The recommended budget for this activity provides for continued
development of several science projects that have already been
approved. The solar polar mission to orbit the Sun will, for the first
time, study solar activity and radiation near the Sun's polar regions. This will contribute to our basic understanding of the Sun's
effect on the Earth's atmosphere and climate. This cooperative
effort with the European Space Agency is an important aspect of
the administration's space policy, which seeks international participation in space science. The two satellites required for this mission
are scheduled to be launched by the shuttle in 1983.
The budget also provides for continued development of a space
telescope. This instrument will allow scientists to observe galaxies
and other sources of radiation that are at far greater distances
from the Earth than can be observed from ground-based observatories. The telescope is planned for launch by the space shuttle in
1983. Work will also continue on the Jupiter orbiter and probe
mission, the next step in the systematic exploration of the planets.
Other projects, such as operation of the Voyager spacecraft that will
photograph the rings and surface of Saturn in 1980 and 1981, will be
continued.
The 1980 budget also emphasizes the development and demonstration of practical application of space technology. To conduct
these activities, the administration proposes outlays of $420 million, a 13% increase over 1979. By 1982, outlays are expected to be
$505 million, 36% above 1979 expenditures.

MEETING NATIONAL NEEDS

123

To investigate further the value of satellite data for monitoring
agricultural crop conditions, the 1980 budget requests funding for
the Departments of Agriculture and Commerce and the National
Aeronautics and Space Administration to initiate a research program in worldwide agricultural production forecasting. The program also includes funds to investigate the use of satellite remote
sensing data for providing early quantitative estimates of the effect
of natural disasters on crop conditions. In support of these and
other remote sensing activities, the budget recommends continued
development of the Landsat-D satellite, the fourth in a series of
experimental Earth resources satellites, scheduled for launch in
1981.
The budget provides for work on long-term, advanced space communications technology, which will assist in maintaining the Nation's leadership in satellite communications.
The budget also reflects the administration's decision to assure
the continuity of civil Earth resources remote sensing data through
the 1980's. To obtain the maximum value from our current remote
sensing capabilities, studies will be conducted to determine the
most effective and economic means for providing such earth resources data. As part of the administration's overall effort to seek
improved coordination of national space programs, studies for
better integration of current civil and defense uses of these capabilities also will be conducted.
Supporting space activities.—In 1980, outlays of $407 million are
recommended to provide tracking and data relay support to the
entire NASA flight program, including automated and manned
spacecraft missions, sounding rockets, and aerodynamic test flights.
CREDIT PROGRAMS—GENERAL SCIENCE, SPACE AND TECHNOLOGY
(In millions of dollars)
Program
Satellite leases:
Guaranteed loans:
New loans
Net credit guaranteed
*$500 thousand or less.

1978
actual

1979
estimate

180
180

1980
estimate

183
183

136
136

124

THE BUDGET FOR FISCAL YEAR 1980

ENERGY
National Needs Statement9
• Reduce dependence on foreign oil in the near term and
minimize the potential effects of supply disruptions.
• Prepare the U.S. economy to withstand the effects of
higher energy prices resulting from continuing growth in
demand coupled with the declining availability of world
oil supplies.
• Develop renewable and essentially inexhaustible sources
of energy for sustained economic growth through the
next century.
• Develop advanced nuclear power systems that will limit
the potential for international proliferation of nuclear
weapons.
• Protect the environment while achieving the Nation's
energy goals.
For many years, low prices and abundant supplies of oil and
natural gas disguised the true dependence of the Nation's economy
on finite energy resources. In 1973, however, sudden shortages and
consequent rapid price increases ushered the United States into a new
energy era. The days of cheap and abundant energy are over, and
energy will become even more costly in the future. The Federal
Government's principal responsibility is to ensure that the Nation's
transition to the new energy era is as smooth as possible. The
measures supported in the budget are intended to provide for such
a transition. These include:
• the development of a strategic petroleum reserve and an overall energy emergency preparedness strategy;
• the setting of energy prices at levels that encourage domestic
energy production and energy efficiency, without unnecessary
inflationary impacts;
• programs and policies that encourage the production and use
of domestic fossil fuel resources in a manner consistent with
the protection of the Nation's environment;
• development of more efficient and more proliferation-resistant
nuclear energy technologies, through continued research on
advanced nuclear systems, together with the development of
safe and effective methods for the disposal of nuclear wastes;
and
• the rapid development of effective and competitive renewable
energy technologies.

MEETING NATIONAL NEEDS

125

In a year of limited budget resources, difficult judgments on the
allocation of resources must be made even in a high-priority area
such as energy. The most important such judgment made is to
concentrate Government investment in technologies that may help
sustain the development of the Nation through the next century.
For the near term, realistic energy prices and private sector investments should bring into the marketplace new, more efficient technologies.
This allocation of resources is reflected in the growth of the solar
energy budget relative to other energy supply areas, and further by
the emphasis placed on long-term research and development of
solar energy. Growth in other areas of the energy budget has been
limited, and a number of existing or planned technical projects
have not been funded in the 1980 budget.
Energy supply.—The programs that support the energy supply
mission are directed at (1) using domestic energy resources more
efficiently and effectively; (2) providing individuals and businesses
with incentives to convert to alternate sources of energy; and (3)
mitigating any harmful environmental effects of both present and
future energy technologies. In addition, this mission includes the
Federal Government's direct energy production responsibilities:
producing enriched uranium for nuclear power plants, producing
oil from the naval petroleum reserves, distributing electricity
through 5 power marketing administrations, and generating and
transmitting power through the facilities of the Tennessee Valley
Authority.
Budget authority of $18.0 billion is proposed for energy supply in
1980. Excluding $15 billion in anticipated new borrowing authority
for the Tennessee Valley Authority power program, this is about
the same as the 1979 level of $3.0 billion. Net outlays for energy
supply are estimated to be $4.4 billion in 1980, compared with $4.9
billion in 1979 and $4.0 billion in 1978. Total new tax incentives for
energy supply provided by the National Energy Act (NEA), including
new tax expenditures and excise tax changes, are estimated at $318
million in 1980. Total tax expenditures for energy supply, including
existing provisions of law, such as the percentage depletion allowance and expensing of exploration and development costs, as well as
the new provisions of the NEA, are estimated to be $3.4 billion in
1980.

280-000

O—79—9

126

THE BUDGET FOR FISCAL YEAR 1980

NATIONAL NEED: ENERGY
(Functional code 270; in millions of dollars)
Major Missions and Programs

BUDGET AUTHORITY
Energy supply: *
Research, and energy technology development:
Solar2
Other renewable resources
Fossil
Nuclear fission
Proposed legislation
Environment (EPA)
Other technology
Uranium enrichment (net)
Petroleum reserves
Petroleum reserve receipts
Power marketing
Proposed-legislation
Other offsetting receipts
Subtotal

1979
estimate

1978
actual

1980
estimate

1981
estimate

410
456
764
1,077

522
538
723
1,110

589
518
772
937
300
102
698

130
599
528
361
-501
152
-250

112
393
47
351
73
-686 -862
173
190
15,000
-273 -319

3,725

3,010

17,999

450
507
963
981

405
422
925
965

102
636
315
91
-910
191

102
639
549
99
-953
139

-319
3,007

-319

228
608
1,673

Energy conservation:
Technology development
Conservation grants

158
369

227
432

247
308

Subtotal

527

659

555

224
608
832

297

Emergency energy preparedness
Energy information, policy, and regulation:
Energy Information Administration
Regulation:
Federal Energy Regulatory Commission...
Economic Regulatory Administration
Nuclear Regulatory Commission
Administrative expenses (Department of
Energy)
Subtotal
Deductions for offsetting receipts
Total, budget authority

3,175

3,007

1982
estimate

2,974

836

42
92
290

64
133
327

74
160
373

67
111
377

64
64
383

367
842

377
980

455
1,099

439
1,039

-25

-96

308
1,003
-84

-96

8,242

7,560

19,482

5,138

6,426

Research and energy technology development.—Energy R. & D.
can provide new technology options for the Nation that will permit
the greater use of domestic energy resources in a safe and environmentally acceptable manner. The appropriate Federal role is to
concentrate on technologies with high levels of technical risk and
long development times that nevertheless have high energy production or energy savings potential. Federal support should complement but not displace sector research and development

M E E T I N G N A T I O N A L NEEDS

127

NATIONAL NEED: ENERGY—Continued
(Functional code 270; in millions of dollars)
Major Missions and Programs

OUTLAYS
Energy supply:*
Research, and energy technology development:
Solar2
Other renewable resources
Fossil
Nuclear fission
Proposed legislation
Environment (EPA)
Other technology
Uranium enrichment
Petroleum reserves
Petroleum reserve receipts
Power marketing
Other offsetting receipts
Subtotal

1978
actual

1979
estimate

313
230
649
808

480
497
812
1,095

118
300
270
558
-501
1,474
-250
3,970

1980
estimate

1981
estimate

127
376
121
410
-686
1,937
-273

597
513
777
970
-100
131
599
16
319
-862
1,730
-319

519
560
903
956
-50
112
625
268
93
-910
1,621
-319

4,896

4,371

4,376

1982
estimate

418
456
969
1,000
-50
102
632
254
86
-953
1,211
-319
3,805

Energy conservation:
Technology development
Conservation grants

125
96

204
286

232
427

237
568

233
615

Subtotal

221

490

660

805

848

897

2,367

1,961

1,619 1,218

38
79
271

59
110
305

70
156
345

68
127
349

64
73
355

371

427
974

308

463

448

969

1,101

1,028

798
-25

-96

-84

-96

5,861

8,630

7,878

7,805

6,803

355
62

Does not include National Energy Act supply and conservation tax credits.
Only a portion of total Federal solar expenditures. See the Federal solar crosscut table in the narrative.

investment. With additional incentives for private investment in R.
& D. provided by rising prices and greater consumer demand for
new products resulting from the National Energy Act, the private

128

THE BUDGET FOR FISCAL YEAR 1980

sector can be expected to finance R. & D. where technical risks are
relatively low and development times relatively short.
Solar is the one area of energy technology for which a large
overall increase is proposed in 1980. This increase reflects the
administration's belief that solar energy can, in time, make a
significant contribution as a clean and renewable source of energy.
Proposed outlays for solar energy R. & D. governmentwide increase
by 40% between 1979 and 1980, while proposed outlays for the
application of solar power rise by 22%. These outlays and tax
credits for solar energy are expected to exceed $800 million in 1980.
In the solar program proposed for 1980, Federal efforts are focused
on longer-term technologies, which the private sector is less likely
to support.
Emphasis will be given to photovoltaics to develop the means for
economical production of electricity directly from solar energy. Efforts
will also be undertaken to develop improved thermochemical, photochemical, and biochemical processes to convert organic wastes
and crops to fuels. The budget supports continued development of
large facilities to produce electricity from the heat of the sun and
the oceans. Basic and applied solar research is also significantly
increased, including funds for construction of a new 300-acre solar
research facility to be built at the Solar Energy Research Institute
site in Golden, Colorado.
Near-term Federal efforts include the development and demonstration of passive solar, advanced cooling, process heat, and wind
technologies. In addition, the budget continues to provide selected
field tests and other demonstrations and applications to help bring
solar technologies into the marketplace. Further stimulus to the
solar industry will result from provisions of the National Energy
Act that make tax credits available to consumers and to businesses
to help defray the high initial cost of purchasing solar equipment.
Most of the work to develop new solar technologies is conducted
by the Department of Energy. Applications of available solar technology are, however, funded by several Federal agencies. For example, a variety of applications in foreign countries, such as solar
building and process heating demonstrations, will be undertaken
by the Agency for International Development as part of its foreign
assistance mission. Demonstrations of solar heating and cooling
will be undertaken by the Tennessee Valley Authority. The Department of Agriculture will support application of solar technologies to agricultural uses. There will be a growing number of
applications of solar technologies in the Federal Government's own
buildings. Although solar activities outside the Department of
Energy are funded by other agencies in support of their specific

MEETING NATIONAL NEEDS

129

missions, these efforts will assist in meeting the overall Federal
goal of stimulating a vigorous solar industry.
Finally, solar technology education, information dissemination,
and training activities will be accelerated in 1980. The Federal
Government will continue its efforts to remove legal and market
barriers to the widespread use of solar energy. At the same time,
efforts will be undertaken to assure that consumers are adequately
protected as the market for solar equipment grows.
FEDERAL OUTLAYS AND TAX EXPENDITURES FOR SOLAR ENERGY DEVELOPMENT
(In millions of dollars)
1979
estimate

Outlays for solar energy:
Solar research and technology development:
Department of Energy
Solar demonstrations and applications:
Department of Energy
Other Federal agencies

1980
proposed

333

465

Subtotal, solar demonstrations

165
53
218

164
101
265

Total outlays

551

730

Tax expenditures for solar energy:
Solar tax credits (revenue loss)

Other renewable energy resources include nuclear fusion, geothermal, and hydroelectric energy from small dams.
For magnetic fusion, the 1980 budget provides for $364 million in
outlays, a modest increase over 1979. The program is directed
toward determining the technical and economic feasibility of producing energy through a controlled thermonuclear reaction. This
concept has the potential of providing a truly clean and limitless
source of power in the next century.
It is expected that technical feasibility will be demonstrated
within the next 4 to 5 years, as a result of major experiments
planned already. These experiments will be conducted at the Tokamak fusion test reactor (TFTR) facility at Princeton University in
New Jersey and at the magnetic mirror facility at the Lawrence
Livermore Laboratory in California. Concurrently, the Department
of Energy is also assessing other fusion concepts. Ultimately a
single concept will be chosen for a test reactor. Such a facility
would produce more energy than it consumes, and would be the
forerunner of commercial fusion power reactors. Based on research
done to date, these reactors might be operational in the first
decade of the next century.
The objective of the geothermal program is to develop hot underground brines (hydrothermal) and deep deposits of hot brines
mixed with natural gas (geopressured) as useful energy sources,

130

THE BUDGET FOR FISCAL YEAR 1980

and to develop the advanced technologies required to tap the Nation's large reserves of thermal energy stored in hot underground
rock formations.
Emphasis in 1980 will be on better definition of geothermal
resources, development of advanced technology to exploit geopressured and hot rock resources, and initiation of a 50 megawatt
project to demonstrate the readiness of hydrothermal technology.
The budget also continues efforts to help resolve environmental,
institutional, legal, and regulatory problems that presently inhibit
the use of domestic geothermal resources.
After several years of rapid program growth, proposed outlays
for geothermal R&D decline slightly from $135 million in 1979 to
$132 million in 1980. Increased private investment in the near-term
development of hydrothermal resources can be expected, capitalizing on the significant progress already achieved through earlier
Federal investments.
For the development of hydroelectric power from small dams the
primary Federal role in permits and licensing will be augmented
by support for assessments of environmental, safety, economic, and
institutional problems in developing such sites.
The goal of the fossil energy program is the accelerated development of environmentally acceptable technologies that can lead to
the increased use of coal and expanded supplies of domestic oil and
gas. The eventual commercial application of these technologies can
greatly reduce our dependence on imported oil. Because coal is the
Nation's most abundant fossil energy resource, the greatest share
of the fossil energy budget is directed to coal-related research and
development.
The 1980 budget places increased emphasis on longer-term activities with higher risks and higher potential payoffs. With greater
reliance on the potential for private sector investments in the near
term and on large demonstration projects, an effective national
effort can be achieved with reduced demands on the Federal
budget. Thus, the administration is proposing that both budget
authority and outlays for fossil research and technology development decrease in 1980. Outlays are estimated to decrease from $812
million in 1979 to $777 million in 1980.
To satisfy the Nation's long-term energy needs, it will be necessary to convert coal to cleaner and more easily transported liquid
and gaseous fuels. The budget requests $248 million in outlays for
this purpose. A portion of these funds will be used to begin construction of two demonstration plants: the first to convert coal to
high-Btu pipeline-quality gas; and the second to convert coal to
either a clean solid or a clean liquid fuel, using solvent refined coal
technology. A decision on which solvent refined coal plant will be
built, either the solid or liquid producing plant, will be made late

MEETING NATIONAL NEEDS

131

this summer following evaluation of proposals from private firms.
The budget proposes to continue support for coal demonstration
and pilot plants already underway, and for third generation gasification and liquefaction technologies.
Advanced energy conversion systems including magneto-hydrodynamics, fuel cells, and turbine technology receive increased emphasis in the 1980 budget.
While these new technologies are being developed, coal will continue to be burned under increasingly stringent environmental
standards. To meet these new standards, the budget includes a
significant increase in budget authority for the development of
environmental control technologies. Substantial funds are also proposed for improved methods of direct coal combustion such as
fluidized bed combustion, for systems to improve coal mining efficiency, and technologies to remove environmental contaminants
prior to combustion.
The principal objectives of the petroleum and gas research and
development programs are to improve recovery of oil and gas from
existing reserves and to develop technology to produce new oil and
gas resources economically. A significant effort is also directed at
developing technologies to ensure that the Nation's oil shale resources are developed economically and in an environmentally acceptable manner. Outlays for petroleum and gas activities are decreasing because a technically mature industry exists in these
areas. Private firms are prepared, capable, and willing to develop
the necessary technologies and to commercialize them without Federal support. By decreasing the funding for these near-term activities, the Federal program will be better able to focus on those
activities not being developed by private industry.
The nuclear fission program continues to be oriented toward the
development of nuclear power as a safe, environmentally acceptable, economic source of electricity. In support of the President's
foreign policy objectives, the program emphasizes reducing the risk
of proliferation of nuclear weapons abroad.
Total outlays for nuclear fission are estimated to be $970 million
in 1980. This represents a decrease of $125 million from 1979,
largely resulting from the administration's policies not to reprocess
spent fuel from commercial nuclear power plants and not to proceed with the construction of the Clinch River breeder reactor
project.
The administration is committed to demonstrating environmentally acceptable means of disposing of nuclear waste. The 1980
budget supports a range of Federal Government activities that are
essential to dealing with the waste management issue. Also, nearterm programs in both the Department of Energy and the Nuclear

132

THE BUDGET FOR FISCAL YEAR 1980

Regulatory Commission are aimed at ensuring the safety of operating nuclear power plants.
Until acceptable permanent disposal methods are available on a
large scale, interim storage will be required for the increasing
amounts of nuclear fuel discharged from nuclear power plants. The
budget supports proposed legislation that would authorize the Federal Government to accept spent nuclear fuel from utilities and
provide interim storage for that fuel. Under proposed legislation,
all costs for this service would be recovered fully by the Government from fees charged to utilities using this service.
Outlays for Energy, 1976-1982
$ Billion,

S Billions

Energy Information,
Policy, and Regulation

Energy Supply
|||m|

1976

1981

1982

For the midterm (1985-2000), the nuclear programs are designed
to provide alternatives to the worldwide use of nuclear fuels (plutonium and highly enriched uranium) that could be diverted to produce nuclear weapons. Several programs are proposed to increase
the availability of low-enriched uranium. These include research on
advanced technologies for uranium enrichment, and projects to
increase the efficiency with which low-enriched uranium fuel is
used in nuclear power plants. In order to reduce the worldwide
availability of weapons-grade nuclear fuel, efforts will be made to
develop techniques that will avoid the need to use weapons-grade
fuel.
In light of projections of reduced growth in the demand for
electricity and the unlikely prospect that industry would develop a

MEETING NATIONAL NEEDS

133

new reactor in the near future, the administration is proposing
that work on the steam cycle, high temperature gas cooled reactor
(HTGR) be discontinued in 1980. In the interest of nonproliferation,
a joint program is proposed with the Federal Republic of Germany
to develop direct cycle technologies for use in HTGR's and to
develop a proliferation-resistant, medium-enriched HTGR fuel.
For the long term, beyond 2000, the administration is continuing
a strong, well-integrated research and development program on
fast breeder reactors. While producing electricity, these reactors
have the capability to generate more fuel than they consume, and
the 1980 budget supports keeping this important energy option
open for the future. The U.S. will continue to work with other
nations to develop technical and institutional arrangements that
can overcome the problems presented by the nuclear materials
produced in breeder reactors.
By aggressively pursuing the mid-term alternatives, the United
States will probably not need breeder reactors for electricity production before the end of the century. This will provide time for
the orderly development of an economical, proliferation-resistant
breeder reactor technology.
The 1980 budget includes substantial funding for research on the
base technologies, fuels, components, and safety of the liquid metal
fast breeder reactor (LMFBR). However, the administration again
proposes to terminate the Clinch River LMFBR project, since it
would be a premature and uneconomic demonstration.
The Department of Energy conducts research on the effects of
energy production and use on the environment. Special emphasis is
given to determining the human health and ecological effects of
the developing technologies, such as coal liquefaction. The budget
also proposes increased funding for the nuclear decontamination
and decommissioning program. The Department will continue its
program to clean up abandoned uranium mill tailings sites, to
protect the public from long-term exposure to low-level radiation.
Research efforts will also continue to determine whether increasing
amounts of carbon dioxide in the atmosphere cause changes in
world climate. Additional funding is proposed for studies of diesel
engine emissions to determine their potential health effects. Over
the past year, DOE and the Environmental Protection Agency have
worked closely together to improve environmental effects research
and pollution control technology programs in the energy area. In
1980, both agencies will be involved in several cooperative programs.
As part of its energy supply strategy, the administration is proposing legislation to help States and localities that are affected by
efforts to develop our domestic resources. Under the proposed legislation, the inland energy impact program would be the central

134

THE BUDGET FOR FISCAL YEAR 1980

focus for such Federal assistance, as discussed in the community
and regional development function of this budget.
Uranium enrichment,—The Department of Energy plans to continue to operate the 3 existing gaseous diffusion enrichment plants
that produce sufficient enriched uranium to meet the Government's own requirements, as well as the needs of domestic nuclear
power plants and anticipated foreign orders. Proposed outlays of
$1.2 billion will continue ongoing work to upgrade these plants to
provide increased enrichment capacity and more efficient plant
operation. Funds are also provided to continue construction of the
new centrifuge enrichment plant at Portsmouth, Ohio. These outlays will be offset by uranium enrichment receipts, estimated to be
$1.2 billion in 1980.
Petroleum reserves.—In 1976 the Congress directed that oil production be increased at the naval petroleum reserves located in
California and Wyoming in order to help reduce U.S. dependence
on higher-cost imported oil. Oil produced from the reserves is sold
at competitive prices, with receipts deposited in the Treasury. Government production from the reserves in 1980 is expected to be
about 160,000 barrels per day, with revenues estimated at $862
million in 1980. The budget requests $69 million in new budget
authority for development and production costs at the California
and Wyoming reserves.
The budget proposes that the Government exploration to define
the potential for oil and gas resources in the national petroleum
reserve in Alaska (NPRA) be concluded at the end of 1979 with
close-out costs to be funded from enacted appropriations. The 1979
termination date was selected because by that time adequate information will have been collected to formulate recommendations to
the Congress on the future use of the reserve as required by Public
Law 94-258. Development of two new gas wells in 1979 will maintain an adequate short-term supply of gas for the Village of Barrow
and nearby Federal facilities. No additional funding will be recommended, either to develop the Barrow field or to provide another
source of energy, until an alternative fuels study requested by the
Congress is completed. As a result of these recommendations, new
budget authority for NPRA activities in 1980 is only $4 million
compared to $231 million in 1979. The funds in 1980 are for operation of the gas field and environmental cleanup.
Power marketing.—Proposed net outlays for power marketing
activities decline from $1.9 billion in 1979 to $1.7 billion in 1980.
These outlays include funds for construction and operations of
transmission facilities at the 5 Federal power marketing administrations (PMA's) of the Department of Energy. These agencies

MEETING NATIONAL NEEDS

135

market about 45% of the hydroelectric energy and over 5% of all
electricity generated in the United States. Revenues from the sale
of the electricity offset most of these outlays. The PMA's will
introduce additional electric rate increases in keeping with statutory requirements that rates reflect the actual cost of services
provided. Approximately 95% of these outlays are for continuation
of the nuclear power plant construction program of the Tennessee
Valley Authority. To facilitate the TVA power program, legislation
will be proposed to increase the limitation on borrowing authority
under the Tennessee Valley Authority Act by $15 billion.
Also included are the administrative expenses of the Rural electrification and telephone revolving fund (RE&TRF) administered
by the Rural Electrification Administration (REA). By statute, the
loans, advances, budget authority, and outlays of this fund are
excluded from the budget totals. New insured loans to rural borrowers during 1980 are estimated to be at least $985 million. Loans
of between $735 million and $885 will be provided for electric
service to rural areas, and at least $250 million will be provided to
furnish and improve telephone service to rural areas. Loans from
the RE&TRF bear interest at either 2% or 5%, and are to be
repaid within 35 years.
In addition, during 1980 the REA proposes to make commitments
to guarantee an estimated $5 billion in loans made by the Federal
Financing Bank (FFB) and other qualified lenders to eligible rural
electric borrowers at rates agreed upon by the borrower and
lender. These loans are intended to finance the construction and
operation of generating plants, and electric transmission and distribution systems in rural areas. By statute, any amounts guaranteed
by the Administrator of REA under the Rural Electrification Act
are not included in the totals of the budget and are exempt from
any general limitation imposed by statute on expenditures and
budget outlays of the United States.
Energy conservation.—The programs that support the conservation mission are designed to encourage more efficient use of energy
in the major sectors of the economy. The principal conservation
components of the 1980 budget for the Department of Energy are
technology development and financial and technical assistance
through conservation grants. Federal appropriations for these purposes have grown rapidly over the last several years, and do not
need to be increased further this year to meet 1980 conservation
objectives.
In addition, the administration's strategy includes tax credits
and regulatory measures to encourage conservation. Tax credits
assist homeowners and commercial and industrial users in the
purchase of energy-saving equipment. Federal regulations will

136

THE BUDGET FOR FISCAL YEAR 1980

result in more efficient buildings, major appliances and motor vehicles, and will help slow the growth of energy consumption and
encourage greater private investment in new technologies.
Total outlays for 1980 energy conservation are estimated at $660
million, a 35% increase above the 1979 level of $490 million. Tax
expenditures for conservation are estimated at $825 million in 1980.
New tax incentives in the National Energy Act, including both tax
expenditures and other tax changes, are estimated at $631 million in
1980. New excise taxes will be imposed on "gas guzzler" 1980 model
automobiles.
Technology development—Federally supported research and technology development is provided to help develop a better understanding of common technical problems in energy conservation,
and to assist private sector development of energy saving technologies in selected instances where there are very high potential
energy savings but severe technical risk and long lead times to
implementation. Programs in the 1980 budget continue to assist
industry in the development of advanced technologies for use in
the buildings, industry, and transportation sectors.
Outlays for conservation technology programs have increased
dramatically over the past several years with 1980 outlays estimated at $233 million, 260% above the 1977 level. Although 1980
outlays are again estimated to increase above the 1979 level, reduced efforts are proposed for near-term conservation technology
efforts, recognizing the increased incentives for private investment
to accelerate improved efficiency in energy use in the near term.
Key efforts being supported in 1980 include development of advanced automotive engines and electric vehicles, industrial waste
and heat recovery technology, and development of efficiency standards for buildings and major applicances.
Conservation grants.—Department of Energy grants provide
weatherization assistance to low-income persons and to public and
non-profit schools and hospitals. These groups do not benefit from
the tax credits and might not make investments in conservation
equipment without assistance. Weatherization for homes of lowincome people is proceeding as planned with budget authority at
$200 million in both 1979 and 1980. The administration is requesting that budget authority for the schools and hospitals grants be
decreased from $100 million in 1979 to $2.5 million in 1980, since
funds appropriated in prior years are expected to be available in
1980. Outlays for these grants are estimated to increase from $60
million in 1979 to $139 million in 1980.
Proposed legislation for State energy management and planning
grants will consolidate State energy conservation and "outreach"
programs for public education, and extend the program to include
State supply and emergency preparedness planning activities. This

MEETING NATIONAL NEEDS

137

proposal will give States more flexibility to use these funds to meet
their needs.
Emergency energy preparedness.—This major mission area is concerned with the development of plans and measures to protect the
Nation against possible petroleum supply disruptions. Efforts include the preparation of contingency plans, development of emergency measures such as gasoline rationing and other demand restraints and implementation of the strategic petroleum reserve
program. The administration continues to believe that the amount
of protection that would be afforded by a billion barrel strategic
reserve is needed to protect the Nation against petroleum supply
disruptions. In combination these programs will provide that protection and ensure our ability to withstand disruptions should they
occur.
The 1980 budget includes funds for continued development of the
storage component of the strategic petroleum reserve on a revised
schedule that calls for storage of 750 million barrels in the 19851986 time period. The administration plans a reprograming of $733
million in 1979 funds appropriated for oil purchases to start the
expansion of existing sites and acquisition of new sites. This would
bring the storage capacity of sites on which work is underway or
completed through 1980 to 608 million barrels. Should program
progress warrant, additional funds will be requested for starting
development of an additional 142 million barrels of facilities for a
total of 750 million barrels. Funds for this eventuality are covered
by the allowance for contingencies. Funds for the purchase of oil
have been previously appropriated and new budget authority for
1980 is not needed for this purpose, but $8 million for management
expenses is requested.1
The budget includes budget authority of $31 million in 1979 and
$33 million in 1980 for the Economic Regulatory Administration to
allow the Department of Energy to prepare measures for use in an
energy emergency. (These activities are classified under energy
information, policy, and regulation.) The measures would reduce
petroleum consumption, promote fuel switching, and facilitate Federal and State government cooperation. Preparations for prompt
implementation of gasoline rationing, as appropriate during an
emergency, will begin in 1979. Planning for non-petroleum energy
emergencies will continue in 1979 and 1980.
Energy information, policy, and regulation.—Passage of the National Energy Act has expanded Federal responsibilities in carry1
Petroleum storage oil funding estimates are based on continuation of price controls on domestic crude. The
estimates were developed for budget purposes and are not the result of an administration decision on oil pricing
policies. At the time the budget was being prepared, future domestic oil pricing policies were under discussion.

138

THE BUDGET FOR FISCAL YEAR 1980

ing out these missions, causing proposed outlays to increase from
$798 million in 1978 to $974 million in 1979 and $969 million in
1980.
Energy information,—The Energy Information Administration
(EIA) in the Department of Energy collects data from the private
sector on energy transactions, production, consumption, imports,
and undertakes independent analysis of that data.
Major efficiencies already have resulted from consolidating
energy information programs from various predecessor agencies
into the Department of Energy. Initiatives undertaken in 1979, and
continued in 1980, will provide more detailed and reliable information on oil and natural gas reserves and production, and the financial condition of major petroleum-producing companies.
The 1980 budget provides total outlays of $91 million for the EIA,
an increase of $19 million over 1979. With these resources, greater
emphasis can be given not only to securing additional energy data
as required by law, but also to improve data validation activities to
help ensure more reliable data collection and analysis for public
policy purposes.
Regulation.—The purpose of energy regulation is to assure that
national energy needs are satisfied safely, efficiently, and equitably. An important aspect of both the proposed 1979 and 1980 budgets is the administration of the new authorities provided in the
various laws making up the National Energy Act.
Under the National Energy Act, the Federal Energy Regulatory
Commission has the important responsibility of administering the
Natural Gas Policy Act. Historically, Federal jurisdiction over natural gas has been limited to gas used in interstate markets. The
new gas act extends Federal jurisdiction to intrastate markets to
eliminate distortions that have been caused by having two separate
markets. To stimulate additional gas supplies, the law authorizes
phased price increases, and provides for complete decontrol of new
gas by 1985. The new law requires incremental pricing so that
industrial users will pay for higher cost gas. To meet this additional workload and still reduce existing case backlogs, the budget
includes substantial increases for the Federal Energy Regulatory
Commission for both 1979 and 1980. Outlays are estimated to rise
from $38 million in 1978 to $59 million in 1979 and $70 million in
1980. This is primarily to increase staffing of the Commission from
1,360 employees in 1978 to 1,800 employees in 1979 and 1980.
The Economic Regulatory Administration in the Department of
Energy will administer provisions of the National Energy Act including the Powerplant and Industrial Fuel Act and the Public
Utility Regulatory Policies Act. The powerplant act strengthens
coal conversion authorities that prohibit the use of oil or natural

MEETING NATIONAL NEEDS

139

gas in new, large electric utilities and industrial boilers. The public
utility act encourages energy-conserving changes in electric utility
rates by requiring State Public Utility Commissions to consider
rate reforms, such as prohibiting electric rates that decline as
consumption increases and time of day pricing.
The Economic Regulatory Administration also administers the
regulatory provisions that ensure equitable petroleum pricing and
allocation regulations. The 1980 budget reflects completion of
audits on most petroleum company transactions from 1973 through
1976. Concentrated audits of the 36 major refiners are expected to
continue through 1980 and to be completed in 1981.
The Nuclear Regulatory Commission (NRC) regulates the siting,
construction, and operation of all civilian nuclear reactors, nuclear
fuel storage, and waste disposal of radioactive materials. It also
conducts a nuclear safeguards program to prevent the loss or diversion of nuclear materials, and a research program to produce information needed to confirm the data and analytic methods that form
the basis for nuclear licensing standards and regulations.
In 1980, the NRC will place primary emphasis on improving the
licensing process. An increase of 108 staffing positions is proposed
primarily to reduce the backlog of license amendments and unresolved generic safety issues, and to bring all operating nuclear
reactors into compliance. Waste management activities, including
preparation of standards for licensing repositories and disposal
research, are another important priority. Major increases in research are proposed for the loss-of-fluid test (LOFT) facility, transferred from DOE, and waste management. The advanced converter
reactor (high temperature gas reactor) program is proposed to be
eliminated, consistent with elimination of the companion DOE research program. Total outlays for the NRC will increase from $305
million in 1979 to $345 million in 1980.
Other Federal regulatory functions that directly affect energy,
but which are discussed elsewhere, include the: Environmental
Protection Agency on air and water quality, Department of Labor
on mine health and safety, Department of the Interior on leasing
and control over transportation corridors crossing Federal lands,
Department of Commerce on the Coastal Zone Management Act,
and Department of Transportation on automobile fuel efficiency,
pipeline safety, and the maritime industry.

140

THE BUDGET FOR FISCAL YEAR 1980
CREDIT PROGRAMS—ENERGY
(In millions of dollars)
Program

Geothermal development and other energy:
Guaranteed loans.New loans
Net credit guaranteed
Off-budget Federal entity—Rural Electrification:
Administration:
Direct loans.New loans
Repayments, sales and adjustments ( - ) . .
Net credit outlays
Guaranteed loans-.
New loans
Net credit guaranteed

1978
actual

1980
estimate

1979
estimate

2
2

173
173

107
105

881
-587

1,100
-897

1,150
-942

294

203

208

2,093
2,093

3,124
3,124

4,693
4,693

MEETING NATIONAL NEEDS

141

NATURAL RESOURCES AND ENVIRONMENT
National Needs Statement:
• Protect the public health and welfare by assuring a clean
environment with special emphasis on air and water
quality and the control of particularly injurious pesticides, hazardous wastes, and toxic substances.
• Provide for the conservation and development of public
lands, water, timber, and other natural resources.
• Preserve natural areas, historic sites, and fish and wildlife, both for their own sakes, and as recreational resources.
• Improve our knowledge and understanding of the atmosphere and of the Earth's structure, environment, and
resources.
Intelligent stewardship of America's natural resources and environment is a prime responsibility of government at all levels. The
resources held in common — our air, water, and land — must be
conserved and enhanced by every generation of Americans, and
each year's Federal budget must provide for those activities. In
this, as in other areas of budgetary responsibility, however, many
activities must be limited or deferred in years of fiscal constraints\
The 1980 budget reflects increased emphasis on the protection of
human health from the hazardous effects of toxic substances and
other pollutants. In order to provide the resources for these expanded efforts, some activities in the areas of construction and
land acquisition will have to be delayed. Investments in the development of timber and other resources of the public lands must be
limited to those that are economically and environmentally sound.
Without reducing the level of our long-term commitments, largescale efforts such as grants for sewage treatment plant construction must be limited to levels of spending that can be effectively
managed under the complex intergovernmental mechanisms involved.
To help meet our national needs for using and preserving our
natural resources and improving the environment, the budget proposes that $11.5 billion be spent in 1980. The budget recommendations give special emphasis to:
• materially strengthening the scientific data base on the
health effects of environmental pollution;
• substantially increasing funding and personnel for the control
of toxic substances;

280-000

O—79—10

142

THE BUDGET FOR FISCAL YEAR 1980

• increasing grants to States to support the control of hazardous wastes, and of air and drinking water pollutants;
• initiating a technical and financial assistance program to control non-point sources of water pollution in rural areas;
• funding of pollution control projects at Federal facilities that
are in violation of Federal, State, and local pollution laws;
• resuming construction of the replacement for Lock and Dam
26 on the Mississippi River, and initiating the construction of
26 other water resources projects;
• increasing the Federal-State cooperative efforts to regulate
surface mining of coal in order to prevent permanent land
degradation, and to reclaim land previously damaged by such
mining; and
• initiating in 1979 a program to provide grants to cities for the
rehabilitation of parks, part of the administration's urban
initiative.
Significant reductions in budget authority below 1979 levels are
proposed for the land and water conservation fund, the agricultural
conservation program, sewage treatment plant construction grants,
and for construction of facilities on Federal and Indian lands.
Pollution control and abatement.—The mission of controlling and

reducing pollution of air, water, and land is carried out by the
Federal Government both directly and through State and local
governments, supported by Federal financial and technical assistance. Outlays for this mission are estimated to increase by 14%,
from $4.1 billion in 1979 to $4.7 billion in 1980.
Sewage treatment plant construction grants.—Under authority of
the Federal Water Pollution Control Act of 1972 and the Clean
Water Act amendments of 1977, the Federal Government has provided over $27 billion for the planning, design, and construction of
municipal sewage treatment facilities. Federal grants under this
program cover 75% of the cost of facility construction. The budget
requests budget authority of $3.8 billion for the program in 1980,
which, together with funds available from prior years, is estimated
to make over $8.3 billion available to the States for obligation in
1980. Obligations are expected to increase from $3.4 billion in 1979
to $3.6 billion in 1980. This request will assist in meeting water
quality requirements by focusing funding on the most critical
water quality improvements and continues the administration's $45
billion long-term funding commitment for this program. As a large
number of projects move into the final construction stages after
1980, outlays for this program are expected to increase significantly.

MEETING NATIONAL NEEDS

143

NATIONAL NEED: USING AND PRESERVING NATURAL RESOURCES, AND IMPROVING THE
ENVIRONMENT
(Functional code 300; in millions of dollars)

Major Missions and Programs
BUDGET AUTHORITY
Pollution control and abatement:
Sewage treatment plant construction
grants
Regulatory and research programs
Rural clean water program
Oil pollution liability and compensation fund
(proposed legislation)
Offshore oil pollution compensation fund
Proposed legislation

1978
actual

1980
estimate

1982
estimate

4,000
1,191
75

4,000
1,188
75

25
14
- 7

5,376

5,312

5,105

5,316

5,313

Water resources

3,818

3,531

4,113

4,456

4,312

Conservation and land management:
Management of national forests and forestry research
Management of public lands
Mining reclamation and enforcement
Conservation of agricultural lands
Other, including offsetting receipts

1,635
394
68
556
-201

1,762
435
118
523
-640

1,490
387
195
400
-595

1,490
416
224
398
-595

1,490
416
256
395
-601

2,450

2,198

1,877

1,933

1,956

861

768

964

38
1,067

628
-18
150
988
4

1,825

1,873

1,752

880
-30
150
1,019
4
2,022

980
-30
150
1,048
4
2,151

1,212

1,307

1,417
-48

1,377
-48
1,329

Subtotal, conservation and land management
Recreational resources:
Land and Water Conservation Fund
Proposed legislation
Urban recreation grants
Operation of recreational resources
Proposed legislation
Subtotal, recreational resources
Other natural resources:
Existing law
Proposed legislation
Subtotal, other natural resources
Deductions for offsetting receipts
Total, budget authority
OUTLAYS
Pollution control and abatement:
Sewage treatment plant construction
grants
Regulatory and research programs
Rural clean water program
Oil pollution liability and compensation fund
(proposed legislation)
Offshore oil pollution compensation fund
Proposed legislation

4,200
1,104

1981
estimate

3,800
1,198
75

Subtotal, pollution control and abatement

4,500
876

1979
estimate

1,370

1,388
-48
1,340

-1,087

-1,252

-1,339

-1,382

-1,416

13,593

12,970

12,878

13,686

13,645

3,187
778

3,100
975

3,600
1,035
7

3,800
1,185
22

4,200
1,190
36

25
14
-7

1,212

1,307

144

THE BUDGET FOR FISCAL YEAR 1980

NATIONAL NEED: USING AND PRESERVING NATURAL RESOURCES, AND IMPROVING THE
ENVIRONMENT—Continued
(Functional code 300; in millions of dollars)
Major Missions and Programs

Subtotal, pollution control and abatement

1978
actual

1979
estimate

1980
estimate

1981
estimate

1982
estimate

3,964

4,083

4,673

5,058

5,476

3,468

3,600

3,670

4,108

4,015

Management of national forests and forestry research
Management of public lands
Mining reclamation and enforcement
Conservation of agricultural lands
Other, including offsetting receipts

1,275
355
5
582
-233

1,579
432
71
597
-666

1,362
382
148
427
-604

1,412
416
190
385
608

1,491
416
197
382
-602

Subtotal, conservation and land management

1,984

2,014

1,716

1,795

1,885

Recreational resources:
Land and Water Conservation Fund
Proposed legislation

632

543

806

2
914

691
5
71
950
3

858

Urban recreation grants
Operation of recreational resources
Proposed legislation

479
7
20
884
4

1,439

1,460

1,394

1,720

1,975

1,157

1,303

1,342

1,326

1,321

1,157

1,303

1,342

1,326

1,321

-1,087

-1,252

1,339

-1,382

1,416

10,925

11,207

11,456

12,625

13,255

Water resources
Conservation and land management:

Subtotal, recreational resources
Other natural resources:
Existing law
Proposed legislation
Subtotal, other natural resources
Deductions for offsetting receipts
Total, outlays

135
978
3

In 1980, the Corps of Engineers will continue to manage much of
the construction stage of the program under an interagency agreement with the Environmental Protection Agency. However, as the
program continues to expand, the administration is encouraging
the States to assume responsibility for program management and
implementation. In support of this effort, the administration will
propose legislative changes that will ensure adequate funding for
the management of State programs, regardless of reductions in
Federal funding for the construction grants program.
Regulatory and research programs.—Consistent

with its firm

commitment to a clean environment and the elimination of environmental public health hazards, the administration proposes
budget authority of $1.2 billion in 1980 for the activities of the
Environmental Protection Agency (EPA) in this area. This represents an increase of 60% in budget authority since January 1977.

MEETING NATIONAL NEEDS

145

During the same time, EPA's personnel levels have increased by
approximately 20%.
The administration proposes to strengthen materially the scientific data base on the health effects of environmental pollution. An
increase of $37 million in budget authority is requested for research on air quality, drinking water, toxic substances, and radiation health effects.
In addition, approximately $15 million of research sponsored by
the National Cancer Institute will support the Environmental Protection Agency's environmental regulatory mission, primarily in
the area of toxic substances control.
Major emphasis on the control of toxic substances will continue.
An increase of $44 million in budget authority (75% over 1979) is
recommended for this area. This increase reflects the high priority
placed on the effective control of toxic substances as an important
part of the Environmental Protection Agency's preventive health
mission.
The administration has increased assistance to State and local
governments for regulatory and enforcement programs by 92%
from January 1977 levels. Increased funding is proposed for State
grants for air, drinking water, and hazardous waste. Increases of
7%, 12%, and 24%, respectively, over the 1979 levels are proposed.
The administration is proposing legislation that would give
States the opportunity to consolidate two or more of the environmental State program grants administered by EPA. This would
enable the States to conduct more coordinated environmental programs. The two key features of this legislation are: (1) the establishment of $25 million in supplemental assistance available to
States that have planned a more effective overall environmental
program, and (2) provision of flexibility for States to transfer up to
20% of individual program grant allotments to problem areas of
higher priority when viewed in the context of the overall pollution
problems of a particular State.
The most critical unmet water pollution problems are associated
with non-point sources. Funds for the EPA program to plan control
of non-point sources of water pollution are requested at a level 25%
higher than the 1979 enacted level. The Department of Agriculture
program to help clean up non-point sources pollution is described
below under the rural clean water program.
As proposed in the 1979 budget, the Department of Transportation's transportation planning process has been integrated with the
Environmental Protection Agency's air quality planning requirements. This integration of planning requirements, plan approval,
and funding will ensure that transportation systems contribute to
meeting air quality health standards in urban areas where these
standards are not now being met. No separate funds for air quality

146

THE BUDGET FOR FISCAL YEAR 1980

planning have been requested for the EPA for 1980. Funds for
these purposes will be available from the Department of Transportation/Environmental Protection Agency joint planning funds and
from the unexpended balance of 1979 appropriations to the EPA.
The budget includes budget authority of $10 million in 1980 to
support State inventory and regulatory planning activities for municipal and industrial wastes that are not classified as hazardous.
The administration will support these activities for 5 years, after
which the States should have completed the inventory and their
regulatory strategy. Federal funding will decline by $2 million per
year, reflecting an anticipated increase in State resources to establish the regulatory program, and end in 1984.
Rural clean water program.—The administration is proposing the
initiation in 1980 of technical and financial assistance to landowners to control the most critical non-point sources of water pollution
in rural areas. This new program is to carry out section 35 of the
Clean Water Act. Budget authority of $75 million is recommended
in 1980 for this program. The Department of Agriculture will share
costs for pollution control and conservation measures required by
State water quality plans developed under the Federal Water Pollution Control Act.
Oil pollution liability and compensation,—The administration is
again proposing comprehensive legislation to establish a fund of up
to $200 million to assure adequate and timely cleanup of oil spills
in the Nation's waterways. A more limited fund, established to
cover cleanup and damages resulting from spills of oil on the Outer
Continental Shelf, will be incorporated in the proposed comprehensive fund.
Related programs.—Budget resources in support of the mission of
pollution control and abatement are provided by agencies other
than the Environmental Protection Agency. Where their primary
purpose is the support of other national needs, they are classified
in other functional categories. For example, pursuant to the President's recent Executive Order No. 12088, the administration is
requesting increased funds to enable Federal facilities to comply
with Federal, State, and local pollution laws. In 1980, an estimated
$640 million (15% more than in 1979) in budget authority is requested for pollution control and abatement at Federal facilities to
meet current environmental standards and to avoid future violations.
The following table summarizes the financing of pollution control
and abatement activities that are classified as meeting these as
well as other national needs. For further detail see Special Analy-

147

MEETING NATIONAL NEEDS

sis K, "Environment," published in a separate volume of this
budget.
POLLUTION CONTROL AND ABATEMENT—INCLUDING PROGRAMS ASSIGNED TO OTHER
MISSIONS
(In millions of dollars)
Obligations
Outlays
1978
actual
Environmental Protection Agency (largely subfunction
304):
Water:
Construction grants
Other water
Air
Other 1
Subtotal
Other programs:
Water:
Construction grants
Other
Air
Land
Other 1

1978
actual

1979
estimate

1980
estimate

3,187
334
150

2,860
347
171

3,400
417
236

3,600
427
268

401

474

613

627

4,072

3,852

4,666

4,922

565
452

214
501

250
557

235
563

264
93
319

285
132
386

255
199
438

360
264
485

Subtotal

1,693

1,518

1,699

1,907

Total

5,765

5,370

6,365

6,829

Includes toxic substances control, waste management, noise, radiation, and pesticide.

Tax expenditures.—The Revenue Act of 1978 allows pollution
control facilities that are amortized over 5 years to qualify for the
full 10% investment credit, unless they are financed with taxexempt bonds. A 5% credit is allowed in the case of tax-exempt
financing. These investment tax credit provisions for pollution control facilities are estimated to result in a 1980 tax expenditure of
$740 million. The exclusion of interest paid on pollution control
bonds from income also results in a tax expenditure. The facilities
financed by these bonds are privately owned, even though the
bonds are nominally issued by State or local governments. The
resulting 1980 tax expenditure is estimated at $460 million. Additional tax expenditures result from allowing certain payments
made by customers of water and sewage disposal facilities to finance construction of new facilities to be treated as contributions
to capital rather than income. This treatment is also available to
gas and electric utilities. These exclusions will result in an estimated 1980 tax expenditure of $60 million.
Water resources.—This mission is to manage and control our
water resources in order to attain the benefits of water resources

148

THE BUDGET FOR FISCAL YEAR 1980

development while preserving the quality of the environment.
Benefits of water resources development include: flood control, municipal and industrial water supply, irrigation of agricultural
lands, water conservation, inland waterways and harbors, hydroelectric power, recreation and wildlife preservation, and erosion
control.
The Federal Government carries out its responsibilities in this
area with careful regard for the proper role of State and local
governments. Outlays for this mission are estimated to increase
slightly from $3.6 billion in 1979 to $3.7 billion in 1980.
Because the involvement of the Federal Government in water
resources development had grown in piecemeal fashion over the
years without a unified and consistent policy, the administration
undertook a major study of water policy. On June 6, 1978, the
President announced the results of this water policy review. At the
same time he announced proposals to improve the planning and
management of Federal water resource projects and programs by:
• improving the procedures for planning and evaluating projects;
• initiating an independent review of all future water resources
projects;
• emphasizing water conservation and non-structural means of
solving water problems;
• involving the States in choosing and funding water projects;
and
• proposing a set of selection criteria for choosing new water
resource construction starts that assures that the projects
selected are safe, economically justified, and environmentally
acceptable.
The 1980 budget recommendations provide necessary funding to
carry out these improvements. The Water Resources Council will
continue to work on a planning manual to be used by all Federal
agencies engaged in planning and constructing water projects. The
Council will conduct independent reviews of water project proposals. The budget provides for grants to States for water management
and grants for technical assistance and public education about
water conservation. Legislation will be proposed to authorize these
grants. Legislation will also be proposed to change the way water
project costs are shared between the Federal Government and nonFederal entities.
Budget authority of $578 million is proposed to fund the full cost
of constructing 26 new water resource projects to be initiated in
1980. These projects meet the administration's criteria for safety,
economics, and environmental impact. The Corps of Engineers will
start construction of 10 projects; the Bureau of Reclamation, 6
projects; and the Soil Conservation Service, 10 projects. Funds are

MEETING NATIONAL NEEDS

149

also provided to resume work in 1980 on replacing Lock and Dam
26 on the Mississippi River.
The budget provides for initiating advance engineering and
design on 7 projects. Funds will be requested to initiate advance
engineering and design on 10 additional projects if they are authorized in a manner consistent with the administration's water policy.
In addition, all Federal agencies have been directed to examine
their programs for opportunities to conserve water resources directly or to encourage conservation by others.
The 1980 budget includes outlays of $30 million for the Corps of
Engineers to continue safety inspections of non-Federal dams.
Under this program, which was initiated in 1978, the Federal Government will finance the one-time inspection of approximately
9,000 potentially hazardous dams. While the Federal inspection
program is expected to be completed in 1981, the Federal Government is assisting States in training personnel to establish adequate
State dam safety programs so that they can continue this activity
in the future.
The funding levels proposed for 1980 for projects now under
construction by the Corps of Engineers and Bureau of Reclamation
are expected to continue all ongoing construction at a rate generally consistent with schedules established during 1979. Construction
outlays are estimated to increase in 1981 as a result of new construction starts.
The following table shows financing data for construction projects that have been funded with year-to-year appropriations and
that need future budget authority for their completion. Because the
total budget authority does not appear in any one budget year, the
full costs of these projects are often not clearly displayed. For
example, the proposed 1980 budget authority of $2.1 billion for
ongoing construction of water resources projects will have to be
supplemented by an additional $19 billion in budget authority in
future years to complete the projects. The total cost of these projects is estimated at over $42 billion.
Other activities, such as the operation and maintenance of completed projects, are expected to continue at approximately the same
level as in 1979.
Federal water resources activities supplement and complement
other national needs and missions. For instance, canals and rivers
provide transportation services; flood-control investments reduce
disaster assistance; irrigation and drainage projects increase farm
production; Federal hydroelectric power meets part of the Nation's
energy needs; and Federal water resources planning constitutes an
integral part of the Nation's environmental protection activities.

150

T H E B U D G E T F O R F I S C A L Y E A R 1980

WATER RESOURCES CONSTRUCTION PROJECTS IN THE 1980 1BUDGET THAT REQUIRE FUTURE
BUDGET AUTHORITY
(In millions of dollars)
Budget Authority
Agency and program

Corps of Engineers—Civil:
Construction, general
Flood control, Mississippi River and tributaries
Department of Agriculture—Soil Conservation Service
Department of Interior—Bureau of Reclamation-.
Colorado River Basin salinity control projects
Construction and rehabilitation
Colorado River basin project
Upper Colorado River storage projects
Total

Already
approved
prior to
1980

Proposed
for 1980

Additional
needed to
complete

Total

9,657
2,597
2,174

1,397
122
145

7,242
3,344
1,601

18,296
6,063
3,920

147
5,388
546
464

38
196
89
63

413
4,932
994
955

598
10,516
1,629
1,482

20,978

2,050

19,481

42,504

Conservation and land management—The gross land area of the

United States is approximately 2.3 billion acres. Federal civil and
defense agencies administer about 762 million acres or 33% of the
total. Nearly 300 million acres of the federally-administered land is
in Alaska. The Federal lands administered by civil agencies are
managed to provide a balanced use of our natural resources integrating recreational and wilderness opportunities, wildlife habitat,
environmental quality, and watershed protection with timber harvest, mineral extraction, and range utilization.
The administration took steps in calendar year 1978 to protect
and preserve lands of outstanding national interest in Alaska by
creating 56 million acres of national monuments, by initiating the
establishment of permanent wildlife refuges on 39 million acres of
land, and by withdrawing these areas and an additional 21 million
acres from mineral development or selection by the State. These
national interest lands were so designated and withdrawn to
ensure the preservation of their extraordinary scientific, historic,
scenic, cultural, and wildlife values. The administration continues
to seek enactment of legislation to designate these areas as part of
the Federal system of parks, wildlife refuges, wild and scenic
rivers, and forests. When the State and Native land selection process is complete, Alaska's 375 million acres will be made up of 103
million acres of State lands, 44 million acres of Native lands, and
228 million acres of Federal lands. Much of the Federal land and
extensive Outer Continental Shelf areas bordering Alaska will continue to be open for development, including timber, mineral, and
oil and gas development. This allows for balanced growth in
Alaska, as well as preservation of unequalled national treasures.

MEETING NATIONAL NEEDS

151

Total outlays for the mission of conservation and land management are estimated to decrease from $2.0 billion in 1979 to $1.7
billion in 1980 largely because of reductions in national forest
administration and in conservation of agricultural lands.
Management of national forests and forestry research.—The
Forest Service administers the national forest system, covering 188
million acres; conducts a comprehensive forest and range research
program; and carries out cooperative forestry programs with States
and private landowners. Proposed 1980 budget authority for these
activities totals $1,490 million, a decrease of $272 million from
1979. However, the 1980 program level will be about $50 million
more than in 1977.
The largest proposed reduction ($161 million) is in the costs of
administering the national forests, including the timber sales program and related road construction, construction of facilities, reforestation, and stand improvement. These reductions are partially
offset by modest increases in fish and wildlife management, administration of minerals development, and other activities.
Other reductions are proposed for research and cooperative forestry programs. The 1980 budget proposes no funds for grants to
States for forest fire control. The objective of this program has
been accomplished, since all States now have established forest fire
control programs.
The 1980 budget also provides no funds for the Youth Conservation Corps in 1980. While this is a popular program providing
summer employment for youths, it is not targeted to the needy or
to the basic underlying causes of unemployment. The Corps performs useful work, but much of it is not essential to the maintenance of our public lands or can be accomplished at a lower cost by
other means. The recommendation to close this program is made
for these reasons, because of the need for strict fiscal restraint, and
in light of the overall program of youth employment and training
discussed in the section on education, training, employment, and
social services.
The proposed budget for the Forest Service is sufficient to meet
high-priority program needs. Timber sale offerings are planned at
11.7 billion board feet in 1980 — the estimated maximum that can
presently be sold economically and in an environmentally acceptable manner from national forest lands. Funds are proposed to
permit the reforestation of 187,000 acres and for timber stand
improvement on 179,000 acres. This is in addition to reforestation
of harvested areas financed by receipts from timber purchasers.
Proposed funding for wildlife and fish management will assure
protection to these important resources; funds for recreational use

152

THE BUDGET FOR FISCAL YEAR 1980

of the national forests and other activities are provided at somewhat lower levels than in 1979.
Because of the need for fiscal restraint, most Forest Service
activities are not proposed at the levels recommended in the program transmitted by the former Secretary of Agriculture in 1976
pursuant to the Forest and Rangeland Renewable Resources Planning Act of 1974. The 1980 budget is, however, consistent with the
statement of policy transmitted at that time, which noted that
additional evaluation of those recommendations would be necessary to support the program, and that the recommendations should
be considered in the context of total Federal priorities and the
overall Size of the budget. The administration is conducting further
planning and evaluation as the basis for revised recommendations
required in calendar year 1980 under the 1974 Act.
Income realized from logging timber is taxed at rates applicable
to long-term capital gains, rather than as ordinary income. This
treatment will result in an estimated 1980 tax expenditure of $455
million.
Management of public lands.—The Bureau of Land Management
administers approximately 417 million acres of public domain land,
including about 243 million acres in Alaska. In addition, it manages subsurface rights vested in Federal ownership on another 370
million acres, and has jurisdiction over 1.1 billion acres of the
Outer Continental Shelf. In managing these lands, the Bureau
strives for an optimal balance among recreation, timber, grazing,
mineral development, wilderness, wildlife, and other uses. Revenues collected from mineral leasing, grazing fees, timber sales,
land and materials sales, and rights-of-way leases are estimated at
$823 million in 1979 and $837 million in 1980. Outer Continental
Shelf receipts are included in the section on undistributed offsetting receipts. Budget authority for the Bureau is proposed to decrease from $435 million in 1979 to $387 million in 1980. Reductions are proposed for facilities construction and several other activities.
Funding recommended for Outer Continental Shelf environmental studies is increased over 1979. Priorities for these studies will
be determined primarily by the importance of the study to oil and
gas lease sale and lease management decisions, and the magnitude
of the potential environmental consequences of those decisions.
The budget proposals continue the emphasis given in 1979 to soil
and vegetative inventories, and to environmental studies to support
the range management program. They provide for continuing the
inventory and review of wilderness areas. Lower priority research
and project development activities have been deferred wherever
possible.

MEETING NATIONAL NEEDS

153

Mining reclamation and enforcement.—The goals of the Office of
Surface Mining Reclamation and Enforcement are the prevention
of environmental degradation of land due to surface mining of coal,
and reclamation of land previously damaged by such mining.
Budget authority of $195 million is recommended for 1980, an
increase of $77 million over 1979.
The first goal is being achieved through enforcement of regulations that set standards for surface mining of coal. The program is
designed to have States assume responsibility for enforcement as
soon as feasible. During 1980 it is expected that the Office will
approve the regulatory and enforcement programs of most coalproducing States. As an incentive for States to assume this responsibility, the budget proposes that the Federal Government provide
several types of aid, including technical assistance and grants to
help support operating expenses of State programs. The Office will
continue to have an oversight role in those States that assume
regulatory responsibility, and will have full responsibility for enforcement in States that do not exercise this option.
The budget provides $114 million in budget authority for the
reclamation of abandoned mine lands, an increase of $53 million
over 1979. Reclamation projects are undertaken by the Office of
Surface Mining, the Soil Conservation Service of the Department of
Agriculture, and by States that have approved regulatory programs. In addition, Bureau of Mines staff will manage a large
number of projects for the Office. The budget proposes budget
authority of $50 million for reclamation grants to States in 1980,
compared to $10 million in 1979. The Office will continue work on
development of an inventory of lands requiring reclamation to
assist Federal and State governments in establishing priorities for
reclamation projects over the 15-year life of the program. By the
end of 1980 the inventory will be more than half complete.
Conservation of agricultural lands.—Several programs contribute
to the mission of protecting and maintaining the long-term productive capacity of the Nation's rural lands, through technical and
financial assistance to conservation districts, State and local governments, and private landowners.
The decrease in budget authority from $523. million in 1979 to
$400 million in 1980 reflects proposed program reforms. These
include the consolidation of the Great Plains conservation program
with the agricultural conservation program, the continued redirection of cost sharing under the agricultural conservation program to
enduring practices, and the initiation of the proposed new rural
clean water program. This proposed new program is discussed in
the section on pollution control and abatement, above. Total 1980
cost sharing funds for conservation and water pollution abatement

154

THE BUDGET FOR FISCAL YEAR 1980

equal the 1979 level. Cost sharing assistance under the agricultural
conservation program will focus on the alleviation of water runoff
that causes non-point source pollution, the treatment of critically
eroding lands, and other conservation measures that provide longterm benefits. This emphasis on achieving lasting benefits should
result in more effective use of the total funds (Federal, State, local,
and private) available for conservation purposes. Resource conservation and development program funds will be directed toward
meeting commitments made in prior years rather than initiating
new projects.
Other conservation and land management.—The Department of
Commerce's National Oceanic and Atmospheric Administration
(NOAA) promotes the rational use and conservation of our coastal
areas by helping States and territories develop and administer
coastal zone management programs. NOAA also provides grants
for the construction of public facilities required as a result of
coastal-related energy development activities, and designates sanctuaries to protect important marine and estuarine areas.
Budget authority for these programs is proposed to increase from
$64 million in 1979 to $66 million in 1980. In 1980, eligible States
and territories will receive Federal grants for the planning and
administration of their coastal zone management programs.
Twenty-one States (60% of the 35 coastal States and territories)
will have programs operating in 1980 to provide for management of
80% of the Nation's coastline. Continued funding for the coastal
energy impact formula grant program is requested to help those
States affected by the anticipated expansion of Outer Continental
Shelf oil and gas developments. Further expansion of the national
marine and estuarine sanctuaries program is also planned.
Recreational resources.—The Federal Government acquires and
operates national parks, recreation areas, historic sites, wild and
scenic rivers, fish hatcheries, and wildlife refuges. Facilities are
provided for visitors and to improve fish and wildlife habitat.
Grants and technical assistance are provided to States for planning, acquiring, developing, and managing areas for recreation,
fish and wildlife conservation, and the preservation of historic
places.
Outlays for these programs are estimated to decrease to $1.4
billion in 1980 compared to $1.5 billion in 1979 largely because of
the postponement of land acquistion and of construction.
Land and water conservation fund.—This fund provides grants to
States for recreational land acquisition and development. It also
finances the Federal purchase of recreational lands and the conser-

MEETING NATIONAL NEEDS

155

vation of natural resources such as national parks and endangered
species of wildlife.
Appropriations for the land and water conservation fund are
recommended at $610 million in 1980. The allocation of the fund
will be in the usual 60% State, 40% Federal ratio:
• $360 million for matching grants to States;
• $242 million for the acquisition of land for parks, wildlife
refuges, and recreation areas by 4 Federal agencies: the National Park Service, the Forest Service, the Fish and Wildlife
Service, and the Bureau of Land Management; and
• $8 million for administering the fund.
The administration does not propose funding this program at its
authorized level in 1980 because of the need for budget restraint
and because land acquisition can be postponed without serious
employment or contractual consequences. However, the recommended funding will allow initial land acquisition at most of the
new Federal areas authorized by the Congress in calendar year
1978.
Urban recreation grants.—This program was enacted in 1978 as
one of the administration's urban initiatives. The objective of this
program is to help make our cities a better place to live. Urban
recreation grants will be provided for the rehabilitation of city
park and recreation facilities and will pay 70% of the costs of
rehabilitation. Budget authority of $37.5 million is recommended to
start this program in 1979, with a recommended increase to $150
million in 1980. This is a one-time, 5-year program for rehabilitating park facilities. It is not available for operating costs, maintenance, or establishment of new parks — all of which can be assisted under other Federal programs.
Operation of recreational resources.—This program conducts diverse activities necessary to the operation of the national park and
wildlife refuge systems. It provides facilities and services for visitors and manages the natural resources within these areas. In
addition, its activities encompass grants, research, and technical
assistance in the areas of recreation, fish and wildlife, and historic
preservation. Budget authority of $988 million is recommended for
1980 compared to $1,067 million in 1978 and $964 million in 1979.
Budget authority of $45 million is recommended for the historic
preservation fund, which makes grants to States covering 50% of
the costs of programs for the identification and survey of historic
places and for their rehabilitation. The recommendation is held at
this level in part because of the need for overall fiscal restraint,
and in part because other Federal funds (e.g., programs of the
Department of Housing and Urban Development and the Economic

156

THE BUDGET FOR FISCAL YEAR 1980

Development Administration) are increasingly being directed to
counteract the underlying causes of loss of historic resources. Also,
there are now tax incentives to encourage rehabilitation of historic
properties and disincentives to demolish historical structures.
The Fish and Wildlife Service's mission involves managing wildlife refuges, comprising 46 million acres, operating 89 fish hatcheries, conducting research on fish and wildlife, administering a program to protect endangered species, and providing grants to States
to assist them in managing fish and wildlife.
Grants to States, funded by Federal excise taxes on sporting
equipment, have increased substantially over the past few years
and budget authority is estimated to total $117 million in 1980. The
administration urges that the States use these funds for the protection of non-game, as well as game, species of wildlife, and the
budget does not include funds specifically to finance States' management of non-game species.
Budget authority for cooperative State-Federal wildlife management plans on Federal lands is recommended at $17 million, compared to $16 million in 1979 and $13 million in 1978. This work is
conducted pursuant to the Sikes Act and similar authorizing laws.
The National Park Service develops, operates, and maintains the
national park system, comprising 327 areas totalling about 72 million acres. Total visits to these areas are expected to increase by
about 4% to 294 million in 1980. In order to maintain high levels of
funding for park operations, the administration is proposing that
park visitors pay a higher proportion of the costs of operating
national parks. Park users now pay only about 5% of these costs.
Over the 1979 and 1980 visitor seasons, park fee receipts will be
increased by about 70% over 1978 levels through a combination of
initiating entrance fees at parks that do not currently charge and
raising other entrance and user fees from their current relatively
low levels. Park fees have not been increased since 1972.
Other natural resources.—These activities are primarily directed
at increasing understanding of the atmosphere and the Earth's
structure and environment. To accomplish this mission, the Geological Survey and the Bureau of Mines in the Department of the
Interior, and the National Oceanic and Atmospheric Administration in the Department of Commerce conduct a wide range of
activities.
The Geological Survey conducts national geologic and mineral
resources surveys, including the identification of geologic hazards
such as earthquakes, water resources investigations, and topographic surveys and mapping. It also supervises Federal mineral
leases and the exploration for petroleum resources in the national
petroleum reserve in Alaska. Recommended conclusion of the

MEETING NATIONAL NEEDS

157

latter program is discussed in the energy function. Budget authority of $451 million is recommended for the resource programs of the
Geological Survey in 1980, compared to $376 million in 1978 and
$421 million in 1979.
Increased levels of funding in 1980 are recommended for oil and
natural gas lease sales on the Outer Continental Shelf (consistent
with legislation enacted in the 95th Congress), carrying out the
Natural Gas Policy Act and the Surface Mining Act, resumption of
competitive coal leasing on Federal lands, mineral surveys of land
under consideration for designation as wilderness areas, and analyses of regional underground water resources. These increases are
partially offset by decreases in geothermal resources assessment
and other programs.
The Bureau of Mines conducts research and administers various
programs to develop and conserve the Nation's mineral resources
and to diminish the adverse effects of mining on the environment.
To achieve its mission, the Bureau makes estimates of non-fuel
mineral reserves to support both private and public policymaking,
including reviews of wilderness area proposals. It also conducts
research on metallurgy, environmental problems related to mining
and mineral processing, and mine health and safety techniques.
Budget authority of $135 million is recommended for these programs in 1980, compared to $149 million in 1979. This decrease
reflects proposed termination of the mined lands demonstration
program, which will be replaced by reclamation work financed
through the Office of Surface Mining.
The National Oceanic and Atmospheric Administration (NOAA)
conducts marine- and atmosphere-related research and environmental monitoring, produces maps and charts for navigation, manages our marine fisheries resources, protects marine mammals and
endangered species, and operates a national system to monitor and
predict weather conditions.
An increase in budget authority from $681 million in 1979 to
$718 million in 1980 is proposed for the operations of this agency.
In 1980 NOAA plans to accelerate ocean pollution research and
monitoring efforts, to develop and carry out fisheries management
plans for the 200-mile zone, and to expand weather warning and
forecasting services, especially for the coastal areas.
Credit programs.—Loans are made to State and local organizations for the construction and rehabilitation of small irrigation,
municipal, and industrial water systems that utilize water from
Federal projects.

280-O00

O—79—11

158

THE BUDGET FOR FISCAL YEAR 1980
CREDIT PROGRAMS—NATURAL RESOURCES AND ENVIRONMENT
(In millions of dollars)
Program

1978
actual

Bureau of Reclamation loan program and
other
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net credit outlays....

1979
estimate

1980
estimate

58
-24

37
-6

43
-7

MEETING NATIONAL NEEDS

159

AGRICULTURE
National Needs Statement:
• Assure sufficient agricultural production to meet domestic needs and to capture a fair share of growth in export
markets.
• Provide an adequate return to farmers based on the cost
of production.
• Dampen fluctuations in food prices.
• Provide capability for further increases in farm output
and returns through research and assistance to farmers
in applying research results.
• Improve health through nutrition and food safety.
• Improve the efficiency and reliability of domestic and
export agricultural marketing systems.
American agricultural commodities provide basic nutrition for
millions of people at home as well as abroad and a source of
livelihood for American farmers. The Nation therefore has strong
interests both in assuring that food supplies are sufficient to meet
domestic needs and export demands, and in protecting American
agricultural producers against the vagaries of the weather and
excessive fluctuations in supply and demand.
The 1980 budget demonstrates the Federal commitment to a
strong agricultural economy in three ways:
• The Government seeks to modulate the swings in the agricultural economy by supporting prices and incomes in years of
abundance and by helping to create farmer-held grain reserves for years of short supply.
• The budget reflects an increasing commitment to basic
animal and plant research so that the American farmer can
continue to be the world's most dependable supplier of food
and fiber.
• The budget provides for a redirection of Government spending
in conservation-related agriculture programs toward increased Government assistance to farmers who must solve
farm-related water pollution problems. These environmentally sound practices will at the same time contribute to an
enriched land base for a growing farm economy. (These programs are discussed in the natural resources and environment national needs section.)
Estimated outlays for the agriculture function decrease by $2.0
billion from 1979 to 1980, largely due to the reduced level of short-

160

THE BUDGET FOR FISCAL YEAR 1980

term export credit and large reductions in the anticipated costs of
commodity price support programs.
The United States is the world's largest exporter of farm products. Many countries depend on us to close the gap between their
production and consumption, and we look to them as markets for
our farm products. Since U.S. exports are a large part of its agricultural production, small changes in world production and corresponding demand for U.S. farm products can produce rapid increases and decreases in prices of U.S. farm products. This situation calls for mechanisms that both stabilize prices and are flexible
enough to allow us to respond to changing supply and demand.
These objectives are being met through the establishment of
grain reserves—the cornerstone of the administration's agricultural policies. We now have farmer-held reserves that include 11
million tons of wheat and 20 million tons of feed grains. In addition, the Commodity Credit Corporation (CCC) owns 0.5 million
tons of rice.
To assist in bringing supplies into better balance with demand,
the government has established acreage-set-aside programs for
major crops. A better match between supply and demand should be
achieved over time, and the crop reserves program will provide a
stabilizing force against unexpected events. The administration is
continuing to build export markets abroad, and to help maintain —
through food stamp and nutrition programs—an adequate level of
food consumption at home. (Food stamps are discussed in the
income security section of this part of the budget.)
Among the steps taken in the agriculture function to meet the
tight spending constraints for 1980 was an $800 million reduction
below 1979 levels in CCC short-term export credit. Despite this
reduction, export expansion should be achieved by aggressive marketing, by prudent use of the $800 million in outlays budgeted for
short- and intermediate-term foreign credit, and by use of more
credit guarantees where some form of credit assistance is essential
to expanding our markets. The 1980 budget requests that most
other agricultural programs be funded at near the 1979 levels.
Farm income stabilization.—This mission is the major Federal
involvement in the agricultural sector. Estimates of price support
program costs for 1980 and 1981 are, of course, highly speculative
and subject to the uncertainties of weather. The projected outlays
are not limits on the assistance to be provided. They will vary
upward or downward depending on the requirements of the agricultural sector.

M E E T I N G N A T I O N A L NEEDS

161

NATIONAL NEED: IMPROVED AGRICULTURE
(Functional code 350; in millions of dollars)
Major Missions and Programs

BUDGET AUTHORITY
Farm income stabilization:
Price support and related programs
Federal Crop Insurance Corporation
Proposed legislation
Agriculture credit insurance fund
Other programs
Unallocated salaries and expenses
Subtotal, farm income stabilization
Agricultural research and services:
Research programs
Extension programs
Marketing programs
Animal and plant health programs
Economic intelligence
Other programs
Unallocated overhead
Offsetting receipts

1978
actual

1979
estimate

524
62

6,491
12

509
14
228

1980
estimate

1981
estimate

1982
estimate

144
36
228

3,056
12
-12
273
40
191

3,657
12
-12
264
43
191

3.370
12
-12
249
45
191

1,337

6,910

3,559

4,155

3,855

491
269
65
209
125
55
60
-53

608
275
74
241
138
59
72
-63

532
259
76
225
144
62
79
-66

532
259
76
231
144
62
79
-66

532
259
76
237
144
62
79
-66

1,221

1,405

1,311

1,317

1,323

—3

-3

2,573

8,312

4,868

5,469

5,175

5,623
57

4,737
271
21

653
39
215

-383
43
230

2,511
127
20
-26
187
43
186

3,580
193
12
-26
349
45
186

3,567
478
12
-20
327
45
186

6,588

4,920

3,049

4,339

4,595

456
252
56
201
119
52
48
-53

535
250
77
241
136
58
72
-63

494
233
78
203
143
60
78
-66

525
259
76
229
142
60
79
-66

534
259
76
237
142
60
79
-66

1,129

1,307

1,223

1,306

1,322

-3

5,642

5,915

Subtotal, agricultural research and
services
Deductions for offsetting receipts
Total, budget authority
OUTLAYS
Farm income stabilization:
Price support and related programs
Proposed legislation
Federal Crop Insurance Corporation
Proposed legislation
Agriculture credit insurance fund
Other programs
Unallocated salaries and expenses
Subtotal, farm income stabilization
Agricultural research and services:
Research programs
Extension programs
Marketing programs
Animal and plant health programs
Economic intelligence
Other programs
Unallocated overhead
Offsetting receipts
Subtotal, agricultural research and
services
Deductions for offsetting receipts
Total, outlays
1

International food reserve and comprehensive crop insurance.

-3

7,731

6,224

4,269

162

THE BUDGET FOR FISCAL YEAR 1980

Price support and related programs.—Commodity Credit Corporation (CCC) outlays for price support programs are projected to fall
from $5.0 billion in 1979 to the $2.7 billion estimated for 1980.
Lower production of feed grains and improved markets for grains
generally are estimated for 1980, which lessens the need for CCC
financial assistance. Reductions are also anticipated because of
legislation being proposed to establish a 4 million ton international
emergency food reserve in 1979, and because of a downturn in net
lending to farmers for storage facilities as need for new facilities
decreases. In addition, higher receipts from sugar sales and sugar
loan repayments are expected to result in a reduction of $650
million between 1979 and 1980 in outlays for this program.
The largest part of the reduction in CCC outlays is accounted for
by an $800 million cut in the level of short-term export credit in
1980. The reduction of this item is based on the projections that the
excess of world supply of farm products over demand will be reduced by 1980, that export markets will continue strong, and that
the CCC's non-commercial risk assurance program will result in a
shift to non-Federal sources for short-term export credit.
COMMODITY CREDIT CORPORATION OUTLAYS
[In millions of dollars]

Function and Program

Agriculture:
Price support and related programs:
Commodity loans
Commodity purchases
Direct payments
Grain reserve storage payments
Short-term and intermediate export
credit sales
Storage facility loans
Interest expenditures
Other price support operations
Receipts and adjustments
Proposed legislation
Subtotal, price support and related
programs
Other agricultural activities
Subtotal, agriculture

1978
actual

1979
estimate

1980
estimate

1981
estimate

5,739
761
2,268
216

4,776
573
2,152
325

3,962
659
1,620
325

1,584
646
232
393
-6,219

1,600
550
669
288
-6,196
271

800
300
1,075
327
-6,557
127

800
225
1,100
315
-7,031
193

5,623

5,008

2,638

3,773

1982
estimate

4,364
4,145
788
738
2,721
2,954
298
265

800
100
1,100
315
-6,850
478
4,045
45

5,656

5,047

2,681

3,817

4,090

1,193
-384

1,438
-383

1,399
-406

1,500
-431

1,650
455

Subtotal, international

-808

1,055

993

1,069

1,195

Total Commodity Credit Corporation outlays

6,465

6,102

International affairs:
P i . 480 Food Aid:
Gross outlays
Receipts and reimbursements

3,674

4,886

5,285

MEETING NATIONAL NEEDS

163

Crop insurance.—Farmers are offered insurance against crop
losses from natural hazards by the Federal Crop Insurance Corporation. Federal crop insurance is available in some counties for
selected crops to cover the farmers' variable production costs. Indemnity payments are estimated to total $85 million in 1979 and
$98 million in 1980. In addition, the CCC provides disaster payments partially to offset reductions in income from supported crops
due to adverse weather conditions. Disaster aid programs for farmers also include emergency loans (estimated at $578 million in 1979
and 1980) financed by the agricultural credit insurance fund. To
protect producers from losses from natural disasters, the administration is proposing legislation for a nationwide crop insurance
program, which would—over time—replace existing programs.
Agricultural credit insurance fund.—Agricultural loans, including emergency loans from the agricultural credit insurance fund,
increased sharply in 1978 when more than two-thirds of the counties in the United States were declared eligible for emergency
financial assistance because of adverse weather conditions. Loan
volume is expected to decline from $3.6 billion in 1978 and $3.3
billion in 1979 to $1.3 billion in 1980 because of an expectation of
more normal weather and the expiration of the emergency livestock loan guarantee and economic emergency loan programs. Currently, the Small Business Administration also provides loans for
crop losses. In order to avoid overlap with loan programs of the
Farmers Home Administration, the 1980 budget proposes that farm
lending assistance under the Small Business Act be terminated.
Agricultural research and services.—This mission is to improve
production and marketing efficiency through better technology and
regulation. It also provides information on worldwide agricultural
markets, and controls the spread of animal pests and diseases.
Research.—Research helps increase agricultural productivity resulting in more abundant domestic supplies, a large volume of
competitively priced exports, and more nutritious food products. It
also provides information on human nutrition, food safety, and
marketing technology. Outlays of $494 million are estimated for
agricultural research in 1980, about the same level as in 1979,
excluding a one-time expenditure of $40 million in 1979 for the U.S.
contribution to the Israel-U.S. Binational Agricultural Research and
Development Fund.
Funds will be redirected from selected crop, animal, and postharvest technology research and construction, to permit increases
for food safety, human nutrition, conservation and natural re-

164

THE BUDGET FOR FISCAL YEAR 1980

sources, integrated pest management research, and basic plant research.
Emphasis will be placed on carrying out needed research
through cooperative agreements and competitive grants and contracts with private, State and local organizations.
Animal and plant health.—The Federal Government carries out
a number of programs to prevent the introduction and spread of
plant and animal pests and diseases that could result in severe
losses in yields or in the output of livestock products. Budget
authority of $225 million is proposed for these services in 1980, $16
million below 1979.
CREDIT PROGRAMS—AGRICULTURE
[In millions of dollars]
Program

Price support and related commodity loans:
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net credit outlays
Agricultural and emergency credit programs
and other
Direct loans:
New loans
Repayments, sales and adjustments ( - ) 1
Net credit outlays

1978
actual

1980
estimate

1979
estimate

7,969
-5,240

6,926
-5,447

5,063
-5,424

2,729

1,479

-362

5,701
-5,374

4,090
-4,757

3,928
-4,199

327

-667

-271

4,219
3,031

3,883
2,953

3,021
1,249

Guaranteed loans:
New loans
Net credit guaranteed
1
2

Includes sale of loan assets.
Includes loans counted as direct loans of other accounts.

Credit programs.—Net credit outlays for price support and related commodity loans are projected to fall from $1.5 billion in 1979 to
—$0.4 billion in 1980 largely because of the reduction in CCC shortterm export credit. Loans to farmers for facilities to store grain
reserves are expected to drop by 1980, following years of large
additions to on-farm storage capacity. Commodity loans, offered as
a part of commodity price supports, are also expected to decline
with the achievement of grain reserve targets in 1979.
Agricultural and emergency credit programs include farm real
estate, farm operating, and emergency loans. The estimated increase in net outlays for these programs is a result of larger
amounts of asset sales in 1979 than in 1980.

MEETING NATIONAL NEEDS

165

Tax expenditures.—The objectives of agricultural income support
and rural development are promoted by a variety of tax expenditures in agriculture. The tax code permits farmers to treat certain
capital outlays as current expenses and accords capital gains treatment to certain kinds of ordinary income. The 1980 revenue loss
from these two provisions is estimated to be $505 million and $395
million, respectively. Rural electric and telephone and agricultural
marketing cooperatives are permitted to deduct noncash patronage
dividends, and are accorded preferential tax treatment in a
number of other ways. A 1980 tax expenditure of $365 million is
expected from these preferences. The Revenue Act of 1978 for the
first time permits payments received under Federal and State cost
sharing conservation programs to be excluded from income. The
revenue loss from this provision is estimated to be $30 million in
1980.
Related programs.—Several programs that fulfill other national
needs complement the programs in agriculture. The most important of these programs is the P.L. 480, food aid program, which is
discussed in the International Affairs section.
OUTLAYS FOR FEDERAL PROGRAMS THAT SUPPORT THE AGRICULTURAL MISSIONS
(In millions of dollars)

Program Title

Disaster and drought assistance
Conservation of agricultural lands
Rural clean water programs
Public Law 480 Food Aid
Food safety and quality service

Primary
Function
in budget

450
300
300
150
550

1978
actual

1979
estimate

2,120
582

818
597

808
262

1,055
281

1980
estimate

45
427
7
993
278

166

THE BUDGET FOR FISCAL YEAR 1980

COMMERCE AND HOUSING CREDIT
National Needs Statement
• Ensure that an adequate supply of mortgage credit is
available nationally.
• Target credit to urban and rural areas and prospective
borrowers not well served by private credit markets.
• Encourage the return of middle-income families to central cities to aid urban revitalization efforts.
• Maintain effective mail service at reasonable rates with
costs largely borne by postal customers.
• Provide oversight of and assistance to business to encourage the development of jobs and a sound economy.
The Federal Government's long-term objectives in the commerce
and housing credit area are affected significantly by aggregate
fiscal and monetary policies. In the past year, these policies have
necessarily become more restrictive to help counter inflationary
pressures.
In contrast to prior periods of restrictive monetary policy and
high interest rates, the housing industry remained strong last year.
Total housing starts in 1978 were slightly more than 2 million,
despite increasing interest rates during the year. While singlefamily starts were slightly less than the lVfe million record level
of 1977, multi-family starts rose to 600,000. This high rate of activity may not be sustainable in the long run, and a slight decline in
housing starts is forecast for next year to about 1.75 million units.
This rate is well above the troughs experienced in previous highinterest-rate periods. The current performance of the housing
sector indicates: (1) the underlying strength of the demand for
housing derived largely from the post-World War II baby boom,
and (2) the ability of mortgage lenders to compete for savings more
effectively than during previous periods of tight money due to
institutional changes in financial markets.
The performance of the housing market is critical to the improvement in housing conditions for American families, especially
low-income families. Census data indicate that the number of
households residing in physically substandard housing units has
declined substantially and that, as of the fall of 1976, 3.4 million
lower-income households resided in units with one or more significant physical deficiencies, compared to 3.7 million in 1974. Further
improvements in housing conditions will occur given the past performance of the private housing market, the continued projected

MEETING NATIONAL NEEDS

167

growth in family incomes, and continued growth in the number of
eligible families receiving Federal housing subsidies over the next
few years.
At the same time, business investment continued to show strong
growth, rising by more than 8% in real terms during the year. As
a result, investment rose to 10% of gross national product, close to
its share in the high-investment periods of the 1960's and early
1970's.
A principal concern is to avoid the sharp and disproportionate
reductions in housing credit that have typically resulted from tight
monetary policies and to ensure that the Federal Government continues to provide an economic environment and adequate investment incentives to foster continued strength in business investment.
Other major concerns are to achieve Federal commerce and
housing credit objectives more efficiently, and to target Federal
resources more effectively to those groups, regions, or economic
sectors with both the greatest need and the greatest potential
return for those funds.
While Federal expenditure programs in this functional area contribute significantly to the achievement of Federal objectives, Federal tax policies and credit programs make an equal or even more
substantial contribution to these objectives. Major efforts in the
budget to avoid sharp curtailments of mortgage credit and housing
market activities include:
• another $2 billion in 1980 GNMA mortgage purchase commitments for HUD-subsidized housing projects and middle/moderate income multifamily housing projects in distressed urban
areas through the targeted tandem program;
• expanded use of GNMA mortgage-backed securities; and
• continued use of new money market instruments, especially
the money market certificates approved by the Federal Home
Loan Bank Board.
This budget will also make more efficient use of Federal resources allocated to commerce and housing credit by:
• initiating a protective insurance payments program to help
homeowners in temporary financial trouble to avoid defaults;
• relying primarily on the private sector to renovate and repair
currently held FHA properties in conjunction with the sale of
those properties; and
• consolidating travel and tourist policy activities within the
Department of Commerce, while eliminating the U.S. Travel
Service.
To achieve more effective targeting of Federal resources in the
commerce and housing credit area, this budget proposes:

168

THE BUDGET FOR FISCAL YEAR 1980

• a 30% increase in SBA-guaranteed business loans to minorityowned business between 1979 and 1980;
• sustained emphasis on the nonelderly handicapped in HUD's
elderly and handicapped housing program; and
• continued targeting of rural housing programs to low-income
families occupying substandard housing.
Mortgage credit and thrift insurance.—Federal housing policy
continues to focus on the basic goal of providing a decent home in a
suitable living environment for every American family. Federal
housing programs carry out this goal by:
• ensuring an adequate supply of mortgage credit;
• increasing the stock of housing through new construction and
rehabilitation programs; and
• providing explicit subsidies primarily for low- and moderateincome households.
Most of the explicitly subsidized programs are discussed in the
income security section.
Mortgage credit programs are aimed at increasing the supply of
credit for housing. Mortgage insurance, guaranteed and direct
loans, interest subsidies, and secondary mortgage market activities
support the smooth operation of private mortgage credit markets
and supplement those markets, particularly in rural and centralcity areas. By making credit available at affordable interest rates,
Federal credit policies stimulate the demand for, and therefore, the
production of, housing.
Past periods of fiscal and monetary austerity have led to sharp
outflows of savings from savings and loans institutions to other
savings instruments, resulting in severely depressed housing construction activity. The development of money market certificates,
the expanded use of GNMA mortgage-backed securities to attract
nontraditional mortgage investors, and the provision of GNMA
tandem interest subsidies have allowed the housing sector to compete effectively for funds during the recent period of high interest
rates.

169

MEETING NATIONAL NEEDS
NATIONAL NEED: PROMOTION OF COMMERCE AND HOUSING CREDIT
(Functional code 370; in millions of dollars)
Major Missions and Programs
BUDGET AUTHORITY
Mortgage credit and thrift insurance:
Department of Housing and Urban Development:
Mortgage purchase activities (GNMA)....
Mortgage credit (FHA)
Housing for the elderly or handicapped...
Department of Agriculture—rural housing
programs
Federal Home Loan Bank Board
National Credit Union Administration

1978
actual

1979
estimate

1980
estimate

1981
estimate

1982
estimate

7
552
750

507
310

6
247
800

6
175
800

6
125
800

669
-10

1,825

1,651

2,257

2,524

1,968

3,442

4,405

3,238

3,455

1,787

1,803

1,698

1,640

1,616

197
151
374

749
54
237
277
420

735
89
263
712
437
-22

785
128
262
211
432
-22

810
83
262
165
430
-22

1,558

1,737

2,213

1,797

1,729

5,308

6,982

8,315

6,675

6,800

"ijbb

Subtotal, mortgage credit and thrift

insurance
Postal Service..
Other advancement
commerce:

and regulation of

Small business assistance
National Consumer Cooperative Bank
Technology utilization
Economic and demographic statistics
Other
Proposed legislation
Subtotal, other advancement and regulation of commerce
Deductions for offsetting receiptsTotal, budget authority

835

-5

OUTLAYS
Mortgage credit and thrift insurance:
Department of Housing and Urban Development:
Mortgage purchase activities (GNMA)....
Mortgage credit (FHA)
Housing for the elderly or handicappedDepartment of Agriculture—rural housing
programs
Federal Deposit Insurance Corporation
Federal Home Loan Bank Board
National Credit Union Administration

211
357
176

257
111
476

362
34
700

319
-92
658

245
-154
615

449
-567
-403
-13

218
-1,121
-390
-23

362
-1,192
-506
-83

892
-1,250
-619
-39

1,056
-1,300
-707
-47

Subtotal, mortgage credit and thrift
insurance

210

-472

-323

-131

-292

1,778

1,803

1,698

1,640

1,616

662

730
50
221
237
400

674
90
252
601
411

696
126
268
336
438

721
82
258
165
429

Postal Service
Other advancement
commerce:

and regulation of

Small business assistance
National Consumer Cooperative Bank
Technology utilization
Economic and demographic statistics
Other

192
136
353

170

THE BUDGET FOR FISCAL YEAR 1980
NATIONAL NEED: PROMOTION 01• COMMERCE AND HOUSING CREDIT—Continued
(Functional code 370; in millions of dollars)
Major Missions and Programs

1978
actual

1979
estimate

1980
estimate

Proposed legislation
Subtotal, other advancement and regulation of commerce
Deductions for offsetting receipts...
Total, outlays
ADDENDUM
Off-budget Federal entities:
Postal Service:
Outlays
Federal Financing Bank:
Budget authority....

Outlays

1982
estimate

1981
estimate

-11

-22

1,342

1,637

2,016

1,842

1,633

-5

3,325

2,968

3,390

3,350

2,957

-496

349

529

-304

12,659

15,134

13,869

14,000

10,614

11,477

11,288

11,300

*500 thousand or less.

Mortgage purchase activities.—Major Federal support for the
mortgage market is provided by the Government National Mortgage
Association (GNMA). Guarantees of securities that are backed by
mortgages insured by the Federal Housing Administration or guaranteed by the Veterans Administration are one form of support.
These guaranteed securities help to attract into the mortgage
market investors who have not traditionally invested in mortgages.
New securities guaranteed by GNMA are estimated to increase
from $15.0 billion in 1979 to $16.5 billion in 1980.
GNMA also operates "tandem" mortgage purchase programs to
support special types of mortgages. Two types of mortgages are
currently being supported by the GNMA tandem program. The
first is FHA-insured mortgages for multifamily projects receiving
rent subsidies through HUD's lower income housing assistance
program (section 8). The second, "targeted tandem" program supports the construction of moderate- and middle-income rental housing in distressed urban areas. Interest subsidies provided by the
latter program encourage the return of middle-income families to
these distressed areas.
The budget proposes $2.0 billion of mortgage purchase commitments in 1980, the amount provided in both 1978 and 1979. This 3year total of $6.0 billion of commitments will facilitate the development of an estimated 200,000 units of new multifamily housing
with below-market interest rates. Mortgages purchased under the
tandem programs are resold when market conditions permit, with
GNMA absorbing the loss. Net outlays for GNMA's credit activi-

MEETING NATIONAL NEEDS

171

ties, including losses on mortgage purchases, are estimated to be
$257 million in 1979 and $362 million in 1980.
Mortgage credit.—The Federal Housing Administration's (FHA's)
mortgage and loan insurance programs provide assistance for families who are able to fulfill the obligations of a mortgage loan but
who may not be adequately served by the private market. Insurance for mortgages with graduated payment schedules, which require lower initial monthly payments, will continue to be made to
assist young, first-time homebuyers.
Heavy default rates experienced under some mortgage insurance
programs in the early 1970's resulted in large increases in the FHA
inventory of assigned mortgages and properties acquired as a result
of foreclosure. Improved economic conditions, better underwriting,
and the use of HUD's lower-income housing assistance (section 8)
and troubled projects operating subsidies programs should result in
a decrease in the growth of the assigned mortgage inventory. Beginning in 1979 a major effort will be made to increase the sale of
multifamily properties now owned by FHA. Section 8 rental assistance, which is classified as an income security program, will be
used where necessary to protect low-income tenants from displacement or large rent increases, and to induce the private market to
rehabilitate properties not currently meeting minimum housing
standards. In 1980, a new protective insurance payments program
is proposed to protect homeowners from precipitous foreclosures
when sudden, uncontrollable reductions in income temporarily put
them in default. The program will also prevent unnecessary additions to the assigned inventory due to temporary default problems.
All of these factors are expected to result in a decline in outlays
for FHA mortgage credit activities from $111 million in 1979 to $34
million in 1980.
Housing for the elderly or handicapped.—In addition to supporting private market mortgage financing with FHA insurance, HUD
provides direct loans to finance housing for the elderly or handicapped under the "section 202" program. The 1980 budget provides
for $800 million in new loan commitments and a continued emphasis on housing for the handicapped. Outlays for this program are
estimated to rise from $476 million in 1979 to $700 million in 1980.
Rural housing programs.—The Farmers Home Administration
(FmHA) of the Department of Agriculture provides direct and guaranteed loan housing assistance to low- and moderate-income families in rural communities of less than 20,000 population. In addition, a rural rental assistance program to assist the tenants of
FmHA-financed housing was recently established. A related program of grants to repair and rehabilitate inadequate single-family

172

THE BUDGET FOR FISCAL YEAR 1980

housing and grants for labor housing and self-help housing are
classified in the income security function.
As a result of a recent major rural housing study, the 1980
budget proposes to continue targeting housing assistance under
FmHA programs to those rural families who are most in need—
low-income families and occupants of substandard housing. Legislation was proposed and enacted last year to authorize a special
homeownership assistance program to assist very low-income families in those cases where home ownership is more cost effective
than other FmHA low-income housing assistance programs. Partial
or total recovery of Federal subsidies under this program will occur
at the time a family sells its house.
For 1980, the budget proposes $3.9 billion in new direct and
guaranteed loans and almost $1.4 billion in budget authority for
housing assistance payments. This budget authority covers the life
of the contracts entered into by the Federal government under the
rental assistance and homeownership assistance programs. These
totals represent decreases of about $400 million in insured and
guaranteed loans, and $30 million in budget authority for housing
assistance payments from the enacted levels for 1979. The decreases reflect the need for restraint to achieve the administration's anti-inflation objectives. The requested funds, which are directed primarily to the needs of lower-income families occupying
inadequate housing; will provide assistance for about 144,000 rural
housing units. About 77% of the total number of assisted units will
receive either interest subsidies or grant assistance, and approximately 35,000 of the subsidized units will also receive rural rental
and homeownership assistance payments.
Outlays for FmHA housing programs in this function are estimated to decline from $449 million in 1978, to $218 million in 1979,
and to $362 million in 1980. Receipts from sales of loans (asset
sales), which are an offset to gross outlays, are largely responsible
for the lower net outlay levels in 1979 and 1980.
Other mortgage credit and thrift insurance.—The Federal Deposit
Insurance Corporation protects bank depositors and fosters sound
banking practices. Receipts are expected to exceed outlays by $1.2
billion in 1980.
The Federal Home Loan Bank Board (FHLBB), which charters
and regulates savings and loan institutions, recently authorized
those institutions to offer graduated payment mortgages and reverse annuity mortgages. Graduated payment mortgages feature
lower scheduled payments in the initial years, rising gradually to a
fixed level. The FHLBB estimates that 2.5 million families now
unable to purchase a home using standard, fixed-rate mortgages
will be able to buy homes using graduated payment mortgages.

MEETING NATIONAL NEEDS

173

Reverse annuity mortgages are designed to let older homeowners
draw upon the accumulated equity of their homes. These mortgages promote continued homeownership, because families are able
to use accumulated equity to meet higher costs.
The Federal Savings and Loan Insurance Corporation, which is
part of the Federal Home Loan Bank Board, protects depositors of
savings and loan institutions. In 1980, receipts are expected to
exceed outlays by $506 million.
National Credit Union Administration.—The recently authorized
Central Liquidity Facility (CLF) will begin operations on October 1,
1979, to provide for the liquidity needs of member credit unions.
Credit unions, which voluntarily join the CLF, must purchase capital stock equivalent to one-half of 1% of their paid-in and unimpaired capital and surplus. The funds in the CLF may be lent to
credit unions for the following liquidity needs: short-term adjustment credit, seasonal fluctuations, and extended credit in the event
of emergency conditions. During 1980 the CLF expects to lend $200
million to credit unions.
Postal Service.—The Postal Reorganization Act of 1970 established the U.S. Postal Service as an independent establishment of
the executive branch to replace the former Cabinet-level Post
Office Department. The Act charged the Postal Service with providing prompt, reliable, and efficient mail services to patrons at
reasonable rates and fees. Outlays for the general operations of the
Postal Service are excluded from Federal budget totals, with the
exception of the Federal subsidy payment. That payment covers
certain liabilities of the former Post Office Department, public
service costs, and revenue forgone for carrying certain classes of
mail at free and reduced rates. A payment of $1.7 billion is requested for 1980, $0.1 billion below the amount appropriated for 1979.
This decrease reflects a $92 million reduction in the public service
subsidy and a $15 million reduction in the revenue forgone subsidy.
Both of these decreases are scheduled to occur under existing law.
The budget includes an $18 million supplemental appropriation
request for 1979 to cover the costs associated with legislation that
permits bulk third-class material mailed by a "qualified political
committee" to be mailed at the special bulk third-class rates for
qualified nonprofit organizations. Qualified political committees include national or State committees of a political party, the Republican and Democratic Senatorial campaign committees, the Democratic National Congressional Committee, and the National Republican Congressional Committee.
The request for 1980 and future-year budget projections carry on
the existing policy that postal costs should be largely borne by mail
280-000

O—79—12

174

THE BUDGET FOR FISCAL YEAR 1980

users and not by the general taxpayer. The off-budget outlays of
the U.S. Postal Service reflect the difference between gross expenditures and gross receipts.
Other advancement and regulation of commerce.—Many Federal

programs provide technical assistance to and promote the development of new businesses. Other programs provide oversight of the
economy and business community to assure fair and equal practices and opportunities.
Small business assistance.—Net outlays for assistance to small
business are estimated to total $0.7 billion in 1980. The budget
request for the Small Business Administration (SBA) provides for
$3.9 billion of new commitments for guaranteed business loans,
which is equivalent to the level of assistance available to the SBA
in 1979. It is anticipated that the share of the SBA's guaranteed
business loans approved for minority-owned businesses in 1980 will
increase by 30% over current levels. This increase is part of a
larger effort to expand overall Federal assistance to minority businesses. The proposed level of Federal assistance to minority firms
in 1980 is 36% above 1979. Major factors behind this expansion are
more widespread use of minority participation goals in grant, loan,
and procurement programs of Federal agencies, and the establishment of the proposed National Development Bank.
Funds are also requested to enhance the economic analysis capability of the SBA. Particular emphasis will be placed on improving
the small business data base and further defining the role of the
small business sector in the economy.
National Consumer Cooperative Bank.—The recently enacted National Consumer Cooperative Bank will begin operations in 1979.
The Bank is authorized to make loans at market interest rates to
finance cooperative food stores, pharmacies, garages, health maintenance organizations, and other cooperatively-owned businesses.
An adjunct to the Cooperative Bank, the Office of Self-Help
Development and Technical Assistance, has also been created to
provide new and existing cooperatives with technical assistance.
This office will provide interest subsidies and capital advances to
cooperatives that are not able to qualify for the Cooperative Bank
loans.
The Cooperative Bank will begin with Federal funding and will
repay the Federal investment as its ownership is transferred to the
member cooperatives that borrow from the Bank. Eventually, the
Cooperative Bank will be owned by its customers, and loans will be
financed through debt issues on the private market.

MEETING NATIONAL NEEDS

175

Economic and demographic statistics.—Budget outlays for the
Bureau of the Census are estimated to rise from $212 million in
1979 to $575 million in 1980, primarily for the 1980 decennial
census. Of the $475 million in outlays projected for the 1980 census,
approximately half is for improvements to reduce the undercounting of the population in rural and urban areas, especially among
minority groups.
Other.—The administration is requesting the elimination of the
United States Travel Service (USTS) as a separate organization
within the Commerce Department and its consolidation with other
trade activities in the Industry and Trade Administration. No
funds are requested for overseas travel promotion activities now
performed by the USTS. Several factors have reduced the need for
the Service's travel promotion activities: (1) discount air fares, (2)
changes in the value of U.S. currency that improve foreign purchasing power for U.S. products, and (3) significant private sector
tourism promotion. This proposed elimination reduces $11 million
from the 1979 spending level of $14 million for the Travel Service.
Since the Industry and Trade Administration is concerned with the
entire trade deficit and the oversight of all U.S. business sectors,
the transfer of Travel Service policy assessment, data, and coordination functions will help assure more consistent Federal policies
for the travel sector.
The budget also includes $14 million to carry out new administration initiatives aimed at expanding U.S. export opportunities, particularly for small- and medium-sized businesses through: (1) A new
computerized matching system to provide U.S. exporters greater
access to marketing opportunities abroad; (2) cost-sharing financial
assistance designed to reduce a firm's risk during the startup phase
of its export marketing efforts; and (3) special assistance to firms to
help overcome problems commonly encountered by new or relatively
inexperienced exporters.

176

THE BUDGET FOR FISCAL YEAR 1980
CREDIT PROGRAMS—COMMERCE AND HOUSING CREDIT
(In millions of dollars)

Program

1978
actual

1979
estimate

1980
estimate

Mortgage purchase activity (GNMA):
Direct loans:

New loans

Repayments, sales and adjustments ( - ) 1
Net credit outlays

1,123

2,419

2,192

-1,151

-2,626

-2,114

-28

-207

15,194
10,032

15,000
9,836

16,500
10,500

246
-232

130
-311

86
-340

-181

-254

14,292
4,377

16,450
5,978

18,601
7,074

196
-6

516
-8

760
-8

189

508

752

5,477
-5,538

4,877
-5,152

6,581
-6,923

-60

-275

-342

4,356
2,186

4,021
2,846

5,782
2,772

Guaranteed loans-.
New loans
Net credit guaranteed
Mortgage credit (FHA):
Direct loans:
New loans
Repayments, sales and adjustments ( - ) 1
Net credit outlays
2

Guaranteed loans:
New loans
Net credit guaranteed
Housing for the elderly or handicapped:
Direct loans:
New loans
Repayments, sales and adjustments ( - ) . .
Net credit outlays
Rural housing programs:
Direct loans:
New loans
Repayments, sales and adjustments ( - ) ]
Net credit outlays
Guaranteed loans:2
New loans
Net credit guaranteed
Central Liquidity Facility:
Direct Loans:
New Loans
Repayments, sales and adjustments

200
-150

Net credit outlays

National Consumer Cooperative Bank:
Direct loans:
New loans
Repayments, sales and adjustments ( - ) 1

41
41

82
*
82

539
-330

575
-306

580
-312

209

269

268

Net credit outlays
Small Business assistance:
Direct loans:
New loans
Repayments, sales and adjustments ( - ) 1
Net credit outlays

MEETING NATIONAL NEEDS

177

CREDIT PROGRAMS—COMMERCE AND HOUSING CREDIT—Continued
(In millions of dollars)
Program

Guaranteed loans:2
New loans
Net credit guaranteed
Other business assistance:
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net credit outlays
Guaranteed loans:
New loans
Net credit guaranteed
Off-budget Federal entity—Federal Financing
Bank:
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net credit outlays

1978
actual

1979
estimate

1980
estimate

3,500
1,233

5,025
1,950

5,025
1,927

30
-26

59
-21

234
-172

-4

37
24

46
30

46
27

15,309
-4,614

13,795
-2,227

16,665
-5,287

10,695

11,568

11,738

*500 thousand or less.
Includes sales of loan assets.
Includes loans counted as direct loans of other accounts.
1

Federal Financing Bank.—The Federal Financing Bank (FFB)
provides for coordinated and efficient financing of certain types of
Federal and federally assisted borrowing. The FFB acquires the
direct debt of Federal agencies, obligations of government-guaranteed borrowers, and loan assets sold by Federal agencies. This
consolidation of financing has reduced Federal interest costs in some
programs and has made market conditions more orderly.
At the end of 1978, FFB holdings totaled $48 billion. These
holdings are estimated to total $77 billion at the end of 1980.
Further discussion of the FFB is contained in Part 6 of the Budget
and Special Analyses E and F in the Special Analyses volume of
the budget.
Tax expenditures.—The tax system provides a variety of incentives for investment in equipment, commercial and industrial
structures, and residential housing.
The 10% tax credit for capital equipment generates a tax expenditure estimated at $18.5 billion in 1980. The new credit for the
rehabilitation of industrial structures will generate an additional
tax expenditure of $180 million in 1980. Rapid depreciation using
asset depreciation ranges and additional first-year depreciation of
equipment are estimated to result in a 1980 tax expenditure of $3.2
billion. The depreciation of commercial structures at rates in

178

THE BUDGET FOR FISCAL YEAR 1980

excess of straightline rates will produce an estimated 1980 tax
expenditure of $255 million, and expensing construction period
interest and taxes produces a tax expenditure estimated to be $700
million in 1980.
The cost of financing investment is also reduced by a number of
tax preferences. The dividend exclusion produces a revenue loss
estimated at $450 million in 1980. Exclusion of interest on State
and local industrial development bonds generates an estimated
1980 tax expenditure of $585 million. Preferential treatment of
capital gains produces two types of tax expenditures. Taxation of
capital gains at less than the ordinary rates is estimated to reduce
receipts by $10.8 billion in 1980, and failure to tax capital gains at
death is estimated to reduce receipts by another $10 billion.
Housing investment is encouraged by permitting deduction for
mortgage interest and property taxes of owner-occupied homes.
These deductions generate estimated 1980 tax expenditures of $9.3
billion and $6.6 billion, respectively. Homeownership is also encouraged by the deferral of capital gains taxes on the sale of one's
home. This treatment is estimated to reduce 1980 receipts by $1.0
billion. Rental housing investment is encouraged by allowing depreciation in excess of straightline rates. The 1980 tax expenditure
that results from this practice is estimated at $350 million.
There are also tax expenditures for specific types of businesses.
Financial institutions receive tax expenditures estimated at $855
million in 1980 because of the favorable tax treatment accorded
excess bad debt reserves. Small businesses receive a tax preference
because the first $100,000 of corporate income is taxed at less than
46%. In 1980, this provision will generate a tax expenditure of $6.9
billion. The income of credit unions is exempt from tax, producing
a tax expenditure of $100 million.
Finally, permitting the deduction of interest on consumer debt
produces an estimated tax expenditure of $2.9 billion in 1980.

MEETING NATIONAL NEEDS

179

TRANSPORTATION
National Needs Statement:
• Maintain a transportation system to meet the needs of
commerce and the public.
• Operate that system safely, reliably, and efficiently.
• Ensure that transportation programs are consistent with
the Nation's economic, energy, urban policy, environmental, and social goals.
To accomplish the national transportation needs, the Federal
Government has programs for:
• highway construction, improvement, and safety;
• mass transit construction projects and operating assistance;
• railroad safety, research and development, and financial assistance;
• aviation safety, research and development;
• airway and airport development;
• marine safety, environmental protection, and financial assistance; and
• economic regulation.
Together with the efforts of private enterprise and State and local
governments, these Federal programs will continue to fulfill the
high expectations we have for the Nation's transportation system.
Transportation budgets and programs will exhibit the same emphasis on restraint and promoting efficiency that characterize the
entire budget this year. Because transportation is a means to
achieve economic progress rather than an end in itself, it is particularly important to focus on the costs and efficiency of those
services. The Federal Government cannot fund all transportation
projects that may benefit individual firms or individual localities;
the total cost of such an undertaking would be prohibitive. We
must exercise restraint and fund only those programs that are
required when viewed from a national perspective. Similarly, the
Federal Government cannot continue to subsidize inefficiencies
within the transportation sector that lower productivity and cause
a constant drain on national resources. These inefficiencies are
caused in part by outdated regulations and in part by poor management or an inability to respond to changing transportation patterns. Federal operating subsidies to private firms and local governments sometimes make it too easy to continue these inefficiencies.
Not only do such Federal subsidies and regulations lead to inefficiencies that waste our resources, they also lead to an atmosphere

180

THE BUDGET FOR FISCAL YEAR 1980

of increasing Federal involvement in the affairs of private industry
and State and local governments. This is obvious in the case of
Federal Government regulation but less obvious in the case of
Federal financial assistance—including those programs financed by
trust fund user taxes. Although trust funds can be entirely selfsupporting, they may grow and add to the size of the Federal
Government's share of total GNP. All Federal financial assistance
programs, including thosefinancedby trust funds, should be subjected to rigorous budgetary review. Controlling the size of Government's share of GNP has very real consequences for the size of the
bureaucracy needed to administer the programs and the intrusion
of Federal "control" that is often the corollary to Federal aid.
Throughout the transportation budget run two themes that represent the way in which the administration hopes to achieve restraint and efficiency while still meeting our national needs.
The first theme is regulatory reform. With ptissage of the Airline
Deregulation Act of 1978, the Government took the first step
toward returning to the private transportation industry—and the
consumers who use it—the power to make decisions shaping the
transportation system through the competitive marketplace. Early
in 1979, the administration will propose legislation to reform the
regulation of the railroad, truck and intercity bus industries as
well. While economic regulation of transportation industries may
have served a useful purpose at one time, the administration believes that the various transportation industries are now mature
and largely able to function as other industries do: competing in
the marketplace to satisfy the demands of their customers. Although the direct budget savings of reducing or eliminating economic regulatory programs are relatively small, significantly less
regulation of the transportation industry can lead to greater efficiency and productivity for the Nation's economy, thereby combating inflation and reducing pressure for future Federal assistance.
The second theme is that the costs of Federal Government transportation programs should be equitably shared by the users who
benefit from those programs. To encourage efficient use of various
forms of transportation supported by Federal programs, the administration will make a number of proposals to ensure that those who
benefit most pay the greatest share of the costs.
Collection of the waterway user charges authorized by the last
session of Congress will be an important first step in the effort to
charge the beneficiaries of the waterway system for its costs.
The administration also reassessed the expiring Airport and Airways Development Act with the objectives of focusing Federal assistance on essential safety and capacity projects and achieving a
more equitable balance of costs and benefits through a restructuring
of the trust fund and the taxes that maintain it.

MEETING NATIONAL NEEDS

181

For highway programs, the administration is undertaking a
study to determine whether the current distribution of highway
trust fund user taxes is equitable.
For mass transit, the administration proposes to hold Federal
subsidies for operating mass transit at current levels. The administration will undertake a study of the short and long term implications of trends in mass transit operating deficits and how these costs
might be shared between Federal, State and local governments, and
the users themselves.
For freight railroad systems, the budget proposes various financial assistance programs for private railroads, including funds for
Conrail. The administration, however, expects that railroad deregulation will decrease the need for Federal financial assistance, and
the budget proposals reflect these expectations. The cost to the
railroads of the regulatory system—a cost often passed on to shippers in the form of inefficient service or higher rates on other
shipments or to the taxpayer in the form of government assistance to
the railroads—has exceeded the benefits to the Nation.
The administration will propose a reduction in the railroad passenger routes served by Amtrak. The Nation can no longer afford
the luxury of maintaining rail passenger trains that, on many
routes, are little used. Based on recommendations of the final
Amtrak route restructuring report of the Department of Transportation, the administration supports a reduced Amtrak system that
emphasizes routes most heavily traveled by rail passengers. The
budget proposes to continue improvements of the Northeast corridor where rail passenger ridership is heavy and the improvements
make economic sense.
These twin themes of economic deregulation and bringing costs
into line with benefits underlie the discussion of each mission that
follows. With these themes, restraint and economic efficiency can
be achieved while still meeting our national needs for a safe and
reliable transportation system.
Ground transportation.—The budget proposes outlays of $11.9 billion in 1980 to support the Nation's network of highways, railroads,
and mass transit services in a safe, reliable, and efficient manner.
This is $97 million below the 1979 level.
Highways and mass transit,—Requested funding for traffic and
highway safety continues to focus on meeting the national goals of
reducing the number of deaths and injuries on the highways and
improving automobile fuel efficiency. The National Highway Traffic Safety Administration will focus its regulatory activities on
programs with a high potential for reducing deaths and injuries on
the Nation's highways. Fuel economy activity is directed toward

182

THE BUDGET FOR FISCAL YEAR 1980
NATIONAL NEED: BALANCED TRANSPORTATION SYSTEMS
(Functional code 400; in millions of dollars)

Major Missions and Programs

BUDGET AUTHORITY
Ground transportation:
Highway improvement and construction
Highway safety
Mass transit
Railroads
Proposed legislation
Regulation
Subtotal, ground transportation
Air transportation:
Airways and airports
Proposed legislation
Aeronautical research and technology
Air carrier subsidies
Regulation

1978
actual

1979
estimate

6,510
754
551
1,939

6,964
1,587
2,416
3,055

9,819
2,785
437
74
25

14,095
3,161
529
73
28

1980
estimate

7,139
1,817
2,473
1,445
250
81
13,205
3,096
557
76
31

1981
estimate

7,353
2,042
3,712
1,571
400
83
15,161
966
2,400
505
78
30

1982
estimate

6,527
1,624
3,827
1,500
325
83
13,885
838
2,680
522
82
30

Subtotal, air transportation

3,321

3,792

3,760

3,979

4,152

Water transportation:
Marine safety and transportation
Ocean shipping
Regulation

1,417
494
10

1,534
511
11

1,598
487
11

1,672
614
11

1,740
627
11

1,920

2,056

2,096

2,297

Subtotal, water transportation
Other transportation
Deductions for offsetting receipts
Total, budget authority

85
^102
15,043

91
^53
19,981

90
^50
19,101

95
^52
21,479

2,379
96
^52
20,460

improving fuel efficiency in automobiles, light trucks, and vans.
The highway safety grant program will continue the special emphasis on enforcement of the 55 mile per hour national speed limit.
Safety inspections of trucks and buses used in interstate commerce
will also be increased.
Federal highway and mass transit programs will be carried out
under the newly enacted, comprehensive Surface Transportation
Assistance Act of 1978, which provides multi-year authorizations
for Federal assistance programs for highways, highway safety, and
public transit. Likewise, it extends the highway trust fund to continue financing highway programs from user tax revenues. The
Act, enacted in November 1978, moves significantly toward
achievement of the administration's transportation goals through:
• accelerated construction of the interstate system by the imposition of firm dates by which Interstate projects must be
initiatied;
• increased flexibility in the use of Federal highway and transit
funds;

MEETING NATIONAL NEEDS

183

NATIONAL NEED: BALANCED TRANSPORTATION SYSTEMS—Continued
(Functional code 400; in millions of dollars)

Major Missions and Programs

OUTLAYS
Ground transportation:
Highway improvement and construction
Highway safety
Mass transit
Railroads
Proposed legislation
Regulation
Subtotal, ground transportation
Air transportation:
Airways and airports
Proposed legislation
Aeronautical research and technology
Air carrier subsidies
Regulation
Subtotal, air transportation
Water transportation:
Marine safety and transportation
Ocean shipping
Regulation
Subtotal, water transportation
Other transportation
Deductions for offsetting receipts
Total, outlays
ADDENDUM
Off-budget Federal entity:
U.S. Railway Association:
Budget authority
Outlays

1978
actual

1979
estimate

5,640
644
2,177
1,829

6,160
969
2,376
2,396

1980
estimate

6,083
1,394
2,539
1,740
40
81

10,355

11,973

11,876

2,778

2,949

2,994

398
77
25

476
73
28

539
72
31

1981
estimate

6,475
1,760
2,702
1,987
320
85
13,329

1982
estimate

6,849
1,853
2,952
1,511
360
86
13,610

992
2,298
534
78
30

875
2,564
518
82
30
4,068

3,277

3,526

3,635

3,932

1,273
571
9

1,411
485
11

1,484
562
11

1,586
596
11

1,660
592
11

1,854

1,906

2,057

2,193

2,264

61
-102
15,444

20
66

- 53

- 50

- 52

17,449

17,609

19,492

19,981

27
63

30
27

a narrowing of the differences in Federal matching shares for
financing highway and mass transit construction to encourage
more balanced State and local government transportation decisions;
an expanded bridge program, including rehabilitation and replacement;
greater emphasis on reconstruction of existing roads;
a grant program for transit in rural areas and small towns to
be allocated by a set formula;
a discretionary grant program for city transit programs focused to support the administration's urban policies; and

184

THE BUDGET FOR FISCAL YEAR 1980

• consolidated planning requirements for transit and highway
programs.
The authorized funding levels contained in the new act are
higher than those requested by the administration. Nevertheless,
with moderate appropriations restraint, the effective funding level
requested for the act can be set at a level consistent with the
President's budgetary goals. Restraint will also be needed to slow
down the unacceptably high rate of cost increases in highway
construction (21% higher in 1978 than in 1977).
The administration is seeking in 1980 to maintain major highway and transit programs that meet critical transportation needs
while continuing to eliminate or reduce those programs that have
been identified as lower priorities. While support for the Federalaid highway programs (primarily interstate, primary, secondary
and urban highways) is increasing—with a $360 million outlay
increase in 1980—the budget does not propose funding a series of
smaller highway programs that can be funded within existing Federal-aid highway authorities or that can be supported satisfactorily
by States and localities. Among the highway programs for which
no funds are proposed are aid for construction of roads not listed
on any Federal-aid highway system and most aid earmarked for
specifically identified highway projects. Additionally, in light of
recently enacted legislation that drastically reduces the scope of
the highway beautification program, the budget does not request
any funds for this purpose pending completion of a comprehensive
Department of Transportation review of the program to determine
if it can be successfully continued.
The 1980 budget recommends a program of grants for public
transit assistance at levels near those originally proposed by the
administration last year for 1980. This assistance will maintain the
policy, begun in 1979, of allocating by formula over half of the
Federal assistance for the purchase of transit buses.
The 1980 budget proposes support for substantial construction on
the new rail transit systems now underway in several cities. In
addition, the budget requests $200 million of budget authority for
transit-related investments intended to revitalize the central city
areas of many metropolitan areas. This funding is part of the
President's urban initiative announced in March, 1978. The program will be conducted in close cooperation with the Departments
of Commerce, and Housing and Urban Development.
The budget, however, does not request funds for several new,
narrow categories of public transportation assistance authorized in
the Surface Transportation Assistance Act. These narrow grants—
which include intercity bus subsidies and bus terminal construction—largely duplicate funding authority already available under
more broadly based transit programs. The administration believes

MEETING NATIONAL NEEDS

185

that existing programs address the problems for which these special categories were created.
The administration proposes to fund Federal mass transit operating subsidy assistance in 1980 at the same level as in 1979. This
level of funding continues the administration's commitment to provide an adequate level of operating assistance to the Nation's
urban transportation systems.
The administration is proposing the most significant organizational streamlining of the Department of Transportation since it
was created in 1967. The Department of Transportation has developed a plan to create a single Surface Transportation Administration, which would consolidate the personnel and functions currently performed by two separate agencies—the Urban Mass Transportation Administration and the Federal Highway Administration. It
is expected that this will reduce the paperwork burden, improve
efficiency and effectiveness at all levels of government, and encourage a more integrated approach to highway and public transportation investments.
Railroads,—The President's budget for various railroad financial
assistance programs is an outgrowth of a broader analysis of the
future of the railroad industry and its role as part of a viable
national transportation system. The railroads in general are struggling for financial survival, and particular railroads are already
bankrupt or on the verge of bankruptcy. Any attempt to preserve
the current rail system in its entirety would require massive
amounts of Federal aid. Such aid would treat only the symptoms
and not the fundamental causes of the railroads' financial difficulties that include: requirements to provide services at rates that do
not cover costs; a lack of flexibility to vary rates and service
according to fluctuations in supply and demand; inadequate productivity improvements; increasing competition from other forms
of transportation; poor service reliability; and a deteriorating physical plant structure. Failing to deal with the railroads' basic problems could become a significant threat to our efforts to control
Federal spending and to limit the intrusion of the Government into
the affairs of private industry.
The key assumption of the President's budget is this: We cannot
continue to ask the general taxpayer to pay the cost of an uneconomic railroad system, a system largely sustained by outdated
Federal regulatory policies. As a consequence, the administration
regards changes in the regulatory system as crucial.
The administration believes that railroads should no longer be
forced to transport freight at rates that do not yield a reasonable
rate of return. The administration's regulatory reform proposals
are designed to permit the railroads freedom to respond to chang-

186

THE BUDGET FOR FISCAL YEAR 1980

ing market pressures and, through the actions of the marketplace,
to assume their proper role in our transportation system. This will
mean that each freight mode—trucks, railroads, airlines, pipelines,
and barges—carries the freight traffic that it is most economically
suited to handle. It also will mean the end to certain cross-subsidies in the railroad rate structure that penalize some railroad
shippers to benefit others. In the long run the Nation cannot afford
the cost to the economy and the taxpayer of maintaining these
economic inefficiencies.
In prior years, direct Federal financial assistance to railroads (not
including Conrail) was in the form of loan guarantees and the
purchase of non-voting, preferred railroad stock, which is redeemable and yields a fixed dividend. This assistance was designed
to preserve the industry while providing time to conduct a comprehensive analysis of the railroads and their role in the transportation system. That analysis, contained in the Department of Transportation's study, "A Prospectus for Change in the Freight Railroad Industry," concludes that the railroad industry would require
massive Federal assistance to survive in its present form. Moreover, it found that the industry could become economically selfsustaining only through major structural and other changes of
which regulatory reform is an essential element.
The new financial assistance programs for railroads proposed in
the budget are consistent with these findings and complement the
regulatory reform proposals. The purpose of Federal aid should not
be the preservation of uneconomic railroad services that may be
better performed by other modes. Rather, the administration proposes that Federal aid should be provided only to assist the railroads as they make the transition to a deregulated competititve
environment. That environment would encourage railroads to compete for traffic and improve the productivity of both labor and
capital. It would allow railroads to terminate those services for
which railroads cannot profitably compete. Legislation will be proposed this spring to alter the form in which Federal financial
assistance will be offered (grants, direct loans, or guarantees). The
budget proposes that the total of Federal commitments should not
exceed $250 million in 1980 and $1.2 billion during the transition to
deregulation.
Conrail is a case study of the problems of the freight railroad
industry and what happens when Federal aid is provided to maintain a railroad without addressing its basic problems. Unless there
are fundamental changes, Conrail will need permanent Federal aid,
even though it has already received a commitment of $3.3 billion of
taxpayer assistance to date. Budget authority of $2.3 billion has
already been appropriated to Conrail, and a supplemental of $974

MEETING NATIONAL NEEDS

187

million is now being requested for 1979. Outlays from the supplemental are estimated to be $239 million in 1979, $440 million in 1980
and $295 million in 1981. The supplemental is required because the
original assumptions about the rate of financial improvement were
over optimistic and Conrail has been unable to make the needed
changes.
The President's budget proposes to continue funding Conrail, but
constrained to the approximate rate requested in Conrail's February 1978 business plan. This rate of funding will not allow ConRail
to continue all of its unprofitable operations. The administration
believes ConRail needs to trim away its unprofitable operations
and improve its services. As discussed above, the proposals to
change the regulatory system will facilitate this process.
Assistance to rail passenger service takes the form of a subsidy
to the National Railroad Passenger Corporation (Amtrak), and financing capital improvements through the Northeast corridor improvement project. The 1980 Amtrak request is sufficient to operate a reduced route system as recommended in the final Amtrak
route restructuring study. The reduced system has fewer long-haul
routes and places greater emphasis on trains that average more
passengers. The Northeast corridor improvements are designed to
make rail passenger travel in the Northeast more attractive and,
therefore, increase the number of passengers and the revenues
received by Amtrak. These improvements will provide the best
opportunity for rail passenger service in the Northeast to become
self-supporting.
Regulation.—In addition to its regulatory reform initiatives for
railroads, the administration will propose intercity bus deregulation legislation to Congress early this session. Intercity bus deregulation will complement airline deregulation and extend the benefits
of more competition to people who travel by bus and not by plane.
The administration also supports reforming truck industry regulations. It would be a logical complement to railroad deregulation,
since competition between modes of transportation would be increased. It also should lead to reduced shipping costs, less inefficiency and wasted fuel, less paperwork, and more opportunities for small
and minority businessmen.
Air transportation.—To provide a safe and reliable air transportation system, the Federal Government will spend an estimated
$3.1 billion in 1980, compared to $3.5 billion in 1979.
Airways and airports.—The primary mission of the Federal Aviation Administration (FAA) is the safe and expeditious movement
of air traffic. This budget allows the FAA to expand further its air
traffic controller staffing levels in airport towers and terminals

188

THE BUDGET FOR FISCAL YEAR 1980

where airline and general aviation traffic has placed additional
demands upon the air traffic control system. As was the case last
year, the FAA will continue to improve its management so as to
reduce staffing for functions other than air traffic control. The
budget also reflects the initial productivity gains in systems maintenance resulting from the agency's program to replace obsolete
equipment and to install remote monitoring systems, which will
reduce the frequency of on-site maintenance visits.
In recent months the FAA has conducted a thorough review of
its activities aimed at reducing the risk of mid-air collisions and
near misses. As a result of this review, additional funds are requested for both 1979 and 1980: (1) to increase air traffic control
oversight at 62 locations; (2) to install instrument landing systems
primarily for training purposes at 24 "reliever" airports (airports
that can relieve traffic levels at more congested nearby airports);
and (3) to expedite research and development on collision avoidance
systems and expanded computer systems.
The budget proposes to continue the growth in fire safety research so that a well-defined information base can be developed for
subsequent rulemaking proceedings. All high-priority facilities and
equipment projects related to aviation safety are proposed for funding. However, many projects for refurbishing and enchancing facilities have been deferred. The budget proposes a 1-year reduction of
the discretionary portion of the airport development grants program.
The administration will offer legislation to extend the airport
and airway trust fund. The programs financed by this fund will
expand the capacity and safety of the airport and traffic control
system to handle the expected rapid growth in air transportation—
growth that is partly attributable to the deregulation of the airline
industry and the expected surge in airline passenger traffic. Funding levels for 1981-85 total $14.6 billion. This includes $4.0 billion
for airport grants and planning, $2.1 billion for facilities and equipment, $0.5 billion for research and development, and $8.0 billion to
cover an increasing share of the cost of operating the airway
system. These amounts will provide steadily increasing program
levels commensurate with the growth of aviation. Revenues plus
interest on the unspent trust fund balance are estimated to be
$13.2 billion over the same period. The uncommitted trust fund
balance would therefore be reduced from $3.2 billion at the beginning of 1981 to $1.8 billion by the end of 1985. At the same time,
changes will be made in the user taxes that sustain the trust fund
to provide a better balance between the sources of revenue and the
groups that benefit from the various trust fund programs. Specific
changes to be reflected in the proposal are: (1) an ad valorem fuel
tax on aviation gasoline plus an excise tax on new aircraft and

MEETING NATIONAL NEEDS

189

aircraft equipment; (2) beginning in 1981, a substantial increase in
funding levels for airport grants, airway facilities and equipment;
and (3) more extensive coverage of FAA operational expenses by
trust fund revenues. A discussion of these proposals is included in
Part 4, "Budget Receipts."
Aeronautical research and technology.—NASA's aeronautical research and technolgy activities will continue to provide a sound
technology base for increasing the safety, efficiency, and performance of air transportation systems, supporting the Department of
Defense in maintaining the superiority of the Nation's military
aircraft, and maintaining our strong competitive position in the
international market for aviation equipment. The 1980 budget continues to emphasize the current energy efficiency program, which
should lead to more efficient aircraft needing less fuel.
Air carrier subsidies.—Under the terms of the Airline Deregulation Act, the Civil Aeronautics Board will continue the current
subsidy program. This program, which provides Federal funds to
certified carriers that operate routes eligible for subsidies, will end
after 7 years. The Board is also beginning a new subsidy program
that is designed to guarantee essential air services to small communities now served by certified carriers. Commuter airlines will be
eligible to receive funds under the new subsidy program, and will
also be eligible to receive loan guarantees for the purchase of
aircraft. The administration believes commuter airlines can replace
larger airlines in serving small communities and provide even
more frequent and convenient service.
Regulation.—The administration's commitment to reform of domestic commercial aviation contributed to the enactment of legislation deregulating airline passenger and cargo operations. Already,
deregulation and prior support of regulatory reform have led to
drastically reduced fares for passengers. Lower fares have, in turn,
generated increased airline traffic and higher industry profits. Air
cargo service is also improving in a deregulated environment. The
administration believes deregulation will lead to even more benefits as airline competition to serve the traveler and shipper expands further.
Water transportation.—Ho meet the need for a competitive U.S.
merchant marine and to maintain a safe, reliable, and efficient
marine transportation system, the budget proposes $2.1 billion in
outlays for water transporation programs in 1980, compared to $1.9
billion in 1979.

280-000

O—79—13

190

THE BUDGET FOR FISCAL YEAR 1980

Marine safety and transportation.—The Coast Guard provides a
variety of services to the mariner and general boating public that
enhance the safe, efficient, and enjoyable use of the Nation's waterways. These services range from search and rescue of persons in
distress, to maintenance of navigation aids, to prevention and
cleanup of marine pollution. The budget recommends a continuing
emphasis on improving maritime safety and environmental protection through such high-priority activities as the oil tanker inspection and examination programs, the upgrading of tanker construction and operations standards, and implementation of the recently
enacted Outer Continential Shelf legislation. Legislation to implement the International Convention for the Prevention of Pollution
from Ships, 1973, will again be proposed as part of the administration's efforts to control oil pollution in the oceans. To accomplish
the Coast Guard's many missions, the budget continues the renovation and replacement of over age, inadequate operating equipment.
The budget proposes termination of the boating safety grant
program. This program has achieved its objective of stimulating
increased State and local effort in the area of recreational boating
safety.
Ocean shipping.—Direct subsidies are provided to the U.S. merchant marine and shipbuilding industry to offset higher American
costs that otherwise would encourage ship operators to build their
vessels in foreign shipyards and operate them under foreign registry.
The total 1980 outlays for this program are estimated to be $549
million. Other indirect support is provided to the maritime industry
in the form of loan guarantees and government cargo preference
rules. (These rules require that half of all ocean shipments of
Government-sponsored cargoes be made aboard U.S. flag vessels
except for military shipments, which must be moved exclusively on
American ships.) In 1980, an estimated $1 billion in new ship
construction loan commitments will be guaranteed by the Federal
Government. The cost to the Federal Government of the cargo
preference rules is estimated to be approximately $150 million in
1980 outlays.
The administration will propose legislation to reorient the subsidy programs toward the growing market in bulk carriage and to
more effectively promote the U.S. maritime industry. As with the
truck and rail industries, the regulated ocean liner shipping industry will be the subject of legislative proposals designed to reform the
shipping statutes administered by the Federal Maritime Commission.
A new Federal agency will begin operating the Panama Canal in
1980. Under legislation to be proposed by the administration to
implement the Panama Canal Treaty of 1977, the Panama Canal

MEETING NATIONAL NEEDS

191

Commission, a new agency, will be self-financing and will be governed by a Board of Directors composed of 5 U.S. and 4 Panamanian members. The U.S. members will represent the Departments
of Defense, State, Transportation, Commerce, and Treasury. The
Defense representative will serve as Chairman of the Board. The
new Commission will operate the Canal but, unlike the predecessor
Panama Canal Company, will not provide related commercial services to Canal users and employees. Commercial services will be
provided largely by the government and private businesses of
Panama.
CREDIT PROGRAMS—TRANSPORTATION
(In millions of dollars)
1978
actual

Program
Highways and mass transit:
Direct loans:
New loans
Repayments, sales and adjustments ( - )

1980
estimate

1979
estimate

17
-56

..
-101

*
*

73
—3

-101

801

1,006

521

801

1,006

521

67
25

402
433

15
-92

108
-36

6
-2

4
-1

Guaranteed loans:
New loans
Net credit guaranteed

900
451

937
730

888
661

Aircraft loan guarantees:
Guaranteed loans:
New loans
Net credit guaranteed

41
27

50
29

Net credit outlays
Net credit guaranteed

Railroads:
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net credit outlays
Guaranteed loans:
New loans
Net credit guaranteed
Assistance to ocean shipping:
Direct loans.New loans
Repayments, sales and adjustments ( - )
Net credit outlays

Off-budget Federal entity—U.S. Railway Association:
Direct loans.New loans
Repayments, sales and adjustments ( - )
Net credit outlays

100
70

79
-10

90
-22

58
-23

192

THE BUDGET FOR FISCAL YEAR 1980

COMMUNITY AND REGIONAL DEVELOPMENT
National Needs Statement:
• Promote the development, maintenance, or redevelopment of economically and socially viable neighborhoods
in urban, suburban, and rural areas.
• Develop a partnership among Federal, State, and local
governments and the private sector to assist in the stabilization of and revitalization of economically depressed
and declining areas.
• Provide relief to areas that suffer from natural disasters.
In announcing the urban initiative last spring, the President
emphasized the need to develop a viable and continuing partnership among the Federal, State, and local governments and the
private sector to assure the revitalization of economically depressed
and declining areas. This partnership concept was an essential
ingredient in the urban policy. It acknowledged that Federal resources alone could not begin to achieve the task of revitalizing
economically depressed urban areas.
The current austere budget has forced a thorough reexamination
of the array of Federal programs providing direct and indirect
community and regional development assistance to States and local
communities, including the program increases and initiatives contained in the President's urban policy. This effort has reaffirmed
the need to develop an effective partnership among Federal, State
and local governments and the private sector.
Proposed resources allocated for community and regional development are increased substantially, despite overall budget austerity. Total proposed budget authority increases from $8.1 billion in
1979 to $11.3 billion in 1980. This 39% increase reflects the high
priority placed on meeting essential community and regional development needs and fulfilling the Federal Government's commitment
to developing a meaningful and effective partnership. The decline
in 1980 outlays reflects the higher level of outlays in 1978 and 1979
for antirecession and disaster assistance programs. These programs
are phasing down in 1980 due to improved economic conditions, a
return to normal levels of disaster relief and emergency loan assistance, and more effective management of those disaster assistance
programs.
Federal programs in this area have not been uniformly increased, however. This budget proposes increases for those programs that advance the partnership with State and local governments and the private sector, and that target Federal resources to

MEETING NATIONAL NEEDS

193

areas with the greatest need and the greatest potential for improvement. Federal resources for community and regional development will focus more explicitly on two key objectives:
• increasing the capability of local governments to provide
those public services essential to the revitalization of their
neighborhoods and communities; and
• more effective support for private sector economic development to increase the competitiveness of the U.S. economy and
the economic vitality of local areas.
For those programs considered most effective in meeting these
objectives, this budget proposes:
• an increase of $150 million in HUD's community development
block grant program;
• maintaining HUD's urban development action grant program
at its 1979 funding level of $400 million;
• a National Development Bank (NDB) to provide $3.5 billion in
budget authority for grants, loan guarantees, interest subsidies,
and other financial assistance to business firms willing to
locate or remain in economically depressed areas;
• increased funding for neighborhood-oriented programs, including neighborhood self-help development grants, the livable
cities programs, and the housing rehabilitation activities of
the recently established Neighborhood Reinvestment Corporation;
• additional adjustment assistance for communities adversely
affected by energy resource development activities; and
• a revised framework of regional commissions to spur economic development.
The proposed NDB is a major part of the administration's increased efforts in the community and regional development area.
Although it is currently shown as an independent agency, the
administration is considering several options for locating the Bank
within an existing department.
The substantial increases in proposed budget authority for community and regional development activities more than offset the
proposed reduction or elimination of a number of lower priority
programs in this area. Prime examples of these proposed program
reductions are the $13 million decrease in HUD's comprehensive
planning grant program; the elimination of the $200 million HUD
State incentive grants program proposed last year; and the $323
million reduction in Department of Agriculture grants and insured
loans for water, sewer, and community facility development in
rural areas.

194

THE BUDGET FOR FISCAL YEAR 1980
NATIONAL NEED: COMMUNITY AND REGIONAL DEVELOPMENT
(Functional code 450; in millions of dollars)

Major Missions and Programs

BUDGET AUTHORITY
Community development:
Department of Housing and Urban development:
Community development block grants
Urban development action grants
Expiring categorical programs
Rehabilitation loans
Research and planning
Neighborhood self-help
Other programs
Departmental management
Neighborhood Reinvestment Corporation
Pennsylvania Avenue development
Other
Subtotal, community development
Area and regional development:
National Development Bank (proposed)
Rural development and business assistance.
Economic development assistance
Local public works
Inland energy impact
Coastal energy impact
Indian programs
Regional commissions
Other programs
Offsetting receipts
Subtotal, area and regional development
Disaster relief and insuranceDisaster loans
Federal emergency management activities...
Drought assistance and other
Subtotal, disaster relief and insurance
Deductions for offsetting receipts
Total, budget authority

1978
actual

1979
estimate

3,600
400
3

Ill
157

3,750
400
3
230
110
15
47
171

21
2

65
2

109

4,403

966
522
4

4,794
4
989
538
11

1980
estimate

1981
estimate

1982
estimate

3,900
400
14
130
93
15
40
192
10
39
2

3,800
400
16
140
93
15
62
194
10
40
2

3,800
400
15
135
93
15
67
194
10
44
2

4,834

4,772

4,776

3,530
605
609

2,563
783
607

2,574
812
607

150
150
4
4
893
895
484
528
120
108
-343 -368
5,262

115
799
430
139
-295

970
481
155
-350

150
4
885
484
134
-353

2,679

2,797

6,049

5,309

2,641
2,641
576
576
30
30

218
218
325
325
10
10

61
313
20

76
739
20

91
289
20

3,246

553
5
53

394

835

400

--23
23

--19
19

-19

10,306

8,126

11,259

10,850

10,467

MEETING NATIONAL

195

NEEDS

NATIONAL NEED: COMMUNITY AND REGIONAL DEVELOPMENT—Continued
(Functional code 450; in millions of dollars)
Major Missions and Programs
OUTLAYS
Community development:
Department of Housing and Urban development:
Community development block grants
Urban development action grants
Expiring categorical programs
Rehabilitation loans
Research and planning
Neighborhood self-help
Other programs
Departmental management
Neighborhood Reinvestment Corporation
Pennsylvania Avenue development
Other
Subtotal, community development

1979
estimate

1978
actual

2,464

1980
estimate

1981
estimate

1982
estimate

100
145

2,875
44
307
91
112
3
51
166

20
12

52
13

3,272
162
315
125
110
14
59
191
10
42
16

3,302

3,715

4,316

4,654

4,748

756
777
476

971
829
519

150
55
795
471
122
-343

150
55
816
516
110
-368

395
47
118

3,687
267
85
160
96
15
66
194
10
53
21

3,760
395
12
135
93
15
66
194
10
42
25

Area and regional development:
National Development Bank (proposed)
Rural development and business assistance.
Economic development assistance
Local public works
Inland energy impact
Coastal energy impact
Indian programs
Regional commissions
Other programs
Offsetting receipts

516
326
3,057

4
666
348
2,051

*
746
372
127
-295

11
782
400
150
-350

195
475
431
319
76
54
730
412
134
-353

Subtotal, area and regional development

4,850

4,062

2,473

3,259

3,597

Disaster relief and insurance:
Disaster loans
Federal emergency management activities...
Drought assistance and other

2,105
618
148

793
470
42

20
460
30

35
405
20

50
414
20

Subtotal, disaster relief and insurance

2,871

1,305

510

460

484

-23

-19

^19

-19

11,000

9,063

7,281

8,354

8,810

150
143

146
140

144
135

Deductions for offsetting receipts
Total, outlays
ADDENDUM
Off-budget Federal entity—Rural Telephone
Bank:
Budget authority
Outlays

135
113

156
124

*$500 thousand or less.

Community development.—A variety of Federal programs, administered by several agencies, support the mission of community development by providing Federal grants, loans, and technical assist-

196

THE BUDGET FOR FISCAL YEAR 1980

ance to States and localities. Outlays for this mission are estimated
to rise from $3.5 billion in 1979 to $4.2 billion in 1980.
Department of Housing and Urban Development,—The Housing
and Community Development Act of 1974 consolidated a number of
separately funded HUD community development programs into the
community development block grant program. This program substantially improved and simplified Federal community development assistance to local governments by offering a single flexible
source of Federal assistance to support a wide range of activities
based on local priorities. Activities funded under this program
include property acquisition, the construction of public facilities,
the rehabilitation of buildings, the provision of social services, and
planning and management. Funds are allocated by formula on the
basis of objective measures of need. The Housing and Community
Development Act of 1977 made the community development block
grants more responsive to the needs of distressed urban areas. It
provided metropolitan cities and urban counties the choice of receiving allotments under either of two formulas:
• the original formula, composed of poverty (50%), population
(25%), and overcrowded housing (25%); or
• an alternative formula, composed of poverty (30%), population
growth lag, as represented by below average growth rates
since 1960 (20%), and age of housing stock (50%).
The alternative formula addressed the physical deterioration in
older urban areas and has increased entitlement grants for these
communities.
The proposed level of new commitments for block grants in 1980
is $3.8 billion, $150 million above the 1979 level. This increase will
go primarily to metropolitan cities anil urban counties. Outlays
reflect the rate at which State and local governments carry out
their projects and are expected to increase from $2.8 billion in 1979
to $3.2 billion in 1980.
The Housing and Community Development Act of 1977 also established urban development action grants. Under this program,
severely distressed cities and urban counties receive discretionary
grants to supplement local government and private sector financing for major urban rehabilitation projects. The 1980 budget requests $400 million in budget authority for the action grants. Outlays for the urban development action grant fund are estimated to
rise from $44 million in 1979 to $162 million in 1980.
Outlays for categorical programs replaced by block grants will
continue to decrease as previously approved projects are completed.
To help communities settle these old commitments, the budget
requests $100 million in budget authority for the categorical projects financial settlements fund, which is in the community develop-

MEETING NATIONAL NEEDS

197

ment block grant program. By using these funds, plus funds from
the block grant program, and their own resources, local communities should be able to meet their remaining financial commitments
under these old categorical community development programs.
Comprehensive planning grants, established by the Housing Act
of 1954, provide funds to States, local governments, and areawide
organizations for planning and management. The budget authority
proposed for this program in 1980 is $40 million, about 25% less
than the $53 million appropriated in 1979. This reduction recognizes that the program has achieved many of its original purposes
— the development of comprehensive planning and management
capability in many State and local governments. It also reflects the
availability of other Federal funds to support planning activities
and independent efforts to improve the regional commissions (described in the area and regional development mission).
The rehabilitation loan program provides subsidized loans to rehabilitate residential and commercial structures in specified areas.
A program level of $185 million is proposed for 1980 compared to
$260 million in 1979. The 1980 request would finance the rehabilitation of 12,800 single-family dwellings and 4,500 multi-family
units. Outlays are estimated to increase from $91 million in 1979 to
$125 million in 1980.
The budget continues the emphasis on neighborhood-oriented
programs established in the administration's urban initiative.
Budget authority of $15 million for the neighborhood self-help development program is requested for both 1979 and 1980. This program provides Federal grants to voluntary, non-profit neighborhood organizations to assist them in carrying out revitalization
projects in declining urban neighborhoods. The budget also provides budget authority of $5 million in both 1979 and 1980 for
HUD's livable cities program. This program is expected to help
revitalize low- and moderate-income urban neighborhoods by supporting projects with cultural, artistic, and historical merit. In
addition, the programs of the newly established Neighborhood Reinvestment Corporation will be supported in 1980 by a request of
$9.5 million in budget authority. This corporation replaces the
Urban Reinvestment Task Force which received $8.5 million in
1979 from HUD research and demonstration funds for neighborhood housing rehabilitation projects.
Pennsylvania Avenue development.—The budget requests $39 million in budget authority for 1980 to continue the revitalization of
downtown Washington, D.C., as envisioned in the Pennsylvania
Avenue development plan. The first two major projects are scheduled to begin in 1979. Development will continue under the direction of the Pennsylvania Avenue Development Corporation in coop-

198

THE BUDGET FOR FISCAL YEAR 1980

eration with private enterprise. Outlays for land acquisition and
development and public development activities are estimated to
decline from $52 million in 1979 to $42 million in 1980 as the need
for Federal support declines.
Related programs for urban assistance.—On March 27, 1978, the

President presented his urban policy "a new partnership to conserve America's communities." The policy committed the Federal
Government to a comprehensive effort to make Federal programs
more sensitive to the needs of urban areas. This effort included
improvements in existing Federal programs as well as major legislative initiatives. While a large portion of urban assistance is included in the national needs category of community and regional
development, significant portions of it are classified elsewhere. Included in these initiatives as part of community development are:
• the livable cities program;
• the neighborhood self-help and development program;
• additional funding for the section 312 housing rehabilitation
program emphasizing multi-family rehabilitation; and
• the National Development Bank (discussed under regional
development below) to help both urban and rural areas.
Classified as meeting national needs other than community and
regional development are the following:
• An urban parks and recreation program, which provides
matching grants to local governments to encourage revitalization and rehabilitation of urban parks and recreation systems.
• The creation of a National Consumer Cooperative Bank,
which will provide credit, equity, and technical assistance to
consumer cooperatives.
• An urban intermodal transit program, which provides assistance to urban areas for intermodal transportation and economic development projects.
• A private sector initiative to encourage private employers to
hire and train unemployed and low-income individuals.
• New efforts to improve the health care of inner-city residents
in selected cities across the country.
• The provision of additional assistance for school districts with
high concentrations of low-income students.
• A program permitting the Secretary of Treasury to guarantee
loans to New York City.
In addition, improvements in the employment tax credit and an
extension of the investment tax credit for rehabilitation of existing
plant and equipment will provide support to urban areas. Legislation to be proposed for the reauthorization of the Law Enforcement
Assistance Administration will include an expansion of urban community anti-crime programs.

MEETING NATIONAL NEEDS

199

The budget also reflects a transition program of targeted fiscal
assistance. This program, discussed in the section on general purpose fiscal assistance, will provide aid to local governments continuing to experience high unemployment and fiscal strain. Also
discussed in that section is the proposal for a standby countercyclical fiscal assistance program to be activated in the event of an
economic decline.
A precise accounting of the amount of Federal resources currently allocated to urban areas is difficult. Approximate data do exist,
however, on the portion of Federal grants to State and local governments that go to standard metropolitan areas (SMSA's). These
areas are essentially urban in character, but include suburbs as
well as central cities. To make a meaningful comparison of the
year-to-year changes in resources flowing into SMSA's, it is useful
to adjust for the effects of the business cycle and therefore exclude
from the figures the amounts attributable purely to antirecession
programs, which are expected to be phased down in response to
improved economic conditions. Deleting these amounts yields estimated total grant outlays going into SMSA's of $46 billion, $51
billion, and $54 billion for 1978, 1979, and 1980, respectively, or an
annual rate of increase between 1978 and 1980 of approximately
7.7%. Total Federal grant outlays for SMSA's in 1980 are estimated
to be $55 billion.
Area and regional development.—Programs in this mission support rural and urban development, American Indian tribal governments, and multistate regional development through the Appalachian Regional Commission and other regional commissions. The
administration is proposing a significant shift in emphasis toward
direct support for private sector economic development efforts. The
proposed National Development Bank is the key element in this
shift.
National Development Bank.—The National Development Bank
is the major new initiative in the area of community and regional
economic development. The mission of the Bank is to stimulate
private investment and increase private sector employment in
rural and urban areas experiencing lagging growth and persistent
or increasing unemployment.
The Bank will be the nucleus for the consolidation of new and
existing Federal business credit assistance targeted on economic
development. Direct and guaranteed loan programs in the Economic
Development Administration, Farmers Home Administration, the
Small Business Administration, and the Department of Housing
and Urban Development will be among those considered for incorporation within the Bank. In addition to consolidating business

200

THE BUDGET FOR FISCAL YEAR 1980
URBAN INITIATIVES
(In millions of dollars)
Budget Authority

National needs
1979
estimate
Community and regional development:
HUD: Livable cities
HUD: Self-help development program
HUD: Housing rehabilitation loans
National Development Bank
Natural resources and environment:
Solid waste recovery planning
grants
Urban parks and recreation facilities
Commerce and housing credit:
National Consumer Cooperative
Bank
Transportation:
Multi-modal transportation demonstration grants
Education, training, employment,
and social services:
Private sector initiatives
Community Development Credit
Union (CSA)
Urban Volunteer Corp (ACTION)...
Assistance to troubled schools
(HEW)
Health:
Increased funds for community
health services
General purpose fiscal assistance:
Targeted fiscal assistance
Total

1980
estimate

Outlays
1981
estimate

1979
estimate

15
135

15
36

15
47

3,126

3,208

1980
estimate

1981
estimate

3
6
4

14
25
695

15
53
1,755

150

128

126

200

120

150

3
21

400

12
25

250

150

250

150

1,174

3,877

3,847

409

1,265 2,368

credit within the Bank, the Administration in considering alternatives to locate the Bank within an existing department.
The Bank will add a variety of new inducements to promote
economic development including:
• capital grants to firms of up to 15% of the capital costs of a
project, with a $3 million limit on any single project;
• guarantees of private loans for job-producing plant and equipment: up to 75% of the long-term debt with a maximum of
$15 million on a specific project;

MEETING NATIONAL NEEDS

201

• interest subsidies for the long-term debt guaranteed by the
Bank, which could bring a firm's cost of funds on the guaranteed loan to a rate as low as 2.5%;
• a 40% interest subsidy for up to $20 million of taxable development bonds to finance the capital costs of a project as an
alternative to the guarantee; and
• a financial intermediary to buy long-term private loans made
to businesses in distressed areas to encourage the flow of
capital in those areas.
The variety of inducements could be tailored to address specific
local needs and would, in turn, result in maximum benefits per
Federal dollar invested.
Rural development and business assistance.—The Department of
Agriculture administers a variety of development programs. The
budget provides for $950 million in water and sewer and community facility insured loans during 1980, a decrease of $200 million
from the 1979 level, and for insured and guaranteed loans of $1.0
billion for industrial development, a decrease of $100 million from
the 1979 level. It also proposes that $275 million in budget authority be made available for water and sewer and rural development
grants, $18 million less than the 1979 level. No funds are requested
for comprehensive planning grants, or for rural community fire
protection grants. Total funding for these programs in 1979 was
$8.5 million.
The water and sewer and the community facility loan and grant
programs are intended to augment and complement the community development block grant program and the Environmental Protection Agency waste treatment grant program in rural areas. The
Department of Agriculture community facility programs are limited to communities with a population of less than 10,000; industrial
development loan guarantees are available in communities of less
than 50,000 population.
While the program decreases reflect the need for restraint to
achieve the administration's anti-inflation objectives, the funds provided are directed at meeting the needs of lower income communities. Comprehensive planning is assisted under a number of Federal programs including HUD's community development block grants
program.
Outlays for these rural programs are estimated to increase from
$516 million in 1978 to $666 million in 1979 and decline to $475
million in 1980, because of disbursements from prior-year loan and
grant commitments in 1978 and 1979, and because of asset sales in
1980.
Economic development.—-The Economic Development Administration (EDA) assists States, rural and urban communities, and Indian

202

THE BUDGET FOR FISCAL YEAR 1980

tribes to help them deal with problems of economic distress
through grants and loans for public works and business development loans and loan guarantees. Budget authority of $609 million
is requested for 1980, an increase of $71 million over the 1979
appropriation. Outlays for economic development assistance are
estimated to increase from $348 million in 1979 to $431 million in
1980.
Outlays for local public works are estimated to decline from $2.1
billion in 1979 to $0.3 billion in 1980 as spending for the countercyclical program is completed. No funding is requested for the labor
intensive public works program announced last year as part of the
President's urban initiative.
Inland energy impact assistance.—This program would provide
funds for non-coastal States, communities, and Indian tribes to
develop and carry out plans for mitigating the adverse effects of
rapid population growth due to the development of energy resources. For each of 5 years, beginning in 1980, the program would
provide $15 million for planning grants and $135 million for implementation grants, primarily to capitalize State revolving funds that
would make grants and loans to local areas for infrastructure
improvements. Matching contributions of State and tribal funds for
the implementation of impact mitigation strategies would be required.
Coastal energy impact—This program provides planning grants
and major loans and loan guarantees to States and local governments to assist them in planning and financing public facilities and
services required as a result of energy development activities in or
near coastal areas, such as Outer Continental Shelf oil development. No 1980 funding for the loan program is requested because
an estimated $130 million will be available in 1980 for loans and
loan guarantees from prior-year appropriations. For 1979 and 1980
an estimated total of $98 million will be obligated for Federal
grants, loans, and loan guarantees. Outlays are estimated to rise
from $11 million in 1979 to $54 million in 1980.
Indian programs.—The major objectives of Federal Indian policy
are to meet the trusteeship responsibilities of the U.S. Government,
to increase self-determination for American Indian tribal governments, and to encourage economic development on Indian reservations. To further these objectives, the Indian Self-Determination
and Education Assistance Act of 1975 enables Indian communities
to administer Federal programs serving them, pursuant to contracts with the Bureau of Indian Affairs (BIA). Approximately $180
million of BIA programs are covered by such contracts.

MEETING NATIONAL NEEDS

203

The Federal Government provides grants, training, and technical
assistance to strengthen tribal management and planning abilities.
It also encourages economic development through business development assistance, direct Federal loans, loan guarantees, and interest
subsidies. The Federal Government funds community development
activities, such as construction of roads, schools, and irrigation
systems. Outlays for the Indian programs whose primary mission is
regional development are estimated to be $763 million in 1980
compared to $822 million in 1979 reflecting a reduced construction
program. Additional assistance to Indian tribes is classified in the
health, education, natural resources and environment, and general
government functions.
Regional commission programs.—The regional commissions seek
to encourage community and economic development within their
boundaries. The administration will propose legislation to reauthorize and improve the Appalachian Regional Commission and to
strengthen and modernize the other regional commissions consistent with the following objectives:
• to provide a nationwide system of compatible multistate regional commissions to assist areas experiencing rapid economic growth, as well as those areas suffering from economic
decline;
• to upgrade regional planning by ensuring that State and,
where appropriate, substate development plans are used as
"building blocks" leading to coordinated and compatible multistate development plans;
• to encourage the use of development grants to resolve multistate, rather than strictly local problems;
• to broaden the commissions' scope to permit work on subjects
such as energy, urban policy, human and natural resources—
subjects that go beyond the commissions' traditional ' 'economic development" focus;
• to increase coordination with Federal Regional Councils to
facilitate the execution of interagency agreements for implementing multistate strategies; and
• to facilitate an evolutionary shift of regional commission
boundaries to a more rational framework, with no State belonging to more than one commission.
Taken together, these changes will revive the regional commissions and will significantly improve the Federal-State partnership
in promoting regional development.
Disaster relief and insurance.—Insurance against losses from
such natural disasters as floods, hurricanes, and tornadoes is the
responsibility of individuals and businesses, with State and local

204

THE BUDGET FOR FISCAL YEAR 1980

governments primarily responsible for aiding recovery. Federal insurance and disaster relief are available to supplement these resources when they are insufficient. Beginning in 1979, responsibility for administering the disaster relief programs authorized by the
Disaster Relief Act of 1974 and the flood insurance program will be
vested in the new Federal Emergency Management Agency.
Outlays for disaster relief and insurance are estimated to be $1.3
billion in 1979 and $0.5 billion in 1980.
Disaster loans.—Under current law, both the Farmers Home
Administration in the Department of Agriculture and the Small
Business Administration have the authority to make emergency
farm disaster loans. To remedy the difficulties caused by this overlap in responsibility, the administration is again proposing to limit
such authority to the Farmers Home Administration. The administration will also propose that firms seeking disaster loan assistance
from the Small Business Administration must first be denied loan
assistance by private lenders. The Farmers Home Administration is better equipped, through its long experience in dealing
with farmers, to handle disaster loans for farmers more effectively,
and will assure that loan assistance is extended only to those who
can demonstrate a real need and who cannot obtain private loans.
Farmers Home Administration programs are discussed more fully
in the agriculture and commerce and housing credit functions.
Federal Emergency Management Activities.—The Federal Emergency Management Agency (FEMA) will be established in 1979 to
bring together, in a single agency the major Federal programs for
civil defense, emergency preparedness, flood insurance, disaster
relief assistance and hazard mitigation. The objectives prompting
consolidation of these programs are: (1) better coordination of Federal responsibilities for civil and natural disasters and (2) establishing a single Federal contact for State and local disaster preparedness agencies.
Disaster relief is provided in the form of grants to individual
victims and block grants for the restoration of public facilities.
Outlays depend upon the incidence and severity of uninsured losses
from natural disasters, and are estimated to be $241 million in
1980, compared to $276 million in 1979.
The national flood insurance program, included in FEMA, is
designed to reduce the economic hardship resulting from floods.
Flood insurance is available at federally subsidized rates for structures located in flood hazard areas in communities that are willing

MEETING NATIONAL NEEDS

205

to adopt flood plain management plans. By the end of 1980, 16,322
communities — representing 90% of the total population that resides in the Nation's flood hazard areas — will be participating in
the program. Most of the estimated $162 million in outlays in 1980
will result from the payment of insurance claims.
Hazard mitigation programs will work to reduce the occurrence
of preventable disasters and reduce the damage caused by disasters
that do occur. These programs will concentrate on fires, flood plain
management, earthquakes, dam safety, weather-related disasters,
and the consequences of terrorist activities. The U.S. Fire Agency
will continue its work on fire prevention and control in the new
agency, including training local fire personnel in management and
fire-fighting techniques at a new National Fire Academy. Flood
plain studies conducted by FEMA will assist local governments in
land use planning in these areas, in order to minimize the adverse
effects of flooding. In the remaining areas, FEMA will carry out
programs of its own and will coordinate the related programs of
other Federal agencies.
CREDIT PROGRAMS—COMMUNITY AND REGIONAL DEVELOPMENT
[In millions of dollars]
1978
actual

Program

Housing and Urban Development programs:
Direct loans:
New loans
Repayments, sales and adjustments ( - ) 1 . . . .
Net credit outlays

1979
estimate

386
- 277
108

Guaranteed loans-.
New loans
Net credit guaranteed

46
-515

1980
estimate

266
-187
79
52
-223

National Development Bank:
Direct loans:
New loans

348
-167
181
27
-286

532

Repayments, sales and adjustments ( — ) 1 . . . .
Net credit outlays

—501
31

Guaranteed loans:
New loans
Net credit guaranteed

1,832
1,777

Farmers Home Administration programs:
Direct loans:

New loans
Repayments, sales and adjustments ( - )
Net credit outlays
Guaranteed loans:

990
-948
42

1,141
-1,111
31

1,404
-1,551
-147

New loans

1,473

1,946

2,475

Net credit guaranteed

1,064

1,503

1,748

280-000

O—79—14

206

THE BUDGET FOR FISCAL YEAR 1980
CREDIT PROGRAMS—COMMUNITY AND REGIONAL DEVELOPMENT—Continued
[In millions of dollars]

Program

Other community and regional development
programs:
Direct loans:
New loans
Repayments, sales and adjustments
Net credit outlays
Guaranteed loans:
New loans
Net credit guaranteed

1978
actual

1979
estimate

1980
estimate

247
-33

204
-34

242
-36

213

170

207

113
78

395
350

433
387

Small Business Administration disaster loans:
Direct loans.-

New loans

2,211

953

237

Repayments, sales and adjustments

-181

-330

-412

2,030

623

-175

1
- 1

1
- *

- 1

142
- 4

160
-11

185
-14

138

149

171

Net credit outlays
Guaranteed loans:
New loans
Net credit guaranteed
Off-budget Federal entity—Rural Telephone
Bank:
Direct loans:
New loans
Repayments, sales and adjustments1
Net credit outlays
* $500 thousand or less.
1
Includes sale of loan assets.
Includes loans counted as direct loans of other accounts.

Related programs.—Many programs whose primary purpose is to
fulfill other national needs also promote community and regional
development. Federal outlays for civil public works, shown on the
table below, support community development. In addition, grants
for local health, education, crime prevention, employment training,
transportation and general revenue sharing assist State and local
development. Other direct Federal activities, such as housing
credit, defense contracting, management of public forests and
parks, and the operation of Federal facilities (for example, Veterans Administration hospitals, naval shipyards, and NASA research
facilities) also significantly affect community development.

MEETING NATIONAL NEEDS

207

FEDERAL OUTLAYS FOR CIVIL PUBLIC WORKS AND CONSTRUCTION1
(In billions of dollars)

Function or Program

Federal public works:1
Community and regional development
Water resources projects
Other natural resources and environment

Energy
Transportation
Veterans hospitals
Health
Other functions
Total, Federal public works
Grants to State and local governments:
Community and regional development:
Community development block grants

Local public works
Other
Subtotal, community and regional development
Highways and mass transit
Other transportation
%
Pollution control and abatement
Other natural resources and environment

Other

1978
actual

1979
estimate

1980
estimate

238
2r032
601

261
1,975
688

171
1,934
663

2,054

2,188

1,943

348
284
217
423

377
318
212
475

297
243
167
319
5,952

6,385

6,092

2,464

2,875

3,057
W83

2,051
U33

319
1,249

3,272

6,605
7,200
660
3,187
233

6,059
8,151
653
3,100
261

4,841
8,425
602
3,600
213

138

196

168

Total, grants to State and local governments

18,022

18,420

17,849

Total, public works

23,974

24,804

23,941

Outlays for the construction and rehabilitation of physical assets, including privately owned assets.

208

THE BUDGET FOR FISCAL YEAR 1980

EDUCATION, TRAINING, EMPLOYMENT, AND
SOCIAL SERVICES
National Needs Statement9
• Assist the disadvantaged and the disabled to be selfsufficient and self-supporting.
• Assist State and local governments in providing equal
elementary and secondary educational opportunities to
students of special national concern, particularly the disadvantaged and the handicapped.
• Ensure that no one is denied access to higher education
because of financial barriers.
• Promote the development and dissemination of knowledge concerning education theory and practice.
• Promote the development of, and access to, the arts and
humanities.
• Provide work skills needed for full and equal access to
jobs.
• Provide transitional employment opportunities for the
disadvantaged where regular labor markets do not provide sufficient jobs for them.
• Enhance the quality of the workplace and the stability of
labor-management relations.
To help meet our national needs in education, training, employment, and social services in 1980, the budget proposes Federal
spending of $30.2 billion and requests $30.9 billion in budget authority. The 1980 outlay estimate is $446 million below the 1979
level and the budget authority request is $2.1 billion below 1979,
reflecting the fiscal restraint that is one of the dominant principles
of this year's budget.
Notwithstanding these decreases, the proposed spending to support education, training, employment, and social services is nearly
50% above the 1977 level. Available resources have been directed
toward programs that serve the disadvantaged. For example, although the total budget authority request is below the 1979 level,
the budget includes increases for education services for low-income,
low-achieving students, education of the handicapped, and bilingual
and Indian education. Similarly, although the total level of public
service employment proposed for 1980 is below the 1979 level, no
reduction is proposed in the programs directed at structural unemployment, which serve the neediest of the unemployed. Moreover, a
1979 supplemental of $400 million in budget authority would provide additional outlays in both 1979 and 1980 for a new program to

MEETING NATIONAL NEEDS

209

improve private sector employment opportunities for the disadvantaged. The major budget proposals in this area would:
• provide increased assistance to localities for compensatory
education in areas with high concentrations of low-income
children;
• assist States in improving the basic skills of school children;
• provide training and employment assistance for individuals in
greatest need, emphasizing long-term job skill development
and private sector job creation;
• safeguard the rights and improve the status of children in
foster care, and provide assistance for family reunification or
adoption as alternatives to long-term foster care;
• develop new strategies to improve the welfare system, with
special emphasis on employment and training; and
• assist in maintaining older Americans with the greatest economic and social needs in a home environment through the
provision of necessary supportive services.
NATIONAL NEED: EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES
[Functional code 500; in millions of dollars]

Major Missions and Programs
BUDGET AUTHORITY
Education:
Elementary, secondary, and vocational
education:
Aid to education agencies-.
Elementary and secondary education..
Indian education
Impact aid
Education for the handicapped
Occupational, vocational and adult
education
Other
Child development
Subtotal, elementary, secondary, and
vocational education
Higher education:
Student aid and institutional support
Special institutions
Subtotal, higher education
Research and general education aids:
Special projects and training
Educational research:
National Institute of Education
Other
Cultural activities
Other
Subtotal, research and general education aids

1978
actual

1979
estimate

1980
estimate

1981
estimate

3,953
328
528
1,028

1982
estimate

3,953
328
528
1,028

3,191
318
805
661

3,779
335
816
977

3,953
339
528
1,028

733
339
676

782
345
731

772
358
751

6,721

7,765

7,730

7,719

4,141
160
4,300

5,332
175
5,507

5,013
188
5,200

5,118
188
5,305

5,224
188
5,411

101

113

118

90
28
492
517

92
33
559
541

98
33
638
518

98
33
635
523

98
33
648
530

1,405

1,407

1,228

1,339

111
358
751

772
358
751

1,426

210

THE BUDGET FOR FISCAL YEAR 1980

NATIONAL NEED: EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES—Continued
[Functional code 500; in millions of dollars]
Major Missions and Programs
Subtotal, education
Training, employment, and labor services:
Training and employment:
General training and employment programs
Private sector program
Public service employment
Youth programs
Older workers
Work incentive program
Federal-State employment service
Subtotal, training and employment
Other labor services
Subtotal, training, employment, and
labor services
Social services:
Grants to States for social and child welfare services
Proposed legislation
Retroactive claims
Services for the disabled, the elderly and
other special groups
Community service programs
Domestic volunteer programs
Other social services
Subtotal, social services
Deductions for offsetting receipts
Total, budget authority
OUTLAYS
Education:
Elementary, secondary, and vocational
education:
Aid to education agencies-.
Elementary and secondary education..
Indian education
Impact aid
Education for the handicapped
Occupational, vocational and adult
education
Other
Child development
Subtotal, elementary, secondary, and
vocational education
Higher education:
Student aid and institutional support
Special institutions

1978
actual

1979
estimate

1980
estimate

1981
estimate

1982
estimate

12,249

14,611

14,335

14,431

14,556

2,359

2,466

2,526

2,540

1,173
212
365
694

2,384
400
5,992
1,967
221
385
745

4,727
2,047
235
385
762

4,570
2,276
243
385
800

4,707
2,276
243
385
839

4,802

12,094

10,623

10,800

10,989

440

530

543

548

553

5,242

12,624

11,166

11,348

11,542

2,614

2,965

2,632
434

2,651
480

2,668
504

543
1,553
598
118
7

1,623
543
135
15

1,658
505
170
15

1,655
505
170
15

4,891

5,823

5,414

5,475

5,517

-12

-13

22,370

33,046

30,903

31,241

31,603

2,815
289
766
327

3,034
302
800
525

3,447
301
619
814

4,006
284
537
982

3,948
309
528
1,011

693
235
561

808
349
699

840
326
758

784
349
756

775
356
751

5,686

6,517

7,106

7,698

7,679

3,337
148

4,696
177

4,702
185

4,800
190

5,168
191

MEETING NATIONAL NEEDS

211

NATIONAL NEED: EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES—Continued
[Functional code 500; in millions of dollars]

Major Missions and Programs
Subtotal, higher education

1978
actual

1979
estimate

1980
estimate

1981
estimate

1982
estimate

3,486

4,873

4,887

4,990

5,359

Research and general education aids:
Special projects and training
Educational research:
National Institute of Education
Other
Cultural activities
Other

101

104

105

117

64
14
490
454

89
29
530
523

90
26
592
519

95
36
623
514

95
33
643
525

Subtotal, research and general education aids

1,082

1,272

1,330

1,373

1,413

10,254

12,662

13,323

14,061

14,451

2,393
5,764
1,475
134
364
653

2,644
50
5,465
2,242
210
372
745

2,582
150
4,570
2,261
239
385
800

2,540
50
4,707
2,275
243
385
839

10,784

11,729

11,002

10,986

11,038

410

520

525

540

551

11,194

12,249

11,527

11,526

11,589

2,809

2,965

2,586
434

2,651
480

2,668
504

Subtotal, education
Training, employment and labor services:
Training and employment:
General training and employment programs
Private sector program
Public service employment
Youth programs
Older workers
Work incentive program
Federal-State employment service
Subtotal, training and employment
Other labor services
Subtotal, training, employment, and
labor services
Social services:
Grants to States for social and child welfare services
Proposed legislation
Retroactive claims
Services for the disabled, the elderly and
other special groups
Community service programs
Domestic volunteer programs
Other social services
Subtotal, social services
Deductions for offsetting receipts
Total, outlays

2,432
150
4,930
2,131
219
378
762

543
1,517
575
113
14

1,499
597
128
25

1,680
506
151
15

1,650
505
168
15

1,655
505
170
15

5,027

5,757

5,372

5,469

5,517

^12

^13

26,463

30,656

30,210

31,043

31,544

EDUCATION

The primary mission of Federal education programs is to assure
that all Americans have equal access to a good education. This
mission is carried out by giving State and local education agencies

212

THE BUDGET FOR FISCAL YEAR 1980

funds to enhance their education systems and to provide enriched
education for the disadvantaged and the handicapped; by providing
Federal assistance to support higher education; and by promoting
research and the dissemination of information in the field of education.
Total budget authority for Federal education programs for 1979
is $14.6 billion. That is $2.4 billion more than was provided in the
preceding year—the largest 1-year increase in the history of education programs. This budget proposes $14.3 billion in budget authority for 1980, $276 million less than for 1979.
Over half of this $276 million decrease is accounted for by a
reduction in the budget authority needed to continue current policies
in the basic educational opportunities grants program.
Consistent with the restraint that characterizes this budget, total
1980 budget authority proposed for other education programs is
approximately the same as the 1979 level. However, in developing
this budget, the purposes and effectiveness of each of these education programs was rigorously examined. As a result, program objectives have been refined and priorities have been adjusted. Although
aggregate budget authority for these education programs is close to
last year's level, some programs have been reduced or terminated,
while some new initiatives and increases in other programs are
proposed.
Elementary, secondary, and vocational education.—These programs provide assistance to State and local education agencies
through formula and discretionary project grants.
Most of the assistance is to improve the quality of educational
services offered to students of special national concern to the Federal Government—those in low-income families, the handicapped,
Indians, and students with limited English language skills. Funds
are also provided to support vocational education, and to compensate school districts for the economic burden placed on them by the
presence of federally related activities.
Elementary and secondary education.—The largest share of the
funds for elementary and secondary education goes to State and
local education agencies for supplementary services to low-income,
low-achieving students under Title I of the Elementary and Secondary Education Act (ESEA). Budget authority of $3.1 billion is requested for the basic ESEA State grant program in 1980, which is
expected to aid an estimated 6.4 million students at an average
per-pupil expenditure of $454. While the budget request provides
funds for basic grants at the same level as in 1979, increases are
proposed for several other elementary and secondary education
programs.

MEETING NATIONAL NEEDS

213

The administration requests funding for a new initiative under
Title I—ESEA authorized by the education amendments of 1978.
This new authority targets compensatory education funding to
areas with high concentrations of low-income students. A supplemental appropriation of $258 million for 1979 and $400 million of
budget authority in 1980 is requested for this initiative to help
urban areas cope with the severe problems of educating their economically disadvantaged youth.
The 1978 amendments also expanded the Right to Read program
from one of reading improvement to a program aimed at assisting
States and local education agencies to teach the basic skills of
reading, writing, and mathematics more effectively. In addition,
funds will be spent to assist States in developing and using achievement tests. Budget authority of $37 million is requested for these
expanded programs in 1980.
Budget authority of $174 million, compared to $150 million in
1979, is requested for grants to States and local schools to help
340,000 children with limited English language skills. These funds
will establish bilingual education programs and promote teacher
and curriculum development to meet the needs of bilingual children.
Indian education.—Budget authority of $339 million is recommended for 1980 to advance the education of Indians and Alaskan
Natives, $4 million more than was provided in 1979. The Department of the Interior's Bureau of Indian Affairs operates 220 schools
serving approximately 52,000 elementary and secondary students.
An estimated 7,700 handicapped Indian students will receive special services, and four tribally controlled Indian community colleges will be supported. In addition, the Department of Health,
Education, and Welfare will provide grants of $160 per child to
1,200 public school districts serving 300,000 Indian students. Special
projects will increase the number of Indian professionals in medicine, law, business, forestry, and engineering. Over 16,000 adult
Indians will receive assistance in reading and mathemathics.
Impact aid.—This program is intended to compensate local
school districts for the loss of property tax revenue caused by taxexempt Federal land or federally-related activities. However, much
of the aid now goes to school districts where Federal activity does
not place a special burden on the tax base of local communities.
The administration is proposing to provide Federal impact aid to
school districts only on behalf of children whose parents both live
and work on Federal property. Since Federal property is exempt
from local taxes, these families do not contribute to the cost of
education—as other families do. Therefore, Federal contributions to

214

THE BUDGET FOR FISCAL YEAR 1980

support public education for the children of these families are
appropriate. Budget authority of $528 million is requested for 1980,
compared to $816 million in 1979.
Education for the handicapped.—The budget requests budget authority of $862 million in 1980 for grants to assist State and local
education agencies in educating handicapped children, $58 million
more than the 1979 appropriation. The funds will pay approximately 12% of the extra costs incurred by school districts in meeting
the special needs of 4 million handicapped children, the same
percentage as in 1979. The budget requests a total of $1.03 billion
in budget authority to support education for the handicapped.
Occupational, vocational, and adult education.—Budget authority of $772 million is proposed to support occupational, vocational,
and adult education. The request for occupational and vocational
education, $682 million, is the same as the 1979 appropriation. The
request for adult education programs is the same as the request for
1979 and $10 million below the appropriation for that year. Most of
the funds go to the States for general support of vocational education. Some funds are allocated separately for special programs for
the disadvantaged.
Other aid to education agencies.—Budget authority of $354 million is requested for the Emergency School Aid Act and for civil
rights advisory activities to aid school districts engaged in desegregation, an increase of $13 million over the 1979 program level.
Child development.—Federal funds foster research, demonstration, and service programs that aid in the social and cognitive
development of preschool children. A supplemental appropriation
of $55 million is requested for 1979 to bring total funding for the
preschool Head Start program in this year to $680 million. For
1980, the budget requests $700 million in budget authority. This
funding will allow Head Start to serve 414,000 children in 1980.
The 1980 budget also requests continued support for programs
aimed at preventing child abuse and neglect.
Higher education.—The primary mission of Federal higher education programs is to assure that students are not denied the opportunity to receive post-secondary education because of inadequate
financial resources.
Student aid.—Student aid in the form of grants, loans, and workstudy assistance enables several million students annually to go to
college who otherwise might not be able to afford the cost. The
budget includes $2.4 billion in 1980 budget authority to assist families with incomes of up to $25,000 under the basic educational

MEETING NATIONAL NEEDS

215

opportunity grant program. This request fully funds the program
and provides grants of up to $1,800 to 2.6 million undergraduate
students in school year 1980-81, a decrease of 100,000 from the
prior school year, but 800,000 more than the 1978-79 school year.
The decrease is the result of anticipated increases in family incomes, which will reduce the number of students eligible to receive
an award.
The budget also requests funding for three other student grant
programs in 1980 at the same levels as in 1979. Budget authority of
$340 million is requested for supplemental educational opportunity
grants to 573,000 post-secondary students. Budget authority of $77
million is recommended for State student incentive grants to provide aid to 307,000 students in financial need. In addition, $550
million of budget authority is recommended to maintain the same
number of part-time jobs under the college work-study program as
in 1979. Legislation will be proposed to eliminate the requirement
that these three programs be funded at specified levels, some of
which are not met by the 1980 budget request, before the basic
educational opportunity grant program is funded.
Budget authority of $960 million is requested to provide $2.5
billion in loans in 1980 to 1.5 million students under the guaranteed student loan program. The request includes funds to cover the
costs of providing Federal interest payments under the guaranteed
student loan program to all students regardless of family income
while they are in school and for up to 1 year thereafter. The
Middle Income Student Assistance Act authorizing these payments
was enacted in 1978, reflecting the administration's recognition
that the substantial cost of higher education is a problem that
confronts middle-income as well as low-income families. In addition
to the continued growth of the guaranteed student loan program,
budget authority of $220 million is requested to provide Federal
capital contributions to institutional student loan funds in 1980
under the national direct student loan program.
CREDIT PROGRAMS—HIGHER EDUCATION
[In millions of dollars]
1978
actual

Direct loans.New loans
Repayments, sales and adjustments ( - ) 1
Net credit outlays

1979
estimate

1980
estimate

564
-115

638
-149

496
-94

449

489

402

4,284
848

4,857
1,001

5,300
1,200

Guaranteed loans :
New loans
Net credit guaranteed
1
3

Includes sale of loan assets.
Includes loans counted as direct loans of other accounts.

216

THE BUDGET FOR FISCAL YEAR 1980

Budget authority of $130 million is requested for the special
higher education (TRIO) programs for the disadvantaged in 1980.
These programs identify and help prepare potential college students at the secondary school level, and assure that placement,
career counseling, and other services will be provided once they are
enrolled in postsecondary courses. Budget authority of $18 million is
requested to assist minority students under the biomedical sciences
and the graduate professions opportunities programs. The total 1980
budget authority request for these three programs, $148 million, is
the same as the 1979 level. The distribution among the three
programs, however, is somewhat different. The budget also requests
that funding to assist developing institutions be continued at the
1979 level of $120 million. This funding is the full amount authorized
for appropriation.
Special institutions.—Budget authority of $192 million is recommended to fund the American Printing House for the Blind, Gallaudet College, the National Technical Institute for the Deaf, and
Howard University in 1980. This budget authority is an increase of
$13 million over 1979. These institutions will serve an estimated
55,000 students in 1980.
Research and general education aids.—These funds provide support for educational research and development, cultural activities,
special projects that focus on national needs in education, and
program administration. Budget authority of $98 million is requested for the National Institute of Education for 1980, compared to
$92 million in 1979. The Institute will focus on increasing educational equity and improving educational practice. In addition, the
Institute will conduct research on testing proficiencies in the basic
skills.
Budget authority requested for 1980 for the National Endowments for the Arts and the Humanities is $154 million and $150
million, respectively. Federal support for the Endowments is partially matched by contributions from non-Federal sources. Funds
for the Corporation for Public Broadcasting are provided two years
in advance, and the budget includes $172 million in budget authority for the Corporation for Public Broadcasting for 1982. An appropriation of $171 million is requested for the Smithsonian Institution in 1980.
Department of Education.—The administration will resubmit to
the Congress a proposal to establish a Cabinet-level Department of
Education. The basic purposes of the new Department will be to
continue and strengthen the Federal commitment to ensuring
equal education opportunity, to promote and support efforts to

MEETING NATIONAL NEEDS

217

improve the quality of education, to improve the management, efficiency and accountability of Federal education activities, and to
promote an effective partnership among Federal, State and local
governments, and private and public institutions in education matters.
Related programs.—A number of Federal programs are related to
education, although their primary purpose is to meet other national needs and to serve other major missions. For example, veterans
readjustment benefits provide assistance to eligible veterans attending school, and the health programs of the Federal Government support substantial levels of training in the biomedical field.
Comprehensive Employment and Training Act (CETA) training activities are frequently conducted through State and local education
agencies, and some CETA public service employment participants
are employed in education agencies. CETA also provides special
grant set-asides to be used by, or with the cooperation of, education
agencies, primarily to increase coordination between the education
and the training and employment systems. The accompanying
table shows major education-related programs that support other
major missions.

218

THE BUDGET FOR FISCAL YEAR 1980
FEDERAL OUTLAYS FOR EDUCATION AND RELATED PURPOSES
(In millions of dollars)
1978
actual

Level and program
Education outlays1
Related outlays supporting other major missions:
Elementary and secondary:
Child nutrition
Student grants, Social Security Administration.
U.S. Forest Service, Agriculture
Military personnel
Veterans readjustment.
Other

10,254

12,662

13,323

2,665
335
112
33
379
60
3,584

2,809
360
120
40
296
62
3,687

2,658
390
141
42
252
66
3,549

2,697
1,277
624
624

2,214
1,378
670
395

1,892
1,509
679
270

145

156

160

73
180
5,620

73
207
5,093

74
161
4,745

240
119
128
43
530

239
96
137
56
528

232
23
151
63
469

338

353

364

1,126
37
173
1,336
10,997

1,052
44
170
1,265

Total related outlays

1,104
23
162
1,289
11,361

Grant Total

21,615

23,659

Subtotal, elementary and secondary

„

Higher education:
Veterans readjustment benefits
Student grants, Social Security Administration.
Defense service academies and ROTC
Health professions training....
Research training, National Institutes of
Health
Alcohol, Drug, and Mental Health Administration
Other
Subtotal, higher education
Adult and continuing education:
Agriculture Extension Service
Veterans readjustment benefits
Student grants, Social Security Administration.
Other
Subtotal, adult and continuing education
Training of Federal military employees:
Defense and Coast Guard
Other.
Comprehensive Employment and Training Act...
International development assistance
Other
Subtotal, other

1980
estimate

1979

See national needs table at the beginning of this section.

10,392
23,715

MEETING NATIONAL NEEDS

219

TRAINING, EMPLOYMENT, AND OTHER LABOR SERVICES

Programs that carry out the training and employment mission
are designed to improve employment opportunities, mainly for the
disadvantaged, and increase long-term employment and earnings
prospects. These programs develop work skills, provide employment, and improve the operation of labor markets. Other labor
services include regulation of employer-employee relations and the
publication of labor statistics.
Training and employment—Funding for the training and employment mission has grown steadily over the years, with large temporary increases in 1977 and 1978 as part of the President's economic
stimulus effort. Because of continued improvement in the economy,
employment has increased substantially, by more than 7.4 million
jobs since December 1976. For 1980, funding for training and employment programs would be directed toward the economically disadvantaged and the long-term unemployed. In addition, greater
emphasis will be placed on improvements in management and in
minimizing fraud and abuse.
The following tables and charts provide information on trends in
the level of training and employment services, on the distribution
of services by type of service provided, and on the characteristics of
participants in training and employment programs, compared both
to the unemployed and to the poor. These data cover all programs
that are functionally classified as training and employment services, as well as programs with similar objectives in other classifications. Outlays for these other programs are shown in the table at
the end of this section.
DISTRIBUTION OF TRAINING AND EMPLOYMENT SERVICES BY TYPE OF SERVICE
(In percent)
Outlays
Service

Public service employment
Work experience
On-the-job training
Institutional training
Vocational rehabilitation
Labor market services
n.a. = Not applicable.

1978

40
19
3
16
7
14

1979

31
21
4
21
7
15

Years of service
1980

30
22
5
21
8
15

1978

1979

1980

17
30
3
17
33
n.a.

14
33
4
20
28
n.a.

13
34
4
20
28
n.a.

220

THE BUDGET FOR FISCAL YEAR 1980

Service Years (or Training and Employment Activities

Vocational Rehabilitation

Outlays (or Training and Employment Activities
SBillion,

-fi

it-

MEETING NATIONAL NEEDS

221

CHARACTERISTICS OF THE UNEMPLOYED, THE POOR, AND TRAINING AND EMPLOYMENT
PROGRAM PARTICIPANTS1
Poverty population2

Unemployed workers
1974

Average number (millions)
Percent:
Age 21 or less
Female
Less than high school education...
Low income
Public assistance recipient
Minority

1976

1978

1974

1976

1978

Program participants
1974

1976

1978

5.1

7.3

6.0 15.4 17.3 16.9

2.1

3.3 3.9

39
47
47
3
20
n.a.
20

34
46
42
3
21
n.a.
20

40
25
27
26
49
63
62
62
49
67
68
65
3
23 100 100 100
n.a. n.a. n.a. n.a.
24
30
28
31

31
56
43
67
42
35

40 34
47 52
41 46
65 4 86
23 35
43 35

Unemployed and poor reported on a calendar year basis; program participants reported on a fiscal year basis.
Data collected in March of year shown here; represents income of prior year. Source-. Bureau of the Census data from the Current Population Survey.
Represents individuals living in poverty areas.
4
Reflects increase in income eligibility limits in many CETA programs to about 2 0 % above the poverty level.
2

n.a. = Not available.

General training and employment programs.—Most training and
employment programs are operated by State and local prime sponsors through grants under the Comprehensive Employment and
Training Act (CETA). Legislation enacted last year provided new
authority which increased CETA emphasis on permanent private
sector jobs and substantially redesigned most existing programs to
increase their targeting on the disadvantaged and the long-term
unemployed. The law also introduced new requirements aimed at
decreasing fraud and abuse.
The 1980 budget would continue general purpose grants at 1979
levels, providing an average of 424,000 years of service during the
year. The services provided under this program include classroom
and on-the-job training, work experience, and retraining for individuals who have the ability to move to jobs requiring greater skill,
or who are about to lose their current jobs. Early studies of the
impact of the programs indicate that these services tend to improve
the subsequent employment and earnings of participants. An evaluation program started after the enactment of CETA in 1973 will
produce data in 1979 that will allow a comparison of the employment and earnings of training program participants with the employment and earnings of similar people not in the programs. This
comparison will make possible more accurate calculations of the
benefits of various programs to participants.
The Federal Government also provides training and employment
services outside of the State and local prime sponsor system to
migrant and seasonal farmworkers because their mobility makes it
difficult for States and localities to serve them. Services are also
provided directly to Indians, primarily because of their special
Federal relationship. A portion of CETA general grant, youth, and
280-000

O—79—15

222

THE BUDGET FOR FISCAL YEAR 1980

public service employment funds are set aside for these two groups.
Outlays are estimated to reach $164 million by 1980.
Private sector program.—In response to administration proposals,
the CETA reauthorization and the Revenue Act of 1978 place increased emphasis on assisting disadvantaged persons, including
youth, to secure unsubsidized private sector jobs. Under the new
private sector program, for which a 1979 supplemental appropriation of $400 million is requested, funds will be provided through
States and localities for training, placement, implementation of the
new targeted employment tax credit (described in the tax expenditure section), and other services, such as on-the-job training, designed jointly with Private Industry Councils. Planning and initial
development work is already underway. As required by law, an
assessment of the initiative will be made in 1980 to allow the
development of recommendations for future activities in this area,
for which provision has been made in the contingency allowance.
Public service employment (PSE).—PSE programs provide temporary, federally subsidized employment in public or nonprofit agencies principally through grants to State and local governments. The
1978 amendments to CETA restructured PSE into two new programs: (1) Title II-D authorizes PSE for the low-income, long-term
unemployed—the structurally unemployed—to help them obtain
the skills, work experience, and placement aid that they need to
find and retain permanent, unsubsidized jobs; and (2) Title VI of
CETA authorizes PSE for individuals who are out of work primarily because of cyclical changes in the economy.
Estimated outlays for PSE in the 1980 budget are $4.9 billion,
with increased emphasis on PSE for those most in need.
Under the restructured public service employment program, appropriations in 1979 provided for 267,000 jobs in Title II-D for the
low-income, long-term unemployed. The application of more targeted income and duration of unemployment criteria, lower wage
rates, and the formula for distributing grants among the States
and localities directs job opportunities toward the most needy.
Comparable targeting applies to the training programs under Title
II-A, B, and C of CETA. The $400 million in budget authority for
the private sector program in Title VII (described elsewhere in this
section) is similarly aimed at structural unemployment. Together,
these targeted programs comprise a major employment policy initiative in the 1978 amendments. The 1980 budget continues the
1979 level of 267,000 public service jobs with outlays of $2.4 billion.
The countercyclical PSE program in Title VI under the 1978
amendments serves workers with up to 40% higher incomes and
with shorter periods of unemployment than the public service em-

MEETING NATIONAL NEEDS

223

ployment program aimed at the structurally unemployed. This program was created in 1974 as a response to rising unemployment.
As part of the 1977 economic stimulus program required by the
extremely high unemployment at that time, the President sought
and Congress provided an additional 415,000 PSE jobs. Improvements in the economy, especially the unprecedented increases in
employment in the last two years, have made so large a countercyclical program unnecessary. Recognizing this increase in employment, Congress provided appropriations in 1979 to reduce the countercyclical program to an end of year level of 358,000 jobs, a total
PSE reduction of 100,000 below the level funded in 1978. Given
continued economic health and employment growth, the budget
proposes a further phasing down of the countercyclical program to
a level of 200,000 jobs at the end of 1980. As a result of the funding
proposed for the two titles, PSE programs for the structurally
unemployed will expand to 57% of all PSE, compared to 43% in
1979. This shift in emphasis reflects a fundamental principle of the
1980 budget: concentration of resources on the most needy. Major
progress in the reduction of unemployment in future years requires
more effective attacks on the problems of structural unemployment. Most of the new CETA provisions, the targeted employment
tax credit, and the expanded work incentive (WIN) tax credit move
in this direction.
Youth programs.—About half of the Nation's unemployed are
under age 25 and about one-quarter are between ages 16 and 19.
Developing strategies to reduce this level of unemployment continues to be a major administration objective. Continued expansion of
the Job Corps training program to 44,000 training opportunities for
youth—double the 1977 level—is proposed. Under the budget request, the summer youth employment program would be maintained in 1979 at the 1 million part-time jobs actually filled in
1978, requiring a deferral of $122 million in 1979 summer youth
employment funds to 1980. The program would be reduced to
750,000 jobs in 1980, and regulations would be changed to remove
14-year-olds from eligibility. Total outlays would be continued in
1980 at the 1979 level of $1.2 billion for the four experimental
programs authorized by the Youth Employment and Demonstration Projects Act (YEDPA) as part of the economic stimulus program. The four experimental programs are (1) the young adult
conservation corps; (2) youth incentive entitlement pilot projects;
(3) youth community conservation and improvement projects; and
(4) youth employment and training programs.
The private sector program and the new targeted employment
tax credit will provide additional resources aimed at increasing the
employment of youth in the private sector.

224

THE BUDGET FOR FISCAL YEAR 1980

The accompanying chart covers these youth programs as well as
other major related youth training and employment programs.
Youth Training and Employment Programs
$ Billion,

$ Billion,

6New Private

H E W Training and
Work Programs

The causes and long-term effects of youth unemployment are not
clear. A number of causes are probably involved: insufficient numbers of jobs; inefficient efforts by youth to find employment, especially when they first enter the labor market; employers finding it
unprofitable to employ inexperienced youth at current labor costs;
high turnover as youth engage in job sampling or move in and out
of the labor force to earn pocket money; and general employer
reluctance to hire young workers because they are perceived as
unskilled, undisciplined, and unproductive. The range of research
and demonstration efforts being undertaken in conjunction with
the YEDPA programs should significantly advance our understanding of this problem.
Older workers.—Funding is requested for the community service
employment program for older Americans to continue to provide
47,500 job opportunities for low-income persons aged 55 and over in
1980.
Work incentive (WIN) program.—This program helps persons receiving aid to families with dependent children (AFDC) find and

MEETING NATIONAL NEEDS

225

retain jobs by providing training, work experience, subsidized jobs,
intensive employment services, child care, and other supportive
services. Private employers are encouraged to hire recipients
through the WIN tax credit. Estimated WIN outlays for 1980 are
$378 million, a slight increase over 1979. An estimated 286,000
individuals will be hired in unsubsidized jobs. Increased resources
in 1979 and 1980 are being used to develop special initiatives,
including some welfare reform models, to improve training and
employment strategies for welfare recipients in the WIN program
and to support planning for welfare reform.
Welfare reform employment program.—The administration will
propose a new welfare reform initiative that provides a carefully
designed, phased implementation of essential reforms in the level
and delivery of cash assistance integrated closely with an employment and training strategy, the new employment tax credit, and
revisions in the earned income tax credit (see the section of Part 5
on income security). The proposal will ensure that individuals receiving public assistance have strong incentives to seek and retain
permanent unsubsidized employment, and would provide work and
training for principal earners in eligible families. The 1980 budget
request includes almost 700,000 training and employment opportunities in CETA general grants and PSE for the structurally unemployed, many of whom are or will be eligible for cash assistance.
The work incentive program, including tax credits for employment,
also provides employment and training services to welfare recipients. These resources, coupled with carefully designed research and
demonstration efforts in both CETA and WIN, form the initial
phase of the new welfare reform strategy in 1979 and 1980. In later
years, as the effectiveness of these services is determined, necessary additional resources will be requested. Provision has been
made in the contingency allowance for such a request.
Federal-State employment service.—Job-matching services for
workers and employers are provided free of charge by 2,400 State
offices financed by Federal funds. The 1980 budget maintains employment service operations at the 1979 level. An assessment of the
results of computerized job-matching and redesign of automated
procedures, begun in 1979, will continue in 1980.
Other labor services.—The Federal Government establishes and
enforces standards affecting the relationship between employer and
employees and between unions and their members. The activities
include enforcement of the minimum wage and related laws, regulation of welfare and pension plans, supervision of labor-management relations, and regulation of the equal employment practices
of Federal contractors. In addition, labor statistics and related

226

THE BUDGET FOR FISCAL YEAR 1980

information in the areas of employment and unemployment, wages
and prices, and productivity are collected and disseminated. Outlays for these services are estimated at $525 million in 1980. (Enforcement efforts for job safety and health are included in the
health function, while those relating to job discrimination on the
basis of race, age, or sex are covered in the administration of
justice function.)
Training and employment-related programs.—A number of Feder-

al programs are related to training and employment efforts, although their primary purpose is to meet other national needs and
serve other major missions. The following table shows major training and employment-related programs that support other major
missions. The table does not include programs that finance economic development activities.
TRAINING AND EMPLOYMENT OUTLAYS FOR OTHER MAJOR MISSIONS
(in millions of dollars)
Functional
code
350
450
450
500-503
506
600
700
750
750
999

1978
actual

Agency
Agriculture .
Housing and Urban Development
Interior
Health, Education, and Welfare
Health, Education, and Welfare
Health, Education and Welfare
Veterans Administration
Equal Employment Opportunity Commission
justice
Various agencies
Total

1980
estimate

1979
estimate
63
17
52
1,611
754
135
686

70
18
54
1,755
838
144
601

6
20
51
1,711
768
152
545

74
2
219

114
4
189

124
5
189

3,613

3,786

3,571

SOCIAL SERVICES

The Federal Government provides grants to States for a variety
of social services. These services are primarily for the poor and
other groups with special needs.
Grants to States for social and child welfare services.—Under

Title XX of the Social Security Act, assistance is given to States for
services to individuals and families to promote their independence
and self-support and to reduce institutionalization. Through this
program, States provide a broad array of services including family
planning, preparation and delivery of meals, transportation, counseling, child care, and services to meet the special needs of the lowincome, aged, handicapped, mentally retarded, alcoholics, and drug
addicts. State and local government training of personnel for the
social service fields is also provided under Title XX. Legislation

MEETING NATIONAL NEEDS

227

will be proposed to increase the limit on Federal payments under
Title XX to a total of $2.9 billion, beginning in 1980. This proposal
would make permanent the $200 million increase in the regular
ceiling enacted for 1979, and would also encompass the $200 million provided for the special child day care set-aside enacted for
1979. The proposal will include an emphasis on services to areas of
special need, as set forth in the President's urban initiatives. Specific appropriation authority is also requested for the territories of
Guam, Puerto Rico, the Virgin Islands, and the Northern Mariana
Islands. In addition, legislation will be proposed to phase in a
ceiling on State and local government training at 3% of the Title
XX social services funding. Special efforts will be made to improve
the management and operations of this rapidly growing progam.
Under Title IV-B of the Social Security Act, child welfare grants
are made to the States for the care and protection of neglected,
homeless, and abused children. The administration is proposing
legislation to significantly improve the scope and quality of services
provided to children by the States, and to develop stronger procedural safeguards to protect the rights of children and their parents.
This proposal is designed to:
• aid in reuniting children with their natural families whenever possible;
• require more frequent monitoring of the status of chidren in
foster care to ensure that they are permanently placed as
rapidly as possible;
• encourage the adoption of children who might otherwise
remain in foster care for an extended period; and
• subsidize low-income families who want to adopt children.
Under these proposals, outlays for child welfare services rise
from $57 million in 1979 to $141 million in 1980.
Services for the disabled, elderly, and other special groups.—
Outlays for programs providing rehabilitation and related services
to the disabled are estimated to be $978 million in 1980, and will
aid approximately 1.8 million persons who have physical and
mental disabilities to become self-sufficient. Additional outlays to
rehabilitate recipients of supplementary security and social security disability benefits are classified in the income security function.
Outlays for programs serving older persons are estimated to be
$559 million in 1980. These programs are aimed at enabling older
persons to continue living in their homes and communities by
preventing or delaying institutionalization. Particular emphasis
will be placed on serving those elderly who have the greatest
economic and social need. Special projects, including long-term care
services demonstrations, will be designed to meet the special needs

228

THE BUDGET FOR FISCAL YEAR 1980

of, and improve the delivery of services to, low-income, minority,
rural, and disabled elderly. Special programs for older Americans
will also provide approximately 588,000 daily meals.
Funds previously appropriated will be used for a White House
Conference on Families in 1981. A supplemental appropriation is
requested for 1979 for a White House Conference on Aging also to
be held in 1981. The conference will assess the needs of older
Americans. In addition, funds are requested for 1980 for a White
House Conference on Children and Youth to be held in 1982. Funds
are requested to continue demonstrating approaches to the provision of services that meet the needs of other special groups such as
runaway youth and Native Americans. To aid States and localities
in improving their adoption and foster care systems, budget authority of $5 million is requested for 1980.
Community services program.— Several social services activities
are undertaken through community action programs of the Community Services Administration (CSA). The program funds administrative support for about 900 local community action agency
grantees, although most local agency program funding is derived
from such sources as Head Start and employment and training
programs administered by other Federal agencies. The 1980 budget
seeks to:
• strengthen the administration of community action agencies;
• expand innovative demonstration activities concentrating on
the delivery of assistance to the poor and emphasizing selfhelp projects;
• increase funds to develop and test new programs for the poor;
• improve the quality of community action programs and their
management through more evaluation efforts; and
• concentrate funding for community economic development
programs on the more successful grantees.
Domestic volunteer programs.—ACTION, the Federal Govern-

ment's agency for volunteer programs, supports Volunteers in
Service to America (VISTA) and the Foster Grandparent, Senior
Companion, and the Retired Senior Volunteer programs. ACTION
will continue to emphasize planning and programming based on
meeting the needs of the poor.
The budget proposes an increase of 600 in the number of VISTA
volunteers in 1980, with more emphasis on community development and enhancement of rural programs. This proposed expansion reflects the administration's conviction that effective volunteer programs are crucial to meeting the social needs of the country. The Senior Companion, Foster Grandparent, and Retired
Senior Volunteer programs would enroll the same number of vol-

MEETING NATIONAL NEEDS

229

unteers as in 1979. Increased funding requested for these three
programs will raise volunteer allowances and stipends, and provide
for increased support to local projects. The budget includes a major
increase for ACTION'S urban volunteer programs, which will
expand activities into 110 additional cities in 1980 and mobilize
about 75,000 additional local volunteers to improve the conditions
in distressed urban communities. This level of funding would elevate the pilot 1979 effort to a national program.
The budget also request increases for technical assistance,
grants, and demonstration projects to explore alternative approaches to voluntary action, in the private sector. Outlays for
ACTION'S domestic programs are estimated to increase from $113
million in 1978 to $128 million in 1979 and $151 million in 1980.
TAX EXPENDITURES

The tax code law provides significant benefits that have effects
similar to budget expenditures for education, training and employment, and social services.
Education.—The major tax expenditure provisions that aid
higher education result from the personal income tax exemptions
available to parents of children over 18 who are in school, the
deductibility of contributions to educational institutions, and the
exclusion of scholarships and fellowships from income subject to
tax. The revenue losses associated with these provisions in 1980 are
estimated to be $1.0 billion, $1.2 billion, and $0.4 billion, respectively. In addition, the Revenue Act of 1978 permits employers to
establish educational assistance plans for the benefit of their employees. Payments under the plan, which may be used to pay for
most educational programs, are not included in the employee's
income. Deductions for educational assistance are estimated to
result in a tax expenditure of $30 million in 1980.
Training and employment.—The tax code provides incentives for
employers to hire disadvantaged individuals and those receiving
certain welfare benefits. Tax credits are also provided to encourage
individuals with dependents to work by allowing tax credits for
child care expenses.
The targeted employment credit was enacted in the Revenue Act
of 1978. It encourages employers to hire disadvantaged youth under
25, as well as Vietnam veterans, recipients of general assistance or
supplementary security income, participants in cooperative education programs, certain ex-offenders, and handicapped individuals
undergoing vocational rehabilitation. The credit, equalling 50% of
first year and 25% of second year wages, applies to the first $6,000
of each eligible employee's wages. It replaces the general, untarget-

230

THE BUDGET FOR FISCAL YEAR 1980

ed employment tax credit that was in effect in 1977 and 1978. The
new credit is estimated to result in a tax expenditure of $0.5 billion
in 1980.
The employment credit, for hiring employees under the WIN
program or other AFDC recipients, was revised to make it similar
to the targeted employment credit. This credit is estimated to
result in a tax expenditure of $60 million in 1979 and $160 million
in 1980.
Employment is also encouraged by a credit of 20% of child care
expenses incurred to permit a person with dependents to work. The
maximum credit is $200 for one child and $400 for 2 or more
children. The revenue loss resulting from the child care credit is
estimated to be $0.7 billion in 1980.
Social services.—The provision of social services by a wide variety of private institutions is encouraged by the tax deductibility of
contributions to those institutions. The tax expenditure for charitable contributions, other than to educational and health institutions,
is expected to be $6.4 billion in 1980.

MEETING NATIONAL NEEDS

231

HEALTH
National Needs Statement
• Improve access to quality medical care and mental
health services.
• Restrain inflation in health care costs.
• Acquire knowledge regarding the causes, prevention, and
treatment of diseases and promote preventive measures
by which good health can be maintained.
• Support education of health students in high priority
specialties and employment of health workers in medically underserved areas.
• Improve consumer and workplace health and safety.
Total outlays for the health function are estimated to be $49.1
billion in 1979, $53.4 billion in 1980, and are projected to grow to
$64.2 billion in 1982. These estimates include cost-saving proposals
that would reduce outlays by $2.1 billion in 1980 and $5.4 billion by
1982.
The administration is developing a national health plan. Consistent with this plan, the 1980 budget emphasizes the following 3
priorities.
• Expanded assistance to improve access to health services for
those most in need. Increases in 1980 of $453 million in
budget authority and $451 million in outlays above 1979 are
proposed for health financing and services delivery improvements. Health financing proposals would expand medicaid
eligibility to more than 2 million additional low-income children and youth and expectant mothers. Proposed health services program expansions include new community health centers, new programs in delivery and financing of mental health
services, and an increase of 1,095 National Health Service
Corps professionals serving in medically-underserved areas.
• Expanded efforts throughout the Federal Government to promote health and to prevent disease, illness, injury, and death.
New and expanded efforts in the health mission in 1980,
totaling an increase of $77 million in budget authority and an
estimated $44 million in outlays above 1979, are proposed for
health promotion and disease prevention. A major effort will
be made to reduce smoking and alcohol abuse. Emphasis will
also be given to basic research, prevention of mental illness
and dental disease, and improvement of health education programs.

232

THE BUDGET FOR FISCAL YEAR 1980

• Increased efforts to control inflationary growth in health care
costs and to eliminate waste, fraud, and abuse in federally
supported programs. Hospital cost containment legislation
will be proposed to limit increases in hospital inpatient revenues. Federal savings from this legislation are estimated to
be $1.7 billion in 1980, and savings to the Nation as a whole
are estimated at $4.3 billion. Other actions to reduce waste,
fraud, and abuse in Federal health care programs will save an
estimated $1.7 billion in 1980.
These proposals are discussed in detail in the following sections.
Health care services.—The mission of financing and providing
health care services represents the largest amount of Federal
spending for national health needs. Federal outlays for health services in this mission are expected to rise from $48.5 billion in 1980
to $59.1 billion in 1982, even with proposed savings legislation.
The Federal Government pays, primarily through medicare and
medicaid, about 28% of the costs of the Nation's health services;
this includes 39% of hospital expenses, 33% of nursing home expenses, 18% of physicians' services expenses, and 5% of drug expenses. Total Federal outlays for health care services, including
outlays not in this function, have risen from $4.3 billion in 1965 to
$59.4 billion in 1980—a 19% annual rate of increase for this period.
The inflationary growth in health care costs is a major burden
on both the national economy and the Federal budget. National
health care expenditures in 1977 were $163 billion or 9% of GNP;
almost one dollar in every 10 spent in the U.S. was used to finance
health care. In 1955 only 4.5% of GNP, $17.3 billion, was spent on
health care. During the last 10 years, hospital costs—the largest
component of health care costs—have grown 2x/2 times as fast
as the consumer price index.
Enactment of cost-savings legislation is essential to the Nation's
efforts to combat inflation. The administration's hospital cost containment legislation will propose that hospitals limit increases in
revenues for inpatient care so that they are consistent with the
administration's 1979 anti-inflation guidelines. Enactment of this
legislation is expected to result in $9.8 billion of Federal outlay
savings in the 1980-1982 period.

233

MEETING NATIONAL NEEDS
NATIONAL NEED: HEALTH
(Functional code 550; in millions of dollars)

Major Missions and Programs
BUDGET AUTHORITY
Health care services:
IV16QIC3r6
Proposed legislation
Medicaid
Proposed legislation
Other health services
Proposed legislation
Subtotal, health care services
Health research:
National Institutes of Health research
Alcohol, Drug Abuse, and Mental Health
Administration research
Other research programs
Subtotal, health research
Education and training of the health care
work force:
National Institutes of Health training
Health Resources Administration training
Alcohol, Drug Abuse, and Mental Health
Administration training
Other health training programs
Subtotal, education and training of
the health care work force
Consumer and occupational health and
safety:
Consumer safety
Occupational safety and health
Subtotal, consumer and occupational
health and safety
Deductions for offsetting receipts
Total, budget authority
OUTLAYS
Health care services:
Medicare
Proposed legislation
Medicaid
Proposed legislation
Other health services
Proposed legislation
Subtotal, health care services

1978
actual

1979
estimate

1980
estimate

1981
estimate

1982
estimate

3,513

31,747
8
11,895
-53
3,902

35,809
2
12,714
-18
3,948
205

44,934
85
13,790
_4
4,069
205

52,295
375
15,186
-90
4,176
205

41,773

47,499

52,660

63,080

72,148

2,659

3,005

2,979

181
168

218
166

259
201

259
210

3,007

3,388

3,440

3,448

184
556

184
389

193
275

193
277

109

118
2

111

850

694

579

581

610
248

647
302

650
312

649
312

858

949

962

961

-18

-15

-14

-16

46,469

52,515

57,627

68,055

77,123

25,209

3,171

29,499
-350
11,897
-53
3,501

33,823
-1,743
12,474
-18
3,885
41

38,695
-3,028
13,793
-4
4,094
183

44,115
-4,573
15,189
-90
4,139
277

39,103

44,494

48,462

53,733

59,057

27,586
10,674

10,723

234

THE BUDGET FOR FISCAL YEAR 1980
NATIONAL NEED: HEALTH—Continued
(Functional code 550; in millions of dollars)

Major Missions and Programs
Health research:
National Institutes of Health
Alcohol, Drug Abuse, and Mental Health
Administration research programs
Other research programs

1978
actual

1979
estimate

1980
estimate

1981
estimate

2,505

2,681

2,961

180
137

199
149

229
176

252
211

259
220

2,822

3,029

3,365

3,451

3,469

170
650

170
424

192
316

193
365

193
386

110

110
-*

116
-*

112
-*

111
-*

Subtotal, education and training of
the health care work force

930

704

623

670

690

Consumer and occupational health and
safety:
Consumer safety
Occupational safety and health

587
252

637
288

644
299

650
304

648
312

Subtotal, health research
Education and training of the health care
work force:
National Institutes of Health, training
Health Resources Administration, training....
Alcohol, Drug Abuse, and Mental Health
Administration, training
Other health training programs

Subtotal, consumer and occupational
health and safety
Deductions for offsetting receipts
Total, outlays

2,988

1982
estimate

2,989

838

925

943

954

960

-18

-15

-14

-16

43,676

49,136

53,379

58,792

64,160

* $500 thousand or less.

Medicare.—Medicare outlays of $29.1 billion in 1979 and $32.1
billion in 1980 are estimated for health services for aged and
disabled medicare recipients. These outlays are based on an estimated
26.9 million beneficiaries in 1979 and 27.5 million in 1980. Included in
these budget estimates are proposed legislative savings totaling $1.8
billion in 1980, which are discussed in the following section. A
proposal to expand outpatient psychiatric services is also reflected
in the estimated medicare outlays for 1980. This proposal would
lower the beneficiary copayment from 50% to 20% and increase
the maximum annual Federal reimbursement for these services
from $250 to $750. This proposal would improve mental health
benefits for the elderly and disabled, and reduce the need for
inpatient care in mental institutions and nursing homes. The disabled will be assisted by 2 additional measures. Elimination of a
second waiting period for medicare coverage of disabled individuals
who return to work but are unable to remain in the work force
would remove a disincentive to re-entry into the work force. A
companion measure would provide continued coverage for disabled

235

MEETING NATIONAL NEEDS

workers who re-enter the work force but still have the medical
condition which caused the disability.
Savings From Hospital Cost Containment
SBHIiom
30

$ Billions
30-

[

24*

j Private Imwvn

\-££+] $*<**« and Local
20

12.1

-10

1980

1981

1982

J980-J982

Medicaid,— Medicaid outlays of $11.8 billion in 1979 and $12.5
billion in 1980 are estimated for health services for low-income
adults and children. These outlays are based on an estimated 22.9
million recipients in 1979 and 24 million in 1980. Included in the
1980 medicaid estimates are proposed legislative savings totaling
$319 million and program expansions of $301 million.
The proposals in the 1980 budget to expand access to health
services for the most needy through medicaid are:
• A new child health assessment program (CHAP), to provide
medicaid coverage and early and periodic screening, diagnosis, and treatment services (EPSDT) to an additional 2 million
low-income children and youth under the age of 18 currently
not eligible for medicaid. CHAP will also improve services to
13.6 million children already eligible for medicaid coverage by
improving monitoring of State performance in providing these
services and by establishing penalties for poor performance
and rewards for good performance.
• An extension of medicaid to cover 100,000 low-income pregnant women. Prenatal care has been shown to be effective in

236

THE BUDGET FOR FISCAL YEAR 1980

reducing birth defects and infant mortality. Legislation will
be proposed requiring States to provide medicaid coverage to
women who will be eligible for medicaid after their child is
born but are not currently covered during pregnancy.
• An ensured coverage provision for migrants under medicaid.
This proposal would empower the Secretary of Health, Education, and Welfare to establish regulations to ensure that migrants are not denied needed care because of State residency
requirements.
• An expanded benefit for disabled workers. Currently, disabled
individuals who return to work are subject to a complete cutoff of medicaid coverage if their earnings exceed $240 per
month. This proposal would continue medicaid coverage.
The medicaid quality control program, initiated in 1979, will be
continued in 1980. Federal savings of over $500 million are anticipated in 1980 as a result of reductions in payments to ineligible
recipients, reductions in bill processing errors, and more aggressive
identification of private insurers' liability for beneficiaries' medical
costs. State fraud and abuse units, which are jointly funded by the
Federal Government and State governments, will recover an estimated $92 million in Federal medicaid costs in 1980.
Other cost-saving proposals,—In addition to hospital cost containment legislation and quality control efforts, there are other costsaving proposals in the 1980 budget for medicare and medicaid,
which are described below. The accompanying table summarizes
the legislative proposals for the medicare and medicaid programs,
which are proposed to be effective by October 1, 1979.
• Hospital-based physicians. Compensation to radiologists, pathologists, and anesthesiologists will be limited by new rules
designed to curb excessive reimbursements.
• Medicare for the working aged. Medicare currently pays for
all covered expenses of beneficiaries, even those with private
health insurance. Under this proposal, private health insurance plans covering the working aged and other employees
would have primary liability and medicare benefits would
supplement these plans. This change would help protect the
trust funds against the anticipated upward shift in the age
distribution of the population.
• Chiropractors. Chiropractic services will be removed from coverage by the medicare and medicaid programs.
• Fines. A new program of fines against individuals guilty of
fraud or abuse of the medicare and medicaid program will be
instituted.
In addition, several regulatory actions will be taken to limit
excessive Federal reimbursement to hospitals. Reimbursement for

MEETING NATIONAL NEEDS

237

malpractice premiums will be adjusted to reflect the actual claim
experience of Federal beneficiaries. Also, reimbursement to hospitals with routine costs substantially higher than similar hospitals
will be further limited. Savings from these 2 actions are estimated
at $413 million in 1980.
Other health care services.—In addition to medicare and medicaid, the more than 30 other programs in the health care mission
support the provision of health care directly or through grants and
contracts. Budget authority for these other programs is expected to
increase from $3.9 billion in 1979 to $4.2 billion in 1980.
OUTLAY IMPACT OF PROPOSED MEDICARE AND MEDICAID LEGISLATION
(In millions of dollars)

1980

Medicare:
Proposed expansions:
Expanded outpatient psychiatric coverage
Elimination of the second waiting period for
the disabled
Continued coverage for disabled workers
Subtotal, expansion
Proposed Cost Savings:
Hospital cost containment
Limit excessive compensation to hospitalbased doctors
Make health insurance supplemental to private
insurance for working aged
Elimination of chiropractor services
Fines for fraud and abuse
Other

1981

1982

27
7

32
26

37
52

121

-1,500

-2,750

-4,290

-48

-57

-65

- 200
-34
-9
- 9

- 245
-38
-9
-13

- 280
-42
- 9
- 8

Subtotal, cost savings

-1,800

-3,112

-4,694

Total, medicare legislation

-1,743

-3,028

-4,573

Medicaid:
Proposed Expansions:
Child health assessment program (CHAP)
Low-income pregnant women
Migrants
Continued coverage for disabled workers
Subtotal, expansions
Proposed cost savings:
Hospital cost containment
Limit excessive compensation to hospitalbased doctors
Elimination of chiropractor services
Fines for fraud and abuse
Other
Subtotal, cost savings
Total, medicaid legislation

280-000

O—79—16

220
68
9
4

424
74
9
13

563
81
9
25

301

520

678

-225

-413

-644

-7
- 1
-14
-72

-10
- 1
-14
-87

-10
- 1
-14
-99

-319

-525

-768

-18

-4

-90

238

THE BUDGET FOR FISCAL YEAR 1980
HEALTH SERVICES PROGRAMS
(In millions of dollars)
Budget Authority
Program

Health Care Financing Administration:
Medicare

1978
actual

1979
estimate

1980
estimate

27,586

31,755

10,674

11,842

35,811
12,696

279
6
90
11
372
11
140
36

362
8
6
90
11
389
11
150
36

395
8
1
52
13
384
11
151
43

1
45
45
182
1
515

2
45
72
173
1
574

2
43
90
176
1
587

42
33
14
11
4

42
55
14
11
10

42
41
14
11
13
18
5
92

293
174
86

332
175
87

367
175
102

99
133

99
80

100
85

203

243

209
30

6
84

7
6
91

60
22
103

506

606

634

Total, budget authority

41,773

47,499

52,660

(Total outlays)

(39,103)

(44,494)

(48,462)

Medicaid
Health Services Administration:
Community health centers
Black lung clinics
Home health services
Comprehensive grants to States
Hypertension
Maternal and child health
Genetic services
Family planning
Migrant health
Payments to Hawaii for treatment of Hansen's
disease
Emergency medical services
National Health Services Corps
Public health service hospitals
Federal employee health units
Indian health service
Center for Disease Control:
Venereal diseases
Immunizations
Rat control
Lead paint poisoning
Health education
Prevention formula grants
Fluoridation
Other disease investigations
Alcohol, Drug Abuse, and Mental Health Administration:
Mental health services
Drug abuse services
Alcohol abuse services
State formula grants for mental health, alcohol
and drug abuse
Saint Elizabeths Hospital
Health Resources Administration:
Health planning
Conversion closure grants
Office of the Assistant Secretary for Health:
Health maintenance organizations
Adolescent health, services, and pregnancy prevention
Health promotion and anti-smoking
Other health programs
Office of Personnel Management:
Federal employee health benefits

MEETING NATIONAL NEEDS

239

In addition to continuing the community health component of
the 1979 urban initiative, the 1980 budget proposes to expand
health services funding for high-priority underserved areas
through the community health centers programs and the National
Health Service Corps (NHSC). Budget authority for community
health centers is proposed to rise from $362 million in 1979 to $395
million in 1980. This amount will provide 45 new centers in medically-underserved areas, bringing the total number of federally
supported community health centers to 909 in 1980. Proposed
budget authority for the NHSC rises from $72 million in 1979 to
$90 million in 1980. This will provide for an increase of 1,095
NHSC professionals for a 1980 level of 2,820. In addition, the administration is requesting budget authority of $60 million in 1980
and $7 million in 1979 for the recently authorized adolescent
health services program targeted primarily toward prevention of
unwanted teenage pregnancy.
The emergency medical services (EMS) systems demonstration
program will provide funds on a matching basis to 294 out of the
300 EMS regions in the Nation. As a result of increased State
participation in this program, the administration is proposing to
phaseout Federal grants by 1982. Budget authority is proposed to
decline slightly from $45 million in 1979 to $43 million in 1980. In
addition, the administration is proposing that budget authority for
the health maintenance organization (HMO) program be increased
from $41 million in 1979 to $74 million in 1980.
Legislation is being proposed in 1979 to restructure Federal support to States and communities for the development and delivery of
comprehensive mental health services, reflecting the recommendations of the President's Commission on Mental Health. Through a
new program of cooperative agreements with States, $38 million in
1980 budget authority is requested to support the improvement of
services for the treatment of mental disorders and the prevention
of institutionalization. In 1980, this program will aid systems serving an estimated 700,000 chronically mentally ill adults and
400,000 severely disturbed children and youth. Grants to communities for mental health services in 1980 are expected to include
support for 161 new projects for the initiation and development of
community-based services, 300 new projects for the provision of
mental health services in general health care settings, and 693
awards to established community mental health centers. As States
develop comprehensive systems of mental health care, Federal
funding for community mental health services will be consolidated
into the cooperative agreements with States. Total budget authority for State and community mental health services is proposed to
increase from $293 million in 1978 to $332 million in 1979, and
$367 million in 1980.

240

THE BUDGET FOR FISCAL YEAR 1980

A new program of consolidated State formula grants with $100
million in 1980 budget authority is requested to support State
mental health, alcohol, and drug activities. Legislation will also be
proposed this year to extend and revise the health planning program.
The Federal direct care services in the health mission consist
primarily of 3 programs: The Indian Health Service, Public Health
Service hospitals and clinics, and St. Elizabeths Hospital.
Budget authority of $587 million in 1980 is requested to provide
direct medical services to 722,000 American Indians and Alaskan
Natives living on or near Federal reservations. Federal funding for
Indian health services has quadrupled since 1960; during this
period, the health status of Indians in general has improved and
that of Indian infants has improved dramatically.
Proposed budget authority for Public Health Service (PHS) hospitals and clinics is $176 million in 1980, compared with $173 million
in 1979. These funds provide primarily for the medical care of
American merchant seamen and active-duty Coast Guard personnel.
Budget authority of $85 million in 1980 will subsidize the delivery of mental health care at St. Elizabeths Hospital, primarily for
District of Columbia residents. In addition, renovation of hospital
facilities will be continued in 1979 and 1980 to meet facilities
standards of the Joint Commission on Accreditation of Hospitals.
The Federal and District Governments will continue negotiations
for the transfer of a fully accredited St. Elizabeths Hospital to the
District of Columbia by 1982.
Increased support for health promotion activities in 1980 underscores a growing recognition that future improvements in American health status are more likely to result from individual lifestyle
changes than from an expansion of traditional medical services.
New initiatives include expanded efforts in disease prevention,
health information and promotion, and health education. A new
$18 million State formula grant program will be initiated in 1980
to support preventive health services that address the 5 leading
causes of disease and death in each State.
In addition to continued support for childhood and influenza
immunizations, venereal disease control, and childhood lead-based
paint poisoning prevention, a new $5 million prevention initiative
for community water fluoridation is proposed. Research and practical experience over the last 30 years have demonstrated that fluoridation can prevent 65% of tooth decay in children. An estimated
$30 in dental treatment costs for tooth decay can be saved for
every $1 expended on water fluoridation.
The budget includes new activities in 1980 for the smoking and
health program, with a special emphasis on high-risk individuals.

MEETING NATIONAL NEEDS

241

Similarly, an increase of $15 million in 1980 budget authority is
proposed to develop models for the prevention and treatment of
alcohol abuse, with an emphasis on women, youth, and employed
individuals. Increases of $12 million in 1980 budget authority are
proposed for research and services programs to help prevent
mental illness and institutionalization, with an emphasis on highrisk children and adults.
The budget requests the initiation of new projects in 1980 in the
area of health education, including development of school health
education curricula, protocols for effective education of patients on
adherence to therapeutic regimens, and the demonstration of
health education programs at the worksite. Health information and
health promotion activities will be expanded in 1980 to encourage
private sector involvement in this area. Increased funding is requested to provide for expansion of the National Health Information Clearinghouse to increase the public awareness of helpful and
responsible health information. CHAP and expanded medicaid coverage for low-income pregnant women, described previously, are
expected to make significant contributions to preventive health
and lower infant mortality rates.
In addition, health benefits for 3.7 million Federal civilian employees and retired employees and their 7.1 million dependents are
financed under the Federal employees health benefits program
managed by the Office of Personnel Management. In 1980, Federal
payments to finance these programs are estimated to total $2.2
billion. Federal payments for retired employees, estimated at $0.6
billion in 1980, are included in the health care services mission.
Federal payments for active employees in each agency are shown
in aggregate in the table at the end of the health chapter.
The mission of the major Federal health care programs — medicare, medicaid, and the health service delivery programs — is
primarily to assist those groups of Americans most in need; i.e., the
aged, the poor, and the disabled. The following table shows total
Federal health outlays for health care services by income and age
group. An estimated 57% of the expenditures supports services for
the aged and 32% for the poor, including low-income aged persons.

242

THE BUDGET FOR FISCAL YEAR 1980
TOTAL FEDERAL HEALTH SERVICE OUTLAYS BY INCOME AND AGE GROUPS
(In millions of dollars)
1978
actual

1980
estimate

1979

Poor persons:
Aged (65 and over)
Other adults (21 to 64)
Children and youth (0 to 20)

5,503
7,738
2,494

6,129
8,634
2,968

6,157
9,348
3,482

Subtotal, poor

15,736

17,731

18,987

Non-poor persons:
Aged (65 and over)
Other adults (21 to 64)
Children and youth (0 to 20)

21,919
8,206
1,854

24,967
9,242
2,104

27,582
10,343
2,447

31,979

36,313

40,372

27,422
15,944
4,349

31,096
17,876
5,072

33,739
19,691
5,929

Subtotal, non-poor
Total, all recipients:
Aged (65 and over)
Other adults (21 to 64)
Children and youth (0 to 20)
Total, all recipients
Allocated to health (function 550)
Allocated to other national needs

47,714

54,044

59,359

(39,103)
(8,611)

(44,494)
(9,550)

(48,462)
(10,897)

Tax expenditures.—In addition to direct Federal spending, Federal tax laws help finance health care by excluding health insurance
premiums paid by employers from employees' taxable income. The
revenue loss from this tax expenditure is estimated at $9.6 billion
for 1980. Furthermore, individuals are permitted to itemize certain
deductions for health care expenses and health insurance premiums. In 1980, the revenue loss from this tax expenditure is estimated at $3.1 billion. In addition, tax reductions for health-related
charitable contributions are estimated at $1.4 billion in 1980.
Health research.—Federal outlays for health research in this
mission are estimated to increase from $3.0 billion in 1979 to $3.4
billion in 1980. This will continue the development of knowledge on
the causes, prevention and treatment of diseases.
The Federal Government provides approximately $2 out of every
$3 devoted to health research in the Nation. Federal support will
continue to emphasize basic research in degenerative and chronic
diseases, such as cancer, heart disease, and diabetes — illnesses
that have increased as the life expectancy in the Nation has risen.
Federal outlays for health research, including outlays not in this
function, are expected to be $4.0 billion in 1979 and $4.4 billion in
1980, as shown on the following table.

MEETING NATIONAL NEEDS

243

FEDERAL OUTLAYS FOR HEALTH RESEARCH
(In millions of dollars)
1978
actual

Cancer
Environmental health
Cardiovascular disease
Neurological and visual disease
Metabolic diseases
Infectious diseases
Mental health
Child health
Health services research and development.
Population and family planning
Pulmonary diseases
Nutrition
Dental health
Research facilities
Rehabilitation research and development..
General medical sciences
Health statistics activities
Regulatory research and development
Other research and development
Total
Allocated to health (function 550)
Allocated to other national needs

1979
estimate

1980
estimate

860
402
251
248
214
222
224
53
85
81
69
72
63
46
224
12
191
45
37
317

817
447
291
276
273
224
244
48
85
86
81
86
63
56
251
13
205
52
50
356

3,715

4,004

4,427

(2,822)
(893)

(3,029)
(975)

(3,365)
(1,062)

899
496
311
316
286
255
281
59
96
102
86
100
65
65
111
15
225
66
49
377

The National Institutes of Health (NIH) account for 67% of the
total Federal outlays for health research and over 75% of HEW's
research budget. Total outlays for health research at NIH are
estimated to rise from $2.7 billion in 1979 to $3.0 billion in 1980.
Within this total, outlays for basic research are estimated to rise
from $1.3 billion in 1979 to $1.4 billion in 1980.
Support for research in the areas of mental health, alcohol, and
drug abuse is estimated to increase from $199 million in 1979
outlays to $229 million in 1980 outlays. This increase is consistent
with the research recommendations contained in the report of the
President's Commission on Mental Health, and reflects an increase
of 43%, or $78 million, in budget authority from 1978 to 1980.
Proposed outlays for health services research in this mission
total $62 million in 1980, including research activities supported by
the Health Care Financing Administration and the National
Center for Health Services Research. Research will be carried out
in the areas of technology assessment, cost containment and health
planning, regulation, and health manpower. Increased funding is
requested in 1980 to carry out survey work essential for some of
the decisions to be made for the national health insurance plan.
Federal outlays to improve worker safety and health are estimated to be $61 million in 1980. The National Institute for Occupation-

244

THE BUDGET FOR FISCAL YEAR 1980

al Safety and Health (NIOSH) plans to increase its efforts to develop criteria on toxic materials and other hazards in the workplace.
These criteria are used by the Department of Labor in issuing
occupational safety and health standards. The number of health
hazard evaluations conducted will increase from 136 in 1979 to over
200 in 1980. NIOSH will continue its testing of protective devices
and industrial hygiene monitoring devices and expand its research
related to occupational safety. Additional research will be directed
in 1980 to carry out NIOSH's responsibilities under the Federal
Mine Safety and Health Act of 1977.
Education and training of the health care work force.—Total

outlays for training health professionals in this mission are estimated to decline from $704 million in 1979 to $623 million in 1980.
During the 1960's and 1970's there was a major increase in the
supply of health manpower, partly as a result of increased Federal
institutional and student assistance to support expanded numbers
of health professions students and training programs. It is estimated that the number of practitioners in the major health professions
categories will increase by another 70% between 1975 and 1990. In
every case, the increase in health professionals will far exceed
population growth, raising the practitioner-to-population ratios
well above current levels. In particular, the ratio of physicians to
population is projected to rise 37% from about 177 per 100,000 in
1975 to 241 per 100,000 in 1990. These projected increases in the
numbers of health professionals during the coming decade underscore the fact that Federal subsidies are no longer required to
increase supply of these professionals. Therefore, Federal programs
that in the past have provided institutional subsidies to increase
the supply of particular categories of health professionals without
regard to specialty preference or geographic location are recommended either for termination in 1980 or for phaseout. In addition,
because increases in the supply of health resources result in increased health care costs, targeting Federal support for health
professions training is also a component of the administration's
health cost containment strategy. However, the administration is
recommending that Federal institutional grants totaling $84 million in 1980 budget authority be retained to support residency
programs in primary care and family medicine because specialists
in these areas are in short supply.
As part of a national health strategy to address the needs of the
poor and medically-underserved, the administration is requesting a
redirection in Federal support for health professions training. To
meet this important objective, $76 million in outlays is estimated to
support 6,195 National Health Service Corps (NHSC) scholarships
in 1980. Scholarship recipients agree to serve in medically under-

MEETING NATIONAL NEEDS

245

served areas in return for this assistance. The NHSC scholarship
program represents the primary Federal mechanism for alleviating
the current maldistribution of health professionals.
For health professions students who do not wish to accept a
service commitment, alternative financial assistance will be available under loan- and needs-based grant programs in the Office of
Education. It is estimated that new student loan guarantees under
the health education loan program will total $136 million for the
1979-1980 academic year.
FEDERAL OUTLAYS FOR HEALTH STUDENTS
[In millions of dollars]
1978
actual

Students in life science fields
Medical students
Dental students
Nursing students
Students in mental health fields
Other training
Total
Allocated to health (550)
Allocated to other national needs.

1979
estimate

122
635
96
155
38
542
1,588
(930)
(658)

1980
estimate

119
590
68
135
38
559
1,509
(704)
(805)

136
640
67
89
39
598
1,569
(623)
(946)

Consumer and occupational health and safety.—An estimated
$943 million in outlays will be spent in 1980 on the Federal mission
of protecting consumers from unsafe and defective products, and
workers from occupational and health hazards.
Outlays for consumer safety activities are estimated to increase
from $637 million in 1979 to $644 million in 1980. Efforts will
continue to assure the safety and efficacy of drugs and medical
devices in 1980. Proposed initiatives, such as reform of existing
drug laws, continued emphasis on insuring food safety, and the
fostering of cooperative regulatory activities are expected to make
existing programs more effective. Consumer safety efforts will continue research, information dissemination, and regulatory measures to protect consumers from unreasonable consumer product
risks.
Workplace safety and health inspections by the Department of
Labor under the Occupational Safety and Health Act and the
Federal Mine Safety and Health Act are expected to increase from
267,000 in 1978 to 308,000 in 1980. Standards will continue to be
issued to require changes in workplace conditions identified as
causes of accidents, illness, or death. Emphasis on hazards that
affect worker health will continue to increase. The Occupational
Safety and Health Administration expects to increase grants to

246

THE BUDGET FOR FISCAL YEAR 1980

help private organizations develop capacity to train workers and
employers to recognize and eliminate hazards. The Mine Safety
and Health Administration will shift emphasis from providing
safety and health training to assisting and regulating mine operator training programs.
Health-related programs,—A number of Federal programs are
health related, although their primary purpose is to meet other
national needs and to serve other major missions. The following
table lists 1980 outlays for health and health-related programs.
PROPOSED 1980 FEDERAL HEALTH AND HEALTH-RELATED OUTLAYS
(In millions of dollars)
Mission
Agency

Health care
services

Health, Education, and Welfare
Defense
Veterans
Housing and Urban Development
Agriculture
Environmental Protection Agency
National Aeronautics and Space Administration
Department of Energy
State
National Science Foundation
Interior
Transportation
Justice
Other agencies
Agency contributions to employee health funds

48,072
3,283
5,278
29
44

Total
Allocated to health (550)
Allocated to other national needs..
1

14
39
46
897
1,630
59,359
(48,462)
(10,897)

Health
research

Training the
health care
work force

3,473
145
127

854
280
344

132
77
51
220
4
74
67
5
1
51

4,427

1,569

(3,365)
(1,062)

(623)
(946)

Protecting
consumers
and workers

Total

52,723
3,752
5,750
44
557
77
11
62
220
77
38
1
75
85
5
19
67
14
61
340
1,367
1,630
66,547
1,193
(943) 1 (53,393)
(250) (13,155)
323
45
1
15
381

Excludes offsetting receipts of - $ 1 4 million.

Outlays for health-related programs supporting the veterans
benefits function, for example, are estimated to be $5.8 billion in
1980. The primary objective of the veterans health program is to
provide medical care to veterans suffering from service-connected
disabilities. On a space-available basis, veterans who are unable to
afford medical care are also treated in Veterans Administration
(VA) facilities. In order to assure quality of care, 136 VA hospitals
are affiliated with one or more medical schools. The VA funds over
$100 million in health-related research each year.
Estimated outlays of $3.8 billion in 1980 for the health care
system of the Department of Defense will support the primary
military mission by maintaining the peacetime health of the active
duty forces and by preparing for the care of the sick and wounded

247

MEETING NATIONAL NEEDS

in time of war. The Defense health care system also provides
health care as a benefit to active duty dependents, retirees and
their dependents, survivors of deceased active duty and retired
personnel, and other beneficiaries entitled under the law. Health
care services are provided to 9.4 million eligible beneficiaries by a
direct care system of 179 military hospitals, numerous medical and
dental clinics, and in civilian facilities by the Civilan Health and
Medical Program of the Uniformed Services (CHAMPUS). The Defense Department supports research and training activities at
medical centers and research institutes throughout the country.
Physician training is supported at the Uniformed Services University of the Health Sciences and by the Armed Forces Health Professions Scholarship Program.
Good health also is promoted by a wide range of current and
proposed programs in other agencies and functions. Some of these
efforts are included in the table above covering health-related activities. These activities include such programs as human nutrition
research in the Department of Agriculture: health and environmental research in the National Science Foundation and the Department of Energy; and research on toxic substances and other
pollutants in the Environmental Protection Agency. However, the
1980 budget also supports health promotion through other Federal
activities not included in this table. For example, the 1980 budget
requests an increase in nutrition programs for low-income women
and youth, school children and the elderly in the Departments of
Agriculture and Health, Education, and Welfare to help improve
the health status of the beneficiaries. Pollution abatement and
regulatory activities of the Environmental Protection Agency are
also expected to promote better health.
CREDIT PROGRAMS—HEALTH
(in millions of dollars)
1978
actual

Direct loans:
New loans
Repayments, sales and adjustments ( — )
Net credit outlays
Guaranteed loans:
New loans
Net credit guaranteed

1980
estimate

1979
estimate

88
-48

125
-98

129
-95

53
22

252
219

285
251

248

THE BUDGET FOR FISCAL YEAR 1980

INCOME SECURITY
National Needs Statement:
• Mitigate through social insurance the loss of income due
to unemployment, retirement, disability, or death.
• Assure a reasonable income for poor Americans, especially the elderly, disabled, and families with children
who—even though they may be working—are unable to
provide sufficiently for themselves.
• Coordinate the various income transfer programs to
eliminate duplication and inequities, and assure that all
needy and deserving persons are benefited.
• Administer these programs efficiently, while preserving
the dignity and independence of the beneficiaries.
In 1980, income security outlays are estimated to be $179.1 billion—about 34% of total budget outlays. This represents an increase of $20.3 billion over 1979, and $32.9 billion over 1978. In the
last 5 years, income security outlays have grown by 40.6%, representing substantial real growth in benefits. These programs serve
the retired and disabled as well as their dependents, the unemployed, and the poor in many different ways, with both cash and
with in-kind benefits.
Most income security programs are entitlements and uncontrollable unless existing law is changed. Growth in the costs of these
programs generally results from increases in the number of beneficiaries and from automatic cost-of-living increases, not from discretionary increases. It is thus difficult to achieve appreciable economies without seriously affecting current beneficiaries or individuals
expecting to receive benefits in the near term.
Strenuous efforts have been made to assure that the poor and
elderly who depend primarily on these programs are not adversely
affected by 1980 budget proposals. Emphasis has also been placed
on promoting accountability for proper and efficient operation of
these programs. Administration proposals and initiatives in the
income security area focus on:
—simplifying programs to ease access for beneficiaries, and to
achieve administrative efficiencies;
—reducing fraud and abuse to promote public confidence, as well
as assuring that benefits are targeted on intended beneficiaries; and
—reforming programs to eliminate benefits that are not closely
related to need or to earned right.

MEETING NATIONAL NEEDS

249

Increased funding is proposed for the special supplemental feeding program for women, infants, and children (WIC) to cover a
larger portion of a major vulnerable population. Reform proposals
are being designed to achieve real improvements in the welfare
system. The welfare reform is discussed in more detail, below,
under public assistance.
For social security, legislation will be proposed to more closely
relate benefits to earnings before retirement. Sound financing is a
major concern for the railroad retirement system and will require
increased taxes, coupled with a restructuring of future benefits to
bring them more in line with social security. For food stamps,
fraud and error will be reduced by creating fiscal incentives for
States to improve administration. Legislation will be proposed requiring States with excessive error rates in administering food
stamp benefits to share in the cost of such errors. Legislation will
also be proposed to reduce child nutrition subsidies for meals for
children from middle- and upper-income families so that Federal
resources may be better targeted on the neediest. All Federal retirement programs and some public assistance benefits are related
by law to changes in the cost of living, as measured by the consumer price index (CPI) or some other index. In this way, benefits are
protected against inflation. As of last year, 2 consumer price indices are published: the original index, which was designed to measure the purchasing power of the dollar for urban wage earners and
clerical workers, and a new index, which covers all urban households. The new index covers about 80% of the population, double
that of the original index. Legislation is again proposed to shift to
the more comprehensive all-urban index in measuring automatic
cost-of-living increases for Federal programs linked to the CPI.
General retirement and disability insurance.—This mission includes benefits paid out under the social security and railroad
retirement systems to retired and disabled workers and their survivors. It also includes benefits for disabled coal miners and Federal
employees.
A broad range of fundamental problems will be addressed by the
President's Commission on Pension Policy, which is considering not
only retirement programs of the Federal Government, but those of
State and local governments and the private sector in order to
develop a national retirement income policy. Legislation will be
submitted to continue to work of the Commission, which was established by Executive order.
Social security.—The old-age survivors and disability insurance
(OASDI) system is the basic retirement program for more than
90% of the Nation's workers, and is the largest single program in
the budget. More than 100 million people work at jobs covered

250

THE BUDGET FOR FISCAL YEAR 1980

NATIONAL NEED: PROVIDING INCOME SECURITY
[Functional code 600; in millions of dollars]
Major Missions and Programs

BUDGET AUTHORITY
General retirement and disability insurance:
Social Security (OASDI)
Proposed legislation
Railroad retirement
Proposed legislation
Special benefits for disabled coal miners
Other
Subtotal
Federal employee retirement and disability:
Retirement and disability
Federal employees workers'compensation...
Subtotal
Unemployment compensation
Public assistance and other income supplements:
Supplemental security income
Proposed legislation
AFDC and other
,
Proposed legislation
Earned income credit
Food stamps
School lunch and other nutrition programs..
Proposed legislation
Housing assistance
Refugee assistance
Proposed legislation
Real wage insurance (proposed legislation)
Other
Subtotal
Deductions for offsetting receipts
Total, budget authority
OUTLAYS
General retirement and disability insurance:
Social Security (OASDI)
Proposed legislation
Railroad retirement
Proposed legislation
Special benefits for disabled coal miners
Other

Subtotal

1978
actual

1979
estimate

1980
estimate

1981
estimate

1982
estimate

87,976

100,419

3,843

4,035

1,068
6

1,564
11

115,740
14
4,274
211
1,570
6

132,058
103
4,597
245
1,308
7

150,030
287
4,789
281
1,392
7

121,816

138,319

156,786

92,893

106,028

17,777
292

20,608
228

22,716
304

24,005
268

25,082
310

18,069

20,836

23,020

24,273

25,392

14,676

15,726

15,710

15,584

14,056

5,250

5,558

6,396

6,354

6,669

881
5,618
3,399

841
6,015
3,792

32,300
196

24,787
227

7,139
11
7,536
-282
1,426
7,320
4,954
-396
28,067
59
88

439

474

6,749
7
7,080
7,354
- 212
- 250
1,547 1,486
6,927
7,363
4,454
4,720
-358 -374
27,475
28,003
76
67
90
89
200
240
240
53,914

56,163

54,438

48,363

55,454

240

- *

180,077

190,954

214,460

233,628

252,397

92,242

102,319
4
4,267

128,510
-1,682
4,832
-93
1,422
7

140,799
-2,928
5,013
-116
1,339
7

132,996

144,114

3,983
1,027
5

97,257

115,846
-609
4,581
- 65
1,307 1,463
7
8

107,903

121,224

MEETING NATIONAL NEEDS

251

NATIONAL NEED: PROVIDING INCOME SECURITY—Continued
[Functional code 600; in millions of dollars]

Major Missions and Programs

1978
actual

1979
estimate

1980
estimate

1981
estimate

1982

Federal employee retirement and disability:

Retirement and disability
Proposed legislation
Federal employees workers'compensation...

Subtotal
Unemployment compensation
Public assistance and other income supplements:
Supplemental security income
Proposed legislation
AFDC and other
Proposed legislation
Earned income credit
Food stamps
School lunch and other nutrition programs..
Proposed legislation
Housing assistance
Refugee assistance
Proposed legislation
Real wage insurance (proposed legislation)

Other
Subtotal
Deductions for offsetting receipts

Total, outlays
ADDENDUM
Off-budget Federal entity:
Pension Benefit Guaranty Corporation:
Outlays

10,491
174

12,140

13,802

15,391

16,929

228

21
304

22
268

23
310

10,665

12,368

14,127

15,681

17,262

11,769

10,296

12,410

11,884

10,756

5,855

5,558

6,340

6,639

6,702

881
5,499
3,427

841
6,321
3,831

3,677
139

4,453
228

6,961
-212
1,547
6,877
4,257
-358
5,322
126
90
200

6,749
7
7,354
-250
1,486
7,312
4,582
-364
6,283
78
89

7,139
11
7,536
-282
1,426
7,290
4,810
-365
7,397
61
88

403

367

210

211

26,521
*

28,300
- *

210
31,360
-*

33,534

35,323

146,212

158,867

179,120

194,095

207,454

-32

-24

-31

-33

-36

*$500 thousand or less.

under the program. In 1980, workers and employers will contribute
$113 billion in payroll taxes to support the system. Benefits to
almost 36 million retired and disabled workers, aged dependents,
and survivors will total $113 billion. During the year, more than
900,000 additional persons will be added to the benefit rolls.
The Social Security Amendments of 1977 (P.L. 95-216) revised the
benefit computation formula to correct a runaway growth in benefit costs in the long range. It also provided a substantial rise in
payroll taxes over the next several years to cover higher than
anticipated costs. Even so, the measures contained in the 1977
amendments will not totally resolve the financing problems in
social security. While the new taxes and changes in the benefit
formula will increase trust fund resources temporarily, the funds
may nonetheless encounter financial trouble after the turn of the

252

THE BUDGET FOR FISCAL YEAR 1980

century if the ratio of productive workers to retired persons decreases as projected. (People born during the post-World War II
baby boom will begin to retire after 2010, while at the same time
the labor force is expected to be growing much more slowly. Consequently, current projections indicate that the ratio of taxpayers to
beneficiaries will drop from 3:1 in the 1980's, to 2:1 in the 2030's.)
Unless changes are made in the system before 2010, the trust
funds' reserves will be exhausted in the 2040's.
A number of groups, in addition to the President's Commission
on Pension Policy, have been formed to study the social security
and related retirement systems, and recommend changes in the
systems to guarantee their long-term soundness. Among these
groups are:
• the congressionally-mandated National Commission on Social
Security;
• a congressionally-mandated study of universal coverage under
social security;
• a congressionally-mandated study of dependency as a factor in
spouses' benefits; and
• the Quadrennial Advisory Council on Social Security.
The study groups are expected to report beginning late in 1979.
In the interim, the administration is proposing legislation to improve administration of the social security program and to eliminate unnecessary benefits. The 1980 budget contains a coordinated
package of changes that would reduce social security outlays by an
estimated $0.6 billion in 1980 and $1.7 billion in 1981. Social security outlays, including these proposed reductions, are estimated to
be $102.3 billion in 1979 and $115.2 billion in 1980. If these reduction proposals, as well as the administration's hospital cost containment legislation, are enacted, it would be possible to consider a
reduction in social security taxes beginning in 1981.
Legislation will be proposed to:
• Limit the number of work years that may be disregarded in
computing social security benefits.—Under present law, the 5
lowest years of a worker's covered earnings may be disregarded in determining the average lifetime earnings, upon which
the benefit is based. The proposal would relate the number of
years that may be disregarded to the number of the worker's
years of covered employment.
• Phase out post-secondary school student benefits.—Currently,
student benefits are paid to individuals over the age of 18
regardless of their income if they attend post-secondary
schools. It would be more appropriate for needy students to
receive assistance under the basic education opportunity
grants (BEOG's), which take into account the cost of the

MEETING NATIONAL NEEDS

•

253

education and the family's ability to pay. The administration
is requested full funding for BEOG's irf 1980.
Modify parent's benefit.—Currently, spouses may receive immediate benefits for which they would not otherwise be eligible until they reached age 60 or 62, if they are caring for a
child under 18 of the retired, disabled, or deceased worker.
Present law provides such a benefit on the assumption that
the parent cannot work away from the home while a child
under the age of 18 is in her (his) care. In today's world this is
unrealistic and costly.
Offset worker's benefits for Federal civilian pensions.—The
1977 Social Security Amendments provided that social security benefits received by dependents of workers be reduced if
the dependents receive benefits from other public pension
systems such as the Federal employees retirement system.
The purpose was to avoid windfall benefits from the overlap
of both systems. This proposal extends the same principle to
retirees themselves.
Simplify certain statutory rules.—A number of technical
changes are proposed to simplify and speed benefits. Some,
such as rounding benefits to the nearest dollar instead of
rounding up to the nearest 10 cents, have little effect on the
individual beneficiary but will save the fund $60 million or
more every time a cost-of-living adjustment is made. Others
may have a modest cost, such as modifying the penalties for
untimely reports of excess earnings. Most of the proposals in
this category have relatively negligible costs.
Eliminate minimum benefit for new recipients.—Under present law, insured workers who retire at age 65 are guaranteed
$120 a month regardless of the average level of their past
covered earnings. This is a windfall to persons for whom
social security covered employment was not the principal
source of pre-retirement earnings.
Replace the lump-sum death payment with a new death benefit in SSI.—The lump-sum death payment has not increased
since 1954 and is now largely an anachronism. For people
with truly minimal resources an alternative death benefit is
proposed in the supplemental security income (SSI) program.
Reform the disability insurance program.—A number of
changes in the disability insurance program are proposed to
limit opportunities for abuse of the program. These include
new maximum family benefit and increased incentives for
disabled beneficiaries to return to gainful employment.
Other.—Other changes include a proposal that survivors
would no longer be eligible for benefits unless the deceased
worker were fully insured. These benefits now go mainly to

280-000

O—79—17

254

THE BUDGET FOR FISCAL YEAR 1980

families protected by other retirement systems. Another proposal would raise the age at which individuals might begin to
receive full benefits without regard to their current earnings
from 70 to 72. Presently, the age limit benefits mostly highearners and is costly to the social security system.
Railroad retirement.—The Railroad Retirement Board, a Federal
agency, administers benefits equivalent to social security, as well as
industry-financed benefits for retired and disabled railroad employees, their dependents, and survivors. The industry also finances an
array of retirement, survivor, and disability benefits beyond social
security, such as "windfall" benefits, lump-sum, and taxable supplemental annuities. Outlays are estimated to increase from $4.3 billion
in 1979 to $4.5 billion in 1980 as a result of higher per capita benefit
levels. Higher benefits paid to the 1 million beneficiaries more than
offset the effect of a decline of 5,000 beneficiaries between 1979 and
1980.
The Board's latest actuarial valuation projections suggest that
the industry pension fund will be out of funds by 1986. The
fund is underfunded by at least 4% of current railroad industry
payroll; that is, revenues have to be increased or benefits decreased
by an amount equivalent to 4% of payroll to put the fund on a
financially sound basis. The budget includes legislation to assure
that the interests of current and future beneficiaries are protected
by restoring the solvency of the railroad industry pension fund.
The proposals would increase revenues by 2% of railroad industry
payroll chiefly by removing the maximum limit on wages subject to
railroad retirement taxes. The proposal would also reduce the
future growth in benefits so that they more closely conform to
social security. This will result in prospective savings to the fund
actuarially equivalent to 2% of industry payroll. The administration also invites proposals negotiated by railroad labor and management to provide sound financing of the industry pension component without added Federal subsidies.
The industry component of the railroad retirement system provides windfall benefits to certain beneficiaries entitled to both
social security and railroad retirement benefits. The general taxpayer has subsidized the cost of providing these benefits to railroad
industry beneficiaries since 1976. This subsidy is currently projected at $313 million in outlays annually through the year 2000.
Legislation is again being proposed to cease providing cost-of-living
increases in the windfall benefit for workers who retire after May
31, 1979.
Special benefits for coal miners.—Benefits to coal miners disabled
from pneumoconiosis (commonly known as "black lung") and their

MEETING NATIONAL NEEDS

255

dependents and survivors are provided under the Federal Mine
Safety and Health Act of 1977. Monthly benefits are based on the
GS-2 Federal salary and increase as that salary level changes. If
the beneficiary filed for benefits for years between 1970 through
1973 and if the claim was approved by the Department of Health,
Education, and Welfare, these benefits are financed out of Federal
funds. These federally-funded benefits are estimated to total $1.0
billion annually in 1979 and 1980. An increase in average benefit
levels will be offset by a reduction in the number of beneficiaries.
Beneficiaries are expected to decline from 453,000 in 1978 to
432,000 in 1979 and 410,000 in 1980.
The Department of Labor receives claims filed after 1973, and
benefits are paid by the mine operator found responsible for the
disability. In addition, the Black Lung Benefits Reform Act of 1977
provided for review by the Department of Labor of all claims
denied by the Department of Health, Education, and Welfare for
possible approval under new eligibility criteria.
Benefit payments for eligible miners and survivors where no
mine operator can be assigned liability, or where mine employment
terminated prior to 1970, are paid from the black lung disability
trust fund. This trust fund is financed by an excise tax on coal, and
will pay out benefits estimated at $281 million in 1979 and $424
million in 1980.
Pension Benefit Guaranty Corporation.—The Pension Benefit
Guaranty Corporation, an off-budget Federal entity, was established by the Employee Retirement Income Security Act of 1974 to
protect the vested benefits of workers in covered pension plans in
case a plan terminates. Employers with covered plans pay an
annual premium of $2.60 per plan participant to cover the Corporation's costs of taking over terminated pension plans and paying
benefits when due. Employers whose plans terminate are liable for
the unfunded portion of vested retirement benefits to the extent it
does not exceed 30% of their net worth. The Corporation's receipts
are expected to exceed expenditures by $24 million in 1979 and $31
million in 1980. The Corporation's discretionary authority to cover
terminating multi-employer plans expires on June 30, 1979. The
budget estimates are based upon legislation that will be proposed
to extend this discretionary authority. The legislation would also
establish a comprehensive multi-employer plan termination insurance program.

256

THE BUDGET FOR FISCAL YEAR 1980
FEDERAL BENEFITS FOR THE AGED
(In millions of dollars)
1978
actual

Cash benefits:
Covered employment:
Social security (OASI) members
Federal civilian employees
Railroad employees
Uniformed services members
Coal miners widows
Supplemental security income
Income-tested veterans pension
Subtotal, cash benefit outlays
In-kind benefits:
Medicare
Medicaid
Food stamps
Subsidized public housing

Other in-kind
Subtotal, in-kind benefit outlays

Total Outlays
Allocated to income security (function 600)
Allocated to other national needs

1979
estimate

1980
estimate

62,922
4,995
3,033
1,958
291
1,855
1,835

70,150
5,684
3,186
2,863
343
1,560
2,139

79,705
6,477
3,379
2,363
383
1,689
2,396

76,889

85,925

96,392

21,479
3,849
544
1,074

24,747
4,209
546
1,348

28,439
4,356
516
1,670

26,977

30,898

35,034

103,866

116,823

131,427

(73,096)
(30,770)

(80,922)
(35,901)

(91,633)
(39,794)

Tax expenditures.—A variety of income exclusions, tax deferrals,
and credits, assist the aged, retired, and disabled. The exclusion
from income subject to tax of all social security and most railroad
retirement benefits without regard to an individual's income from
other resources results in an estimated tax expenditure of $6.7
billion in 1980. The exclusion from income of benefits for the
disabled results in an estimated tax expenditure of $2.2 billion in
1980. The tax expenditures resulting from the extra personal exemption for those over 64 and the blind, and from tax credits for
the elderly will reduce 1980 receipts by an estimated $2.1 billion.
The Revenue Act of 1978 significantly increased the level of tax
expenditures going to elderly homeowners. The new provisions that
allow a once-in-a-lifetime tax exemption on capital gains up to
$100,000 on the sale of a principal residence will reduce tax collections by an estimated $535 million in 1980.
Tax expenditures also provide incentives for employers to provide their workers with pension and other benefits such as life and
health insurance and supplemental unemployment. Excluding the
cost of these benefits from income results in an estimated tax
expenditure of $13.9 billion in 1980. Acquiring life insurance is
encouraged by the Government through exclusions from income of

MEETING NATIONAL NEEDS

257

interest earned on policies that reduce premiums. This exclusion
will result in an estimated 1980 tax expenditure of $2.7 billion.
Federal employee retirement and disability insurance.—Outlays
for Federal civilian retirement and non-work-related disability insurance are estimated to increase from $12.1 billion in 1979 to
$13.8 billion in 1980. These Federal programs are estimated to have
1.7 million beneficiaries in 1980. (Military retirement is discussed
under national defense.)
The Department of Labor, through the Federal Employee Compensation Act program, provides tax-free cash and medical benefits
to Federal employees, or their survivors, for job-related injuries,
illnesses, or deaths. Other Federal agencies subsequently reimburse
the Department for payments made on behalf of their employees.
Approximately 48,000 workers with long-term disabilities or their
survivors are expected to receive monthly payments in 1979 and
49,000 in 1980. Outlays are estimated to increase from $228 million
in 1979 to $304 million in 1980.
There is evidence that the Federal employee workers compensation system is being overused. Consequently, legislation is being
proposed to amend the Federal Employees Compensation Act to (1)
remove incentives to file questionable claims and disincentives for
injured workers to return to work when they are medically able; (2)
remove inequities in compensation, which now permit higher paid
workers to receive in compensation more than they took home in
pay when working; and (3) encourage both employees and employers to participate fully in the restoration of injured workers to
gainful employment as soon as medically possible.
The proposals will include provisions designed to reduce fraud
and simplify the program. Such provisions would facilitate management of the system and would eventually produce savings in both
compensation and administrative funds.
Unemployment compensation.—Approximately 97% of wage and
salaried employment in the United States is covered by unemployment compensation, which provides support to individuals who are
temporarily out of work and are searching for a job. This income to
unemployed workers also helps support aggregate purchasing
power during slack periods in the economy. It is estimated that an
average of 2.2 million workers per week will receive unemployment
benefits during 1979 and 2.6 million in 1980. Outlays for unemployment compensation are estimated to increase from $10.3 billion in
1979 to $12.4 billion in 1980 as a result of the final phase-in of the
increased coverage enacted in 1976, increases in wages on which
benefits are based, and a slight rise in the projected average unemployment rate from 5.9% in FY 1979 to 6.2% in 1980.

258

THE BUDGET FOR FISCAL YEAR 1980

Tax expenditures.—Unemployment compensation benefits received by single persons with annual income, including unemployment compensation, of under $20,000 (under $25,000 for married
couples) are excluded from income subject to taxation. The resulting tax expenditure is estimated at $1.9 billion in 1980.
Public assistance and other income supplements.—This mission

includes programs that provide cash, food, and shelter for people in
need. Groups eligible for such aid include families with dependent
children, the aged, the blind, and the disabled. A major administration proposal for reform of the welfare system will provide significant improvements in welfare programs and in benefits for the
needy.
Welfare reform.—The basic components of the welfare reform
plan would:
• establish a national minimum benefit level for the aid to
families with dependent children program (AFDC);
• increase efficiency and reduce fraud and abuse through administrative improvements;
• transform the unemployed father component of the AFDC
program into assistance for unemployed parents, and extend
it to all States;
• attempt to provide an employment and training opportunity
for the principal earner in AFDC families for whom a private
sector job cannot be found;
• maximize reliance on the enacted resources for the most severely disadvantaged under the CETA program and tax credits;
• further expand the earned income tax credit (EITC) to increase incomes of working poor families and thereby strengthen work incentives and reduce welfare costs; and
• provide additional fiscal relief to State and local governments
as a result of the above components.
Provision for this reform proposal has been made in the allowance for contingencies beginning in 1981.
Supplemental security income.—The supplemental security
income (SSI) program, which is administered by the Federal Government, provides cash assistance to needy aged, blind or disabled
individuals. The basic Federal grant is supplemented by State payments in certain States.
The number of recipients in 1980 is estimated to be 4.2 million.
Federal outlays in 1980 are estimated to reach $6.3 billion, compared to $5.6 billion in 1979 and $5.9 billion in 1978. Because
payments are not made on a Sunday, benefits for the first month

MEETING NATIONAL NEEDS

259

in 1979 were actually paid in 1978, causing the decrease in outlays
between 1978 and 1979 and the large increase in 1980.
The high error rates associated with the program's initial years
have been markedly reduced. Much of this reduction is due to
concentrating staff resources on error-prone cases, and extensively
cross-checking benefits provided by other benefit programs. The
Department of Health, Education, and Welfare intends to reduce
further the number of errors without sacrificing equity or incurring substantial new program costs. For example, legislation is
being proposed to shift to a system under which a recipient's
eligibility and benefits would be determined by taking into consideration the past month's income, rather than trying to forecast
income, as under current law.
AFDC and related programs.—The program of aid to families
with dependent children (AFDC) assists States and localities in
providing cash assistance to needy families. Federal outlays for
these grants are estimated at $6.7 billion in 1980, compared with
$6.7 billion in 1979 and with $6.6 billion in 1978. A small outlay
increase from an anticipated moderate rise in the average benefit
payment is offset by proposals to improve program management.
Errors and abuses are being combated through closer cooperation
between the States and the Department of Health, Education, and
Welfare. In addition, vigorous management improvement efforts,
such as welfare management and training institutes, are focusing
on administration in selected States. Concerted efforts are being
made to match data from other benefit programs to assure that
recipients receive only the cash assistance to which they are entitled. Child support payments are being collected from parents who
are legally liable for such support. This effort results in a decrease
in Federal, State, and local AFDC expenditures.
Legislation is being proposed to include stepparents' income in
calculating AFDC eligibility and benefits, standardize allowable
work expenses, and require monthly retrospective income reporting
(as in SSI) for determining AFDC eligibility and benefits. These
proposals greatly simplify administration and reduce associated
costs. Legislation is also being proposed to revise the child support
enforcement program, by extending enforcement and collection activities to alimony, permitting access to wage information of the
Social Security Administration, and extending AFDC entitlement
to assure the establishment of a regular pattern of support payments for the family.
Earned income tax credit (EITC).—This credit aids low-income
workers. In 1978 the credit was 10% of the first $4,000 of income
and was phased out at the rate of $1 for each $10 earned. For 1979

260

THE BUDGET FOR FISCAL YEAR 1980

and later years, the credit will be 10% of the first $5,000 and will
phase out at the rate of $1.25 for each $10 earned above $6,000.
Budget outlays for the earned income credit, representing payments in excess of tax liability, are expected to rise from $0.8
billion in 1979 to $1.5 billion in 1980 as a result of the changes
enacted last year. The 1980 revenue loss associated with this credit
is estimated to be $0.7 billion. Expansion of the EITC is under
consideration as part of the design of the welfare reform proposal.
Food stamps.—The food stamp program is designed to help needy
families purchase food for an adequate diet. Food stamp allotments
are adjusted twice a year for changes in food prices. Outlays are
estimated to be $6.9 billion in 1980, supporting 17.4 million individuals. The net incomes of food stamp recipients are below the poverty line; 17% of participating households have one or more members
over age 64, and 68% of all households are headed by women.
Legislation will be proposed to improve program administration
by placing fiscal liability on States that operate the program at
unacceptably high error rates, and to allow States to determine
benefits through retrospective rather than prospective accounting
of household income. These proposals, plus the Food Stamp Act of
1977, will ensure that Federal resources reach those eligible and
most in need. The 1977 Act tightened income eligibility requirements, eliminated those households with relatively high incomes,
improved access to the program, and simplified administration.
Legislation will be proposed to eliminate the authorization ceiling
so that cost-of-living changes can be made. The effects of the legislation are not shown separately on the national need table.
School lunch and other nutrition programs.—There are 15 separate Federal programs that financially assist States in feeding
children and other needy persons. Outlays for these programs are
estimated to total $3.9 billion in 1980.
Legislation will be sought to direct these resources more effectively to needy children, since a substantial portion of child nutrition subsidies goes for meals for middle and upper income families
or duplicates resources available elsewhere. Included are proposals
to reduce school lunch and breakfast subsidies by 5 cents for children from families with incomes above $13,845, and revise eligibility requirements for free and reduced-price meals to ensure that
subsidies assist only those in need. Another proposal would end
subsidies for special milk programs in schools where the Federal
Government already pays for milk as part of a breakfast or lunch
program. The Department of Agriculture will also increase its
audit activities to reduce the incidence of improper reimbursements for children not eligible for certain subsidies.

MEETING NATIONAL NEEDS

261

Support for the special supplemental food program for women,
infants, and children (WIC) will be increased $200 million to $750
million in 1980. This represents a $345 million increase in outlays
since 1978. Recent studies suggest that this program may lead to
significant reductions in infant mortality and in the incidence of
low birth-weight babies, both of which disproportionately afflict
poor families who are the program's beneficiaries. WIC benefits
will be better targeted on poor families and linked more effectively
with health care services.
Housing assistance,—The Department of Housing and Urban Development (HUD) provides housing assistance to low-income families to improve their opportunity to secure decent housing. The
total number of families receiving housing assistance is estimated
to increase from 3.0 million in 1979 to 3.2 million in 1980. Total
outlays for housing assistance are estimated to rise from $4.4 billion in 1979 to $5.3 billion in 1980—an increase of 20%. The 1980
budget requests $27.4 billion in budget authority, of which $26.7
billion is for long-term subsidized housing commitments. This will
provide rental housing assistance for up to 300,000 additional lowincome families, and homeownership assistance to an additional
25,000 moderate-income households.
Housing assistance is currently provided through 3 major activities within HUD's subsidized housing programs: lower income
housing assistance, public housing, and homeownership assistance.
The most important of these programs—lower income housing assistance (section 8)—provides rental subsidies to participating families equal to the difference between market rents and 15-25% of
family income. These rental subsidies are paid over a 15- to 40-year
period for tenants in newly-constructed, rehabilitated, and existing
units. The budget proposes additional section 8 assistance for lowincome families in 1980, requiring total budget authority of about
$20 billion. Outlays from the section 8 housing program are estimated to increase $1.4 billion in 1979 to $2.1 billion in 1980. HUD
will continue efforts begun in 1978 to control subsidized housing
cost increases in response to growing concerns about the costs of
these programs. In addition, the administration will explore alternatives that would encourage communities to make more extensive
and effective use, including rehabilitation, of existing units to meet
housing needs of eligible households. Average cost per unit of section
8 housing is estimated as follows:
• $178,800 over 40 years for State agency-financed new construction;
• $133,200 over 30 years for private new construction; and
• $40,050 over 15 years for existing housing.

262

THE BUDGET FOR FISCAL YEAR 1980

Public housing, including housing for reservation Indians, is the
other major active rental assistance program within the subsidized
housing programs. The budget proposes budget authority of $6.1
billion in 1980. This will help to provide another 50,000 units of
public housing. The budget provides $750 million in budget
authority for modernization to improve existing public housing
projects. Almost all existing public housing projects also receive an
operating subsidy to fill the projected gap between the operating
costs estimated for "well-run" projects under the performance
funding system and anticipated revenues from rent collections.
Budget authority of $742 million is proposed for 1980 for public
housing operating subsidies. Outlays under this program are estimated to increase from $652 million in 1979 to $720 million in
1980. The administration has undertaken a study of the performance funding system to update and improve the method used to
determine operating subsidies. Total outlays for public housing are
estimated to increase from $1.8 billion in 1979 to $2.0 billion in
1980.
The subsidized housing program also helps families become
homeowners by subsidizing mortgage payments down to an effective rate of a 4% mortgage. In 1980, an additional 25,000 households are expected to receive homeownership assistance under the
current program using authority provided by the Congress in past
years. The administration will propose changes in the current
mortgage limits to enable this program to respond better to areas
where displacement of low and moderate income households is
occuring. Outlays for homeownei*ship assistance are estimated to
increase from $103 million in 1979 and $111 million in 1980.
The budget also continues the new troubled projects operating
subsidy for subsidized, FHA-insured, multi-family projects in financial difficulty. This recently enacted program provides the difference between the HUD-approved operating costs and projected
rents, and helps defray additional rent burdens for low-income
tenants, while mandating management improvements for participants. Budget authority of $82 million is requested for 1980, and
outlays are estimated to be $78 million in 1980. The exclusion from
income of interest on State and local housing bonds results in an
estimated 1980 tax expenditure of $820 million.

MEETING NATIONAL NEEDS

263

CREDIT PROGRAMS—INCOME SECURITY
(In millions of dollars)
Program

Public housing operation and construction:
Direct loans:
New loans
Repayments, sales, and adjustments ( - )

1979
estimate

1978
actual

1980
estimate

191
-176

204
-201

205
-203

Net credit outlays

Guaranteed loans:
New loans
Net credit guaranteed

9,448
365

11,310
1,810

14,193
3,093

*
- 1

*
-1

-1

- 1

-1

Assistance to refugees:
Direct loans:
New loans
Repayments, sales, and adjustments ( - )
Net credit outlays

*$500 thousand or less.

Refugee assistance.—States are reimbursed for assistance provided needy Cuban and Indochinese refugees. Some refugees need
cash assistance, medical care, social services, or English language
and employment skills training to facilitate their integration into
American society. Outlays are estimated to be $228 million in 1979
and $216 million in 1980 to provide for the continued needs of
recent refugees and the anticipated needs of the additional IndoChinese refugees recently authorized for entry by the Attorney
General. As Indochinese refugees become self-sufficient and as Federal aid for the earliest arrivals is phased out in 1980, residual
refugee welfare needs will be met by the regular national assistance programs. Refugee needs will continue to be monitored carefully by the administration over the next several months in light of
the continuing exodus from Indochina.
Under the provisions of the Foreign Assistance and Related Programs Appropriation Act of 1979, the Department of Health, Education, and Welfare has assumed responsibility from the State
Department for providing grants to several American private voluntary organizations to aid in the permanent resettlement in the
United States of refugees from other nations.
Real wage insurance.—The President has proposed a program of
real wage insurance as a part of his comprehensive anti-inflation
program. Its major effect on the budget would be a reduction in
receipts, resulting from tax credits of $2.3 million in 1980. In
addition, there would be $0.2 billion in outlays, reflecting payments

264

THE BUDGET FOR FISCAL YEAR 1980

in excess of an individual's tax liabilities. A detailed description of
this proposal is in Part 4, "Budget Receipts."
Other.—Estimated outlays for other income supplements are decreasing for $367 million in 1979 to $210 million in 1980. This is
because of the transfer of the home weatherization program to the
Department of Energy.
Related programs.—There are a number of other programs that
are related to income security, but their primary purpose is to
meet other national needs and serve other major missions. The
following table lists these income security-related programs that
support other missions.
FEDERAL OUTLAYS FOR INCOME SECURITY-RELATED BENEFITS SUPPORTING OTHER MAJOR
MISSIONS
(In millions of dollars)
Benefit outlays
Department, agency, and program

1978
actual

1980
estimate

1979
estimate

Department of Health, Education, and Welfare:
Hospital insurance
Supplementary medical insurance
Medicaid
Public Health Service officers retirement

17,862
7,350
10,680
52

20,378
8,771
11,751
60

21,989
10,091
12,354
71

Total, Department of Health, Education,
and Welfare

35,944

40,960

44,505

Veterans Administration:
Disability and dependency and indemnity compensation
Veterans and survivors pensions
Life insurance (net subsidy)
Other veterans benefits

6,200
3,261
496
176

6,750
3,758
537
199

7,255
4,239
550
205

10,133

11,244

12,249

9,171

10,102

11,435

156

177

198

55,404

62,483

68,387

Total, Veterans Administration
Department of Defense—Military:
Military retirement
Department of Transportation:
Coast Guard retirement
Total outlays

MEETING NATIONAL NEEDS

265

VETERANS BENEFITS AND SERVICES
National Needs Statement:
• To meet the Nation's obligation to compensate veterans
disabled while in military service for their loss of earning power.
• To provide medical care to veterans for disabilities incurred while in military service.
• To compensate the families of veterans who are killed in
service or who die from service-related disabilities for the
reduction in the family's earning power.
• To help veterans of wartime and draft service return to
civilian life on a social and economic basis comparable to
their peers who did not perform military duty.
• To provide psychological readjustment services and extended training opportunities to Vietnam-era veterans
with special needs.
• To provide financial assistance to needy veterans and
their survivors.
Veterans benefits recognize the special needs of veterans and
their dependents and survivors that result from the sacrifices that
veterans have made in military service to this country. Benefits
compensate for loss of earnings resulting from service-related disabilities, provide medical care for physical and psychological disabilities suffered in military service, and assist in preparing returning veterans for civilian life. In addition, veterans benefits provide
financial assistance to needy, non-service disabled veterans of wartime service and their survivors.
While veterans benefits and services are generally adequate and
have been successful in meeting these needs, it is the goal of the
administration to meet more effectively the special needs of the
Vietnam-era veteran, to organize the Veterans Administration
medical system to better accommodate the imminent increase in
the number of aging veterans, and to concentrate needs-related
financial assistance benefits on the most needy veterans.
The budget proposes several legislative initiatives for 1980. These
include:
• Cost-of-living increases to veterans receiving compensation
benefits for service-connected disabilities.
• A program under which the VA would have expanded authority to provide psychological readjustment services to Vietnamera veterans directly or by contract with private and other
non-Federal health care providers.

266

THE BUDGET FOR FISCAL YEAR 1980

• A 2-year extension of the period of eligibility for certain readjustment benefits for needy and educationally disadvantaged
Vietnam-era veterans.
The budget also reflects the beginning of changes that will be
necessary to adapt VA's health care program to the large increase
in demand for medical care anticipated as the World War II veteran population reaches 65 years of age during the decade of the
1980's. Under current law, veterans are considered disabled on
reaching age 65 and become eligible for a wide variety of medical
benefits. Changes in the medical programs of VA, currently underway, will concentrate on providing medical care appropriate to the
needs of eligible veterans. Specifically, the Department of Medicine
and Surgery will place increased emphasis on its resources to outpatient and extended care for eligible veterans, and to treatment of
the gerontological problems of the increasing number of aging
World War II veterans.
In keeping with the President's emphasis on budget restraint,
several cost-saving legislative proposals are reflected in the budget.
The proposals will correct inequities in current programs and terminate activities that do not accomplish their objectives. They will
also help to offset the costs of improvements in veterans programs.
Outlays for veterans benefits and services are estimated at $20.5
billion in 1980, and are estimated to increase to $21.2 billion in
1981 and $21.7 billion in 1982. These increases reflect the cost of
proposed improvements, as well as changes in the numbers of
beneficiaries and benefit levels in entitlement programs. Outlays
for veterans income security programs, primarily compensation
and pensions, are expected to increase by more than $1.0 billion
(9.4%) between 1979 and 1980, largely as a result of cost-of-living
increases. Readjustment benefits are expected to decrease by $460
million (17%) over the same period as fewer veterans apply for GI
bill benefits. Outlays for hospital and medical care for veterans will
decrease by $76 million if proposed savings legislation is enacted by
1980. Finally, veterans housing programs are expected to produce
negative outlays of $215 million in 1980 as a result of the sale of
housing assets held by the agency. Overall, outlays for veterans
benefits will increase by $132 million over 1979 if this budget,
including savings legislation, is enacted.

267

MEETING NATIONAL NEEDS
NATIONAL NEED: PROVIDING VETERANS BENEFITS AND SERVICES
(Functional code 700; in millions of dollars)
Major Missions and Programs
BUDGET AUTHORITY
Income security for veterans:
Compensation and pensions:
Service-connected compensation
Proposed legislation
Non-service-connected pensions
Other veterans income security
Insurance programs:
National service life insurance trust fund
U.S. Government life insurance trust
fund
All other insurance programs
Insurance program receipts
Subtotal, income security for veterans
Veterans education, training, and rehabilitation:
Existing law
Proposed legislation
Subtotal, education, training, and rehabilitation
Hospital and medical care for veterans:
Medical care and hospital services
Proposed legislation
Construction
Medical administration, research, and other.
Subtotal, hospital and medical care....
Other veterans benefits and services:
Undistributed VA overhead and other
Proposed legislation
Non-VA support programs
Subtotal, other benefits and services..
Deductions for offsetting receipts
Total, budget authority

1978
actual

1979
estimate

1980
estimate

1981
estimate

1982
estimate

3,758
199

6,757
498
4,239
205

6,768
954
4,399
211

6,774
1,371
4,494
218

940

966

968

974

977

36
4
—484

36
6
—471

34
5
—457

32
6
-452

30
6
-447

10,132

11,244

12,251

12,892

13,422

2,635

2,446

2,279
-*

1,833
11

1,574
-1

2,446

2,278

1,844

1,573

4,925

5,409

504
209

462
278

5,595
-301
395
173

5,720
-306
473
177

5,868
-313
368
177

5,638

6,149

5,862

6,064

6,100

608

650

604
—1
32

610
-1
29

611
-1
29

635

678

635

639

6,200

6,750

3,261
176

2,635

—3

-3

19,037

20,514

21,024

21,435

21,732

Income security for veterans.—In addition to general Federal
income security programs, such as social security, several programs
help certain veterans and their survivors maintain their income
when the veteran is disabled, aged, or deceased. Outlays for this
mission are estimated to increase from $10.9 billion in 1979 to $12.0
billion in 1980.
Service-connected compensation. —Monthly compensation payments are provided to veterans whose disability resulted from military service. The amount of the benefit depends on the degree to
which average earnings of individuals with a particular disability
are reduced. In addition, dependency and indemnity compensation

268

THE BUDGET FOR FISCAL YEAR 1980
NATIONAL NEED: PROVIDING VETERANS BENEFITS AND SERVICES—Continued
(Functional code 700; in millions of dollars)

Major Missions and Programs

OUTLAYS
Income security for veterans:
Compensation and pensions:
Service-connected compensation
Proposed legislation
Nonservice-connected pensions
Other veterans income security
Insurance programs:
National service life insurance trust fund
U.S. Government life insurance trust
fund
All other insurance programs
Insurance program receipts
Subtotal, income security for veterans
Veterans education, training, and rehabilitation:
Existing law
Proposed legislation
Subtotal, education, training, and rehabilitation
Hospital and medical care for veterans:
Medical care and hospital services
Proposed legislation
Construction
Medical administration, research, and other.
Subtotal, hospital and medical care....
Veterans housing:
Loan guaranty revolving fund
Direct loan revolving fund
Other (HUD participation sales trust fund).
Subtotal, veterans housing
Other veterans benefits and services:
Undistributed VA overhead and other
Proposed legislation
Non-VA support programs
Subtotal, other benefits and services..
Deductions for offsetting receipts

Total, outlays

1978
actual

1979
estimate

6,159

6,704

3,239
175

1980
estimate

1981
estimate

1982
estimate

3,734
199

6,803
457
4,175
205

6,772
874
4,401
211

6,780
1,256
4,497
218

668

740

771

778

794

67
—79
-484

70
—59
-471

66
—65
-457

62
—65
-452

60
—64
-447

9,745

10,918

11,955

12,583

13,094

3,365

2,701

2,241
-*

1,794
11

1,558
- 1

3,365

2,701

2,241

1,805

1,558

4,809

5,403
294
221

5,593
-301
328
222

5,718
-306
538
227

5,866
-313
702
196

5,254

5,918

5,842

6,177

6,451

80
-39
-13

157
-33
-17

—30
-165
-20

74
-67
- 3

75
-62
-3

106

-215

560

658

608
—1
29

250
195

612
—1
31

585

689

642

636

-3

- 3

-3

- 3

18,974

20,329

20,461

21,201

21,747

* $500 thousand or less.

payments are made to survivors of veterans who die from serviceconnected injuries. Recently enacted legislation increased compen-

MEETING NATIONAL NEEDS

269

sation benefits by 7.3%, effective in October 1978; extended dependents allowances, previously given only to veterans 50% or more
disabled, to veterans 30% or more disabled; and increased clothing
and monthly aid and attendance allowances. Legislation will be
proposed to provide a 7.8% cost-of-living increase in compensation
benefits, effective in October 1979; and annual cost-of-living increases, based on the projected consumer price index, are assumed
to take place in each subsequent year. It is this assumption that
causes compensation payments to grow from $6.7 billion in 1979 to
$8.0 billion in 1982. An estimated 2.6 million veterans and their
survivors are expected to receive compensation benefits in each of
the years 1979 through 1982.
Non-service-connected pensions.—Pensions are provided to needy
wartime-service veterans who are aged or have become disabled
subsequent to their military service. Survivors of wartime-service
veterans also may qualify for pension benefits based on demonstrated financial need. The Veterans and Survivors Pension Improvement Act of 1978 sharpens the focus of veterans pension
benefits upon needy, non-service disabled veterans. The Act liberalized benefits for the neediest veterans and survivors, while correcting most of the inequities that existed in the previous program.
The reform legislation does away with most earnings exclusions,
which had allowed veterans in widely differing financial conditions
to draw identical pensions. It also provides that pension benefits
will be reduced dollar-for-dollar with increases in earnings. In addition, the reform legislation provides for automatic cost-of-living
increases each July starting in 1979. In all, 2.3 million needy
veterans and their survivors are expected to receive $4.2 billion in
1980, $4.4 billion in 1981 and $4.5 billion in 1982.
Burial and other benefits.—Families of deceased veterans who
are buried in private cemeteries rather than VA National Cemeteries may receive allowances to apply toward the purchase of burial
plots. Families of deceased veterans also receive burial benefits to
assist in defraying veterans funeral expenses. Outlays for burial
and other allowances are estimated to increase from $199 million
in 1979 to $205 million in 1980.
Life insurance.—Insurance programs for veterans and their survivors will provide $33.5 billion of coverage on 4.6 million policies
in 1980. The servicemen's group life insurance program for military personnel will provide $62.9 billion of coverage on 3.2 million
policies in 1980.
Veterans education, training, and rehabilitation.—The GI bill provides education benefits ranging from college courses to vocational

280-000

O—79—18

270

THE BUDGET FOR FISCAL YEAR 1980

and on-the-job training. These benefits help eligible veterans make
the transition from military to civilian life by helping them obtain
the education they might have received had they not entered military service. Active duty servicemen and widows and children of
veterans who have died or been totally disabled in military service
also are eligible for these benefits. Service-disabled veterans with
significant disabilities can choose between regular GI bill benefits
or vocational rehabilitation training. Those who enter military
service after 1976 are eligible for a new education program that
allows them to set aside $50 to $75 from their monthly pay to
finance future education. These amounts are matched by the government on a two-for-one basis and returned in education payments after they are discharged.
Over 65% of all Vietnam-era veterans have utilized GI bill benefits. However, the number of GI bill trainees will continue to drop
in the future as the number of eligible veterans becomes smaller.
In 1980, nearly 1.0 million GI bill trainees are expected to participate in the program, a reduction from 1.2 million in 1979. Thus,
outlays for this mission are estimated to decline from $2.7 billion
in 1979, to $2.2 billion in 1980 and $1.6 billion in 1982.
This budget proposes legislation extending the period of eligibility from 10 to 12 years for certain Vietnam-era veterans who have
less than a high school diploma or who require on-the-job training
to find employment. In addition, administrative and legislative
changes are proposed to improve and extend vocational rehabilitation training for service-disabled veterans. A major part of this
effort is directed at better coordination of the rehabilitation activities of training programs and medical programs. The administration is again proposing legislation to end enrollments in general
flight training and correspondence courses that do not promote the
readjustment of veterans to civilian life. The budget estimates
assume enactment of these proposals, which would result in net
savings of $0.6 million in 1980.
Hospital and medical care for veterans.—The Veterans Administration provides hospital and medical care to veterans by operating
a nationwide medical care system. In 1980, it will operate 172
hospitals, 228 outpatient clinics, 96 nursing homes, and 16 domiciliary facilities. Outlays for medical programs are expected to be $5.9
billion in 1979 and $5.8 billion in 1980.
Medical care and hospital services.—In 1980, the VA will continue to reorder its health care program to provide the most appropriate type of care and to accommodate the anticipated influx of
World War II veterans, most of whom will reach age 65 during the
decade beginning in 1980. Since these veterans become eligible for

MEETING NATIONAL NEEDS

271

a wide variety of medical benefits under current eligibility criteria,
the VA anticipates a rapid increase in the number of veterans in
need of long-term and geriatric care. Major increases in the cost of
VA health care will be avoided through increased efficiencies. This
is consistent with the President's policies of fiscal restraint and
improved efficiency of Government activities. Planning is underway to
provide for these changes to the greatest extent possible within the
resources available, while still recognizing that the single highest
priority demand upon the VA medical care system is that of service-disabled veterans. Efforts to improve the quality of medical
care, especially for service-disabled veterans, will continue. Under
the budget proposals, the research programs of the VA medical
systems will continue at the same level in 1980 as in 1979; and
training of health care professionals will continue, primarily
through the affiliation of 136 VA hospitals with medical schools.
Legislation is again proposed seeking reimbursement to the VA
from health insurers for treatment of insured veterans, non-service-connected disabilities. This proposal recognizes that an insurer's
obligation to premium-paying veterans is no different from its obligation to insured non-veterans. Additional legislation is again
being proposed to limit travel reimbursement for those veterans
treated for non-service-connected disabilities. Also proposed in this
budget is legislation to prohibit the provision of over-the-counter
drugs for most ambulatory VA patients being treated for nonservice-connected disabilities. These proposals would help focus VA
resources on the provision of quality care to those with serviceconnected disabilities, and are expected to save $0.3 billion in each
of the years 1980 through 1982.
Legislative authority will be sought to allow VA to contract with
community halfway houses and other programs for a pilot drug
and alcohol abuse treatment effort. Also, legislation will be proposed to establish a program of psychological counseling and readjustment services for Vietnam-era veterans.
Construction of hospital and extended care facilities.—Budget authority of $67.8 million is requested for 1980 to fund the construction of a new VA hospital at Camden, New Jersey, and $75.1
million to finance construction of a replacement hospital at Baltimore, Maryland. Additional budget authority of $201.6 million is
requested for 1980 to support renovation and construction of medical facilities. Included is funding for new nursing homes and outpatient facilities. Finally, budget authority of $5 million is requested
in 1980 for grants to States for construction of extended care facilities, permitting the establishment or repair of additional State
veterans homes for the care of aging veterans.

272

THE BUDGET FOR FISCAL YEAR 1980
CREDIT PROGRAMS—VETERANS BENEFITS AND SERVICES
(In millions of dollars)
Program

Income security programs:
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net credit outlays
Education programs:
Direct loans:
New loans
Repayments, sales and adjustments ( — )
Net credit outlays
Housing programs:
Direct loans:
New loans
Repayments, sales and adjustments (-)1
Net credit outlays

1978
actual

1980
estimate

1979
estimate

120
-111

122
-110

37
-2

15
-3

17
-7

430
-404

527
-454

542
-684

-142

14,849
8,871

16,259
8,951

18,264
9,739

137
-126

Guaranteed loans:
New loans
Net credit guaranteed
1
2

Includes sale of loan assets.
Includes loans counted as direct loans of other accounts.

Veterans housing.—VA mortgage loan guarantee and direct loan
programs are expected to assist 382,350 veterans obtain mortgage
loans totaling $18.8 billion in 1980. Sales of VA-held housing
assets (VA mortgages) programmed for 1980 are expected to produce negative outlays of $195 million.
Other veterans benefits and services.—The Veterans Administration administers a national cemetery system for burial of eligible
veterans, servicemen, and their survivors. Under administration
policy, one large active national cemetery will be designated as the
regional cemetery in each of the 10 Federal regions. New regional
cemeteries are under construction in regions I, II, III, and IX;
existing cemeteries have been designated in regions VI, VII, VIII,
and X; and site selection is underway in regions IV and V. The
National Capital area's cemetery capacity is being expanded by the
construction of an annex at Quantico, Virginia. The budget also
provides an initial $5 million in budget authority for grants for
construction of State Veterans Cemeteries authorized in 1978.
Other VA expenditures include the cost of undistributed nonmedical program administration, both in VA headquarters and in
field units. Outlays for these programs are estimated to be $689
million in 1979 and $642 million in 1980.

MEETING NATIONAL NEEDS

273

Tax expenditures.—Veterans compensation and pension benefits
are excluded from taxable income. The revenue losses from these
exclusions in 1980 are estimated to be $1.0 billion and $55 million,
respectively. GI bill benefits are also excluded from taxable income,
which results in an estimated 1980 tax expenditure of $170 million.
Related programs.—In addition to the assistance provided under
the Federal Government's special programs for veterans, many
veterans receive assistance from the income security, health, housing, education, training, employment, and social services programs
supported by the Federal Government and available to the general
population. Some of these programs have components specifically
intended to assist veterans. For example, the Department of Labor
has instituted a special program to aid disabled veterans in need of
job placement and related services, with anticipated outlays of $27
million in 1980. In addition, the Department has made available
special funding for job training for veterans. Under this program,
about $35 million will be spent in 1980. The Department of Labor
also takes steps to ensure that qualified veterans participate fully
in the training and related services available under the Comprehensive Employment and Training Act. Firms holding Government
contracts are required to list their job vacancies with the State
employment service and are required to take affirmative action to
employ Vietnam-era and handicapped veterans.

274

THE BUDGET FOR FISCAL YEAR 1980

ADMINISTRATION OF JUSTICE
National Needs Statement:
• Represent the interests of the public in civil litigation
and other legal matters.
• Provide fair and prompt prosecution and trial procedures.
• Maintain public order and enforce Federal statutes.
• Provide detention and correctional facilities for people
charged with or convicted of violating Federal laws.
• Help to improve State and local criminal justice systems.
At the heart of every functioning democracy is a body of laws
and legal institutions that together constitute a legal system. While
one of the less costly functions in the Federal budget, the equitable
administration of justice is one of the most basic American rights.
The Federal Government will spend almost $4-1/2 billion to meet
this need in 1980, while State and local governments will spend
close to $25 billion.
Under traditional budget formulation procedures, there have
been few incentives to view the administration of justice as an
integrated system. Incremental budgeting encouraged program
managers to focus almost exclusively on allocating new resources
to priority programs, while activities initiated at times long past
were often permitted to continue without critical review. Among
those who devote their careers to the administration of justice—
judges, jailers, lawyers, and investigators — the law is the law as
long as it remains in the statutes; one does not consciously pick
and choose between good laws and bad, or effective laws and ineffective ones.
As a practical matter, however, there have always been "bottlenecks" in the legal system, and in recent years the systemic imbalances have become apparent. At the Federal level, law enforcement
officers have the capability to develop more criminal charges than
the U.S. attorneys can prosecute, the Government can bring more
cases than the judiciary can hear, and the courts can sentence
more criminals than the Bureau of Prisons can incarcerate. Criminal cases crowd out an increasing number of civil cases, and hardpressed U.S. attorneys are forced to assign their own priorities to
the prosecution of criminal violations.
For many years the Federal Government has provided State and
local law enforcement agencies with training and technical assistance, while Federal officers have directly assisted State and local
authorities in the investigation of certain types of criminal activi-

MEETING NATIONAL NEEDS

275

ties. Since 1968, Federal grants-in-aid have been channeled to State
and local governments through the Law Enforcement Assistance
Administration. In this area, too, there has been a tendency to
continue to fund ongoing programs simply because they are there,
even though in some cases the programs are no longer as important as in the past.
This year, zero-base budgeting techniques have provided the
mechanism—and budget constraints the incentive—for policy-level
officials to address the imbalances in resource allocation that have
developed over the years.
The result is a budget in which outlays for the administration of
justice increase by only $36 million in 1980, even though uncontrollable cost increases attributable to inflation have added $118 million to the most recent reestimates for 1979. To achieve the outlay
levels proposed in this budget it will be necessary to shift resources
away from less productive activities in the law enforcement mission
and into litigation and judicial activities. In addition, the President
has recommended a major reorganization of Federal programs that
provide State and local civil and criminal justice assistance; outlays
for this mission are expected to decline over the period 1979-82. No
new prison construction is proposed for 1980, and efforts to improve the Federal prison system through increased use of minimum security facilities and community treatment alternatives continue to be accorded high priority.
The following proposals are included in the budget:
• increase litigative staff commensurate with the increase in
Federal judges resulting from enactment of the Omnibus
Judgeship Act of 1978;
• focus investigative resources on organized crime, white-collar
crime, high-level drug traffickers, and corruption in the
public sector, while reducing staff time devoted to violations
of the law that can better be addressed at the State and local
level;
• continue to augment enforcement staff at the Nation's borders, but at slower rates than originally planned;
• improve operating efficiencies and reduce inspections staff at
international airports and other ports of entry;
• consolidate civil and criminal justice research and statistical
reporting programs;
• reduce law enforcement grant assistance to State and local
government but ease restrictions on the use of these funds;
and
• encourage and coordinate fulfillment of private attorney obligations to provide civil legal assistance to the poor.

276

THE BUDGET FOR FISCAL YEAR 1980
NATIONAL NEED: ADMINISTRATION OF JUSTICE
(Functional code 750; in millions of dollars)

Major Missions and Programs
BUDGET AUTHORITY
Federal law enforcement activities:
General investigation (FBI)
Narcotics violation investigation (DEA)
Alcohol, tobacco and firearms investigation

(ATF)
Border enforcement activities (Customs
and INS)
Protection and other activities (Secret

Service)
Other enforcement
Subtotal, Federal law enforcement activities

1978
actual

1979
estimate

1980
estimate

1981
estimate

1982
estimate

554
188

582
194

576
194

575
194

129

138

139

689

748

746

139

148

165

149

195

256

268

1,894

2,066

2,087

2,070

433
-6
647
292

433
-6
681
292

Federal litigative and judicial activities:
Civil and criminal prosecution and representation
Proposed legislation
Federal judicial activities
Representation of indigents in civil cases....

361

399

463
205

543
270

433
- 6
628
292

Subtotal, Federal litigative and judicial activities

1,029

1,212

1,346

1,366

1,400

308

350

334

351

356

654

658

181
366

654

658

546

—8

—10

-10

3,877

4,276

4,304

4,323

4,362

Federal correctional activities
Criminal justice assistance:1
Existing law
Proposed legislation
Subtotal, Criminal justice assistance...
Deductions for offsetting receipts
Total, budget authority
1

Includes civil as well as criminal justice programs in 1980 and subsequent years.

Federal law enforcement activities.—The law enforcement mission continues to receive the largest share of outlays for the administration of justice, though the proportion is expected to decline
slightly in 1980-82. Outlays are expected to remain level at $2.07
billion in 1980; a 3% reduction in Federal employment in both 1979
and 1980 will be offset by statutory pay increases and higher
operating costs.
Civil and criminal justice can be viewed as a complex system
with many interactions between the missions. The current challenge is to bring it more nearly into balance. To keep within a
restrained budget, the administration proposes to recruit more
prosecutors, shift enforcement emphasis for some crimes from Federal to State and local authorities, and offset litigative staff in-

MEETING NATIONAL NEEDS

277

NATIONAL NEED: ADMINISTRATION OF JUSTICE—Continued
(Functional code 750; in millions of dollars)
1978
actual

Major Missions and Programs
OUTLAYS
Federal law enforcement activities:
General investigation (FBI)
Narcotics violation investigation (DEA)
Alcohol, tobacco and firearms investigation

(ATF)
Border enforcement activities

Service)
Subtotal, Federal law enforcement activities
Federal litigative and judicial activities:
Civil and criminal prosecution and represen
tation
Proposed legislation
Federal judicial activities
Representation of indigents in civil cases....
Subtotal, Federal litigative and judicial activities
Federal correctional activities
Criminal justice assistance:1
Existing law
Proposed legislation
Subtotal, criminal justice assistance...

Total, outlays
1

1981
estimate

1982
estimate

552
178

578
190

575
193

575
194

128

136

137

139

666

744

739

746

(Secret

Other enforcement

Deductions for offsetting receipts

1980
estimate

(Customs

and INS)
Protection and other activities

1979
estimate

151

161

149

178

272

267

1,831

2,071

2,072

2,070

340

393

445
157

535
261

426
-6
627
281

433
-6
639
292

433
-6
666
292

943

1,189

1,328

1,357

1,384

307

367

377

370

363

729

733

536
86

181
446

181
392

729

733

622

627

573

-10

4,351

4,388

4,413

4,379

- 8
3,802

Includes civil as well as criminal justice programs in 1980 and subsequent years.

creases with judicious reductions in law enforcement personnel.
This will require Federal law enforcement officers to concentrate
on significant criminal activities and reduce investigations in areas
in which the return per investigator hour is low, or in which
violations are so common that Federal enforcement has no appreciable impact. Following this strategy, the allocations in the budget
will:
• increase Federal Bureau of Investigation (FBI) staff directed
against organized and white collar crime by 5%, but reduce
headquarters staff, selected State and local assistance, and
domestic investigation programs;
• improve coordination between the Immigration and Naturalization Service and the Customs Service at the border and at

278

THE BUDGET FOR FISCAL YEAR 1980

interior ports of entry to improve efficiency and reduce overall staffing requirements;
• emphasize use of immigration officers on the border where
they are most effective, and deemphasize apprehensions in
the interior;
• concentrate firearms enforcement efforts of the Bureau of
Alcohol, Tobacco and Firearms on investigating major illegal
sources of firearms;
• focus enforcement efforts on high-level traffickers in hard
drugs; and
• support new agency inspectors general in their efforts to uncover malfeasance and corruption in Federal programs.
The FBI enforces a broad range of criminal statutes, and works
closely with State and local authorities in support of this mission.
Training and financial assistance programs conducted by the
Bureau and the Law Enforcement Assistance Administration
(LEAA) have improved capabilities in some communities to the
point that Federal investigators are no longer needed for certain
types of crime, such as bank robberies. Headquarters support staff
can be reduced because of advances made in automated fingerprint
processing and other technological improvements in operations.
Employment within the Bureau is proposed to be reduced by about
500 positions. Outlays are expected to decline by $3 million to $575
million in 1980.
The Drug Enforcement Administration will continue to shift resources away from street level transactions and concentrate on
organized trafficking in the most dangerous drugs. Modest staff
reductions are planned in 1979 and 1980, but outlays are estimated
to rise from $190 million in 1979 to $193 million in 1980.
The Bureau of Alcohol, Tobacco and Firearms will continue to
try to curtail illegal commerce in firearms, but the focus of the
program will be narrowed. Experience has shown that under existing statutes, Federal enforcement efforts focused on smaller firearms traffickers have had a minimum impact on the overall availability of illegal firearms. Therefore, resources will be directed to
more complex investigations involving major organized illegal
sources of firearms. The budget proposes to reduce investigative
staff by 122 full-time positions in 1979 and 1980. Outlays are expected to be about $136 million in both years.
Last year the President requested a substantial increase in
border enforcement personnel for the Immigration and Naturalization Service and the Customs Service. He also proposed major
legislative initiatives to reduce the opportunities and incentives for
illegal immigration and to provide equitable treatment for undocumented aliens already in this country. The Congress agreed to

MEETING NATIONAL NEEDS

279

increase border enforcement personnel but took no action on the
legislative proposals.
Although enforcement is an important component of the President's programs, traditional enforcement techniques alone will not
stem the flow of undocumented aliens. Accordingly, recruitment of
new personnel originally proposed for 1979 will be extended over
the period 1979 to 1982. If legislation providing for sanctions
against employers of undocumented aliens is adopted, it may be
necessary to accelerate this schedule. Very little construction is
proposed for 1980, so outlays for the Immigration and Naturalization Service are now estimated at $301 million in 1979 and $297
million in 1980.
The budget contemplates a reduction through attrition of 252
Customs Service personnel in 1979 and 1980. Continued development of "one-stop" inspection systems at airports will enable Customs and Immigration officers to share inspection duties; no additional delays should be encountered by the traveling public, and
many may find that the inspection process is expedited. Outlays for
the Customs Service should remain stable at $442 million in 1980.
Corruption and waste in the management of Federal programs is
always inexcusable, and the administration is determined to uncover and prosecute those who abuse the public trust. Recent legislation authorized new inspectors general for 12 major Federal agencies. The Department of Justice expects to work closely with these
new officials, to supplement their investigative resources and to
coordinate prosecutions. This is a low-cost initiative that should
produce very large returns.
Other enforcement activities include those of the Equal Employment Opportunity Commission, which enforces statutory prohibitions against job discrimination because of race, age, color, national
origin, sex or religion. In 1979, the Federal sector equal employment opportunity program previously administered by the Civil
Service Commission, and enforcement responsibilities for the Equal
Pay Act and the Age Discrimination in Employment Act previously
administered by the Department of Labor, will be transferred to
the Equal Employment Opportunity Commission as a result of a
reorganization of civil rights functions within the Federal Government. Total outlays for the agency are expected to increase from
$114 million in 1979 to $124 million in 1980.
The Office for Civil Rights conducts enforcement activities for
the Department of Health, Education, and Welfare under a
number of statutes requiring nondiscrimination by recipients of
Federal funds. The office investigates discrimination complaints,
conducts periodic reviews, negotiates to secure compliance, initiates
enforcement proceedings, and promotes voluntary compliance. Out-

280

THE BUDGET FOR FISCAL YEAR 1980

lays in 1980 are estimated to be $65 million—nearly double the
1978 level but slightly less than in 1979.
Civil rights activities classified in other functions include enforcement by the Department of Labor of the requirement that
Government contractors take affirmative action to overcome employment discrimination, the activities of various agencies to
ensure that grant recipients do not discriminate, and the actions of
all agencies to avoid discrimination in Federal employment. These
activities are discussed in Special Analysis J, "Civil Rights Activities/' in the Special Analyses volume of the budget.
Federal litigative and judicial activities.—Recent legislation provides the opportunity to improve greatly the judicial system. The
Omnibus Judgeship Act of 1978 created 117 new District Court
judgeships and 35 new Circuit Court judgeships for those jurisdictions experiencing the biggest backlog of cases. This increase in
judgeships, the largest since the Federal courts were established in
1789, will significantly enhance the capacity of the judiciary to
cope with the highest pending caseload in history.
Most Federal litigation, both civil and criminal, is conducted by
the Department of Justice. With the adoption of the Omnibus
Judgeship Act, pressures on the Department's litigative resources
have intensified. The administration is considering a proposal to
shift the handling of some civil litigation from the Department of
Justice to other Federal agencies while strengthening the Department's coordination role. Even with this reform, additional attorneys will be required to move civil and criminal cases through the
courts expeditiously. The budget proposes:
• a 17% increase in assistant U.S. attorneys and support staff
to meet a larger and more complex caseload;
• reassignment of a substantial number of U.S. marshals to
provide assistance to new judges in Federal courts;
• modest staff reductions in the Antitrust Division, offset by a
substantial increase in automated litigation support systems;
and
• maintenance of current staffing levels for the Washingtonbased legal divisions.
Outlays for litigation and court support are expected to rise from
$1,189 million in 1979 to $1,328 million in 1980. If additional litigative personnel are required in 1981-82, staff increases directed at
this mission will be offset by reductions elsewhere in the parent
agencies whenever possible.
The law requires that budget estimates for the judiciary be forwarded to the Congress without change. The Administrative Office
of the U.S. Courts has estimated outlays of $627 million in 1980 for
the Supreme Court, the appellate and district courts, and other

MEETING NATIONAL NEEDS

281

judicial activities—a 17% increase over current estimates for 1979.
Most of the increase is attributable to the long-awaited increase in
the number of judges mentioned above.
The Bankruptcy Reform Act of 1978 modernizes the substantive
law of bankruptcy and the current bankruptcy system, which was
last overhauled in 1938. The act establishes an independent system
of bankruptcy courts with presidentially appointed judges, and a
pilot program of U.S. trustees to supervise bankruptcy cases and
act as trustees in cases where private trustees will not serve. The
budget includes $0.8 million in 1979 and $37 million in 1980 to
administer the new act.
The Legal Services Corporation funds local programs that provide free civil legal assistance to the poor. Corporation outlays have
grown from $71 million in 1975 to an estimated $261 million in
1979. In 1980, outlays of $281 million are proposed. Title XX (social
services), general revenue sharing, and other Federal programs
outside of the administration of justice function will provide about
$60 million more for legal services. Because the primary obligation
for legal services rests with the private bar, the administration
requests additional funds to encourage and coordinate fulfillment
of these obligations. The budget also includes a $13 million increase
above 1979 for Legal Services Corporation grantees.
Federal correctional activities.—The Federal Government is responsible for the care and custody of prisoners convicted of violating Federal laws as well as detainees held for Federal trial or
sentencing. In 1980 the Bureau of Prisons is expected to house an
average of 28,600 offenders, substantially below the 1979 level.
Funds for new construction are not requested for 1980, but several
minimum security camps are being expanded now and 2 new housing units will be opened at existing institutions. The Bureau of
Prisons plans to close 3 antiquated penitentiaries at McNeil Island,
Leavenworth, and Atlanta within the next decade. These closings
will be made possible by a declining prison population, reclassification of prisoners to identify those who can be reassigned to lower
security institutions, and increased use of community half-way
houses. Since inflation drives up the costs of food, heat, and other
institutional operations, outlays for correctional activities are estimated to increase from $367 million in 1979 to $377 million in
1980, even though the prison population is expected to be smaller.
Criminal justice assistance.—The administration will again propose legislation to create an Office of Justice Assistance, Research
and Statistics (OJARS) to provide support and coordination for (1) a
National Institute of Justice to undertake civil and criminal research, (2) a Bureau of Justice Statistics to gather and disseminate

282

THE BUDGET FOR FISCAL YEAR 1980

statistics on criminal and civil matters and to provide assistance to
State and local governments in their development of statistics, and
(3) a Law Enforcement Assistance Administration to administer
several grant programs. The proposed changes will reduce redtape
and paperwork, and give cities and counties more direct control
over the Federal funds they receive for criminal justice assistance.
For example, the proposed formula grant program will provide
funds directly to States, cities, and counties, and the proposed
national priority grant program will encourage government and
nonprofit private organizations to carry out programs that have
proved to be effective in strengthening the criminal justice system.
A reduction in funding for juvenile justice and delinquency prevention programs is proposed because of the inability of these programs to efficiently utilize funding at the current level. Proposed
funds for community crime prevention programs are increased. By
creating a National Institute of Justice separate from the financial
assistance programs, the administration hopes to assure the objectivity and independence of research and development. The National Institute of Corrections, formerly a part of the Federal prison
system, will become a part of the OJARS assistance program.
Outlays for civil and criminal justice assistance are expected to
decrease from $733 million in 1979 to $622 million in 1980.
Related programs.—A number of agencies classified in other
functions support the administration of justice. Over 100 agencies
and regulatory commissions perform some type of law enforcement
activity. About 30 Federal agencies, including the Department of
Agriculture, the Department of Labor, the Environmental Protection Agency, and most independent regulatory commissions have
some litigation authority independent of the Department of Justice.
CREDIT PROGRAMS—ADMINISTRATION OF JUSTICE
(In millions of dollars)
Program

Law enforcement assistance:
Direct loans:
New loans
Repayments, sales and adjustments ( -- )
Net credit outlays

1978
actual

1980
estimate

1979
estimate

29
-34
4

38
-39

14
-36

-1

-22

MEETING NATIONAL NEEDS

283

GENERAL GOVERNMENT
National Needs Statement:
• Provide for a legislative system that is responsible to the
people of the Nation.
• Provide effective and efficient central executive policy
development and management.
• Ensure accountability in the use of resources.
• Formulate tax and fiscal policies and conduct efficient
and effective financial operation of the Federal Government.
• Provide essential internal government housekeeping
services, including property and personnel management.
The general government function consists of a variety of diverse
activities that provide for the legislative functions of the Federal
Government, executive branch policy development and oversight,
and central governmental support. These include the legislative
branch, the Executive Office of the President, agencies responsible
for central tax collection, fiscal operations, personnel management,
property control, and records storage.
To address national needs in general government the Federal
Government will spend an estimated $4.4 billion in 1980.
This budget includes proposals to:
• administer voluntary wage and price guidelines;
• increase Internal Revenue Service staff to meet the new requirements of the Revenue Act of 1978 and the Energy Tax
Act of 1978;
• continue to improve cash management throughout the Federal Government;
• improve management and increase efficiency in procurement
of goods and delivery of central services;
• increase General Services Administration (GSA) resources to
provide strong central control and
• reorganize Federal personnel functions to achieve more effective personnel management within the Federal Government.
Legislative functions.—By law, the budget estimates for the legislative branch are included in the President's budget without
change. The legislative branch proposes to spend $1.1 billion in
1980 for the Congress, the General Accounting Office, the Congressional Budget Office, and other programs.

284

THE BUDGET FOR FISCAL YEAR 1980
NATIONAL NEED: GENERAL GOVERNMENT
(Functional code 800; in millions of dollars)
Major Missions and Programs

BUDGET AUTHORITY
Legislative functions

1978
actual

1979
estimate

1980
estimate

1981
estimate

1982
estimate

904

1,011

1,041

1,023

1,055

1,967
204

2,155
297

2,182
312

2,192
310

2,202
314

2,171

2,453

2,494

2,503

2,516

General property and records management:
Real property
Personal property
Other

-75
168
186

21
220
219

143
244

143
247

143
257

Subtotal, general property and records management

279

460

387

390

400

126

135

136

137

190

181

146

116

118

102
287
113

122
152
120

125
152
87

134
152
254

85
152
102

691

575

510

656

457

Executive direction and management
Central fiscal operations:

Collection of taxes
Other fiscal operations
Subtotal, central fiscal operations

Central personnel management
Other general government:
Territories..
Indian affairs
Treasury claims
Other
Subtotal, other general government....
Deductions for offsetting receipts
Total, budget authority

-188

-182

-133

-127

-126

4,063

4,536

4,528

4,676

4,528

Executive direction and management—In October, the President
announced a comprehensive anti-inflation program. One important
component is an austere budget policy, as is reflected in the 1980
budget proposals. But the Federal Government alone cannot solve
the inflation problem. Success will also require the cooperation of
the private sector. To this end, the President has set forth pay and
price guidelines for the year ahead.

MEETING NATIONAL NEEDS

285

NATIONAL NEED: GENERAL GOVERNMENT—Continued
(Functional code 800; in millions of dollars)

Major Missions and Programs

1978
actual

1979
estimate

1980
estimate

1981
estimate

1982
estimate

OUTLAYS
Legislative functions

900

1,022

1,064

1,007

Executive direction and management

1,940
184

2,143
296

2,175
309

2,124

2,438

2,485

2,192
311
2,504

2,202
313
2,516

-168
196
186

-122
207
219

-140
122
244

-10
143
248

39
143
247

214

304

226

381

428

Central personnel management

129

135

140

136

Other general government:
Territories
Indian affairs
Treasury claims
Other

155
96
198
74

180
121
241
64

137
132
152
117

147
138
152
22

151
85
152
209

523

606

538

597
-126
4,662

Central fiscal operations:
Collection of taxes
Other fiscal operations
Subtotal, central fiscal operations
General property and records management:
Real property
Personal property
Other
Subtotal, general property and records management

Subtotal, other general government....
Deductions for offsetting receipts
Total, outlays

-188
3,777

-182

-133

459
-127

4,413

4,412

4,452

1,022

The President has also directed the Office of Federal Procurement
Policy to conduct procurement of Federal supplies and services in
ways that will support the anti-inflation effort, including directing
Federal contracting toward firms that limit wage and price increases. The major reason for the increased staffing in the Executive Office of the President is increased responsibility for administering this program. Under this initiative, the Council on Wage
and Price Stability (COWPS) will monitor wage and price developments in the economy, and will publicly identify sectors of the
economy and firms that are not in compliance with the standards.

280-000

O—79—19

286

THE BUDGET FOR FISCAL YEAR 1980

Final staffing requirements for COWPS to implement the antiinflation program are under review.
Central fiscal operations.—The mission of central fiscal operations is to provide the essential financial activities necessary for
the Federal Government. Outlays for central fiscal operations are
estimated to increase by $47 million to almost $2.5 billion in 1980.
Most of the funds supporting this mission are spent on the collection of taxes by the Internal Revenue Service (IRS). In 1980, the
budget requests funds for additional staff to answer taxpayer inquiries resulting from the changes in the Revenue Act of 1978, the
Energy Tax Act of 1978, and the Foreign Earned Income Act of
1978. Increased staff will also be used to match tax returns with
wage and other documents, and to process the increasing number
of tax returns. The number of returns audited by IRS is expected
to decline slightly from the 1979 levels.
The Government handles very large amounts of money, and it is
possible to achieve savings simply by improving the way funds are
managed. A number of measures have been initiated to improve
Federal cash management:
(1) On November 2, 1978, Treasury began to earn interest on its
cash balances in its tax and loan accounts. These accounts are
held in a large number of banks throughout the country as a
convenience to employers who withhold employee taxes. Under
recently enacted legislation, the Treasury will pay the banks
for handling the transactions in these accounts as well as for
other services, such as issuing savings bonds. In return, the
banks will pay Treasury interest on the excess balances. The
net savings to the Government are expected to total $75 million in 1980.
(2) Several initiatives will accelerate the payment of tax revenues by requiring taxpayers to make income tax payments
closer to the time that tax liabilities occur, and by requiring
employers to deposit taxes withheld from employees on a more
timely basis. These proposals increase receipts by $2.2 billion
in 1980, $5.0 billion in 1981, and $5.3 billion in 1982. At the
same time, efforts will be taken to reduce the filing burden on
small employers. These initiatives are discussed in more detail
in Part 4 of the Budget.
(3) A number of other improvements in cash management are
planned that will improve the effectiveness of Federal collection procedures and the management of Federal cash resources.
General property and records management—The General Services Administration (GSA) manages Federal real property, acts as a

MEETING NATIONAL NEEDS

287

central procurement agent, and is the custodian of the Federal
Government's historical records.
In response to the need for strong central oversight and control
in GSA, the following initiatives have been undertaken:
• An increase of 50 positions has been approved by Congress for
the Office of the Inspector General. An additional 100 positions are requested for 1979 to significantly enhance GSA's
internal audit and investigative capabilities.
• A centralized Office of Controller-Administration has been
established within GSA as a means of tightening financial
controls and monitoring agencywide transactions.
• An Office of Acquisition Policy has been established to provide central policymaking and oversight of contracting and
regulations writing for GSA.
• The Federal Property Resources Service has been established
to consolidate property disposal functions; these include the
sale of real and personal property, management of Federal
stockpile activities, and the sale of silver dollars. Centralization of these functions will result in more efficient organization, planning, direction, and control.
Personal property.—GSA maintains, jointly with the Department
of Defense, a national supply system that procures supplies and
equipment, and maintains the interagency motor pool program. A
supplemental request for $81 million in 1979 budget authority is
being made to improve the efficiency of the motor pool.
Better management of the supply operation is expected to result
in cost reductions to customer agencies of approximately $54 million in 1980.
Records activities.—Under the terms of Executive Order No.
12065, Federal records will be examined for declassification after 20
years, rather than after 30 years as had been the practice. The
National Archives and Records Service is requesting additional
funds in 1979 to begin the additional examinations required. In
addition, an Information Security Oversight Office has been established to monitor agency compliance with the declassification requirements of the Executive order.
Central personnel management—in 1978, a comprehensive
reform of the Federal civil service system was enacted into law.
The basic legislation is expected to (1) make Federal Government
operations more efficient and responsive through a fundamental
change in the management of Federal personnel, (2) improve administration of the Federal labor-relations program, and (3) safeguard merit systems against political and other abuses.

288

THE BUDGET FOR FISCAL YEAR 1980

The 1980 budget reflects the major organizational changes in
central personnel management resulting from the act. The personnel management tasks of the Government previously performed by
the Civil Service Commission will be the responsibility of the Office
of Personnel Management. Merit system review and employee appeals adjudication will be performed by the Merit System Protection Board. Within the Board, the Office of Special Counsel will
investigate merit system violations and reprisals against "whistleblowers/' The Federal Labor Relations Authority will carry out the
new provisions of the law governing labor-relations as well as those
previously carried out under various Executive orders.
In line with the statutory employment limitation also contained
in the reform act and the President's objective of restraining Federal employment, the Office of Personnel Management will reduce
its recruitment efforts.
Other general government—Other activities included in the general government function include payments of claims and judgments against the Federal Government, and funding for the territories, Indian affairs and various commissions. Outlays are expected to decline from $606 million in 1979 to $538 million in 1980.
Territories.—Outlays for governmental operations, construction
projects, and Federal oversight in Guam, American Samoa, the
Virgin Islands, the Northern Marianas, and the Trust Territory of
the Pacific Islands are estimated to decline from $180 million in
1979 to $137 million in 1980. This decrease reflects an unusually
high level of outlays in 1979 due to one-time claim payments, and
the completion of facility acquisition projects. It also reflects an
effort to reduce territorial dependence on the Federal Government.
Budget authority of $52 million is recommended to complete a
substantial portion of a major, 5-year construction program underway in the Trust Territory that will supply these Pacific Islands
with a basic infrastructure of roads, docks, harbors, and airports as
well as water, sewer, and electrical systems.
These programs are directly funded by the Department of the
Interior's Office of Territorial Affairs. The territories also receive
grants and payments from other Federal agencies that are described elsewhere in the budget.
Indian affairs.—The budget estimates outlays of $121 million in
1979 and $132 million in 1980. Most of these outlays are annual
payments to extinguish land claims, and to pay Alaskan Natives
mineral, oil, and gas royalties under the provisions of the Alaskan
Native Settlement Act of 1971. The outlay increase between 1979
and 1980 is due to increased oil production flowing through the
Trans-Alaska Pipeline.

MEETING NATIONAL NEEDS

289

Credit programs.—Credit programs for the U.S. territories provide for direct loans to Guam for typhoon rehabilitation, guarantees of Guam Power Authority obligations, and guarantees of bonds
and loans for capital improvement projects in the Virgin Islands.
Real property credit programs of the General Services Administration include sales of debentures to the public to finance construction of new Federal office buildings under purchase contract authority, sales of surplus real property for credit in which the Federal Government is the mortgage holder, and repayment of mortgages on properties sold to the public by the Virgin Islands Corporation.
CREDIT PROGRAMS—GENERAL GOVERNMENT
(In millions of dollars)
Program

1980
estimate

Net credit outlays

1
-1
*

CVJ

Loans to U.S. Territories:
Direct loans:
New loans
Repayments, sales and adjustments (—)

1979
estimate

1979
actual

-2
_2

Guaranteed loans:
New loans
Net credit guaranteed

39
38

-2

5
-22

3
-19

3
-17

Net credit outlays

-17

-16

-14

Guaranteed loans:
New loans
Net credit guaranteed

128
115

35
30

45
36

Real property activities and other:
Direct loans:
New loans
Repayments, sales and adjustments

*$500 thousand or less.

3
-2

290

THE BUDGET FOR FISCAL YEAR 1980

GENERAL PURPOSE FISCAL ASSISTANCE
National Needs Statement
• Support the Federal system with financial assistance to
State and local jurisdictions.
• Assist States and localities by providing monies in lieu of
taxes.
General purpose fiscal assistance is financial aid granted to State
and local governments without major restrictions or matching requirements. Recipients may use it to increase services, offset increasing costs, maintain service levels that otherwise would have
been reduced, or lower taxes. Its purpose is to meet national needs
by supplying States and local governments with the resources to
provide the goods and services they judge will best meet the requirements of their residents. It is also a means of targeting fiscal
aid to those State and local governments most in need. The largest
general purpose fiscal assistance program is general revenue sharing for which full funding is requested in 1980.
Certain municipalities are having fiscal difficulties due to structural factors such as population decline, the outmigration of industry and skilled labor, a high incidence of poverty, and changing
technological conditions. They are particularly vulnerable to the
harmful effects of inflation and cyclical fluctuations in economic
activity. Inflation exerts upward pressure on payroll and procurement cost of these governments, but tax revenues cannot be easily
raised to meet the higher cost. During periods of recession these
jurisdictions are usually the hardest hit and the last to recover.
These communities have rapidly absorbed whatever level of Federal assistance has been available; as a result, they have become
increasingly dependent on Federal aid. In particular, the antirecession fiscal assistance program (ARFA), which expired in 1978, accounted for a large share of the revenues of fiscally strained local
governments—many of which are finding it difficult to adjust to
the loss of expected funds.
One study estimates that ARFA payments during 1978 represented 3.5 percent of general purpose taxes for ten major cities with
high fiscal strain. Other forms of "economic stimulus" programs
provided an even larger share.
To resolve the withdrawal problem the administration proposes a
transitional highly-targeted fiscal assistance program to help fiscally-distressed jurisdictions adjust to the termination of ARFA payments. In addition, a new countercyclical assistance program is

MEETING NATIONAL NEEDS

291

proposed to help those governments in greatest need during recessions.
It is also expected that the proposed National Development
Bank, discussed in the community and regional development section, will over time strengthen the tax bases of distressed governments, and other grants and categorical assistance to States and
local governments will also provide relief.
General revenue sharing.—General revenue sharing has been the
primary means by which the Federal Government has given general purpose assistance to State and local governments. Legislation
enacted in 1976, extended the program through September 30,
1980. Full funding of the authorization for fiscal year 1980—$6.86
billion—is requested. No final decisions have been made on the
desirability of extending general revenue sharing and related general purpose fiscal assistance programs beyond September 30, 1980.
General revenue sharing provides some funds to virtually every
unit of general government below the Federal level; over 39,000
units of government receive benefits. There are minimal Federal
controls, which seek to assure nondiscrimination and public participation in spending decisions. In addition, governments that receive
$25,000 or more in any one year must have their funds audited at
least once every 3 years.
Revenue allocations to the States are based on total population,
urban population, per capita income, income tax collections, and
general tax effort. Within States the allocations for local governments are based primarily on population, per capita income, tax
effort, and the share of taxes collected. The formula results in some
targeting to governments with fiscal problems.
Other general purpose fiscal assistance.—These programs also
provide funds with minimal restrictions to States and localities.
Total outlays are estimated to decrease from $2.8 billion in 1978
and $2.1 billion in 1979 and $1.9 billion in 1980, largely because of
the termination of the antirecession fiscal assistance program.
Targeted and anti-recession assistance.—A transitional fiscal assistance program that is carefully aimed at the cities with the
greatest need will be proposed to reduce the fiscal impact of the
termination of ARFA on a few hard pressed local governments. To
ease the transition, the new program would provide funds to the
most severely affected governments in 1979 and 1980. Budget authority of $250 million is proposed for 1979, and $150 million for
1980.

292

THE BUDGET FOR FISCAL YEAR 1980
NATIONAL NEED: FISCAL ASSISTANCE TO STATE AND LOCAL GOVERNMENTS
[Functional code 850; in millions of dollars]

Major Missions and Programs
BUDGET AUTHORITY
General revenue sharing:
General revenue sharing payments to
States and localities
Administration
Subtotal, general revenue sharing
Other general purpose fiscal assistance:
Antirecession fiscal assistance to States
and localities
Targeted fiscal assistance (proposed)
Payments and loans to the District of Columbia
New York City loan guarantees (administrative expenses)
Payments to States from Forest Service
receipts
Payments to States and counties from Federal land management activities
Payments to territories and Puerto Rico
Other

1978
actual

1979
estimate

1980
estimate

1981
estimate

1982
estimate

6,855
8

6,855
7

6,855
6

6,862

6,861

6,862

1,400

250

150 .

393

214

462

488

455

226

241

283

394
445
6

420
780
5

470
570
5

478
585
5

499
601
5

Subtotal, other general purpose fiscal
assistance

2,865

1,911

1,943

1,841

1,845

Total, budget authority

9,728

8,773

8,804

8,702

8,707

6,823
7

6,852
7

6,863
6

6,855
6

6,830

6,860

6,869

6,861

OUTLAYS
General revenue sharing:
General revenue sharing
States and localities
Administration

payments to

Subtotal, general revenue sharing
Other general purpose fiscal assistance:
Antirecession fiscal assistance to States
and localities
Targeted fiscal assistance (proposed)
Payments and loans to the District of Columbia
New York City loan guarantees (administrative expenses)
Payments to States from Forest Service
receipts
Payments to States and counties from Federal land management activities
Payments to territories and Puerto Rico
Other

1,329

2 ..

250

150 ..

371

362

462

488

455

226

241

283

393
446
5

421
793
6

471
572
5

478
585
5

500
601
5

Subtotal, other general purpose fiscal
assistance

2,772

2,077

1,945

1,841

1,846

Total, outlays

9,601

8,936

8,814

8,703

8,707

MEETING NATIONAL NEEDS

293

A separate, standby program will also be proposed to provide
fiscal assistance to governments in the event of recession. The new
program will resemble the antirecession fiscal assistance program,
but will have a higher trigger and improved targeting of resources
among governments. Under current economic assumptions, no outlays are expected in 1979 or 1980.
Payments and loans to the District of Columbia.—The District of
Columbia's operating budget is financed in part by annual payments from the Federal Government in recognition of the costs to
the local government of the Federal establishment. The administration is requesting $317 million in budget authority and outlays for
the Federal payment in 1980 and $10 million for reimbursement of
water and sewer charges. Additional authorizing legislation is proposed to increase the Federal payment from $300 million to $317
million.
The District of Columbia Self-Government and Governmental
Reorganization Act of 1973 (the "Home Rule Act") authorized the
city to issue short-term notes on its own behalf. Accordingly, interest-free cash advances from the U.S. Treasury to the District will
no longer be made after 1979. The 1980 estimate anticipates that
the city will exercise its authority to borrow in the private market
for short-term, cash management purposes. While the administration continues to support the District's efforts to obtain long-term
bonding capability, the District will not be able to develop its
capability to support capital improvements in 1980. In the interim,
the District is authorized to borrow from the U.S. Treasury. The
1980 budget provides for Federal loans of $159 million to fund
capital improvements in the District.
New York City loan guarantees.—Under the New York City Loan
Guarantee Act of 1978, the Secretary of the Treasury is authorized
to guarantee up to $1,650 million of New York City obligations
through June 30, 1982. During 1980 an estimated $250 million will
be guaranteed.
The guarantees are contingent upon a number of conditions,
including the holding of the obligations by City or State employee
pension funds, the balancing of the City's budget within four years,
the City's seeking access to the security markets during that time,
and the City paying a xk% per year guarantee fee to the Secretary of the Treasury. The loan guarantees are not included in the
budget totals, but the administrative costs are reflected.
Other payments.—Some jurisdictions receive payments from the
Federal Government based on a percentage of receipts generated in
their jurisdictions from the sale of timber, mineral leases, grazing
permits, and other activities on Federal property and lands. Pay-

294

THE BUDGET FOR FISCAL YEAR 1980

ments are also provided to local governments in lieu of taxes for
certain Federal lands contained within their jurisdictions. The Departments of Interior and Agriculture will return an estimated
$661 million in 1979 and $753 million in 1980 to State and local
jurisdictions. In addition, Federal taxes and other revenues generated or collected in Guam, the Virgin Islands and Puerto Rico by
various Federal agencies are returned to those territories for their
fiscal support. Beginning in 1979, these payments are being made
in advance rather than at the end of the year. As a result, a larger
payment will be made in 1979.
Tax expenditures.—Major tax expenditures also provide fiscal
assistance to States and localities. Interest income from most municipal securities is not subject to Federal income tax. This exclusion allows municipalities to borrow at lower interest rates. The
cost of this tax expenditure for general purpose State and local
debt alone is estimated at $5.9 billion in 1980.
In addition, the deductibility of State and local taxes from gross
income allows individuals who itemize deductions to offset some of
their State and local taxes through reduced Federal taxes. The
revenue loss is estimated to be $12.5 billion in 1980.
CREDIT PROGRAMS—GENERAL PURPOSE FISCAL ASSISTANCE
[In millions of dollars]

Program

Guarantees of New York City Loans:
Direct loans: l
New loans
Repayments, sales and adjustments ( - )
Net credit outlays
Guaranteed loans: l
New loans
Net credit guaranteed
Loans to District of Columbia:
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net credit outlays

1978
actual

1979
estimate

729
-729

1980
estimate

729

500
490

250
213

111
-44

149
-42

159
-25

107

135

Guaranteed loans:
Net credit guaranteed
1

-20

Loans made by Treasury to New York City are subsequently sold to the Federal Financing Bank with Treasury's guarantee.

Related programs.—In addition to general purpose fiscal assistance, the Federal Government supports States and localities
through a large variety of Federal grants-in-aid programs. These
grants, which range from relatively narrow categorical programs to

MEETING NATIONAL NEEDS

295

block grant programs, are designed to meet other national needs
and to serve other major missions. Therefore, they are not included
as general purpose fiscal assistance, although they are, taken together, a far larger source of State and local funds. Total grants-inaid are estimated to rise from $82.1 billion in 1979 to $82.9 billion
in 1980.
FEDERAL GRANT-IN-AiD OUTLAYS BY FUNCTION
(In millions of dollars)

Function

National defense
Energy
Natural resources and environment
Agriculture
Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, and social services
Health
Income security
Veterans benefits and services
Administration of justice
General government
General purpose fiscal assistance1
Total outlays
1

1978
actual

1979
estimate

60
180
3,898
426
13
8,837
7,078
20,557
12,725
13,782
76
572
164
9,523

55
393
3,970
436
30
9,945
6,452
22,676
13,839
14,687
87
565
176
8,818

77,889

82,129

These numbers differ slightly from total outlays for this function, because they exclude administrative expenses.

1980
estimate

50
573
4,559
405
45
10,324
5,416
22,320
14,532
15,321
87
487
149
8,669
82,937

296

THE BUDGET FOR FISCAL YEAR 1980

INTEREST
Interest is the cost of borrowing or the income from lending
money. The interest function includes both interest paid and interest received by the Federal Government. In 1979 and 1980, interest
outlays are projected to grow substantially, rising by $8.8 billion
and $4.3 billion, respectively. By 1980, outlays for the interest
function are projected to be $57.0 billion.
INTEREST
[Functional code 900; in millions of dollars]

Programs
BUDGET AUTHORITY
Interest on the public debt1
Other interest:
Interest on refunds of tax collections
Interest on loans to the Federal Financing
Bank
Other
Subtotal, other interest
Total, budget authority
OUTLAYS
Interest on the public debt1
Other interest:
Interest on refunds of tax collections
Interest on loans to the Federal Financing
Bank
Other
Subtotal, other interest
Total, outlays

1978
actual

1979
estimate

1980
estimate

1981
estimate

1982
estimate

48,695

59,800

65,700

68,000

67,800

317

321

326

332

337

-2,748
-2,297

-4,101
-3,255

-5,504
-3,500

-5,653
-3,552

-5,073
-3,521

-4,728

-7,035

-8,679

-8,873

-8,257

43,967

52,765

57,021

59,127

59,543

48,695

59,800

65,700

68,000

67,800

317

321

326

332

337

-2,748
-2,298

-4,101
-3,254

-5,504
-3,500

-5,653
-3,552

-5,073
-3,521

-4,729

-7,034

-8,678

-8,873

-8,257

43,966

52,766

57,022

59,127

59,543

1
Includes interest paid on the public debt held by Government investment accounts. Several proposals in the budget reduce estimated trust fund
outlays. These outlay reductions increase estimated trust fund balances and thereby increase trust fund investments in Treasury securities. The higher
interest earnings on these investments are included in the estimates of interest on the public debt presented above and, as an offset, in the estimates of
interest received by trust funds presented elsewhere in Part 5. The legislation has no effect on net interest outlays.

Interest on the public debt.—This subfunction includes all interest paid on the public debt. The public debt consists of Treasury
securities sold to the public and also securities sold to trust and
revolving funds. In the past, the budget has generally assumed, as
a convention, that interest rates would remain at the levels prevailing at the time the estimates were made. Because interest rates
are now unusually high, this convention would produce artifically
high estimates of interest outlays. Beginning with this budget, a
different convention is used, namely that interest rates are assumed to fall as inflation declines. Under this convention, which is
not meant to be a forecast, the interest outlay estimates assume

MEETING NATIONAL NEEDS

297

that the 91-day bill rate will decline gradually from 9.3%, the
prevailing rate at the time the estimates were made, to an average
of about 8.8% in calendar year 1979 and 7.6% in calendar year
1980. Currently, the 91-day rate is over one-and-one half times the
level a year earlier. This substantial rise is the major contributing
factor to the sharp increase in interest on the public debt from
1978 to 1979.
These outlays are projected to grow at a much slower rate in
1981 and 1982. This results from much smaller increases in Federal
debt outstanding and from assumed further declines in interest
rates. The estimates also reflect substantial savings from the cash
management initiatives discussed in Part 4 and the general government section of Part 5.
Other interest—This subfunction includes interest payments on
tax refunds and interest collections from Federal agencies and the
public. The largest item in other interest is collections from the offbudget Federal Financing Bank (FFB). In recent years, this offbudget Federal entity has become the major source of funds for
many Government programs. The FFB borrows directly from the
Treasury and uses those funds to purchase debt and financial
assets of various Government programs. It then pays interest to
the Treasury on this borrowing. A more detailed discussion of the
FFB and its operations is contained in Part 6 of this document.
That section also discusses borrowing by the Federal Government.
Additional borrowing information is contained in "Special Analysis
E, Borrowing, Debt, and Investment," in the Special Analyses
volume of the budget.
Net interest—A substantial portion of interest outlays is paid to
trust funds on securities held by these funds. These amounts are
deducted from both budget authority and outlays before arriving at
budget totals, since the payment of interest is not made to the
public, but consists of offsetting transactions within the budget
itself. As shown in the following table, net interest outlays—the
interest function minus the interest received by trust funds—are
projected to be $46.1 billion in 1980.
In addition, Federal Reserve Banks hold Government securities
as part of their monetary functions. The Federal Reserve Banks
return most of the interest they receive on those securities back to
the Treasury as miscellaneous budget receipts. This deposit of earnings is projected to be $8.6 billion in 1980. Deducting these receipts
from net interest results in a net impact on the budget of $37.5
billion in 1980. The net impact of interest is the amount of interest
that must be paid from receipts or additional borrowing to meet
Federal financing requirements.

298

THE BUDGET FOR FISCAL YEAR 1980
NET INTEREST
[In millions of dollars]

Outlays for the interest function
Interest received by trust funds
Net interest outlays
Deduct: Deposit of earnings by the Federal
Reserve System *
Net impact
1
2

1978
actual

1979
estimate

43,966
-8,530
35,435
6,641
28,794

1980
estimate

1981
estimate

1982
estimate

52,766
-9,782

57,022
-10,940

59,127
-12,431

59,543
-14,499

42,984

46,082

46,696

45,044

7,600

8,600

9,200

9,700

35,384

37,482

37,496

35,344

Shown as budget receipts.
Net amount of interest to be paid from receipts or other means of financing.

A tax expenditure arises from the optional deferral of interest
income on U.S. savings bonds. The interest on savings bonds is
normally taxed each year as it is credited, but the holder may
defer paying the tax until the bond is redeemed. The revenue loss
from this tax expenditure is estimated to be $0.6 billion in 1980.

MEETING NATIONAL NEEDS

299

ALLOWANCES
Allowances are included in the 1980 budget to cover statutory
pay increases for Federal civilian agency employees, future initiatives, and unforeseen requirements that may arise. Estimates
beyond 1980 also include an inflation allowance for nondefense
purchases of goods and services. Pay and price allowances for the
Department of Defense are included in the national defense function.
ALLOWANCES
(Functional code 920; in millions of dollars)

Program
BUDGET AUTHORITY
Civilian agency pay raise
Proposed legislation
Contingencies for:
Relatively uncontrollable programs
Welfare reform
Inflation
Other requirements
Total, budget authority
OUTLAYS
Civilian agency pay raises
Proposed legislation
Contingencies for:
Relatively uncontrollable programs
Welfare reform
Inflation
Other requirements
Total, outlays

1978
actual

1979
estimate

1980
estimate

1981
estimate

1982
estimate

950
-24

2,337
-40

3,533
-42

100

1,500

1,500
1,800
4,000

5,500
3,300
4,000

100

2,426

8,597

16,291

921
-23

2,244
-38

3,485
-42

500

1,500
1,800
3,000

5,500
3,300
3,000

1,398

8,506

15,243

Significant changes in the Federal civil service system were
made this past year with enactment of the Civil Service Reform
Act of 1978. In addition to the reforms discussed in Part 2 and in
the general government function in Part 5, the act creates new
compensation systems for 2 classes of Federal civilian employees.
High level employees will now be included in a Senior Executive
Service (SES) with 5 or more levels of compensation. Special performance awards will be possible, providing new incentives for
efficient and productive employees. Mid-level managers and supervisors will no longer receive within-grade step increases, but will be
covered by a new merit pay system that will reward performance
and efficiency rather than length of service. While receiving at
least one-half the annual pay adjustment allowed non-supervisory
civilian employees, these employees will be eligible for merit pay
increases each year based upon performance. The Administration

300

THE BUDGET FOR FISCAL YEAR 1980

will propose comprehensive legislation to reform and improve Federal pay-setting systems and procedures.
As part of the overall effort to hold down inflationary trends and
to comply with the national wage-price standards, the budget assumes an October 1979 pay increase of 5.5% for Federal employees.
A final decision on the level of the October 1979 pay increase will
be made in late summer after appropriate Presidential review of
recommendations of the President's pay agent, the Federal Employees Pay Council, the Advisory Committee on Federal Pay, and
after a review of the economic situation at that time.
The allowance for relatively uncontrollable programs is assumed
to be zero since the probability of estimates higher or lower than
the budget estimates is assumed to be the same.
The budget includes an allowance for welfare reform proposals
beginning in 1981. This allowance represents the effect on the
surplus or deficit. Decisions to be made at a later date will determine the mix between outlays and revenues foregone. The budget
authority and outlay portion of the allowance will be divided between the income security function and the education, training,
employment, and social services function. Discussions of current
proposals are included in those functions.
An allowance for nondefense purchase inflation is included for
1981 and subsequent years. The estimates for 1980 and beyond also
include a contingency allowance, which does not represent a compilation of a specific list of future needs, but is a rough estimate
taking into account past experience of unanticipated requirements
and possible requirements for future initiatives.

MEETING NATIONAL NEEDS

301

UNDISTRIBUTED OFFSETTING RECEIPTS
Offsetting receipts (which are shown in detail in summary table
11 in Part 9 of the Budget) are generally deducted from budget
totals at the function, subfunction, or agency level. In three instances, however, such payments are deducted from the budget as
undistributed offsetting receipts. In the case of rents and royalties
on the Outer Continental Shelf, the payments are extremely large
and to include them in a particular function would present a
distorted view of Federal program costs. In the case of the payment
that each agency makes as its share of employee retirement costs
and interest received by trust funds, the deductions are made here
to eliminate double counting of budget authority and outlays and,
therefore, to reflect properly transactions with the public.
UNDISTRIBUTED OFFSETTING RECEIPTS
(Functional code 950; in millions of dollars)

Offsetting Receipts

BUDGET AUTHORITY AND OUTLAYS
Employer share, employee retirement
Interest received by trust funds:
Existing law
Proposed legislation
Subtotal, interest received by trust
funds
Rents and royalties on the Outer Continental
Shelf
Total

1979
estimate

1980
estimate

1981
estimate

1982
estimate

-4,983

-5,388

-5,482

-5,663

-5,787

-8,530

9,774
-8

10,852
-88

-11,763
-668

-13,372
1,127

-8,530

-9,782

-10,940

-12,431

-14,499

-2,259

-3,500

-2,600

-3,000

-15,772

-18,670

-19,021

-21,094

-23,286

1978
actual

Employer share, employee retirement.—The payments by Federal
agencies to various employee retirement funds are reflected as
outlays of the agencies and receipts of the respective retirement
fund. Over 70% of these payments are to the civil service retirement fund, with the remainder paid mostly to the social security
trust funds. About a quarter of these payments come from the
Postal Service.
Interest received by trust funds.—By law, most trust fund balances are invested in interest-bearing Federal securities. The interest outlays are included in interest on the public debt. The receipts
collected by various trust funds are shown as undistributed offsetting receipts. Almost half of these interest collections are received
by the civil service retirement and disability fund, and almost onethird are received by social security and medicare. Several proposals in the budget reduce estimated trust fund outlays. These outlay
280-000

O—79—20

302

THE BUDGET FOR FISCAL YEAR 1980

reductions increase estimated trust fund balances and thereby increase trust fund investments in Treasury securities. The higher
interest earnings on these investments are included in the estimates of interest on the public debt and, as an offset, in the
estimates of interest received by trust funds. The legislation has no
effect on net interest outlays.
Rents and royalties from the Outer Continental Shelf (OCS).—

These estimates include cash bonuses received from the leasing of
new OCS lands that have the promise of containing oil and gas.
Annual rents on existing leases and royalties based on a percentage of the value of production are also included. The current estimates assume that six scheduled OCS sales will be conducted in
1979 and four sales in 1980. Seven sales are currently scheduled for
1981. No final decision will be made on any of these sales until
environmental studies and other requirements under the National
Environmental Policy Act have been completed. This planning
schedule is subject to possible change, since a 5-year leasing program is being prepared by the Department of the Interior pursuant
to the OCS Lands Act amendments of 1978.

PART 6

PERSPECTIVES ON
THE BUDGET

303

PERSPECTIVES ON THE BUDGET
This part of the budget explains several topics that help place
the budget in perspective. It discusses:
• relationship of budget authority to outlays;
• fiscal activities outside the Federal budget:
—outlays of off-budget Federal entities,
—Government-sponsored enterprises,
—guaranteed loans, and
—tax expenditures;
• Federal debt and the relationship of budget funds to changes
in Federal debt;
• the difference between the initial budget estimate of outlays
and the actual outlays of relatively uncontrollable programs
for the last completed fiscal year; and
• the difference between the initial budget estimates of receipts
and the actual receipts.
RELATIONSHIP OF BUDGET AUTHORITY TO OUTLAYS
The Congress must provide budget authority, generally in the
form of appropriations, before Federal agencies can obligate the
Government to make outlays. For 1980, $615.5 billion of new
budget authority is proposed for those Federal agencies included in
the budget. In addition, $14.0 billion in new budget authority is
proposed for those Federal entities that are excluded from the
budget.1
Of the total new budget authority proposed for budget agencies
in 1980, $386.7 billion will require congressional action. The remaining $228.9 billion of new budget authority will be available
under existing law. The latter consists mainly of trust fund receipts, which in most programs are automatically appropriated
under existing law, and interest on the public debt, for which
budget authority is automatically provided under a permanent appropriation enacted in 1847. Most budget authority for off-budget
Federal entities will be available under existing law.
Not all of the new budget authority for 1980 will be obligated or
spent in that year.2
• Budget authority for most trust funds authorizes the expenditure of the funds' receipts from special taxes and contribu1

Budget authority is discussed further in Part 7 of this volume.
This subject is discussed more fully in a separate report, "Balances of Budget Authority," that is published
by the Office of Management and Budget shortly after the budget is transmitted.
2

304

305

PERSPECTIVES ON THE BUDGET
BUDGET AUTHORITY
[In billions of dollars]

Description

Available through current action by Congress:
Enacted appropriations
Proposed in this budget: *
Appropriations
Supplemental requests
Rescission proposals
To be requested separately:
Upon enactment of proposed legislation..
Allowances:
Civilian agencies2
Department of Defense—Military 3 ....

1978
actual

326.8

1980
estimate

1979
estimate

1981
estimate

1982
estimate

354.1
361.8

377.7

391.9

20.2

5.3

5.1

2.4
2.3

9.6
4.6

16.3
7.0

326.8

366.6

386.7

397.1

420.4

172.9
48.7
12.7
-59.6

188.5
59.8
13.2
-68.4

220.5
65.7
16.2
-73.5

247.0
68.0
17.8
-79.0

273.2
67.8
18.4
-84.1

501.5

559.7

615.5

651.0

695.7

Budget authority for off-budget Federal
entities:
Available through current action by the
Congress
Available without current action by the
Congress

13.2

15.3

14.0

14.1

14.2

Total, off-budget Federal entities

13.2

15.3

14.0

14.2

514.7

575.0

629.6

665.2

709.9

Subtotal, available through current
action of the Congress
Available without current action by the
Congress (permanent authorizations):4
Trust funds (existing law)
Interest on the public debt
Other
Deductions for offsetting receipts
Total, budget authority

13.1
-.9

MEMORANDUM

Total, budget authority including offbudget Federal entities

*$50 million or less.
1
Amounts for 1981 and 1982 are tentative planning targets.
Includes allowances for civilian agency pay raises and contingencies.
3
Includes allowances for civilian and military pay raises for Department of Defense.
4
Allowances for relatively uncontrollable programs with permanent authorizations are estimated at zero.
2

tions and from Federal fund payments to the trust funds.
These receipts are to be used as needed over a period of years
for benefit payments and other purposes specified by law.
• Under longstanding budget policy, budget authority for most
major construction and procurement projects covers the
entire cost expected when the projects are initiated, even
though costs will be incurred and outlays made over a period
extending beyond the fiscal year in which the budget authori-

306

THE BUDGET FOR FISCAL YEAR 1980

ty is enacted. In the past, an exception to this policy has
existed for water resources programs. The administration is
again proposing that funds for new water resources projects
cover the entire costs of the projects.
• Government enterprises are occasionally given budget authority for general capital purposes that will be used over a period
of years.
• Budget authority for the subsidized housing programs is equal
to the Government's maximum contractual obligation to pay
subsidies under contracts, which may extend over periods of
up to 40 years.
• Budget authority for many direct loan programs provides financing for a number of years; budget authority for many
insurance and guaranteed loan programs consists of amounts
to be used only in the event of defaults or other claims made
upon the programs.
As a result of these factors, a substantial amount of budget
authority carries over from one year to the next. Most of this is
earmarked for specific uses and is not available for new programs;
a very small part may never be obligated or spent.
As shown in the following chart, $136.7 billion of the outlays in
1980, 25.7% of the total, will be made from budget authority enRelation of Budget Authority to Outlays—1980 Budget
SBiftiom

New Authority
Recommended
for 1980
615.5

W
A
W

Unspent Authority
Enacted in
Prior Years
684.1

To be spent in 1980

394.8

Outlays
in 1980
531.6

To be spent in
Future Years

546.5

thority
Unspent
for Outlays in
Future Years
767.2

PERSPECTIVES ON THE BUDGET

307

acted in previous years. At the same time, $220.7 billion of the new
budget authority proposed for 1980, which is 35.9% of the total
amount proposed, will not result in outlays until future years. The
relationship between budget authority, obligations, and outlays is
discussed further in Part 7 of the Budget and displayed in table 5
of Part 9.
Once budget authority is provided, the Congressional Budget and
Impoundment Control Act requires that any available amounts
withheld from use (without specific congressional authorization)
must be reported to the Congress in rescission or deferral messages. The Congress may require these funds to be released by
overturning the deferral of budget authority or by not taking
action on the proposed rescission.
FISCAL ACTIVITIES OUTSIDE THE FEDERAL BUDGET
The budget does not include a number of fiscal activities of the
Federal Government that result in spending similar to budget outlays. One major exclusion—the outlays of off-budget Federal entities3—is discussed in some detail below. This is followed by a
discussion of the Government-sponsored enterprises, which are outside the budget because of their private ownership.4 Guaranteed
loans and tax expenditures, which also have significant effects on
the economy, are discussed subsequently. The regulation of economic activity may have similar effects by requiring the private
sector to make expenditures for specified purposes, such as safety
and pollution control. These effects cannot be quantified satisfactorily and are not discussed in this section.
The off-budget Federal entities and the privately-owned, Government-sponsored enterprises primarily carry out loan programs.
Guaranteed loans are likewise a part of federally assisted lending.
The table on the next page summarizes Federal credit activity by
showing the amounts outstanding of Federal and federally assisted
loans: direct loans by Federal agencies included in the budget, direct
loans by off-budget Federal entities, guaranteed loans, and loans by
Government-sponsored enterprises.

3
Financial statements for these entities are published in the Appendix, Budget of the United States Government, Fiscal Year 1980. See Part IV, "Off-Budget Federal Entities."
4
For financial statements, see the Appendix, Part VI, "Government-Sponsored Enterprises."

308

THE BUDGET FOR FISCAL YEAR 1980
FEDERAL AND FEDERALLY ASSISTED LOANS OUTSTANDING 1
[In billions of dollars; at end of fiscal year]
1977
actual

1978
actual

1979
estimate

1980
estimate

Direct loans—on budget
Direct loans-off-budget
Guaranteed and insured loans2

67.9
32.7
181.7

76.5
43.9
193.1

81.5
55.9
213.9

84.3
67.7
239.4

Total, direct loans and guaranteed loans
Government-sponsored enterprise loans3

282.4
98.9

313.5
126.8

351.3 391.4
142.3 160.7

1
See Table F-9 in Special Analysis F, "Federal Credit Programs," published in Special Analyses, Budget of the United States Government, Fiscal Year
1980.
2
Excludes loans held by Government accounts and Government-sponsored enterprises.
3
Net of loans between Government-sponsored enterprises and between such enterprises and Federal agencies.

The direct loans made by agencies within the budget are shown
in this table to comprise only about a quarter of the total direct
and guaranteed loans outstanding made by the Federal Government. They are an even smaller proportion of total Federal and
federally assisted loans, which include also the loans of the privately owned, Government-sponsored enterprises. The direct loans
made by budget agencies are, however, the only part of Federal
and federally assisted lending that is fully subject to the normal
budgetary process of an annual review in which the benefits of
using resources for a specific purpose are examined in competition
with the use of these resources elsewhere. Off-budget direct loans
are largely excluded from this process because their amounts do
not affect the budget totals, on which attention must necessarily
focus; loan guarantees are conceptually different from outlays and
thus fall outside most of the budgetary process. The loans of Government-sponsored enterprises, though assisted by the Federal Government, are even further outside the budget process because they
are privately owned.
Consequently, the Federal Government does not have any systematic mechanism to consider the resource allocation implied by
most of its credit programs or to judge whether it makes or assists
an appropriate share of the Nation's total credit transactions. In
order for the Government to influence efficiently the allocation of
economic resources and the operation of financial markets and the
economy as a whole, it must exercise control over its credit programs as well as over its other operations. Therefore, as discussed
in Part 2, the administration is proposing a set of executive and
congressional procedures that would apply budget-type controls on
all of the Government's direct and guaranteed lending programs
alike. Annual limits on gross loans would be proposed for each
program in the budget and would be set in the appropriation bills;
an aggregate limit would be proposed in the budget and a ceiling
set under the congressional budget resolutions.

PERSPECTIVES ON THE BUDGET

309

Outlays of off-budget Federal entities.— Off-budget Federal enti-

ties are federally owned and controlled, but their transactions have
been excluded from the budget totals under provisions of law.5
Therefore, their fiscal activities are not reflected in either budget
outlays or the budget surplus or deficit, appropriation requests for
their programs are not included in the totals of budget authority
for the budget, and their outlays are not subject to the ceilings set
by the congressional budget resolutions. As shown in the table on
page 322, the outlays of the off-budget Federal entities are added
to the budget deficit to derive the total Government deficit that has
to be financed by borrowing from the public or by other means.
When off-budget outlays are financed by Treasury borrowing, the
additional debt is subject to the statutory debt limit; when financed
by the entities' own borrowing, it is not. In either case the additional debt is part of the gross Federal debt.
The first Federal entity removed from the unified budget was the
Export-Import Bank, which was excluded by statute in August
1971. This exclusion was the first departure of budgetary practice
from the concept of the unified budget, which had been adopted
beginning with the 1969 budget and which combined the administrative budget with the substantial trust fund transactions of the
Federal Government. After the Export-Import Bank was removed,
further departures from a unified budget occurred. The Postal
Service fund, the Rural Telephone Bank, the lending transactions
that became the Rural Electrification and Telephone revolving
fund, and the Housing for the Elderly or Handicapped fund were
removed from the budget. The Environmental Financing Authority,6 the Federal Financing Bank, the U. S. Railway Association,
and the Pension Benefit Guaranty Corporation were established
off-budget. The Exchange Stabilization fund had always been outside the unified budget, although until two years ago it was classified as a deposit fund instead of an off-budget Federal entity.7
In the past 3 years the trend toward increasing the number of
off-budget Federal entities has been reversed. The Export-Import
Bank was returned to the budget by statute on October 1, 1976, and
the Housing for the Elderly or Handicapped fund was returned to
the budget by statute on October 1, 1977. Last year Congress enacted legislation proposed by the administration to include in the
budget the administrative expenses paid until now by the Exchange Stabilization Fund, and the interest collections of the fund
5
The Board of Governors of the Federal Reserve System (but not the Federal Reserve banks, which are
privately owned) is a Federal organization. It is excluded from the budget and from this discussion.
6
The Environmental Financing Authority expired without having conducted any operations.
7
The Exchange Stabilization fund conducts a cycle of operations similar to revolving funds. Consequently, its
classification as a deposit fund was contrary to the normal definition of a deposit fund: an account that records
amounts held by the Government as an agent for others or amounts held in suspense temporarily before being
refunded or paid into some other fund.

310

THE BUDGET FOR FISCAL YEAR 1980

are being put on-budget by administrative action at the same time.8
The budget outlays and deficits of previous years have been revised
to include these three entities so that the series measuring governmental activity over time would be as consistent as possible. Legislation has also caused the transactions of the U.S. Railway Association to appear more fully in the budget. The assistance program
to Conrail now comprises almost all of the Association's activity,
and since the start of this program in 1976 the purchase of Conrail
securities has been required by law to be included in the budget.
Despite the exclusion of the off-budget entities from the budget,
some of the outlays related to their activities are nonetheless included in the budget totals. The budget totals include the subsidies
paid to the Postal Service fund and the administrative expenses of
the Rural Electrification Administration lending programs and the
U.S. Railway Association. Moreover, while the budget authority
and outlays of off-budget Federal entities are excluded from the
budget totals, some of their activities are subject to Presidential
and congressional review. For example, limits on the amount of
new lending for the rural electrification program financed by the
Rural Electrification and Telephone revolving fund are set annually by law, and the outstanding debt and annual borrowing of the
Postal Service are limited by statute.
Congress has expressed concern about the existence of off-budget
Federal entities. The Congressional Budget Act of 1974 calls for the
Committees on the Budget of the House of Representatives and the
Senate to study on a continuing basis those provisions of law that
exclude any outlays of Federal entities from the budget and to
report to their respective Houses their recommendations for terminating or modifying such provisions. In 1976 the House Budget
Committee held hearings and then adopted a report recommending
that the budget include the administrative expenses of the Exchange Stabilization fund and the outlays of all other off-budget
Federal entities except the Federal Financing Bank. At that time
the Committee deferred judgment about the Federal Financing
Bank.9 The House Budget Committee subsequently supported legislation to include the Federal Financing Bank in the budget and
renewed its recommendation for the other off-budget entities.10
Except for the Postal Service and the Pension Benefit Guaranty
Corporation, the excluded outlays of the off-budget Federal entities
are incurred for carrying out loan programs. These programs are of
8
In the present budget the profits and losses from foreign exchange transactions are counted with changes in
deposit fund balances. Because it is not practicable to forecast transactions in gold, foreign currency, and foreign
investments, the budget will continue the past practice of not estimating profits and losses in foreign exchange
transactions for the current and future years.
9
House of Representatives, Committee on the Budget, Off-Budget Activities of the Federal Government, Report
No. 94-1740 (1976); and First Concurrent Resolution on the Budget—Fiscal Year 1978, Report No. 95-189 (1977),
pp. 11-12 and 135.
10
House of Representatives, Committee on the Budget, First Concurrent Resolution on the Budget—Fiscal Year
1979, Report No. 95-1055 (1978), p.23.

PERSPECTIVES ON THE BUDGET

y 311

the same nature as the direct loan programs in the budget. The
outlays of the off-budget loan programs are approximately equal to
the difference between new loans disbursed and repayments of
principal. For example, during 1978 new loans disbursed by the
excluded programs were $16.8 billion and repayments $5.7 billion,
for an increase in loans outstanding of $11.2 billion. This is about
the same as the outlays of these programs, which were $10.9 billion. The difference is due to such factors as administrative expenses and interest paid and received.
Like direct loans in the budget, the loans of the excluded programs are designed to allocate economic resources toward particular uses. The off-budget Federal entities support a variety of program functions both by their direct operations and, in the case of
the Federal Financing Bank, by purchasing debt securities issued
by several agencies and purchasing obligations guaranteed under a
number of Government programs. Part 5 of the Budget, "Meeting
National Needs: the Federal Program by Function," shows the
outlays of the off-budget Federal entities by function and discusses
some of their more significant activities.
OUTLAYS OF OFF-BUDGET FEDERAL ENTITIES
[In billions of clollars]

Off-budget Federal entity

Federal Financing Bank
Rural Electrification and Telephone revolving
fund
Rural Telephone Bank
Pension Benefit Guaranty Corporation
Postal Service fund
U.S. Railway Association
Total
*$50 million or less.

1978
actual

1979
estimate

1980
estimate

1982
estimate

1981
estimate

10.6

11.5

11.3

.1
.1
*
-.5
.1

.1
__*
.3
.1

.1
*
.5
*

.1
*
.1

.1
*
-.3

10.3

12.0

11.5

11.1

312

THE BUDGET FOR FISCAL YEAR 1980

As the preceding table shows, the Federal Financing Bank (FFB)
accounts for most of the off-budget outlays. The outlays of the FFB
include only its purchase of Government-guaranteed obligations,
not its purchase of Federal agency debt. This prevents counting the
same amount twice, both in the FFB's outlays and in the outlays of
the agency that borrows from the FFB and spends the proceeds.
The FFB's share of the total off-budget outlays has been increased by the legislation mentioned above that put certain offbudget spending into the budget totals. Among the remaining offbudget Federal entities only the Postal Service fund in some years
has comparatively large outlays. The outlays of the Postal Service
fund are calculated with an offset for the subsidy that it receives
for public service costs and for revenue forgone from carrying
certain mail at free or reduced rates. This subsidy, which is included in the budget, is estimated at $1.6 billion in 1980. The small size
of the outlays of the Rural Electrification and Telephone revolving
fund does not indicate the level of this fund's activity. The fund
sells certificates of beneficial ownership to the FFB, and the sale of
these certificates is required by law to be treated as the sale of
assets instead of as borrowing. Therefore the sale of these certificates to the FFB is shown as an offset to the outlays of the Rural
Electrification and Telephone revolving fund and as part of the
outlays of the FFB.
Since the outlays of the FFB arise for loans originated by other
agencies, not the FFB itself, the budgetary accounting system does
not now attribute FFB's outlays to the agency whose program is
being supported. Nor, except for the budget function where FFB is
classified, does the accounting system attribute FFB's outlays to
the function that is being supported. As part of its control system
for Federal credit, the administration is considering the treatment
of FFB's outlays and budget authority as off-budget transactions of
the agency and function where the loans were originated.
The table on the next page compares the excluded outlays of the
off-budget Federal entities with the budget outlays.11 The outlays of
the entities that are now off-budget (which thus exclude the
Export-Import Bank and Exchange Stabilization fund) were negligible in 1973 but grew rapidly afterwards, as the Federal Financing
Bank and other off-budget entities were created or shifted out of
the budget. The outlays of the off-budget Federal entities equaled
2.3% of budget outlays in 1978 and are estimated to equal 2.4% in
1979 and 2.2% in 1980.

11
The historical data for budget outlays include Federal entities that are now off-budget for any period when
they were in the budget; the Export-Import Bank and Housing for the elderly or handicapped fund for all years;
the administrative expenses and interest collections of the Exchange Stabilization fund beginning in 1976; and
Government-sponsored enterprises for periods when they had any Government ownership.

313

PERSPECTIVES ON THE BUDGET
COMPARISON OF OUTLAYS FOR THE BUDGET, OFF-BUDGET FEDERAL ENTITIES, AND
GOVERNMENT-SPONSORED ENTERPRISES
[In billions of dollars]
Outlays
Federal Government1
Year
Budget

Off-budget
Federal
entities

Total

Governmentsponsored
enterprises2

1960
1961
1962
1963
1964

92.2
97.8
106.8
111.3
118.6

.4
-.3
1.1
.5
1.8

1965
1966
1967
1968
1969

118.4
134.7
158.3
178.8
184.5

1.2
1.9
-2.9
1.7
4.3

1970
1971
1972
1973
1974

196.6
211.4
232.0
247.1 0.1
269.6
1.4

196.6
211.4
232.0
247.1
271.1

9.6
*
4.4
11.4
14.5

1975
1976
TQ
1977
1978
1979 estimate

326.2
8.1
366.4
7.3
94.7 1.8
402.7
8.7
450.8
10.3
493.4
12.0

334.2
373.7
96.5
411.4
461.2
505.4

7.0
4.6
2.3
10.2
25.6
15.2

1980 estimate
1981 estimate
1982 estimate

531.6 12.0
578.0
11.5
614.9 11.1

543.5
589.5
626.0

19.1

* $50 million or less.
1
The 1972-77 and TQ data have been revised to include the Export-Import Bank and the Housing for the elderly or handicapped fund in the budget
instead of with the off-budget Federal entities. The administrative expenses and interest collections of the Exchange Stabilization Fund are included in the
budget beginning in 1976. Comparable data are not available for earlier years.
2
To prevent double counting, outlays of Government-sponsored enterprises exclude loans to other Government-sponsored enterprises and loans to or
from Federal agencies and off-budget Federal entities.
3
Not available.

314

THE BUDGET FOR FISCAL YEAR 1980

Outlays of Government-sponsored enterprises.—Several Govern-

ment-sponsored enterprises have been established and chartered by
the Federal Government to perform specialized credit functions.
The earlier enterprises were all created with partial or full Government ownership and with direct Government control, but, in time,
they were converted to private ownership and some new enterprises were created as privately owned institutions. The rule governing the budget treatment of these enterprises was established in
1967 in accordance with a recommendation by the President's Commission on Budget Concepts. The Commission recommended that
the budget exclude those Government-sponsored enterprises that
are entirely privately owned. Since the enterprises carry out federally designed programs and receive benefits from their close association with the Government, the Commission recommended that
financial statements of their operations be included in the budget
documents.12
The Federal Land Banks and Federal Home Loan Banks had
both become entirely privately owned a number of years before the
unified budget was adopted and therefore have always been excluded. The Federal National Mortgage Association, the Banks for
Cooperatives, and the Federal Intermediate Credit Banks became
wholly privately owned by repaying their Federal equity capital
during 1969 and were accordingly removed from the budget. The
Federal Home Loan Mortgage Corporation and the Student Loan
Marketing Association were subsequently established with full private ownership.
The Government-sponsored enterprises were all created to carry
out loan programs, either lending their funds directly for specifically authorized purposes or buying loans originated by the private
group that they were established to assist. Their loans primarily
support housing but also support agriculture and higher education.
As shown in the preceding table, the outlays of the privately owned
Government-sponsored enterprises have grown considerably—from
relatively small amounts in the early 1960's to an average of $12.2
billion (equal to 3.4% of budget outlays) during 1974-78, when
more Government-sponsored enterprises had been established. In
1980 these enterprises are expected to spend $19.1 billion, an
amount equal to 3.6% of budget outlays in that year.
Guaranteed loans.—Government-guaranteed loans are loans for
which the Government guarantees the payment of the principal or
interest in whole or in part. Loan guarantees constitute contingent
liabilities. They generally do not result in budget outlays except in
the case of default.
12

Report of the President's Commission on Budget Concepts (Washington: U.S. Government Printing Office,

1967), pp.29-30.

315

PERSPECTIVES ON THE BUDGET
Guaranteed Loans Outstanding

$Billions

IBiifions

350

280

1970
Fiscal Years
1
Federal Firmncing Bonk.

'74

*?$

'7$

'77

'70

'79

'SO

Estimate

Loan guarantees are designed to allocate economic resources
toward particular uses by providing credit at more favorable terms
than would otherwise be available in the private market. The
major use of loan guarantees is to support housing, but in recent
years guarantees have increasingly been used for other purposes.
The effect of loan guarantees on the economy is difficult to assess.
Some portion of the private loans that are guaranteed would have
been made without the guarantee, and those private loans that
would not otherwise have been made tend to divert credit away
from other economic activities.
Guaranteed (or insured) loans have diverse characteristics. The
loan may be made to individuals, businesses, State and local governments, or foreign governments. The guaranteed obligation may
be a loan made by a bank or other institutional lender, it may be a
security sold in the capital market, or it may be a security sold to
the Federal Financing Bank. The guarantee may be full or partial,
and in some programs it is supplemented by other explicit subsidies or other forms of assistance.
Guaranteed loans include most loan assets sold by Federal agencies. Loan asset sales occur when an agency makes a direct loan
and then sells it. A guarantee by the selling agency is usually
attached. Loan asset sales are treated as offsets to the outlays of

316

THE BUDGET FOR FISCAL YEAR 1980

the agency that sells them, so if the selling agency is in the budget
they reduce the amount by which the direct loans of Federal agencies add to budget outlays.
In some cases of loan asset sales the agency sells the direct loans
themselves, but in other cases the agency sells securities (sometimes called participation certificates or certificates of beneficial
ownership) that are backed by loans that the agency continues to
hold and service. The President's Commission on Budget Concepts
recommended that the sale of such securities be treated as borrowing,13 but in certain cases legislation requires that it be treated
instead as the sale of loan assets. As the Commission argued,
however, as a means of financing outlays there is no difference in
substance between an agency selling securities labeled t 'certificates
of beneficial ownership," the same agency selling securities labeled
"debt," and the Treasury selling securities labeled "debt." Moreover, when certificates of beneficial ownership are sold, the ownership of the specific loans is retained by the Government, interest
payments on the loans continue to be made to the Government,
and the Government continues to incur the servicing costs of the
loans and to assume fully the risk of default on the loans.
The following table shows the gross amount of new loans guaranteed during the years 1977-80, the net loans guaranteed during
each year (that is, the change in loans outstanding), and the
amount outstanding of guaranteed loans held by the public at the
end of each year. The figures include the full amount of all loans
guaranteed (whether guaranteed in whole or in part), in billions of
dollars:
1977
actual

Gross loans guaranteed
Net loans guaranteed
Guaranteed loans outstanding

40.8
14.0
181.7

1978
actual

39.5
11.3
193.1

1979
estimate

51.5
20.8
213.9

1980

60.4
25.5
239.4

This table suggests the importance of guaranteed loans. The
amount outstanding held by the public is large and growing each
year. Gross loans, which measure the total new assisted borrowing
that takes place each year, are much larger than the change in
loans outstanding, primarily because they are not offset by the
repayment of old loans. In addition to the $57.6 billion increase in
guaranteed loans held by the general public during 1978-80, the
total held by the Federal Financing Bank (FFB) and other Federal
agencies is estimated to increase by $33.5 billion; and the total held
by Government-sponsored enterprises is estimated to increase by
$4.2 billion. These amounts are reflected in the outlays of the FFB,
other Federal agencies, and Government-sponsored enterprises that
buy these loans. When the FFB buys new issues of guaranteed
3

See Report of the President's Commission on Budget Concepts, pp. 8, 47-48, and 54-55.

PERSPECTIVES ON THE BUDGET

317

loans (except loan assets), the guaranteed loans are in effect converted into direct Federal loans outside the budget.14
Since guaranteed loans are outside the budget, they are not
subject to the same kind of review and control as budget outlays.
The authorizing statutes for half or more of the guarantee programs impose a ceiling on the amount of guaranteed loans outstanding, but the limits imposed at one time are usually designed
to meet several years of requirements at once. Plans for guarantees
are generally reviewed annually in the course of reviewing the
budget and personnel requests of the administering agencies, but
annual limits usually are not set. Except when explicit subsidies or
capital for reserve funds must be appropriated, limits on guarantees are not imposed, directly or indirectly, through the Appropriations Committees of the Congress. Similarly, the Senate and
House Budget Committees do not scrutinize the total amount of
guaranteed loans in developing their concurrent budget resolutions, and the concurrent budget resolutions do not include a target
or ceiling for guaranteed loans as they do for budget outlays and
budget authority. The administration's proposal for control over
Federal credit, by establishing annual limits on gross loan guarantees for each program, would overcome the significant deficiencies
in the current process.
The major loan guarantee programs are discussed by function in
Part 5 of the Budget. Guaranteed loans are analyzed together with
other types of credit assistance in Special Analysis F, "Federal
Credit Programs."15 Schedules describing the status of loan guarantees are being published in the Budget Appendix for the first time
in the current budget for every budget account through which loan
guarantees are made.
Taxation and tax expenditures.—Taxation affects the economy
not only by providing the Government with receipts, but also by
affecting the allocation of resources among private uses and the
distribution of income and wealth among individuals. These effects
are caused by the structural characteristics of each different tax—
for example, by the rate schedules, exemptions, deductions, and
exclusions of the individual income tax—and by the relative size of
the different taxes. The effects of taxation on resource allocation
and income distribution are analogous to the effects of outlays, but
they are not measured in budget receipts or outlays.
Some aspects of taxation, called "tax expenditures," receive special attention in the budget. Tax expenditures are defined as revenue losses under the individual and corporation income taxes that
are attributable to a special exclusion, exemption, or deduction
14
When the FFB buys loan assets, it effectively converts direct loans that have already been made by another
agency into off-budget direct loans of the FFB.
15
See Special Analyses, Budget of the United States Government, Fiscal Year 1980.

280-000

O—79—21

318

THE BUDGET FOR FISCAL YEAR 1980

from gross income or to a special credit, preferential tax rate, or
deferral of tax liability.
Tax expenditures are one means by which the Federal Government pursues its objectives and in almost all cases can be viewed
as alternatives to instruments of Government policy such as outlays, loan guarantees, regulations, and provisions of the tax law
other than those that give rise to tax expenditures. The objectives
of tax expenditures are varied. Nearly all are intended either to
encourage particular economic activities or to reduce the tax liabilities of taxpayers in special circumstances. Among the economic
activities encouraged are investment, homeownership, State and
local government borrowing, and support of charities; among the
persons with reduced tax liabilities are many of the aged and
unemployed and taxpayers with high medical expenses.
Tax expenditures ordinarily result from permanent legislation
and therefore, unlike much of the budget, are not submitted to the
Congress each year and do not receive a formal and systematic
annual review. Some tax expenditures and many other provisions
of tax law were, nonetheless, reviewed by the administration and
the Congress during the past two years in the process leading to
the Revenue Act of 1978. The Congressional Budget Act requires
that the estimated levels of tax expenditures be presented each
year in the budget that the President submits to the Congress and
in the reports of the Senate and House Budget Committees to their
respective Houses on the proposed congressional budget resolutions. This is intended to encourage regular examination of tax
expenditures by the administration, the Congress, and the public.
The provisions of the income tax law other than those that result
in tax expenditures—although likewise affecting the allocation of
resources and the distribution of income—do not receive either an
annual, systematic review or the kind of presentation mandated for
tax expenditures; nor do taxes other than the individual and corporation income taxes receive such a review.
The classification of certain provisions of law as resulting in tax
expenditures requires some standard against which the law can be
compared. Deviations of the law from this standard—sometimes
called the "normal tax structure"—are deemed to cause tax expenditures. The "normal tax structure" used for the individual
income tax includes those provisions that exist under current law
for graduated rate schedules, personal exemptions, and standard
deductions. Thus, under current definition, these characteristics of
the tax structure do not generate tax expenditures.
However, selecting such a standard of comparison depends on
judgments about what is the "normal structure" of the tax system.
A different standard might exclude personal exemptions and standard deductions and thus classify these provisions as resulting in tax

PERSPECTIVES ON THE BUDGET

319

expenditures; or it might integrate the individual and corporation
income taxes, in which case the lack of integration under current
law could be thought to produce higher receipts and thus a negative tax expenditure. The provisions of tax law that are not defined
as resulting in tax expenditures deserve as much scrutiny as the
provisions that are, since both types of provision have the same
kinds of economic effects and since a different standard judgment
might change the classification of what is considered to result in a
tax expenditure.
Tax expenditures are presented at two places in the budget. Part
5 of the Budget, "Meeting National Needs: the Federal Program by
Function," discusses the most important tax expenditures in each
functional category, together with outlays and guaranteed loans, in
order to describe more fully the effects of governmental policy
toward meeting each national need. Special Analysis G, "Tax Expenditures," discusses the concept of tax expenditures and presents
a complete list of tax expenditure estimates for individuals and
corporations in 1978-80.16
The figures shown for tax expenditures are necessarily estimates
for past years as well as future ones, since they compare actual tax
receipts with what tax receipts would have been if the tax law had
been different. The method of estimation is to assume that only the
tax provision in question is removed, while taxpayer behavior and
all other characteristics of the tax system remain the same. If
removing a particular provision increases taxable income, as would
occur in most cases, the tax expenditure is then estimated as the
increase in taxable income multiplied by the appropriate tax rate.
The size of a particular tax expenditure depends not only on the
tax provision in question but also on the interaction of this provision with the rest of the tax structure. The income tax changes
enacted in 1978, as an example, automatically decrease many tax
expenditures below what they otherwise would have been, since
they reduce the tax rate schedules and raise standard deductions
and personal exemptions. The reduction in the tax rate schedules
decreases the amount of receipts that would be gained by repealing
deductions and exclusions, because lower tax rates would be applied to the increase in taxable income; the higher standard deductions decrease the number of taxpayers itemizing deductions, thereby lowering tax expenditures for deductions, particularly those
taken disproportionately by low-income taxpayers; and the higher
standard deductions and personal exemptions decrease the taxable
income of individual taxpayers, thereby reducing the receipts that
would be gained by repealing deductions and exclusions.
16
See Special Analyses, Budget of the United States Government, Fiscal Year 1980. The presentation in this
special analysis meets the requirement in the Congressional Budget Act that tax expenditures be set forth in
the budget.

320

THE BUDGET FOR FISCAL YEAR 1980

The interaction among tax provisions means that special calculations are generally needed to add tax expenditures together. For
example, if more than one exclusion from individual income were
ended, the gain in receipts would generally be greater than the
sum of the separate tax expenditures, because some taxpayers
would move into higher tax rate brackets. If more than one personal deduction were ended, the gain in receipts would generally be
smaller than the sum of the separate tax expenditures, because
more taxpayers would switch to the standard deduction. According
to a special calculation made by Treasury, if all itemized deductions resulting in tax expenditures were eliminated, the gain in
receipts in 1980 would be $30.6 billion. In comparison, the sum of
the tax expenditures for each separate item is $42.8 billion. Consequently, except for a few special calculations, adding together separate tax expenditures would be misleading, and they are not generally added together in this budget. Where tax expenditures for both
individuals and corporations result from the same provision, however, such as the investment tax credit, the two estimates may
meaningfully be added.
Interaction among separate tax expenditure provisions is one
reason why the tax expenditures cannot all be added together to
form a meaningful total amount. In addition, there are two conceptual reasons why even a total amount that took these interactions
into account would be of limited use. First, as explained above, the
list of tax expenditure items would be different if a different standard were used for comparison. Any total amount would depend on
the judgments that defined the standard, and a total based on the
present standard could readily be raised or lowered.
Second, the effect of tax expenditures on receipts depends on the
extent to which eliminating tax expenditures would be offset by
reducing tax rates or changing other provisions of the tax law in
order to compensate for the higher receipts that would otherwise
be collected. Frequently tax expenditures and other provisions of
tax law have been changed together; and one particular provision,
whether a tax expenditure or not, has been used to modify, compensate, or substitute for another provision. Thus, if a large
number of tax expenditures were removed, the tax rate schedules
would ordinarily be reduced and the net effect on receipts might be
small. The effects on resource allocation and income distribution
from repealing tax expenditure provisions would depend on which
method of changing tax rates and outlays—from a limitless
number of alternatives—was used to compensate for their removal.
The Revenue Act of 1978 reduced individual and corporation
income taxes significantly. Part 4 of the Budget shows the estimated effect of this Act on receipts and summarizes its more important
provisions. For the reasons stated above, the tax expenditures for

PERSPECTIVES ON THE BUDGET

321

deductions and exclusions will be decreased by the reduction in the
individual and corporation tax rate schedules and by the higher
personal exemptions and standard deductions.
Several specific tax expenditure provisions were changed. Business investment is expected to be stimulated by liberalizing the
investment tax credit. The credit was made permanent at its current rate of 10%, extended to the rehabilitation of non-residential
buildings, and generally allowed to offset a greater proportion of
tax liability than before. Business investment should also be stimulated by the reduction in the corporation income tax rate schedule,
but the part of this reduction due to the cut in the maximum
corporate rate from 48% to 46% is not defined as being a tax
expenditure. Other noteworthy changes in tax expenditure provisions include reduced taxation of capital gains, which will increase
tax expenditures, and the repeal of the non-business deduction for
State and local gasoline taxes. The repeal of the latter tax expenditure provision will improve equity and reduce gasoline use.
The Energy Tax Act of 1978 also includes new tax expenditure
provisions, which allow credits for installing insulation, solar heat,
and certain other items in homes and for installing energy equipment that does not use oil or natural gas in businesses. This
provision will conserve scarce energy resources. This Act also imposes an excise tax on the sale of new automobiles with low fuel
efficiency. Because it is an excise tax, its effects on receipts are not
defined to change tax expenditures.
The principal tax proposal in this year's budget is real wage
insurance. Groups of employees whose compensation increases in
1979 fall within the anti-inflation guidelines will be eligible for a
tax credit if inflation exceeds 7%. This tax expenditure provision
will protect people whose wage increases are consistent with the
guidelines in case inflation turns out to be higher than the guidelines anticipate. It is thus expected to encourage compliance with
the guidelines and thereby reduce inflation.

BUDGET FUNDS AND THE FEDERAL DEBT
The budget consists of two major groups of funds: Federal funds
and trust funds.17
The Federal funds are derived mainly from taxes and borrowing
and are used for the general purposes of the Government. Most of
these funds are not restricted by law to any specific Government
program. The trust funds, on the other hand, collect certain taxes
and other receipts for specified purposes, such as paying social
security and unemployment insurance benefits.
17
Data for Federal funds and trust funds are presented in Special Analysis C, "Funds in the Budget," in
Special Analyses, Budget of the United States, Fiscal Year 1980.

322

THE BUDGET FOR FISCAL YEAR 1980
BUDGET FINANCING AND CHANGE IN DEBT OUTSTANDING

[In billions of dollars]
Description

1978
actual

1979
estimate

1980
estimate

1982
estimate

1981
estimate

-48.8
-10.3

37.4
-12.0

-29.0
-12.0

-1.2
-11.5

37.8
-11.1

59.2

49 4

-41.0

-12.7

26.7

-2.5

9.9

1.9
.2
.4

-1.4
-.1
.9

1.2
— 3
1.1

Total, means of financing other than
borrowing from the public

9.4

2.0

Total, requirements for borrowing
from the public

-59.1

-40.0

-39.0

-11.9

27.6

59.1

40.0

39.0

11.9

-27.6

-.1
11.7
.6

.9
17.7
.1

1.2
19.9

29.4

39.3

12.2

18.8

20.8

29.4

39.3

71.3

58.8

59.8

41.3

11.7

Budget surplus or deficit (—)
Deficit ( - ) of off-budget Federal entities
Total, surplus or deficit ( - )
Means of financing other than borrowing
from the public:
Decrease or increase ( - ) in cash and
monetary assets2
Increase or decrease (—) in liabilities for:
Checks outstanding, etc
Deposit fund balances
Seigniorage on coins

Change in debt held by the public
Change in Federal agency investments in
Federal debt:
Federal funds
Trust funds 3
Off-budget Federal entities
Total, change in Federal agency investments in Federal debt
Change in gross Federal debt

1
Several amounts have been assumed to be zero in 1981 and 1982 because they are usually small and would be very difficult to estimate
accurately.
2
Includes profits on gold sales, which have been reclassified as a means of financing rather than as an offsetting collection. The budget totals have
been adjusted retroactively for the period since these sales began in 1975.
3
Estimates for 1981 and 1982 are equal to the trust fund surplus.

The budget includes the receipts and outlays of both the Federal
funds and trust funds and deducts the various transactions that
occur between them. The budget totals therefore generally display
the net transactions of the Federal Government with the public.
Thus, as is shown in the table above, the budget surplus or
deficit is the principal determinant of the change in Federal debt
held by the public. In the last several years, however, the transactions of the Federal Financing Bank and the other off-budget Federal entities have also become an important determinant of the
change in Federal debt held by the public. The transactions of the
off-budget Federal entities have been excluded from the budget
under provisions of law and are not included in either the Federal
funds or the trust funds group. Were they to be included in the
budget, virtually all their transactions would be classified in the
Federal funds group.

PERSPECTIVES ON THE BUDGET

323

BUDGET TOTALS BY FUND GROUP
[In billions of dollars]
1978
actual

Budget receipts.Federal funds
Trust funds
Interfund transactions
Total, budget receipts
Budget outlays:
Federal funds
Trust funds
Interfund transactions
Total, budget outlays
Budget surplus or deficit ( - ) :
Federal funds
Trust funds
Total, budget surplus or deficit
(-)
Memorandum:
Deficit off-budget Federal entities'
Total, surplus or deficit (-) including off-budget Federal entities

1979
estimate

1980
estimate

1981
estimate

1982
estimate

270.5
168.0
-36.5

306.1
189.5
-39.6

332.8
212.2
-42.5

402.0

456.0

502.6

332.0
155.3
-36.5

361.3
171.7
-39.6

381.8
192.2
-42.5

450.8

493.4

531.6

578.0

614.9

-61.5
127

-55.2
IU

-49.0
2M

-30.6
2%A

-1.5
3^3

-48.8

-37.4

-29.0

-1.2

37.8

-10.3

-12.0

-59.2

-49.4

-41.0

382.8
436.4
240.2
267.4
-46.2 -51.1
576.8

652.6

413.4
437.9
210.8 228.1
-46.2 -51.1

-11.5 -11.1
-12.7

26.7

All off-budget Federal entities are revolving funds; income is offset against expenditure to derive net outlays. Hence, no adjustments are made to
receipts when on and off-budget totals are consolidated. Virtually all off-budget outlays would be classified as Federal funds outlays if they were included
in the budget.

The budget deficits and the deficits of the off-budget Federal
entities, together with the other factors noted in the table on the
preceding page, are estimated to increase the Federal debt held by the
public from $610.9 billion at the end of 1978 to $689.9 billion at the
end of 1980. Debt beyond the budget year is projected for the first
time in this year's budget, based on assumptions for the economy
and the tentative long-range planning base as explained in Part 3
of this volume. Debt held by the public is projected to rise in 1981,
primarily due to the deficit of the off-budget Federal entities, but
to fall significantly in 1982 because of a large budget surplus.
Gross Federal debt is the sum of the debt held by the public and
the debt held by the Government itself, which includes such investments as the Treasury debt held by the social security trust funds.
The Federal funds deficit and the deficit of the off-budget Federal
entities are the principal determinants of changes in gross Federal
debt.
Gross Federal debt is estimated to rise by $59.8 billion during
1980. As indicated in the lower section of the table on the previous
page, $20.8 billion of this increment will be held by trust funds and
other Federal agencies, reflecting mainly the investment of trust
fund surpluses in Treasury debt.

324

THE BUDGET FOR FISCAL YEAR 1980

The gross Federal debt consists almost entirely of securities
issued by the Treasury Department. However, a few Government
agencies are authorized to issue their own debt instruments to the
public or to other Government agencies and funds. These securities
are part of the gross Federal debt. At the end of 1978 the public
held $7.4 billion of agency debt. This debt is expected to fall by
small amounts each year due to the Federal Financing Bank,
which buys most new issues of agency debt and finances its purchases through Treasury borrowing. To prevent double counting,
these holdings are not included in gross Federal debt. Consequently, the change in agency debt is largely determined by the repayment of securities that have matured.
Almost all Treasury debt issues are covered by a statutory debt
limit, though most borrowing by Federal agencies other than the
Treasury is excluded from this limit. The ceiling on the debt subject to limit is $798 billion through March 31, 1979. To permit the
Federal Government to meet its obligations, this ceiling will have
to be extended and raised.
Debt subject to this general statutory limit is a little less than
gross Federal debt, primarily because most agency debt is excluded
from the general statutory limitation. Both debt concepts include
debt held internally within the Government, such as the social
security trust fund holdings of Treasury securities. At the start of
1979 internally held debt was $169.5 billion. Thus, debt held by the
public is much less than either gross Federal debt or debt subject
to the general statutory limit.
Since trust fund surpluses for the most part are invested in debt
securities included under the general statutory limit, the Federal
funds deficit and the deficit of off-budget Federal entities must
primarily be financed by selling Federal debt; and this debt is
almost entirely subject to the statutory limit. The Federal funds
deficit in 1980 is estimated to be $49.0 billion, and the deficit of the
off-budget Federal entities is estimated to be $12.0 billion. As
shown in the following table, these deficits will account for most of
the increase in the debt subject to limit.

PERSPECTIVES ON THE BUDGET

325

FEDERAL FUNDS FINANCING AND CHANGE IN DEBT SUBJECT TO LIMIT
[In billions of dollars]
Description

1978
actual

1979
estimate

1980
estimate

Federal funds surplus or deficit ( - )

-61.5

-55.2

-49.0

Deficit ( - ) of off-budget Federal entities

-10.3

-12.0

-71.9

-67.2

Total, amount to be financed
Means of financing other than borrowing:
Decrease or increase ( - ) in cash and monetary assets1
Increase or decrease ( — ) in liabilities for:
Checks outstanding, etc
Deposit fund balances
Seigniorage on coins
Total, means of financing other than borrowing
Decrease or increase ( —) in Federal funds and off-budget entity
investments in Federal debt
Increase or decrease ( —) in Federal funds and off-budget entity
debt not subject to limit
Total, requirements for borrowing subject to debt limit
Change in debt subject to limit

-61.0

-2.5

9.9

2.9
.2
.4
1.0

-1.3
-.1
.9
9.4

1.3
-.3
1.1
2.1

—.5

—1.0

—.9

—1.4

—1.5

-.4

—72.7
72.7

—60.3
60.3

—60.2
60.2

1
Includes profits on gold sales, which have been reclassified as a means of financing rather than as an offsetting collection. The budget totals have
been adjusted retroactively for the period since these sales began in 1975.

A substantial part of the Federal funds deficit—and, therefore, a
substantial part of the growth in debt subject to limit—is associated with transactions between Federal funds and trust funds. These
transactions consist primarily of Federal funds payments to trust
funds. These payments include interest paid on Treasury debt securities held by trust funds; the employer share of employee retirement payments; the Federal payment to finance the unfunded
liability of the civil service retirement fund; and other payments
primarily to social insurance trust funds, such as the Federal Government's contribution for supplementary medical insurance. The
trust fund payments to Federal funds are relatively small.

326

THE BUDGET FOR FISCAL YEAR 1980
BUDGET SURPLUS OR DEFICIT ( - ) BY FUND GROUP 1
[In billions of dollars]

Description

1978
actual

1979
estimate

1980
estimate

1982
estimate

1981
estimate

Federal funds:
Transactions with the public 2
Transactions with trust funds
Total

-32.4
—29.1
-61.5

-24.3
-30.9
-55.2

-15.6
-33.5
-49.0

6.4
-37.0
-30.6

38.4
-39.9
-1.5

Trust funds:
Transactions with the public 2
Transactions with Federal funds
Total

—16.4
29.1
12.7

-13.1
30.9
17.8

-13.4
33.5
20.0

-7.6
37.0
29.4

-.6
39.9
39.3

Budget total:
Federal funds
Trustfunds

-61.5
12.7

-55.2
17.8

-49.0
20.0

-30.6
29.4

-1.5
39.3

-48.8

-37.4

-29.0

-1.2

37.8

Total

1
For purposes of this analysis, payments from Federal funds to the general revenue sharing trust fund are treated as transactions with the public
instead of transactions with a trust fund; and the corresponding payments from the general revenue sharing trust fund to the public are accordingly
omitted. This is because the general revenue sharing trust fund has no independent source of funding, and serves only as a channel through which a
Federal funds payment is made to the public
2
Includes some incidental transactions with off-budget Federal entities.

Federal Debt as a Percent of GNP

1975

1980

'82

Estimate

From 1969 through 1978, the cumulative Federal funds deficit
was $370.3 billion, of which $175.5 billion was attributable to transactions with trust funds and the remaining $194.8 billion was
attributable to transactions with the public. The Federal funds
group can have a deficit at the same time as there are surpluses in

PERSPECTIVES ON THE BUDGET

327

the budget and in the transactions of the Federal funds group with
the public. This occurred in 1969 and is projected to occur again in
1982. The relevant figures for 1978 through 1982 are shown in the
preceding table.
The gross Federal debt was equal to more than 50% of GNP in
the early 1960's, and debt held by the public was equal to more
than 40%. Both proportions declined steadily through 1974. Because of the large deficits induced by the recession, Federal debt as
a percentage of GNP then rose. Federal debt held by the public
increased from a postwar low of 25% in 1974 to 30% in 1977, but
declined in 1978 and is estimated to decline further to 28% in 1980
and still lower levels in the following two years.
RECONCILIATION OF RELATIVELY UNCONTROLLABLE
OUTLAYS AND OF RECEIPTS
The Congressional Budget Act requires that the budget contain
two reconciliations between the initial budget estimates and the
actual amounts for the last completed fiscal year: a reconciliation
of the differences in relatively uncontrollable outlays by major
program, and a reconciliation of the differences in receipts by
major source. Two different budget-year estimates were initially
made for 1978. The previous administration submitted the 1978
Budget in January 1977, and this administration submitted the
1978 Budget Revisions in February 1977. The reconciliations made
in the two sections below explain the differences first between the
January and the February estimates and then between the February estimates and the actual amounts.
Relatively uncontrollable outlays for 1978.—Outlays are defined
as relatively uncontrollable in any one year when the President's
decisions in that year can neither increase nor decrease them
without a change in substantive law. That is, under existing law,
these outlays generally depend upon factors that are beyond administrative control at the start of the fiscal year. For example, the
definition of eligible beneficiaries is established under law, and
contractual agreements and other legally binding commitments
must be fulfilled.
The amounts estimated in the budget for relatively uncontrollable outlays may differ from the actual outlays for a number of
reasons. For example, legislation may change benefit rates or coverage; the number of beneficiaries may differ from the number
estimated; and economic conditions (such as the interest rates required for Federal borrowing) may differ from what was assumed
in developing the estimates.

328

THE BUDGET FOR FISCAL YEAR 1980

The budget estimates of uncontrollable outlays do not include
the outlay effect of legislation being proposed. This is a standard
practice, consistent with the definition of uncontrollable outlays
stated above. Where legislation was enacted that significantly affected relatively uncontrollable outlays in 1978, it is identified in
the discussion below.
The following table shows the differences between actual outlays
for relatively uncontrollable programs in 1978 and the estimated
amounts shown in the January budget and the February budget
revisions. The list of programs in this table is consistent with Table
14 (Controllability of Budget Outlays) in Part 9 of this year's
budget.
In the aggregate, actual outlays for relatively uncontrollable programs exceeded the January 1977 estimate by $1.5 billion or 0.4
percent. The February 1977 estimates, however, exceeded actual
outlays by $1.5 billion or 0.4 percent.
RELATIVELY UNCONTROLLABLE OUTLAYS FOR 1978
[In billions of dollars]
Relatively Uncontrollable Under Present Law
Open-ended program and fixed costs:
Payments for individuals-.
Social security and railroad retirement....
Federal employees' retirement and insurance
(Military retired pay)
(Other)
Unemployment assistance
Veterans benefits: Pensions, compensation,
education and insurance
Medicare and medicaid
Housing payments
Public assistance and related programs
Subtotal, payments for individuals
Netinterest
General revenue sharing
Farm price supports (CCC)
Other open-ended programs and fixed costs
Total, open-ended programs and fixed
costs
Outlays from prior-year contracts and obligations: i
National defense2
Civilian programs 2
Total, outlays from prior-year contracts and obligations
Total, relatively uncontrollable
outlays

January
1977
estimate

February
1977
estimate

Change

Actual

95.7

20.3
(9.0)
(11.2)
14.5

20.3
(9.0)
(11-2)
13.8

-.3
(.1)
(-.4)
-1.4

20.0
(9.2)
(10.8)
12.4

13.1
37.9
3.8
22.9

-2.0
-.2
-.3

13.1
35.9
3.6
22.7

13.1
37.9
3.6
22.7

-.7

.2
.2

96.2

207.8
31.2
6.8
1.0
10.4

-.4
2.0

207.4
33.2
6.8
1.0
10.7

-3.5
2.2
*
4.5
-.7

203.8
35.4
6.8
5.5
10.0

257.2

1.9

259.1

2.5

261.6

31.2
44.1

1.1

31.2
45.1

-3.0
-1.0

28.2
44.1

75.2

1.1

76.3

-4.0

72.3

332.4

3.0

335.4

-1.5

333.9

*$50 million or less.
1
Excludes prior-year contracts and obligations for activiies shown above as "open-ended programs and fixed costs."
2
International Security assistance programs are now classified as civilian programs rather than National Defense. The original estimates have been
changed to reflect that shift.

PERSPECTIVES ON THE BUDGET

329

Changes from the January estimate to the February estimate.—
The February estimates of relatively uncontrollable outlays were
$3.0 billion above the January budget estimates. The largest revision ($2.0 billion) was for higher interest outlays to reflect higher
interest rates and debt levels than previously assumed. The January estimates assumed a 4.4% interest rate on new 91-day Treasury bills while the February estimates assumed a 4.6% rate (the
market rate when the estimates were made). Total borrowing requirements were revised upward by $11.0 billion in 1977 and $10.3
billion in 1978 to reflect the larger budget deficits being proposed.
Other open-ended programs were increased by $0.6 billion due to
revised spending patterns for several programs.
Partially offsetting these increases was a $0.7 billion decline in
estimated outlays for unemployment insurance. The January
budget assumed that the national unemployment rate would average 6.8% in fiscal year 1978 while the February revisions assumed
a 6.5% rate.
Outlays from prior-year contracts and obligations were $1.1 billion higher in the revised budget, due largely to a $1.0 billion
increase in the outlay estimate for the Temporary Employment
Assistance program. This reflected a higher number of jobs estimated to be made available during 1977 under the economic stimulus package. Other increases were the result of revised spendout
rates for housing and other programs.
Changes from the February estimate to the actual amounts.—
Actual 1978 outlays for relatively uncontrollable programs were
$1.5 billion lower than estimated in February 1977. Open-ended
programs and fixed costs were $2.5 billion higher than the February estimate, while outlays from prior-year contracts and obligations were $4.0 billion lower.
Open-ended programs and fixed costs consist mainly of benefit
programs, grants, and subsidies for which eligibility is automatic or
fixed by law; interest payments; farm price supports; and payments
for the legislative and judicial branches, which the President
must—by law—include in the budget as submitted and without
change.
Most of the $3.5 billion overestimate in payments for individuals
can be explained by differences between assumed and actual economic conditions and beneficiary levels.
Outlays for social security retirement and disability and railroad
retirement were $0.5 billion above the February estimates. Higher
cost-of-living adjustments increased outlays for these programs by
$1.3 billion. The February estimates assumed a 4.9% increase in
July 1977 and a 5.5% increase in July 1978; the actual increases

330

THE BUDGET FOR FISCAL YEAR 1980

were 5.9% and 6.5%, respectively. Outlays were also increased by
$0.2 billion as a result of a Supreme Court ruling that certain
benefit payments discriminated against men. These increases were
partially offset by the effect of fewer beneficiaries than assumed in
the February estimates ($0.7 billion) and lower outlays caused by
benefit changes included in the Social Security Amendments of
1977 ($0.3 billion).
Actual outlays for Federal employee retirement and disability
programs were $0.3 billion below the revised budget estimates despite higher-than-estimated cost of living increases during the year.
The February estimates assumed automatic cost-of-living increases
for these retirees of 2.7% in September 1977 and 2.6% in March
1978. Actual cost-of-living increases were 4.3% and 2.4%, respectively. The higher average benefits that resulted from these cost-ofliving increases added about $0.3 billion to 1978 outlays.
Outlays for military retirees were underestimated by $0.1 billion,
due largely to the differences between actual and projected cost-ofliving increases, as noted above. Outlays for other retired Federal
employees, however, were overestimated by $0.4 billion despite the
difference in cost-of-living increases, which added roughly $0.2 billion. The major cause was an overestimate of civil service beneficiaries by 70 thousand in 1977 and 102 thousand in 1978; this reduced
1978 outlays by $0.5 billion. Compensation for work-related injuries
and disabilities of Federal employees was also overestimated (by
about $0.1 billion) because of an overestimate of the number of
beneficiaries.
Outlays for unemployment insurance programs were $1.4 billion
below the February estimates due largely to lower-than-predicted
unemployment rates. The actual unemployment rate for fiscal year
1978 was 6.2%, compared to the February 1977 forecast of 6.5%.
The insured unemployment rate, the rate that is more directly
related to the level of benefits, was 3.4% for fiscal year 1978 rather
than the assumed rate of 3.8%. In addition, outlays for Federal
supplemental unemployment benefits were overestimated by $0.3
billion because beneficiaries remained on the rolls for a shorter
time than previously assumed.
Actual 1978 outlays for veterans programs were virtually the
same as the February estimates. There were, however, large but
offsetting differences in individual programs. Legislated increases
for compensation benefits (6.6% effective October 1, 1977) and pension benefits (6.5% effective January 1, 1978) raised outlays by $0.4
billion from the February estimate. However, outlays for readjustment benefits were $0.4 billion below the February estimate because 342 thousand fewer eligible veterans applied for benefits
than had been anticipated.

PERSPECTIVES ON THE BUDGET

331

Outlays for medicare and medicaid were $2.0 billion lower than
the February estimate, because hospital costs increased at a slower
rate than assumed.
Uncontrollable outlays for housing subsidy programs were $0.2
billion lower, reflecting a slower rate of construction of subsidized
units.
Public assistance and related programs, which include public
assistance cash payments, food stamps, and child nutrition programs, were overestimated by $0.3 billion. Food stamp outlays were
$0.1 billion below the February estimate due to fewer participants
than assumed in February. This more than offset increases in
program costs due to higher food prices. Outlays for child nutrition
programs were $0.4 billion below the February estimates due to
significant overestimates of participation by schools and individuals. Most other programs in this category—including public assistance cash payments, supplemental security income, earned income
tax credits, and other income support payments—were within $0.1
billion of the February estimate.
Net interest outlays were $2.2 billion above the February estimates. Interest on the public debt was $1.9 billion higher due to
significantly higher interest rates than assumed. The February
estimate assumed a 4.6% interest rate on 91-day Treasury bills
through 1978, whereas the actual 91-day rate averaged 4.9% in
1977 and 6.6% in 1978. The effect of these higher interest rates on
1978 outlays more than offset the effect of lower-than-projected
borrowing in 1977 and 1978. Borrowing requirements were lower by
$19.5 billion in 1977 and by $6.7 billion in 1978. Interest received
by trust funds, which is offset against interest costs to reflect
transactions with the public, was within $0.1 billion of the February estimate.
Actual outlays for general revenue sharing virtually matched the
original estimate since the amounts are specified in law and no
legislative changes were made.
Farm price supports were $4.5 billion higher than estimated due
to price support increases and higher production. Record crops of
feed grains and wheat put downward pressure on market prices for
these commodities and, when coupled with legislated increases in
price support levels, raised outlays $2.8 billion over the February
estimate. The authorized level of short-term export credit was more
than doubled after the February estimates were made, and this
accounted for nearly a $1 billion increase in outlays.
Other open-ended programs and fixed costs were overestimated
by $0.7 billion. Significant underestimates of beneficiaries for social
service, child welfare, and human development programs resulted
in a $0.4 billion underestimate in outlays. Other underestimates
occurred in disaster relief programs ($0.3 billion) and payments to

332

THE BUDGET FOR FISCAL YEAR 1980

the Postal Service ($0.1 billion). These increases were more than
offset by increased receipts from foreign military sales ($0.3 billion)
and lower outlays for the Federal Housing Administration ($0.6
billion), ship operating-differential subsidies ($0.1 billion), the Federal Deposit Insurance Corporation ($0.2 billion), and the legislative
and judicial branches ($0.1 billion).
Outlays for prior-year contracts and obligations were $4.0 billion
lower for 1978 than estimated in the revised budget. National
defense outlays in this category were $3.0 billion lower. Outlays for
the Department of Defense were $2.8 billion lower than originally
estimated, while outlays for atomic energy related defense activities of the Department of Energy were overestimated by $0.2 billion.
Civilian programs were overestimated by $1.0 billion. Major
shortfalls included $1.7 billion for construction of sewage treatment
plants; $1.5 billion for the Department of Energy; $1.1 billion for
the Export-Import Bank; $0.8 billion for the Federal-aid highway
trust fund and $0.5 billion for the Urban mass transportation fund;
and $0.2 billion for petroleum reserves. Major underestimates included $2.3 billion for the local public works program and $2.6
billion for Temporary Employment Assistance and the Employment and Training Assistance programs.
Reconciliation of actual and estimated receipts.—As shown in the
following table, receipts for 1978 were $402.0 billion. This is $9.0
billion greater than the January 1977 budget estimate but only
$0.4 billion greater than the estimate of $401.6 billion made by this
administration in its February 1977 budget revisions.
COMPARISON OF FISCAL YEAR 1978 RECEIPTS
[In billions of dollars]
January
1977
estimate

Individual income taxes
Corporation income taxes
Social insurance taxes and contributions
Excise taxes
Estate and gift taxes
Customs duties
Miscellaneous receipts
Total

change

171.2
58.9
126.1
18.5
5.8
5.3
7.2

8.0
2.7
-2.3
.1
*
*

393.0

8.6

February
1977
estimate

179.2
61.6
123.8
18.6
5.8
5.3
7.2
401.6

Change

Actual

1.8
-1.7
-.4
-.2
-.6
1.3
.2

181.0
60.0
123.4
18.4
5.3
6.6
7.4

402.0

*$50 million or less.

Changes from the January estimate to the February estimate.—
The February 1977 estimate of receipts was $401.6 billion, $8.6
billion greater than the January estimate of $393.0 billion. Substitution of the proposals presented in the February budget revision

PERSPECTIVES ON THE BUDGET

333

for those in January accounts for $6.7 billion of the increase. An
upward revision in incomes, reflecting the stronger economic expansion that was expected from the Administration's proposed economic stimulus package, accounts for the remaining increase of
$1.9 billion.
In the January 1977 budget, permanent individual and corporation income tax reductions were proposed to become effective retroactive to January 1, 1977, together with a number of other changes
affecting income tax receipts. These proposals were expected to
reduce 1978 individual and corporation income taxes by $19.2 billion and $4.7 billion, respectively. An increase in the combined
employer-employee social security tax rate, effective January 1,
1978, was the other major proposal affecting 1978 receipts.18
Smaller individual and corporation income tax reductions were
proposed (effective retroactive to January 1, 1977) in the February
1977 budget revisions, together with a one-year extension of the
temporary tax provisions of the Tax Reform Act of 1976 that were
scheduled to expire December 31, 1977. Together, these proposals
were expected to reduce 1978 income taxes by $15.7 billion. The
February estimates also included proposed legislation to hold the
monthly supplemental medical insurance (medicare) premium at
$7.20 through September 1978 and several minor proposals contained in the January 1977 budget.19
RECONCILIATION OF JANUARY 1977 AND FEBRUARY 1977 ESTIMATES OF FISCAL YEAR 1978
RECEIPTS
[In billions of dollars]
January
1977
estimate

Individual income taxes
Corporation income taxes
Social insurance taxes and contributions
Excise taxes
Estate and gift taxes
Customs duties
Miscellaneous receipts
Total

Removal of
January 1977
proposals

February
1977
proposals

Reestimates
and revised
incomes

February
1977
estimate

171.2
58.9
126.1
18.5
5.8
5.3
7.2

19.2
4.7
-1.3
*

-.1

*
*

179.2
61.6
123.8
18.6
5.8
5.3
7.2

393.0

22.5

-15.8

1.9

401.6

-12.9
-2.9
-.1

1.7
.9
-.8
*

*$50 million or less.

Changes from the February estimate to the actual amounts.—As
previously mentioned, actual receipts for 1978 were $402.0 billion,
only $0.4 billion higher than the February 1977 estimate. Differences in tax law from the legislation proposed in February de18
Under prior law, the combined employer-employee social security tax rate was scheduled to increase from
11.7% to 12.1% on January 1, 1978. The proposed increase would have raised the rate to 12.3%.
19
Under prior law, the supplemental medical insurance premium was scheduled to rise to $7.70 in July 1977
and to an estimated $8.10 in July 1978.

280-000

O—79—22

334

THE BUDGET FOR FISCAL YEAR 1980

creased receipts by $1.0 billion, while revised incomes and technical
adjustments increased receipts by $1.3 billion.
On May 23, 1977, the Tax Reduction and Simplification Act of
1977 was enacted. This act replaced the low income allowance
($2,100 for a joint return and $1,700 for a single taxpayer) and the
percentage standard deduction (16% of adjusted gross income with
a maximum deduction of $2,800 for a joint return and $2,400 for a
single taxpayer) with a flat standard deduction of $2,200 for single
taxpayers and $3,200 for married couples filing jointly. This was a
slight modification of the flat standard deduction of $2,200 for
single taxpayers and $3,000 for married couples filing jointly that
had been proposed in the February 1977 budget revisions. The act
also included a jobs credit applicable to certain new employees
hired in calendar years 1977 and 1978 and extended the temporary
provisions of the Tax Reform Act of 1976 to December 31, 1978.
Relative to the income tax reductions and extensions proposed in
the February 1977 budget revisions, this act reduced 1978 receipts
by $1.3 billion.
Other enacted legislation, which increased 1978 receipts by $0.2
billion, included: the Social Security Amendments of 1977, which
required employers as well as employees to pay social security
taxes on certain employee income derived from tips, effective January 1978; the Surface Mining Control and Reclamation Act of 1977,
which levied a tonnage tax on coal to finance coal mine reclamation; and the Black Lung Benefits Revenue Act of 1977, which
levied a tonnage tax on coal to finance benefits for disabled coal
miners. An increase in sugar import fees, which was accomplished
by Administrative action, added an additional $0.1 billion to 1978
receipts.
RECONCILIATION OF ACTUAL FISCAL YEAR 1978 RECEIPTS WITH THE FEBRUARY 1977
ESTIMATES
[In billions of dollars]
February
1977
Estimate

Individual income taxes
Corporation income taxes
Social insurance taxes and contributions
Excise taxes
Estate and gift taxes
Customs duties
Miscellaneous receipts
Total
*$50 million or less.

179.2
61.6
123.8
18.6
5.8
5.3
7.2
401.6

Changes in
Legislation
from February
Proposals

-1.8
.6
.2
.1

Reestimates
and Revised
Incomes

Actual
Receipts

.1
*

3.6
-2.2
-.6
-.3
-.6
1.2
.2

181.0
60.0
123.4
18.4
5.3
6.6
7.4

-1.0

1.3

402.0

PERSPECTIVES ON THE BUDGET

335

Individual income taxes were $181.0 billion in 1978, $1.8 billion
greater than the February 1977 estimate of $179.2 billion. As
shown in the preceeding table, substitution of the Tax Reduction
and Simplification Act of 1977 for the February 1977 proposals
reduced these receipts by $1.8 billion. This was more than offset by
higher than anticipated personal incomes and an underestimate of
tax payments, which raised receipts $3.6 billion.
Corporation income tax receipts were $60.0 billion in 1978, $1.7
billion less than the February 1977 estimate. Differences in tax law
from the legislation proposed in the February revisions resulted in
a net increase in receipts of $0.6 billion. Different effective tax
rates, collection patterns, and economic conditions than assumed in
February 1977 more than offset the effect of the changes in tax
law.
Social insurance taxes and contributions in 1978 were $0.4 billion
less than the February 1977 estimate. Lower employment taxes
and contributions, largely due to lower than anticipated wages and
salaries, and lower unemployment insurance receipts reduced
social insurance taxes and contributions by $0.6 billion and $0.3
billion, respectively. This underrun in receipts was partially offset
by an increase in contributions for other insurance and retirement
of $0.5 billion, in large part due to non-enactment of the proposed
reduction in the supplemental medical insurance premium.
Excise taxes and estate and gift taxes were below the February
1977 estimates by $0.2 billion and $0.6 billion, respectively. Customs duties were $1.3 billion higher. Increased imports of automative, electrical, and electronics products combined with a decline in
the dollar relative to currencies of major exporting countries explain much of this increase.
An increase in miscellaneous receipts of $0.2 billion was in large
part due to a $0.2 billion underestimate of deposits of earnings by
the Federal Reserve System.

PART 7

THE BUDGET SYSTEM
AND CONCEPTS

337

THE BUDGET SYSTEM AND CONCEPTS
The budget system of the U.S. Government supports decisionmaking and management of programs in relation to the requirements of the Nation, effective financial control, and accountability
for the use of Federal resources.
THE BUDGET PROCESS

The budget process has four main phases: (1) executive formulation and transmittal; (2) congressional action; (3) budget execution
and control; and (4) review and audit. Each of these phases interrelates with and overlaps the others.
Executive formulation and transmittal.—The budget sets forth
the President's financial plan of operation and thus indicates his
priorities for the Federal Government during the coming year. The
President's transmittal of his budget to the Congress early in each
calendar year is the climax of many months of planning and analysis throughout the executive branch. Formulation of the 1980
budget began in the spring of 1978, although general goals were set
earlier.
In connection with the development of the 1980 budget, a 3-year
budget planning, and tracking system was established that expanded the budget planning horizon to cover the 2 years following the
budget year and integrated long-range planning into the executive
budget cycle. This multi-year budget planning system requires that
broad fiscal goals and agency spending targets beyond the budget
year be established during the budget planning process and that
agency budget requests be prepared in the context of the expanded
planning period. Long-range implications are identified and considered during the decisionmaking process, and, to the extent possible,
decisions are made for the 2 years beyond the budget year as well
as for the budget year.
During the period when a budget is being formulated in the
executive branch, there is a continuous exchange of information,
proposals, evaluations, and policy decisions among the President,
the Office of Management and Budget (OMB), and the various
Government agencies. Decisionmaking in the budget process is facilitated by the use of zero-base budgeting, a management process
that provides for an in-depth evaluation of all proposed and existing programs and activities in conjunction with planning and budgeting.
In the spring, agency programs are evaluated, policy issues are
identified, and budgetary projections are made, giving attention
both to important modifications and innovations in programs and
to alternative long-range program plans. These budgetary projections, including projections of estimated receipts prepared by the
Department of the Treasury, are then presented to the President
338

THE BUDGET SYSTEM AND CONCEPTS

339

for his consideration, and the major issues are discussed. At about
the same time, the President receives projections of the economic
outlook that are prepared jointly by the Council of Economic Advisers, and Departments of Commerce, Labor, the Treasury, and
OMB.
Following a review of these projections, the President establishes
general budget and fiscal policy guidelines for the fiscal year that
will begin about 15 months later, and for the 2 years beyond.
General policy directions and planning ceilings are then given to
the agencies to govern the preparation of their budget requests.
Throughout the fall and early winter the executive branch is
involved in the development of the President's budget. Current
services estimates are also prepared to provide the Congress with a
basis for the review of the President's budget. These estimates are
projections of budget authority and outlays required to continue
Federal programs and activities in the upcoming fiscal year without policy changes from the fiscal year in progress at the time the
estimates are submitted. The Congressional Budget Act of 1974
requires that these estimates be transmitted by November 10 in
order to provide the Congress with early information on projected
costs of current programs. However, the current services estimates
transmitted at that time did not provide a suitable basis for review,
since the underlying assumptions could vary before the transmittal
of the budget. Therefore, the Congress has passed a joint resolution
continuing an experiment begun last year in which the current
services estimates are transmitted with the President's budget, and
therefore, are based upon the same economic assumptions.
The primary phase of the budget process involves the formulation and preparation of the President's budget for transmittal to
the Congress. Budget determinations are developed after detailed
reviews of the agency zero-base budget requests and the Government-wide OMB ranking of zero-base decision packages falling at
the margin of approved agency totals. These determinations are
then discussed with the agencies and may be revised as a result of
later Presidential decisions. Overall fiscal policy issues—relating to
total budget outlays and receipts—are reexamined. Consistent with
the multiyear budget planning system, the effects of budget decisions on outlays in the years that follow are also considered and
are explicitly taken into account. Thus, the budget formulation
process involves the simultaneous consideration of the resource
needs of individual programs, and the total outlays and receipts
that are appropriate in relation to current and prospective economic conditions. The budget reflects the results of both of these considerations.
Congressional action.—The Congress can act to approve, modify,
or disapprove of President's budget proposals. It can change funding levels, eliminate proposals, or add programs not requested by

340

THE BUDGET FOR FISCAL YEAR 1980

the President. It may also act upon legislation determining taxes
and other means of increasing or decreasing receipts.
In making appropriations, the Congress does not normally vote
on the level of outlays directly, but rather on budget authority. The
Congress first enacts legislation that authorizes an agency to carry
out a particular program and, in some cases, includes guidance on
the amount that subsequently should be appropriated for the program. Many programs are authorized for a specified number of
years or indefinitely; other programs, such as most education and
health programs, nuclear energy programs, space exploration, defense procurement, foreign affairs, and some construction programs, require annual authorizing legislation.
Budget authority is usually provided in a separate, subsequent
action. Generally, budget authority becomes available each year
only as voted by the Congress. However, in a significant number of
cases, the Congress has voted permanent budget authority, under
which funds become available annually without further congressional action. Most trust fund appropriations are permanent, as are
a number of Federal fund appropriations, such as the appropriation to pay interest on the public debt.
Congressional review of the budget begins when the President
transmits his budget estimates to the Congress within 15 days after
the start of each new session in January, as required by law.
Under the procedures established by the Congressional Budget Act,
the Congress considers budget totals before completing action on
individual appropriations. The act requires that each standing committee of the Congress submit reports on budget estimates to the
House and Senate Budget Committees by March 15; and that the
Congressional Budget Office submit a fiscal policy report to the two
budget committees by April 1. This is followed, no later than May
15, by the adoption of the first concurrent budget resolution, containing Government-wide budget targets of receipts, budget authority, and outlays to guide the Congress in its subsequent consideration of appropriations and revenue measures.
Congressional consideration of requests for appropriations and
for changes in revenue laws occurs first in the House of Representatives. The Appropriations Committee, through its subcommittees, studies the proposals for appropriations and examines in
detail each agency's performance. The Ways and Means Committee
reviews proposed revenue measures. Each committee then recommends the action to be taken by the House of Representatives.
As the appropriation and tax bills are approved by the House,
they are forwarded to the Senate, where a similar review process is
followed. In case of disagreement between the two Houses of the
Congress, a conference committee (consisting of Members of both
bodies) meets to resolve the issues. The report of the conference
committee is returned to both Houses for approval. When the

THE BUDGET SYSTEM AND CONCEPTS

341

measure is agreed to, first in the House and then in the Senate, it
is ready to be transmitted to the President in the form of an
enrolled bill, for his approval or veto.
After action has been completed on all money bills, the Congress
adopts, by September 15, a second concurrent resolution containing
budget ceilings classified by function for budget authority and outlays, and a floor for budget receipts. This resolution may retain or
revise the levels set earlier in the year, and can include directives
to the appropriations committees and to other committees to recommend changes in new or carryover authority or entitlements.
Similarly, the second resolution may direct the appropriate committees to recommend changes in budget receipts or in the statutory limit on the public debt. Changes recommended by various
committees pursuant to the second budget resolution are to be
reported in a reconciliation bill (or resolution, in some cases) on
which the Congress must complete action by September 25, a few
days before the new fiscal year commences on October 1.
After the Congress completes action on the reconciliation bill or
resolution, it may not consider any spending or revenue legislation
that would breach any of the levels specified in the second resolution. The Congress would be able to pass a supplemental appropriation that would cause budget authority or spending to rise above,
or reduce receipts below, the second resolution's totals only if it
adopted a new budget resolution changing the levels set by the
second resolution.
If action on appropriations is not completed by the beginning of
the fiscal year, the Congress may enact a "continuing resolution"
to provide authority for the affected agencies to continue operations usually until their regular appropriations are enacted.
Budget execution and control—Once approved, the budget becomes the financial plan for the operations of each agency during
the fiscal year. Under the law, most budget authority and other
budgetary resources are made available to the agencies of the
executive branch through an apportionment system. The Director
of OMB apportions (distributes) appropriations and other budgetary
resources to each agency by time periods (usually quarters) or by
activities. Obligations may not be incurred in excess of the amount
apportioned. The objective of the apportionment system is to
ensure the effective and orderly use of available authority and to
reduce the need for requesting additional or supplemental authority.
Changes in laws or other factors may indicate the need for more
authority during the year, and supplemental requests may have to
be transmitted to the Congress. On the other hand, reserves may
be established under the Antideficiency Act to provide for contingencies or to effect savings made possible by or through changes in
requirements or greater efficiency of operations. Amounts may also

342

THE BUDGET FOR FISCAL YEAR 1980

be withheld for policy or other reasons pursuant to the Impoundment Control Act of 1974.
Whenever the President determines that all or part of any
budget authority provided by the Congress will not be required to
carry out the full objectives or scope of a program for which it was
provided, or that such budget authority should be rescinded for
fiscal policy or other reasons, a special message is transmitted by
the President to the Congress requesting a rescission of the budget
authority. The budget authority proposed by the President for rescission must be made available for obligation unless both the
House and the Senate pass a rescission bill within 45 days of
continuous session after receiving the President's message.
Whenever all or part of any budget authority provided by the
Congress is deferred (that is, temporarily withheld from obligation),
the President transmits a special message to the Congress on such
deferrals. Either House may, at any time, pass a resolution disapproving this deferral of budget authority, thus requiring that the
funds be made available for obligation. When no congressional
action is taken, deferrals may remain in effect until, but not
beyond the end of the fiscal year. If the funds remain available
beyond the end of a fiscal year and continued deferral of their use
is desired by the President, he must transmit a new special message to the Congress.
Review and audit—This is the final phase in the budget process.
The individual agencies are responsible for assuring—through their
own review and control systems—that the obligations they incur
and the resulting outlays follow the provisions of the authorizing
legislation and appropriations, as well as other laws and regulations relating to the obligation and expenditure of funds. OMB
reviews program and financial reports and keeps abreast of agency
programs and the effort to attain program objectives.
In addition, the General Accounting Office (GAO), as an agent of
the Congress, regularly audits, examines, and evaluates Government programs. Its findings and recommendations for corrective
action are made to the Congress, to OMB, and to the agencies
concerned. The GAO also monitors the executive branch's reporting of special messages on proposed rescissions and deferrals. The
GAO reports any items not reported by the executive branch and
any differences that it may have with the classification (as a rescission or deferral) of withholdings included in special messages transmitted by the President. The GAO may bring civil actions to obtain
compliance should the President fail to make budget authority
available in accordance with the Impoundment Control Act of 1974.

COVERAGE OF THE BUDGET TOTALS
Agencies and programs.—The budget totals cover agencies and
programs (including Government corporations) owned by the Feder-

THE BUDGET SYSTEM AND CONCEPTS

343

al Government, no matter how funded, except for the following offbudget Federal entities:
Rural electrification and telephone revolving fund
Rural Telephone Bank
Board of Governors of the Federal Reserve System
Pension Benefit Guaranty Corporation
Postal Service fund
United States Railway Association 1
Federal Financing Bank
The off-budget Federal entities listed above are discussed in Part
6 of the Budget, and financial statements are presented in Part IV
of the Budget Appendix. Except for the Federal Reserve Board,
these data are also presented in selected tables throughout the
budget documents. The totals also exclude privately owned, Government-sponsored enterprises, such as the Federal land banks and
Federal home loan banks. Privately owned, Government-sponsored
enterprises are discussed in Part 6 of the Budget, and financial
statements are presented in Part VI of the Budget Appendix.
Functional classification.2—The functional classification arrays
budgetary data according to the major purpose served by the unit
being classified. In accordance with the Congressional Budget Act
of 1974, the Congress must pass resolutions establishing budget
targets and ceilings by functional categories.
The following criteria are used in establishing and in assigning
activities to functional categories:
• A function must have a common end or ultimate purpose
addressed to an important national need. (The emphasis is on
what the Federal Government seeks to accomplish rather
than the means of accomplishment, what is purchased, or the
clientele or geographic area served.)
• A function must be of continuing national importance and be
significant in size.
• Each basic unit of classification (generally the appropriation
or fund account) is classified into the single best or predominant purpose and assigned to only one function. However,
when an account serves more than one major purpose, it may
be subdivided into two or more subfunctions.
• Activities and programs are normally classified by common
purpose (or function) regardless of which agencies conduct the
activities.
National needs presentation.—Section 601 of the Congressional
Budget Act of 1974 requires that the budget for each fiscal year
beginning with the fiscal year ending September 30, 1979:
1
Investments in Conrail securities, which comprise almost all of the Association's activity after 1977, are
included in the budget.
2
A discussion of this subject is also found in Part 5 of this volume.

344

THE BUDGET FOR FISCAL YEAR 1980

shall contain a presentation of budget authority, proposed
budget authority, outlays, proposed outlays, and descriptive
information in terms of—
(1) a detailed structure of national needs which shall be used
to reference all agency missions and programs;
(2) agency missions; and
(3) basic programs.
The functional presentation of the budget is used to meet the
national needs requirement. While national needs and agency missions were not specified, as such, in budgets previous to the one for
1979, the thrust of the budget functional classification has always
been to summarize what the Government is doing, or expects to do,
in terms of the ultimate purpose that the Government programs
are designed to serve. Building upon this basic approach, the
budget functional classification was refined in preparation for the
1979 budget to provide a sharper focus on the end purposes and
accomplishments, and further refinements in the classification are
made as circumstances warrant. Each major function is described
in the context of national needs being served and subfunctions are
described in the context of major missions devoted to serving national needs. This is in keeping with the act, which states:
To the extent practicable, each agency shall furnish information in support of its budget requests in accordance with its
assigned missions in terms of Federal functions and subfunctions, including mission responsibilities of component organizations, and shall relate its programs to agency missions.
In the national needs presentation, Federal programs are discussed in terms of national needs and the functional classification.
In this context, a single program may be identified as serving
several national needs even though classified in a single function.
For example, medicare, primarily a health program, is identified as
meeting the national need for improved health care. However, it
also provides a form of income security by paying for medical bills
and, hence, can also be identified as meeting the national need for
income security. A discussion of Federal programs based solely on
the functional classification system would have been limited to
discussion of each program, classified by major purposes served, in
only one category.
The national needs presentation can be found in Part 5 ("Meeting National Needs: the Federal Program by Function").
Types of funds.—Agency activities are financed through Federal
funds and through trust funds, both of which are included in the
budget.
Federal funds are of four types. The general fund is credited with
receipts not earmarked by law for a specific purpose, and is
charged with payments from appropriations of such receipts and
from general borrowing. Special funds contain Federal receipts

THE BUDGET SYSTEM AND CONCEPTS

345

earmarked for specific purposes, other than for carrying out a cycle
of operations. Public enterprise (revolving) funds finance a cycle of
business-type operations in which outlays generate collections, primarily from the public. Intragouernmental funds, including management and consolidated working funds, facilitate financing operations within and between Government agencies.
Trust funds are established to account for receipt and expenditure of moneys by the Government for use in carrying out specific
purposes and programs in accordance with the terms of a trust
agreement or statute. These moneys are not available for the general purposes of the Government. Within the category of trust
funds there is a special subcategory of trust revolving funds that
carry on a cycle of business-type operations.
Current expense and capital investment—The budget includes
spending for both current operating expenses and capital investment, such as the purchase of lands, structures, and equipment. It
also includes capital investment in the form of lending and the
purchase of investments. These categorizations of outlays are discussed in Special Analysis D.
BUDGET AUTHORITY AND RELATED TRANSACTIONS

Budget authority.—Government agencies—whether or not they
are included in the budget totals—are permitted to enter into
obligations requiring either immediate or future payment of money
only when they have been granted authority to do so by law. This
authority is usually provided as budget authority. (Collections specifically authorized to be credited to appropriation and fund accounts are also available for obligation.)
Budget authority permits obligations to be incurred. The
amounts of budget authority requested are determined by the
nature of the programs or projects being funded.
For activities for which the cost depends upon the program level
planned for a fiscal year, the amount of budget authority requested
covers the obligations expected to be incurred during the year.
Most of these Federal activities, such as operations and maintenance, entitlement programs and continuing research programs,
are fully funded on an annual basis.
For most projects that are separate and distinct units, particularly direct Federal major procurement and construction projects,
"full funding" is requested. That is, funds are requested to cover
the entire cost to complete the project at the time it is initiated,
regardless of the expected time of completion. In the past, an
exception to this policy has existed for water resources programs.
The administration is again proposing that funds for new water
resources projects cover the entire cost of those projects.
Budget authority usually takes the form of appropriations, which
permit obligations to be incurred and payments to be made. Some

346

THE BUDGET FOR FISCAL YEAR 1980

budget authority is in the form of contract authority, which permits
obligations in advance of appropriations and therefore requires a
subsequent appropriation or the collection of receipts to "liquidate"
(pay) these obligations. There is also authority to borrow; such
budget authority permits the use of borrowed money to incur obligations and make payments.
Since January 1976, it has not been in order for either House of
the Congress to consider any bill, with certain exceptions, that
provides new borrowing or contract authority unless that bill also
provides that such new spending authority will be effective only to
the extent or in such amounts as are provided in appropriations
acts.
Most appropriations for current operations are made available
for obligation only during a specified fiscal year (1-year appropriations). Some are for a specified longer period (multiple-year appropriations). Others, including most of those for construction, some
for research, and many trust fund appropriations, are made available for obligation until the objectives have been attained (no-year
appropriations).
When budget authority is made available by the Congress for a
specific period of time, any part that is not used for obligations
during that period expires and cannot be used later. Reappropriations—congressional actions to continue availability of unobligated
amounts that have expired or would otherwise expire—are counted
as budget authority in the year for which the availability is extended.
A rescission is a legislative action that cancels new budget authority or unobligated balances of budget authority prior to the
time the authority would otherwise have expired. Rescissions are
offset against new budget authority in arriving at the total of
budget authority for each year. A deferral is an executive branch
action or inaction—including the establishment of reserves under
the Antideficiency Act—that effectively delays the obligation or
expenditure of budget authority.
Most authority to obligate funds is granted year by year (current
authority). Under certain laws, some budget authority in Federal
funds and most budget authority in trust funds becomes available
from time to time without further action by the Congress (permanent authority).
The amount of budget authority is usually stated specifically in
the legislation that makes it available (definite authority). In some
cases the amount is left indefinite, to be determined by subsequent
circumstances (indefinite authority). Examples of the latter type
are the appropriation for interest on the public debt, and the trust
fund appropriation equal to receipts under the Federal Insurance
Contributions Act (social security).
Obligations incurred.—Following the enactment of budget authority, obligations are incurred by Government agencies. Such

THE BUDGET SYSTEM AND CONCEPTS

347

obligations include the current liabilities for salaries and wages,
certain contractual services, and interest; contracts for the purchase of supplies and equipment, construction and the acquisition
of land; contracts to make loans; and other contractual arrangements requiring the payment of money.
Outlays.—Obligations generally are liquidated by the issuance of
checks or the disbursement of cash; such payments are called
outlays. In lieu of issuing checks, obligations may also be liquidated
(and outlays occur) by the maturing of interest coupons in the case
of some bonds, or by the issuance of bonds or notes (or increases in
the redemption value of bonds outstanding). Outlays during a fiscal
year may be for payment of obligations incurred in prior years or
in the same year. Such outlays, therefore, flow in part from unexpended balances of prior year budget authority and in part from
budget authority provided for the year in which the money is
spent.3 Total budget outlays are stated net of deductions for offsetting collections (see collections below), and exclude outlays of offbudget Federal entities. Payments for tax credits in excess of tax
liabilities are treated as outlays rather than as an adjustment to
budget receipts.
Balances of authority.—Not all budget authority enacted for a
fiscal year is obligated and paid out in the same year. The obligated balance is that portion of the budget authority that has been
obligated but not yet paid. For example, in the case of salaries and
wages, 1 to 3 weeks elapse between the time of obligation and the
time of payment. In the case of major procurement and construction, up to several years may elapse. Obligated balances of budget
authority are carried forward until the obligations are subsequently paid. In addition, in multiple-year or no-year accounts, budget
authority that is still available for obligation (unobligated balances)
may be carried forward for obligation in the following year.4
Therefore, a change in the amount of budget authority for a
given year does not necessarily result in a similar change in either
the obligations incurred or the budget outlays of that same year. A
change in budget authority in any one year may have an effect on
obligations for 2 or more years, and may affect budget outlays for
an even longer period. In the case of standby budget authority,
obligations and outlays may never materialize.
Allocations between agencies.—In some cases, an agency may
share in the administration of a program for which appropriations
are made to another agency or to the President. This is made
possible by the establishment of allocations from the "parent" account, to which the appropriation was made. Obligations incurred
3
This process is depicted on a chart "Relation of Budget Authority to Outlays—1980 Budget" in Part 6 of this
volume.
4
Additional information on balances of budget authority is provided in a separate report. "Balances of Budget
Authority" that is prepared by OMB shortly after the budget is transmitted.

348

THE BUDGET FOR FISCAL YEAR 1980

through such allocations are included with the parent account in
the Budget (without separate identification) and in the Budget
Appendix (where the total obligations of each participating agency
are identified separately under the parent account).
COLLECTIONS

In general— Amounts collected during the year are classified
into two major categories:
• Budget receipts, which are compared with total outlays in
calculating the budget surplus or deficit.
• Offsetting collections, which are deducted from disbursements
in calculating total outlays. Corresponding offsets are made in
arriving at total budget authority and net obligations incurred.
Budget receipts.—These are collections from the public that
result from the exercise of the Government's sovereign or governmental powers and from contributions paid by participants in certain voluntary Federal social insurance programs. These collections, also called governmental receipts, consist primarily of tax
receipts and social insurance premiums, but also include receipts
from court fines, certain licenses, and deposits of earnings by the
Federal Reserve System. Gifts and contributions (as distinguished
from payments for services or cost-sharing deposits by State and
local governments) are also counted as budget receipts.
Offsetting collections.—These are collections from other Government accounts or from transactions with the public that are of a
business-type or market-oriented nature. They are classified into
two major categories: collections credited to appropriation or fund
accounts and offsetting receipts (that is, amounts deposited in receipt accounts). In general, the distinction between these two major
categories is that collections credited to appropriation or fund accounts normally can be used without appropriation action by the
Congress, whereas funds in receipt accounts cannot be used without being appropriated.
Collections credited to appropriation or fund accounts occur in
two circumstances:
• Reimbursements.—When authorized by law, amounts collected
for materials or services furnished (for example, amounts received from the public to pay expenses of providing information under the Freedom of Information Act) are treated as
reimbursements to appropriations. These collections are
netted in determining outlays from such appropriations.
• Revolving funds.—In the three types of revolving funds—
public enterprise, intragovernmental, and trust revolving—

THE BUDGET SYSTEM AND CONCEPTS

349

collections are netted against spending and outlays are reported as the net amount.
Offsetting receipts generally are deducted from budget authority
and outlays by function and/or subfunction, and by agency. Offsetting receipts are subdivided into two categories, as follows:
• Proprietary receipts from the public.—These are collections
from the public—deposited in receipt accounts of the general
fund, special funds, or trust funds—that arise out of the business-type or market-oriented activities of the Government (for
example, loan repayment, interest, sale of property and products, charges for nonregulatory services, and rents and royalties). Such collections are not counted as budget receipts, and,
with one exception, are offset against total budget authority
and outlays by agency and by function. The exception consists
of receipts from rents and royalties from Outer Continental
Shelf lands that are deducted from total budget authority and
outlays for the Government as a whole rather than from any
single agency or function.
• Intragovernmental transactions.—These are payments into receipt accounts from Federal appropriations or fund accounts.
They are treated as an offset to budget authority and outlays,
rather than as a budget receipt. Intragovernmental transactions may either be intrabudgetary (where the payment and
receipt both occur within the budgetary universe) or result
from receipts from off-budget Federal entities in those cases
where the payment is made by a Federal entity whose funds
are excluded from the budget totals. Normally, intragovernmental transactions are deducted from both the outlays and
the budget authority for the agency receiving the payment.
However, in two cases intragovernmental transactions are not
deducted from the figures of any agency or function. Instead,
intragovernmental transactions that involve agencies' payments (including payments by off-budget Federal entities) as
employers into employee retirement trust funds and the payment of interest to nonrevolving trust funds appear as special
deduct lines in computing total budget authority and outlays
for the Government.
Intrabudgetary transactions are further subdivided into
three categories: (1) interfund transactions, where the payment is from one fund group (either Federal funds or trust
funds) to a receipt account in the other fund group; (2) Federal intrafund transactions, in those cases where the payment
and receipt both occur within the Federal fund group; and (3)
trust intrafund transactions, in those cases where the payment and receipt both occur within the trust fund group.

350

THE BUDGET FOR FISCAL YEAR 1980

OTHER TRANSACTIONS
Borrowing and repayments.—Borrowing and debt repayment are
not treated as receipts or outlays; if they were, the budget could be
balanced simply by borrowing. This rule applies both to borrowing
in the form of public debt securities and to specialized forms of
borrowing—such as the sale of agency securities, the assumption of
military family housing mortgages, and certificates representing
participation in a pool of loans. However, some transactions that
otherwise would be treated as borrowing are required by law to be
treated as a sale of assets. This results in collections being credited
to an appropriation or fund account with a corresponding reduction
in outlays.
Exercise of the monetary power.—Seigniorage is the profit from
coining money; it is the difference between the value of coins as
money and their cost, including the cost of manufacturing. Seigniorage on coins arises from the exercise of the Government's
monetary powers and differs from receipts coming from the public,
since there is no corresponding payment by another party. Therefore, seigniorage is excluded from receipts and treated as a means
of financing a budget deficit, or as a supplementary amount to be
applied to reduce debt or to increase the cash in Treasury in the
years of a budget surplus. The increment (profit) resulting from the
revaluation of gold as a monetary asset is treated like seigniorage.
In recent years, the profit from the sale of gold was treated as a
proprietary receipt. However since the value of gold is determined
by its value as a monetary asset rather than as a commodity, the
budget now treats all of the profits on gold sales as a means of
financing rather than as an offsetting collection.
Liabilities in deposit fund accounts.—Accounts outside the
budget, known as deposit funds, are established to record certain
amounts held in suspense temporarily, or held by the Government
as agent for others (for example, savings accounts for military
personnel, State and local income taxes withheld from Federal
employees' salaries, and payroll deductions for the purchase of
savings bonds by civilian employees of the Government). Such
transactions affect Treasury's cash balances even though they are
not a part of the budget.
Exchange of cash,—The Government's deposits with the International Monetary Fund (IMF) are considered to be similar to cash
assets. Therefore, the movement of money between the IMF and
the Department of the Treasury is not in itself considered a receipt
or an outlay, borrowing or lending. In a similar manner, the holdings of foreign currency by the Exchange stabilization fund (ESF)
are considered to be cash assets. Changes in these holdings are
outlays only to the extent there is a realized loss, and offsetting

THE BUDGET SYSTEM AND CONCEPTS

351

collections only to the extent there is a realized profit on the
exchange.
Obligations to multilateral development banks.—Debt instruments
issued (in lieu of checks) in payment of subscriptions to multilateral development banks are not considered borrowing or outlays, but
remain a part of the obligated balances until they are cashed, at
which time they become outlays. These differ only in form, and not
in substance, from ordinary balances for unpaid obligations.
BASIS FOR BUDGET FIGURES
In general—Outlays are stated in terms of checks issued, including cash paid in lieu of checks, net of offsetting collections received.
The accrual basis is generally used for interest on the public debt
held by private investors; however, interest on the public debt held
by trust and other Government accounts was stated on a cash
basis. When debt securities are issued at a discount (or at a premium), the difference between the sales price and the redemption
value is treated as interest and is accrued evenly over time in the
account that issued the securities.
The budget totals include, for all 3 years, amounts for the administrative expenses of the Department of the Treasury's international affairs activities and interest received by the Exchange stabilization fund on investments in U.S. securities. These amounts were
formerly included under an Exchange stabilization fund presentation in the part of the budget appendix covering off-budget Federal
entities.
Data for 1978.— The 1978 column of this budget generally presents the actual transactions and balances as recorded in agency
accounts and as summarized in the central financial reports prepared by the Department of the Treasury.
Data for 1979.—All regular appropriation acts for 1979 have been
enacted. (The Energy and Water Development appropriations bill
was enacted by reference in a continuing resolution.) However, a
number of programs traditionally included in the Labor and
Health, Education, and Welfare appropriations were excluded due
to a lack of authorizing legislation. These were also included in the
continuing resolution, which is effective through September 30,
1979. Supplemental appropriations will be required in certain cases
for various pay raises, including those of October 1978 and additional amounts requested to meet previously unforeseen program
costs.
Where the word "enacted" is used with reference to 1979, as in
tables 1 and 5 of Part 9 of the Budget, the amount represents
budget authority already voted by the Congress. In the case of

352

THE BUDGET FOR FISCAL YEAR 1980

indefinite appropriations, the enacted sums include the amounts
likely to be required. Where the word "estimate" is used, the
amounts include enacted budget authority and requested supplementals.
Data for 1980.—This budget is complete as to the estimates for
1980. Part I of the Budget Appendix generally includes the proposed appropriation language for the various items identified in
the budget. However, in some instances, estimates are included in
the budget schedules without appropriation language for 1979 and
1980. For these, proposed legislation may be required, or the estimated amounts will be requested later when the requirements are
known. In certain tables of the budget, these items for later transmittal and the related outlays are separately identified. Estimates
of the total requirements for 1979 and 1980 include both the
amounts formally requested and the amounts planned for later
transmittal.
Data for 1981 and 1982.—To place more emphasis on longer term
objectives and plans consistent with the multi-year budget planning system, this budget presents 1981 and 1982 estimates in somewhat greater detail then previously. Data for 1981 and 1982 often
reflect specific Presidential policy determinations and are shown in
a number of budget tables.
Allowances.—Lump sum allowances are included in the tables to
cover possible additional changes, such as civilian pay increases
and contingencies. The allowance for civilian agency pay raises
includes an estimate of the additional amounts that will be required for pay raises anticipated in October 1979 for employees of
civilian agencies of the Government. A separate allowance for pay
raises is shown for the military and civilian employees of the
Department of Defense and is included in its figures. These increases could not be reflected in the various program appropriation
requests since the applicable detailed amounts have not yet been
determined.
The allowance for contingencies is shown separately as required
by the Congressional Budget Act. The estimates for relatively uncontrollable programs are zero because the probability of net decreases or net increases for such programs is believed to be equal.
The allowances for other requirements contains estimates for potential requirements related to for existing programs and for the
possible enactment of legislation not specifically provided for in the
budget, and estimates beyond 1980 also include an inflation allowance for nondefense purchases of goods and services.
Budget authority and outlays included in the allowance section
are never appropriated as undistributed allowances. These
allowances merely indicate the estimated budget authority and
outlays that may be appropriated subsequently by program.

PART 8

THE FEDERAL PROGRAM
BY AGENCY AND ACCOUNT

353

EXPLANATORY NOTE
This tabulation contains information on budget authority (BA) and outlays (O) for each appropriation and fund
account. The budget authority in this tabulation takes account of certain transfers between appropriations. All
budget authority items are current and definite appropriations except where otherwise indicated. In addition,
budget authority and outlay data for off-budget Federal
entities are presented at the end of this table.
Functional code numbers are shown for each account as
a cross reference to tables 12 and 13, where the figures are
summarized by functional classification. Types of funds in
the budget and the deduct entries at the end of each
chapter of this tabulation are explained in Part 7.
Congressional action in the appropriation process occasionally takes the form of a limitation on the use of a trust
fund or other fund, or of an appropriation to liquidate
contract authority. Amounts for such items, which do not
affect budget authority, are included here in parentheses
and identified in the stub column, but are not included in
the totals.
354

355

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
BUDGET ACCOUNTS LISTING (in thousands of dollars)
Account and functional code

1978
actual

1979
estimate

1980
estimate

Legislative Branch
Senate
Federal Funds
General and Special Funds:

Compensation and mileage of the
Vice President and Senators ....801
Appropriation, current
Outlays
Expense allowances of the Vice
President, Majority and Minority
Leaders and Majority and Minority
Whips
801
Appropriation, current
Outlays
Salaries, officers and employees..801
Appropriation, current
Outlays

BA
0

6,474
6,435

6,480
6,480

6,827
6,827

BA
0

55
26

25
25

45
45

101,888

125,122

100,095

116,082
'1,688
"6,019
122,101
* 1,688

125,122

Payments to widows and heirs of
deceased members of Congress
801

Appropriation, current
Outlays
Office of the Legislative Counsel of
the Senate
801
Appropriation, current

BA
0

238
238

793

815

899

Outlays
Senate policy committees
Appropriation, current

761

840

899

1,272

1,462

1,170

1.388
°74
1,462

BA
0

50
43

58
58

65
65

29,995

32,600

26,187

30,625
1,330
31,955

103

109

25,492

29,443

38,695

23,199

29,456

38,695

BA
0

27
25

6
6

7
7

BA
0

37
43

39
39

40
40

Outlays
Automobiles and maintenance
Appropriation, current
Outlays
Inquiries and investigations
Appropriation, current

801

Outlays
Folding documents

Outlays
Postage stamps
Appropriation, current
Outlays
Stationery (revolving fund)
Appropriation, current
Outlays

801

801
801

Public Enterprise Funds:

Senate restaurant fund (revolving
fund)
801
Outlays
See footnotes at end of table.

32,600

801

Appropriation, current
Outlays
Miscellaneous items
Appropriation, current

1,462

801

THE

356

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Legislative Branch—CONTINUED
Senate—CONTINUED
Federal Funds—CONTINUED
General and Special Funds:

Congressional use of foreign
currency, Senate
801
Appropriation, permanent

750

Public Enterprise Funds:

Recording studio

(revolving fund)
801

Outlays

-96

General and Special Funds:

Congressional use
currency, Senate
Outlays

foreign
801
0

Public Enterprise Funds:

Senate barber shops (revolving fund)
801
Outlays
Total Federal funds Senate

-29

166,424

194,969

206,621

158,208

194,969

206,621

House of Representatives
Federal Funds
General and Special Funds:

Payments to widows and heirs of
deceased members of Congress
801
Appropriation, current
Outlays
Compensation of Members
801
Appropriation, current
Outlays
Mileage of Members
801
Appropriation, current
Outlays
House leadership offices
801
Appropriation, current

BA
0

115
115

BA
0

27,760
27,547

27,699
27,699

27,690
27,690

BA
0

210
185

210
210

2,147

2,222

Outlays
Salaries, officers and employees..801
Appropriation, current

1,753

2,147
"75
2,008

24,324

29,673

Outlays
Committee employees
801
Appropriation, current
Outlays
Committee on Appropriations
(Studies and Investigations) ....801
Appropriation, current

24,102

26,408
*1,358
25,125

BA
0

24,705
22,795

24,705
22,234

2,776

2,895

2,950

2,000

26,706

°9
Outlays
Committee on the Budget (Studies)
801
Appropriation, current
Outlays
Office of the Law Revision Counsel
801
Appropriation, current
Outlays
See footnotes at end of table.

2,490

2,614

2,655

BA
0

261
157

261
235

277
249

410

465

389

435
14
406

418

357

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Legislative Branch—CONTINUED
House of Representatives—CONTINUED
Federal Funds—CONTINUED
General and Special Funds—CONTINUED

Office of the Legislative Counsel..801
Appropriation, current

1,751

1,879

1,987

1,363

1,751

1,788

112,648

118,308

109,828

112,648
D
5,142
106,011

58,584

62,377

Outlays
0
Stationery (revolving fund)
801
Appropriation, current
BA
Outlays
0
Special and select committees 801
Appropriation, current
BA

57,023

59,967
D
774
54,744

46,762
2,572
44,658

55,551
49,996

Outlays
Members' clerk hire
Appropriation, current

801

Outlays
Allowances and expenses
Appropriation, current

801

Outlays
New edition of the District of
Columbia Code
801
Outlays

106,477

56,139

2,854
2 237
40,563

39,172

113

-73

Public Enterprise Funds:

House of Representatives restaurant
fund (revolving fund)
801
Outlays
Recording studio (revolving fund)
801

Outlays
Beauty shop (revolving fund) 801
Outlays
Office of the attending physician
(revolving fund)
801
Outlays
Total Federal funds House of
Representatives.

BA
0

299,108
289,245

316,020
287,651

326,415
296,518

1,800

2,749

Outlays
0
Joint Committee on Atomic Energy
801
Outlays
0
Joint Committee on Printing
801
Appropriation, current
BA

1,337

2,353
D
70
2,423

656
"60
656
^60

744

Joint Items
Federal Funds
General and Special Funds:

Joint Economic Committee
Appropriation, current

801

Outlays
American Indian
Commission
Outlays
See footnotes at end ot table.

0
Policy

2,749

4 ....
1,117
689

Review
801
5

744

THE

358

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Legislative Branch—CONTINUED
Joint Items—CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

Joint Committee on Inaugural
Ceremonies of 1977
801
Outlays
Statements of appropriations, Senate
801
Appropriation, current
Joint Committee on Taxation
801
Appropriation, current

Outlays
Office of the Attending Physician.801
Appropriation, current
Outlays
General expenses, Capitol police..801
Appropriation, current
Outlays
Capitol Police Board
801
Appropriation, current

Outlays
Education of pages
Appropriation, current

2,315

2,375
*77

2,607

2,169

2,215

2,346

BA
0

344
360

465
418

459
413

BA
0

725
698

750
675

810
729

1,572

1,421

1,297

1,364

1,421

1,297

194

206
'28
C
11

242

194

217

242

801

Outlays

'28
Official mail costs
Appropriation, current
Outlays
Capitol Guide Service
Appropriation, current

801
BA
0

64,944
46,959

434

64,944
64,944

70,707
70,707

544

610

801

'20
D
29
Outlays

Statements of appropriations, House
of Representatives
801
Appropriation, current
Outlays
Joint Committee on Defense
Production
801
Outlays
Joint Committee on Congressional
Operations
801
Outlays
Total Federal funds Joint Items.

401

573
'20

610

BA
0

13
6

BA
0

73,457
54,185

74,022
73,656

80,238
79,843

10,400

10,800

13,586

9,835

"261
11,200

13,100

Congressional Budget Office
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

Outlays
See footnotes at end of table.

801

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

359

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1979
estimate

1978
actual

1980
estimate

Legislative Branch—CONTINUED
Architect of the Capitol
Federal Funds
General and Special Funds:
Office of the Architect of the Capitol:
Salaries
801
Appropriation, current

Outlays
Contingent expenses
Appropriation, current
Outlays
Capitol buildings
Appropriation, current

Outlays
Capitol grounds
Appropriation, current

3,055

2,045

2,485

3,020

BA
0
BA

210
100
6,468

210
210
8,541

6,299

210
440
6,157
C
167
"56
7,446

2,435

2,565
C
74

4,223

2,042

3,159

3,327

1 587

435

8,216

801

Extension of additional Senate Office
Building site
801
Outlays
Acquisition of property as a site for
parking facilities for the United
States Senate
801
Outlays
Plans for garage and related
facilities for the United States
Senate
801
Outlays
Senate garage
801
Appropriation, current

2,382

801

Outlays
Construction of an extension to the
New Senate Office Building
801
Appropriation, current
Outlays

Outlays

2,130

801

Outlays
West central front of the CapitoL801
Outlays
Master plan for future development
of the Capitol grounds and
related areas
801
Appropriation, current
Outlays
Acquisition of property as an
addition to the Capitol grounds
801
Outlays
Senate office buildings
801
Appropriation, current

See footnotes at end of table.

BA
0

100 .
3

180

36 ....

10,697

10,491

10,274
r
369
D
20
13,727

BA
0

11,744

"49,500
39,853

10,949

23,490
"20,920

78 ....

10,983

49 ....

0
BA

162

156

164
C
7
176

196
195

3g()

THE BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Legislative B r a n c h — C O N T I N U E D
Architect of the Capitol—CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

House office buildings
Appropriation, current

801

Outlays
Acquisition of property, construction,
and equipment, additional House
Office Building
801
Outlays
Installation of solar collectors in
House office buildings
801
Appropriation, current
Outlays
Capitol Power Plant
801
Appropriation, current

Outlays
Expansion of facilities, Capitol Power
Plant
801
Outlays
Modifications and
enlargement,
Capitol Power Plant
801
Outlays
Alterations and improvements,
buildings and grounds, to provide
facilities for the
physically
handicapped
801
Outlays
Structural and mechanical care,
Library buildings and grounds.801
Appropriation, current

Outlays

19,693

20,685

18,466
c
570
24,035

BA
0

'3,000
'300

20,391
20,138

'2,000

13,054

13,255
c
100

15,133

10,210

13,322

14,317

247

5,070

5,669

7,688

244

1,071

1,008

2,303

8,785

2,320

2,776
'425
C
95
3,077
'408

8,619
'17

Library of Congress James Madison
Memorial Building
801
Appropriation, current
Outlays

BA
0

7,675
27,229

22,720

3,681

Total Federal funds Architect of
the Capitol.

BA
0

64,927
100,256

110,745
139,000

71,517
127,795

85,151

90,343
'3,360
C
186
°3,134

108,293

81,099

Library of Congress

Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

503

Outlays
Copyright Office-. Salaries
expenses
Appropriation, current
Outlays
See footnotes at end of table.

98,065

106,833

'3,216

'144

8,561
"561
9,780

10,542

and
376
BA

8,560

8,360

10,461

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Legislative Branch—CONTINUED
Library of Congress—CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

National Commission on New
Technological Usage of
Copyrighted Works: Salaries and
expenses
376
Appropriation, current
Outlays
Congressional Research Service-.
Salaries and expenses
801
Appropriation, current

BA
0

520
463

23,041

22,057

28,854

Outlays
Collection and distribution of library
materials (special foreign currency
program)
503
Appropriation, current

23,049

3,441

Outlays
Furniture and furnishings
Appropriation, current

3,338

7,031

1,660

BA
0
BA
0

Outlays
Books for the blind and physically
handicapped: Salaries and
expenses
503
Appropriation, current

58
24,275
1,031
25,898

30,335

34,130
C
9
"106
35,812

36,948

3,474
D
M
3,930

3,902

29,857

35,348

4,028

503

Outlays
Payments to copyright owners
376
Appropriation, permanent
Outlays
Oliver Wendell Holmes devise fund
503
Appropriation, permanent
Outlays

5,060
^3,000
15,038
* 1,500

2,880
11,460
' 1,500

6,465

16,491
5,885

16,898
15,796

13
20

19
20

291

-1,746

-4

5,072
5,209

Intragovernmental Funds:

Consolidated working fund
503
Outlays
Trust Funds
Gift and trust fund accounts,
non-revolving
503
Appropriation, permanent
Outlays

BA
0

6,283
6,122

5,879
5,945

Total Federal funds Library of
Congress.

BA
0

163,066
140,317

193.751
197,456

Total Trust funds Library of
Congress.

BA
0

6.283
6,122

5,879
5,945

5,072
5,209

BA
0

12,952
41,714

11,476
18,724

19,541
15,222

209,817
215,443

Government Printing Office
Federal Funds
General and Special Funds:

Printing and binding
Appropriation, current
Outlays
See footnotes at end of table.

801

362

THE BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1979
estimate

1978
actual

1980
estimate

Legislative Branch—CONTINUED
Government Printing Office—COMTIMUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

Congressional printing and binding
801
Appropriation, current
Outlays
Office of Superintendent of
Documents-. Salaries and expenses
806
Appropriation, current
Outlays
Acquisition of site and general plans
and designs of buildings
806
Appropriation, current
Outlays
Project planning
806
Outlays

BA
0

71,674
50,142

68,529
67,861

76,212
75,512

22.045

23,037

23,613

23,200
"285
27,645

24,037
19,396
23,996

BA
0

Intragovernmentol Fund*:

Government Printing Office revolving
fund
806
Outlays
Total Federal funds Government
Printing Office.

BA
0

1,912
106,671
117,381

-22,289
103,490
91,982

-2,800
138,186
135,967

175,680

176,476
'5,500
"7,281
187,155
'5,300

206,763

9,391

General Accounting Office
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

801

169,507

Outlays..

205,893
'200

United States Tax Court
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current
Outlays
Construction
Outlays

752

8,188

7,954

8,715
"88
8,769

763

499

104
42
8,188
8,717
104
42

121
44
8,803
9,268
121
44

BA
0

United

BA
0

Total Trust funds United States
Tax Court.

BA
0

See footnotes at end of table.

9,333

752

Trust Funds
Tax Court judges survivors annuity
fund
602
Appropriation, permanent
Outlays
Total Federal funds
States Tax Court.

128
44
9.391
9,333
128
44

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

ggg

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978

1979

1980

actual

estimate

Legislative B r a n c h — C O N T I N U E D
Other Legislative Branch Agencies
Federal

Funds

General and Special Funds:

Commission on Security and
Cooperation in Europe: Salaries
and expenses
801
Appropriation, current
Outlays
Botanic Garden-. Salaries and
expenses
801
Appropriation, current
Outlays

Copyright Royalty Tribunal: Salaries
and expenses
376
Appropriation, current
Outlays
Cost-Accounting Standards Board:
Salaries and expenses
801
Appropriation, current
Outlays
Temporary Commission on Financial
Oversight of the District of
Columbia: Salaries and expenses
801
Appropriation, current

Outlays
Office of Technology Assessment:
Salaries and expenses
801
Appropriation, current
Outlays
Trust Funds
Office of Technology Assessment:
Contributions and donations....801
Appropriation, permanent,
indefinite.
Outlays
Total Federal funds Other
Legislative Branch Agencies.
Total Trust funds Other
Legislative Branch Agencies.

BA
0

347
324

521
478

550
534

1,371

1,392
C
56

1,473

1,308

1,432

1,465

BA
0

726
421

765
716

631
654

1,837

1,758

1,800

1,551

1,741

1,796

3,000

500

1,171

2,540

4,100

8,681

12,500

9,226

9,215
»196
11,303

BA
0
BA
0

15.962
14,001

1
16,903
18,210

3
0

12,504

5
-

5
17,454
21,053
5
5

Summary
Federal Funds:
(As shown in detail above)
Deductions for offsetting receipts:
Intrafund transactions
803

1,083,883

1,219,021

1,279,988

1,061,652

1,215,847

1,311,766

-385

-61

-1,826

-1,310

-40

BA1

0 I

Proprietary

receipts

public

See footnotes at end of table.

from

902

BA1

the

0 I
BA1

376

0 J

503

BA1
0 J

-6,465
-295

THE BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Legislative Branch—CONTINUED
Summary—CONTINUED
Federal Funds:—CONTINUED
801
Total Federal funds
Trust Funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the
public
503

902
Total Trust funds
Total Legislative Branch

BA1
0 J

-8,620

-6,589

-6,581

1,068,057

1,210,181

1,271,672

1,045,826

1,207,007

1,303,450

BA
0

6,390
6,163

6,005
5,994

5,205
5,258

BA1
0 I

-3,100

-3,400

-3,600

-109

-115

BA1
0 J
BA

3,181

2,490

1,490

2,954

2,479

1,543

1,071,238

1,212,671

1,273,162

1,048,780

1,209,486

1,304,993

9,690
»400
9,882

10,250

2,157

The Judiciary
Supreme Court of the United States
Federal Funds
General and Special Funds:
Salaries and expenses
Appropriation, current

752

Outlays
Care of the buildings and grounds
752
Appropriation, current
Outlays

8,691

8,074

1,588
890

1,450
<*6
2,486

BA
0

10,279
8,964

11,576
12,368

12,407
11,828

1,066

1,099

1,719

Total Federal funds Supreme
Court of the United States.

10,050

1,778

Court of Customs and Patent Appeals

Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

752
i>39

Outlays

1,036

1,132

2,985

2,893

3,055
»129
3,179

1,717

Customs Court
Federal Funds
General and Special Funds;

Salaries and expenses
Appropriation, current
Outlays
See footnotes at end of table.

75?
4,983
4,979

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

ggg

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

The Judiciary—CONTINUED
Court of Claims
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

752

Outlays

3,000

2,739

3,520
D
95
3,564

5,361

40,258
'3,550
40,150
"3,400

48,814

166,195
"5,690
"8,954
174,917
"5,581

196,532

24,800
"408
24,090

26,595

20,750
"4,000
26,100
"3,700

36,000

5,356

Courts of Appeals, District Courts, and other
Judicial Services
Federal Funds
General and Special Funds:

Salaries of judges
Appropriation, current

752

Outlays
Salaries of supporting personnel..752
Appropriation, current

Outlays
Defender services
Appropriation, current

Outlays
Travel and miscellaneous expenses
752
Appropriation, current
Outlays

Bankruptcy courts, salaries
expenses
Appropriation, current

Outlays
See footnotes at end of table.

38,069

156,900

154,801

48,550
'150

194,932
"109

24,000

21,815

23,250

19,288

27,600

25,407

17,500

16,858

34,000

33,134

87,200

84,099

25,771

35,420
"300

31,914
"7,229
33,052
"6,314

40,272

19,441
"50
D
296
19,450
"50

21,185

35,300
°1,358
36,119

67,818

39,972
"915

752

21,061

and
752

64,246

752

Outlays
Furniture and furnishings
Appropriation, current

Outlays

Outlays
Space and facilities
Appropriation, current

38,200

752

Outlays
Fees of jurors and commissioners
752
Appropriation, current..

Salaries and expenses
magistrates
Appropriation, current

98,400
"2,377
95,307
"2,377

125,928
120,322

752
BA

7,000

4,654

8,500
"8,505
7,764
"766

4,238
"4,613

THE BUDGET FOR FISCAL YEAR 1980

366

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1980
estimate

1979
estimate

The Judiciary—CONTINUED
Courts of Appeals, District Courts, and other
Judicial Services—CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

Speedy trial planning
752
Outlays
Pretrial services agencies, The
Judiciary
752
Appropriation, current
Outlays
Special rail reorganization court...752
Appropriation, current
Outlays
Services for drug dependent
offenders
752
Appropriation, current
Outlays
Total Federal funds Courts of
Appeals, District Courts, and
other Judicial Services.

0
BA
0

253

600
5,000
3,279

3,322

1,623

2,000
2,127

417,650
401,492

492,975
484,527

3,500
3,200
568,644
569,848

11,075

12,250
'338

15,879

10,457

12,193
'336

15,187
'2

BA
0

-93
11,075
10,364

41
13,087
12,570

15,879
15,189

6,749

8.025
'300

9,768

6,991

7,732
'300

9,180

BA
0

3,114
2,000

BA
0
BA
0

Administrative Office of the United States
Courts
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

752
BA

Outlays..
Intragovernmental Funds:

Consolidated working fund
Outlays

752
0

Total Federal funds
Administrative Office of the
United States Courts.
Federal Judicial Center
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

752

Outlays..

Bicentennial Expenses, The Judiciary
Federal Funds
General and Special Funds:

Bicentennial activities
Outlays
See footnotes at end of table.

806

235

375

100

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

The Judiciary—CONTINUED
Judiciary Trust Funds
Trust Funds
Judicial survivors' annuities fund
602
Appropriation, permanent
Outlays
Operation of the Public Defender
Service for the District of
Columbia
752
Outlays
Total Trust funds
Trust Funds.

BA
0

Judiciary

Summary
Federal Funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the
public
750
902

6,364
1,847

6,830
2,130

7,373
2,330

106

BA
0

6,364
1,953

6,830
2,130

7,373
2,330

BA
0

452,804
434,714

534,032
525,747

618,761
618,197

BA1
0 J

-1,466

-1,463

BA1

-77

-80

BA
0

451,261
433,171

532,489
524,204

617,218
616,654

BA
0

6,364
1,953

6,830
2,130

7,373
2,330

BA
0

457,625
435,124

539,319
526,334

624,591
618,984

0 J
Total Federal funds
Trust Funds:
(As shown in detail above)
Total The Judiciary

Executive Office of t h e President
Compensation of the President
Federal Funds
General and Special Funds:

Compensation of the President
Appropriation, current
Outlays

802
BA
0

250
250

16,415

18,210

16,572

16,711
"452
16,050

2,575
C
48
°60
2,683

2,957

The White House Office
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

802

Outlays

18,210

Executive Residence at the White House
Federal Funds
General and Special Funds:

Operating expenses
Appropriation, current

Outlays
See footnotes at end of table.

802
BA

2,236

2,338

2,957

THE BUDGET FOR FISCAL YEAR 1980

368

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

198C
estimate

Executive Office of the President—CONTINUED
Official Residence of the Vice President
Federal Funds
General and Special Funds:

Operating expenses
Appropriation, current
Outlays

802
BA
0

121
112

129
134

233
203

1,327

1,404

1,339

1,280
/>35
1,315

BA
0

2,018
2,024

2,042
2,037

2,075
2,078

2,854
2,829

3,026
3,026

3,126
3,126

Special Assistance to the President
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

802

Outlays

1,361

Council of Economic Advisers
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current
Outlays

802

Council on Environmental Quality and Office
of Environmental Quality
Federal Funds
General and Special Funds:
Council on Environmental Quality
and Office of
Environmental
Quality
802
Appropriation, current
Outlays
Intragovernmental Funds:
Consolidated working fund
802
Outlays
Total Federal funds Council on
Environmental Quality and
Office of
Environmental
Quality.

BA
0

0
BA
0

-1,562

1,998

2,854
1,267

3,026
5,024

3.126
3,126

Council on International Economic Policy

Federal Funds
General and Special Funds:
Salaries and expenses
Outlays

802
0

91_

2,100

1,753

1,922

"4,108
1,753
"3,893

Council on Wage and Price Stability

Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

802
BA

"6,076
Outlays
See footnotes at end of table.

5,904
"215

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

ggg

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978

1979

1980

actual

estimate

Executive Office of the President—CONTINUED
Domestic Policy Staff
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

802

Outlays
National Security Council
Federal Funds

2,755

2,500
z>44
2,939

2,650

2,203

3,315

3,557

3,039

3,400
D
125
3,525

3,557

4,267

7,279

11,900

2,954

7,774

10,709

28,054

2,635

General and Special Funds:

Salaries and expenses
Appropriation, current

802

Outlays
Office of Administration
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

802

Outlays

°m

Office of Drug Abuse Policy
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current
Outlays

802
BA
0

342
433

27,481

27,738

28,200
D
844
30,226

2,890

3,000

1,561

3,000

*3,000
3,000

30,371
29,299

32,044
33,226

31,054
30,423

2,600

2,900

1,758

2,476
°37
2,992

Office of Management and Budget
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

802

Outlays
Office of Federal Procurement Policy:
Salaries and expenses
802
Appropriation, current
Outlays
Total Federal funds Office of
Management and Budget.

BA
0

27,423

Office of Science and Technology Policy
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current
Outlays
See footnotes at end of table.

802

3,400

THE BUDGET FOR FISCAL YEAR 1980

370

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Executive Office of the President—CONTINUED
Office of the Special Representative for
Trade Negotiations
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

802

2,751

4,173

2,665

"42
Outlays

2,638

RA
0

3,965
4,306

1047

0
0

2,023

4,228

2,845

Office of Telecommunications Policy
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current
Outlays

802
.
.

Special Action Office for Drug Abuse
Prevention
Federal Funds
General and Special Funds:

Salaries and expenses
Outlays
Special fund for drug abuse
Outlays

554
561 ...

554

Total Federal funds Special
Action Office for Drug Abuse
Prevention.
Summary
Federal Funds:
Total Executive Office of the
President.

BA
0

976

77,687
74,568

1,481

....

2,042 ....

83,264
88,490

90.565
89,256

Funds Appropriated to the President
Appalachian Regional Development Programs
Federal Funds
General and Special Funds:

Appalachian regional development
programs
452
Appropriation, current

112,400

135,700
F

Contract authority, current
Contract authority, permanent
Liquidation of contract authority,
current.
Outlays

BA
BA

21.000
180,000

-77
233,000

"134.600
224.000

(211,300)

(233,000)

260,964

281,000

296,000

711
313,400
261,675

1,900
368,623
282,900

1,000
358,600
297,000

Public Enterprise Funds:

Appalachian housing fund
Outlays
Total Federal funds
Appalachian Regional
Development Programs.
See footnotes at end of table.

452

BA
0

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

371

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Funds Appropriated to the President—CONTINUED
Disaster Relief
Federal Funds
General and Special Funds:

Disaster relief
Appropriation, current
Outlays

453

Summary
Federal Funds:
(As shown in detail above)
Deductions for offsetting receipts-.
Proprietary receipts from the
public
450
902
Total Disaster Relief-

BA
0

440,716
461,007

192,105
275 f 600

193,600
241,397

BA
0

440,716
461,007

192.105
275,600

193,600
241,397

BAl.
0 J

-300

BAl.
0 J

-22

BA
0

440,716
461,007

191,783
275,278

193,278
241,075

BA
0

1,000
154

1,000
1,000

427

179,800

83,375

BA
0

169,259

125,800
230,000
* 13,000

30,000

27,900

BA
0

21,763

5,705
25,000

31,000

1,449

500

497

675,850

654,500

569,549

555,000

Unanticipated Needs
Federal Funds
General and Special Funds:

Unanticipated needs
Appropriation, current
Outlays

802

Expenses of Management Improvement
Federal Funds
General and Special Funds:

Expenses of management
improvement
Outlays

802
0

Foreign Assistance
International Security Assistance
Federal Funds
General and Special Funds:

Military assistance
Appropriation, current

152
BA

Reappropriation
Outlays
International military education and
training
152
Appropriation, current

*110,200
180,000
'20,000

"32,900
Reappropriation
Outlays
Military assistance, South
Vietnamese Forces
Outlays
Foreign military credit sales
Appropriation, current
Outlays
See footnotes at end of table.

152
152
BA

"656,300
525,000

THE

372

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Funds A p p r o p r i a t e d to t h e P r e s i d e n t — C O N T I N U E D
Foreign Assistance—CONTINUED
International Security Assistance—CON.
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

Security supporting assistance 151
Appropriation, current, indefinite...

2,219,300

1,909,400

1,907,872

11,758
2,061,000

1,950,000

-701

-2,500

-2,000

*1,995,100
Reappropriation
Outlays

BA
0

Public Enterprise Funds:

Liquidation of foreign military sales
fund
152
Outlays
Trust Funds
Advances, foreign military sales...155
Contract authority, permanent
Liquidation of contract authority,
permanent.
Outlays
Summary
Federal Funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the
public
152
902

9,643,085
(8,445,172)

11,900,000
(9,500,000)

12,800,000
(10,600,000)

8,104,016

9,400,000

10,600,000

BA
0

3.104,950
2,669,191

2,818,438
2,882,000

2.794,500
2,704,497

BA1
0 J

-250,681

-217,000

-210,800

BA1

-73,707

-80,000

-84,200

BA
0

2,780,562
2,344,803

2,521,438
2,585,000

2,499,500
2,409,497

BA
0

9,643,085
8,104,016

11,900,000
9,400,000

12,800,000
10,600,000

BA1
0 J

-8,445,172

-9,500,000

-10,600,000

BA
0

1,197,913
-341,156

2,400,000
-100,000

2.200,000

BA
0

3,978,475
2,003,647

4,921,438
2,485,000

4,699,500
2,409,497

BA
0

380,000
38,000

163,079
16,308

1,025,777
102,578

BA
0

800,000
323,325

1,258,000
421,000

1,092,000
525,000

0 I
Total Federal funds
Trust Funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the
public
155
Total Trust funds
Total International
Assistance.

Security

International Development Assistance
Multilateral Assistance

Federal Funds
General and Special Funds:

Contribution to the International
bank for reconstruction and
development
151
Appropriation, current
Outlays
Contribution to the International
development association
151
Appropriation, current
Outlays
See footnotes at end of table.

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

373

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Funds Appropriated to the President—CONTINUED
Foreign Assistance—CONTINUEO
International Development Assistance—COM.
Multilateral Assistance—CONTINUED

Federal

Funds—CONTINUED

General and Special Funds:—CONTINUED

Contribution to the International
finance corporation
151
Appropriation, current
Outlays
Contribution to the Inter-American
development bank
151
Appropriation, current
Outlays
Contribution to the Asian
development bank
Appropriation, current

BA
0

38,000
38,000

40.045
22,299

33.448
22,299

480.000

763.728

381,722

356,400

150.277
"862,302
321,900

217.500

265.000

151
308.215
"111,250
49,007

Outlays
Contribution to the African
development fund
151
Appropriation, current

67,171

40,800

10,000

25,000

Outlays
Payment to the International Fund
for Agricultural Development....151
Outlays
International organizations and
programs
151
Appropriation, current, indefinite...

10,000

1,000

Ml,667
2,000

19,600

20,400

40,000

240,250

260,000

210,223

251,235

"277,190
271,763

BA
0

2.165,750
1,088,041

2.774,852
1,129,442

3,902,126
1,334,547

931,000

1,132,000

Outlays
Sahel development program
151
Appropriation, current, indefinite...

614,269

746,015

50,000

75,000

Outlays
Payment to the Foreign Service
retirement and disability fund .153
Appropriation, current
Indefinite
Outlays

2,131

17,941

BA
BA
0

24,220
24,220

'856
24,820
24,820
'856

American schools and hospitals
abroad
151
Appropriation, current, indefinite...

23,750

25,000

12,822

14,044

Outlays
Total Federal funds Multilateral
Assistance.
Bilateral Assistance

Federal Funds
General and Special Funds:

Functional development assistance
program
151
Appropriation, current, indefinite...

Outlays
See footnotes at end of table.

"1.333.879
895,263

"105,000
34,632

25,676
25,676

"15,000
14,783

THE BUDGET FOR FISCAL YEAR 1980

374

BUDGET ACCOUNTS LISTING (in thousands of dollar*)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Funds Appropriated to the President—CONTINUED
Foreign Assistance—CONTINUED
International Development Assistance—COM.
Bilateral Assistance—CONTINUED

Federal

Funds—CONTINUED

General and Special Funds:—CONTINUED

International disaster assistance. 151
Appropriation, current, indefinite... BA

56,500

35,000

46,716

9,634
60,574

213.000

254,000

206,620

248,884

"25,000
Reappropriation
BA
Outlays
0
Operating expenses of the Agency for
International Development 151
Appropriation, current, indefinite... BA
Outlays
0
Foundation for International
Technological Cooperation
151
Appropriation, current
BA
Outlays
0
Miscellaneous appropriations 151
Outlays
0

41,884

"268,000
264,469
'25,000
'6,250

46,298

31,916

17,215

60,359

40,024

30,115

4,481

2,391

1,755

-65,395

-42,764

-42,094

BA
0

6,511

10.000
10,274

15,964
14,724

Public Enterprise Funds:

Development loans—revolving fund
151
Outlays
Housing and other credit guaranty
programs
151
Outlays
Overseas Private Investment
Corporation
151
Outlays
Inter-American Foundation
151
Appropriation, current, indefinite...
Outlays
Intragovernmental Funds:

Advance acquisition of
property—revolving fund
151
Outlays
Office of the Inspector General of
Foreign Assistance
151
Outlays
Consolidated working fund
151
Outlays

103
102

139

3,129

14,287
6,467

10,468

15,000

BA
0
BA

1,298,470
962,366
14,287

1.566,310
1,155,114
10,000

1,813,519
1,304,672
15,000

6,467

10,468

15,000

3,464,220
2,050,407

4,341,162
2,284,556

5,715,645
2,639,219

Trust Funds

Miscellaneous trust funds
151
Appropriation, permanent,
indefinite.
Outlays
Total Federal funds Bilateral
Assistance.
Total Trust funds Bilateral
Assistance.

10,000

15,000

Summary
Federal Funds:

(As shown in detail above)
See footnotes at end of table.

BA
0

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

375

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

F u n d s A p p r o p r i a t e d to t h e

1979
estimate

1980
estimate

President—CONTINUED

Foreign Assistance—CONTIMUED
International Development Assistance—COM.
Summary—CONTINUED
Federal Funds:—CONTINUED
Deductions for offsetting receipts:
Proprietary receipts from the
BA1
public
150
0 J
151
902

-545

-145

BA1
0 J

-301,796

-314,447

-330,986

BA1

-217,234

-303,341

-354,808

BA
0

2,944,645
1,530,832

3,723,229
1,666,623

5,029,706
1,953,280

BA
0

14,287
6,467

10,000
10,468

15,000
15,000

-14,287

-10,000

-15,000

0 J
Total Federal funds
Trust Funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the
public
151

BA1
0 J

Total Trust funds

Total International Development
Assistance.

BA
0

-7,820

468

2,944,645
1,523,012

3,723,229
1,667,091

37,100

38,500

34,987

37,200

BA
0

5,000
3,627

3,000
2,871

1,318

BA
0

5,767,307
3,914,249

6,286,167
4,291,694

7,567,006
4,401,095

BA
0

1,197,913
-348,976

2,400,000
-99,532

2,200.000

5,029,706
1,953,280

International Narcotics Control Assistance
Federal Funds
General and Special Funds:

International narcotics control
Appropriation, current

151

Outlays

*37,800
37,000

Contingencies
Federal Funds
General and Special Funds:

President's foreign assistance
contingency fund
151
Appropriation, current, indefinite...
Outlays
Total Federal
Assistance.

funds

Total Trust funds
Assistance.

Foreign
Foreign

International Commodity Agreements
Federal Funds
General and Special Funds:

Investment in international tin buffer
stock
155
Appropriation, current
Outlays
See footnotes at end ot table.

BA
0

'60,000
'60,000

THE BUDGET FOR FISCAL YEAR 1980

376

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Funds Appropriated to the President—CONTINUED
International Monetary Programs
Federal Funds
General and Special Funds:

Supplementary financing facility, IMF
155
Appropriation, current

1,831.640

Israel-United States Binational Agreements
Federal Funds
General and Special Funds:

Israel-United States binational
agricultural research and
development fund
352
Appropriation, current
Outlays

40.000
40,000

BA
0

Petroleum Reserves
Federal Funds
General and Special Funds:

Petroleum reserves:
(Energy supply)
(Outlays)

271

Summary
Federal Funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the
public
271

Total Petroleum Reserves..
Summary
Federal Funds:
(As shown in detail above)..

354,445

45,917

168,000

354,445

45,917

168,000

-mm

192,813

-861,553

0 J
BA1
0 J
BA
0

151
152
271

-192,813

192,813
238,730

24,659
192,659

7,366,386
5,835,540

9,694,468
5,912,471

9,101.145

BA1
0 J

-545

-145

BA1
0 J
BA1
0 J
BA1
0 J

-301,796

-314,447

-330,986

-250,681

-217,000

-210,800

-192,813

192,813

-861,553

BA1
0 J

Total Federal funds
See footnotes at end of table.

886,212

161,632

BA
0

Deductions for offsetting receipts:
Proprietary receipts from the
public
150

450

BA1.
0 J

902

-290,941
BA1
0 I
BA " 6,329,610
0
4,798,764

6,089,431

886,212

-300

-383,363

-439,030

8,972,026

8,144,543

5,190,029

5,132,829

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

377

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Funds Appropriated to the President—-CONTINUED
Summary—CONTINUEO
Trust Funds:
(As shown in detail above)

6A
0

Deductions for offsetting receipts:
Proprietary receipts from the
public
151
155

BA1
0 I
BA1
0 I

9,657,372
8,110,483

11,910,000
9,410,468

12,815,000
10,615,000

-14,287

-10,000

-15,000

-8,445,172

-9,500,000

-10,600,000

Total Trust funds

BA
0

1,197,913
-348,976

2,400,000
-99,532

2,200,000

Total Funds Appropriated to the
President.

BA
0

7,527,523
4,449,788

11,372,026
5,090,497

10,344,543
5,132,829

Department of Agriculture
Office of the Secretary
Federal Funds
General and Special Funds:

Office of the Secretary
Appropriation, current

352

Outlays

4,349

3,493

4,291
"105
4,299

4,534

18,511
C
17
"491
18,617

20,909

4,437

Departmental Administration
Federal Funds
General and Special Funds:

Departmental administration
Appropriation, current

352

Outlays

15,590

14,250

-5,333

-3,253

BA
0

15,590
5,664

19,019
18,617

20,909
20,509

29,780

34,151

28,921

31,669
"557
c
303
31,959

20,509

Intragovernmental Funds:

Working capital fund
352
Outlays
Miscellaneous consolidated working
funds
352
Outlays
Total Federal funds
Departmental Administration.
Office of the Inspector General
Federal Funds
General and Special Funds:

Office of the Inspector General
Appropriation, current

Outlays
See footnotes at end of table.

352

33,573

THE

378

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Agriculture- -CONTINUED
Office of the General Counsel
Federal Funds
General and Special Funds:

Office of the General Counsel
Appropriation, current

352

10,022

10,251

11,305

9,919

10,409

11,113

338,132

344,872

Reappropriation
Outlays
Scientific activities overseas (special
foreign currency program)
352
Appropriation, current
Outlays
Cooperative research
352
Appropriation, current
Outlays
Extension activities
352
Appropriation, current
Outlays
Technical information systems 352
Appropriation, current

BA
0

2,000
310,055

338,416
C
1,479
D
8,571
2,000
323,368

BA
0

5,750
7,504

5,750
6,900

7,500
7,100

BA
0

143,148
134,724

174,395
157,850

178,317
157,621

BA
0

269,058

275,399
250,409

259,227

Outlays
Buildings and facilities
Appropriation, current
Outlays
Library facilities
Outlays

Outlays
Science and Education Administration
Federal Funds
General and Special Funds:

Agricultural research
Appropriation, current

352

251,739

7.835

35.720
5,650

18,275

7.109
6,349
BA
0
352

232,656

7,527
"200
7,293

352

310,190

7,317

2,267

249

1.650

1,500

Intragovernmental Funds:

Consolidated working fund
352
Outlays
Trust Funds
Miscellaneous contributed funds..352
Appropriation, permanent,
indefinite.
Outlays
Science

BA
0

846
765,197
712,651

976
849,457
751,719

976
797,751
733,159

Total Trust funds Science and
Education Administration.

BA
0

1,650
846

1,500
976

80,112
C
A
2,962
82,711

87,903

Total Federal funds
and Education
Administration.

Economics, Statistics, and Cooperatives

Service
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

352
BA

6,751

Outlays
See footnotes at end of table.

5,704

87,536

379

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1979
estimate

1978
actual

Department of Agriculture—CONTINUED
Economics, Statistics, and Cooperatives
Service—CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

Statistical Reporting Service
Appropriation, current
Outlays
Economic Research Service
Appropriation, current
Outlays
Trust

352

BA
0

38,711
39,587
31,721
28,844

101

BA
0
352

Funds

Miscellaneous contributed funds..352
Appropriation, permanent,
indefinite.
Outlays
Total Federal funds Economics,
Statistics, and Cooperatives
Service.

BA
0

63
77,183
74,135

137
83,078
82,711

122
87,903
87,536

Total Trust funds Economics,
Statistics, and Cooperatives
Service.

BA
0

88
63

101
137

101
122

1.005

1.009

1.045

396

1,131

995

46.559

54,929

43,481

53.397
D
570
51,867

640
46,559
44,121

500
53.967
52,367

500
54.929
54,340

271
59

447
646

2.964
2,964

World Food and Agricultural Outlook and
Situation Board
Federal Funds
General and Special Funds:

World food and agricultural outlook
and situation board
352
Appropriation, current

Outlays

Foreign Agricultural Service
Federal Funds
General and Special Funds:

Foreign Agricultural Service
Appropriation, current

352

Outlays
Salaries and expenses (special
foreign currency program)
352
Outlays
Total Federal funds Foreign
Agricultural Service.

BA
0

53,840

Office of International Cooperation and
Development
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current
Outlays

352
BA
0

Intragovernmental Funds:

Consolidated working fund
Outlays
See footnotes at end of table.

151
0

3,611

THE BUDGET FOR FISCAL YEAR 1980

380

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Agriculture—CONTINUED
Office of International Cooperation and
Development—CONTINUED
Trust

Funds

Miscellaneous contributed funds ..352
Appropriation, permanent,
indefinite.
Outlays
Total Federal funds Office of
international Cooperation
and Development.
Total Trust funds Office of
International Cooperation
and Development.

234

5,500

5,547

0
BA
0

-195
271
3,670

6,341
447
646

5,547
2,964
2,964

BA
0

234
-195

5,500
6,341

5,547
5,547

BA
0

922,885
808,239

805,900
1,054,864

719,476
993,200

114,646

-248,964

-273,724

922,885
922,885

805,900
805,900

719,476
719,476

227,986
215,124
-1

227,527
229,991

190,586
185,870

BA
BA

36,600
190,000
(165 000)

190,000

125,000

(190 000)

264,949

231,700

118,600

BA
0

10,000
6,210

10,000
7,100

7,100

Foreign Assistance Programs
Federal Funds
General and Special Funds:

Expenses, Public Law 480, foreign
assistance programs, Agriculture
151
Appropriation, current
Outlays
:
Increase (-) or decrease in amount
owed by the Public Law 480
account to the Commodity Credit
Corportation
351
Outlays
Total Federal funds Foreign
Assistance Programs.

Agricultural Stabilization and Conservation
Service
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current
Outlays
Sugar Act program
Outlays
Agricultural conservation

351
BA
0
351
0
program
302

Appropriation, current
Contract authority, current
Liquidation of contract authority,
current.
Outlays
Water Bank program
302
Appropriation, current
Outlays
Cropland adjustment program
351
Outlays
Emergency conservation program.453
Appropriation, current
Outlays
Dairy and beekeeper indemnity
programs
351
Appropriation, current
Outlays

-30

BA
0

30,000
15,496

10,000
25,000

20,000
25,000

BA
0

4,050
4,410

3,240
3,240

400
400

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

BUDGET ACCOUNTS LISTING (in thousands of dollore)—Continued
Account and functional code

1978
actual

D e p a r t m e n t of

1979
estimate

1980
estimate

Agriculture—CONTINUED

Agricultural Stabilization and Conservation
Service—CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

Forestry incentives program
Appropriation, current
Outlays

302

Total Federal funds Agricultural
Stabilization and
Conservation Service.

BA
0

15,000
16,265

15,000
15,661

10,000
17,145

BA
0

513,636
522,423

455.767
512,692

345,986
354,115

11,986

12,000

11,282

12,000

12,000
'-12,000
12,000
'-12,000

BA
0

50,000
46,154

9,496

Federal Crop Insurance Corporation
Federal Funds
General and Special Funds:

Administrative and operating
expenses
351
Appropriation, current
Outlays
Public Enterprise Funds:

Federal Crop Insurance Corporation
fund
351
Appropriation, current, indefinite...
Outlays
Limitation on administrative and
operating expenses.

(12,669)

8,126
'-13,557
(13,557)

^(560)
Total Federal funds Federal
Crop Insurance Corporation.

BA
0

61,986
57,436

12,000
21,496

BA
BA
0

524,342

990,900
5,500,000
4,737,007
'271,284
(50,100)

3.056,189

-5,431

Commodity Credit Corporation
Support and Related Activities

Federal Funds
Public Enterprise Funds:

Price support and related programs:
Reimbursement for net realized
losses
351
Appropriation, current
Authority to borrow, current
Outlays
Limitation on
expenses.

administrative

5,623,347
(45,750)

2,511,320
'127,138
(50,700)
^(66,004)

Total Federal funds Support
and Related Activities.

BA
0

524.342
5,623,347

6,490,900
5,008,291

3,056,189
2,638,458

10,428

33,038

39,462

33,038

39,462

42,559

Special Activities

Federal Funds
General and Special Funds:

National Wool Act (special fund)..351
Appropriation, permanent,
indefinite.
Outlays
See footnotes at end of table.

280-000

O—79—25

THE

382

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of A g r i c u l t u r e — C O N T I N U E D
Commodity Credit Corporation—CONTINUED
Special Activities—CONTINUED

Fee/era/ Funds—CONTINUED
Intragovernmental Funds:

Increase or decrease (-) in amount
owed to the Corporation by the
Public Law 480 account
351
Outlays

-114,646

248,964

273,724

Special

BA
0

10,428
-81,608

33,038
288,426

39,462
316,283

Total Federal funds Commodity
Credit Corporation.

BA
0

534,770
5,541,739

6,523,938
5,296,717

3,095,651
2,954,741

23,796

25,970

23,429

24,805
"756
25,449

BA
0

300,000
180,034

282,500
284,136

265,000
243,066

Total Federal funds
Activities.

Rural Electrification Administration
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

271

Outlays

26,574

Farmers Home Administration
Federal Funds
General and Special Funds:

Rural water and waste disposal
grants
452
Appropriation, current
Outlays
Rural development grants
452
Appropriation, current

Outlays
Rural development planning grants
452
Appropriation, current
Outlays
Salaries and expenses
452
Appropriation, current

10,000

10.000

10,000

9,904

12,472

10,016

BA
0

5.000

5,000
7,900

2,100

197,327

218,432

225.818

8
"6,805
Outlays
Rural community fire protection
grants.
452
Appropriation, current
Outlays
Rural housing for domestic farm
labor
604
Appropriation, current
Outlays
Mutual and self-help housing
604
Appropriation, current
Outlays
Rural- housing supervisory assistance
grants
371
Appropriation, current
Outlays
Very low income housing repair
grants
604
Appropriation, current
Outlays
See footnotes at end of table.

188,037

223,926

225,495

BA
0

3,500
2,664

3,500
4,309

1,303

BA
0

7,500
6,228

33,000
8,356

25,000
9,989

BA
0

9,000
4,471

13,500
8,427

5,000
7,763

2,500
2,500

1,200
1,200

19,000
19,003

24,000
23,900

BA
0
BA
0

9,000
8,688

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of A g r i c u l t u r e — C O N T I N U E D
Farmers Home Administration—CONTINUED
Federal Funds—CONTINUED
Public Enterprise Funds:

Self-help housing land development
fund
371
Appropriation, current
Outlays
Rural housing insurance fund
371
Appropriation, current
Indefinite
Appropriation, permanent,
indefinite.
Authority to borrow, current
Authority to borrow, permanent,
indefinite.
Outlays
insurance fund
351
Appropriation, current, indefinite...
Authority to borrow, permanent,
indefinite.
Outlays
Rural development insurance fund
452
Appropriation, current, indefinite...
Authority to borrow, permanent,
indefinite.
Outlays
Community Services loan fund 452
Outlays

BA
0

242

BA
BA

329,806

726

BA
BA

338,457

1,000
704
320,192
46,861
'30,000
455

-40
320,209
136,580
179

'954,960
469.167

1,193,197

449,087

184,971
'30,000

331,080
'30,000

BA
BA

164,735
343,818

143,565

272,809

653,451

-383,398

187,123

BA
BA

75,547
375,019

107,276
355,370

91,874
12,220

136,620

132,952

-8,148

Agricultural credit

Total Federal funds Farmers
Home Administration.

-1,605

250

696

BA
0

2,169,435
1,637,821

3,023,091
536,508

2,583,086
1,065,543

250.111

253,902

242,466

255,466
"8,587
282,069

Soil Conservation Service
Federal Funds
General and Special Funds:

Conservation operations
Appropriation, current

302

Outlays
Rural clean water program
Appropriation, current
Outlays
River basin surveys and
investigations
Appropriation, current

BA
0

Outlays
Watershed and flood
operations
Appropriation, current
Outlays
See footnotes at end of table.

75,000
6,660

301

Outlays
Watershed planning
Appropriation, current

256,342

304

16,456

16,487
°490

15,801

16,468

17,699

15,828

12,575

6,023

12,394

11,847
°446
13,695

269,270
174,628

169,607
257,875

184.908
211,864

301

6,482

prevention
301
BA
0

384

HE BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of A g r i c u l t u r e — C O N T I N U E D
Soil Conservation Service—CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED
Great plains conservation program
302
Appropriation, current
BA
Outlays
Resource conservation
development
Appropriation, current

22,069

18,288
"401
22,734

8,426

21,881

21,005

31,959

25,000
D
441

2,943

30,321

37,967

6,467

808

1,092

1,050

1,208

1,380

950

143

120

and
302

Outlays
Trust Funds
Miscellaneous contributed funds:
(Water resources)
301
(Appropriation, permanent,

indefinite).
(Outlays)
(Conservation and land
management)
302
(Appropriation, permanent,

indefinite).
(Outlays)

120

Total Miscellaneous contributed
funds.

BA
0

951
1,328

1,212
1,500

1.100
1,000

Total Federal funds Soil
Conservation Service.

BA
0

602,440
498,158

507,060
632,039

547,003
524,648

Total Trust funds Soil
Conservation Service.

6A
0

951
1,328

1,212
1,500

1,100
1,000

208,427

232,315
D
5,178

220,976

200,338

237,191

198,846

-327

520

1,035

3,109

Animal and Plant Health Inspection Service
Federal

Funds

General and Special Funds:
Animal and Plant Health Inspection
Service
352
Appropriation, current

Outlays
Animal quarantine station
Outlays
Trust

352

Funds

Miscellaneous trust funds
Appropriation, permanent,

352

indefinite.
Outlays

767

3,109

3,659

Total Federal funds Animal and
Plant Health Inspection
Service.

BA
0

208,427
200,011

237,493
237,711

220,976
198,846

Total Trust funds Animal and
Plant Health Inspection
Service.

BA
0

1JD35
767

3J09
3,109

3^659
3,659

See footnotes at end of table.

3,659

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978

1979

1980

actual

estimate

Department of Agriculture—CONTINUED
Federal Grain Inspection Service
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current
Outlays

352
BA
0

17,460
14,948

22,680
22,680

23,372
23,372

0
BA
0

-3,675
17,460
11,273

1,675
22,680
24,355

1,675
23,372
25,047

43,039

50,707

42,221

46,502
»1,352
47,704

BA
0

1,600
566

1,600
2,627

1,736

1,621

1,815

1,880

1,536

200

-126

429

200

Public Enterprise Funds:

Inspection

and weighing

services
352

Outlays
Total Federal funds Federal
Grain Inspection Service.
Agricultural Marketing Service
Federal Funds
General and Special Funds:

Marketing services
Appropriation, current

352

Outlays
Payments to States and possessions
352
Appropriation, current
Outlays
Perishable Agricultural Commodities
Act fund
352
Appropriation, permanent,
indefinite.
Outlays
Trust Funds
Miscellaneous trust funds
352
Appropriation, permanent,
indefinite.
Outlays
Milk market orders assessment fund
351
Outlays

50,557

1,682

Total Federal funds Agricultural
Marketing Service.

BA
0

46,375
44,602

51,075
52,211

52,328
52,437

Total Trust funds Agricultural
Marketing Service.

BA
0

1,536
1,556

200
429

200
200

269,040

279,930

261,997

271,104
"10,677
281,085

364,600

223,191

314,842

272,910

319,825

297,966

Food Safety and Quality Service
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

554

Outlays
Funds for strengthening markets,
income, and supply (section 32)
604
Appropriation, permanent,
indefinite.
Outlays
See footnotes at end of table.

278,403

ggg

THE BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Agriculture—CONTINUED
Food Safety and Quality Service—CON.
Trust

Funds

Expenses and refunds, inspection
and grading of farm products .352
Appropriation, permanent,
indefinite.
Outlays
Total Federal funds Food Safety
and Quality Service.
Total Trust funds Food Safety
and Quality Service.

47,953

51,074

53,772

0
BA
0
BA
0

46,107
633,640
534,907
47,953
46,107

50,950
504,972
600,910
51,074
50,950

53,420
594,772
576,369
53,772
53,420

69,821

84,422

66,851

75,141
"2.149
80,540

83,356

5,618,381

5,770,581

6,926,520

Food and Nutrition Service
Federal

Funds

General and Special Funds:
Food program administration
Appropriation, current
Outlays
Food stamp program
Appropriation, current

604

604
BA

Outlays

Special milk program
Appropriation, current

6,876,600

604

Outlays
Child nutrition programs
Appropriation, current

5,498,775

'245,000
F
-303
6,075,700
'245,000

155,000

142,000

32,000

138,596

139,900

32,000

1,486,734

1,285,535

604
BA

1,450,218
J

Appropriation, permanent
Outlays
Special supplemental food programs
(WIC)
604
Appropriation, current
Outlays
Food donations program
604
Appropriation, current
Outlays
Total Federal funds Food and
Nutrition Service.

-357,600

BA
0

1,014,557
2,526,732

1,411,575
2,669,300

1,711,083
3,022,434
•'-357,600

BA
0

247,000
370,569

569,500
538,800

771,500
730,200

61,400

90,290

51,686

57,800
'24,901
57,800
'24,536

BA
0

8.652,893
8,653,209

90,290
'365

9,583,879 " 10,708,433
9,831,576
10,477,645

Forest Service
Federal

Funds

General and Special Funds:
Forest management, protection and
utilization
302
Appropriation, current

Outlays
See footnotes at end of table.

911,592

782,379

847,026

889,430

'60,000
D
28,759
848,961
'57,600

750,928
'2,400

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

387

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Agriculture—CONTINUED
Forest Service—CONTINUED

Federal Funds—CONTINUED
General and Special Funds:—CONTINUED
Construction and land acquisition
302
Appropriation, current
BA
Outlays
Youth Conservation Corps
Appropriation, current
Outlays
Forest roads and trails
Appropriation, current

65,719

BA
0

60,000
63,099

187,224

279,311
D
442
204,524

335.547
207,331

302

Liquidation of contract authority,
current.
Outlays
Other general appropriations
302
Outlays
Acquisition of lands for national
forests, special acts
302
Appropriation, current
Outlays
Acquisition of lands to complete
land exchanges
302
Appropriation, current, indefinite...
Outlays
Rangeland improvements
302
Appropriation, current, indefinite...
Outlays
Construction and operation of
recreation facilities
303
Appropriation, current, indefinite...
Outlays
Timber salvage sales
302
Appropriation, current
Appropriation, permanent,
indefinite.
Outlays
Rights of way
302
Appropriation, current
Outlays
Forest Service
permanent
appropriations
302
Appropriation, permanent,
indefinite.
Outlays
Forest Service
permanent
appropriations
852
Appropriation, permanent,
indefinite.
Outlays
Intragovernmental Funds:
Working capital fund
302
Outlays
Consolidated working fund
302
Outlays
See footnotes at end of table.

253,208

60,000
69,982
224,275
"9,489

6,000

(78,781)

160,031

174,928

192,674

282

BA
0

165
88

385
358

325
325

BA
0

239
239

155
155

BA
0

5,200
2,829

5,400
5,826

5,900
4,135

BA
0

4,084
3,227

3,459
4,129

3,850
2,850

BA
BA

8,397

3,000
14,228

11,000

4,904

10,025

8,070

100
100

BA
0

120,908

124,654

150,724

101,590

106,237

138,040

225,805

240,593

283,458

225,702

240,593

283,458

-6,955

8,963

3,803

ggg

THE BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Agriculture—CONTINUED
Forest Service—CONTINUED
Trust Funds
Cooperative work
302
Appropriation, permanent,
indefinite.
Outlays
Highland scenic highway
401
Appropriation, current
Outlays

87,830

105,002

96,609

77,261

78,174

84,980

BA
0

1,500
5,732

3,050

3,869

Forest

BA
0

1,776,621
1,426,474

1,901,360
1,745,333

1,680,389
1,563,723

Total Trust funds Forest Service

BA
0

89,330
82,993

105,002
81,224

96,609
88,849

17,114,320

24.709,316

21,612,933

20,957,337

21,276,755

19,482,359

-35,204

-188,350

-233,355

Total Federal
Service.

funds

Summary
Federal Funds:
(As shown in detail above)
Deductions for offsetting receipts:
Intrafund transactions
302

BA1

0 J
Proprietary
public

receipts

from

the
270

BA1
0 J

-2

300

BA1
0 J

-361,374

-379,606

-445,325

302

BA1
0 J

-201,164

-477,839

-387,115

14,017

-2,806

1,577

-23

-4

-69

350

BA1

0 I
450
550

BA1
0 J
BA1

0 I
600

BA1
0 J

1,239

-319

902

BA1
0 J

-209

-189

-190

16,533,196

23,660,115

20,543,731

20,376,213

20,227,554

18,413,157

BA
0

142.777
133,465

167.698
144,666

162,488
153,773

BA1
0 J

-87,830

-105,002

-96,609

BA1

-53,447

-62,696

-65,879

Total Federal funds
Trust Funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the
public
302
352

0I
Total Trust funds

BA
0

Total Department of Agriculture

BA
0

1,500

-7,812

-23,032

-8,715

16.534,696
20,368,401

23,660.115
20,204,522

20.543.731
18,404,442

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

339

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Commerce
General Administration
Federal Funds
General and Special Funds:

Salaries and expenses ,
Appropriation, current

376

Outlays
White House conference on balanced
national growth and economic
development
376
Appropriation, current
Outlays
Special foreign currency program.376
Outlays
Participation in United States
expositions
376
Appropriation, current
Outlays

21,879

22,741

24,900
C
2
°778
25,826

26,612

490

25,902

BA
0

750
718

309

472

BA
0

135

'200
174
'200

-687
200
170
25,880
25,985
200
170

200
170
26,612
26,392
200
170

49.286
"1,837
50,821

55,632

196,800
"5,398
161,514

630,974

Intragovernmental Funds:

Working capital fund
Outlays
Consolidated working fund
Outlays
Trust

376
376

Funds

Miscellaneous trust funds
Appropriation, permanent
Outlays

376

Total Federal funds General
Administration.

BA
0

Total Trust funds
Administration.

BA
0

154
101
22.629
23,995
154
101

47,614

45,622

82,848

67,637

2.213

BA
0

General

Bureau of the Census
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

376

Outlays
Periodic censuses and programs..376
Appropriation, current
Outlays
Intragovernmental Funds:

Consolidated working fund
Outlays
See footnotes at end of table.

376

55,247

520,387

390

THE BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Commerce—CONTINUED
Bureau of the Census—CONTINUED
Trust Funds
Special studies,
services, and
projects
376
Appropriation,
permanent,
indefinite.
Outlays

BA
0

6,362
6,000

Total Federal funds Bureau of
the Census.

BA
0

130,462
115,472

Total Trust funds Bureau of the
Census.

BA
0

6.362
6,000

14,110

13,882

235

154

6,961
6,961
253,321
212,335
6,961
6,961

7,301
7,301
686,606
575,634
7,301
7,301

Economic and Statistical Analysis
Federal

Funds

General and Special Funds:
Salaries and expenses
Appropriation, current

376

Outlays
Intragovernmental Funds:
Consolidated working fund
Outlays

16,430
"547
17,035

17,898

200

17,561

376

Trust Funds
Special studies,
services, and
projects
376
Appropriation,
permanent,
indefinite.
Outlays

Total Federal funds Economic
and Statistical Analysis.

BA
0

Total Trust funds Economic and
Statistical Analysis.

BA
0

152
14,110
14,117
154
152

200
16,977
17,035
200
200

200
17,898
17,561
200
200

Economic Development Assistance
Economic Development Administration
Federal

Funds

General and Special Funds:
Salaries and expenses
Appropriation, current
Outlays
Economic development
programs
Appropriation, current

452
42,667

29,391

29,300
"1,301
29,858

494,000

507,525

329,856

350,187

92,000
*624,375
501,635

3,788

38,232

452

Outlays
Drought assistance program
453
Outlays
Financial and technical assistance
376
Outlays
Job opportunities program
504
Outlays

28,285

assistance
452

Outlays
Local public works program
Appropriation, current

See footnotes at end of table.

BA
0

3,057,363

10,600
°387
2,050,985

319,199

132,594

16,848

5,000

263

1,000

954

11,560

15,786

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

391

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Commerce—CONTINUED
Economic Development Assistance—CON.
Economic Development Administration—COM.
Federal Fund's—CONTINUED
Public Enterprise Funds:

Economic

development

revolving

fund

452

Outlays

Total Federal funds Economic
Development Administration.

-33,009

-32,000

-33,000

BA
0

526,073
3,528,018

549,113
2,432,664

759,042
832,020

64,748

62,800

59,833

67,711

*74,005
70,157

43,999

41,963

43,758

Regional Action Planning Commissions
Federal Funds
General and Special Funds:

Regional development programs...452
Appropriation, current
Outlays
Trust Funds
Regional action planning
commissions
Appropriation, permanent,
indefinite.
Outlays

452

43,316

41,252

36,908

Total Federal funds Economic
Development Assistance.

0
BA
0

590,821
3,587,851

611,913
2,500,375

833,047
902,177

Total Trust funds Economic
Development Assistance.

BA
0

43,999
43,316

41,963
41,252

43,758
36,908

69,366

71,775

73,728
*11,480

65,841

"1,888
73,629

84,408

5,495

5,522

9,475

6,447

5,726

9,475

BA
0

49,397
54,542

57,965
53,000

58,783
56,248

14,364

13,847

13,500
°97
14,097

Promotion of Industry and Commerce
Industry and Trade Administration
Federal Funds
General and Special Funds:

Operations and administration
Appropriation, current

376

Outlays
Trust Funds
Miscellaneous trust funds
Appropriation, permanent,
indefinite.
Outlays

376

Minority Business Enterprise
Federal Funds
General and Special Funds:

Minority business development
Appropriation, current
Outlays

376

United States Travel Service
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current
Outlays
See footnotes at end of table.

376

392

THE BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Commerce—CONTINUED
Promotion of Industry and Commerce—CON.
United States Travel Service—CONTINUED
Federal
Funds—CONTINUED
Intragovernmental Funds:

Consolidated working fund
Outlays

376

-113

122 ...

14,364
13,734

13,597
14,219 ...

Total Federal funds Promotion
of Industry and Commerce.

BA
0
BA
0

Total Trust funds Promotion of
Industry and Commerce.

Total Federal funds United
States Travel Service.

133,127
134,117

145,225
140,848

143.991
140,656

BA
0

5,495
6,447

5,522
5,726

9,475
9,475

627,142

663.850

Science and Technology
national Oceanic and Atmospheric
Administration
Federal Funds
General and Special Funds:

Operations, research, and facilities
306
Appropriation, current

662,766
54,816

A
C

Indefinite
Outlays
Construction
Appropriation, current
Outlays
Coastal zone management
Appropriation, current

BA
0

817
636,529

1,427
°14,713
'363
800
670,830

BA
0

15.500
2,416

10,000

3,726

50,850

57.200

61,354
*4,624

800
707,676

306
302

'7,000
Outlays..
Promote and develop fishery
products and research pertaining
to American fisheries
376
Appropriation, current
Appropriation, permanent,
indefinite.
Outlays
Fishing vessel and gear damage
compensation fund
376
Appropriation, current
Indefinite
Outlays

27,647

43,098
'2,000

59,758
'5,000

BA
BA

12.984

12,436

'-23,000
23,000

6,608

13,947

BA
BA
0

'3,500

'2,800
Fishermen's contingency fund
Appropriation, current

15,400
•'-12,000

3,500
2,800
'700

376
BA

600
'600

Outlays

600
'600

See footnotes at end of table.

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

393

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Commerce—CONTINUED
Science and Technology—CONTINUEO
National Oceanic and Atmospheric
Administration-COHTfNUED
Federal
Funds—CONTINUED
Public Enterprise Funds:

Fisheries loan fund
376
Outlays
Fishermen's guaranty fund
376
Outlays
Coastal energy impact fund
452
Appropriation, current
Outlays
Federal ship financing fund, fishing
vessels
376
Outlays

-114

-279

BA
0

115,000 ..
383

-100

-100
11,193

4,043
54,043

-50

-292

-1999

10,838

12,000

Intragovernmental Funds:

Consolidated working fund
Outlays
Trust Funds
Miscellaneous trust funds
Appropriation, permanent,
indefinite.
Outlays

306

Total Federal funds National
Oceanic and Atmospheric
Administration.

BA
0

11,217
822,293
670,899

12,000
762,029
754,403

12,000
792,503
837,603

Total Trust funds National
Oceanic and Atmospheric
Administration.

BA
0

10,838
11,217

12,000
12,000

94,321

93,600

97,598

91,763

°2,985
95,746

96,368

73,801

Patent and Trademark Office
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

376

Outlays..
Science and Technical Research
Federal Funds
General and Special Funds:

Scientific and technical research and
services
376
Appropriation, current

72,531

84,370
C
459
2,281
78,918

BA
0

3.208
3,559

3,330
1,530

1,494

94,581

5,873
4,551

Outlays

95,687

Intragovernmental Funds:

Working capital fund
Appropriation, current
Outlays
Consolidated working fund
Outlays
See footnotes at end of table.

376

T H E

394

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of C o m m e r c e — C O N T I N U E D
Science and Technology—CONTINUED
Science and Technical Research—COM.
Trust Funds
Information products and services
376
Appropriation, permanent,
BA
indefinite.
Outlays
0

18,273

19,787

22,000

18,442

19,787

22,000

Total Federal funds Science
and Technical Research.

BA
0

77,009
77,584

90,440
80,448

100,454
100,238

Total Trust funds Science and
Technical Research.

BA
0

18,273
18,442

19,787
19,787

22,000
22,000

11,864
*541
°130
11,361
^500

18,762

18,000
12,769

23,705
15,805

30,535
24,630

42,467
33,110

national Telecommunications and
Information Administration
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

376

Outlays
Public telecommunications facilities,
planning and construction
376
Appropriation, current
Outlays

7,831

4,005

BA
0
7,831
4,005

17,264
HI

Total Federal funds National
Telecommunications and
Information Administration.

BA
0

Total Federal funds Science
and Technology.

BA
0

1,001,454
844,251

979,658
955,227

1,033,022
1,067,319

Total Trust funds Science and
Technology.

BA
0

29,111
29,659

31,787
31,787

34,000
34,000

135,000

157,000

156,657

162,000

M01,000
218,000

284,709

278,904

308,065

(352,000)

(250,000)

(256,208)

303,194

292,526

306,714

18,325

17,500

17,227

19,500

Ocean Shipping
Maritime Administration
Federal Funds
General and Special Funds:

Ship construction
Appropriation, current

403

Outlays
Operating-differential subsidies....403
Contract authority, permanent,
indefinite.
Liquidation of contract authority,
current.
Outlays
Research and development
403
Appropriation, current
Outlays
See footnotes at end of table.

"16,360
16,360

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

395

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of C o m m e r c e — C O N T I N U E D
Ocean Shipping—CONTINUED
Maritime Administration—COHTIHUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

Operations and training
Appropriation, current

403
BA

56,044

56,525
*61,472

55,000

192
1,245
58,781

66,303

41,800

-440

-83

513

Outlays

60,956

-52,500

Public Enterprise Funds:

Federal ship financing fund

403

Outlays
Vessel operations revolving fund..403

Outlays
War risk insurance revolving fund
403
Outlays

655
-404

-549

400

420

Intragovernmental Funds:

Consolidated working fund
403
Outlays
Trust Funds
Special studies, services and
projects
403
Appropriation, permanent,
indefinite.
Outlays

410

586

420

Total Federal funds Maritime
Administration.

BA
0

494,078
597,868

511,366
491,258

486,897
548,981

Total Trust funds
Administration.

BA
0

513
410

400
586

420
420

BA
0

2,386,681
5,317,671

2.544,340
4,343,063

3.228.073
3,278,720

BA1
0 i

-550

-866

BA1
0 i

-5,136

-406

-252

BA1

-64,055

-6,537

-6,586

Maritime

Summary
Federal Funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the
public
300
370
400

0 I

450

BA1

-479

-418

0I
902
Total Federal funds
Trust Funds:
(As shown in detail above)
Deductions for offsetting receipts:
Intrafund transactions
376
See footnotes at end of table.

BA1
0 i

-9,089

-3,331

-3,274

2,307.372

2,532.782

3.216,677

5,238,362

4,331,505

3,267,324

85.788

87.033

95.354

86,085

86,682

88,474

-985

BA1
0 i

THE BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Commerce—CONTINUED
Summary—CONTINUED
Trust Funds:—CONTINUED
Proprietary receipts from the
public
306

BA1
0J

-10,838

-12,000

376

BA1
0 J

-26,523

-28,548

-34,721

403

BA1
0 J

-513

-400

-420

452

BA1
0 J

-1,606

-1,706

-1,982

45,246

Total Trust funds
Interfund transactions

376
452

45,323

43,394

45,620

43,043

38,366

BA1
0 J
BA1

-2.800

-2,967

-3,300

-42,393

-40,257

-41,776

2,307,502
5,238,789

2,532,952
4,331,324

3,216,847
3,260,614

0 I
Total Department of Commerce.

BA
0

Department of Defense—Military
Military Personnel
Federal Funds
General and Special Funds:

Military personnel, Army
Appropriation, current

...051

Outlays

Military personnel, Navy
Appropriation, current

9,176,733

9,154,325
'100,100
*440,375

9.754,500

9,197,825

9,444,900
'100,100

9,594,000

6,444,413

6.461.600

6,892,500

6,384,533

'32,700
*306,700
6,672,300

6,792,000

051

Outlays

'32,700
Military personnel, Marine Corps..051
Appropriation, current
Outlays

Military personnel, Air Force
Appropriation, current

Appropriation, current
Outlays
See footnotes at end of table.

2,014.975
'12,100
*97,425

2.135,000

2,007,804

2,071,900
'12,100

2,088,000

7,568,090

7,525,001
'17,200
'366,199

7,876,400

7,526,267

7,802,800
'17,200

7,822,000

532.600

597,600

518,782

547,350
'18,950
547,000

225,400

227,025

184,100

213,765

*8,975
228,000

184,000

051

Outlays
Reserve personnel, Navy

2,022,200

051

Outlays

Reserve personnel, Army
Appropriation, current

578,000

051

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of D e f e n s e — M i l i t a r y — C O N T I N U E D
Military Personnel—CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

Reserve personnel, Marine Corps..051
Appropriation, current
Outlays
Reserve personnel, Air Force
Appropriation, current
Outlays

Outlays
National Guard personnel, Air Force
051
Appropriation, current
Outlays
funds

82,424

82,559

84,125
'500
*3,075
84,500
'500

87,000
85,000

051

National Guard personnel, Army...051
Appropriation, current

Total Federal
Personnel.

Military

183,800

175,257

772,500

733,557

237,600

186,850
'4,100
£
7,750
184,900
'4,100

214,700

759,200
'5,300
*36,600
760,700
'5,300

874,200

204,000

834,000

273,500

234,999

256,477
*8,123
251,000

BA
0

27,245,760
27,075,348

28,683,100
28,220,000

28,889,500
28,447,000

10,139,838
'178,662
10,102,338
'178,662

11,451.500

9,119,967
'92.300
c
77,200
"97,000
9,051,600
'76,400

9,907,400

11,695,895
'67,600
'95,800
"32,400
11,111,700
'46,300

12,801,600

266,000

Retired Military Personnel
Federal Funds
General and Special Funds:

Retired pay, Defense
Appropriation, current

051

Outlays

9,179.600

9,171,474

8,631,789

8,476,147

11,435,000

Operation and Maintenance
Federal Funds
General and Special Funds:

Operation and maintenance, Army
051
Appropriation, current

Outlays
Operation and maintenance, Navy
051
Appropriation, current

Outlays
See footnotes at end of table.

280-000

O—79—26

11,065,506

10,319,924

9,635,100
'15,900

12,099,700
'21,300

THE

398

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of D e f e n s e — M i l i t a r y — C O N T I N U E D
Operation and Maintenance—CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

Operation and maintenance, Marine
Corps
051
Appropriation, current
Outlays
Operation and maintenance, Air
Force
051
Appropriation, current

Outlays
Operation and maintenance, Defense
agencies
051
Appropriation, current

Outlays
Operation and maintenance, Army
Reserve
051
Appropriation, current

658,976

624,998

8,605,176

8,541,356

2,955,322

2,857,253

733,000
c
2,800
676,000

735,800
723,000

9.249,784
'58,400
< 40,800
"57,100
8,932,600
'50,400

10,091,600

3,001,984
'2,300
f
8,000
"94,200
3,013,700
'2,300

3.578,200

418,100

9,722,000
'8,000

3,416,000

391,494

Outlays
Operation and maintenance, Navy
Reserve
051
Appropriation, current
Outlays
Operation and maintenance, Marine
Corps Reserve
051
Appropriation, current
Outlays
Operation and maintenance, Air
Force Reserve
051
Appropriation, current

393,712

416.900
"3,400
408,000

BA
0

319,290
306,707

382,900
359,000

301,600
312,000

BA
0

16,613
14,712

19,900
18,000

20,967
20,000

384,849

410,600

Outlays
Operation and maintenance, Army
National Guard
051
Appropriation, current

370,131

384,700
c
3,500
"5,100
386,000

766,346

791,400

Outlays
Operation and maintenance, Air
National Guard
051
Appropriation, current

746,371

786,000
r
1,000
"8.700
755,000

849,107

1,039.500

Outlays
National Board for the Promotion of
Rifle Practice, Army
051
Appropriation, current

845,784

932,700
c
8,000
"11,200
930,000

1,021,000

365
"10
377

Outlays
See footnotes at end of table.

365

334

410,000

405,000

757,000

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

399

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Defense—Military—CONTINUED
Operation and Maintenance-CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

Claims, Defense
051
Appropriation, current
Outlays
Contingencies, Defense
051
Appropriation, current
Outlays
Court of Military Appeals, Defense
051
Appropriation, current
Outlays
Foreign currency fluctuations,
Defense
051
Appropriation, current
XIII Olympic winter games
051
Appropriation, current
Outlays
Miscellaneous expired accounts....051
Outlays
Total Federal funds Operation
and Maintenance.

BA
0

82,500
79,329

87,500
83,000

113,200
112,000

BA
0

2,500

2,500
1,023

758

1,735

1,750

2,033

964

1,800

2,000

500,000

2,000

1,800

BA
0

49
34,731,568
33,577,779

38,084,745
35,905,000

656,100

949,709

380,259

417,000

554,220

736,900

417,738

*27,800
281,500
*2,500

1,408,563

1,511,100

837,290

847,000

1,159,300

1,218,100

BA
0

731,689

30,000
859,000

1,408,625

BA
0

839,017

3,528,900

4,358,700

2,601,666

2,965,000

* 10,000
9,200
40,222,000
38,690,000

Procurement
Federal Funds
General and Special Funds:

Aircraft procurement, Army
Appropriation, current
Outlays
Missile procurement, Army
Appropriation, current

051
"946,400
625,000

051
"1,250,500

Outlays..
Procurement of weapons and tracked
combat vehicles, Army
051
Appropriation, current
Outlays
Procurement of ammunition, Army
051
Appropriation, current
Reappropriation
Outlays
Other procurement, Army
Appropriation, current

Outlays
See footnotes at end of table.

051

Reappropriation
Outlays
Aircraft procurement, Navy
Appropriation, current

1,642,250
'69,900
40,000
958,400
'2,600

546,100
*10,900

"1,888,900
1,151,000
1,260,410
"82,990

94M00
1,694,200

1,195,100
'16,900

051
"3,967,900
3,337,000

4QQ

THE BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of D e f e n s e — M i l i t a r y — C O N T I N U E D
Procurement—CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

Weapons procurement, Navy
Appropriation, current

051
BA

2,238,100

1,955,600
"1,973,500
"24,000

Outlays

Shipbuilding and conversion, Navy
051
Appropriation, current

1,302,388

5,760,500

1,426,100

1,701,200

"1,900

7,800

3,759,600
"6,173,800
"834,700

Outlays

Other procurement, Navy
Appropriation, current

3,047,606

3,834,500
"45,500

3,736,600
"107,400

2,176,410

2,641,600

2,694,500

1,910,874

'6,000
1,964,000
'1,000

2,307,000
'2,000

435,750

356,000

159,500
"124,700

306,214

324,000

359,000

5,823,300

6,885,207

051

Outlays

Procurement, Marine Corps
Appropriation, current

051

Outlays

Aircraft procurement, Air Force 051
Appropriation, current

"7,931,200
"259,500
Outlays

Missile procurement, Air Force
Appropriation, current

3,989,465

4,572,200
"14,800

5,332,700
"84,300

1,751,300

1,513,500

1,376,242

1,541,000

1,635,000

2,300,345

2,356,650
'11,500

2,671,100

1,969,235

2,143,700

2,348,100

'1,300

'3,900

051
"2,288,600

Outlays

Other procurement, Air Force
Appropriation, current

051

Outlays

Procurement, Defense agencies....051
Appropriation, current
Outlays

Procurement of aircraft and missiles,
Navy
051
Outlays
Procurement of equipment and
missiles, Army
051
Outlays

Total

327,826

273,800
'800

294,000

219,657

237,900

267,700

'100

'300

25,000

20,000

0
0

Federal

Procurement.
See footnotes at end of table.

funds

28,390
17,824

10,000

8,000

29,529,239

31,462,916

35,402,200

19,975,554

22,476,000

25,749,000

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

401

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1979

D e p a r t m e n t of D e f e n s e — M i l i t a r y — C O N T I N U E D
Research, Development, Test, and Evaluation
Federal Funds
General and Special Funds:
Research, development, test,
evaluation, Army
Appropriation, current

and
051
2,408,327

2,635,864

2,342,208

"73,600
2,453,000
"45,000

4,018,291

4,468,871

"2,927,000
Outlays..

Research, development, test, and
evaluation, Navy
051
Appropriation, current

2,777,000
"23,000

"4,484,000
Reappropriation
Outlays
Research, development, test, and
evaluation, Air Force
051
Appropriation, current

"38,000
15,000
4,197,600
"23,400

BA
0

3,824,871

4,165,266

4,211,040

3,626,026

"386,600
3,975,300
"212,700

754,278

892,887

690,994

"24,500
785,000
"13,000

25,000

27.600

23,865

21,000

"33,400
27,000

BA
0

11,371,162
10,507,964

12,773,962
11,726,000

13,536,100
13,015,000

527,769

711,509

55,700
"666,600

626,549

"118,034
570,200
"6,800

559,500
"38,500

471,556

760.145

62.110
"489.790

604,256

"1,053
587,300
"700

496,700
"300

4,415,400
"14,600

"5,005,100
Outlays..

Research, development, test, and
evaluation, Defense agencies...051
Appropriation, current

4,611,700
"154,300

"1,086,600
Outlays..
Director of test and
Defense
Appropriation, current

983,400
"8,600

evaluation,
051

Outlays
Total Federal funds Research,
Development, Test, and
Evaluation.

Military Construction
Federal Funds
General and Special Funds:

Military construction, Army
Appropriation, current

051

Outlays..
Military construction, Navy
Appropriation, current

Outlays
See footnotes at end of table.

051
BA

402

THE BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of D e f e n s e — M i l i t a r y — C O N T I N U E D
Military Construction—CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

Military construction, Air Force
Appropriation, current

051
BA

415,566

483,264

47,000
"492,700

Outlays

Military construction, Defense
agencies
051
Appropriation, current

481,137

49,429

37,567
491,800
B
2,200
194,880

Outlays

23,113

22,677
23,300
B

Military construction, Army National
Guard
051
Appropriation, current

600,000
14,000

14,000
"230,300
72,100

700

*5,900

5,463
"14,537
48,000

49,400

52,200

58,038

47,000

43,300

44,750

Outlays
Military construction, Army Reserve
051
Appropriation, current

40,532

38,000

50,500

37,100

5,176
"19,824

Appropriation, permanent,
indefinite.
Outlays
Military construction, Naval Reserve
051
Appropriation, current

662

Outlays
Military construction, Air Force
Reserve
051
Appropriation, current

Outlays
Military construction, Air
Guard
Appropriation, current

National
051

Outlays

52,607

45,000

40,000

21,700

21,850

2,210
"12,790

29,789

26,000

20,000

11,200

13,000

2,500
"7,500
13,000

Total Federal funds Military
Construction.

6,500
"23,500
43,000

15,483

15,000

BA
0

1,641,082
1,931,504

2,498,029 "
1,854,000

1,344,082

1,560,665

2,158,200
1,951,000

Family Housing
Federal Funds
General and Special Funds:

Family housing, Defense
Appropriation, current

051
"1,570,000

Outlays
See footnotes at end of table.

1,402,993

*51,730
C
3,622
D
4,997
1,401,800
fl
34,200

1,477,100
B
9,900

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

403

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1979
estimate

1978
actual

Account and functional code

1980
estimate

Department of Defense—Military—CONTINUED
Family Housing—CONTINUED
Federal Funds—CONTINUED
Public Enterprise Funds:

Homeowners assistance
Defense
Appropriation, current

fund,
051

Outlays
Total Federal
Housing.

funds

Family

1.500

1,780

5,000

"5,000
6,000

1,345.582
1,404,773

1.622.514
1,441,000

1.575.000
1,493,000

2.480

14.362

2,355

3,021

746
*5.921
4,099

BA
0

Special Foreign Currency Program
Federal Funds
General and Special Funds:

Special foreign currency program.051
Appropriation, current
Outlays
Revolving and Management Funds
Federal Funds
Public Enterprise Funds:

Defense production guarantees ....051
Outlays
Laundry service, Naval Academy ..051
Outlays
Intragovernmental Funds:
Army stock fund
051
Appropriation, current
Outlays
Navy stock fund
051
Appropriation, current
Contract authority, permanent,
indefinite.
Outlays
Marine Corps stock fund
051
Appropriation, current
Outlays
Air Force stock fund
051
Appropriation, current
Contract authority,
permanent,
indefinite.
Outlays
Defense stock fund
051
Appropriation, current
Outlays
Army industrial fund
051
Outlays
Navy industrial fund
051
Outlays
Marine Corps industrial fund
051
Outlays
Air Force industrial fund
051
Outlays
Defense industrial fund
051
Outlays
Army management fund
051
Outlays
Navy management fund
051
Outlays
See footnotes at end of table.

-724

-484

74,000
64,300

-48,800

33,393

132,800

2,400

BA
0

1,900
-1,643

18,000

10,500

BA
BA

34,600
252.107

26.800

104,650

71,000

45,900

11,000

83,100

41,035

-29,545

56,635

36,310

-1,380

891

-52,384

24,362

-2,978

5,410

131
BA
0

100.000
-186,056

BA
BA

30,000
457

BA
0

...

4,300
-245,383

0
-4,511
0
-62,941
0
-355
0
0
0
0

-36,126
-10,201
9,709
-29,756

THE

404

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Defense—Military—CONTINUED
Revolving and Management Funds—CON.
Federal Funds—CONTINUED
Intragovernmental Funds:—CONTINUED
Air Force management fund
051
Outlays
0
Total Federal funds Revolving
and Management Funds.

BA
0

Allowances
Federal runas
General and Special Funds:
Civilian and military pay raises ...051
Appropriation, current

Outlays
Other legislation
Appropriation, current
Outlays

Summary
Federal Funds:
(As shown in detail above)
Deductions for offsetting receipts-.
Proprietary receipts from the
public
051
Total Federal funds
Trust Funds:
(As shown in detail above)

See footnotes at end of table.

BA
0

Total Trust funds Trust Funds...

051

130,044

'2,256,110
'-81,000
'2,234,000
•'-SQ.OOO

051

Trust Funds
Trust Funds
Miscellaneous trust funds
051
Appropriation, permanent,
indefinite.
Outlays
Miscellaneous trust revolving funds
051
Outlays

Total Department of
Defense—Military.

849
100,800
338,892

Total Federal funds Allowances.

Interfund transactions

1,194
423.364
-428,619

61,123
^l.OOO

BA
0

2,236,233
2,215,000

12,369

10,600

10,500

11,285

10,657

10,534

-27,339

4,730

6,923

BA
0

12,369
-16,054

10,600
15,387

10,500
17,457

BA
0

115,469,837
103,218,132

125,558,928
112,244,913

135,477,400
123,129,143

-149,123

-350,700

-436,800

BA
0

115,320,714
103,069,009

125,208,228
111,894,213

135,040,600
122,692,343

BA
0

12,369
-16,054

10.600
15,387

10,500
17,457

BA1
0 I

-11,050

-9.600

-9,800

115,322,033
103,041,905

125,209,228
111,900,000

135,041,300
122,700,000

BA1
0 I

BA
0

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of Defense—Civil
Cemeterial Expenses, Army
Federal Funds
General and Special Funds:
Salaries and expenses
Appropriation, current
Outlays

705
BA
0

5,000
4,688

5,100
7,500

7,943
7,000

BA
0

107,046
96,145

137,978
108,000

133,166
135,000

1,537,820

1,343,711

Outlays
Operation and maintenance, general
301
Appropriation, current

1,428,768

1,393,427

1,504,694
"270,000
1,392,888

768,870

Outlays
Flood control and coastal
emergencies
Appropriation, current
Outlays
General expenses
Appropriation, current

757,278

795,500
C
8,428
°8,097
*75
811,600

830,000

BA
0

18,000
5,663

20,000
-5,000

10,000

60,000

Corps of Engineers—Civil

Federal Funds
General and Special Funds:
General investigations
Appropriation, current
Outlays
Construction, general
Appropriation, current

301

825,500

301

301
73,200

55,998

66,500
2,261
*139
68,400

BA
0

253,081
224,679

223,035
230,000

193,140
202,400

BA
0

6,000
5,169

3,300
3,500

4,000
4,000

5,586

3,074

1,398

1,405

7,285

1,398

6,134

5,202

5,302

Outlays
Flood control, Mississippi River and
tributaries
301
Appropriation, current
Outlays
Special recreation use fees
303
Appropriation, current
Outlays
Permanent appropriations-.
(Water resources)
301
(Appropriation, permanent,
indefinite).
(Outlays)
(Other general purpose fiscal
assistance)
852
(Appropriation, permanent,
indefinite).
(Outlays)
Total Permanent appropriations.

Public Enterprise Funds:
Alaska hydro-electric
power
development fund
Appropriation, current
See footnotes at end of table.

73,000

4,656

6,134

5,202

11,720

8,276

6,700

6,061

13,419

6,600

5,450

271

THE

406

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Defense—Civil—CONTINUED
Corps of Engineers—Civil—CONTINUED
Federal Funds—CONTINUED
Intragovernmentol Funds:
Revolving fund
301
Appropriation, current
BA
Outlays
0
Consolidated working fund
301
Outlays
0
Trust Funds
Rivers and harbors contributed funds
301
Appropriation, permanent,
BA
indefinite.
Outlays
0
Summary
Federal Funds:
(As shown in detail above)

300
902

46.000
10,000

50.000
60,000

46,749

6,830

7,112

39.153

28.100

27.600

38,500

28,100

27,600

2.789.512
2,573,127

2,663.300
2,640,176

3.060.400
2,721,000

BA1
0 J

-12

-15

BA1
0 J

-15,780

-17,215

-18,705

BA1

-2,883

-2,270

-2,280

BA
0

2.770,837
2,554,452

2,643.800
2,620,676

3.039,400
2,700,000

BA
0

39,153
38,500

28,100
28,100

27,600
27,600

-39,153

-28,100

-27,600

2,643.800
2,620,676

3.039,400
2,700,000

BA
0

Deductions for offsetting receipts:
Proprietary receipts from the
public
271

21,525
-53,383

0 J
Total Federal funds
Trust Funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the
public
301

BA1
0 I

Total Trust funds

Total Corps of Engineers—Civil

BA
0

Ryukyu Islands, Army
Federal Funds
General and Special Funds:
Administration
806
Outlays

-653
2,770,837
2,553,799

Summary
Federal Funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the
public
800
Total Ryukyu Islands, Army

BA1
0 J

-452

-410

-452

-410

-449

-410

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

407

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1978
actual

Account and functional code

1979
estimate

1980
estimate

Department of Defense—Civil—CONTINUED
Soldiers' and Airmen's Home
Trust

Funds

Operation and maintenance
Appropriation, current

705

Outlays
Payment of claims
705
Appropriation, permanent,
indefinite.
Outlays
Soldiers' and Airmen's Home
revolving fund
705
Outlays

16,882

16,486

18,471

16,939
C
212
"378
17,529

18,471

Summary
Federal Funds:
Deductions for offsetting receipts:
Proprietary receipts from the
public
705
Total Federal funds
Trust Funds:
(As shown in detail above)..
Deductions for offsetting receipts:
Proprietary receipts from the
public
705
Total Trust funds
Total Soldiers' and Airmen's
Home.

BAl
0 J
BA "
0

-1
-1

-1

BA
0

16,887
16,507

17,534
17,534

18,476
18,476

BAl
0 J
BA "
0

-1,881

-1,913

-2,066

15,006
14,626

15,621
15,621

16,410
16,410

BA
0

15,005
14,625

15,621
15,621

16,410

71,067

68,534

74,000
'4,934
°1,234
75,180
'2,734

16,410

The Panama Canal
Canal Zone Government

Federal Funds
General and Special Funds:

Operating expenses
Appropriation, current

806

Outlays
Capital outlay
Appropriation, current
Outlays

806

Total Federal funds Canal Zone
Government.
See footnotes at end of table.

3,128
'2,200

BA
0
BA
0

2,130
2,621
73,197
71,155

1,035
3,597
81,203
81,511

...
5,328

THE BUDGET FOR FISCAL YEAR 1980

408

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Defense—Civil—CONTINUED
The Panama Canal-CONTINUED
Panama Canal Company

Federal Funds
Public Enterprise Funds:
Corporation: Panama Canal Company
403
Outlays
Limitation on general and
administrative expenses.

Total Federal funds
Canal Company.

-23,613
(26 731)

-5,260
(27 580)

-23,613

"(1,837)
"(795)
-5,260

73,197
47,542

81,203
76,251

5,328

BA\
0 J

-20,431

-26,414

-1,930

the
800

BA1
0 J

-46,324

-49,367

-4,301

902

BA1
0 J

Panama

Summary
Federal Funds:
(As shown in detail above)

BA
0

Deductions for offsetting receipts:
Intrafund transactions
806
Proprietary
public

receipts

from

Total The Panama Canal

-46

-70

6,396
-19,259

5,352
400

-6,231
-903

BA
BA

724

706

700
743

576

648

1,437

BA
BA

400
94

100

500

BA
BA

138

130

400
130

115

130

530

BA
0

941
737

928
878

2,467
2,467

-941

-928

-204

-50

BA
0

Wildlife Conservation Military Reservations

Federal Funds
General and Special Funds:
Wildlife conservation, Army
Appropriation, current
Appropriation, permanent,
indefinite.
Outlays
Wildlife conservation, Navy
Appropriation, current
Appropriation, permanent,
indefinite.
Outlays
Wildlife conservation, Air Force
Appropriation, current
Appropriation, permanent,
indefinite.
Outlays

303

Summary
Federal Funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the
public
300
Total Wildlife Conservation
Military Reservations.
See footnotes at end of table.

BA1
0 J
BA
0

-967
1,500

1,500

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

4Q9

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Defense—Civil—CONTINUED
Summary
Federal Funds:

(As shown in detail above)
Deductions for offsetting receipts-.
Intrafund transactions
806

Proprietary
public

receipts

from

2,868,650

2,750,531

3,070,810

2,626,097

2,724,805

2,735,795

-20,431

-26,414

BA1
0 J

the
271

BA1
0J

300

BA1
0 I

705

BA1
0 J

800

BA1
0 J

902

Total Federal funds

-12

-15

-18,143

-19,672

-46,776

-49,777

-4,711

BA1

-2,929

-2,340

-2,280

0 J
BA

2,781,780

2,653,842

3,042,202

2,539,227

2,628,116

2,707,187

BA
0

56,040
55,007

45,634
45,634

46,076
46,076

BA1
0J

-39,153

-28,100

-27,600

BA1
0 J

-1,881

-1,913

-2,066

15,006

15,621

16,410

13,973

15,621

16,410

2,796,786
2,553,200

2,669,463
2,643,737

3,058,612
2,723,597

-16,721

-15

-1,930

-1

Trust Funds:

(As shown in detail above)
Deductions for offsetting receipts-.
Proprietary receipts from the
public
301
705

Total Trust funds
Total Department
Defense—Civil.

BA
0

D e p a r t m e n t of E n e r g y
Atomic Energy Defense Activities
Federal Funds
General and Special Funds:

Atomic energy defense activities operating expenses
053
Appropriation, current

1,944,549

2,122,283
"2,394,364
"1,176

Outlays

Atomic energy defense activities plant and capital equipment ...053
Appropriation, current

1,669,743

2,038,918

2,320,006

569,144

458,500

400,551

"32.000
452,650
*17,500

639,729
*8,000

2.513,693
2,070,294

2,613,959
2,509,068

3,022,288
2,967,735

*627,924
Outlays

Total Federal funds Atomic
Energy Defense Activities.
See footnotes at end of table.

BA
0

410

THE BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Energy—CONTINUED
Energy Programs
Federal Funds
General and Special Funds:

General science and research operating expenses
251
Appropriation, current

300,564

308,244

Outlays
General science and research - plant
and capital equipment
251
Appropriation, current

274,195

304,512

104,485

121,700

Outlays
Energy supply, R&D - operating
expenses
271
Appropriation, current

81,081

114,000

2,060,678

2,103,925

1,327,003

Energy supply, R&D - plant and
capital equipment
271
Appropriation, current
Outlays
Uranium enrichment expenses
Appropriation, current

\ 3,750
"447
2,043,417
B
7,000

2,188,604
B
6,750

439,555

291,292

367,769

"408,521
439,907

49,617

400
"32
-42,929

11,892

operating
271

Outlays
Uranium enrichment - plant and
capital equipment
271
Appropriation, current
Outlays
Fossil fuel -operating expenses...271
Appropriation, current

"136,500
120,900

"2,283,991

Outlays..

"337,638
332,038

-102,708

BA
0

477,933
373,065

682.167

46,800
163,711
656,088

645,320

"1,694
721,218

72,800

4,310
"670,592

Outlays
Fossil energy construction
Appropriation, current

271

700,384

99.709 .
"77,050

Outlays..
Energy production, demonstration
and distribution
271
Appropriation, current

2,835

"-50,000
90,314
"-10,000

181.599

163,258

84,487

*1,000
170,811
*l,000

526.650

618,750

221,214

"40,325
473,358
*16,450

73,410
"-20,000

"122,299
Outlays..
Energy conservation
Appropriation, current

119,499

272
BA

"555^295
Outlays
See footnotes at end of table.

636,545
23,875

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

411

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Energy—CONTINUED
Energy Programs—CONTINUED
Fee/era/ Funds—CONTINUED
General and Special Funds:—CONTINUED
Strategic petroleum reserve
274
Appropriation, current
BA
Outlays
Energy information

administration
276
Appropriation, current

3,174,617

3,006,854

897,148

2,366,811

50,654

*8,391
1,960,700

63,386
*88,657
B

Outlays..
Economic

39,156

administration
276
Appropriation, current

14,780
"1,258
64,594
*7,780

83,507
*7,000

regulatory

92,218

90.633
*159,646
B

Outlays.
Federal Energy Regulatory
Commission
Appropriation, current

78,894

42,100
87,273
*23,000

41,600

51,300

137,385
*19,100

276
BA

*73,937

Outlays..

38,211

Geothermal resources development
fund
271
Appropriation, current
Outlays
Payments to states under Federal
Power Act
852
Appropriation, permanent
Outlays
Public Enterprise Funds:
Spent fuel storage fund
271
Authority to borrow, current,
indefinite.
Outlays
Trust Funds
Advances for cooperative work
Appropriation, permanent
Outlays
Total Federal
Programs.
Total Trust
Programs.
See footnotes at end of table.

funds
funds

«10,600
"1,930
51,631
B
7,400

66,406
3,200

15,000

357

6,000

*6,288
1,000

BA
0

218
112

85
85

'300,000

•MOO.OOO

271

Energy
Energy

BA
0

4,061
5,090

2,500
2,500

12,536
12,536

BA
0

8.270,355
4,251,662

7,820,564
7,035,205

5.228,890
6,816,497

BA
0

4,061
5,090

2,500
2,500

12,536
12,536

412

THE BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1980
estimate

1979
estimate

Department of Energy—CONTINUED
Power Marketing Administrations
Federal Funds
General and Special Funds:

Operation and maintenance, Alaska
Power Administration
271
Appropriation, current
Outlays

2,163

2,614

2,041

2,582

"2,660
2,660

52,872

73,500

-88,600

1,197

1,212

984

"41
1,249

Public Enterprise Funds:

Bonneville Power Administration fund
271
Outlays
General and Special Funds:

Operation and maintenance,
Southeastern Power Administration
271
Appropriation, current

"1,400
Outlays
Continuing fund, Southeastern Power
Administration
271
Appropriation, permanent
Outlays

1,392

50
50

BA
0

General and Special Funds:

Operation and maintenance,
Southwestern Power
Administration
271
Appropriation, current
Outlays
„
Continuing fund, Southwestern Power
Administration
271
Appropriation, permanent
Outlays
Construction, rehabilitation,
operation and maintenance,
Western Area Power
Administration
271
Appropriation, current

BA
0

25,891

35,909

12,048

"168
33,077

32,180

228
228

BA
0

"32,180

89,237

103,252

91,301

"1,248
104,500

* 122,800
Outlays
Emergency fund, Western Area Power
Administration
271
Appropriation, current
Outlays

200

400

122,800

"200
200

Public Enterprise Funds:

Colorado river basins power
marketing fund, Western Area
Power Administration
271
Appropriation, current
Outlays
Total Federal funds Power
Marketing Administrations.
See footnotes at end of table.

BA
BA

3,813

0
BA
0

6,438
122,301
165,684

2,286 .,
786
147,208
216,372

"5,152
5,152
164,392
75,784

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of E n e r g y — C O N T I N U E D
Departmental Administration
Federal Funds
General and Special Funds:

Departmental administration:
(Energy information, policy, and
regulation)
276
(Appropriation, current)

367,054

328,108
"307,829
"33,500
\ 5,495
400,422
*27,000
D

(Outlays)

371,140

301,049
B
6,500

Special foreign currency program.271
Appropriation, current
Outlays

BA
0

1,500
6,263

2,000
2,500

883

Total Federal funds
Departmental Administration.

BA
0

368,554
377,403

379,103
429,922

307,829
308,432

BA
0

11,274,903
6,865,043

10,960,834
10,190,567

8,723,399
10,168,448

BA1
0 J

-25,424

-96,234

-83,970

BA1

-553,709

-1,148,201

-305,754

Summary
Federal Funds:
(As shown in detail above)
Deductions for offsetting receipts-.
Proprietary receipts from the
public
270
271

BA1
0 J
300

BA1
0 J

-441

902

BA1
0 J

-1

BA
0

10,695,328
6,285,468

9,716,398
8,946,131

7.447,462
8,892,511

BA
0

4,061
5,090

2,500
2,500

12,536
12,536

-2,500

-12,536

9,716,398
8,946,131

7,447,462
8,892,511

Total Federal funds
Trust Funds:
(As shown in detail above)
Deductions for offsetting receipts-.
Proprietary receipts from the
public
271

BA1
0 J

Total Trust funds

Total Department of Energy

BA
0

See footnotes at end of table.

280-000

O—79—27

-886,212

-4,061
1,029
10,695,328
6,286,497

THE

414

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of H e a l t h , Education, a n d W e l f a r e
Health Programs
Public Health Service
Food and Drug Administration
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

Outlays
Buildings and facilities
Appropriation, current
Outlays

554
BA

286,710

316,296

274,557

295,154
c
140
"7,990
*575
300,702

6,665
2,079

10,459
4,799

4,372
6,514

310,479

554
BA
0

Public Enterprise Funds:

Revolving fund for certification and
other services
554
Outlays
Total Federal funds Food and
Drug Administration.

-665

BA
0

293,375
275,971

314,318
305,501

320,668
316,993

1,219,239

1,260,342

1,319,447
"51,450

Health Services Administration
Federal Funds
General and Special Funds:

Health services
Appropriation, current

551

Outlays
Indian health services
Appropriation, current
Outlays
Indian health facilities
Appropriation, current
Outlays
Emergency health
Outlays

1,078,694

'100,219
F
-3,600
1,198,324
'51,702

1,297,986
'48,517

551
BA

442.010

535,116

386,231

483,829
«11,152
475,544

71,257
81,001

76,960
103,748

50,240
75,539

524,612

551
BA
0
054
0

Total Federal funds Health
Services Administration.

-9

BA
0

1,732,506
1,545,917

1,928,902
1,829,318

1,956,253
1,946,654

171,176

184,805
'20.600
°2,410

236,283

136,098

191,501
'5,562

201,615
'15,038

Center for Disease Control
Federal Funds
General and Special Funds:

Preventive health services:
(Health care services)
(Appropriation, current)

(Outlays)
See footnotes at end of table.

551

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

415

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of H e a l t h , E d u c a t i o n , a n d W e l f a r e — C O N T I N U E D
Health Programs—CONTINUED
Public Health Service—CONTINUED
Center for Disease Control—CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

(Health research)
(Appropriation, current)

552
BA

(Outlays)

51,884

61,994
D563
60,717

Total Preventive health services

227,441
187,982

270,372
257,780

312,835
277,132

BA
0

227,441
187,982

270,372
257,780

312,835
277,132

852,259

917,000

916,548

Total Federal funds Center for
Disease Control.

56,265

76,552
60,479

National Institutes of Health
Federal Funds
General and Special Funds:

National Cancer Institute:
(Health research)
(Appropriation, current)

552

(Outlays)
(Education and training of health
care work force)
553
(Appropriation, current)
(Outlays)
Total National Cancer Institute..
National Heart, Lung and Blood
Institute:
(Health research)
552
(Appropriation, current)
(Outlays)
(Education and training of health
care work force)
553
(Appropriation, current)
(Outlays)
Total National Heart, Lung and
Blood Institute.
National Institute of Dental
Research:
(Health research)
552
(Appropriation, current)
(Outlays)
(Education and training of health
care work force)
553
(Appropriation, current)
(Outlays)
Total National Institute
Dental Research.

National Institute of Arthritis,
Metabolism, and Digestive
Diseases:
See footnotes at end of table.

-392

861,357

815,355

903,709

BA
0

20.129
19,160

20,129
20,036

20,410
20,076

BA
0

872,388
880,517

936,737
835,391

936,958
923,785

425,314

480,560

374,114

484,160
'-392
438,781

BA
0

22,595
19,879

22,616
20,513

26,784
26,150

BA
0

447,909
393,993

506.384
459,294

507,344
495,327

BA
0

57,997
57,538

61,371
57,554

61,418
59,220

BA
0

3,731
3,656

3,842
4,280

4,700
4,771

BA
0

61,728
61,194

65,213
61,834

66,118
63,991

469,177

THE BUDGET FOR FISCAL YEAR 1980

416

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Health, Education, and Welfare—CONTINUED
Health Programs—CONTINUED
Public Health Service—CONTINUED
national Institutes of Health—CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

(Health research)
552
(Appropriation, current)
(Outlays)
(Education and training of health
care work force)
553
(Appropriation, current)

BA
0

242,976
207,533

287,327
269,449

287,002
282,450
18,744

17,277

15.440

(Outlays)

15,496

16,578

16,367

Total National Institute of
Arthritis, Metabolism, and
Digestive Diseases.

BA
0

260,253
223,029

302,767
286,027

305,746
298,817

170.578

204,437

168,592

176,034

202,448

BA
0

7,860
6,500

7,928
7,543

7,885
7,670

BA
0

178,438
175,092

212.365
183,577

212,322
210,118

153,474

182,702

181,863

149,728

156,057

180,564

8,867

8,626

8.339

8,651

7,367

8,496

National Institute of Neurological
and Communicative Disorders and
Stroke:
(Health research)
552
(Appropriation, current)

(Outlays)
(Education and training of health
care work force)
553
(Appropriation, current)
(Outlays)
Total National Institute of
Neurological and
Communicative Disorders
and Stroke.
National Institute of Allergy and
Infectious Diseases:
(Health research)
552
(Appropriation, current)

(Outlays)
(Education and training of health
care work force)
553
(Appropriation, current)

(Outlays)
Total National
Allergy and
Diseases.

Institute of
Infectious

BA
0

162,341
158,379

191,328
163,424

190,202
189,060

182,319

228,947

233,440

170,028

182,446

202,100
46,938

National Institute of General Medical

Sciences:
(Health research)
(Appropriation, current)

552

(Outlays)
(Education and training of health
care work force)
553
(Appropriation, current)

48,477

48,681

(Outlays)

45,197

40,466

Total National Institute of
General Medical Sciences.

BA
0

230,796
215,225

National Institute of Child Health
and Human Development:

277,628 ~
222,912

51,347
280,378
253,447

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

417

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Health, Education, and Welfare—CONTINUED
Health Programs—CONTINUED
Public Health Service—CONTINUE!)
National Institutes of Health—CONTINUED
Federal
Funds—CONTINUED
General and Special Funds:—CONTINUED

(Health research)

552

(Appropriation, current)

193,676

155,695

179,058
'10,713
146,845
'3,750

BA
0
BA
0

11,000
11,020
166,390
166,715

11,072
9,851
200,843
160,446

10.705
9,983
204,381
198,053

BA
0

34,720
29,595

54,326
41,732

54.343
51,182

BA
0
BA
0

2,585
2,221
37,305
31,816

2,585
1,981
56,911
43,713

2,167
2,307
56,510
53,489

80,577
66,929

100,479
87,124

99.811
98,660

4,823
4,033
85,400
70,962

4,713
4,058
105,192
91,182

4.717
4,518
104,528
103,178

59,378
57,581

73.489
60,136

72,724
72,423

4,863
4,182
64,241
61,763

4,591
5,138
78,080
65,274

6,288
4,919
79,012
77,342

144,561
129,371

153,630
144,050

153,634
151,277

(Outlays)

(Education and training of health
care work force)
553
(Appropriation, current)
(Outlays)
Total National Institute of Child
Health and Human
Development.
National Institute of Aging:
(Health research)
552
(Appropriation, current)
(Outlays)
(Education and training of health
care work force)
553
(Appropriation, current)
(Outlays)
Total National Institute of
Aging.

National Eye Institute:
(Health research)
552
(Appropriation, current)
BA
(Outlays)
0
(Education and training of health
care work force)
553
(Appropriation, current)
BA
(Outlays)
0
Total National Eye Institute
BA
0
National Institute of Environmental
Health Sciences:
(Health research)
552
(Appropriation, current)
BA
(Outlays)
0
(Education and training of health
care work force)
553
(Appropriation, current)
BA
(Outlays)
0
Total National Institute
Environmental Health
Sciences.
Research resources:
(Health research)
(Appropriation, current)
(Outlays)
See footnotes at end of table.

155,390

of BA
0

181,107
'6,963

552
BA
0

THE BUDGET FOR FISCAL YEAR 1980

418

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1979
estimate

1978
actual

1980
estimate

Department of Health, Education, and Welfare—CONTINUED
Health Programs—CONTINUED
Public Health Service—CONTINUED
National Institutes of Health—CONTINUED
Federal
Funds—CONTINUED
General and Special Funds:—CONTINUED

(Education and training of health
care work force)
553
(Appropriation, current)
(Outlays)
Total Research resources

BA
0
8A
0

534
512
145.095
129,883

534
500
154.164
144,550

565
548
154,199
151,825

8,483
8,310

8.989
7,564

8,989
8,405

John E. Fogarty International Center
for Advanced Study in the Health
Sciences
552
Appropriation, current
BA
Outlays
0
National Library of Medicine:
(Health research)
552
(Appropriation, current)
BA
(Outlays)
0
(Education and training of health
care work force)
553
(Appropriation, current)
BA
(Outlays)
0
Total National Library of
BA
Medicine.
0

7,825
5,936

9.411
8,809

8,792
8,588

29.794
28,066
37.619
34,002

32.020
30,261
41.431
39,070

32,639
32,544
41,431
41,132

Office of the Director:
(Health research)
(Appropriation, current)

17,300
16,509

18.166
G
784
19,594

18,792

0
BA
0
BA
0

1.600
1,820
18.900
18,329

1.507
1,662
20.457
21,256

2,270
2,103
21,062
20,502

65.650

3,250

47,011

67.950
"-37,000
69,778
"-4,000

552

(Outlays)
(Education and training of health
care work force)
553
(Appropriation, current)
(Outlays)
Total Office of the Director
Buildings and facilities
Appropriation, current

18,399

552

Outlays

76,301
"-12,000

Intragovernmentol Funds:

General research support grants ..552
Outlays
National Institutes of Health
management fund
552
Outlays
Consolidated working fund
552
Outlays
Service and supply fund
552
Outlays
Total Federal funds National
Institutes of Health.
See footnotes at end of table.

78
31

BA
0

3,001

419

-3,627

-290

2.842.936
2,675,703

3.189.439
2,851,421

3,172,430
3,152,816

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of H e a l t h , Education, a n d W e l f a r e — C O N T I N U E D
Health Programs—CONTINUED
Public Health Service—CONTINUED
Alcohol, Drug Abuse, and Mental Health
Administration
Federal Funds
General and Special Funds:

Alcohol, drug abuse, and mental
health:
(Health care services)
551
(Appropriation, current)

651,768

697,233

269,569
"276,026

'-3,428
'198,100

(Outlays)
(Health research)
(Appropriation, current)

642,089

660,119

660,686
'33,681

180.572

216,112

234,345
"25,078

552
X

(Outlays)
(Education and training of health
care work force)
553
(Appropriation, current)

(Outlays)
Total Alcohol, drug abuse, and
mental health.
Construction and renovation, St.
Elizabeths Hospital
551
Appropriation, current
Outlays
Saint Elizabeths Hospital
551
Appropriation, current
Outlays

1,564
197,992
^704

179,712

109,328

115,613
^2,554

111,492

110,109

109,556
^226

113,667
^2,328

BA
0

941,668
931,910

1,029,648
968,597

1,114,610
1,039,050

BA
0

54,210
814

3,316

11,628

79,075

85,119

73,338

75,824
3,428
77,530

83,814

227,828
^860

Intragovernmental Funds:

Working capital fund, Lexington
Addiction Research Center 551
Outlays
Total Federal funds Alcohol,
Drug Abuse, and Mental
Health Administration.

BA
0

1,074,953
1,006,067

1,108,900
1,049,443

1,199,729
1,134,492

161,547

168,164

18,263
"175,400

BA
0

260
229,350

'-7,552
39,940
195,898

182,510

38,179

12,473

4,521

Health Resources Administration
Federal Fund*
General and Special Funds:

Health resources:
(Health care services)
(Appropriation, current)
(Reappropriation)
(Outlays)
(Health research)
(Outlays)
See footnotes at end of table.

551

552
0

THE

420

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Health, Education, and Welfare—CONTINUED
Health Programs—CONTINUED

Public Health Service—CONTINUED
Health Resources Administration—COM.
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

(Education and training of health
care work force)
553
(Appropriation, current)

553,608

554,808

258,027
*14,743

650,938

452,004
"-30,000

422,960
"-109,060

715.415

587,467

466,433

918,467

630,375

500,931

"-167,893

(Outlays)
Total Health resources
Public Enterprise Funds:

Health education loans
Appropriation, current

553
BA

Outlays

1,814

1,899

1,495

-1,031

1,899

1,495

BA
0

778
-334

513
513

505
505

41,000

42,000

45,000

32,606

40,438

41,591

759,007
949,708

631,879
673,225

513,433
544,522

51.657

49,688
'23,490
C
14
"780
*47

177,713

32,554

47,057
'12,118

111,225
'11,372

71,250

71,982

82,880

35,777

"780
E
51
55,709

80,229

122.907

146,832

260,593

68,331

114,884

202,826

BA
0

57,399
52,141

65,083
60,270

76,925
70,522

11,387

6,520

5,853

8,603

14,586

Nurse training fund
553
Appropriation, current
Outlays
Medical facilities guarantee and loan
fund
551
Appropriation, current

Outlays
Total Federal funds Health
Resources Administration.

BA
0

Office of Assistant Secretary for Health
Federal Funds
General and Special Funds:

Salaries and expenses:
(Health care services)
(Appropriation, current)

551

(Outlays)
(Health research)
(Appropriation, current)

552

(Outlays)

Total Salaries and expenses

Retirement pay and medical benefits
for commissioned officers
551
Appropriation, current, indefinite...
Outlays
Scientific activities overseas (special
foreign currency program)
552
Appropriation, current

Outlays
See footnotes at end of table.

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

421

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of H e a l t h , E d u c a t i o n , a n d W e l f a r e — C O N T I N U E D
Health Programs—CONTINUED
Public Health Service—CONTINUED
Office of Assistant Secretary for Health
—CONTINUED
Federal Funds—CONTINUED
Public Enterprise Funds:

Health maintenance organization
loan and loan guarantee fund .551
Outlays

-478

-510

-6,495

-9,192

-5,427

19,507

Intragovernmental Funds:

Service and supply fund
551
Outlays
Grants management fund
551
Outlays
Miscellaneous consolidated working
funds
552
Outlays
Trust Funds
Miscellaneous trust funds
551
Appropriation, permanent,
indefinite.
Outlays

BA
0

6,151

6,495

4,636

4,620

6,528

5,205

4,779

Total Federal funds Office of
Assistant Secretary for
Health.

BA
0

191,693
109,650

223,302
184,825

344.038
307,441

Total Trust funds Office of
Assistant Secretary for
Health.

BA
0

6,151
6,528

4,636
5,205

4.620
4,779

Total Federal funds
Health Service.

Public

BA
0

7,121.911
6,750,998

7,667,112
7,151,513

7,819,386
7,680,050

Total Trust funds Public Health
Service.

BA
0

6,151
6,528

4,636
5,205

4,620
4,779

10,593.190

11,250,000
'554,429
•'-53,000
11,250,000
'554,429
'-53.000

12,616,799

7,969,906
J
-70,000
7,969,906
•'-70,000

Other Health Programs
Health Care Financing Administration
Federal Funds
General and Special Funds:

Grants to States for Medicaid
Appropriation, current

551
BA

Outlays..

10,679,881

Payments to health care trust funds
551
Appropriation, current
Outlays
Program management:
(Health care services)
(Appropriation, current)

(Outlays)
See footnotes at end of table.

7.242,941

7,760,913

7,242,941

7,760,913

80,553

87,862
"2,600

43,323

92,942

M9.300
12,373,799
•'-19,300

551
BA

97,205
y
1,755
100,355
'1,755

THE

422

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of H e a l t h , E d u c a t i o n , a n d W e l f a r e — C O N T I N U E D
Health Programs—CONTINUED
Other Health Programs—CONTINUED
Health Care Financing Administration—COH.
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

(Health research)
(Appropriation, current)

552
BA

28,742

18,750

(Outlays)

15,221

12,187

15,994

Total Program managment

109,295

109,212

133,950

58,544

105,129

118,104

265

'29,000
25,467,906

Intragovernmental Funds:
Miscellaneous consolidated working
fund
551
Outlays
Trust Funds
Federal hospital insurance trust fund
551
Appropriation, current
Appropriation, permanent,
indefinite.

Outlays
Federal supplementary medical
insurance trust fund
551
Appropriation, current
Appropriation, permanent,
indefinite.
Outlays
Limitation on
expenses.
Limitation on
expenses.

34,990

BA
BA

18,543,022

J
8,000
21,942,849

17,861,676

20,727,619

23,670,029

'-350,000

'-1,680,885
'-27,000
10,341,000

BA
BA

9,045,490

9,804,064

7,349,594

8,771,054

10,153,169
'-62,300

administrative

(270,869)

administrative

(382,735)

Total Federal funds Health Care
Financing Administration.

BA
0

17,945,426
17,981,631

19,621,554
19,617,471

20,631,355
20,372,509

Total Trust funds Health Care
Financing Administration.

BA
0

27,588,512
25,211,270

31,754,913
29,148,673

35,810.906
32,080,013

Total Federal
Programs.

BA
0

25,067,337
24,732,629

27,288,666
26,768,984

28,450,741
28,052,559

BA
0

27,594,663
25,217,798

31,759,549
29,153,878

35,815,526
32,084,792

3,181,050

3,521,282
"258,000

3.952,882

3,028,841
"5,200

3,264,500
"182,800

Total Trust
Programs.

funds
funds

Health
Health

Education Division
Office of Education
Federal Funds
General and Special Funds:

Elementary and secondary education
501
Appropriation, current
Appropriation, permanent

Outlays

Indian education
Appropriation, current

Outlays
See footnotes at end of table.

9,478

2,814,994

501
BA

59.732

71,735

76,875

58,697

61,500

71,202

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

423

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Health, Education, and Welfare—CONTINUED
Education Division—CONTINUED
Office of Education—CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

School assistance in federally
affected areas
501
Appropriation, current
Outlays
Emergency school aid
501
Appropriation, current
Outlays
Education for the handicapped ....501
Appropriation, current
Outlays
Occupational, vocational, and adult
education
501
Appropriation, current
Appropriation, permanent
Outlays
Student assistance
502
Appropriation, current
Reappropriation
Outlays
Higher and continuing education .502
Appropriation, current
Appropriation, permanent
Outlays
Library resources
503
Appropriation, current
Outlays
Special projects and training
503
Appropriation, current

Outlays

BA
0

805,000
766,349

816,100
799,584

528,000
619,456

BA
0

335,200
231,699

341,350
345,316

354,100
321,162

BA
0

660,625
327,032

976,637
525,219

1,027,825
814,116

BA
BA
0

725,750
7,161
692,967

774,453
7,161
808,014

765,203
7,161
840,000

BA
BA
0

3,254,503

3,922,650

2,515,494

3,097,143

2,961,035
726,000
3,375,813

BA
BA
0

338,500
2,700
294,200

393,000
2,700
587,015

346,380
2,700
360,254

BA
0

253,212
208,989

266,475
236,836

233,837
230,441

100,659

134,472
"1,000
"-22,365
105,319
"250
"_4,473

117,628

Educational activities overseas
(special foreign currency program)
503
Appropriation, current

59,742

2,000

110,361
"750
"-7,111

2,000
"2,000

Outlays
Salaries and expenses
Appropriation, current
Outlays
Educational development
Outlays

1,999

1,880
"220

685
"1,335

133,407
129,513

126,495
123,657

128,353
122,842

744

1,000

700

479,663

959,621

BA
0

40,000
545,697

714,314
"243,189
25,000
859,017
"78,058

503
BA
0
503
0

Public Enterprise Funds:

Student loan insurance fund
Appropriation, current
Authority to borrow, current
Outlays
See footnotes at end of table.

502

782,994
"165,131

THE

424

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Health, Education, and Welfare—CONTINUED
Education Division—CONTINUED
Office of Education—COHTIHUED
Federal
Funds—CONTINUED
Public Enterprise Funds:—CONTINUED

Higher education facilities loan and
insurance fund
502
Appropriation, current
Appropriation, permanent,
indefinite.
Outlays
Health professions graduate student
loan insurance fund
553
Authority to borrow, current
Outlays

BA
BA
0

1,847
971
29,074

BA
0

2,204
1,052

2,189
931

5,571

7,920

2,500
-351

-300

Intragovemmental Funds:

Consolidated working fund
503
Outlays
Total Federal funds Office of
Education.

0
BA
0

-2,846
10,391,458
8,674,344

12.581.404
10,664,816

90,100

92,300

68,532

°160
86,543

88,419

0
BA
0

-4,239
90,100
64,293

2,441
92.460
88,984

1,272
98,285
89,691

BA
0

12,000
10,925

13,000
11,729

14,000
12,683

BA
0
BA
0

24,279
13,951
36,279
24,876

25,483
24,043
38,483
35,772

21,930
21,319
35.930
34,002

7,852
4,736

10,900
5,000

12.192,720
11,265,051

national Institute of Education
Federal Funds
General and Special Funds:

National Institute of Education 503
Appropriation, current

"98,285
Outlays
Intragovernmentol Funds:

Consolidated working fund
503
Outlays
Total Federal funds National
Institute of Education.
Office of the Assistant Secretary for
Education
Federal Funds
General and Special Funds:

Salaries and expenses:
(Higher education)
502
(Appropriation, current)
(Outlays)
(Research and general education
aids)
503
(Appropriation, current)
(Outlays)
Total Salaries and expenses
Institute of Museum Services
Appropriation, current
Outlays
See footnotes at end of table.

503
BA
0

4,010
74

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

425

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Health, Education, and Welfare—CONTINUED
Education Division—CONTINUED
Office of the Assistant Secretary for
Education—CONTINUED
Trust Funds
Special statistical compilations and
surveys
503
Appropriation, permanent,
BA
indefinite.
Outlays
0

100

Total Federal funds Office of
the Assistant Secretary for
Education.

BA
0

40,289
24,950

46,335
40,508

46,830
39,002

Total Trust funds Office of the
Assistant Secretary for
Education.

BA
0

7?
33

80
40

100
50

Total Federal funds Education
Division.

BA
0

10,521,847
8,763,587

12,720,199
10,794,308

12,337,835
11,393,744

Total Trust funds
Division.

BA
0

71
33

80
40

100
50

-2

Education

Social and Rehabilitation Service
Federal Funds
General and Special Funds:

Program Administration
Outlays

506

Social Security Administration
Federal Funds
General and Special Funds:

Payments to social security trust
funds
601
Appropriation, current
Outlays
Special benefits for disabled coal
miners
601
Appropriation, current
Outlays
Supplemental security income
program
604
Appropriation, current
Outlays
Assistance payments program
604
Appropriation, current

Outlays

BA
0

741.203
740,930

760,774
758,863

676,933
676,933

BA
0

967,623
982,230

1,016.608
994,867

1,005.202
1,004,202

BA
0

5,250,000
5,854,560

5,557,854
5,557,564

6,396,436
6,339,767

6,354,412

6,663.000
'4,895
"1,105

7,079,210

6,639,462

6,696,725
'4,895

'-212,000
6,960,810
'-212,000

Refugee assistance
Appropriation, current

Outlays

See footnotes at end of table.

604
BA

195.950

175,300
'51,664

143,290

193,098
'33,581

75,540
'90,000
107,840
'18,082
'90,000

THE

426

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of H e a l t h , Education, a n d W e l f a r e — C O N T I N U E D
Social Security Administration—CONTINUED
Fee/era/ Funds—CONTINUED
General and Special Funds:—CONTINUED

Payments to states from receipts for
child support
604
Appropriation, permanent
Outlays
Trust Funds
Gifts and donations, refugee
assistance
604
Outlays
Federal old-age and survivors
insurance trust fund
601
Appropriation, current
Appropriation, permanent,
indefinite.
Outlays
Federal disability insurance
fund
Appropriation, current
Appropriation, permanent,
indefinite.
Outlays

BA
0

27
19

400
408

438
438

BA
BA

76,811,029

86,610,200

•'12,000
99,764,106

81,205,455

89,649,225
'4,000

101,546,000
'-505,000

BA
BA

12,783,707

15,192.663

'2,000
17,415,827

12,655,285

14,055,570

(2,108,761)

(2,292,764)

trust
601

Limitation on administrative
expenses.

15,740,253
'-104,000
(2,325,035)

"(4,434)

"(20,831)

Total Federal funds Social
Security Administration.

BA
0

13.509.215
14,360,491

14,231,600
14,240,001

15,111.759
14,986,072

"(23,337)

Total Trust funds Social
Security Administration.

BA
0

89.594,736
93,860,745

101.802.863
103,708,795

117.193.933
116,677,253

BA
0

3,498
3,498

3,906
3,906

4,349
4,349

BA
0

14,630
14,783

16,625
16,625

17,349
17,349

BA
0

45,976
35,852

44,833
51,176

48,341
52,912

BA
0

99,118
97,659

113,393
109,308

121,893
115,028

BA
0

163,222
151,792

178,757
181,015

191,932
189,638

Special Institutions
Federal Funds
General and Special Funds:

American Printing House for the
Blind
501
Appropriation, current
Outlays
National Technical Institute for the
Deaf
502
Appropriation, current
Outlays
Gallaudet College
502
Appropriation, current
Outlays
Howard University
502
Appropriation, current
Outlays
Total Federal funds
Institutions.
See footnotes at end of table.

Special

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

427

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978

1979

1980

actual

estimate

D e p a r t m e n t of H e a l t h , Education, a n d W e l f a r e — C O N T I N U E D
Human Development Services
Federal Funds
General and Special Funds:

Grants to states for social services
and child welfare services
506
Appropriation, current

Outlays

2,614,460

2,776,352
'188,548

2,808,723

2,776,352
* 188,548

2,632,325
'433,925
2,586,325
•'433,925

Human development services-.
(Elementary, secondary, and
vocational education)
501
(Appropriation, current)

(Outlays)
(Social services)
(Appropriation, current)

675,527

675,589
'55,000
"596

751,231

560,877

689,221
'10,000

717,983
'40,000

1,553,175

1,657,667

1,516,744

BA
0

2,228,702
2,077,621

1,547,064
'74,028
»1,791
1,443,668
'55,000
2,354,068
2,197,889

1,671,523
'8,214
2.408,898
2,437,720

BA
0

365,000
364,099

385,000
372,000

385,000
378,000

1,821

'3,490
2,980

BA
0

5,208,162
5,252,264

5,707,458
5,537,769

5,864,548
5,839,862

87,090

135,060

506

(Outlays)
Total Human development
services.
Work incentives
504
Appropriation, current
Outlays
Research and training activities
overseas (special foreign curency
program)
506
Appropriation, current
Outlays

BA
0

Total Federal funds Human
Development Services.

4,400
2,892
'1,000

Departmental Management
Federal Funds
General and Special Funds:

General Departmental management
604
Appropriation, current
Outlays
Office of Inspector General
Appropriation, current
Outlays
Office for Civil Rights
Appropriation, current
Outlays
Office of Consumer Affairs
Appropriation, current
Outlays
See footnotes at end of table.

80,752

127,986
D
3,545
132,657

BA
0

28,743
25,304

35,606
34,525

39,868
39,107

BA
0

41,807
36,494

68,227
67,814

65,092
65,198

1,800

1,861

1,806

1,700
"32
1,704

134,569

604

751

506

1,851

THE BUDGET FOR FISCAL YEAR 1980

428

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Health, Education, and Welfare—CONTINUED
Departmental Management-CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

Policy research
Appropriation, current
Outlays

604
BA
0

30.000
23,802

25,000
28,546

10,001

2,459

-3,890

10,773

24,715
25,603

Intragovernmental Funds:

Working capital fund
Outlays
Consolidated working fund
Outlays
Grants management fund
Outlays

506
506
552
0

Total Federal funds
Departmental Management.

174,204

262,096
278,478

266,596
266,328

BA
0

54,659,223
53,434,965

60,388,776
57,800,555

62,223.411
60,728,203

BAl
0 1

-6,361

-5,622

-5,602

550

BAl
0 1

-18,389

-15,196

-14,221

902

BAl
0 J

-4,561

-3,781

-3,765

BA
0

54.629,912
53,405,654

60.364,177
57,775,956

62.199.823
60,704,615

BA
0

117,189,470
119,078,576

133,562,492
132,862,713

153,009.559
148,762,095

BAl
0 J

-1,618,461

-1,386,000

-1,440,000

BAl
0 1

-17,238

-15,000

-18,000

Deductions for offsetting receipts:
Proprietary receipts from the
500
public

Total Federal funds
Trust Funds:
(As shown in detail abov<»)
Deductions for offsetting receipts:
601
Intrafund transactions

902
receipts

from

the
503

BAl
BAl
0 J

554

BAl
0 I

601

BAl
0 J

-80

-100

-14
-4,111

-4,095

115,548,008
117,437,114

132,157,301
131,457,522

151,547,364
147,299,900

RA1 - 7 245,441

- 7 760 913

-7,969 906

BA
0

-5,605

-73

OCD

551

-71

0 i

551

Total Trust funds
Interfund transactions

189,440

Summary
Federal Funds:
(As shown in detail abovei)

Proprietary
public

-65

BA
0

See footnotes at end of table.

'70,000

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

429

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Health, Education, and Welfare—CONTINUED
Summary—CONTINUED
Trust Funds:—CONTINUED
601
Total Department of Health,
Education, and Welfare.

-740,930
BA1
0J
BA 162,191,549
0
162,856,397

-758,863

-676,933

184,001,702
180,713,702

205,170,348
199,427,676

Department of Housing and Urban Development
Housing Programs
Federal Funds
General and Special Funds:

Subsidized housing programs
Contract authority, current

604

31,507,863

24,395,848

BA
BA

-5,754
39,158
(3,948,109)

38,169
(4,460,000)

2,920,223

3,588,000

685,000

727,000

691,329

652,000

"741,500
720,000

BA
0

10.000
1,800

2,000

74,000

30,000

"-600,000
Indefinite
Contract authority, permanent
Liquidation of contract authority,
current.
Outlays
Payments for operation
income housing projects
Appropriation, current

"26,480,128
39,700
'(5,529,000)
4,404,000

low
604

Outlays
Congregate services program
604
Appropriation, current
Outlays
Troubled projects operating subsidy
604
Appropriation, current
Outlays

"82.000
78,000

Public Enterprise Funds:

Federal Housing Administration fund
371
Appropriation, current, indefinite...
Authority to borrow, permanent
Outlays
Housing for the elderly or
handicapped fund
371
Authority to borrow, current
Outlays
College housing—loans and other
expenses
502
Appropriation, current
Appropriation, permanent
Outlays
Low-rent public housing—loans and
other expenses
604
Outlays
Nonprofit sponsor assistance
604
Outlays
Community disposal operations fund
451
Outlays
See footnotes at end of table.

280-000 O--79—28

15,000

252.290

BA
0

536.985
356,764

57.600
110,895

102,250
"92,600
51,900
34,131

BA
0

750.000
176,366

800,000
476,000

800,000
700,000

BA
BA
0

10,299
285
-61,259

14,619
287
60,000

10,945
1,097

2,300

1,993

-697

-620

-540

THE

430

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Housing and Urban Development—CONTINUED
Housing Programs—CONTINUED
Federal Funds—CONTINUED
Public Enterprise Funds:—CONTINUED

Rental housing assistance fund...604
Outlays

Revolving fund (liquidating
programs)
451
Appropriation, current
Appropriation, permanent,
indefinite.
Outlays

-12,191

BA
BA

2,149
814

8,676

69,311

2,158
877
13,636

13,471
394
31,758

Intragovernmental Funds:

Disaster assistance fund

453

Outlays

Total Federal funds Housing
Programs.

BA
0

-33,717

-16,812

33,541,799
4,057,536

25,772.848
4,986,510

28,403,943
5,971,342

Government National Mortgage Association
Federal Funds
Public Enterprise Funds:

Special assistance functions fund
371
Appropriation, current
Appropriation, permanent,
indefinite.
Authority to borrow, permanent
Outlays
Emergency mortgage purchase
assistance
371
Outlays

Management and liquidating
functions fund
371
Outlays
Guarantees of mortgage-backed
securities
371
Outlays

Participation sales fund:
(Mortgage credit and thrift
insurance)
371
(Outlays)
(Other advancement and
regulation of commerce) 376
(Outlays)
(Community development)
451
(Outlays)

(Higher education)

4,139
3,260

3,700
3,100

3,500
3,000

BA
0

-54,629

500,000
143,912

286,555

359,778

164,865

125,926

-42,638

-32,000

-29,000

-41,393

-41,820

-49,000

-10,405

22,306

27,462

-3,858

-4,027

-5,354

2,147

1,970

1,397

5,092

-721

-1,931

-477

-824

-187

502

(Outlays)

(Health research)
(Outlays)
(Veterans housing)

BA
BA

552
704

(Outlays)

-13,028

-17,044

-20,081

Total Participation sales fund...
Total Federal funds Government
National Mortgage
Association.

0
BA
0

-20,529
7,399
200,589

1,660
506,800
236,617

1,306
6^500
335,787

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

431

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

Department of Housing and Urban Development—CONTINUED
Community Planning and Development
Federal Funds
General and Special Funds:

Community development grants ...451
Appropriation, current
Outlays
Urban development action grants
451
Appropriation, current
Outlays
Comprehensive planning grants...451
Appropriation, current

BA
0

3,600,000
2,464,267

3,750,000
2,875,000

3,900,000
3,272,000

BA
0

400,000

400,000
162,000

57,000

67,083

44,000
53,000

Outlays
Urban homesteading
Appropriation, current
Outlays
Miscellaneous appropriations
Outlays

59,000

451
BA
0

"40,000
56,000

20,000

15,000

451

Public Enterprise Funds:
Rehabilitation loan fund
451
Appropriation, current
Outlays
Urban renewal programs
451
Liquidation of contract authority,
permanent.
Outlays
Total Federal funds Community
Planning and Development.

10,750

12,934

18,378

BA
0

47,176

230,000
91,000

130,000
125,000

375,678
4,057,000
2,964,954

280,000
4,453,000
3,361,934

265,000
4,470,000
3,913,378

BA
0

1,275

"-8,167
4,507

4,000

110,961

30,169

34,582

0
BA
0

97,202
110,961
98,477

42,981
22,002
47,488

34,582
34,582
38,582

5,000
4,219

9,000
7,356

9,000
9,000

(700,000)
0
BA
0

New Communities Development Corporation

Federal Funds
General and Special Funds:
New community assistance
Appropriation, current
Outlays
Public Enterprise Funds:
New communities fund
Authority to borrow,
indefinite.
Outlays
Total Federal
Communities
Corporation.

grants
451

451
permanent,

funds New
Development

Neighborhoods, Voluntary Associations, and
Consumer Protection

Federal Funds
General and Special Funds:

Housing counseling assistance 506
Appropriation, current
Outlays
Neighborhood self-help development
program
451

Appropriation, current

BA
0

15,000

BA
^15,000

Outlays..
^3,000
See footnotes at end of table.

5,000
"9,000

THE

432

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of H o u s i n g a n d U r b a n D e v e l o p m e n t — C O N T I N U E D
Neighborhoods, Voluntary Associations, and
Consumer Protection—CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED
Livable cities program
451
Appropriation, current
BA

5,000
'5,000

Outlays

0
'2,000

Mobile home standards program..376
Outlays
Interstate land sales
376
Appropriation, permanent,
indefinite.
Outlays
Total Federal funds
Neighborhoods, Voluntary
Associations, and Consumer
Protection.

495

940

342

423

2,000
'3,000

423

405

789

423

BA
0

5,342
5,119

29,423
14,085

29,423
28,423

52,000

57,500

50,834

53,300

Policy Development and Research

Federal Funds
General and Special Funds:

Research and technology
Appropriation, current

451

Outlays

"53.000
53,800

Fair Housing and Equal Opportunity
Federal Funds
General and Special Funds:
Fair housing assistance
Appropriation, current
Outlays

751
BA
0

3,700
3,700

Management and Administration

Federal Funds
General and Special Funds:

Salaries and expenses, Department
of Housing and Urban
Development:
(Other advancement and
regulation of commerce)
376
(Appropriation, current)
(Outlays)
(Community development)
(Appropriation, current)

(Outlays)
See footnotes at end of table.

7,825

7,505

8,033
"444
8,131

9,679
9,284

451

(Outlays)
(Public assistance and
income supplements)
(Appropriation, current)

156,951

164,457
"6,987

191,539

145,417

166,334

190,789

48,595

77.543

46,611

68.044
"8,903
73,806

other
604

74,378

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

433

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1978
actual

Account and functional code

1979
estimate

1980
estimate

Department of Housing and Urban Development—CONTINUED
Management and Administration—CON.
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

(Federal law enforcement
activities)
751
(Appropriation, current)
BA
(Outlays)

Total Salaries and expenses, BA
Department of Housing and 0
Urban Development.
Urban transportation
401
Outlays
0
Low income-housing demonstration
program
451
Outlays
0

16.216

14,743
"556
14,674

17,241

15,554
229,587
215,087

272.167
262,945

296,002
290,989

16,538

-2

689

478

-184

lntragov«rnm«ntal Funds:

Working capital fund
451
Outlays
Joint grants management fund ....451
Outlays
Total Federal funds
Management and
Administration.
Summary
Federal Funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the
public
450
902

Total Department of Housing
and Urban Development.

0
0

-183

BA
0

229,587

272,167

296,002

215,630

263,558

290,806

38,004,088
7,593,139

31,113.740

33,297,150

8,963,492

10,635,818

-2,510

-367

-1,141

-1,300

38,000,437
7,589,488

31,112,073

33,295,483
10,634,151

BA1
0 J
BA1
0 J
BA
0

8,961,825

Department of t h e Interior
Land and Water Resources
Bureau of Land Management
Federal Funds
General and Special Funds:

Management of lands and resources
302
Appropriation, current

Outlays.
Acquisition, construction and
maintenance
302
Appropriation, current
Liquidation of contract authority,
current.
Outlays
See footnotes at end of table.

306,955
274,808

286,792
'44,850
"4,418
296,980
'40,000

287,931
280,962
'4,850

18,707
(298)

19,011

16,343

16,877

20,200

15,829

THE

434

BUDGET

FOR

FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of t h e I n t e r i o r — C O N T I N U E D
Land and Water Resources—CONTINUED
Bureau of Land Management—CONTINUED
Federal
Funds—CONTINUED
General and Special Funds:—CONTINUED

Payments in lieu of taxes
852
Appropriation, current
Outlays
Oregon and California grant lands
302
Appropriation, current, indefinite...
Outlays
Range improvements
302
Appropriation, current, indefinite...
Outlays
Recreation development and
operation of recreation facilities
302
Appropriation, current, indefinite...
Outlays
Service charges, deposits, and
forfeitures
302
Appropriation, current, indefinite...
Outlays
Miscellaneous permanent
appropriations:
(Conservation and land
management)
302
(Appropriation, permanent,
indefinite).
(Outlays)
(Other general purpose fiscal
assistance)
852
(Appropriation, permanent,
indefinite).
(Outlays)
Total Miscellaneous permanent
appropriations.

BA
0

100,000
97,608

105,000
105,000

108,000
108,000

BA
0

43,145
43,877

55,000
50,600

55,000
54,200

8,665
9,400

10,900
10,900

BA
0

9,172
8,340

BA
0

300
381

300
400

300
300

BA
0

9,975
7,955

13,750
12,400

13,750
12,000

2,484

2,002

2,909

2,411

2,202

287,323

308,598

356,048

0
BA
0

287,027
289,807
289,936

308,689
310,600
311,100

356,098
358,050
358,300

Intragovernmental Funds:

Working capital fund
302
Appropriation, current
Outlays
Trust Funds
Miscellaneous trust funds
302
Appropriation, current, indefinite...
Appropriation, permanent,
indefinite.
Outlays
Total Federal funds Bureau of
Land Management.
Total Trust funds Bureau of
Land Management.

BA
0

2,000
-675

-672

300

BA
BA

100
721

100
600

0
BA
0
BA
0

757
780,061
739,107
82?
757

BA
0

27,753
20,823

700
848,386 ~
845,408
700
700

700
850,274
845,641
700
700

Bureau of Reclamation
Federal Funds
General and Special Funds:

Loan program
Appropriation, current
Outlays

301
36,366
34,000

76,221
42,792

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

435

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of the Interior—CONTINUED
Land and Water Resources—CONTINUED
Bureau of Reclamation—CONTINUED
Federal
Funds—CONTINUED
General and Special Fund*.—CONTINUED

Recreational and fish and wildlife
facilities
303
Appropriation, current
Outlays
Colorado River Basin Salinity control
projects
301
Appropriation, current
Outlays
Drought emergency assistance 301
Outlays
General investigations.....
301
Appropriation, current
Outlays
Emergency fund
301
Appropriation, current
Outlays

4,890
4,760

10,600
10,000

12,026
10,025

22,675

17,315

20,782

31,000

38,054
'140
33,360

39,943

BA
0

25,106
25,593

30,870
31,000

14,862

7,000

1,000

BA
0

357,850
323,735

221,572
230,582

313,153
254,044

81,331

86,355
1,158
°1,205

100,653

Outlays

General administrative expenses..301
Appropriation, current

79,266

85,252

94,611

24,845

25,250
"760

27,400

Outlays

24,913

25,730

27,394

3,018

BA
0

Construction and rehabilitation ....301
Appropriation, current
Outlays
Operation and maintenance
301
Appropriation, current

Miscellaneous permanent
appropriations
Appropriation, permanent
Indefinite
Outlays

BA
0

34,320
30,568
1,000

852
BA
BA
0

600
2,140
2,750

600
2,100
2,700

Public Enterprise Funds:

Colorado River Basin project
301
Appropriation, current
Outlays
Upper Colorado River storage project
301
Appropriation, current
Outlays

BA
0

78,145
82,850

74,770
78,000

89,217
74,586

BA
0

63,253
45,493

76,799
76,000

57,277
58,806

12,623
10,000
585,720
614,282
12,623
10,000

5,300
8,200
752,161
629,886
5,300
8,200

Intragovernmental Funds:

Consolidated working fund
Outlays
Trust Funds

301

Reclamation trust funds
301
Appropriation, permanent
Outlays
Total Federal funds Bureau of
Reclamation.
Total Trust funds Bureau of
Reclamation.
See footnotes at end of table.

-21,628

BA
0
BA
0
BA
0

4,936
4,452
688,588
664,142
4,936
4,452

THE

436

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of t h e I n t e r i o r — C O N T I N U E D
Land and Water Resources-CONTINUED
Office of Water Research and Technology
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current
Outlays

301
BA
0

25,307
17,585

28,351
24,233

30,739
25,338

Intragovernmental Funds:

Consolidated working fund
Outlays

306
35

Total Federal funds Office of
Water Research and
Technology.

0
BA
0

25.307
17,620

28,351
24,236

30,739
25,338

Total Federal funds Land and
Water Resources.

BA
0

1,493.956
1,420,869

1,462,457
1,483,926

1,633,174
1,500,865

Total Trust funds Land and
Water Resources.

BA
0

5,757
5,209

13,323
10,700

6,000
8,900

18,154

14,871
"406

14,954

23,530

25,226

Fish and Wildlife Parks
Heritage Conservation and Recreation
Service
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

303

Outlays
Urban park and recreation grants
303
Appropriation, current

J
Z 566
15J01
'3,459

150,000
'37,500

Outlays

0
'2,500

Land and water conservation fund
303
Appropriation, current
Indefinite
Contract authority, current
Contract authority, permanent
Outlays

BA
BA
BA
BA
0

Historic preservation fund
Appropriation, current
Outlays

BA
0

831.000

738,025

30,000
632,101

30,000
543,000

45.000
11,299

60,000
9,000

See footnotes at end of table.

'12,000
598,000
'-30,000
30,000
479,000
'7,000

303

Intragovernmental Funds:

Consolidated working fund
Outlays

10,000
'10,250

303
0

45,000
15,000

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

437

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of t h e I n t e r i o r — C O N T I N U E D
Fish and Wildlife Parks—CONTINUED
Heritage Conservation and Recreation
Service—CONTINUED
Trust Funds
Donations
303
Appropriation, permanent,
BA
indefinite.
Outlays
0

5
36

Total Federal funds Heritage
Conservation and Recreation
Service.

BA
0

924,154
666,978

Total Trust funds Heritage
Conservation and Recreation
Service.

BA
0

5
36

United States Fish and Wildlife Service
Federal Funds
General and Special Funds:
Resource management
303
Appropriation, current
BA

177,082

Outlays
Construction and anadromous fish
303
Appropriation, current
Outlays
Migratory bird conservation account
303
Appropriation, current
Appropriation, permanent,
indefinite.
Outlays
Development and operation of
recreation facilities
303
Appropriation, current
Outlays
Miscellaneous permanent
appropriations:
(Recreational resources)
303
(Appropriation, permanent,
indefinite).
(Outlays)
(Other general purpose fiscal
assistance)
852
(Appropriation, permanent,
indefinite).
(Outlays)
Total Miscellaneous permanent
appropriations.
Intragovernmental Funds:
Consolidated working fund
Outlays
See footnotes at end of table.

264
264
880,802
579,726
264
264

264
264
823,520
540,410
264
264

207,055

167,251

200,087
'486
"4,924
200,364

BA
0

68,660
33,585

97,856
36,753

47,574
34,804

BA
BA

10,000
11,219

10,000
12,000

10,000
18,000

21,640

22,000

BA
0

150
39

150
150

202,944

200
200

94,314

114,544

117,755

87,584

78,357

83,613

BA
0

4,083

4,100

3,700

5,395

4,827

4,300

BA
0

98,397
92,979

118,644
83,184

121,455
87,913

-2,273

303

THE

438

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of the Interior—CONTINUED
Fish and Wildlife Parks-CONTINUED
United States Fish and Wildlife Service
-CONTINUED
Trust

Funds

Contributed funds
303
Appropriation, permanent,
indefinite.
Outlays

BA
0

2,324

3,000

3,400

2,383

2,800

3,200

Total Federal funds United
States Fish and Wildlife
Service.

BA
0

365,508
313,221

444,147
342,451

404,284
347,861

Total Trust funds United States
Fish and Wildlife Service.

BA
0

2,324
2,383

3,000
2,800

3,400
3,200

340,851

382,777

331,454

379,999
'1.727
C
2,955
"6,166
388,557

National Park Service
Federal
Funds
General and Special Funds:
Operation of the national
system
Appropriation, current

park
303

Outlays

371,697

'1,727
Construction
303
Appropriation, current
Outlays
Road construction
303
Liquidation of contract authority,
current.
Outlays
John F. Kennedy Center for the
Performing Arts
303
Appropriation, current

118,488
93,488

85,358
74,340

16,912

13,912

7,222

3,855

4,287

Outlays
Planning, development, and
operation of recreation facilities
303
Appropriation, current, indefinite...

3,938

4,055
C
49
°34
4,055

14,468

28,465

Outlays
Commemorative activities fund....303
Appropriation, permanent,
indefinite.
Outlays
Miscellaneous permanent
appropriations
303
Appropriation, permanent,

15,368

15,478
"350
17,814

indefinite.
Outlays
Intragovernmental Funds:
Consolidated working fund
Outlays
See footnotes at end of table.

BA
0

161,442
77,649
(30,198)

4,244

28,074

252

611

330

446

435

325

435

1,246

303

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

439

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of the Interior—CONTINUED
Fish and Wildlife Parks—CONTINUED
national Park Service—COHTIHUED
Trust Funds
Miscellaneous trust funds
303
Appropriation, permanent,
8A
indefinite.
Outlays
0

927

2,200

1,005

2,265

2,200

Total Federal funds National
Park Service.

BA
0

521.314
447,503

529,736
520,318

501,322
486,342

Total Trust funds National Park
Service.

BA
0

927
1,005

2,200
2,265

2,200
2,200

Total Federal funds Fish and
Wildlife Parks.

BA
0

1,810,976
1,427,702

1,854,685
1,442,495

1,729,126
1,374,613

Total Trust funds Fish and
Wildlife Parks.

BA
0

3,256
3,424

5,464
5,329

5,864
5,664

375,899

409,008
'1,700
'300
D
10,114
398,080
'1,600

451,021

231,048
220,606

4,427
82,753

Energy and Minerals
Geological Survey
Federal Funds
General and Special Funds:

Surveys, investigations and research
306
Appropriation, current

Outlays..

361,926

Exploration of national petroleum
reserve in Alaska
271
Appropriation, current
Outlays
Payments from proceeds, sale of
water
301
Appropriation, permanent,
indefinite.

BA
0

209,541
141,554

432,217
'100

Intragovernmental Funds:

Consolidated working fund
Outlays

306

Total Federal funds Geological
Survey.

-1,685

BA
0

585,443
501,795

652,170
620,286

455,448
515,070

30,880

81,320

4,198

53,939
'2,241
45,000
'1,570

Office of Surface Mining Reclamation and
Enforcement
Federal Funds
General and Special Funds:

Regulation and technology
Appropriation, current
Outlays
See footnotes at end of table.

302
70,623
'671

THE BUDGET FOR FISCAL YEAR 1980

440

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1980
estimate

1979
estimate

Department of the Interior—CONTINUED
Energy and Minerals—CONTINUED
Office of Surface Mining Reclamation and
Enforcement—CONTIHUED
Federal Funds—CONTINUED
General and Special Funds—CONTINUED

Abandoned mine reclamation fund
302
Appropriation, current
Outlays
Total Federal funds Office of
Surface Mining Reclamation
and Enforcement.

BA
0

36,647
1,214

61,451
24,800

113.916
76,803

BA
0

67,527
5,412

117,631
71,370

195.236
148,097

BA
0

48,825
48,405

135,194

500

Mining Enforcement and Safety
Administration
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current
Outlays

554

Intragovernmental Funds:

Consolidated working fund
Outlays

554
0

Total Federal funds Mining
Enforcement and Safety
Administration.

...

BA
0

48.825
48,488

138.200

121,792

146.976
"2,186
155,721

800

BA
BA

-47,500

"-3,127
-47,500

BA
0

47.500
-574

47,500
2,412

Bureau of Mines
Federal Funds
General and Special Funds:
Mines and minerals
Appropriation, current
Outlays
Drainage of anthracite mines
Outlays
Public Enterprise Funds:

Helium fund
Authority to borrow, current
Contract authority, current

306

Contract authority, permanent
Outlays
Intragovernmental Funds:

Consolidated working fund
Outlays
See footnotes at end of table.

137,319

306

-579

'-47,500
47,500
1,323

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

441

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of the Interior—CONTINUED
Energy and Minerals—CONTINUED
Bureau of Mines-CONTIHUED
Trust Funds

Contributed funds
306
Appropriation, permanent,
indefinite.
Outlays

BA
0

731

800

722

800

BA
0

138,200
120,690
731
722
839,995
676,385

146,035
158,933
800
800
915,836
850,589

135,194
139,142
800
800
785,878
802,309

Total Trust funds Energy and BA
Minerals.
0

731
722

800

800
800

Total Federal funds Bureau of
Mines.
Total Trust funds Bureau of
Mines.
Total Federal funds Energy and
Minerals.

BA
0
BA
0

Indian Affairs
Bureau of Indian Affairs
Federal Funds
General and Special Funds:
Operation of Indian programs:
(Conservation and land
management)
(Appropriation, current)

302
BA

76,967

67,370
'7.000

64,692

(Outlays)
(Area and regional development)
452
(Appropriation, current)

(Outlays)
(Elementary, secondary,
vocational education)
(Appropriation, current)

Indian

Construction
452
Appropriation, current
Outlays
Road construction
452
Appropriation, current
Liquidation of contract authority,
current.
Outlays
Eastern Indian land claims
settlement fund
806
Appropriation, current..
Outlays
Miscellaneous permanent
appropriations:
See footnotes at end of table.

56,822

68,337

390.091

449.946
H,605
"4,558

465,245

345,770

414,326

408,646

258,203

262.083

229,836

257,272
C
917
"5,449
240,030

BA
0

725.261
643,943

795,292
723,738

695,671

BA
0

67,144
89,657

126,554
85,337

67,721
50,664

75,335
(22,912)

79,253

58,379

76,186

74,395

47,113

and
501

(Outlays)
Total Operation
programs.

122
"1,053
62,382
'7,000

BA
0

3.500
3,500

230,203
792.020

THE

442

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of t h e I n t e r i o r — C O N T I N U E D
Indian Affairs—CONTINUED
Bureau of Indian Affairs—CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED
(Area and regional development)
452
(Appropriation, permanent,
BA
indefinite).
(Outlays)
0
(Other general government)
806
(Appropriation, current)
BA
(Appropriation, permanent,
BA
indefinite).
(Outlays)
0

20,981

17,000

19,040

16,000

17,000

30,000
787

30,000
200

30.000
200

30,781

30,200

51,768
49,821

47,200
46,200

47,200
47,200

5,860

6,600

2,000

761

2,158

6,000

13,299

-20,556

BA
BA
BA

1,594
25,293
218,630

3,000
23,000
265,000

3,000
23,000
250,900

195,660

203,300

199,000

BA
BA
0

30,000
35,660
60,166

30,000
46,700
76,700

30,000
61,000
91,000

Total Miscellaneous trust funds

BA
0

311,177
255,826

367.700
280,000

367.900
290,000

Total Federal funds Bureau of
Indian Affairs.

BA
0

919,508
879,557

1,051,799
921,427

965,320
848,648

Total Trust funds
Indian Affairs.

BA
0

311.177
255,826

367,700
280,000

367,900
290,000

Total Miscellaneous permanent
appropriations.
Public Enterprise Funds:
Revolving fund for loans
452
Outlays
Indian loan guaranty and insurance
fund
452
Outlays
Liquidation of Hoonah Housing
Project revolving fund
452
Outlays
Intragovernmental Funds:
Consolidated working fund
Outlays

452

Trust Funds
Miscellaneous trust funds:
(Area and regional development)
452
(Appropriation, current)
(Indefinite)
(Appropriation, permanent,
indefinite).
(Outlays)
(Other general government)
806
(Appropriation, permanent)
(Indefinite)
(Outlays)

BA
0

Bureau of

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

443

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

Department of the Interior—CONTINUED
Territorial Affairs
Office of Territorial Affairs
Federal Funds
General and Special Funds:
Administration of territories
Appropriation, current

806
BA

71,968
68,815

Outlays..
Trust Territory of the Pacific Islands
806
Appropriation, current
Outlays
Micronesian claims fund, Trust
Territory of the Pacific Islands.806
Appropriation, current
Outlays
Payments to the Virgin Islands,
fiscal assistance
852
Appropriation, permanent,
indefinite.
Outlays
Office of the Comptroller for Guam
806
Outlays
Internal revenue collections for the
Virgin Islands
852
Appropriation, permanent,
indefinite.
Outlays
Total Federal funds Office of
Territorial Affairs.

52.023
'1,419
D
100
73,084
'1,419

46,804

99,010

117,666

85,454

114,608
D
130
91,268

170

12,600
14,288

BA
0

44,604

92,511

24,000

198

24,662

24,000

22,171
214,296
176,808

28,826
228,880
232,885

2,360
169,814
163,475

14,407

14,582

15,619

13,547

15,102

14,592

39,015

41,095
'200

48,761

34,639

45^561
'195

43,924
'5

1.000
295

1.000
2,200

1,000
1,000

BA
0

Secretarial Offices
Office of the Solicitor and Office of the
Secretary
Federal

Funds

General and Special Funds:
Office of the Solicitor, salaries and
expenses
306
Appropriation, current
Outlays
Departmental management
Appropriation, current

306

Outlays..
Salaries and expenses (special
foreign currency program)
306
Appropriation, current
Outlays
Intragovernmental Funds:
Working capital fund
Outlays
See footnotes at end of table.

BA
0

306
0

-9.983 ..

THE

444

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of the Interior—CONTINUED
Secretarial Offices—CONTINUED
Office of the Solicitor and Office of the
Secretary-COHTINUEO
Federal
Funds—CONTINUED
Intragovernmental Funds:—CONTINUED

Consolidated working fund, Office of
the Secretary
306
Outlays
Total Federal funds Office of
the Solicitor and Office of
the Secretary.

0
BA
0

239
54,422
38,737

58,620
63,058

65,380
59,521

5,572,277
4,994,380

5,348,692
4,749,431

-853,197

-873,337

Summary
Federal Funds:

(As shown in detail above)

BA
0

Deductions for offsetting receipts:
Proprietary receipts from the
public
300
301
302
450
500
800
902
Total Federal funds
Trust Funds:
(As shown in detail above)
Deductions for offsetting receipts-.
Proprietary receipts from the
public
301

BA1 -707,728
0 I
BA1
-21
0 J
BA1
-11,213
0 J
BA1
-21,402
0 J
BA1
-38
0J
BA1
-1,063
0 J
BA1
-5,306
0 J
BA
4.586,382
0

3,873,287

BA
0
BA1
0 i

302

BA1
0J

303

BA1
0J

306

BA1
0J
BA1
0J

452

5,333,153
4,620,058

-30

-15,750

-17,500

-17,433

-70

-35

-1,100

-1,500

-5,888

-6,092

4,678,742

4,434,515

4,100,845

3,835,254

320.921
265,181

387,287
296,829

380,564
305,364

-4,936

-12,623

-5,300

-808
-2,324
-731
-207,074

-700
-3,000
-800
-223,651

-700
-3,400
-800
-243,801

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

445

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of the Interior—CONTINUED
Summary—C0NTINUE0
Trust Funds:—CONTINUED
902
Total Trust funds
Interfund transactions

452

BA1
0 I

-32,132

-32,230

-32,600

BA
0

72,916
17,176

114,283
23,825

93,963
18,763

-39,610

-80,000

-60,000

-30,000

4,589,688
3,820,853

4,683.025
4,014,670

4,438.478
3,764,017

BA1

0 J
806
Total Department of the Interior

BA1
0 J
BA
0

D e p a r t m e n t of Justice
General Administration
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

751

Outlays
Intragovernmental Funds:
Consolidated working fund
Outlays
Working capital fund
Outlays

27,582

25,702

28,474
C
18
D
949
28,896

25,917

-407

1,917

-1,851

-282

-396

BA
0

27,582
23,444

29,441
30,531

25,917
24,801

25,197

751
751

Total Federal funds
Administration.

General

United States Parole Commission

Federal Funds
General and Special Funds:
Salaries and expenses
Appropriation, current
Outlays

751
BA
0

5,555
5,430

Legal Activities

Federal Funds
General and Special Funds:

Salaries and expenses, General Legal
Activities
752
Appropriation, current
Outlays
Salaries and expenses,
Division
Appropriation, current
Outlays
See footnotes at end of table.

280-000 O-79-29

81,653

79,573

42,371

35,749

90,550
°457
88,400

98,119

46,377
"1.131
46,054

43,592

95,695

Antitrust
752

46,661

THE

446

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of J u s t i c e — C O N T I N U E D
Legal Activities—CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

Salaries and expenses, United States
Attorneys and Marshals
752
Appropriation, current

Outlays
Support of United States prisoners
752
Appropriation, current
Outlays
Fees and expenses of witnesses...752
Appropriation, current
Outlays
Salaries and expenses, Community
Relations Service
752
Appropriation, current
Outlays
Total Federal
Activities.

funds

Legal

190,570

196,700
'226
°7,293

184,014

203,399
'215

'-6,470
227,286
'11
'-5,969

BA
0

21,000
19,298

25,100
24,200

25,100
25,000

20,050

27,052

16,906

20,000
'6,464
19,701
'6,399

'65

BA
0

5,192
4,805

BA
0

360,836
340,345

4,781
4,755

234,632

26,683

4,473
4,459

399,079
393,123

426,498
419,891

553,954

561,341

575,608

552,001

"20,506
578,030

574,927

283,087

274,681

299,350
"6,000
301,319

188,295

193,525

177,883

°700
190,420

Federal Bureau of Investigation

Federal Funds
General and Special Funds:
Salaries and expenses
Appropriation, current

751

Outlays
Immigration and Naturalization Service
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

751

Outlays

298,817
296,952

Drug Enforcement Administration

Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

751
*193.836

Outlays
See footnotes at end of table.

193,108

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

447

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Justice—CONTINUED
Federal Prison System
Federal Funds
General and Special Funds:

Salaries and expenses, Bureau of
Prisons
753
Appropriation, current
Outlays
National Institute of Corrections...754
Appropriation, current
Outlays
Buildings and facilities
Appropriation, current
Outlays

BA
0

269,576
263,134

315,200
310,058

328,167
326,838

9,900

9,920

4,862

9,514

9,884
'-9,884
11,456
'-11,456

BA
0

38,850
46,047

35,280
57,339

5,960
50,300

-1,808
(1,500)

(2,041)

(2,062)

(3,905)

(2,863)

(2,904)

753

Intragovernmental Funds:

Federal Prison Industries,
Incorporated
753
Outlays
Limitation on administrative
expenses.
Limitation on vocational expenses.
Trust Funds
Commissary funds, Federal prisons
(trust revolving fund)
753
Outlays
Total Federal funds Federal
Prison System.
Total Trust funds
Prison System.

Federal

0
BA
0
0

-210 ...
318,326
312,235
-210

360,400
376,911

644,582

646,488

334,127
377,138

Law Enforcement Assistance Administration
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

754
BA
BA

*170,853
"1,437

Outlays..

724,076

723,661

'-170,853
524,512
'-524,512

754
ooo

Law enforcement assistance
Appropriation, current
Outlays
Research and statistics
Appropriation, current
Outlays

0
BA

'497,936
'591,486

BA
BA
0

'48,411
'30,247

754

Public Enterprise Funds:

Revolving fund
754
Outlays
Total Federal funds Law
Enforcement Assistance
Administration.
Summary
Federal Funds:
(As shown in detail above)
See footnotes at end of table.

0
BA
0

BA
0

-8 .
644,582
724,068

2.376,662
2,404,657

647,925
723,661

546,347
621,733

2,518,267
2,593,995

2,406,705
2,513,980

THE

448

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of J u s t i c e — C O N T I N U E D
Summary-CONTINUED
Federal Funds:—CONTINUED
Deductions for offsetting receipts:
Proprietary receipts from the
public
750
902
Total Federal funds

BA\
0 J

-6,779

-8,141

-8,882

BA1
0 J

-294

-250

2,369,589
2,397,584

2,509,876
2,585,604

2,397,573
2,504,848

2,509,876
2,585,604

2,397,573
2,504,848

BA
0

Trust Funds:
(As shown in detail above)

Total Department of Justice

BA
0

-210
2,369,589
2,397,374

D e p a r t m e n t of Labor
Employment and Training Administration
Federal Funds
General and Special Funds:

Program administration
Appropriation, current

504

Outlays
Employment and training assistance
504
Appropriation, current
Reappropriation
Outlays
Community service employment for
older Americans
504
Appropriation, current
Outlays
Temporary

employment

90,832

89,299

3,440,930

BA
0

4,763,675

211,700

134,333

90,190
D
676
90,143

86,260

6,769,758
"400,000
7,164
7,060,310
"50,000

6,841,754

211,700
"8,900
208,035
"2,225

234,800

79,453

122,133
6,842,099
"150,000

211,946
"6,675

assistance
504

Appropriation, current
Outlays
Federal unemployment benefits and
allowances
603
Appropriation, current
Outlays
Grants to States for unemployment
insurance and employment
services
504
Appropriation, current
Outlays
Advances to the unemployment trust
fund and other funds*.
(General retirement and disability
insurance)
601
(Appropriation, current)
(Outlays)
See footnotes at end of table.

BA
0

4,769,404

3,474,954
3,180,992

2,190,500
2,571,000

BA
0

1,200,000
1,165,356

950,000
820,000

950,000
950,000

BA
0

53,600
46,356

21,600
21,600

22,300
22,300

BA
0

23,650

200,000
73,180

300,000
206,044

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

449

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

D e p a r t m e n t of

1979
estimate

1980
estimate

Labor—CONTINUED

Employment and Training Administration
-CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED
(Unemployment
compensation)
603
(Outlays)
0
Total Advances to the
unemployment trust fund
and other funds.
Intragovemmental Funds:
Consolidated working fund
Outlays

BA
0

1,086,257
1,109,907

200,000
73,180

-1,057

4,353

300,000
206,044

504
0

Trust Funds
Gifts and bequests, National
Commission for Employment Policy
504
Appropriation, permanent,
indefinite.
Outlays
Unemployment trust fund:
(Training and employment)
504
(Appropriation, permanent,
indefinite).
(Outlays)
(Unemployment
compensation)
603
(Appropriation, permanent,
indefinite).
(Outlays)

100

640,216

723,721

740,148

606,313

723,721

740,148

14,520,668

15,576,279

15,659,852

BA
0

10,562,815

10,276,279

12,359,852

Total Unemployment trust fund.

BA
0

15,160,884
11,169,128

16,300,000
11,000,000

16,400,000
13,100,000

Total Federal funds
Employment and Training
Administration.

BA
0

4,997,062
12,077,273

12,134,942
11,510,838

10,747,747
11,039,517

Total Trust funds Employment
and Training Administration.

BA
0

15,160,914
11,169,205

16,300,100
11,000,100

16,400,100
13,100,100

BA
0

50,796
48,523

53,773
51,632

53,941
51,824

119,632

164,923

107,226

154,634
'8.218
"6,069
157,307
'8,013

Labor Management Services Administration
Federal Funds
General and Special Funds:
Salaries and expenses
Appropriation, current
Outlays

505

Employment Standards Administration
Federal Funds
General and Special Funds:
Salaries and expenses
Appropriation, current

Outlays
Special benefits:
See footnotes at end of table.

505

160,800
'205

THE

450

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Labor—CONTINUED
Employment Standards Administration—CON.

Federal Funds—CONTINUED
General and Special Funds:—CONTINUED
(General retirement and disability
insurance)
601
(Appropriation, current)
BA
(Outlays)
0
(Federal employee retirement and
disability)
602
(Appropriation, current)
BA
(Outlays)
0
Total Special benefits

Trust Funds
Black lung disability trust fund ...601
Appropriation, current
Indefinite

Outlays
Special workers'
compensation
expenses
601
Appropriation, permanent,
indefinite.
Outlays

27,035
17,532

3,063
3,063

3,369
3,369

292,325
173,937

228,137
228,137

304,017
304,017

319,360

231.200

307,386

191,469

231,200

307,386

BA
BA

181,689

422,265

466,667
756

112,143

313,905

455,044

5,520

6,108

6,478

4,998

5,192

5,712

Total Federal funds
Employment Standards
Administration.

0
BA
0

438,992
298,695

400,121
396,520

472,309
468,391

Total Trust funds Employment
Standards Administration.

BA
0

187,209
117,141

428.373
319,097

473,901
460,756

139,070

179,520

147,751

171,224
°1,810
161,740

Occupational Safety and Health
Administration

Federal Funds
General and Special Funds:
Salaries and expenses
Appropriation, current

554

Outlays
Intragovernmental Funds:
Consolidated working fund

554

Outlays

Total Federal funds
Occupational Safety
Health Administration.

172,060

and

-371

711

712

BA
0

139,070
147,380

173,034
162,451

179,520
172,772

64,461

131,710

60,680

125,500
"2,730
124,924

Mine Safety and Health Administration

Federal Funds
General and Special Funds:
Salaries and expenses
Appropriation, current
Outlays
Intragovernmental Funds:
Consolidated working fund
Outlays
See footnotes at end of table.

554

126,126

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

451

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of L a b o r — C O N T I N U E D
Mine Safety and Health Administration-CON.
Trust

Funds

Contributed funds
554
Outlays
Total Federal funds Mine Safety
and Health Administration.
Total Trust funds Mine Safety
and Health Administration.

0
BA
0
0

64,461
60,688

84,015

19
128,230
124,928
19

131,710
126,126

Bureau of Labor Statistics
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

505

Outlays

102,028

79,025

94,752
"715
93,501

0
BA
0

784
84,015
79,809

95,467
93,501

102,028
94,700

66.058

78,912

86,197

94,700

Intragovernmental Funds:

Consolidated working fund
505
Outlays
Total Federal funds Bureau of
Labor Statistics.
Departmental Management
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

505
D

Outlays

Special foreign currency program.505
Appropriation, current
Outlays

BA
0

60,720

70
175

2,442
77,836

81,887

70
100

70
70

1,445

544

Intragovernmental Funds:

Working capital fund
505
Outlays
Consolidated working fund
505
Outlays
Total Federal funds
Departmental Management.
Summary
Federal Funds:
(As shown in detail above)

-3,644

0
BA
0

313
66,128
57,564

BA
0

Deductions for offsetting receipts:
Proprietary receipts from the
public
500
550
600
902
Total Federal funds

BA1
0J
BA1
0 J
BA1
0 J
BA1
0 I
BA
0

See footnotes at end of table.

81,424
79,381

86,267
82,501

5.840,524
12,769,932

13,066,991
12,419,251

11,773,522
12,035,831

-5,263

-6,341

-94

-120

-829

-69

-470

-1,023
5.833,315

13,059,991

11,766.522

12,762,723

12,412,251

12,028,831

452

THE BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

Department of Labor—CONTINUED
Summary—CONTINUED
Trust Funds:
(As shown in detail above)

BA
0

Interfund transactions

15.348.123
11,286,346

16.728.473
11,319,216

16,874.001
13,560,856

601

BAl
0 I

-108.258

-77.905

-206.044

603

BAl
0 J

-1.045.000

-800.000

-900.000

BA
0

20.028.180
22,895,811

28.910.559
22,853,562

27.534.479
24,483,643

Total Department of Labor.

D e p a r t m e n t of S t a t e
Administration of Foreign Affairs
Federal Funds
General and Special Funds:
Salaries and expenses
Appropriation, current

153
BA

621.037

660.945
"717,911

Outlays..

655,217

Representation allowances
Appropriation, current

'13,892
^93
°13.367
594,331
'12,722

695,671
'1,170

153

Outlays
Acquisition, operation, and
maintenance of buildings abroad
153
Appropriation, current

2.500

2.900

2,513

2,800

113.310

125.000

"3,200
3,100

"64,443
D

Outlays
Acquisition, operation, and
maintenance of buildings abroad
(special foreign currency program)
153
Appropriation, current
Outlays
Emergencies in the diplomatic and

consular service

Outlays
Payment to the Foreign Service
retirement and disability fund .153
Appropriation, current

permanent,

Intragovernmental Funds:
Working capital fund
Outlays
See footnotes at end of table.

7,520

6.025

13,754

10,200

2.350

120,158

"18,150
19,700

153

Appropriation, current

Appropriation,
indefinite.
Outlays

43,529

W
90,706

BA
0

1,764

37.607

69.800

2,268

"2,350
2,350

38.107
"43.369
'3,462
97.800

112.800

107,407

135,907
'3,462

156,169

-648

337

153

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

453

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1978
actual

Account and functional code

1979
estimate

1980
estimate

Department of State—CONTINUED
Administration of Foreign Affairs—CON.

Federal Funds—CONTINUED
Intragovernmental Funds:—CONTINUED

Consolidated working fund

153

Outlays

Trust Funds
Foreign Service retirement
and
disability fund
602
Appropriation, current, indefinite...
Appropriation, permanent,
indefinite.
Outlays
Miscellaneous trust funds
153
Appropriation, permanent,
indefinite.
Outlays

BA
BA
0
BA
0

Total Federal funds
Administration of Foreign
Affairs.

BA
0

Total Trust funds
Administration
of
Affairs.

BA
0

Foreign

-151

3,232

199,061

'4,318
224,027

247,445

93,683

113,028

127,927

1,682

950

995
854,124
823,385

950
964,118
855,965

950
962,223
998,369

200,743
94,678

229,295
113,978

248,395
128,877

390,106

327,676

331,585

'58,357
355,745
'15.173

47,400

27,000

27,003

'40,000
47,397
'20,000

11,118

12,000

10,019

'961
"235
11,810
'925

8,000

8,462
4,297
4,575

10,241

*7,200
8,473

4,717
4,730

758

International Organizations and Conferences

Federal Funds
General and Special Funds:
Contributions to
international
organizations
153
Appropriation, current

Ml 1,552
Outlays.
Contributions for
international
peacekeeping activities
153
Appropriation, current

395,548
'43,184

*70,000
Outlays..
Missions to
international
organizations
Appropriation, current

153
BA

Outlays..
International conferences
contingencies
Appropriation, current

*14,193
13,888
'36

and
153

Outlays
International trade negotiations ...153
Appropriation, current
Outlays
See footnotes at end of table.

50,000
'20,000

BA
0
BA
0

THE BUDGET FOR FISCAL YEAR 1980

454

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1980
estimate

1979
estimate

Department of State—CONTINUED
International Organizations and Conference*
—CONTINUED
Trust Funds
Gifts and bequests, National
Commission on Educational,
Scientific, and Cultural
Cooperation
153
Appropriation, permanent,
BA
indefinite.
Outlays
0

Total Federal funds
International Organizations
and Conferences.

BA
0

460,921
381,644

478,946
466,021

502,945
531,887

Total Trust funds International
Organizations and
Conferences.

BA
0

45
26

50
45

6,620

6,800

International Commissions
Federal Funds
General and Special Funds:
International Boundary and Water
Commission, United States and
Mexico:
Salaries and expenses
301
Appropriation, current

Outlays
Construction
Appropriation, current

6,508

104
"85
6,977

17,000

3,900

6,875

10,500

2.288

2,500

*7,708
7,699

301

Outlays
American sections, international
commissions
301
Appropriation, current

*8,248
12,000

*3,261
Outlays
International fisheries commissions
302
Appropriation, current

1,892

2,195

6,245

6,600

2,887

*7,516
Outlays..
Total Federal funds
International Commissions.
See footnotes at end of table.

BA
0

5,999

6,270
'30

7,470

32.153
21,274

20,084
25,972

26,733
30,056

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

455

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

Department of State—CONTINUED
Other
Federal Funds
General and Special Funds:
Migration and refugee assistance
151
Appropriation, current

66,869

91,544

M 36,885

*53,257
Outlays..
United States emergency refugee and
migration assistance fund
151
Appropriation, current, indefinite...
Outlays
United States-Yugoslavia
bilateral
science and technology agreement
153
Appropriation, current
Outlays
Special assistance to refugees from
Cambodia and Vietnam
604
Outlays
Eighth Pan American games
154
Outlays
Payment to the Republic of Panama
153
Appropriation, permanent
Outlays
International Center, Washington,
D.C
153
Appropriation, permanent,
indefinite.
Outlays
Total Federal funds Other

62,212

12,500

13,083

81,614
10,651

9,500
10,000
13,339
^5,000

BA
0

15,000
13,360
^5,000

-^1,400

-4,482

1,652

3,311

6,689

2,328
2,328

BA
0

115,020
39,943

1,235

200

701

1,437

508

81,697
77,153

167,899
122,710

159,085
175,231

1,428,895
1,303,456

1,631,047
1,470,668

1,650,986
1,735,543

Summary
Federal Funds:
(As shown in detail above)..

BA
0

Deductions for offsetting receipts:
Intrafund transactions
153
Proprietary
public

receipts

See footnotes at end of table.

from

BA}
0 J

-519

the
150

BA}
0 I

-11,704

-17,654

-3,219

271

BA}
0 J

-1,031

-1,000

300

BA}
0 J

-64

400

BA}
0 J

-924

-925

-519

-64
-925

THE

456

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of State—CONTINUED
Summary—CONTINUED
Federal Funds:—CONTINUED
902
Total Federal funds
Trust Funds:
(As shown in detail above)
Deductions for offsetting receipts:
Intrafund transactions
602

BA1
0 J

-302

-305

BA
0

1,414,351
1,288,912

1,610,580
1,450,201

1,645,473
1,730,030

BA
0

200,788
94,704

229,345
114,023

248,445
128,922

-453

-500

200,335
94,251

228,845
113,523

247,945
128,422

-131,627

-165,045

-181,845

1,483,059
1,251,536

1,674,380
1,398,679

1,711,573
1,676,607

BA1

0 J
Total Trust funds

BA
0

Interfund transactions

153

BA1

0 I
Total Department of State

BA
0

Department of Transportation
Office of the Secretary
Federal Funds
General and Special Funds:

Salaries and expenses
Appropriation, current

407

Outlays
Transportation planning, research,
and development
407
Appropriation, current
Outlays
Transportation research activities
overseas (special foreign currency
program)
407
Appropriation, current
Outlays

34,904

33,580

25,000

14,460

BA
0

32,931
"843
«63
34,076

35,540

11,450
'5,000
16,000
'3,000

11,530

-63
38

34,250

14,000
'2,000

...

Intragovernmental Funds:

Working capital fund
Outlays

407

Total Federal funds Office of
the Secretary.

-6,243

1,650

800

BA
0

59,904
41,855

50,224
54,764

47,070
51,050

923,829

964,876

Coast Guard
Federal Funds
General and Special Funds:

Operating expenses
Appropriation, current

403
M,036,951
C

Outlays
See footnotes at end of table.

897,803

1,638
"1,996
'20,836
967,777

1,016,446

457

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1978
actual

Account and functional code

1980
estimate

1979
estimate

D e p a r t m e n t of T r a n s p o r t a t i o n — C O N T I N U E D
Coast Guard—CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

Acquisition, construction, and
improvements
403
Appropriation, current

BA
"284,361

Appropriation, permanent
Outlays
Alteration of bridges
Appropriation, current
Outlays
Retired pay
Appropriation, current

131,650

3,500
195,545

15,100

14,900

8,681

10,000

157,401

198,500

156,465

173,500
'4,000
173,500
'4,000

38,560

39,000

10,189
"31,066

36,902

"94
'1,586
40,680

20,000

20,304

17,000

BA
0

5,790
5,817

5,000
6 455

BA
0

7,144
10,836

3,500
7,000

403

Outlays
Reserve training
Appropriation, current

BA
0

199,000
"14,900
14,000

198,200

403

Outlays
Research, development, test, and
evaluation
403
Appropriation, current
Outlays
State boating safety assistance ...403
Appropriation, current
Outlays
Pollution fund
304
Appropriation, permanent
Outlays
Offshore oil pollution compensation
fund
304
Appropriation, current
Indefinite
Authority to borrow, current
Indefinite

BA
BA

'5,000

BA
BA

'3,000

40,680

"21,825
20,000

7,000
7,000

12,000
'-6,000
2,000
'-1,000
14,000

Outlays.
'8,000

'-7,000
Oil

pollution liability and
compensation fund
304
Appropriation, current
Outlays

BA
0

'25,000
'25,000

Intragovernmentol Funds:

Coast Guard supply fund
403
Outlays
Coast Guard yard fund
403
Outlays
Trust Funds
Coast Guard general gift fund 403
Appropriation, permanent,
indefinite.
Outlays
See footnotes at end of table.

-1,097

500

400

16,796

-5,000

THE BUDGET FOR FISCAL YEAR 1980

458

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Transportation—CONTINUED
Coast Guard—CONTINUED
Trust Funds—CONTINUED
Special statistical work
403
Outlays
Miscellaneous trust revolving funds
403
Outlays
Total Federal
Guard.

funds

Coast

Total Trust funds Coast Guard..

-161

161

BA
0

1,423.824
1,284,157

1,545,543
1,425,457

1,636,792
1,522,726

BA
0

18
-96

30
217

30
56

1,622,700

1,680,584

1,804,096

"60,000
1,716,610

1,786,680

Federal Aviation Administration
Federal Funds
General and Special Funds:

Operations
Appropriation, current

402

Outlays
Facilities, engineering and
development
402
Appropriation, current
Outlays
Operation and
maintenance,
Metropolitan Washington Airports
402
Appropriation, current
Outlays
Construction, Metropolitan
Washington Airports
402
Appropriation, current
Outlays
Civil supersonic aircraft development

termination

402

Outlays
Safety regulation

402

BA
0

14,263
14,692

18.370
18,000

20,636
17,237

22,293

25,465

22,053

23.858
"630
24,470

BA
0

5.500
3,623

5,000
14,100

7,985
9,053

150
667

Outlays
United States
International
Aeronautical Exposition
Outlays
Public Enterprise Funds:
Aviation insurance revolving

237
fund
402

Trust Funds
Grants-in-aid for airports (Airport and
airway trust fund)
402
Appropriation, current
Contract authority, current
Contract authority, permanent
Liquidation of contract authority,
current.
Outlays

513

402

Outlays

See footnotes at end of table.

25,038

-1,160
BA
BA
BA

15.000
540,000
(325,000)
562,156

-1,232

15,000
54,140
575,000
(550,000)

10,000

565,000

610,000
(610,000)
570,000

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

459

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of T r a n s p o r t a t i o n — C O N T I N U E D
Federal Aviation Administration—CONTINUED
Trust Funds—CONTINUED
Facilities and equipment (Airport and
airway trust fund)
402
Appropriation, current
BA
Reappropriation
Outlays
Research, engineering and
development (Airport and airway
trust fund)
402
Appropriation, current
Outlays

200,000

BA
0

9,000
211,002

80,800

67,127

282,297
'13,563
54,363
227,600
'4,611

250,000

75,100
'3,500
78,000
'1,700

75,100
71,900
'1,800

213,300
'6,782

Operations (Airport and airway trust
fund)
402
Appropriation, current
Outlays

BA
0

275,000
275,075

300,000
299,790

293,020
293,020

Total Federal funds Federal
Aviation Administration.

BA
0

1,664,756
1,662,581

1,788,442
1,772,461

1,858,182
1,836,776

Total Trust funds Federal
Aviation Administration.

BA
0

1,119,800
1,115,360

1,372,963
1,176,701

1,238,120
1,156,802

8,370

13,738

7,746

12,351
"244
12,734

19,150
(5,000)

13,135
(18,000)

(25,283)

29,563

20,500

15,000

3,920

3,000

2,000

5,600
(290)

6,600
(5,500)

6,600
(4,168)

3,141

4,000

5,000

BA
0

1,767
2,962

13,333
5,900

7,800

(2,700)

(6,000)

(10,000)

5,566

5,500

5,000

BA
0

1,135

15,000
5,500

7,000

Federal Highway Administration
Federal Funds
General and Special Funds:
Motor carrier safety
Appropriation, current

401

Outlays
Highway beautification
401
Appropriation, current
Liquidation of contract authority,
current.
Outlays
Oarien Gap Highway
151
Outlays

Territorial highways

401

Appropriation, current
Liquidation of contract authority,
current.

Outlays
Railroad-highway crossings
demonstration projects
401
Appropriation, current
Outlays
National scenic and recreational
highway
401
Liquidation of contract authority,
current.
Outlays
Alaska Highway
401
Appropriation, current
Outlays
See footnotes at end of table.

13,770

THE BUDGET FOR FISCAL YEAR 1980

460

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1979
estimate

1980
estimate

Department of Transportation—CONTINUED
Federal Highway Administration—CONTINUED
Fee/era/ Funds—CONTINUED
General and Special Funds:—CONTINUED

Off-systems roads programs
401
Appropriation, current
Liquidation of contract authority,
current.
Outlays.
Access highways to public recreation
areas on certain lakes
401
Appropriation, current
Outlays
Highways crossing federal projects
401
Appropriation, current
Outlays
Miscellaneous appropriations
401
Outlays
Trust Funds
Federal-aid highways (trust fund)
401
Contract authority, current
Contract authority, permanent
Liquidation of contract authority,
current.
Outlays
Limitation on general operating
expenses.

165,000
(45,000)

30.000
(44,000)
"(18,500)
138,500
"18,500

(10,000)

82,262

BA
0

8,650
870

BA
0

20,000
16,223

16,000
14,500

14,000
11,000

9,985

1,851

3,075

BA
BA

7,900 ..
3,000

122,800

4,000

-146,067
7,994,067
6,842,778 .
(5,850,000) (6,950,000)

8,599,540
(6,900,000)

6,570,000
(169,650)

6,930,000
(186,031)

5,876,289
(165,325)

^(4,770)
Highway related safety grants
401
Contract authority, permanent
Liquidation of contract authority,
current.
Outlays
Baltimore-Washington Parkway 401
Outlays
Trust fund share of other highway
programs
401
Appropriation, current
Contract authority, permanent
Liquidation of contract authority,
current.
Outlays
Highway safety research and
development
401
Appropriation, current
Outlays
Overseas highway
401
Appropriation, current
Outlays
Miscellaneous trust funds
151
Appropriation, permanent
Liquidation of contract authority,
permanent.
Outlays
Miscellaneous trust funds
Demonstration projects
401
Appropriation, current
Outlays
See footnotes at end of table.

24,756
(20,000)

24,673
(23,000)

24,673
(26,500)

15,530

18,900

23,000

124

500

BA
BA

3,333
25.000
(7,300)

26,667
25,000
(13,000)

25,000
(30,800)

14,035

25,700

40,200

BA
0
BA
0

9,000
8,877
17,000
3,210

9,000
9,000
87,100 ..
14,766

3,329

256
(592)

4,221

3,649

2,925

BA
0

27.250
7,124

10 000
9,000

9,200

9,500
9,000
19,230
2,799

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

461

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Transportation—CONTINUED
Federal Highway Administration—CONTINUED

Trust Funds—CONTINUED
Right-of-way revolving fund (trust
revolving fund)
401
Liquidation of contract authority,
current.
Outlays
Total Federal funds Federal
Highway Administration.
Total Trust funds Federal
Highway Administration.

(20,000)
0
BA
0
BA
0

-16,884 ....
228,537
114,563
163,373
233,485
6,806,379
8,176,763
5,912,526
6,651,515

34,338
196,445
8,661,512
7,033,555

National Highway Traffic Safety
Administration

Federal Funds
General and Special Funds:
Operations and research
Appropriation, current

401

Outlays
State and community highway safety
401
Appropriation, current
Outlays

52,588

55,745

10,475
M7.343

61,552

"540
47,775

58,608

BA
0

1,664
5,101

1,715
1,500

2,297
2,000

26,800

25,875
"460
175,785

27,351

Trust Funds
Trust fund share of highway safety
programs
401
Appropriation, current
Contract authority, current
Contract authority, permanent
Liquidation of contract authority,
current.
Outlays
Gifts and donations
401
Appropriation, permanent,
indefinite.
Outlays

BA
BA

Total Federal funds National
Highway Traffic
Safety
Administration.

BA
0

54,252
66,653

58,000
49,275

60,115
60,608

Total Trust funds
Highway Traffic
Administration.

BA
0

177,134

202,120

143,700

198,069

202,554
187,067

7,440

7,705

6,518

8,195
D
335
8,250

19,500

23,631
D
570

25,940

17,616

28,604

22,886

National
Safety

0
BA

150,336 ..
(166,000)
(112,000)
198,064
143,700

175,203
(171,000)
187,067

_2
5 ...

Federal Railroad Administration

Federal Funds
General and Special Funds:
Office of the administrator
Appropriation, current

401

Outlays
Railroad safety
Appropriation, current

401

Outlays
See footnotes at end of table.

280-000

O—79—30

7,545

THE

462

BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

D e p a r t m e n t of T r a n s p o r t a t i o n — C O N T I N U E D
Federal Railroad Administration—CONTINUED
Federal Funds—CONTINUED
General and Special Funds:—CONTINUED

Railroad research and development
401
Appropriation, current
Outlays
Rail service assistance
401
Appropriation, current
Authority to borrow, current
Outlays
Northeast corridor improvement
program
401
Appropriation, current
Outlays
Grants to National Railroad
Passenger Corporation
401
Appropriation, current
Outlays

BA
0

53,600
62,381

51,980
55,450

56,255
50,675

83,000

84,370

85,210
'250,000

BA
0

8,024
-4,601

121,600

96,000
'40,000

400,000

481,000

203,830

455,000
"35,000
465,000
"17,500

716,000

760,000

716,000

660,000
"119,000
660,000
"119,000

5,000
6,500

370,200
"10,500

634,000

Public Enterprise Funds:

Alaska Railroad revolving fund 401
Appropriation, current
Outlays
Railroad rehabilitation and
improvement financing funds ..401
Authority to borrow, current
Outlays
Total Federal funds Federal
Railroad Administration.

BA
0

3,000
7,493

9,300
8,050

BA
0

200,000
66,247

170,000
85,000

78,000

BA
0

1,490,564
1,075,484

1,617,381
1,568,454

1,671,110
1,316,306

574,000
-90,000
(1,756,000)

2,361,486

2,421,360

(1,850,000)

(1,500,000)

2,027,529

2,250,000

2,455,000

Urban Mass Transportation Administration
Federal Funds
General and Special Funds:

Urban mass transportation fund ..401
Appropriation, current
Contract authority, current
Liquidation of contract authority,
current.
Outlays

BA
BA

Saint Lawrence Seaway Development
Corporation
Federal Funds
Public Enterprise Funds:

Saint Lawrence Seaway Development
Corporation
403
Outlays
Limitation on administrative
expenses.
See footnotes at end of table.

-2,827
(1,174)

-1,303
(1,280)

-1,903
(1,372)

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

4(53

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of Transportation—CONTINUED
Research and Special Programs
Administration
Federal Funds
General and Special Funds:

Research and special programs...407
Appropriation, current
Outlays

BA
0

8,290
5,459

24,760
21,188

26,419
23,029

Intragovernmental Funds:

Consolidated working fund,
transportation systems center..407
Outlays
Total Federal funds Research
and Special Programs
Administration.
Summary
Federal Funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the
public
376

-4,470

3,000

BA
0

8,290
989

24,760
24,188

26,419
23,029

BA
0

5,414,127
6,319,794

7,560,399
7,376,781

7,755,386
7,460,037

BA1
0 J

-1,500
J

BA1
0 J
400

BA1

-36,527

-38,977

1,000

-40,677

0 I
J

BA1
0 J
401

BA1
0 J

-12

902

BA1
0 I

-100

-105

BA
0

5,377,488
6,283,155

7,521,305
7,337,687

7,713,092
7,417,743

BA
0

8,103,331
7,171,490

9,751,876
8,026,502

10,102,216
8,377,480

BA1
0 J

-2,849

-708

-2,299

BA1
0 J

-5

Total Federal funds
Trust Funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the
public
151
902
Total Trust funds
Total Department
Transportation.
See footnotes at end of table.

-l,000

BA
0

8,100,477
7,168,636

9,751,168
8,025,794

10,099,917
8,375,181

BA
0

13,477,965
13,451,791

17,272,473
15,363,481

17,813,009
15,792,924

464

THE BUDGET FOR FISCAL YEAR 1980

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

1980
estimate

Department of the Treasury
Office of the Secretary
Federal Funds
General and Special Funds:
Salaries and expenses
Appropriation, current
Outlays
Investment in National
Cooperative Bank
Appropriation, current

803
BA

30,314

27,240

30,049
<-979
32,722

30,850
30,895

Consumer
376
BA

60,000
'40,000

Outlays

International affairs
Appropriation, current

60,000

803
BA

18,302

16,948

18,754

^5,442
16,513

22,341

39,077

40,000

45,000

-769

2,000

69,000

-463

-213

-120,120

-167,485

-169,883

-26

87,717
-75,360

133,443
-71,141

158,602
12,500

7,500
6,802

7,200
7,395

6,337
6,307

'250,000
'250,000

'150,000

*22,752
Outlays.
Presidential election campaign fund
806
Appropriation, permanent,
indefinite.
Outlays
Miscellaneous
permanent
appropriations
803
Appropriation, permanent,
indefinite.
Outlays
Public Enterprise Funds:
Liquidation of Reconstruction
Finance Corporation
803
Outlays
Exchange stabilization fund
155
Outlays
Intragovernmental Funds:
Working capital fund
803
Outlays....
Trust Funds
Pershing Hall memorial fund
Appropriation, permanent
Outlays

BA
0

705
BA
0

Total Federal funds Office of
the Secretary.

BA
0

Total Trust funds Office of the
Secretary.

BA
0

Office of Revenue Sharing
Federal Funds
General and Special Funds:
Salaries and expenses
Appropriation, current
Outlays
Targeted fiscal assistance
Appropriation, current
Outlays
See footnotes at end of table.

851
BA
0
852
BA
0

•aso.ooo

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

465

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

Department of the Treasury—CONTINUED
Office of Revenue Sharing—CONTINUED

Federal Funds—CONTINUED
General and Special Funds:—CONTINUED
Antirecession financial assistance
fund
852
Appropriation, current
BA
Outlays
0
Payments to State and
local
government fiscal assistance trust
fund
851
Appropriation, current
BA
Outlays
0
Payments to United States
Territories, fiscal assistance ....852
Appropriation, permanent
BA
Outlays
0

1,400,000
1,329,477

2,450

6,854,924
6,854,924

240,000
240,000

6,854,924
6,822,957
8,262,424
8,191,203
6,854,924
6,822,957

6,854,924
6,852,124
7,352,124
7,354,769
6,854,924
6,852,124

6,854,924
6,862,578
7,251,261
7,251,231
6,854,924
6,862,578

BA
0

13,453
12,123

15,000
14,600

12,670
11,680

5,327
13.453
17,450

18,886
15,000
33,486

2,900
12,670
14,580

Trust Funds
State and local government fiscal
assistance trust fund
851
Appropriation, current
Outlays

BA
0

Total Federal funds Office of
Revenue Sharing.

BA
0

Total Trust funds
Revenue Sharing.

BA
0

Office

Federal Law Enforcement Training Center

Federal Funds
General and Special Funds:
Salaries and expenses
751
Appropriation, current
Outlays
Construction, Federal Law
Enforcement Training Center....751
Outlays
Total Federal funds Federal
Law Enforcement Training
Center.

BA
0

Bureau of Government Financial Operations

Federal Funds
General and Special Funds:
Salaries and expenses:
(Social services)
(Appropriation, current)
(Outlays)
(Central fiscal operations)
(Appropriation, current)

506
BA
0
803
BA

156,087

(Outlays)

141,051

Total Salaries and expenses

BA
0

156,087
141,051

See footnotes at end of table.

543,000
543,000
174,000
"9,017
«2,289
176,439
"8,992
728,306
728,431

191,115
189,210
"25
191,115
189,235

THE BUDGET FOR FISCAL YEAR 1980

466

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1978
actual

1979
estimate

Department of the Treasury—CONTINUED
Bureau of Government Financial Ope

Full text of Budget of the United States Government : Fiscal Year 1980

FRASER