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T he F E D E R A L

BUDGET in BRI

F IS C A L Y E A R

1955

EXECUTIVE OFFICE OF THE PRESIDENT
BUREAU OF THE BUDGET

THE BUDGET DOLLAR

*W&en,e ci

Re c e i p t s i n c l ud e Ne w T a x P r o p o s a l s

Fiscal Year 1955 Estimated

The FEDERAL

BUDGET in BRIEF

W hen I took office a year ago, I prom ised the
Congress and the people th a t this adm inistration
w ould seek to ch art a fiscal and economic policy
w hich w ould reduce the planned deficits and bring
the budget into balance.
I w arned th a t this would not be easy. T here still
are heavy national security requirem ents. S ub
stantial expenditures are by law relatively nondiscretionary. D espite these in h erent difficulties,
we have m ade great progress.
G overnm ent m ust play a vital role in m a in tain
ing econom ic grow th and stability. But I believe
th a t our developm ent, since the early days of the
R epublic, has been based on the fact th a t we left a
g reat share of our national incom e to be used by a
p rovident people w ith a will to venture. T h eir
actions have stim ulated the A m erican genius for
creative initiative and thus m ultiplied our p ro
ductivity.
I firm ly believe th a t this budget represents a plan
of governm ent w hich will not only protect our way
of life b u t will also strengthen our economic base
and enhance the welfare of all our people.
D

w ig h t

FISCAL YEAR 1955
July 1, 1954-June 30, 1955

E ise n h o w e r .

From the Budget Message
J a n u a ry 21, 1954

INTRODUCTION
T he Budget of the U nited States is the financial expression of the Presi
d e n t’s program for the G overnm ent during the ensuing fiscal year— the
year beginning Ju ly 1 and ending Ju n e 30. By law, it m ust be trans
m itted to the Congress each year w ithin 15 days of the date Congress
convenes.
T h e budget is a large, complex, official docum ent. Therefore, m any
im p o rta n t facts ab o u t th e budget have been assembled in m ore con
venient form in this booklet.
T his issue of T he Federal Budget in Brief deals particularly w ith the
budget for the fiscal year 1955 (the year beginning Ju ly 1, 1954, and ending
Ju n e 30, 1955), w hich the President sent to the Congress on Ja n u a ry 21,
1954. It presents estim ates of the am ount of m oney w hich will be received
by the G overnm ent in the fiscal year 1955 un d er both existing and proposed
tax laws, and the am ount w hich it is expected will be spent to carry out
present G overnm ent program s and newr program s recom m ended to the
Congress by the President. T he Budget in Brief also provides other infor
m ation designed to prom ote a better understanding of Federal financial
transactions.
C ertain clarifying changes in presentation were m ade in the 1955 budget.
T o perm it com parison, corresponding figures for prior years were adjusted
to conform . H ence some of the figures presented in this booklet for earlier
years will differ from those shown in previous issues of the F ederal Budget
in Brief.
T h e estim ates of receipts and expenditures w hich appear in the budget
are subject to change from the tim e they are transm itted in J a n u a ry until
the close of the fiscal year 18 m onths later. T hey m ay be affected by la te r
am endm ents and recom m endations by the President, by congressional
action on legislation or action on taxes and on appropriations, and also by
changes in domestic or in tern ational conditions w hich influence tax yields
an d expenditures.

CONTENTS
P art

P art

I. Budget Summary .............................................................................................................................
Summary of the 1955 bu d g et..................................................................................................
Budget receipts. . .......................................................................................................................
Budget expenditures..................................................................................................................
Budget authorizations related to expenditures....................................................................
Unexpended balances of appropriations........................................................................
New obligational authority and budget expenditures, by agency..................................
Budget expenditures as a percentage of national incom e.................................................
Budget expenditures per c a p ita ..............................................................................................
II. Budget E xpenditures, by F unction .........................................................................................
National security........................................................................................................................
Veterans’ services and benefits...............................................................................................
International affairs and finance............................................................................................
Social security, welfare, and h e a lth ......... .............................................................................
Housing and community developm ent.................................................................................
Education and general research.............................................................................................
Agriculture and agricultural resources.................................................................................
N atural resources.......................................................................................................................
Transportation and com m unication.....................................................................................
Finance, commerce, and industry.........................................................................................
Labor and m anpow er...............................................................................................................
General governm ent.................................................................................................................
Interest.........................................................................................................................................
Budget expenditures, 1950-1955..........................................................................................
III. Supplementary I nformation......................................................................................................
Gross and net budget expenditures, by agency..................................................................
Trends in the Federal bu d g et.................................................................................................
Trust funds—receipts and expenditures...............................................................................
Receipts from and payments to the public..........................................................................
The public d e b t.........................................................................................................................
Federal public w orks................................................................................................................
Research and developm ent..................................................................... ...............................
Federal aid to State and local governm ents.......................................................................
Federal credit program s..........................................................................................................
Glossary of selected budget term s.........................................................................................
Historical tables:
Budget receipts and expenditures and public debt, 1915-1955 ..............................
Budget expenditures, by function, 1946-1955.............................................................
Organization chart—Executive Branch of the G overnm ent........................................

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46
48
50
52
53
54
56
58
60
62
63
63
64

The Federal Budget
BILLIONS

F IS C A L Y E A R 19S S E S T IM A T E D

Receipts include new tax proposals

R E C E IP TS The Government*s Income
$28.3

Individual Income Taxes . . . .

$19.9

Corporation Income Taxes ...

$10.2

Excise Taxes .........................

$4.3

Customs and Other Receipts

Budget Receipts ..................... $62.7
Budget Expenditures ............. $ 65.6
Budget D eficit

E X P E N D IT U R E S

..................... $2.9

The Government’s Spending
144.9

National Security
Interest
Veterans
Agriculture ................................................... .

■

Social Security, Welfare and Health ..........

■ $1.8

Transportation and Communication ...........

■ $14

International .......... ........................................

■ $<-2

General Government ..................................

■

$ 1.2

Natural Resources ................................ .

$1.1

$0.5

Labor, Education, Commerce, and Housing

PART 1

Budget Sum m ary

T his section of T h e Federal Budget in Brief contains an overall descrip
tion of the U nited States budget for the fiscal year 1955. It presents some
of the issues involved in the 1955 budget and sum m arizes some of the
im p o rtan t facts ab o u t the budget.

PART 1 • Budget Summary

Summary of the 1955 Budget
In the fiscal year ending Ju n e 30, 1955, the
Federal G overnm ent is expected to: (1) spend
65.6 billion dollars u n d e r existing and proposed
legislation; (2) collect 62.7 billion dollars in taxes
and other revenue, taking into account the Presi
d e n t’s new tax proposals; (3) come closer to a b al
anced b udget th an in any fiscal year since 1951.
T he estim ated b udget deficit is 2.9 billion dollars.
Budget expenditures.— T h e bud g et expenditures esti
m ated for the fiscal year 1955 represent a reduction
of 12.3 billion dollars from the am o u n t recom
m ended for 1954 in the budget docum ent of
Ja n u a ry 9, 1953 (which was sent to Congress by
the previous adm inistration), a reduction of 5.3 bil
lion dollars from the presently estim ated expendi
tures for 1954, and a reduction of 8.4 billion dollars
from actual expenditures in the fiscal year 1953.
In the b u d g et message, the President em phasized
that, w ithin a sm aller budget, ap p ro p riate provision
is being m ade “ for our natio n al security and for our
international obligations and we have been able to
propose certain increases in Federal expenditures to
advance our dom estic well-being and to foster eco
nomic gro w th .”
Budget receipts.— E stim ated budget receipts of
62.7 billion dollars for the fiscal year 1955 are
almost 5 billion dollars less than the present esti
m ate for the fiscal year 1954. T his decline results
from lower tax rates. It takes into account the

elim ination of the excess profits tax on corpora
tions and the reduction in individual income taxes
w hich w ent into effect on J a n u a ry 1, 1954. It also
reflects the President’s tax proposals to the C on
gress w hich are discussed on page 8.
Budget deficit.— T he estim ated budget deficit of
2.9 billion dollars for the fiscal year 1955 com pares
w ith an original estim ate for 1954 of 9.9 billion
dollars in the budget sent to the Congress on
J a n u a ry 9, 1953. T he present estim ate of the
budget deficit for 1954 is 3.3 billion dollars. In
the fiscal year 1953, the actual deficit was 9.4
billion dollars.
T he reductions effected in G overnm ent spending
in the fiscal year 1954 were applied to reducing the
large deficit originally estim ated for th a t year. In
the fiscal year 1955, most of the new savings in
expenditures are being returned to taxpayers in
the form of lower taxes.
New obligational authority.—T h e President recom
m ended th at Congress g ran t G overnm ent agencies
the authority to incur 56.3 billion dollars of new
obligations in the fiscal year 1955. This is 35.1
billion dollars less than the am ount enacted for the
fiscal year 1952, 23.9 billion dollars less than 1953,
15.5 billion dollars less th an recom m ended for
1954 in the Budget sent to Congress on Ja n u a ry
9, 1953, and 4.4 billion dollars below the am ount
presently estim ated for 1954.

SUMMARY B U DG ET INFORM ATION

(Fiscal years.

In billions)
1954 estimated 1

1950
actual

1951
actual

1952
actual

1953
actual

Budget expenditures..................................................................
Budget receipts............................................................................

$39. 6
36. 5

$44. 0
4 7 .5

$65. 4
61. 4

Budget deficit (—) or surplus ( + ) ...........................

-3 . 1

+ 3 .5

- 4 .0

Description

Budget
docu
ment

Current
estimate

$74. 0
64. 6

$77. 9
6 8 .0

$70. 9
67. 6

-9 . 4

-9 . 9

-3 . 3

1955
esti
mated

$65. 6
62. 7
-2 . 9
1

New authority to incur obligations.....................................

49. 3

8 2.9

91. 4

80. 2

71. 8

60. 7

56. 3

1
1 References to 1954 are to the 1954 budget document of Jan. 9, 1953, as presented to the Congress, and to currently
revised budget estimates.

Budget Receipts and Expenditures
$ BILLIONS

SURPLUS OR DEFICIT

'1955
Estim ated

Receipts
Expenditures

*1954
Estim ated

Receipts
Expenditures

1951
Receipts
Expenditures

1950
Receipts
Expenditures

^ Receipts include new tax proposals

PART 1 • Budget Summary

Budget Receipts
U nder the President’s tax recom m endations,
budget receipts in the fiscal year 1955 are esti
m ated at 62.7 billion dollars, com pared w ith 67.6
billion dollars in the fiscal year 1954.
As of Ja n u a ry 1, 1954, individual incom e taxes
were lowered by an average of abo u t 10 percent.
T he excess profits tax on corporations was also
rem oved on th a t date. These tax reductions affect
the budget for p art of the fiscal year 1954 and for
all of the fiscal year 1955. T ax reductions were
justified only because of the progress m ade in
reducing expenditures and im proving the budget
ary outlook.
T he im proved budget outlook also perm itted the
President to m ake some proposals for tax reform
and reductions for millions of taxpayers which
represent m uch needed im provem ents in the tax
system. T h e budget message described 25 different
tax proposals w hich w ould m ake the tax system
fairer to taxpayers and encourage initiative and
investm ent, resulting in increased production, more
and b etter jobs, and econom ic growth.
T h e P resident’s proposals for tax reform cover
im provem ents in the tax treatm en t of: (1) children
earning over 600 dollars; (2) single people w ho are
heads of families; (3) foster children; (4) expenses of
child care; (5) m edical expenses; (6) m edical insur
ance and sick benefits for employees; (7) pension

and profit-sharing plans for employees; (8) a n
nuities; (9) double taxation of dividends; (10) esti
m ated returns; (11) filing d ate for tax returns; (12)
depreciation of buildings, m achinery, and eq u ip
m ent; (13) research and developm ent expenses;
(14) accum ulation of earnings; (15) partnerships;
(16) certain corporations and partnerships by
granting them options as to the form of organiza
tion under w hich they m ay be taxed; (17) corporate
reorganizations; (18) loss carryback; (19) soil con
servation expenses; (20) accounting definitions;
(21) m ultiple surtax exemptions, consolidated re
turns, and intercorporate dividends; (22) business
income from foreign sources; (23) paym ent dates of
corporation income tax. H e also recom m ended
(24) simplification of adm inistrative features of the
tax laws and (25) a general simplification and im
provem ent in other com plicated tax provisions.
In the budget message, the President stated th a t
while the budgetary outlook perm its the above tax
revisions, most of w hich involve a loss of tax rev
enue, it does not perm it further general reduction of
tax rates at this time. Therefore he recom m ended,
“ th at the reductions in the general corporate in
come tax be deferred for 1 year; th a t the excise tax
rates, scheduled to be reduced on April 1, including
those on liquor, tobacco, autom obiles, and gasoline,
8

Budget Receipts
FISCAL YEAR 1955 ESTIMATED

$ BILLIONS

28.3

Individual Income Taxes

Corporation Income Taxes

Excise Taxes — Manufacturers
2.9

Excise Taxes — Liquor

Excise Taxes — Retailers and Miscellaneous

Excise Taxes— Tobacco

Customs and Other Receipts

Budget Receipts

$ Billions
Income Taxes

Fiscal Year

Total

Individuals Corporations

Excises

Customs
and Other

be continued a t present rates; and
4.3
28.3
62.7
1955 Est.
19.9
10.2
th at any adjustm ents in the other ex
4.1
30.9
19 5 4 Est.
67.6
22.4
10.2
cise taxes be such as to m ain tain the
total yield w hich we are now re
3.7
29.8
1953
64.6
21.2
9.9
ceiving from this source.55
3.4
1952
27.9
61.4
21.2
8.9
He also said, £T am anxious to have
3.1
1951
21.7
47.5
14.1
8.6
taxes reduced as fast as th a t can be
1950
2.9
15.7
36.5
10.4
7.5
done w ithout building up inflationary
deficits. It is the determ ined p u r
pose of this adm inistration to m ake
further reductions in taxes as rapidly
be the m ajor source of Federal revenue. Incom e
as justified by prospective revenues and reductions
taxes on individuals will account for an estim ated 45
in expenditures. T he objective will be to retu rn to
percent of budget receipts; corporation income taxes
the people, to spend for themselves and in their
for 32 percent. An additional 16 percent will be
own way, the largest possible share of the m oney
th a t the G overnm ent has been spending for th em .”
raised through excise taxes on liquor, gasoline,
tobacco, and other products and services.
I n the fiscal vear 1955 incom e taxes will continue to

PART ( • Budget Summary

Budget Expenditures
B udget expenditures for the fiscal year 1955 are
estim ated at 65.6 billion dollars. A n estim ated 44.9
billion dollars, over tw o-thirds of the total, will be
spent for m ajor national security program s. This
am o u n t will be m ainly for the purchase of m ilitary
equipm ent and weapons, for the pay an d allow
ances of m ilitary personnel, for the o peration and
m aintenance of the m ilitary establishm ent, for the
m u tu al m ilitary program w ith our allies, and for
the developm ent of atom ic energy. It also will
provide for air bases and other m ilitary construc
tion, lor research and developm ent of new and
im proved weapons, for the stockpiling of strategic
and critical m aterials, and for strengthening the
reserve forces and N ational G u ard units.
E xpenditures for m ajor national security pro
gram s in the fiscal year 1955 are estim ated to be
5.4 billion dollars less than in 1953, 9.8 billion
dollars below the original estim ate for 1954, and
3.9 billion dollars below the currently revised
estim ate for 1954. In discussing these reductions,
the President said th at they represent the largest
single elem ent of reduction from the c u rren t year’s
level of expenditures, but he em phasized th at
44these savings result from revisions in program s,
from shifts in emphasis, from better balanced pro

curem ent, and from im proved m anagem ent and
operations. O u r security is being strengthened—
not weakened. F urther, while expenditures for
some program s in this category will be reduced,
others will be increased.” Expenditures in the
fiscal year 1955 for atom ic energy, for the m u tu al
m ilitary program , and for continental defense will
be greater than ever before. Expenditures for
airpow er will be greater than in any year since the
end of W orld W ar II.
T he budget also provides for 14.1 billion dollars,
or 22 percent of total budget expenditures, for
program s w hich are relatively nondiscretionary in
that, once they are established by law, the am ounts
of expenditures are determ ined largely by factors
outside the ann u al budgetary process. For exam ple,
expenditures for grants to States for m any purposes
depend upon the extent to w hich individual States
take advantage of Federal grant-in-aid program s;
those for veterans’ pensions depend upon the n u m
ber of qualified veteran applicants; interest pay
m ents on the public debt depend upon the am ount
of debt outstanding and the current rate of interest;
farm price supports depend upon the size of crops
and the dem and for supported commodities.
10

Budget Expenditures
FISCAL YEAR 1955 ESTIM ATED

$ B ILLIO N S

National Security

Charges Fixed by Law ( Interest, Veterans, Grants to States, etc.)

Other Expenditures

Budget Expenditures

$ Billion?
National

Charges Fixed

Fiscal Year
Other
Security
by Law
Total
All other budget expenditures in
the fiscal year 1955 are estixnated at
14.1
6 5 .6
6.6 billion dollars. T he activities in
1955 Est.
4 4 .9
6 .6
this category cover, in num ber, a
14.1
70.9
4 8 .7
8.1
1 9 5 4 Est.
large m ajority of the appro p riatio n
74.0
14.9
1953
50.3
8.8
items in the budget, although the
6 5 .4
12.3
1 952
4 3.8
9.3
am ount involved is only one-tenth
4 4 .0
12.1
1951
22.3
9.6
of total budget expenditures. Some
1950
3 9.6
15.6
13.0
11.0
of these activities are closely related
to national security, such as the
international program s for econom ic
developm ent, the Selective Service
reduced; those for relatively uncontrollable m ajor
System, civil defense, and the expansion of defense
program s have fluctuated w ithin rath er narrow
production. T he bulk of this category, however,
limits; G overnm ent spending for all other activities
represents the cost of the day-to-day operations of
has been steadily declining. Expenditures for this
the Federal G overnm ent, such as law enforcem ent,
last category of activities, which contain elements
tax collection, the various regulatory agencies,
th at are m ore controllable through the budget
direct civil public works, and the provision and
process, are being reduced in the fiscal year 1955
adm inistration of other benefits and services to the
public.
by an estim ated 2.2 billion dollars below the fiscal
T h e record of budget expenditures in these 3
year 1953 and 1.5 billion dollars below 1954. T he
m ajor categories since the K orean aggression in
reduction since 1953 represents a decrease of about
Ju n e 1950 shows th at expenditures for national
25 percent in the cost of these m any day-to-day
operations of the G overnm ent.
security had risen m arkedly and are now being

PART I • Budget Summary

Budget Authorizations

r elated

e x p e n d it u r e s

FISCAL YEAR 1955 ESTIMATED

$ BILLIONS

36.4

New
O b lig a tio n a l A u th o rity

To be spent
in 1955

36.4

From

O b la tio n a l Authority £
enacted prior to 1955 §

New Obligational
Authority for 1955

U n d er the Constitution, Federal agencies cannot
spend m oney until the Congress authorizes them
to do so.
A uthorizations by Congress m ay take a nu m ber
of forms. T he m ost com m on is an “ a p p ro p ria
tio n ,” w hich (1) perm its a G overnm ent agency to
em ploy personnel, purchase supplies and eq u ip
m ent, aw ard contracts, or to incur other obliga
tions, and (2) authorizes the agency to pay the
bills arising from these obligations.
T h e auth o rity to incur financial obligations
w hich Congress grants in any fiscal year, both in
the form of new appropriations and other types of
authorizations, is known as “ new obligational
au th o rity .”
T he am ount of new obligational au th o rity
g ranted for any year is usually not the same as the
expenditures for th a t year. Since it takes tim e to
place orders for goods and services, there is an
interval betw een the tim e Congress grants an
authorization and the tim e a G overnm ent agency
incurs an obligation. M ore tim e passes before the

56.3

<3>

29.2

Expenditures

19. 9

65.6

bills are actually paid, since it takes tim e for goods
and services to be produced and delivered. In
some cases, such as the paym ent of em ployees’
wages and salaries, the time lag is very short; in
others, such as the production and delivery of
com plex m ilitary equipm ent, it m ay be a m atter
of years before final paym ent is m ade. Thus, the
expenditures m ade in any one year come in p a rt
from new obligational authority granted for th a t
year and in p a rt from authority granted for prio r
years.
In the fiscal year 1955, 45 percent of the 65.6
billion dollars of estim ated expenditures will be
from obligational authority w hich was granted in
prior years. T he rem aining 55 percent is esti
m ated to be from the authorizations recom m ended
for the fiscal year 1955.
T he President recom m ended enactm ent of 56.3
billion dollars of authority to incur new obligations
in 1955. O f this am ount, 36.4 billion dollars is
estim ated to be spent in 1955 and 19.9 billion
dollars in later years.
12

Unexpended Balances

o f a p p r o p r ia tio n s

UN B IL L IO N S !

Amount
brought forward
into the year

Fiscal year

1 9 5 0 ........................................................................................
1 9 5 1 ........................................................................................
1 9 5 2 ........................................................................................
1 9 5 3 ........................................................................................
1954 (estimated) ................................................................
1955 (estimated).................................................................

In the first 3 fiscal years after the start of hostilities
in K orea (1951 through 1953), the new obligational
au thority enacted by the Congress exceeded by far
the budget expenditures for each year. It also
greatly exceeded the revenues then being provided
by the tax system.
T he balances of appropriations th a t were unspent
at the end of the year, b u t still com m itted for later
expenditure, rose from 14.1 billion dollars at the
end of the fiscal year 1950 to 78.7 billion dollars
at the end of the fiscal year 1953. These balances
represent spending com m itm ents w hich have to be
paid from tax revenues of later years.
Thus, in the fiscal year 1954, expenditures could
be m ade from the 78.7 billion dollars of unspent
balances of appropriations granted in prior years,
as well as from the new appropriations enacted for
th a t year. T he unexpended balances are largely
com m itted to buy m ilitary equipm ent which has
been ordered.

$11.5
14.1
50.3
68.8
78.7
66.5

Amount
ccrried over
to next year

$14.1
50.3
68.8
78.7
66.5
54.1

In the fiscal years 1954 and 1955, paym ents for
m ilitary equipm ent ordered in earlier years will
exceed the new equipm ent placed on order. U n
expended balances of appropriations will start
declining, and are estim ated to reach 54.1 billion
dollars at the end of the fiscal year 1955. This
decline of 24.6 billion dollars in unexpended bal
ances since the beginning of the fiscal year 1954
results from estim ated reductions in appropriations
which are m uch greater in am ount th an the re
ductions in budget expenditures.
In the budget message, the President com m ented
on this trend: “ T he lower levels of new obligational
authority and accum ulated unexpended balances
for 1954 and 1955 lead to less expenditures in these
and in future years. In the revision of the 1954
budget and in the 1955 budget the trend clearly is
tow ard a balanced b u dget.”
13

PART I • Budget Summary

New Obligational Authority and Budget Expenditures, by Agency
In p a rt II of this booklet, the activities of the
Federal G overnm ent are grouped an d discussed
in term s of their m ajor purpose or function. H ow
ever, appropriations and o th er authorizations
for each activity are m ade to the G overnm ent
agency responsible by law for carrying out th a t
activity.
In acting on the budget, the ap p ro p riatio n com
mittees and the Congress review in detail, agency
by agency, the activities of the Federal G overn
m ent. Therefore, the budget docum ent sets forth
separately, for each agency, the details of the
P resident’s budget proposals. T h e recom m ended
appropriations for each agency are shown sep
arately, supported by schedules reconciling the
am o u n t of the appropriation, the obligations
estim ated to be incurred, and the estim ated ex
penditures. This grouping of budget proposals
by agencies is not only required for congressional
action, b u t is also essential for those who are
interested in following the progress of the budget
proposals in the Congress.
By far the largest agency in the Federal G overn
m ent is the D ep artm en t of Defense. O f the 56.3
billion dollars of total new obligational authority
recom m ended by the President for the fiscal year
1955, it is estim ated th a t 33.5 billion dollars will be
required to carry out the m ilitary functions of the
D ep artm en t of Defense and the m utual m ilitary
program w ith our allies. Budget expenditures for

these two activities in 1955 are estim ated at 41.9
billion dollars, or 64 percent of total estim ated
expenditures.
New obligational authority recom m ended for the
T reasury D ep artm en t in 1955 am ounts to 7.5 bil
lion dollars. Budget expenditures are estim ated at
7.4 billion dollars, 11 percent of the total. All
except 570 m illion dollars of the T reasury D e p a rt
m ent’s expenditures in 1955 will be for interest
paym ents.
T he President recom m ended in the 1955 budget
th at 3.9 billion dollars in new obligational au th o rity
be granted to the V eterans A dm inistration, and
estim ated th a t the V eterans A dm inistration w ould
spend 4.2 billion dollars in 1955. M ost of this
m oney will be for com pensation, pensions, and
other benefit paym ents to our 20 million veterans.
For the D ep artm e n t of A griculture, the budget
proposes th a t 2.9 billion dollars of new obligational
authority be enacted for the fiscal year 1955.
Budget expenditures are estim ated at 2.5 billion
dollars, three-fifths of which will be for agricultural
price supports and related program s.
T he budget also contains a recom m endation of
1.4 billion dollars in new obligational authority for
the Atom ic Energy Commission. Budget expendi
tures in 1955 are estim ated at 2.4 billion dollars,
mostly for the production of fissionable m aterials
and for the construction of new plant and eq u ip
m ent.
14

New Oblisational Authority and Budget Expenditures,
by Agency
[IN M IL L IO N S ]

Fiscal year 1955
Agency

Recommended
new obligational
authority

Estimated
budget
expenditures

Department of Defense:
M ilitary functions........................................................
Mutual military program...........................................
Civil functions..............................................................
Treasury Department......................................................
Veterans Administration...............................................
Department of Agriculture.............................................
Atomic Energy Commission...........................................
Department of Health, Education, and W e lfa re .. . .
Department of Commerce.............................................
General Services Administration................................
Department of the Interior.............................................
Department of Labor.....................................................
Department of State........................................................
Department of Justice......................................................
Post Office Department (deficiency)..........................
Housing and Home Finance A g en cy........................
O ther.................................................................................

$30,993
2,500
580
7,471
3,893
2,935
1,366
1,806
973
155
488
388
269
178
89
85
2,114

$37,575
4,275
540
7,445
4,165
2,497
2,425
1,787
979
751
528
361
214
176
89
-3 8 5
2,148

T o ta l.....................................................................

1 56,283

1 6 5,570

1
Estimated expenditures exceed recommended new obligational authority because of appropriations
enacted in prior years.

New obligational au th o rity recom m ended for the
D ep artm en t of H ealth, E ducation, and W elfare in
the fiscal year 1955 totals 1.8 billion dollars.
Budget expenditures are also estim ated at 1.8 billion
dollars, of which 1.3 billion dollars is estim ated to
be for grants to the States for public assistance.
F or all the other agencies of the Federal G overn

m ent, including the civil functions of the D e p a rt
m ent of Defense, the President recom m ended 5.3
billion dollars in new obligational authority, less
th an 10 percent of the total of 56.3 billion dollars
recom m ended for 1955. Budget expenditures for
these agencies are estim ated at 5.4 billion dollars in
1955, or 8 percent of all budget expenditures.
15

PART 1 • Budget Summary

Budget Expenditures

as a Percentage of N a tio n a l Income
. . . Budget expenditures in 1955 are estimated
at 21% of National Income, compared with
2 4% in 1953*

52%

Peak W ar Year

23 /
18%
135

24%

23%

21%

17%

P
Estimated

19391

1 94 5 1

1950.1 1951 I

1 9 5 2 1 1 9 5 3 1 1954 8 1955 1

Per C a p ita
. . . Budget expenditures in 1955 are estimated
at $ 4 0 4 for each man, woman, and child in
$707

the U. S. compared with $ 46 7 in 1953-

Peak W ar Year "13

$420

$467
" " «

5442

jas

$68

i muliitii!

I l>945j
945!
1
R12321___
939I

119503 I i 9 5 l l 1)9523 fl95 33 319541 319553

PART 2

Budget Expenditures

by f u n c t io n

T he section w hich follows provides additional details about the budget
expenditures estim ated for the fiscal year 1955. It describes, by m ajor
program , the G overnm ent activities covered by the 1955 budget, and
shows how m uch each activity is expected to cost in 1955.

PART 2 • Budget Expenditures

. . . 68.4% of the 1955 Budget
or $44,860 Million

National Security
Between the fiscal years 1954 and 1955, budget
expenditures for m ajor n ational security program s
are estim ated to be reduced by 3.9 billion dollars.
T h e reduction betw een 1953 and 1955 is even
greater, 5.4 billion dollars.
These savings in an n u al expenditures reflect a
dynam ic long-range defense plan recom m ended by
the J o in t Chiefs of Staff and approved by the
N ational Security Council and the President.
T hey also result from economies in adm inistration
and m anagem ent, from the cessation of hostilities
in K orea, and from decreases in procurem ent
m ade possible by the im proved supplies and
m ateriel position.
In the new defense plan of the J o in t Chiefs of
Staff, em phasis is being placed on providing a
strong m ilitary position w hich can be m aintained
over an extended period of uneasy peace. Thus,
the budget provides for the creation, m aintenance,
and full exploitation of m odern airpow er. At the
same time, it includes provision for an im proved
system of continental defense against possible
enem y attack.
In describing the new plan, the President said,
“ W ith the shift in em phasis to the full exploitation
of airpow er and m odern weapons, we are in a
position to support strong national security p ro
gram s over an indefinite period w ith less of a drain
on our m anpow er, m aterial, and financial re
sources.”
Procurem ent of m ilitary equipm ent for our own
forces accounts for the largest elem ent of national se
curity expenditures. Almost one-third of the 44.9
billion dollars of estim ated expenditures for national
security in the fiscal year 1955 will be for aircraft,

ships, tanks, weapons, am m unition, and other
m ajor items for U nited States forces.
The pay and support of U nited States m ilitary
personnel accounts for nearly one-fourth of n a
tional security expenditures. These expenditures
will support an average of 3.2 million service men
and women during the fiscal year 1955.
O peration and m aintenance of m ilitary eq u ip
m ent and facilities will require nearly 20 percent of
the national security expenditures. These ex
penditures cover the cost of operating our Arm y
and M arine divisions, naval com bat ships and auxil
iary craft, aircraft of all services, and the w orld
wide system of shore installations, including spare
parts, utilities, civilian payrolls, fuel, and other
supplies.
M ilitary equipm ent and training for our allies
of the free world will account for nearly 10 percent
of the national security expenditures estim ated for
the fiscal year 1955. T he m ilitary supplies being
furnished under the m utual m ilitary program are
an im portant help to our allies in their eq u ip p in g
and training an equivalent of 175 arm y divisions,
about 220 air force squadrons, nearly 1,500 naval
aircraft, over 440 naval vessels, and related com bat
and logistic units to back up these forces. These
forces constitute a vital p a rt of the m ilitary strength
of the free world.
Expenditures for atom ic energy in the fiscal year
1955 are estim ated at 2.4 billion dollars, the high
est in history. T hey will provide for the operation
of atom ic energy plants, including additional plants
now being built, to produce fissionable m aterials
and atom ic weapons, for the procurem ent of large
quantities of u ranium ores and concentrates, and
18

Procurement of Aircraft, Ships, Tanks and Other Military Equipment

Pay and Support of Active Duty M ilitary Personnel

Operation and Maintenance of Equipment and Facilities

Mutual Military Program

2.4
Atomic Energy

Military Public Works

Military Research and Development

Stockpiling— Strategic and Critical Materials

EXPENDITURES

Reservists, and Other

Fiscal
Year

$ B illions

% of Budget

NEW OBLIGATIONAL
AUTHORITY
$ B illio n s

% of Budget

for the construction of more p ro d u c
tion capacity. R esearch and devel
61.9
34.9
44.9
68.4
1955 Est.
opm ent, including the developm ent
64.8
39.3
48.7
68.7
1 9 54 Est.
of atom ic pow er for peacetim e uses,
71.3
57.2
50.3
68.0
1953
will be vigorously pursued.
73.9
67.5
1952
43.8
67.0
M ost of the expenditures for m ili
69.7
57.8
1951
22.3
50.6
tary public works in the fiscal year
34.4
17.0
1950
13.0
32.8
1955 will be for airbases and related
construction to support the increase
in airpow er recom m ended in the
budget.
E xpenditures for stockpiling strategic and criti
the 73 stockpile m aterial objectives will be virtually
cal m aterials are decreasing as the planned stock
completed.
pile objectives for some m aterials n ear com pletion.
O ther m ajor national security expenditures are
By Ju n e 30, 1955, 5.5 billion dollars in m ate
for research and developm ent and for strengthening
rials will be in inventory out of a total objective
and im proving the reserve forces and N ational
of 7.2 billion dollars. At th at tim e, abo u t 50 of
G uard.

PART 2 • Budget Expenditures

. . . 6.4% of the 1955 Budget
or $4,192 Million

Veterans Services and Benefits

At present there are m ore than 20 million veter
ans, who w ith their families constitute 40 percent
of the population. Since 1940 the num ber of
veterans has increased nearly fivefold, and it is still
increasing.
O ver 300 laws provide a wide variety of special
veterans’ services and benefits. These range from
hospital care and readjustm ent assistance to service
pensions and burial benefits. T hey are provided to
veterans and dependents of veterans who died or
were disabled in the service, and also to veterans
w ithout service-incurred injuries and to their fam i
lies.
Expenditures lor special veterans’ program s in the
fiscal year 1955, nearly all of w hich are m ade by
the V eterans A dm inistration, are estim ated a t 4.2
billion dollars, ab o u t the same total as in 1954.
Such expenditures have declined sharply from the
peak reached after W orld W ar II.
T h e 2.5 billion dollars of expenditures estim ated
for com pensation and pensions in the fiscal year
1955 will provide benefits to an average of 3.3 m il
lion individuals or families. A bout 1.8 billion dol
lars of this am o u n t will be paid to 2 m illion veterans
disabled in service and to 385,000 families of veter
ans w ho died from service-connected causes. T he
rem aining 700 m illion dollars will be spent largely

for nonservice-connected pension paym ents to m ore
than 900,000 veterans or families of veterans.
Since 1940 expenditures for com pensation and
pensions have increased nearly sixfold. O n the
basis of present laws and veteran population, these
expenditures are likely to double their present an
nual am ount w ithin the next 3 or 4 decades.
T he expenditures of 754 million dollars in 1955
for hospitals and m edical care include 694 m illion
dollars for cu rrent operations and 60 million dol
lars for the construction and im provem ent of
veterans’ hospitals. T he am ount for current ex
penses will provide care for an average of 110,200
patients in V eterans A dm inistration and contract
hospitals, and 25,700 m em bers in V eterans A d
m inistration and State dom iciliary facilities. T o
carry on these program s the V eterans A dm inistra
tion will em ploy an average of 136,000 doctors,
nurses, and other personnel, 3,000 m ore th an in
1954.
Average enrollm ent in school, job, and farm e d u
cation and training courses in the fiscal year 1955 is
estim ated at 537,000 veterans. T he proportion of
veterans w ith K orean service is estim ated to increase
to four-fifths of all veterans enrolled in the fiscal
year 1955.
T he budget also provides for unem ploym ent
20

Veterans Services and Benefits
BUDGET EXPENDITURES IN 19 55

$ M IL L IO N S

2,535
Compensation and Pensions

Hospitals and Medical Care

Readjustment Benefits: Education and Training
i 98
Readjustment Benefits: Unemployment, Loan Guaranty, Other

Insurance

nd Indemnities

Other Services and Administration
EXPENDITURES

Fiscal

$ M illio n s

% of Budget

NEW OBLIGATIONAL
AUTHORITY
$ M illio n s

% of Budget

allowances for veterans who served
Year
during the K orean conflict. These
unem ploym ent paym ents are rising
4,192
3,959
6.4
1955 Est.
7.0
as the nu m b er of eligible veterans
4,229
4,160
19 5 4 Est.
5.9
7.0
increases.
4,132
4,298
1953
5.8
5.1
D uring the fiscal year 1955, it is
1952
4,863
4,391
7.4
4.8
expected th a t G o vernm ent-guaran
1951
5,342
5,679
12.1
6.8
teed loans for homes, farm s, and
1950
6,647
16.8
6,625
13.5
businesses will be m ade to 335,000
eligible veterans. E stim ated expend
itures for this lo an -g u aran ty program
arise from defaulted loans.
W hile expenditures for veterans’ life insurance
In the fiscal year 1955, expenditures of 179
are declining, paym ents u n d er the Servicem en’s
million dollars are estim ated for other services
Ind em n ity A ct of 1951 are increasing sharply.
and adm inistration, 14 m illion dollars less than
U n d er this program , paym ents of $92.90 a m onth
in 1954. Im proved perform ance, organizational
are m ade for 10 years to the family of each service
changes, and declining workloads in some program s
m an who dies on duty or w ithin 120 days after
perm it expenditures for general adm inistration to
separation from service.
be reduced.

PART 2 • Budget Expenditures

. . . 1.9% of the 1955 Budget
or $1,250 Million

International Affairs and Finance

future, it has been possible in the 1955 budget to
reduce the expenditures estim ated for economic
and technical program s.
C apital investm ent and im proved technical skills
are critically short, particularly in the nonEuropean areas of the world. Some assistance is
required from the U nited States to m ake possible
in these countries the m ilitary effort and the
economic progress necessary for their political
stability and for their and our security. In the
1955 budget, the President recom m ended funds
for assisting in the rehabilitation of the w ar devas
tated areas of K orea. H e also recom m ended
economic and technical assistance for friendly n a
tions in L atin A m erica, the N ear East, and the

Budget expenditures for international affairs and
finance cover the program s for economic and tech
nical developm ent abroad, the conduct of our for
eign affairs, and the program for foreign inform a
tion and exchange of persons. T h e m utual m ilitary
program , w hich is closely related to these program s,
is shown as a p a rt of the national security program .
O ver 80 percent of the estim ated expenditures
for in ternational affairs and finance in the fiscal
year 1955 will be for aiding the economic and
technical developm ent of friendly nations. This
program is designed to enhance our own security
by assisting such nations in their economic develop*
m ent and in obtaining the economic strength needed
to support a m ilitary effort sufficient to deter wouldbe aggressors. T h e goods, services, and technical
skills supplied u n d er this program help friendly
countries to expand their production, improve their
living standards and increase th eir political free
dom , and contribute to an expansion of world trade.
W ith the im provem ent in economic conditions
which has occurred in Europe in the past 2 years
and w ith the high level of business activity and
em ploym ent th a t is expected to continue in the

Far East.

In addition, the budget provides funds

for the international program s of m utual assistance
carried on by the U nited Nations.
To com plem ent the general program of econom ic
and technical developm ent, the President said, in
the budget message, th a t he planned to ask the
Congress for authority to use a p a rt of our accu
m ulated
22

surpluses

of agricultural

com m odities

International Affairs and Finance
BUDGET EXPENDITURES IN 1955

$ M IL L IO N S

1,028

Economic and Technical Development

Conduct of Foreign Affairs

Foreign Information and Exchange Activities

EXPENDITURES
Fiscal

NEW OBLIGATIONAL
AUTHORITY

$ M illio n s
% of Budget
% of Budget
$ M illio n s
to help strengthen the economies
Year
of friendly countries and otherwise
to contribute to the accom plish
1.9
1,547
2.7
1,250
1955 Est.
m en t of our foreign policy objec
1,207
2.5
2.0
19 54 Est.
1,779
tives. H e recom m ended an ap p ro
3.0
2,149
2.7
1953
2,216
p riatio n of 300 million dollars for
4.3
3,529
3.9
1952
2,826
the fiscal year 1955 for this purpose.
3,063
8.6
3.7
1951
3,795
E xpenditures for the conduct of
5,454
11.8
1950
11.1
4,674
foreign affairs d urin g the fiscal year
1955 are estim ated at 125 m illion
dollars. These expenditures are p ri
m arily for the activities of the
D e p a rtm e n t of State in developing and coordi
free countries through radio, press, m otion pictures,
n a tin g our foreign policy, in representing our
or inform ation centers, and will reach 10 Iron
C urtain countries through radio broadcasts. It is
natio n al interests thro u g h 273 diplom atic missions
and consular offices abroad, and in p articipating
believed that if these peoples know th a t our policies
in the U nited N ations and other international
and objectives will advance their legitim ate aspira
organizations.
tions for freedom, progress, and peace, they will join
T h e foreign inform ation and exchange of persons
w ith us in the common effort to achieve our m u tu al
program s of the G overnm ent are designed to
goals. T he 1955 budget also provides for the
explain clearly to the peoples of other nations the
exchange of students and other persons so as to
objectives an d policies of the U nited States. T he
improve understanding between A m ericans and
U n ited States Inform ation Agency will reach 77
citizens of other countries.

PART 2 • Budget Expenditures

•

• . 2.8% of the 1955 Budget
or $1,807 Million

Social Security, W elfare, and Health

In the fiscal year 1955, grants to the States for
public assistance am o u n t to 1.3 billion dollars of
the estim ated budget expenditures of 1.8 billion
dollars for all social security, welfare, and health
program s. T hese grants, in com bination w ith
State and local funds, are used to pay benefits to
approxim ately 5 million people in need— most of
th em aged persons or d ependent children.
T he public assistance program is different from
old-age and survivors insurance, w hich is financed
by em ployer and em ployee payroll contributions.
T h e old-age and survivors insurance system oper
ates through a tru st fund, and, like other funds held
in trust by the G overnm ent, is not included in the
budget totals. A bout 6 m illion individuals— re
tired persons an d the widows and orphans of de
ceased w orkers— receive benefits from this insur
ance system.
T o strengthen the social security system and re
duce the need for public assistance grants, the
P resident recom m ended extension of the coverage
of old-age and survivors insurance to an additional
10 m illion w orkers an d their families. H e also
proposed other changes to im prove this program ,
an d to bring ab o u t a gradual reduction in public
assistance grants as the necessity for them
dim inishes.

Expenditures for public health include grantsin-aid to State governm ents and local com m unities
for hospital construction, general health services,
m aternal and child health, and the control of cer
tain specific diseases, such as tuberculosis, cancer,
m ental illness, and heart ailm ents. Federal assist
ance to m edical research and training, as well as
the provision of research laboratories and equip
m ent, will make possible an extensive attack on
prevalent chronic illnesses and diseases, such as
cancer, heart trouble, rheum atism , arthritis, and
neurological disorders.
The 1955 budget also provides for beginning a
new program recom m ended by the President to
help our citizens obtain adequate m edical and
hospital services. This new program would estab
lish a lim ited Federal reinsurance service for
private health insurance plans to encourage
broader health protection for m ore families. It
would also broaden the present Federal grant-inaid program for hospital construction to stim ulate
provision of diagnostic and treatm ent centers,
rehabilitation facilities, nursing homes, and ad d i
tional chronic disease hospitals.
The school lunch program , w hich is carried out
through Federal grants to the States, provides
low-cost lunches for 9.5 million school children
24

Social Security, W elfare, and Health
BUDGET EXPENDITURES IN 19SS

$ M IL L IO N S

1,295
Public Assistance (Payments to States To A id Needy Persons)

Promotion of Public Health

School L

h Program

Indian Education, Health, and W elfare

Accident Compensation and Other
EXPENDITURES

Fiscal

$ M illio n s

% of Budget

NEW OBLIGATIONAL
AUTHORITY
$ M illio n s

% of Budget

throughout the country. Federal
Year
contributions of surplus agricul
1,807
1955 Est.
tural com m odities are m ade to
1,857
2.8
3.3
the program by the D ep artm en t
1,947
19 54 Est.
2.7
1,919
3.2
of A griculture. T otal Federal aid
1,910
1953
2.6
1,886
2.3
for this program , including the sur
1,756
1952
2.7
1,688
1.8
plus foods d istributed as well as the
1,721
1951
3.9
1,660
2.0
68 million dollars of cash paym ents,
1950
1,592
1,681
4.0
3.4
is estim ated at 218 m illion dollars in
1955, 12 million m ore than in 1954.
F ederal responsibilities tow ard the
400,000 native Indians include the
provision of educational opportunities, and the
system, and grants to States for the rehabilitation
m aintenance of basic health and welfare activities.
of physically handicapped persons. T he budget
O th er expenditures for social security, welfare,
provides for the President’s proposed expansion
and health are for such varied activities as accident
of the program for reh abilitating the physically
com pensation for G overnm ent employees, the
handicapped so th at a larger n u m ber of disabled
operation of the Federal prisons and probation
persons m ay be restored to productive lives.

PART 2 • Budget Expenditures

. . . - 0 .4 % of the 1955 Budget
or $-2 77 Million

Housing and Community Development
M ost of the G overnm ent’s program s for housing
and com m unity developm ent involve both expendi
tures and receipts. In the fiscal year 1955, gross
expenditures are estim ated at 1.9 billion dollars.
Receipts, mostly from repaym ents of loans and
insurance prem ium s, are estim ated to exceed these
expenditures by 277 m illion dollars. This com
pares w ith net expenditures of 57 m illion dollars
in 1954 and of 549 million dollars in 1953.
T he President has recom m ended broadening of
the slum clearance program to include renewal of
rundow n houses and neighborhoods; more liberal
m ortgage insurance to encourage private invest
m ent in low er-incom e housing and in rehabilitation
of existing dwellings; and greater private p articipa
tion in the secondary hom e m ortgage m arket.
T h e Public H ousing A dm inistration under pres
ent law makes loans and grants to local housing
authorities to build low -rent public housing units.
U ntil the effectiveness of his new m ortgage insur
ance proposals can be tested, the President recom

mended th at these local agencies be authorized to
build 35,000 new units a year for 4 years. Receipts
will exceed new expenditures by an estim ated 234
million dollars, chiefly because of repaym ents by
local agencies of earlier Federal advances.
The Federal N ational M ortgage Association buys
and sells G overnm ent insured or guaranteed m o rt
gages to help provide funds w here sufficient private
financing cannot be obtained. D uring the fiscal
year 1955 most of the m ortgages purchased will
finance housing construction in defense areas.
Receipts from sale of m ortgages owned by the
x\ssociation and from other sources are expected to
exceed expenditures by 166 m illion dollars.
The Federal H ousing A dm inistration insures
loans for the construction, purchase, and im prove
m ent of homes. Prem ium s and other receipts are
expected to exceed c u rren t expenses substantially,
thus adding to reserves against possible losses.
The 1955 budget for civil defense em p h a
sizes im proved w arning of im pending attack and

ESTIMATED GROSS AND NET EXPEN DITU R ES, FISCAL Y E A R

1955

[In millions]

Gross
expendi
tures

Program

Appli
cable
receipts

Net ex
penditures,
or net
receipts
(~ )

Public housing program s........................................................................................................................
Aids to private housing:
Federal National M ortgage A ssociation..................................................................................
Federal Housing Administration and o th er...........................................................................
Civil defense................................................................................................................................................
Loans for college housing.......................................................................................................................
Urban development and redevelopm ent..........................................................................................
O th er..................................................................
..................................................................................

$956

$1, 190

-$ 2 3 4

488
182
70
62
97
48

654
245
2
4
50
35

-1 6 6
-6 3
68
58
47
13

T o ta l.................................................................................................................................................

1,903

2, 180

-2 7 7

Housing and Community Development
$ M IL L IO N S

BUDGET EXPENDITURES IN 1955

Net Expenditures

Net Receipts

Federal National Mortgage Association

>Aids to Private Housing

-6 3
Federal Housing Administration and Other

Loans for College Housing

Urban Development and Redevelopment

M 13
Other

EXPENDITURES

Fiscal

$ M illio n s

% of Budget

NEW OBLIGATIONAL
AUTHORITY
$ M illio n s

% of Budget

p lanning for the dispersal of p o p
Year
ulations of potential target areas
176
-2 7 7
-.4
.3
1955 Est.
in advance of enem y attack. T h e
628
57
.1
1.0
19 54 Est.
Federal G overnm ent will stockpile
m edical supplies, and provide in
549
.7
1,526
1953
1.9
form ation necessary to supplem ent
1952
708
735
1.1
.8
State an d local resources in oth er
831
1951
602
1.4
1.0
respects.
1950
4,735
262
.7
9.6
Since 1950 the Housing and H om e
Finance Agency has been authorized
to make long-term loans to colleges
and universities for housing construc
tion. Loans approved by the end of the fiscal year
local public agencies for slum clearance and urb an
1955 will finance construction of housing for about
redevelopm ent projects. By the end of 1955, an
50,000 students and faculty m em bers. These loans
estimated 180 projects will be com pleted or in
are being m ade only where private funds on
process of clearance and redevelopm ent. Paym ent
com parable term s are not available.
of grants accounts for most of the net expenditures
T h e G overnm ent also makes loans and grants to
of 47 million dollars estim ated for 1955.

PART 2 • Budget Expenditures

•

. .0 .3 % of the 1955 Budget
or $223 Million

Education and General Research

E ducation is the responsibility of States and local
com m unities. T hey are facing difficult problems
created by the great increase in the num ber of
school children, the shortage of qualified teachers,
and the overcrow ding of classrooms. Since Federal
intervention is not an acceptable solution, the
President recom m ended th a t a national conference
of educators and interested citizens be held to study
the facts ab o u t the N a tio n ’s educational problems
an d to propose the best rem edies. T h e national
conference will be preceded by prep arato ry con
ferences in the States.
I n the fiscal year 1955, m ore th an 60 percent of
F ed eral expen d itu res for education and general re
search will be grants to help school districts where
school needs have been greatly increased by the
activities of the Federal G overnm ent. E xpendi
tures u n d er the 2-year construction program will
help build alm ost 5,000 classrooms to serve 140,000
children. School-operating assistance will be pro
vided to m ore th a n 2,000 school districts w ith a total
enrollm ent of nearly 5 m illion children. These
expenditures are being reduced from their 1954
level. T h e laws u n d er w hich this assistance is given
were extended tem porarily by congressional action
last year and, a t the same time, were im proved to
provide the necessary aid at the least cost and to
the areas most acutely affected.

Expenditures for education and general research
also include grants to the States to help support
their vocational education program s and landgrant colleges. G rants in support of vocational
education program s assist the States to provide
training in agriculture, trades and industries, dis
tributive occupations, and hom e economics. T he
Office of E ducation, w hich adm inisters these grant
programs, also collects and disseminates inform a
tion on educational trends and good practices. In
the 1955 budget, an expansion of this basic service
is recom m ended.
The G overnm ent helps support certain educa
tional institutions of prim ary benefit to special
groups. These include H ow ard U niversity, Co
lum bia Institution for the Deaf, and the A m erican
Printing House for the Blind. At H ow ard U ni
versity, construction is un d er way which, w hen
completed, will allow a doubling of the facilities
available for training doctors, dentists, pharm acists,
and other health specialists. A lthough the uni
versity is not lim ited to any group, it serves as an
im portant center of higher education for Negroes.
To relieve overcrow ding at C olum bia Institution
for the Deaf, the budget provides for a new libraryclassroom building. A bout one-third the cost
of this building will come from contributions,
28

Education and General Research
BUDGET EXPENDITURES IN 1955

$ M IL L IO N S

A id to Schools in Federally Affected Areas

Vocational Education and Other Aids

General Purpose Research

Library and Museum Services
EXPENDITURES
Fiscal

NEW OBLIGATIONAL
AUTHORITY

$ M illio n s
% of Budget
$ M illio n s
% of Budget
prim arily from form er students.
Year
G eneral-purpose research expendi
tures are for the activities of the N a
1955 Est.
223
.3
185
.3
tional Science Foundation, the C en
.4
1 9 54 Est.
278
217
.4
sus Bureau, an d the N ational Bureau
1953
.4
277
328
.4
of S tandards.
1952
.2
171
180
.3
T o strengthen the support of basic
1951
115
.3
227
.3
research being carried on in the
1950
122
.3
130
.3
N atio n , the budg et provides for an
increase in the expenditures of th e
N ational Science Foundation a n d
the B ureau of S tan d ard s in 1955.
the Federal G overnm ent.
A dditional basic research will help develop new
General libraries and m useum s operated by the
crops for farm ers, new m ethods of safeguarding
Federal G overnm ent include the L ibrary of Con
health , new tools for industry, and new weapons.
gress, the Sm ithsonian Institution, the N ational
A fu rth e r result is the training w hich basic re
Gallery of Art, and the Botanic G ardens.
search projects provide for grad u ate students in
O ther activities closely related to education and
our universities— training which will help overcome
general research are discussed elsewhere in this
the present shortage of scientists needed by our
booklet. M ajor items include veterans’ education,
grow ing economy. T he N ational Science F o u n d a
the school lunch program , and research and educa
tion is also m aking studies of the research now being
tion activities in connection w ith the m ilitary,
carried on by public and private groups, giving
atomic energy, and health program s.
p a rtic u la r attention to the research activities of

PART 2 • Budget Expenditures

. . . 3.6% of the 1955 Budget
or $2,366 Million

Agriculture and Agricultural Resources

Credit C orporation are near the legal limit. T h e
budget, therefore, recom m ended an increase of 1.75
billion dollars in the C orporation’s authority to
spend, so th at it can m eet its obligations in 1955
under present price support laws.
In the budget message, the President said th a t
the present price support laws should be recon
sidered not only in the interest of farm ers, but also
in the national interest. In a special message to the
Congress, he recom m ended legislation to deal w ith
the im m ediate pioblem of large surpluses of farm
commodities and to achieve more effectively the
goals of farm price supports at less cost.
To help conserve our agricultural land and w ater
resources, the Federal G overnm ent provides tech
nical assistance to farm ers in soil conservation dis
tricts, makes paym ents to encourage soil con
servation practices, and undertakes upstream flood
prevention projects. T he 1955 budget also pro
vides for initiation of work in cooperation w ith
the States and local agencies on an expanded

Gross expenditures for Federal agricultural pro
gram s in the fiscal year 1955 are expected to be
6.5 billion dollars. R eceipts from these program s,
m ainly from loan repaym ents and com m odity
sales, are estim ated at 4.1 billion dollars, resulting
in estim ated net expenditures of 2.4 billion dollars
for the year. Price support and agricultural credit
program s account for most of the receipts.
In recent years, well over half of the net budget
expenditures for agriculture has been for m an d a
tory farm price supports and related programs.
Because of the decline in farm prices in the past
2 years, the C om m odity C redit C orporation has
acquired large inventories of agricultural com
modities. T o tal price support loans and inven
tories, m ainly for w heat, corn, and cotton, are
expected to reach 5.5 billion dollars by Ju n e 30,
1954.
A lthough acreage allotm ents or m arketing quotas
on these crops in the 1954 crop year are expected
to reduce price-support operations in the fiscal
year 1955, the com m itm ents of the Com m odity

ESTIMATED GROSS AND NET EXPEN DITU R ES, FISCAL Y E A R

1955

[In millions]
Gross
expendi
tures

Program

Applicable
receipts

Farm price support and related program s.......................................................................................
Agricultural land and water conservation.......................................................................................
Rural electrification and rural telephone loan s.............................................................................
Farm ownership and operation lo a n s................................................................................................
Research and other agricultural services..........................................................................................

$ 3,414
267
232
2, 398
167

$1,876
31

T o ta l................................................................................................................................................

6, 478

4, 112

2, 205

N et
expendi
tures

$1, 538
236
232
193
167
2, 366

Agriculture and Agricultural Resources
$ M IL L IO N S

BUDGET EXPENDITURES IN 19SS

1,538

Farm Price Support and Related Programs

Agricultural Land and W a te r Conservation

Rural Electrification and Rural Telephone Loans

Farm Ownership and Operation Loans

Research and Other Agricultural Services
EXPENDITURES

Fiscal

$ M illio n s

% of Budget

NEW OBLIGATIONAL
AUTHORITY
$ M illio n s

% of Budget

u p stream soil conservation and flood
Year
p revention program .
2,791
5.0
3.6
2,366
T h e R u ra l Electrification A d m in
1955 Est.
2,302
3.8
istratio n will continue emphasis on
3.7
2,654
1 9 5 4 Est.
ex p an d in g ru ra l telephone service,
1.7
1,333
4.0
2,936
1953
a n d will im prove electric service in
1,688
1.8
1.6
1,045
1952
ru ra l areas. T o reduce the need for
1,228
1.5
1.5
650
1951
future Federal aid, arrangem ents are
3,324
6.8
7.0
1950
2,783
being considered w hereby m ore p ri
vate cap ital w ould be used to finance
ru ra l telephone service.
E xpenditures for other farm loan
program s are m ainly to help farm ers develop effi
Am erican agriculture. T h e 1955 budget recom
mends increases in expenditures for research, in
cient family-sized farms and to assist farm ers who
are the victim s of d ro u g h t or other n a tu ra l disasters.
cluding farm m arketing, and for extension work to
T h e rem aining expenditures for agricu ltu re and
disseminate more widely inform ation on im proved
production and m arketing techniques for farm
agricu ltu ral resources provide for a variety of p ro
products.
gram s to im prove the efficiency an d stability of

PART 2 • Budget Expenditures

1.7% of the 1955 Budget
or $1,103 Million

Natural Resources

For each of the fiscal years 1950 through 1955,
the Federal G overnm ent has spent or is estimated
to spend 1 billion dollars or m ore for n atu ral re
sources program s. Expenditures reached 1.4 bil
lion dollars in the fiscal year 1953, and are expected
to decline to 1.1 billion dollars in 1955. T he 1955
budget recom m endations are based on a reap
praisal of the responsibility of the Federal G overn
m ent for this work.
A pproxim ately three-fourths of the expenditures
for n a tu ra l resources are for the developm ent of
river basins. T he budget message em phasized that
steps are being taken to encourage non-Federal
interests to form ulate plans and u ndertake the
developm ent of w ater resources.
In the fiscal year 1955, the B ureau of R eclam a
tion an d the Corps of Engineers will continue
construction on ab o u t 160 projects for flood
control, irrigation, and m ultiple-purpose develop
m ent, including power. T h e budget also provides
for starting 8 new local flood protection works and
6 new irrigation and w ater supply projects, as well
as for resum ing w ork th a t had been previously
suspended on 2 flood control reservoirs. These
projects are small or interm ediate-sized, and can be
com pleted w ithin a few years. W here the neces
sary transm ission facilities are not being provided
on reasonable terms by other public or private
agencies, the D ep artm en t of the In terio r will con
struct and operate transm ission lines th a t are eco

nomically feasible and are necessary for proper
interconnection and operation of Federal genera
tion plants, and those lines th at are required to
carry pow er to load centers w ithin economic tran s
mission distances.
Expenditures by the Tennessee Valley A uthority
in 1955 will be for continued work on the power
plants now u n der construction and for operation
of navigation, flood control, power, and fertilizer
facilities. T h e President said that, p u rsuant to the
power policy of the adm inistration, a proposal is
being developed for congressional consideration to
provide th at an ad eq u ate rate of interest be paid
to the T reasury on public funds invested in the
power facilities of the Tennessee Valley A uthority.
The protection, developm ent, and use of the
valuable resources of public lands are provided
for through the D epartm ents of A griculture and
Interior. T he Forest Service, in the D ep artm en t
of A griculture, m anages 181 m illion acres of
national forests, and cooperates w ith S tate and
private forest land owners to im prove fire protec
tion and forest practices on other forest lands.
The B ureau of L and M anagem ent, in the D e p a rt
ment of the Interior, has jurisdiction over 473
million acres of public lands in the U nited States
and Alaska. T im ber, grazing, m ineral, and other
receipts from the public lands, estim ated to be 154
million dollars in 1955, are shared w ith the States
and counties in which the lands are located. T he
32

Natural Resources
$ M ILLIONS

BUDGET EXPENDITURES IN 1955

Flood! Control, Reclamation, and Power

J2 1 2
Tennessee V alley Authority
j 159

Forests, Parks, and Other Public Lands
38

Fish and W ildlife
| 34

Indian Land Resources

Minerals and Other

EXPENDITURES

Fiscal

$ M illio n s

% of Budget

NEW OBLIGATIONAL
AUTHORITY
$ M illio n s

% of Budget

N ational Park Service, in the D e
Year
p artm e n t of the In terior, m anages 24
1.7
m illion acres in the 180 natio n al
1.7
1,103
978
1955 Est.
parks, park areas, and m onum ents.
1.7
1,172
1.7
1,026
19 5 4 Est.
By 1955 the an n u al n u m b er of
1.8
1,358
1.7
1,396
1953
visitors to these park areas is expected
1.9
1.4
1,258
1952
1,324
to reach 50 m illion.
2.6
1.5
1,140
1951
1,277
In the fiscal year 1955 the Fish an d
2.7
1950
1,058
2.4
1,204
W ildlife Service will operate 87 fish
hatcheries and 275 wildlife refuges
for conservation of m igratory w ater
fowl and ra re birds and anim als.
E xpenditures for In d ia n land resources prom ote the
on expanding the utilization of m inerals in ab u n d
econom ic advancem ent of the Indians through
an t supply and the developm ent of suitable substi
m anaging the tim ber, m ineral, and agricultural
tutes for m aterials in short supply. In 1955 the
resources of the 56 m illion acres of In d ia n lands
Federal G overnm ent will also continue to provide
such basic d a ta as geologic surveys, topographic
held in trust by the Federal G overnm ent. In the
m ineral resources program s, research will continue
maps, and hydrologic data.

PART 2 • Budget Expenditures

•

. . 2.2% of the 1955 Budget
or $f,4f8 Million

Transportation and Communication
facilities in the fiscal year 1955 are expected to be
10 percent less th an in 1954. Since the truce in
K orea, the Coast G uard has begun to curtail its
expanded search and rescue facilities and to reduce
the num ber of ocean w eather stations. T he Corps
of Engineers will operate and m aintain existing
river and h arb o r projects, and continue construc
tion work on going projects. Nine other projects
necessary to assure efficient handling of interstate
traffic will be initiated or resum ed. T he budget
also includes funds to perm it the U nited States to
participate w ith C an ad a in constructing the p ro
posed St. Law rence Seaway.
T he Civil A eronautics A dm inistration operates
air navigation aids and other services for both
civil and m ilitary aircraft. T he Civil A ero
nautics Board provides subsidies of about 80
m illion dollars a year to the airlines for

Gross expenditures for transportation and com
m unication program s in the fiscal year 1955 are
estim ated at 4.3 billion dollars. R eceipts, chiefly
postal receipts, will am ount to 2.9 billion dollars.
N et budget expenditures are being reduced from
2.1 billion dollars in the fiscal year 1953 to an esti
m ated 1.9 billion dollars in 1954 and 1.4 billion
dollars in the fiscal year 1955. T h e anticipated
reduction in the postal deficit accounts for most
of the estim ated decline in net expenditures.
Federal expenditures for highways are chiefly
g rants to States on a m atching basis for developing
an d m ain tain in g the Federal-aid highw ay system,
w hich now totals 695,000 miles. T he President has
recom m ended continuation and strengthening of
the Federal-aid highw ay program w ith increased
emphasis on the interstate highw ay system.
N et budget expenditures for navigation aids and

ESTIMATED GROSS A N D N ET E X PE N D IT U R ES, FISCAL Y E A R

1955

[In millions]
Gross
expendi
tures

Program

H igh w ays..................................................................................
Navigation aids and facilities.................................................................................................................
A viation ....................................................................................
M erchant m arine...................................................................
Postal deficit...................................................................................................................
....
Regulatory and oth er................................................................................................................................
T o ta l......................................................................................

Appli
cable
receipts

N et
expendi
tures

$600
401
278
156
2, 775
67

49
2, 686
24

$600
301
278
107
89
43

4, 277

2,859

1,4 1 8

$100

Transportation and Communication
$ M IL L IO N S

BUDGET EXPENDITURES IN 1955

Highw ly

Navigation Aids and Facilities

A viati >n

Merchant Marine

Postal Deficit

Regulatory and Other

EXPENDITURES

Fiscal

$ M illio n s

% of Budget

NEW OBLIGATIONAL
AUTHORITY
$ M illio n s

% of Budget

operation
of
essential
routes.
Year
T h e N atio n al Advisory C om m ittee
2.6
1,418
1,482
2.2
1955 Est.
for A eronautics engages in basic re
2.9
search and w ind-tunnel testing, p ri
1,856
1,756
2.6
1 9 54 Est.
m arily for the m ilitary program .
2.4
2,076
1,925
2.8
1953
F ederal aid to the m erchant m arine
2.2
1,990
1,992
1952
3.0
consists m ainly of o perating and con
2.7
1,747
2,252
1951
4.0
structio n subsidies to offset the
3.8
1,757
1950
1,880
4.4
differences betw een A m erican an d
foreign costs. N et expenditures in
1955 will be ab o u t half of 1954 ex
penditures, because of the virtual com
pletion of the 35 fast cargo ships au thorized in 1951.
dollars. This m ajor change reflects (1) removal of
T he postal service is one of the largest single
airline subsidies and G overnm ent mail costs from
operations of the Federal G overnm ent. Its o p er
the postal budget, (2) m ajor operating economies,
ations in the fiscal year 1953 resulted in a deficit
(3) increases in parcel post and other rates which
of 659 m illion dollars. In the 1955 budget the
can be changed w ithout congressional action, and
anticipated deficit has been reduced to 89 million
(4) other rate increases u n der proposed legislation.

PART 2 • Budget Expenditures

Finance, Commerce, and Industry

W ithin the lim its set by requirem ents of national
defense, and the needs of the n ational economy,
direct banking and business operations of the
Federal G overnm ent are being reduced.
For
exam ple, the R econstruction Finance C orporation
is being liquidated and the G overnm ent’s synthetic
ru b b er plants are being offered for sale. At the
same time, the program s of the D ep artm en t of
Com m erce to prom ote trade and industry are being
strengthened and the Sm all Business A dm inistra
tion has been established. R egulatory agencies
are simplifying their procedures w ithout reducing
protection to the public.
M ajor finance, com m erce, and industry program s
involve both receipts and expenditures. Receipts
from operations of such program s are used to
finance some of the expenditures and a t times
exceed them . Gross expenditures for finance,
com m erce, and industry program s in the fiscal
year 1955 are expected to be 917 million dollars.

Receipts will be 755 m illion dollars. Accordingly,
net budget expenditures are estim ated at 162
million dollars.
A bout 60 p ercent of gross expenditures, account
ing for n et expenditures cf 308 m illion dollars, will
be for financial assistance to expand defense pro
duction. T hey arise prim arily from com m itm ents
m ade in prior years. W ith the help of firm
purchase contracts, loans, and other financial
incentives, m uch of the increase in productive
capacity needed for the defense effort is now
u n d er way. T h e alum inum capacity of the U nited
S tates has doubled since 1950 and supplies of
m achine tools, titan iu m , copper, nickel, and other
critical item s have also substantially increased.
O th er production program s-—prim arily ru b b e r
and tin— are adm inistered by the R econstruction
F inance C orporation. R eceipts from these activi
ties, mostly from the sale of synthetic rubber, are

ESTIMATED GROSS A ND N ET E X PE N D IT U R ES, FISCAL Y E A R

1955

[In millions]

Gross
expendi
tures

Program

Expansion of defense production......................................................
Rubber, tin, and other defense production.......................................................................................
Business loans and guarantees................................................................................................................
Promotion and regulation of business........................................................
T o ta l........................................................................................................

Appli
cable
receipts

N et ex
penditures,
or net re
ceipts ( —)

$546
286
46
39

$238
355
161
1

$308
-6 9
-1 1 5
38

917

755

162

Finance, Commerce, Industry
$ M ILLIO N S

BUDGET EXPENDITURES IN 1955
Net Expenditures

Net Receipts

Expansion of Defense Production

-69

Rubber, Tin, and Other Defense Production

-115

Business Loans and Guarantees

Promotion and Regulation of Business
EXPENDITURES

Fiscal

$ M illio n s

% of Budget

NEW OBLIGATIONAL
AUTHORITY
$ M illio n s

% of Budget

expected to exceed expenditures by
Year
69 m illion dollars in the fiscal year
42
.1
162
.2
1955 Est.
1955. T h e R u b b e r Facilities Dis
97
.2
posal A ct authorizes the sale of
164
.2
1 9 5 4 Est.
the G overnm ent’s synthetic ru b b er
134
.2
76
.1
1953
plants to p riv ate owners before
787
.9
127
.2
1952
the end of the fiscal year 1955,
1,696
2.1
126
.3
1951
b ut receipts from such sale were not
62
.1
1950
106
.3
included in the budget. Pending the
outcom e of intern atio n al negotia
tions, the budget assumes th a t the
G overnm ent will stop operations of
w henever possible, will be m ade jointly w ith
its tin sm elter at the end of the fiscal year 1954.
private banks. T he Sm all Business A dm inistra
By th a t time, deliveries of tin to the national
tion also helps small concerns o b tain G overnm ent
stockpile will have been com pleted.
contracts, and provides technical and financial
T h e reg u lar business loan p ro g ram of the
R econstruction Finance C orporation has been dis
advice.
O th er expenditures for finance, com m erce, and
continued. M ost of the outstanding loans will
industry include program s of the D epartm ent of
be sold to private financial institutions. A new
Com m erce to provide services to business and to
program of loans to small businesses has recently
prom ote international trade, adm inistration of
been established in the Small Business A dm inis
p atent laws, and activities of other agencies in
tration. Loans will be m ade only w here private
helping m aintain a com petitive economy.
credit on reasonable term s is unavailable, and,

PART 2 • Budget Expenditures

. . . 0.4% of the 1955 Budget
or $281 Million

Labor and Manpower

T he labor and m anpow er program s of the
Federal G overnm ent are designed to help the
N atio n ’s productive system function sm oothly and
efficiently by providing economic safeguards to
workers, by helping bring together jo b seekers and
jobs, and by helping recruit the w orking forces for
defense and other industries. T h ro u g h these p ro
grams, workers are given protection against sub
stan d ard wages and w orking conditions, and
against income losses due to unem ploym ent.
O rderly labor relations and the am icable settle
m ent of disputes are assisted th ro u g h m ediation
services provided by the Federal G overnm ent.
O ver three-fourths of the expenditures for labor
and m anpow er program s— or approxim ately 213
m illion dollars of the total of 281 m illion dollars
estim ated for the fiscal year 1955—a re for the
adm inistration of the em ploym ent service and u n
em ploym ent insurance program s, prim arily through
grants to States. T he budget includes a recom
m endation by the President th a t coverage u n d er
the existing Federal-State unem ploym ent co m pen
sation system be extended to workers in firms

em ploying fewer th an 8 persons and to Federal
civilian employees.
T hro u g h the Selective Service System, m ilitary
m anpow er is provided to supplem ent voluntary
enlistments. In the fiscal year 1955, 31 m illion
dollars will be spent for this purpose.
T he D ep artm ent of L abor is prim arily responsible
for adm inistering the program s of labor standards
and training. These include m inim um wage and
child labor laws, and regulations governing co n
tractors doing work for the Federal G overnm ent.
The D epartm ent, w ith the cooperation of State
agencies, also helps conduct local labor-m anagem ent training program s for apprentices. T h ro u g h
safety training cam paigns and on-the-job safeguards
against accidents, it cooperates w ith the State
agencies in program s to reduce industrial accidents.
A lthough the m ediation and regulation of lab o r
relations accounts for less th an 5 percent of the
expenditures for labor and m anpow er in the fiscal
year 1955, this activity is im portant to the N atio n ’s
economic life. T he 1955 budget provides for em38

Labor and M anpow er
$ M IL L IO N S

BUDGET EXPENDITURES IN 1955

Employment Service and‘Unemployment Compensation Administration

Selective Service

Labor Standards and Training

Mediation and Regulation of Labor Relations

Labor Information, Statistics,and General Administration

EXPENDITURES

Fiscal

$ M illio n s

% of Budget

NEW OBLIGATIONAL
AUTHORITY
$ M illio n s

% of Budget

phasis on the im provem ent of serv
Year
ices to em ployers and employees of
.6
.4
1955 Est.
281
314
industries and establishm ents strate
.4
gically situated in interstate com
19 54 Est.
.4
265
267
m erce. These services will be pro
.4
1953
.4
281
282
vided by the Federal M ediation and
1952
.3
.4
275
279
C onciliation Service, the N ational
.3
1951
.6
254
264
M ediation Board, and the N ational
1950
.5
.7
271
233
L ab o r R elations Board.
A m ong the o th er labor and m a n
pow er program s of the G overnm ent
are the collection, analysis, and p u b
lication of inform ation on em ploym ent, hours of
index of consum ers’ prices; industrial plants often
work, industrial accidents, wages, and prices—
are located on the basis of inform ation about avail
mostly done in the Bureau of L abor Statistics. This
able m anpow er; and m en in essential civilian
inform ation is used m ore and m ore in the econom ic
occupations are deferred from m ilitary service on
life of the N ation; for exam ple, wages in some in
the basis of inform ation ab out industrial m an
dustries autom atically change w ith changes in the
power needs.

PART 2 • Budget Expenditures

. . . 1.8% of the 1955 Budget
or $1,160 Million

General Government
involving the violation of the Federal crim inal laws.
In recent years, a large part of the B ureau’s efforts
has been concentrated on m atters affecting the
internal security of the U nited States, such as
espionage, sabotage, and treason. T he Im m ig ra
tion and N aturalization Service adm inisters basic
laws governing control of aliens and n aturalization,
and is in charge of border patrols to prevent u n law
ful entry into the U nited States.
Expenditures for the paym ent of claim s and
judgm ents are largely for certified claims paid by
the T reasury. These result m ainly from activities
of the D ep artm ent of Defense. T he T reasury also
pays other claims as well as am ounts voted by the
Congress for relief of private individuals.
T he Federal G overnm ent makes an an nual p a y
m ent to help finance operations of the D istrict of
Colum bia. T he President recom m ended legisla
tion to increase this paym ent in the fiscal year
1955, as well as to authorize Federal loans to the
D istrict to help finance a long-term public works
program .
Territories, island possessions, and the Pacific
islands for w hich we are responsible un d er a U n ited
N ations m andate are supervised by the D ep a rtm e n t
of the Interior.
T he 1955 budget provides for the P resident’s
proposal th a t the present system of unem ploym ent
insurance adm inistered through the States be ex
tended to cover Federal civilian employees, w ith
the benefits to be paid by the Federal G overnm ent.
T his w ould give Federal workers the same protec
tion now available to most employees of private

T ax collection and other financial m anagem ent
account for m ore th an o n e-third of b udget expendi
tures for activities classified as general governm ent.
M ost of these activities are carried on by the
T reasu ry D epartm ent, w hich collects taxes and
custom s duties, m anages the public debt, m ints
coins, prints the currency, and issues the checks to
pay the G overnm ent’s bills. T h e G eneral A ccount
ing Office is responsible, as an agent of Congress,
for auditing the accounts of G overnm ent agencies
and verifying the legality of expenditures.
C entral property and records m anagem ent in
cludes the purchase and storage of supplies and
equipm ent, the rental of private buildings for
G overnm ent use, m aintenance and o peration of
public buildings, the m anagem ent of the n ational
in d ustrial reserve, the adm inistration of the N a
tional Archives, and the custody of inactive G overn
m en t records. All of these functions are perform ed
by the G eneral Services A dm inistration w hich is the
property m anagem ent agency for the G overnm ent
as a whole. M ajo r reductions are being m ade in
space rented for G overnm ent use, m aking possible
low er expenditures in both the fiscal years 1954
and 1955. Im proved m anag em en t of p ro cu re
m en t an d inventories by the G eneral Services
A dm inistration is also reducing the bud g et re
quirem ents of other agencies th ro u g h o u t the
G overnm ent. O th e r central services include the
G overnm ent-w ide personnel activities of the Civil
Service Commission.
T h e Federal Bureau of Investigation is responsible
for investigating and obtaining evidence in cases

G eneral G overnm ent
$ M IL L IO N S

BUDGET EXPENDITURES IN 1955

Tax Collection and Other Financial Management

Property Management and Other Central Services

FBI, Alien Control, and Related Programs

Payment of Claims and Judgments

Territories, Possessions, and District of Columbia

Legislative and Judicial Functions

Retirement and Unemployment Benefits for Civilian Employees

EXPENDITURES

W eather Bureau and Other
......................... „

J _____________________________________

Fiscal

$ M illio n s

% of Budget

NEW OBLIGATIONAL
AUTHORITY
$ M illio n s

% of Budget

business. In addition, the budget
Year
provides for G overnm ent paym ents
to continue the tem porary cost-of1,160
1.8
1955 Est.
1.8
1,019
living increase in retirem ent benefits
1,175
1.7
19 5 4 Est.
1,033
1.7
th a t was authorized by the Congress
1953
1,439
1.7
1,337
1.9
in 1952.
1952
1,437
1.5
2.2
1,389
Pending the com pletion of a study
1951
1,309
1.5
1,273
3.0
of Federal retirem ent program s by
1950
1,177
2.3
3.0
1,152
the C om m ittee on R etirem ent Policy
for Federal Personnel, the budget
did not provide for the G overnm ent’s
contribution to the civil service
retirem ent system. T his system is financed by
T he W eather B ureau distributes w eather infor
employee contributions and by the G overnm ent
m ation and forecasts for the benefit of agriculture,
as em ployer. T h e G overnm ent’s contribution
business, and the general public. These services
am ounted to 324 m illion dollars in the fiscal year
are particularly im p o rtan t in reducing the dam age
1953, the m ost recent year in which such a paym ent
from storms, floods, and forest fires, and in prom ot
ing the safety and regularity of air transportation.
was m ade.

PART 2 • Budget Expenditures

. . . 10.5% of the 1955 Budget
or $6,875 Million

Interest

Prim arily as a result of the grow th in the public
debt, interest paym ents now account for about 10
percent of Federal expenditures. Interest p ay
m ents in the fiscal year 1955 are estim ated at 6.9
billion dollars. This is an increase of 275 million
dollars over the estim ated expenditures for the
curren t fiscal year.
A bout two-thirds of this increase is due to the
rise in the public debt. T h e rem ain d er reflects
the refunding of certain m atu rin g securities at
rates of interest slightly higher th an those prevailing
at the dm e the securities were originally issued.
O ver half of the interest on the public debt is
paid on m arketable obligations. M ost of these
securities are held by banks, insurance com panies,
and other financial institutions.
Interest on savings bonds am ounts to almost
another q u arter of interest paym ents. These
bonds are owned by nearly 40 percent of all

A m erican families. Interest on savings bonds is
included in budget expenditures as it accrues,
even though bondholders do not receive cash until
the bonds are redeem ed. These interest accruals
increase the longer the bonds are outstanding.
M ost of the rem aining interest is paid on special
issues sold to G overnm ent trust funds. T he in
terest rate for these securities is generally fixed by
law, and averages som ew hat higher th an the aver
age rate on the total debt.
O th er nonm arketable obligations are m ainly
bonds held by insurance com panies and other
private institutions for long-term investm ent, and
short-term savings notes generally bought by corpo
rations w ith funds set aside for later tax paym ents.
Interest paym ents are fixed obligations of the
Federal G overnm ent. U nlike most budget ex
penditures, they are provided for by perm an en t
law and are therefore not dependent upon annual
appropriations by the Congress.
42

Interest
$ BILLIONS

BUDGET EXPENDITURES IN 1955

Interest on Public Debt— Marketable Obligations

Interest on Public Debt— Savings Bonds

Interest on Public Debt— Special Issues

Interest on Public Debt— Other Nonmarketable Obligations

0.1
Interest on Refunds and Uninvested Trust Funds

EXPENDITURES

NEW OBLIGATIONAL
AUTHORITY

Fiscal
Year

$ M illio n s

% of Budget

$ M illio n s

% of Budget

1955 Est.

6,875

10.5

6,875

12.2
10.9

1 9 54 Est.

6,600

9.3

6,600

1953

6,583

8.9

6,583

8.2

5,934

6.5

1952

5,934

9.1

1951

5,714

13.0

5,714

6.9

1950

5,817

14.7

5,819

11.8

PART 2 • Budget, Expenditures

Budget Expenditures 1950-1955

. . . Expenditures are being reduced to an estimated

$ 65.6

Billion in 1955.
$77.9

B IL L IO N S

$65.6

III *39-6

Jan

9, 1953

Budget
f W i.m e n t

F£ f ' i 9 5 0

1951

1952

1953

C u rre n t
E s tim a t e

1954

E s tim a t e d

1954

1955

. . . National Security expenditures continue to dominate
the Federal Budget.
PERCENT

67.0%

68.0%

J M E ,.

68.7%

68.4%

32.8%

?l:
Jan. 9 , 1 9 5 3
§j§

D o c u m e n t:^ !

E s tim a t e $ : •

E s tim a t e d &

Il9 5 4 ij

1954 i

Budget

C u rre n t

1955 *

PART 3

Supplem entary Inform ation

U p to this point, this booklet has been concerned m ainly w ith budget
receipts, expenditures, and new obligational auth o rity for the fiscal year
1955.
P a rt I I I presents a num ber of special classifications of budget expendi
tures w hich are of interest. In addition, it provides inform ation on other
aspects of Federal financial operations, such as the trust funds; a consoli
d ated cash statem ent for the G overnm ent as a whole; the public debt;
Federal credit program s; and historical d a ta on budget receipts, expendi
tures, and the public debt.

PART 3 • Supplementary Information

Gross and Net Budget Expenditures, by Agency
In the 1955 budget a significant clarifying change
was m ade in the tables presenting budget expendi
tures. In past budgets, the totals of expenditures
have u n derstated the scope of the G overnm ent’s
activities in th at they included on a n et basis the
spending by a num ber of G overnm ent enterprises
w hich are engaged in business-type operations with
the public. In carrying o u t their functions, these
public enterprises receive m oney from their cus
tom ers or clients-—interest and collections on loans
or paym ents for goods delivered or services
rendered. By law, m ost public enterprises may
use their receipts and collections to carry on the
operations for w hich they were created. As shown
in the table, these receipts and collections from
the public in the fiscal year 1955 are estim ated to
total 11 billion dollars.
T he public enterprise activities are carried on
thro u g h so-called “ revolving funds.” Some of the
enterprises are organized as G overnm ent corpora
tions; others, such as the Post Office, are u n in
corporated.
In the sum m ary tables of previous budgets, the
receipts of such funds were subtracted from expendi
tures and only the difference was shown as an
expenditure. W hile the use of eith er the gross
figures or the net figures produces an identical
effect on the budget surplus or deficit, the form er
m ethod of presenting only net figures in the
sum m ary tables did not reveal the full scope of the
G overnm ent’s financial transactions.

W hen G overnm ent agencies engaged in lending
activities use their collections on old loans to make
new loans, the net expenditure figure fails to disclose
the volum e of new lending and the new risks
incurred.
In the 1955 budget, the sum m ary tables show the
expenditures of the public enterprise funds on both
a gross and a net basis. T he difference reveals the
m agnitude of receipts from the public in the “ re
volving funds.”
As shown in the accom panying table, most of the
11 billion dollars of receipts of revolving funds in
the fiscal year 1955 will be in public enterprises
w hich are p a rt of the Independent Offices of the
G overnm ent, the Housing and H om e Finance
Agency, the D epartm ent of A griculture, and the
Post Office D epartm ent.
T he Federal interm ediate credit banks account
for about tw o-thirds of the receipts of the public
enterprises in the Independent Offices. T he Public
Housing A dm inistration and the Federal N ational
M ortgage Association account for the largest p art
of the public enterprise receipts in the H ousing and
Hom e Finance Agency. T he price support pro
gram of the Com m odity C redit C orporation is the
largest item in the D epartm ent of A griculture.
T he sale of postage stamps and other services ac
count for most of the receipts of the Post Office
D epartm ent.
46

Gross and Net Budget Expenditures, by Agency
[IN M ILLIONS]

Fiscal year 1955, estimated
Agcncy
Gross expendi
tures

Legislative b ra n c h ................. ..............

The Judiciory....................................
Executive Office of the President..
Funds appropriated to the Pres
ident...............................................
Independent offices:
Atomic Energy Commission..
Veterans Administration.........
O th e r .........................................
General Services Administration..
Housing and Home Finance
A g e n c y .........................................
Department of Agriculture.............
Department of Commerce...............
Department of Defense:
M ilitary functions...................
Mutual military program.........
Civil functions............................
Department of Health, Education,
and W elfare................................
Department of the Interior...............
Department of Justice......................
Department of Labor........................
Post Office Department...................
Department of State....................... ..
Treasury Department........................
District of Columbia (Federal pay
ment and loans)..........................

$66
30
9

Budget expendi
tures (net)

$66
30
9

1,622

$242

1,380

2,425
4,235
3,795
753

O
70
3,317
2

2,425
4,165
478
751

1,712
4,760
1,028

2,097
2,263
49

— 385
2,497
979

37,575
4,275
654
1,789
562
176
362
2,775
214
7,653

Reserve (or contingencies...............

35
150

T otal.......................................

76,655

1 Less than 500,000 dollars.

Applicable re
ceipts of public
enterprise funds

O
114
2
34
1
2,686
208

37,575
4,275
540
1,787
528
176
361
89
214
7,445
35
150

11,085

65,570

PART 3 • Supplementary Information

Trends in the Federal Budget
T he Federal budget plays an im p o rtan t role in
the economic life of the N ation. In the fiscal year
1955, the Federal G overnm ent, through the 56
departm ents and agencies of the executive branch,
will em ploy an average of m ore th an 2,000,000
civilians and m aintain a m ilitary force averaging
3,200,000 servicemen and wom en. T h ro u g h con
tracts w ith private builders an d m anufacturers,
it will order goods w hich will be produced by a d d i
tional millions of private employees. It will spend
an average of abo u t 260 million dollars every
w orking day, 5.5 billion dollars a m onth.
T he size of the Federal budget has expanded con
siderably in recent decades. Budget expenditures
in the fiscal year 1955 are estim ated at a level 125
times greater th an in 1900, and alm ost 20 times
greater th an in 1930. Leaving out the w ar years,
G overnm ent spending rose from 521 m illion dollars
in 1900 to about 3 billion dollars a year in the
decade following W orld W ar I. W ith the adoption
of anti-depression measures in the 1930’s, Federal
expenditures rose, and reached 9.1 billion dollars in
1940. A pproxim ately one-half of this am ount was
spent for social security and agriculture p ro
gram s— m uch of it for work relief. After a sharp
increase in G overnm ent spending d uring W orld
W ar II, a substantial decline took place, but
Federal expenditures were still m uch higher th an
their prew ar level. In the fiscal year 1950, for
exam ple, expenditures were 39.6 billion dollars,
more th an 4 times the am o u n t of G overnm ent
spending in 1940; expenditures for national defense,

international affairs, veterans’ services and benefits,
and interest, however, were in total alm ost 10
times as great as in 1940. W ith the outbreak of
aggression in K orea in Ju n e 1950, Federal expendi
tures rose again, as the U nited States expanded its
m ilitary program . In the fiscal year 1955, budget
expenditures are estim ated at 65.6 billion dollars,
about 68 percent of which will be for m ajor pro
grams directly related to our national security.
Federal budget receipts have also shown a large
increase since the tu rn of the century. T he changed
nature of our tax system, higher tax rates, and a
rising national income have played im p o rtan t roles
in this increase.
In 1900, budget receipts am ounted to 567 m illion
dollars, consisting entirely of customs and excise
taxes (m ainly on liquor and tobacco). In 1920,
budget receipts were 6.6 billion dollars, alm ost 12
times greater th an in 1900. After the adoption of
the 16th am endm ent to the C onstitution, individual
and corporation income taxes were introduced in
1913 and the rates were increased after U nited
States entry into W orld W ar I. T h ese taxes
yielded 3.9 billion dollars, or alm ost 60 percent of
revenue in 1920. D uring the decade of the 1920’s,
budget receipts were mostly betw een 3.6 and 4.0
billion dollars per year, as several reductions in tax
rates were accom panied by rising national incom e.
T he early T hirties witnessed a decline in revenues
to about a 2 billion dollar level as business activity
and national income declined. H ow ever, receipts
gradually rose w ith some economic recovery and
48

Budget Expenditures, Receipts, and Surplus or Deficit
Selected fiscal years, 1900-55
[IN m i l l i o n s I

Budget expendi
tures

Budget receipts

1 900................................................
1905................................................
1910................................................
1915................................................
1919 (peak World W ar I ) .............
192 0................................................
1925................................................
1930................................................
19 3 5................................................
1940 ................................................
1945 (peak World W ar II) .............
1950................................................

$521
567
694
746
18,448
6,357
2,881
3,320
6,521
9,062
98,416
39,606

$567
544
676
683
5,085
6,649
3,598
4,058
3,730
5,144
44,475
36,495

+ $46
-2 3
-1 8
-6 3
-1 3 ,3 6 3
+2 9 1
+ 717
+ 738
-2 ,7 9 1
- 3 ,9 1 8
-5 3 ,9 4 1
-3 ,1 1 1

1954 (estimated in 1954 budget
document)....................................
1954 (current estimate)....................
1955 (estimated)..............................

77,927
70,902
65,570

68,005
67,629
62,642

- 9 ,9 2 2
- 3 ,2 7 4
- 2 ,9 2 8

Fiscal year

Budget surplus ( + )
or deficit ( —)

NO TE.— Detail may not add because of rounding.

m ated a t 67.6 billion dollars, an all-tim e high.
Estim ated budget receipts for 1955 are 62.7 billion
dollars, nearly 5.0 billion dollars less th a n in 1954.
Between 1900 and 1953 the G overnm ent has oper
ated at a deficit in 31 years, 20 of them since 1930.
Following the Tw enties, a decade of surpluses,
1931-46 were years of deficits, due at first to de
clining receipts and later to rising expenditures.
T he peak an n u al deficit, am ounting to 57.4 billion
dollars, was reached during the W orld W ar II
year of 1943. Following W orld W ar II, and until
the outbreak of hostilities in K orea, there were two
surplus years an d two deficit years. Since K orea,
receipts have covered expenditures in only 1 year.

reached 5.1 billion dollars by 1940. As a result of
various increases in taxes and rising incomes during
the W orld W ar II period, budget receipts rose to a
w artim e peak of 44.5 billion dollars in 1945.
Follow ing the end of the w ar, tax rates were re
duced, b u t still rem ained higher th a n in prew ar
years. In 1950, receipts am ounted to 36.5 billion
dollars, the lowest am o u n t of all the post W orld
W ar II years. Increases in tax rates enacted after
the K orean aggression, together w ith a high rate of
business activity and rising n ational incom e, have
caused a substantial increase in budget receipts
since 1950.
Budget receipts in the fiscal year 1954 are esti

PART 3 • Supplementary Information

Trust Funds— Receipts and Expenditures
M ost of the financial transactions of the Govern
m ent are directly reflected in budget receipts and
expenditures. H ow ever, some significant activities
are carried on through trust funds w ith the Govern
m ent acting in the capacity of trustee. T he m ajor
program s conducted th ro u g h trust funds are old-age
and survivors insurance, unem ploym ent insurance,
railroad retirem ent, Federal employees’ retirem ent,
and veterans’ life insurance.
T h e transactions of the trust funds are not in
cluded in the totals of budget receipts and expendi
tures. Receipts of these tru st funds come m ainly
from payroll taxes or, in the case of veterans’ life
insurance, from prem ium s paid by those insured.
These receipts are held in trust by the Government.
T he m oney m ay be spent only for the special p u r
poses of the trust— prim arily the paym ent, to those
eligible, of the benefits for w hich the fund was estab
lished.
T otal receipts of the trust funds are currently
greater than expenditures, w ith the funds taking in
each year several billion dollars m ore than they
pay out. M ost of this trust fund income in excess
of cu rren t spending is invested in G overnm ent
bonds. A t the end of the fiscal year 1953, over 42
billion dollars in U n ited States securities was held
by G overnm ent trust funds. These investments
earn interest for the tru st funds.
T he old-age and survivors insurance trust fund
is by far the largest. It is financed prim arily by a
special payroll tax paid by b o th covered employers
and employees. This tax rate rose from \ ){ percent
to 2 percent on J a n u a ry 1, 1954. Expenditures
from this trust fund consist of (1) m onthly benefits
to retired workers or to survivors of covered workers,

and (2) the adm inistrative costs of the program .
T he railroad retirem ent fund and the Federal
em ployees’ retirem ent fund are operated in a m an
ner sim ilar to the old-age and survivors insurance
trust fund.
T h e unem ploym ent insurance trust fund is fi
nanced by payroll taxes w hich the States and the
R ailro ad R etirem ent Board collect from employers
and transm it to the Federal treasury. Its expendi
tures consist mostly of w ithdraw als from the fund
by the States and the Board to pay unem ploym ent
com pensation benefits to workers.
T he veterans’ life insurance trust funds provide
life insurance for veterans of world wars I and II.
Receipts consist largely of prem ium s paid by those
who are insured, and expenditures are prim arily
paym ents to beneficiaries of policyholders and pay
m ents of dividends.
Estim ates of trust fund transactions for the fiscal
year 1955, as shown in the accom panying chart,
include the President’s recom m endations for ex
panding and im proving the social security system.
W ith respect to the old-age and survivors insur
ance system, the President proposed th a t coverage
be extended to an additional 10 m illion workers
and their families— self-employed farm ers, profes
sional people, casual workers, and, on an optional
basis, State and local governm ent employees. In
addition, he recom m ended increases in benefit
rates an d other im provem ents.
W ith respect to the unem ploym ent insurance sys
tem , the President proposed th a t it be expanded to
include employees of firms em ploying fewer th an
eight persons. A m endm ents to State laws to
achieve this coverage will be needed in only a
dozen States.
50

Trust Funds

r e c e ip t s a m

e x p e n d it u r e s

$ BILLIONS

FISCAL YEAR 1955 ESTIMATED

O ld -A g e and
Survivors Insurance

1 1.7

Unemployment
Insurance

| .7

Railroad
Retirement

Veterans

Trust Funds

Life Insurance

Federal Employees*
Retirement

A H O ther
Trust Funds

$ Billions
Total
Expenditures

Fiscal Year

Total
Receipts

1955 Est.

10.3

7.6

1954 Est.

9.4

6.7

1953

8.9

5.3
5.3

1952

8.8

1951

7.8

3.7

1950

6.7

6.9

PART 3 • Supplementary Information

Receipts From and Payments To the Public
[IN M IL L IO N S ]

Fiscal year 1955
estimated

Description

Budaet receipts tDaQC 8 i ..........................................................................................

S eia n io raa e on silver....................................................................................................

$62,642
10,323
— 2,074
— 49

Total receipts from the public..........................................................

70,842

Budget expenditures (page 1 0 ) .............................. .. ....................................
Trust funa expenditures iD aae 5 0 ). ................................ ....................................
(ntragovernmental transactions................................................................ ..
Met accrued interest and other noncash transactions...................

6 5,570
7,659
— 2,074
— 428

T o ta l aavvnents to the nub ic ........................... ........................................

70,727

Excess of receipts over payments ........................................... .. .....................

115

Trust fund receiots fnaae 5 0 ^ ...................................................................................
Intraao vern m ental transactions.................................................................................

T o show the total flow of money between the
public and the F ederal G overnm ent, a statem ent of
“ receipts from and paym ents to the public” has
been developed. T his statem ent has also been
called the “ consolidated cash statem ent” and “ cash
incom e and outgo of the U nited States T reasury.”
T h e “ p ublic,” as used here, includes individuals;
banks, including the F ederal Reserve and Postal
Savings Systems; businesses; private corporations;
State, local, and foreign governm ents; and inter
national organizations. T h e Federal G overnm ent
includes budget transactions, trust fund trans
actions, and the transactions of Governm entsponsored corporations w hich are carried on the
books of the T reasu rer of the U nited States.
T he above table shows how the totals of receipts
from and paym ents to the public are derived by
consolidating budget receipts and expenditures
w ith trust fund transactions. In this consolidation,
transactions betw een G overnm ent agencies and
trust funds, such as interest paid by the T reasury

on U nited States securities held by the trust funds,
are elim inated. They are not cash transactions
between the G overnm ent and the public. C ertain
other noncash transactions are also elim inated in
the consolidation. For exam ple, interest which
accrues on savings bonds is counted as a budget
expenditure at the time of accrual. But the interest
is not paid in cash until the bonds are redeem ed.
Hence, this consolidation elim inates the interest
accruals, but includes the interest paid a t the time
of redem ption.
For the fiscal year 1955, it is estim ated th at
the total money flow between the Federal
G overnm ent and the public will show an ex
cess of receipts over paym ents of 115 million
dollars. This com pares w ith an excess of pay
m ents over receipts of 5.3 billion dollars in
the fiscal year 1953, of 6.6 billion dollars esti
m ated for the fiscal year 1954 in the 1954
budget docum ent, and of 234 m illion dollars
now estim ated for 1954.
52

Public Debt Ownership

End of Fiscal Year

FISCAL YEARS 7 9 5 0 -1 9 5 5

<950

1951

$ BILLIONS

1952

1953

1954

1955

Estimated

THE PUBLIC DEBT

present statutory lim it d u ring the first half of the
fiscal year 1955. In the budget message, the Presi
dent renew ed his request th a t the Congress raise
the legal debt lim it to m eet this problem and to
facilitate flexible and p ru d e n t debt m anagem ent.
He also stated th at a sound dollar is the co rner
stone of the ad m inistration’s financing policy.
Almost three-fourths of the debt now m atures
w ithin less th a n 5 years or is redeem able a t the
holder’s option. A considerable p a rt of the d eb t is
held by com m ercial banks. T o prevent excessive
expansion of bank credit and the cheapening of the
value of the dollar w hich generally accom panies it,
efforts are being m ade to lengthen m aturities
gradually and to shift some of the deb t from banks

T h e public d eb t is estim ated to be 273 billion
dollars a t the end of the fiscal year 1955. It will
have risen by 16 billion dollars since the end of
the fiscal year 1950. D uring the sam e period, in
vestments in U nited States securities by G overn
m ent agencies and trust funds will have increased
by alm ost the same am ount.
U n d er present law, the public d eb t subject to the
legal lim it m ay not exceed 275 billion dollars at
any time. A bout one-half billion dollars of the
deb t is not subject to this limit. Because, under
existing law, tax collections durin g the first half of
each fiscal year are relatively low, the debt in
D ecem ber is usually m uch higher th a n at the end
of the fiscal year the following Ju n e . T hus, while
the public d eb t is expected to be 273 billion dollars
on Ju n e 30, 1955, it will substantially exceed the

to long-term investors.
53

PART 3 • Supplementary Information

Federal Public Works
In carrying out its m any functions, the Federal
G overnm ent requires m any different kinds of
works and structures. These range from small
buildings to large river basin developm ents and
m ilitary installations. Some of these facilities are
built directly by the Federal G overnm ent as civil
or m ilitary public works. In other cases, the Gov
ernm ent makes loans an d grants to States and
local governm ents to aid the construction of public
works in w hich there is a national interest.
Federal expenditures for public works are p art
of the expenditures alread y discussed in p a rt II of
this booklet. In p a rt I I they are classified with
the m ajor program s they support. H ere they are
grouped together to show the m agnitude and
trend of Federal public works activities.
D uring the years since W orld W ar II, Federal
public works an d Federal grants and loans for
public works have increased in volume and have
become m ore varied in character. Expenditures
for these purposes have increased from 2.2 billion
dollars in the fiscal year 1950 to 5.2 billion dollars

in 1953. T hey are estim ated to decrease to 4.5
billion dollars in 1955.
Following the attack in K orea, a large expansion
took place in construction for national security
purposes. Expenditures for national security con
struction are estim ated a t 2.9 billion dollars in the
fiscal year 1955. M ilitary public works m ake up
the m ajor p a rt of this total. T hey are both over
seas and domestic installations, and include training
and testing facilities as well as operating bases for
the Air Force, Army, and N avy. Expenditures for
atom ic energy plants and facilities are estim ated a t
1.2 billion dollars in 1955, chiefly for large a d d i
tions to the production capacity at H anford, W a sh .;
O ak Ridge, T enn.; and P aducah, K y.; a n d a new
p la n t a t Portsm outh, O hio.
T h e civil public works program s of the F ederal
G overnm ent will require expenditures of 1.6 billion
dollars in the fiscal year 1955. A bout 95 p ercen t
of this am ount will be for program s started in prior
years. H owever, the budget provides for startin g
some new projects w here the need is urgent.

BUDGET EXPENDITURES FOR PUBLIC WORKS

[Fiscal years.

Program

Civil public works:
Direct Federal projects........................................................................
Grants for State and local projects.................................................
Loans for State and local projects (n e t)........................................

In billions]
1950
actual

1951
actual

1952
actual

1953
actual

$ 1 .3
0. 5

SI. 4
0. 5
0 .1

$1. 4
0. 6
0 .2

$1. 4
0. 7

1954
1955
estimated estimated

$1. 3
0 .7
- 0 .1

$1. 1
0 .7
- 0 .2

Subtotal, civil public w orks...........................................................

1 .8

2 .0

2. 1

2 .2

1 .9

1 .6

Public works for national security:
M ilitary and related public works..................................................
Atomic energy plants and facilities.................................................

0. 2
0 .2

0. 4
0. 5

1. 8
1. 1

1. 9
1. 1

1 .7
1. 3

1 .7
1 .2

Subtotal, national security.............................................................

0 .4

0 .9

2 .9

3 .0

2 .9

Total, Federal public w orks..........................................................

2. 2

2 .9

5 .0

5 .2

4 .9

4. 5

1 Less than 50 m illion dollars.
N o t e . — Detail m ay not add to totals because of rounding.

Federal Public Works
$ MILLIONS

ESTIMATED BUDGET EXPENDITURES IN 1955

1,670
M ilitary and Related Public W orks
1,213
Atomic Energy Plants and Facilities
848
River Basin Development
601
Highways and Roads
186
Hospitals and Schools
-197

( Repaym ents Exceed Loan s )

Low-rent Housing Loans
201

Buildings and Other Facilities

A bout one-half of the civil public works expendi
tures in 1955 will be for river basin developm ent.
This includes expenditures for flood control, irriga
tion, navigation, pow er, and m ultiple-purpose
projects. Some o f the large m ultiple-purpose proj
ects are nearing com pletion, and others will be
com pleted in the next few years. E xpenditures for
highw ays and roads, m ostly for grants to States in

the Federal-aid highw ay program , account for the
next largest share. In 1955, collections on earlier
loans for low -rent public housing are expected to
exceed new loans, resulting in net receipts of 197
million dollars from this program . T he rem aining
Federal public works expenditures are for hospitals,
schools, public buildings, research laboratories, and
other facilities.
55

PART 3 • Supplementary Information

Research and Development
E xpenditures for the rem ainder of the G overn
m e n t’s research program have rem ained relatively

R esearch an d developm ent activities are sup
ported o r conducted by m any Federal agencies,
either as a basic purpose of the agency or as a
m eans of im proving the efficiency of its other
operations. Federal expenditures for research and
developm ent are p a rt of the expenditures already
discussed in p a rt II of this booklet. In p art II
they are classified w ith the m ajor program s they
support. H ere they are grouped together to show
the m agnitude an d com position of Federal research
an d developm ent activities.
F ederal G overnm ent expenditures for identifiable
research an d developm ent program s in the fiscal
year 1955 are estim ated at 2.0 billion dollars, 5
percent low er th a n in 1954. T h e total includes
190 m illion dollars for additions to research build
ings and m ajor eq u ip m en t and 1,824 m illion dol
lars for the co nduct of research and developm ent.
These expenditures by the Federal G overnm ent
are ab o u t one-half of the estim ated 3.5 to 4 billion
dollars now being spent annually in the U nited
States for all research and developm ent purposes.
Industry provides nearly all the rem ainder, w ith
educational institutions an d other sources financing
a relatively small am ount.
Federal research and developm ent expenditures
increased substantially d uring W orld W ar II, first
exceeding 1 billion dollars a year in 1944. They
declined thereafter, b u t increased again to an
even higher level d uring the K orean conflict.
These substantial variations reflect changes that
have occurred in the m agnitude of research for
m ilitary and o th er national security purposes.

stable.
In the fiscal year 1955, m ore th an 70 percent of
the Federal G overnm ent research expenditures
will be m ade by the D ep artm en t of Defense in its
work on developing new weapons, im proving
existing weapons, and increasing the effectiveness
of the arm ed forces by applying scientific knowledge
an d techniques to m ilitary problem s. T he Atomic
Energy Commission engages in research and
developm ent aim ed at im proved weapons, more
efficient production of fissionable m aterials, gen
eration of electric pow er from atom ic energy, and
protection of personnel from radiation and the
other hazards of atom ic energy operations. T he
N ational Advisory C om m ittee for A eronautics
conducts basic and applied research to obtain
scientific and engineering d a ta for im proving the
design and perform ance of m ilitary aircraft, guided
missiles, and propulsion systems. T he findings of
both the Atomic Energy Commission and the
N ational Advisory Com m ittee for A eronautics
m ake extensive contributions to nonm ilitary as
well as m ilitary purposes.
T he D epartm ent of A griculture conducts funda
m ental and applied research related to the pro
duction, storage, distribution, and utilization of
agricultural products. It also works on problem s
of hum an n u trition and home economics. T he
D epartm ent of H ealth, Education, and W elfare
does research on the cause, prevention, and
56

Research and Development

agency

$ M ILLIONS

BUDGET EXPENDITURES IN 19 55

1,450
Department of Defense
261
Atomic Energy Commission
77
National Advisory Committee for Aeronautics
76
Department of Agriculture
63
Department of Health, Education, and W elfare
87
Other Agencies

Research and D evelopm ent-Expenditures

$ Million

i __________________
Fiscal Year

Total

Military and
Related Research

Other

treatm en t of cancer, h eart disease,
2,014
1,788
1955 Est.
226
m ental diseases, and other health
2,127
1,913
1954 Est.
problem s.
214
E ighteen other agencies of the
2,108
1,908
1953
200
Federal G overnm ent also have
1,839
1,632
1952
207
budgeted expenditures for research
1,342
1951
1,125
217
and developm ent in the fiscal year
1950
1,143
926
217
1955, b u t in sm aller am ounts.
M ore th an 90 percent of the
Federal expenditures for research
and developm ent are for applied
research, developm ent, and new facilities. Basic
Almost tw o-thirds of the Federal G overnm ent’s
research accounts for less th an 10 percent. T he
research and developm ent funds are spent through
N ational Science F oundation will furnish gencontracts w ith industry. A bout one-third is spent
eral coordination w ith regard to basic scientific
in direct operations in Federal laboratories and
research. T he F oundation is presently engaged
other facilities. A sm all fraction is for grants and
in a com prehensive study of research and national
contracts w ith educational and nonprofit in
science policy.
stitutions.

PART 3 • Supplementary Information

Federal A id to State and Local Governments
Federal aid to S tate and local governm ents is
generally used to help support State and local ac
tivities w hich have a national interest. In the
budget message, the President stated, “ In those
cases w here Federal participation is necessary, the
effort of this adm inistration is to develop p a rtn e r
ships ra th e r th an an exclusive and cften paternalistic
position for the F ederal G overnm ent.”
A Commission on Intergovernm ental R elations
is a t present studying the proper role of the Federal
G overnm ent in relation to State and local g overn
m ents. It is giving p a rtic u la r attention to Federal
grants-in-aid and other aids to States and their
subdivisions—as well as tax sources, governm ental
functions, and intergovernm ental tax imm unities.
It is expected to re p o rt shortly on certain aspects
of its assignm ent.
Federal aid consists m ainly of grants-in-aid, but
also includes loans an d repayable advances, and
shared revenues. B udget expenditures for such aid
in the fiscal year 1955 are estim ated at 2.7 billi >n
dollars. T h ey will equal approxim ately 10 percent
of S tate and local governm ent revenues from other
sources. These F ederal-aid expenditures are in
cluded in the b udget expenditures discussed in

p a rt II of this booklet, w here they are classified w ith
the m ajor program s to w hich they are related.
T hey are grouped together here to show in one
place the m agnitude and the types of Federal aid
to State and local governm ents. In some cases, the
expenditure figures are som ew hat different from
those shown in p a rt II. T he difference represents
the expenditures for Federal adm inistration of these
program s. As presented here, the expenditures
represent the paym ents to S tate and local govern
ments.
N early half of all the Federal-aid expenditures in
the fiscal year 1955 will be grants for public assist
ance. Federal grants also aid school operations
in areas burdened by Federal activities; adm inis
tration of unem ploym ent com pensation and labor
placem ent services; provision of lunches for school
children; public health; and vocational rehabilita
tion. O th er m ajor grants are for construction
program s— they aid in the building of highwaySj
schools in areas burdened by Federal activities, and
hospitals. Substantial grants-in-aid are m ade also
for low -rent public housing program s and for slum
clearance and u rb an redevelopm ent projects.

FED ER AL AID TO STATE AND LOCAL GOVERNMENTS

[In millions]
Gross expenditures

Fiscal year

Total

Grants-inaid

Shared
revenues

Loans and
repayable
advances

(1)

(2)

(3)

(4)

1950............................................................
1951............................................................
1952............................................................
1953............................................................
1954 (estim ated)...................................
1955 (estim ated)...................................

N o t e . — Column ( 6 )

equals column

$2,
2,
3,
3,
4,
3,

(1)

279
520
096
818
197
867

less column

$2, 226
2 ,2 5 6
2, 393
2, 781
2, 940
2, 873

(5).

$27
31
38
50
52
53

$26
233
665
987
1, 205
941

Collections
on loans and
repayable
advances

Budget ex
penditures
(net)

(5)

(6)

$10
86
492
961
1, 330
1, 118

$2, 269
2, 434
2, 604
2 ,8 5 7
2, 867
2, 749

Federal A id to State and Local Governments
BUDGET EXPENDITURES IN 19SS

$ M IL L IO N S

1,293
Public Assistance ( Payments for A id to the Needy )

Highway Construction

Administration, Unemployment Compensation and Employment Service
139
School A id in Federally Affected Areas
108
Low-rent Housing and Slum Clearance Grants

Other Federal A id

______ ...........

F ederal aid in the form of loans and repayable
advances is expected to involve gross expenditures
of 941 m illion dollars in 1955. Collections on loans
and advances are estim ated at 1,118 million dollars.
H ence, in the fiscal year 1955, net receipts of 177
m illion dollars are estim ated for loans and repay
able advances to State and local governments.
M ost of this type of Federal aid is for low-rent
public housing and for slum clearance and urban
redevelopm ent.
T he th ird type of Federal aid is shared revenues.
These revenues are collected by the Federal G overn

m ent and then shared w ith State and local govern
ments. They arise largely in connection w ith the
m anagem ent of public lands. For exam ple, the
Federal G overnm ent turns over to States or their
subdivisions a portion of the proceeds from the sale
or lease of certain Federal property, products, and
services. Often the Federal law requires th at the
State or local share be used for schools, or for schools
and roads, in the county w here the Federal lands
are located. S hared revenues comprise less th an
2 percent of F ederal expenditures for aid to State
and local governm ents.
59

PART 3 - Supplementary Information

Federal Credit Programs
In carrying out several m ajor program s au th o r
ized by the Congress, G overnm ent agencies make
direct loans, and guarantee or insure loans m ade
by private banks and other credit institutions.
F or exam ple, as p art of the Federal program s for
im provem ent of housing and encouragem ent of
home ow nership, Federal agencies insure or guar
antee ab o u t 40 percent of new hom e-m ortgage
loans. Sim ilarly, credit assistance is an im portant
p art of the Federal program of encouraging
efficient family-size farm units.
Federal insurance an d guarantees of private loans
do not norm ally involve budget expenditures. In
direct loan program s, collections on outstanding
loans are usually available for new loans. At times
these collections exceed the disbursements on new
loans. In the fiscal year 1955. for example,
repaym ents on old loans are expected to exceed
disbursem ents on new loans.
T he volum e of “ new com m itm ents”— pledges by
G overnm ent agencies to m ake direct loans or to
guarantee o r insure private loans— indicates the
level and trends of Federal credit activities. T otal
new com m itm ents of 12.5 billion dollars estim ated
for m ajor credit program s in the fiscal year 1955
represent a reduction of m ore than 2 billion dollars
from 1953 and 1954. Because of increased reliance
on guarantees of private loans in place of direct

Federal loans, Federal guarantees and insurance of
private loans will account for 70 percent of new
com m itm ents in the fiscal year 1955, com pared
with 67 percent in 1954 and 64 percent in 1953.
T he shift in em phasis to guarantees of private
loans is likewise visible in the trends of outstanding
loans and guarantees. O u tstanding direct loans
(including undisbursed com m itm ents) are expected
to decline from the peak of 19.1 billion dollars on
Ju n e 30, 1953, to 17.8 billion dollars by the end of
the fiscal year 1955. O n the other hand, Federal
guarantees and insurance of private loans will con
tinue to rise during the same period from 30.9 billion
dollars to an estim ated 37.5 billion dollars.
C redit aids for agricultural program s, supervised
by the D epartm ent of A griculture and the F arm
C redit A dm inistration, total 4.5 billion dollars, or
36 percent of new com m itm ents in 1955. M ajor
farm credit program s include (1) price su p p o rt
loans and guarantees by the Com m odity C redit
C orporation; (2) loans by the Federal interm ediate
credit banks to help finance farm production;
(3) electrification and telephone loans by the R u ral
Electrification A dm inistration; and (4) loans by
the Farm ers H om e A dm inistration for farm o p erat
ing expenses and crop production, farm ownership
and im provem ent, and farm housing.
60

Federal Credit Programs
[IN B IL L IO N S !

Fiscal year

195 0
195 1
195 2
195 3
1954 (estimated).........
1955 (estimated).........

New commitments during
fiscal year
Loans

Guarantees

Total

Loans

Guarantees

Total

$5.5
4.9
5.2
5.3
4.9
3.7

$9.9
8.5
9.7
9.5
9.8
8.8

$15.4
13.4
14.9
14.8
14.7
12.5

$15.7
15.7
17.4
19.1
18.8
17.8

$20.1
23.7
27.2
30.9
35.4
37.5

$35.8
39.4
44.6
50.0
54.2
55.3

A dm inistrator makes direct loans to provide hous
ing for students and faculty m em bers at educational
institutions.
New com m itm ents for veterans’ loans g u ara n
teed by the V eterans A dm inistration are expected
to continue at over 3 billion dollars a year in the
fiscal year 1955. Alm ost 90 percent of these
guaranteed loans will be used to purchase or
improve houses.
O ther m ajor active loan program s of the Federal
Governm ent include loans an d guarantees under
the Defense Production Act to expand defense p ro
duction, loans by the Sm all Business A dm inistra
tion to meet the special needs of small businesses,
and foreign loans by the E x p ort-Im port Bank and
the Foreign O perations A dm inistration. T h e loan
program s of the R econstruction Finance C orpora
tion are now in liquidation.

Five m ajor housing program s supervised by the
H ousing and H om e Finance Agency account for
4.4 billion dollars or about 35 percent of the esti
m ated new com m itm ents in 1955. (1) T h e Fed
eral H ousing A dm inistration insures loans m ade by
private lending institutions for the purchase, con
struction, and im provem ent of homes. (2) T he
Federal N ational M ortgage Association provides a
secondary m arket for residential m ortgages insured
by the Federal H ousing A dm inistration or g u aran
teed by the V eterans A dm inistration. (3) T he
Public H ousing A dm inistration makes direct loans
and guarantees private loans to assist local housing
authorities in the construction of low -rent public
housing. (4) T h e H ousing A dm inistrator makes
direct loans and guarantees private loans to com
m unities for the elim ination of slums and the
redevelopm ent of blighted areas. (5) T h e Housing

Outstanding and committed at end
of fiscal year

PART 3 • Supplementary Information

Glossary of Selected Budget Terms
New obligational authority.— The total am ount of budget authorizations to
incur obligations granted by the Congress to the Federal agencies for a
given year, usually in the form of appropriations. This is the initial action
w hich m ust precede all budget expenditures. New obligational au th o rity
includes a few reauthorizations, by means of which unused portions of prior
year authorizations are continued after they would otherwise expire.
Obligations.—Actions taken by the agencies w ithin their available obliga
tional authority to buy goods and procure services, requiring in due tim e
th e paym ent of money (expenditures). O bligations m ay be in the form of
orders placed, contracts aw arded, personal and contractual services ordered,
an d sim ilar transactions.
Budget expenditures.—W ith a few exceptions, they are checks issued under
budget authorizations, granted either in the current year or in previous
years. T h e usual procedure is th a t obligations are incurred u n der new
obligational authority. Obligations are then liquidated by expenditures
w hich sometimes take place w ithin a few weeks and sometimes occur as m uch
as 3 or even m ore years after an obligation has been incurred. Excludes
spending of funds held in trust.
Budget receipts.— Federal income consisting of personal and corporate
taxes, excises, customs, and other revenues. Excludes funds received in
trust.
Budget deficit.— T he excess of budget expenditures over budget receipts
in an y fiscal year.
Budget surplus.—T he excess of budget receipts over budget expenditures
in any fiscal year.
Unexpended balances of prior year authorizations.— T he unexpended portions
of prior year authorizations, largely obligated, which are brought forw ard
an d are currently available for expenditure. T hey are com m itm ents for
w hich actual funds were not provided in prior years and w hich m ust be
m et as expenditures in the current or future years.

B U D G E T R E C E IP T S A N D

E X P E N D IT U R E S A N D

P U B L IC D E B T

[Fiscal years. In millions]

Fiscal year

1915
1916
1917
1918.
1919.
1920
1921.
1922
1923
1924.
1925.
1926.
1927.
1928.
1929.
1930.
1931.
1932.
1933.
1934.

Total
budget
receipts

Total
budget
expendi
tures

Surplus
or
deficit

$683
762

$746
713
1,954
1 2 , 662
18,448
6 ,357
5, 058
3,285
3,137
2, 890
2,881
2,888
2,837
2, 933
3,127
3,320
3, 578
4, 659
4, 623
6 , 694

-$63
+48
-853
-9 ,0 3 2
-13,363
+291
+509
+736
+713
+963
+717
+865
+1,155
+939
+734
+738
-4 6 2
- 2 , 735
- 2 , 602
- 3 , 630

1,100

3, 630
5,085
6 , 649
5, 567
4, 021
3,849
3,853
3,598
3, 753
3,992
3,872
3,861
4, 058
3,116
1,924
2,022

3,065

Public
debt at
end of
year
$1,191
1,225
2,976
12,455
25,485
24,299
23,978
22,963
22,350
21, 251
20,516
19,643
18, 512
17,604
16,931
16,185
16,801
19,487
22, 539
27,053

Fiscal year

Total
budget
receipts

Total
budget
expendi
tures

Surplus
or
deficit

1935________________________
1936________________________
1937________________________
1938________________________
1939________________________
1940________________________
1941________________________
1942________ _____ __________
1943________________________
1944________________________
1945________________________
1946________________________
1947___________ ____________
1948________________________
1949________________________
1950________________________
1951________________________
1952________________________
1953________________________
1954 (est.)__________________
1955 (est.)__________________

$3, 730
4,069
4, 979
5, 615
4, 996
5,144
7, 103
12, 556
21, 987
43, 636
44, 475
39, 772
39, 787
41,488
37, 696
36, 495
47, 568
61,393
64, 593
i 67, 629
i 62, 642

$6,521
8 ,494
7, 756
6 , 792
8,858
9,062
13, 262
34, 046
79, 407
95,059
98,416
60, 448
39,033
33,068
39, 507
39,606
44,058
65,410
73, 982
70, 902
65, 570

—$2,791
-4,425
-2 , 777
-1,177
-3,862
- 3 , 918
-6,159
-21,490
-57,420
-51,423
-53, 941
-20, 676
+754
+ 8 , 419
-1,811
- 3 , 111
+3, 510
-4 , 017
-9,389
- 3 , 274
- 2 , 928

Public
debt at
end o f
year
$28,701
33,779
36,425
37,165
40, 440
42,968
48,961
72, 422
136,696
201,003
258,682
269,422
258, 286
252,292
252, 770
257,357
255, 222
259,105
266,071
269, 750
273,000

Reflects new tax proposals.

B U D G E T E X P E N D IT U R E S , B Y F U N C T IO N
[Fiscal years.

In millions]
1954
1955
(estimate) (estimate)

Function

1946

1947

1948

1949

1950

1951

1952

1953

National security_______ . _____ __________
Veterans’ services and benefits___________
International affairs and finance.- _______
Social security, welfare, and health_______
Housing and community developm ent____
Education and general research___________
Agriculture and agricultural resources_____
Natural resources_______________________
Transportation and communication______
Finance, commerce, and in d u stry ..- _____
Labor and manpower____________________
General government______ _____________
Interest_____________ __________________
Reserve for contingencies
__
. _

$43,507
4,416
3,066
738
i 199
85
743
251
817
i 44
224
951
4,816

$14,392
7,381
6 , 531
1,007
348

$12,902
6,726
6,053
1,293
282
74
2, 512
902
1,649

$13,009
6,647
4,674
1,592
262

1,243
449
581
161
224
1,334
5,012

$11,675
6,654
4, 566
1,083
82
65
575
631
1,251
71
190
1,366
5, 248

1,075
5,445

2,783
1,058
1,757
106
271
1,177
5,817

$22,306
5,342
3, 795
1,721
602
115
650
1,140
1,747
126
254
1,309
5,714

$43,848
4,863
2,826
1,756
735
171
1,045
1,258
1,990
127
275
1,437
5, 934

$50, 274
4, 298
2 , 216
1,910
549
277
2,936
1,358
2,076
76
281
1,439
6 , 583

$48, 720
4,160
1,779
1,947
57
278
2,654
1,172
1,856
164
265
1,175
6,600
75

$44,860
4,192
1,250
1,807
l 277
223
2,366
1,103
1,418
162
281
1,160
6,875
150

T otal_____________________________
Adjustment to daily Treasury statem ent...

59,371
+1,077

38, 729
+304

33, 457
-389

39, 234
+273

39, 275
+331

44,821
-763

, 265
-855

74, 274
-2 9 2

70,902

65, 570

Total budget expenditures_________

60, 448

39,033

33,068

39, 507

39, 606

44,058

65,410

73,982

70,902

65, 570

* Deduct, excess of repayments and collections over expenditures.
N ote.—D etail may not add to totals because of rounding.

110
211

122

E X E C U T I V E

B R A N C H

THE

G O V E R N M E N T

j TEMPORARY AGENCIES

January 1, 1954

U N IT E D STA TES

G O V E R N M E N T P R IN T IN G O F F IC E

W A S H IN G T O N : 1954

For sale by the Superintendent of Document*-

Price 40 cents

Full text of Budget in Brief : Fiscal Year 1955

FRASER