Full text of Budget in Brief : Fiscal Year 1956
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10 .f ìt è I95<b The Federai Budget in Brief EXECUTIVE OFFICE OF THE PRESIDENT BUREAU OF THE BUDGET THE RUDGET DOLLAR ■ I Ib If lr IMii ■ mmr WmmmMHk mm TW tene it comeúfrom ... Receipts I k I i I i Tax t n y t s i l s Fiscal Year 1956 Estimated The Federal Budget in Brief FISCAL YEAR 1956 July 1, 1955-June 30, 1956 O ur objective of being provident in financial m atters has paid and is still paying dividends in general well-being. We have reduced expenditures and eased the crushing load of taxation. We have im proved the structure of the public debt and provided a favorable environment for sound m onetary policy. We have encouraged private initiative by starting to take the Governm ent out of com petition with private enterprise. We have m ade progress in housing and in protection against personal catastro phe. We are developing our natural resources in partnership with the State and local governm ents and with private 33027 4 0— 55 ------ 1 initiative. T h ese steps are designed to assure high and rising employment, a grow ing prosperity, and a stable dollar. T his adm inistration will continue to exercise the utm ost care in the m anner in which it uses the taxpayers’ money. It will continue to purchase what we m ust have for our security, well-being, and prosperity with the fewest possible num ber of dollars. O u r success thus far in reducing taxes, expenditures, and the deficit is the best evidence of the earnestness of our efforts. D w i g h t D . From the Budget Message January 17, 1955 E i s e n h o w e r . INTRODUCTION T h e B udget of the U nited States is the financial expression of the Presi den t’s p rogram for the G overnm ent during the ensuing fiscal year— the year beginning Ju ly 1 and ending Ju n e 30. D ue to the vast scope and variety of the G overnm ent’s activities, the budget is a large, detailed, com plex docum ent. T herefore, the Budget in Brief is issued each year to present the m ore im portant facts about the budget in a more sim ple and convenient form. By law, the budget m ust be transm itted to the Congress annually within 15 days of the date on which Congress convenes. T h e bu d get for the fiscal year ending Ju n e 30, 1956, was sent to the Congress by President Eisenhow er on Jan u a ry 17, 1955. T h is issue of the B udget in Brief deals particularly with that budget. It shows the am ount of money which the Governm ent expects to receive in the fiscal year 1956 under existing and proposed tax laws, and presents estim ates of how m uch will be spent to carry out present Governm ent program s and new program s recom m ended to the Congress by the President. T h e B udget in Brief also contains other inform ation designed to prom ote a better understanding of Federal finan cial transactions. In the 1956 budget, the 13 broad categories previously used to sum m arize budget expenditures by function wrere reduced to 9. T h is new classifica tion is used in p art II of this issue of the B udget in Brief, with corresponding figures for prior years ad justed for com parability. T h e 1956 budget also presented a new general classification of expenditures which ap p ears on p age 10 of this booklet. T h e estim ates of receipts and expenditures which ap p ear in the budget docum ent reflect the best jud gm en t at this time of results from the Presi dent’s program s for the fiscal year ending 18 months later. U ndoubtedly there will be changes before the final figures are in for the year. T h e estim ates have to be based on assum ptions concerning international and dom estic conditions which can becom e subject to drastic changes. T h e President’s budget proposals are subject to approval by the C ongress which can m ake changes affecting substantially both receipts and expenditures. Also, as has been done in the last 2 years, it continues to be the policy of the adm inistration to m ake economies wherever possible and justified during the year. 2 CONTENTS P art P art I. B udget S ummary ................................................................................................................................. Page 5 Sum m ary of the 1956 b u d get.................................................................................................... 6 Budget receipts............................................................................................................................... 8 Budget expenditures..................................................................................................................... 10 Budget authorizations related to expenditures..................................................................... 12 Unexpended balances of appropriations................................................................................ 13 New obligational authority and budget expenditures, by agen cy.................................. 14 Budget expenditures as a percentage of national incom e.................................................. 16 Budget expenditures per c a p ita ................................................................................................. 16 II. B udget E xpenditures , by F unction ........................................................................................... 17 M ajor national security............................................................................................................... 18 International affairs and finance.............................................................................................. 20 Veterans services and benefits................................................................................................... 22 Welfare, health, and education................................................................................................. 24 Agriculture and agricultural resources................................................................................... 26 N atural resources.......................................................................................................................... 28 Commerce and m anpow er......................................................................................................... 30 General government..................................................................................................................... 32 Interest............................................................................................................................................. 34 Budget expenditures, 1950-1956.............................................................................................. 36 P art III. S upplementary I nformation ......................................................................................................... 37 Gross and net budget expenditures, by agency.................................................................... 38 Trust funds— receipts and expenditures................................................................................. 40 Federal Government receipts from and payments to the p u b lic.................................... 42 Budget expenditures, indicating controllability.................................................................. 43 Federal public w orks.................................................................................................................... 44 Research and developm ent........................................................................................................ 46 Federal aid to State and local governm ents.......................................................................... 48 Federal credit program s.............................................................................................................. 50 Historical tables: Budget receipts and expenditures and public debt, 1915-1956............................... 52 Budget expenditures, by function, 1947-1956............................................................... 52 3 The Federal Budget B IL L IO N S FISCAL YEAR 1956 ESTIMATED Receipts include tax proposals RECEIPTS The Government’s Income Individual Income Taxes .......... .......... . Corporation Income T a x e s ..................................................... Excise Taxes .............. ........ ............... .............. ........................... Customs and Other Receipts .................... ........................... ........... ........................ Budget Receipts ............... H H $ 4 .3 ------— $60.0 Budget Expenditures .......... $62.4 Budget Deficit ............... $ 2.4 E X P E N D IT U R E S The Government’s Spending Major National Security Interest ........................................................................................................ Veterans .......................................................................................................... Welfare, Health, and Education ................ ............................ ....................... Agriculture ............................................................................................ .......... . Commerce and Manpower .................................................... .......................... General Government ..................................................................................... International ................................................................................................. —1^? Natural Resources ............................................................................................... 1 Η Reserves ior Proposed Legislation and Contingencies ............. ...................... IS — JL PART 1 Budget Summary T h is opening section of the Federal Budget in Brief contains an overall description of the U nited States budget for the fiscal year 1956. It presents some of the m ajo r issues in the 1956 budget, and sum m arizes key totals in the budget— receipts, expenditures, the deficit, new obligational authority, and unexpended balances of appropriations. PART I • B u d g e t S u m m a ry Sum m ary of the 19 5 6 Budget than in 1954. T h e decline from 1954 results p ri m arily from tax cuts m ade last year, when the 7.4 billion dollar tax reduction program becam e effec tive. T his was the largest tax reduction for any single year in the country’s history. T h e 1956 estim ate is based on the President’s proposal to continue all taxes now in effect, includ ing present excise and corporate incom e tax rates now scheduled for reduction on April 1, 1955. It is also based on anticipated continued increases in national production and em ploym ent. B u d g e t deficit. — It is estim ated that the deficit will be reduced from 4.5 billion dollars in the fiscal year 1955 to 2.4 billion dollars in 1956. T h is com pares with the actu al deficit of 9.4 billion dollars in 1953, the Jan u a ry 9, 1953 estim ate of a 9.9 billion d ollar deficit for 1954, and the actu al deficit of 3.1 billion dollars for 1954. T h u s, progress tow ard a balanced budget is continued. N e w a u th o r it y to in c u r oblig ation s. — T h e Presi dent recom m ended new authority to incur ob liga tions for the fiscal year 1956 totaling 58.6 billion dollars. T h is am ount is 1.3 billion dollars m ore than for 1955, but represents a reduction of 32.8 billion dollars from 1952, 21.7 billion dollars from 1953, and 4.2 billion dollars from 1954. T o ta l recom m ended new authority is less than both the revenues and the expenditures estim ated for 1956. T h e President pointed out, “ By holding the level of new authority lower than anticipated revenues, we can continue m aking progress tow ard balan cing the budget. Likewise, as long as the am ount of new authority is less than expenditures, we are continuing on the way tow ard lower levels of Governm ent spending.” F or the fiscal year 1956 budget expenditures are estim ated at 62.4 billion dollars and budget receipts at 60 billion dollars, resulting in a deficit of 2.4 billion dollars. R ecom m ended new authority to incur obligations is 58.6 billion dollars. T hese fig ures allow for new legislation proposed by the President. B u d g e t e x p e n d i tu r e s . — T h e budget expenditure estimate of 62.4 billion dollars for 1956 is 11.9 billion dollars below actu al spending in 1953, 15.5 billion dollars below the Jan u a ry 9, 1953 estim ate for the fiscal year 1954, 5.4 billion dollars below actual spending in 1954, and 1.1 billion dollars below the current estim ate for 1955. T h u s the 1956 budget continues the dow nw ard trend in F e d eral expenditures which was begun in the fiscal year 1954. W hile total expenditures will be reduced in 1956, these reductions have been m ade selectively. Som e decreases are being m ade possible by encouraging Federal partnership with State and local govern ments and with private enterprise. O thers will result from taking the G overnm ent out of things which the people can do better for themselves, and from finding better ways to do necessary things. O n the other hand, increases are recom m ended in certain areas im portant to hum an well-being. In his budget m essage, the President stated, “ T h e stern requirem ents of our national defense dictate the largest p art of our budget, and it is chiefly these requirem ents which prevent us from decreasing budget expenditures faster at this tim e.5’ B u d g e t r e c e ip ts .— Budget receipts in 1956 are estim ated at 60 billion dollars, 1 billion dollars above receipts in 1955, but 4.7 billion dollars lower SU M M A R Y BUDGET IN F O R M A T IO N [Fiscal years. In billions] 1954 Description 1950 actual 1951 actual 1952 actual 1953 actual Budget docu ment 1 Actual 1955 esti mated 1956 esti mated Budget expenditures.......................................... Budget receipts.................................................... $39. 6 36. 5 $44. 1 47. 6 $65. 4 61. 4 $74. 3 64.8 $77. 9 68.0 $67. 8 64. 7 $63. 5 59. 0 $62. 4 60. 0 Budget deficit ( —) or surplus ( + ) . . . . -3. 1 + 3. 5 -4 . 0 -9 . 4 -9 . 9 -3 . 1 -4 . 5 -2 . 4 New authority to incur obligations................. 49. 3 83. 1 91. 4 80. 3 72. 2 62. 8 57. 3 58. 6 i Reference is to 1954 budget document of Ja n . 9, 1953, as presented to the Congress by the outgoing administration. 6 Budget Receipts and. Expenditures $ BILLIONS SURPLUS OR DEFICIT Fiscal Years Deficit 2.4 1956 Receipts Expenditures 1955 Deficit 4.5 Receipts Expenditures Deficit 3.1 1954 Receipts Expenditures Deficit 9.4 1953 Receipts' Expenditures Deficit 4.0 1952 Receipts Expenditures Surplus 3.5 1951 Receipts Expenditures Deficit 3.1 1950 Receipts Note: 1955 and 1956 are estimated and receipts include tax proposals Expenditures 7 PART I • B u d g e t S u m m a ry Budget Receipts Budget receipts in the fiscal year 1956 are esti m ated at 60 billion dollars, com pared with 59 billion dollars in the fiscal year 1955. Prim arily because of the 7.4 billion dollar tax reduction program , budget receipts in the fiscal years 1955 and 1956 are estim ated to be lower than in the fiscal year 1954. O ther m ajor reasons for the estim ated decline in receipts are ( 1 ) a drop in the taxable profits of corporations between the calendar years 1953 and 1954, and (2) com pletion of the plan adopted 5 years ago under which pay ments of corporation taxes have been gradually m oved forw ard into earlier fiscal years. T h e tax reductions m ade last year were justified by the progress that has been m ade in reducing budget expenditures. I f taxes had not been re duced, the budget would have been balanced in the fiscal year 1955. U n d er present law, corporation income tax rates and excise tax rates on liquor, tobacco, gasoline, and autom obiles are scheduled to be reduced on A pril 1, 1955. In the budget m essage, the Presi dent said that “ In view of the prospective deficit, we cannot afford to have any further loss of reve nue this year through reductions in taxes.” T h ere fore he recom m ended that existing rates on both excises and corporate incomes be extended for 1 year to support adequate expenditures for national security and avoid inflationary borrowing. T h e estim ates of 1956 budget receipts are based on continuation of all tax rates now in effect, in cluding the enactm ent of the proposed extensions, and on a rise from present levels in business activity, personal income, and corporate profits. In the fiscal year 1956 income taxes will continue to be the m ajor source of F ederal revenue. Incom e taxes 8 Budget Receipts FISCAL YEAR 1956 ESTIMATED $ BILLIONS In d ivid u a l Income T a x e s C o rp o ra tio n Income T a x e s Excise T a x e s — Manufacturers 2.8 Excise T a xe s — Liquor Excise T a xe s — Retailers and Miscellaneous Excis« T a x e s — Tobacco B u d g e t R e c e ip ts Custom s a n d O t h e r Receipts ____I___________________ Income Taxes on individuals will account for an estim ated 50 p er cent of budget receipts, corporation income taxes for 28 percent. A n additional 15 percent will be raised through excise taxes on liquor, gasoline, tobacco, and other products and services. T h e re m ain ing 7 percent of estim ated Federal receipts in 1956 will com e from customs, sales of Governm ent products and services, and other m iscellaneous sources. In the budget m essage, the President stated that “ further tax reductions can only be m ade as savings in governm ental expenditures or increased revenues resulting from growth in our economy are in sight. H ow ever, further tax reduction rem ains a firm goal of this adm inistration, and our policy is directed to achieving both the savings in expenditures and the econom ic growth that will m ake such reductions 33027 4 ° — 55 -------2 $ Billions Fiscal Year Total 1956 Est. 1955 Est. 1954 1953 1952 1951 1950 60.0 59.0 64.7 64.8 61.4 47.6 36.5 Individuals Corporations 29.8 27.9 29.5 30.1 27.9 21.7 15.7 16.6 18.0 21.1 21.2 21.2 14.1 10.4 Excises Customs and Other 9.3 9.0 10.0 9.9 8.9 8.6 7.5 4.3 4.1 4.1 3.6 3.4 3.2 2.9 possible.” H e indicated that he hoped tax reduc tions would be justified next year. If so, the Presi dent said he would recom m end a reduction in taxes to spread the relief fairly am ong all taxpayers in a way which will be the most effective to relieve in dividual tax burdens and to increase incentive for effort and investm ent. 9 PART I • B u d g e t S u m m a ry Budget Expenditures 2 0 ). T h ese expenditures include the acquisition o f F ed eral assets of varying degrees of perm anent value, from airbases to aircraft, tanks, trucks, and bombs. Also included are long-range research and developm ent expenditures, and such current ex penses as m ilitary pay and operations. M any sm aller items, related in varying degrees to protec tion, are scattered throughout other parts of the budget, and are not included in this total. E x a m ples are the C oast G u ard and the Selective Service System . Expenditures for the various civil benefits of the G overnm ent are estim ated at 12 billion dollars in the fiscal year 1956. Tw o-thirds of this am ount consists of current expenses for aids and special services to various groups. T h e largest item, 4.5 billion dollars, goes to veterans for com pensation T o tal budget expenditures in the fiscal year 1956 are estim ated at 62.4 billion dollars. These ex penditures m ay be divided into 4 large groupings to show the ends for which we pay taxes and also the item s which m ake our budgets big. These groupings are (1) the m ajo r cost of protection against war, (2 ) civil benefits to individuals and to various groups and localities, (3 ) interest p ay ments, and (4) the cost of civil operations and adm inistration. T h e largest category is protection, which a c counts for 67 percent of total estim ated budget expenditures. T h is category consists of the 40.5 billion dollars estim ated for m ajo r national security program s (discussed on page 18) and 1 billion dollars for econom ic and technical assistance under the m utual security program (discussed on p age 10 Budget Expenditures Prote ction C iv il Benefits Interest Excludes reserves for proposed legislation a.id contingencies lm 2.3 C ivil O p e r a tio n s a n d A d m in is tra tio n Budget Expenditures an d pension paym ents, hospital and m edical care, and readjustm ent benefits, including vocational training. T h e next largest current expense in the civil benefits group is for public assistance grants to States. O thers aid agriculture, business, hom e owners and tenants, and labor. T h e rem aining one-third of the expenditures for civil benefits is for additions to Fed eral assets and other developm ental purposes, such as civil public w orks; net loans to farm ers, veterans, and other b orrow ers; net increases in inventories of farm com m odities under the price support p ro gram ; grants to States for highways, hospitals, an d airp o rts; agri Fiscal Year Total Protection Civil Benefits Interest Civil O pera tions Reserves and Adjust ments 1956 Est. 1955 Est. 1954 1953 1952 1951 62.4 63.5 67.8 74.3 65.4 44.1 41.5 41.7 47.9 52.0 46.0 25.6 12.0 13.3 11.6 13.4 12.2 11.5 6.4 6.6 6.5 6.6 5.9 5.7 2.3 1.9 1.9 2.3 2.2 1.9 .3 .1 - .9 - .7 Note: Detail may not add to totals because of rounding Expenditures for civil operations and adm inistra tion of the G overnm ent have been obscured for m any years by the large expenditures for defense and by the variety and com plexity of the dom estic and international program s of the Governm ent. Civil operations and adm inistration include m ost of the expenditures classified as “ general governm ent” in p art I I of this booklet, plus expenditures for repair, m aintenance, and operation of Governm ent civilian facilities, and for regulatory activities. These costs are estim ated to be 2.3 billion dollars, or about 4 percent of total budget expenditures in the fiscal year 1956. cultural lan d conservation assistance; and nonm ili tary research. E xpenditures for interest are estim ated at 6.4 billion dollars in the fiscal year 1956, 10 percent of total budget expenditures. T h is is 180 million dollars less than estim ated for the fiscal year 1955, reflecting the lower level of interest rates in the calen d ar year 1954 and a change in the tim ing of som e interest paym ents. $ Billions 11 PART I • Budget Authorizations r e la t e d to e x p e n d it u r e s FISCAL YEAR 1956 ESTIMATED $ BILLIONS 37.9 20.7 New Obligational Authority 58.6 37.9 24.5 From From Expenditures N ew O b lig a tio n a l A u th o rity for 19 5 6 O b lig a tio n a l A u th o rity enacted prior to 19 5 6 U n d er the Constitution, Fed eral agencies cannot incur financial obligations or spend money until the Congress authorizes them to do so. Authorizations by C ongress m ay take a num ber of forms. T h e most com m on is an appropriation which perm its a Governm ent agency to (1) em ploy personnel, order supplies and equipm ent, aw ard contracts, or incur other obligations, and (2) pay the bills arising from these obligations. A ppropriations generally perm it agencies to incur obligations up to the end of the fiscal year for which the appropriation is gran ted and to pay their bills in that year and in the 2 years im m ediately follow ing. Som e appropriations, however, do not have any time limit. T h e total am ount of money spent by Governm ent agencies in any one fiscal year is usually not the sam e as the total am ount of new authority to incur finan cial obligations gran ted by the Congress for that year. T h ere is an interval between the time the Congress grants an appropriation and the time G ov ernm ent agencies incur obligations by placing orders for goods and services. T h ere is a further inter B u d g e t S u m m a ry 62.4 val, while the goods and services ordered are being p roduced and delivered, before funds are actually spent. In some cases, such as the paym ent of w ages and salaries to G overnm ent em ployees, the interval between incurring obligations and m aking expenditures is rather short; in other cases, such as the production and delivery of com plex m ilitary equipm ent, the interval m ay be several years. T h u s p art of the total expenditures in any one year stem s from new authorizations gran ted by Congress for th at year while the rem ainder stems from au thorizations granted for prior years. In the fiscal year 1956, it is estim ated th at of the total expenditures of 62.4 billion dollars, 60 p er cent will com e from new authorizations recom m ended for that year. T h e rem aining 40 percent is estim ated to be from authorizations gran ted in previous years. O f the 58.6 billion dollars of new authorizations to incur obligations recom m ended by the President for the fiscal year 1956, it is estim ated that 65 p er cent will be spent in 1956 and 35 percent will be spent in later years. 12 Unexpended Balances [IN o f appro priatio n s BILLIO N S] Fiscal year 1950...................................................................................... 1951...................................................................................... 1952...................................................................................... 1953...................................................................................... 1954...................................................................................... 1955 (estimated)............................................................. .. 1956(estimated) ................................................................ U nexpended balances of appropriations repre sent am ounts available from enacted appropriations which have not yet been spent. In most cases, however, these balances have been com m itted to pay for goods and services which have been ordered but not yet delivered. T h e length of time required to produce certain types of heavy equipm ent, such as m ilitary planes, ships, and ordnance, m akes a certain level of unex pended balances of appropriations necessary for the orderly and efficient functioning of Governm ent. However, too high a level of these balances tends to restrict executive and congressional control over the fiscal affairs of the Governm ent. In each of the fiscal years 1950 through 1953, the new obligational authority enacted by the C on gress exceeded by far the budget expenditures for each year. It also greatly exceeded the revenues Amount brought forward into the year Amount carried over to next year $11.5 14.1 50.3 68 8 78.4 68.0 53.9 $14.1 50.3 68.8 78.4 68.0 53.9 49.6 then being provided by the tax system. T h e unex pended balances of appropriations com m itted for later expenditure rose from 11.5 billion dollars at the start of the fiscal year 1950 to 78.4 billion dol lars at the end of 1953. These balances constituted a claim against future tax revenues. Startin g in the fiscal year 1954, and in each year since then, enacted or recom m ended new authority to incur obligations is less than expenditures, with the result that the unexpended balances of ap p ro priations have been reduced. These balances are estim ated to be 49.6 billion dollars by the end of the fiscal year 1956. a reduction of 28.8 billion dollars in 3 years. As the President stated in the budget m essage, “ T h e accum ulated unexpended balances of funds appropriated to all Governm ent agencies in prior years are now on their way down to m ore reasonable levels.” 13 PART I • B u d g e t S u m m a ry New Obligationa! Authority and Expenditures, by Agency dollars is for interest. E xpenditures of the T reasu ry D epartm ent are estim ated at 7.2 billion dollars. New obligational authority recom m ended for the V eterans A dm inistration is 4.6 billion dollars, 8 percent of the total. E stim ated expenditures are 4.6 billion dollars. Funds for the m utual security program are a p propriated directly to the President. New obliga tional authority in the am ount of 3.5 billion dollars is recom m ended for this program . It is designed to provide other nations with the m argin of outside assistance which they need to develop and m ain tain their political, m ilitary, and econom ic strength in our interest as well as their own. E xpenditures for the m utual security p rogram are estim ated at 4.7 billion dollars. R ecom m ended new obligational authority for the D epartm en t of H ealth, Education, and W elfare is 2 billion dollars, prim arily for grants to States for public assistance, prom otion of public health and education, and various w elfare aids and services. Expenditures by this D epartm ent are estim ated at about the sam e am ount as the recom m ended new obligational authority. F or the D epartm ent of A griculture, the Presi dent recom m ended new obligational authority of 1.5 billion dollars, m ainly for program s to help sta bilize farm prices and farm income, for rural elec trification and farm loans, for conservation of ag ri cultural land and w ater resources, and for research and other agricultural services. T h e D epartm ent is expected to spend 2.5 billion dollars. New authority to incur obligations recom m ended for the D epartm ent of C om m erce am ounts to 1.5 billion dollars. Expenditures are estim ated at 1.2 T h e activities in which the F ed eral Governm ent will engage in the fiscal year 1956 are discussed in p art I I of this booklet in term s of broad func tions of Governm ent, regardless of the agency des ignated by law to carry them out. H ow ever, the C ongress reviews G overnm ent activities by agencies, and appropriates funds for these activities to the G overnm ent agency responsible for them . A c cordingly, the budget sets forth separately, for each agency, the details of the President’s budget p ro posals. R ecom m ended ap propriations for each agency are shown separately along with supporting schedules detailing estim ated obligations and ex penditures. T h e grouping of budget proposals by agencies is essential for congressional action, and is needed by those who are interested in following the progress of the budget proposals in the Congress. T h e grouping by functions is merely a rearran ge m ent of the m any thousands of in dividual items in the budget, arriving at the sam e gran d total of dollars. F or the fiscal year 1956 the President has recom m ended m ore new authority to incur obligations for the D epartm ent of D efense than for all other Federal agencies com bined. O f the total 58.6 bil lion dollars recom m ended, 32.9 billion dollars or 56 percent is for the m ilitary functions of the D epartm ent of Defense. E xpenditures for the m il itary functions of this D epartm ent are estim ated at 34 billion dollars, 54 percent of total budget expenditures. Recom m ended new obligational authority for the T reasury D epartm ent totals 7.1 billion dollars, 12 percent of the total. O f this am ount, 6.4 billion 14 New Obligational Authority and Budget Expenditures, by Agency [IN M ILLIO NS] Fiscal year 1956 Agency Recommended new obligational authority Estimated budget ex* penditures $32,899 553 7,121 4,553 $34,000 543 7,227 4,608 D e p a rtm e n t o f J u s t ic e ...................................................................... D e p a rtm e n t o f S ta te ............................................................................ Post O f f i c e D e p a rtm e n t (general fu n d )........................ O t h e r ...................................................................................................................... 3,530 27 2,031 1,516 1,458 1,292 692 519 490 314 201 150 25 1,271 4,700 195 2,053 2,496 1,216 2,000 966 515 561 —126 202 150 24 1,078 T o t a l .................................................................................................... 158,642 162,408 D e p a rtm e n t o f D e fe n se : M i li t a r y fu n c tio n s ............................................................................. C iv il fu n c tio n s ........................................................................................ Treasury D e p a rtm e n t........................................................................... V e te ra n s A d m in is tr a tio n ..................................................... Funds a p p ro p ria te d to the President: M u tu a l security p ro g ra m ......................................................... O t h e r ............................................................................................................... D e p a rtm e n t o f H e a l t h , E d u c a tio n , a n d W e lfa re D e p a rtm e n t o f A g ric u ltu r e ........................................................... D e p a rtm e n t o f C o m m e rc e .............................................................. A t o m i c E n e rg y C om m issio n ....................................................... G e n e r a l Services A d m in is tr a tio n ........................................ D e p a rtm e n t o f L a b o r ......................................................................... D e p a rtm e n t o f the In te rio r............................................................ H o u s in g a n d H o m e Fin a n c e A g e n c y ........................... 1 Estimated expenditures exceed recommended new obligational authority because of appro priations enacted in prior years. billion dollars, m ainly for the Federal-aid highway program , for the prom otion of the m erchant m a rine, and for aviation. New obligational authority recom m ended in the budget for the A tom ic Energy Com m ission totals 1.3 billion dollars. Expenditures are estimated at 2 billion dollars. O f these expenditures, 1.5 billion dollars will be for operating expenses; mainly for procurem ent of uranium ore and concentrates, for production of fissionable m aterials and weapons, and for developing peaceful applications of atomic energy. Construction and other capital expendi tures will am ount to one-half billion dollars. T h e President recom m ended new obligational authority of 4.2 billion dollars for all the other agencies of the Governm ent, including 553 million dollars for the construction activities of the Corps of Engineers and other civil functions of the D e partm ent of Defense. Expenditures for all these other agencies are estim ated at 4.1 billion dollars, 7 percent of the total. 15 PART I • B u d g e t S u m m a ry Budget Expenditures a s a P e rc e n ta g e of National Incom e 535 . . . B u d g e t expenditures in 1 9 5 6 are estim ated a t 2 0 % o f N a t io n a l Incom e, co m p a re d w ith 2 5 % in 19 5 3 . Peak War Year 26% 25 % 23% 18% 17% 21% 20% I 13% [1 9 3 9 23% I 1 I 1945 B1950Ì1951 I 952 .Ja n . 9 ,1 9 5 3 I Budget I i Do c u men t J H E s im a t e li I953ÌI9541I954 Estim ated $ 19 5 5 119 5 6 . . . B u d g e t expenditures in 1 9 5 6 are estim ated a t $ 3 7 5 for each m a n , w o m a n , a n d child in the U . S . co m p a re d w ith $ 4 6 9 in 1 9 5 3 . Peak War Year $469 $484 ü i ü J a n . 9 , 1 9 5 3 ÏÏ Ü ' m im .... mil ^ L. ': «mm it ui Budqet ) il 1- ' '"'““ -I____________ ,______u._ " J *1 Ä ¡minim i niiiini»i ^ juiumGumEu 3i S S * - )ocumentüSSi iirnS S i ^ ....ä S ^ E s t i m a t c ^ S ä sgjjM fEstim ated S $68 l953^954K1954ilil955%19563 16 PART 2 Budget Expenditures by Function T h e section which follows provides greater detail about the budget expendi tures estim ated for the fiscal year 1956. It describes, by m ajo r function or p u r pose, the G overnm ent activities which are included in the 1956 budget, and shows how m uch these activities are ex pected to cost in 1956. F or the past several years, expendi tures have been discussed in the budget in terms of 13 m ajo r functional cate gories. In the 1956 budget, these groupings of related Governm ent activi ties have been reduced to 9. T his change will perm it a clearer under standing of the broad purposes for which the G overnm ent is spending money. 3 3 0 2 7 4 ° — 55------- 3 PART 2 • B u d g e t E x p e n d itu r e s • • • 6 4 .8 % of the 1956 Budget or $40,458 Million Major National Security Procurem ent of m ilitary equipm ent for our own forces accounts for the largest share— alm ost onethird— of m ajo r national security expenditures. T h e pay and support of U nited States m ilitary personnel account for one-fourth of m ajor national security expenditures. T h is includes the costs of m ilitary pay increases and other incentives proposed by the President. It will support an average of about 2.9 m illion servicem en and women in 1956. O peration and m aintenance of m ilitary equ ip m ent and facilities will require over one-fifth of the m ajo r national security expenditures. T hese ex penditures cover the cost of operating our Army and M arin e divisions, naval ships, aircraft of all Services, and w orldwide m ilitary shore installations. M ilitary public works expenditures in 1956 are expected to increase substantially over the 1955 level, reflecting progress in construction of bases. O ther D epartm ent of D efense expenditures are for research and developm ent, and for strengthening and im proving the m ilitary reserve forces. Estim ated expenditures in 1956 for the m ilitary program s of the D epartm ent of Defense total 34 billion dollars, although the detailed estim ates for its individual activities total 35.75 billion dollars. Progress in im proving m anagem ent and in increas ing efficiency has led the Secretary of Defense to believe that, repeating the experience of past years, additional savings, econom ies, slippages, and p ro gram adjustm ents not now specifically ascertainable can be anticipated, and th at actu al expenditures will not exceed 34 billion dollars. T herefore, w ith out m aking an arbitrary assignm ent of the expected reductions to p articu lar item s at this time, an u n al located reduction of 1.75 billion dollars (5 percent) is shown. M ilitary assistance and support for our allies under the m utual security program will account fo r 9 percent of the m ajo r national security expend itures for 1956. M ilitary assistance will further Expenditures for m ajor national security p ro gram s in the fiscal year 1956 are estim ated at 40.5 billion dollars com pared with 40.6 billion dollars in 1955. T h is level of expenditures will support the (1 ) m ilitary functions of the D epartm en t of D e fense, (2 ) m ilitary portion of the m utual security program , (3 ) atom ic energy program , and (4) stockpiling of strategic and critical m aterials. Sm aller program s related to national security in varying degree are in other sections of the budget. T h e 1956 budget recom m endations are based on the sam e general philosophy as the President’s rec om m endations for the fiscal years 1954 and 1955. T his ap p roach calls for planning and financing our national security so as to m aintain essential m ilitary strength over an indefinite period of time without im pairing the basic soundness of the U nited States economy. T h e President said in his budget m es sage, “ It is essential that we, together with other nations of the free world, m aintain a level of m ili tary strength which will effectively discourage any w ould-be aggressor from attacking. W e cannot accept less.” T h e budget places strong em phasis on the devel opm ent and m aintenance of effective nuclear-air retaliatory pow er of the A ir Force and N a v al av ia tion as the principal deterrent to m ilitary aggres sion. A bout two-thirds of the projected D ep art m ent of D efense expenditures will be for airpow er and related program s— m ore than was spent for these program s in any previous peacetim e year. T he budget also gives high priority to the accel erated developm ent of the continental defense p ro gram . E xpenditures for continental defense will be higher than in any year in our history. T h e budget also em phasizes the developm ent and introduction into operating units of new w eapons and techniques ad ap ted to the radically changed conditions im posed by nuclear w arfare. 18 Major National Security BUDGET EXPENDITURES IN 1956 ~ $ BILLIONS I D e p a rtm e n t o f D efen se 12.7 Procurement of Aircraft, Ships, Tanks and Other M ilitary Equipment Pay and Support of Active Duty M ilitary Personnel Operation and Maintenance of Equipment and Facilities 1 1 1 Ü 1 1' 8 M ilitary Public Works ¡ ¡ ¡ ¡ I 1 4 M ilitary Research and Development ¡ ¡ I 1.0 Reservists, and Other -1.75 Unallocated Reduction in A b o v e Estimates M ili ta ry A s s is ta n c e a n d S u p p o rt A t o m ic En e rg y .8 S to c k p ilin g — S trateg ic a n d C ritica l h help our allies to equip and train the equivalent of m ore than 180 divisions, 551 com bat ships, 278 air squadrons, and supporting units. D irect forces support will provide our allies such items as tires, uniform s, m edicines, rations, and gasoline. E xpenditures for atom ic energy in 1956 are estim ated at 2 billion dollars. O p eratin g expend itures will rise to the highest rate yet attained, principally because of increased procurem ent of uran ium ores and concentrates, greater production of fissionable m aterials and w eapons, and an ex panded program to develop peaceful uses of atom ic energy. C ap ital expenditures will drop consider ably below the 1955 level as production plants under construction ap p roach com pletion. Recom m ended new construction includes im provem ents in the p ro duction com plex, additional research facilities, and developm ental reactor projects. NEW O B LIG A TIO N A L AUTHORITY EXPENDITURES ateríais Fiscal Year $ B illio n s % of Budget $ B illio n s % of Budget 1 9 5 6 Est. 4 0 .5 6 4 .8 3 6 .7 6 2 .7 1 9 5 5 Est. 4 0 .6 6 4 .0 3 4 .4 6 0 .0 1954 4 6 .5 6 8 .6 39.5 6 2 .9 1953 5 0 .3 6 7 .7 5 7 .3 7 1 .3 1952 4 3 .8 6 7 .0 6 7 .5 7 3 .9 1951 2 2 .3 5 0 .6 5 7 .9 6 9 .6 1950 1 3 .0 3 2 .8 1 7 .0 3 4 .5 A new long-term stockpile level for strategic and critical m aterials has been established to provide ad d ed security above the m inim um goals previ ously set. By Ju n e 30, 1956, about 5.1 billion dol lars of m aterials within the m inim um objectives and an additional 1.2 billion dollars tow ard the longterm objectives will be in inventory. 19 PART 2 • B u d g e t E x p e n d itu r e s • • • 2 .1 % o f the 1956 Budget or $1,332 Million [ 6.1 % of Budget other than M ajor N ational Security 1 International Affairs and Finance O ther p arts of the m u tu al security econom ic p ro gram are technical cooperation and refugee and other foreign relief. U n d er the technical coopera tion program , A m erican experts help the people in foreign countries, and foreign technicians come to the U nited States to observe our m ethods. A gree ments for such cooperation are in effect in 68 coun tries and territories in L atin A m erica, Asia, the N ear E ast, and A frica. O u r help to refugees includes adm inistration of the R efu gee R elief A ct of 1953, which allows the adm ission of 214,000 people to the U n ited States beyond regular im m igration quotas before D ecem ber 31, 1956. Increased appropriations were rec om m ended in the bu dget for this program . T h e U nited States also supports various international agencies for resettling refugees and aiding children, such as the Intergovernm ental C om m ittee for E u ro p ean M igration and the U n ited N ations In tern a tional C hildren’s Em ergency Fund. In a special m essage on foreign econom ic policy, the President recom m ended changes in tariff an d tax laws to prom ote an expansion of foreign trade and investm ent. T h is w ould gradually reduce the need for direct G overnm ent assistance to other countries. As a further step in providing cap ital to underdeveloped areas through stim ulating p ri vate investm ent, he recom m ended th at the U n ited States p articipate in a proposed International F i nance C orporation affiliated with the International Econom ic and technical developm ent, prim arily under the m utual security program , accounts for over 80 percent of estim ated expenditures for inter national affairs and finance in the fiscal year 1956. T he m ilitary portion of the m utual security p ro gram , which is closely related to these activities, is described as p art of the m ajor national security p ro gram s (p ag e 18). T h e economic and technical developm ent portion of the m utual security p ro gram is discussed here; it includes m ainly defense support and developm ent assistance. As p art of the free w orld’s defense against the threat of Com m unist aggression? a num ber of friendly nations have undertaken a m ilitary effort which overburdens their dom estic economies. T h e U nited States supplies consum er-type goods and capital equipm ent to these countries to help them solve their econom ic problem s. Econom ic im provem ent in E urope m akes it possible to lim it this defense support to a very few countries there. M ost defense support now goes for several countries in Asia, including K o rea, Form osa, V ietnam , and Pakistan. In his budget m essage, the President said th at our national interest also requires that we continue to assist certain less developed countries to achieve the econom ic progress essential to m eet the threat of C om m unist subversion. H e stated that the loss of northern V ietnam m akes this m ore im perative than ever. 20 International Affairs and Finance BUDGET EXPENDITURES IN 1956 $ MILLIONS 1,100 Ec o n o m ic a n d Technical D e v e lo p m e n t C o n d u c t o f Fore ign A f fa ir s Fore ign Inform ation a n d E x c h a n g e A c tiv itie s EXPEN DITU RES Bank for R econstruction and Developm ent. T h e budget includes 35 million dollars as the U nited States share of the C orporation’s capital of 100 m illion dollars. In addition, in keeping with legislation approved last year, an increase in direct loans and guaranties of private loans by the ExportIm port Bank is estim ated for the fiscal year 1956. T h e various foreign economic and inform ation program s receive their policy guidan ce from the D ep artm en t of State, which is responsible fo r the conduct of our foreign affairs. E xpenditures are estim ated at 124 million dollars in the fiscal year 1956 for d iplom atic and consular activities and for U nited States m em bership in the U nited N ations and other international organizations. T h is am ount will m ake possible the strengthening of our career foreign service, and will allow for m ore com prehensive economic d ata to help A m erican busi nessmen increase their trade and investm ent abroad. T h e U n ited States Inform ation Agency tells the truth ab out our policies and m otives to people of Fiscal Year $ Millions % of Budget 1956 Est. 1955 Est. 1954 1953 1952 1951 1950 1,332 1,420 1,720 2,216 2,826 3,736 4,674 2.1 2.2 2.5 3.0 4.3 8.5 11.8 N EW O B L IG A T IO N A L A U T H O R IT Y $ Millions % of Budget 1,876 1,585 1,268 2,149 3,529 3,063 5,454 3.2 2.8 2.0 2.7 3.9 3.7 11.1 other countries, in order to counteract Soviet ef forts to divide the free world. Its worldwide radio broadcastin g is increasingly directed to countries behind the Iron C urtain. In 1956, this agency will bring inform ation to 79 countries through radio, press, films, and inform ation centers. The D epartm ent of State arranges the exchange of edu cators, newsmen, labor and m anagem ent officials, and others who influence public opinion abroad. T he budget includes funds for increasing these ex changes, particularly with less developed areas. 21 PART 2 • B u d g e t E x p e n d itu r e s . . . 7 .4 % of the 1956 Budget or $4,640 Million [ 21.1 % of Budget other than M ajor N ational Security ] Veterans Services and Benefits nomic situation of the m any beneficiaries. T h ere fore the President is appointing a Com m ission on V eterans’ Pensions to study the entire structure, scope, and philosophy of our veterans’ pension and com pensation laws in relation to each other and to other Governm ent program s. T h e estim ated expenditures of 770 m illion dollars for hospitals and m edical care include 710 million dollars for current expenses and 60 million dollars for construction and repair. T h e average num ber of patients in V eterans A dm inistration and contract hospitals is expected to rise 4 percent above the 1955 level to 114,500. T h e budget also provides for care of 25,700 veterans in V eterans A dm inis tration and State homes. M ore than two-thirds of the current expenses in 1956 will be for patients hospitalized or treated for ailm ents not connected with m ilitary service. R ead ju stm en t benefits for veterans who served during the K o rean conflict are being provided u n der the V eterans’ R ead ju stm en t A ssistance A ct of 1952, sim ilar to the earlier “ G I bill” for W orld W ar I I veterans. T h e President issued a proclam a tion on Jan u a ry 1, 1955, term inating accrual of eligibility after Jan u a ry 31, 1955, for these benefits for w artim e service. H ow ever, budget expendi tures during the fiscal year 1956 will not be m ate rially reduced because few persons affected by this action will be discharged during the year. T h e 1956 budget includes 587 million dollars for education and training benefits for an average of 516,000 veterans, including 66,000 W orld W ar I I veterans who are still com pleting their courses. Expenditures for veterans5 program s are esti m ated at 4.6 billion dollars in the fiscal year 1956. This is 384 million dollars, or 9 percent, more than was spent during the fiscal year 1954. E xp en d i tures for these program s have reversed their decline from the post-W orld W ar II peak in 1947, and the long-run outlook under present laws is for con tinued large increases. T hree m ain factors account for this. First, the K orean conflict ad d ed to our already large veteran population. Tw enty-one million veterans are now in civilian life, 5 tim es the num ber before W orld W ar II. M ore than one-third of all adult m ales in our population are now entitled to veterans’ bene fits. Second, the 3 million veterans of W orld W ar I are reaching age 65 and are qualifying in large num bers for pensions for which a serviceincurred disability is not required. T h ird , new laws have increased the scope and liberality of veterans’ benefits. Com pensation and pension paym ents of 2.8 bil lion dollars to 3,532,000 fam ilies and veterans will account for three-fifths of all veterans’ expendi tures in the fiscal year 1956. O f this am ount, it is estim ated that 1.9 billion dollars in service-con nected com pensation benefits will be paid in 2,486,000 cases, and 859 million dollars in non-serviceconnected pension benefits in 1,046,000 cases. T h e statutes an d regulations governing these benefits have not h ad a fundam ental review for m any years. In recent years, there has been great im provem ent in m edical and rehabilitation tech niques, in general w elfare benefits, and in the eco 22 Veterans Services and Benefits $ MILLIONS BUDGET EXPENDITURES IN 19S6 2,800 C o m p e n s a tio n a n d Pensions H o s p ita ls a n d M e d ic a l C a re R e a d ju stm e n t Benefits: Ed u c a tio n a n d Train in g R e a d ju stm e n t Benefits: U n e m p lo y m e n t, L o a n G u a r a n t y , O t h e r Insurance I Indem nities O t h e r Services a n d A d m in is tra tio n EXPEN DITU RES Fiscal Y car Only 1 out of each 4 of the 4.7 million veterans of the K o re an conflict will have received these bene fits by Ju n e 30, 1956, com pared to 1 out of 2 W orld W ar I I veterans. An estim ated weekly average of 138,000 veterans of the K o rean conflict will receive Fed eral unem ploym ent benefits totaling 150 m illion dollars d ur ing 1956. In addition, the V eterans A dm in istra tion will insure or guarantee 467,000 loans totaling 5 billion dollars for W orld W ar I I an d K orean conflict veterans. Budget expenditures include 25 m illion dollars for acquisition of properties and losses on defaulted loans under this program . T h e Servicem en’s Indem nity Act of 1951 pro vides benefits of $92.90 a m onth for 10 years to the fam ily of each servicem an who dies on duty or within 120 days after separation. T o ta l budget $ Millions % of Budget N EW O B L IG A T IO N A L A U T H O R IT Y $ Millions % of Budget 1 9 5 6 Est. 4 ,6 4 0 7 .4 4 ,6 1 5 7 .9 1 9 5 5 Est. 4 ,4 3 1 7 .0 4 ,2 8 5 7 .5 6 .8 1954 4 ,2 5 6 6 .3 4 ,2 7 2 1953 4 ,2 9 8 5 .8 4 ,1 3 2 5.1 1952 4 ,8 6 3 7 .4 4 ,39 1 4 .8 1951 5 ,3 4 2 12.1 5 ,6 7 9 6 .8 1950 6 ,6 4 7 1 6 .8 6 ,6 2 5 1 3 .4 expenditures for these paym ents now increase with each additional death. Expenditures are also being m ad e under the earlier W orld W ar I and W orld W ar I I insurance program s. G eneral operating expenses of the Veterans A d m inistration are declining as a result of better or ganization and m anagem ent and of lower workloads in some parts of this agency. 23 PART 2 • B u d g e t E x p e n d itu r e s • . . 3 .7 % of the 1956 Budget or $ 2,3 12 Million [ 10 .5 % of Budget other than M ajor National Security ] W elfare, Health, and Education m edical personnel, and (4 ) to provide additional help for State an d com m unity health services. Expenditures for prom otion of education in 1956 will be chiefly for aid in building and operating schools in districts especially burdened by Federal activities. Congress recently extended the school construction program for 2 years to aid districts where the school population will increase during the fiscal years 1955 and 1956 because of F ederal activities. T h e President has stated th at he will propose to the Congress an affirm ative program to enable the Fed eral G overnm ent to serve as an effective catalyst in dealing with the nationw ide problem of class room shortages. H e also has scheduled a White H ouse conference to highlight possible long-range solutions to the m any problem s which confront the N atio n ’s school systems. E xpenditures for prom oting education also in clude paym ents to States for vocational education and for land gran t colleges, continued assistance to H ow ard U niversity and to G allau d et College for the deaf, and a new program of research for the O ffice of Edu cation with the cooperation of uni versities and State educational agencies. T h e Fed eral Governm ent provides basic health, education, and w elfare services to our In d ian p op u lation living on reservations. T h e 1956 budget p ro vides for im proved m edical care for these people. F ed eral grants supplem ent State, local, and private B udget expenditures for w elfare, health, and ed u cation are estim ated at 2.3 billion dollars for the fiscal year 1956. O f this am ount, 1.4 billion dol lars is for grants to help States pay public assistance benefits to 5 million people in need, mostly aged persons and dependent children. T h e President recom m ended broadening these grants to perm it a greater Federal sharing in the cost of m edical care for persons dependent on public assistance. O ther recom m ended legislation would provide greater en couragem ent for the needy to help themselves. Expenditures for public health are prim arily for gran ts to States and for research in cancer, heart disease, m ental health, and other serious health problem s. T h e grants help pay for the construc tion of hospitals, and for public health services, including m aternal and child health care. The 1956 budget proposes expansion of research, espe cially in m ental health, as well as an intensification of efforts to control air and w ater pollution and a strengthening of our food and drug laws. The budget also provides for new legislation recom m ended by the President (1 ) to establish Federal reinsurance which will enable private health in surance plans to expand their coverage and give m ore adequate protection, (2) to prom ote con struction of additional health facilities, (3) to en courage the training of nurses and other necessary 24 Pu b lic A s s is ta n c e (Payments to States to A i d N e e d y Persons) i 338 P ro m o tio n o f Pu blic H e a lt h 1237 P ro m o tio n o f E d u c a tio n 76 fn d ia n H e a l t h , E d u c a tio n , a n d W e lfa r e S c h o o l L u n c h Prog ram O t h e r (V ocatio n al Rehabilitation, General Research, Etc.) EXPEN DITURES Fiscal Year funds to help provide low -priced lunches for about 10 m illion school children throughout the country. T hese school lunch grants are augm ented by the new school-milk p rogram and by donations of sur plus com m odities, for which F ed eral expenditures are included under agriculture and agricultural resources. T ak en together, these various aids will m ake F ed eral support of the overall school lunch program in 1956 the largest in our history. O ther expenditures for w elfare, health, and edu cation include grants to States for rehabilitation of physically h an dicapped people, a program which w as expanded in 1954; the Fed eral prison and pro bation system ; and accident com pensation for F ed eral employees. A lso included are general-purpose research supported by the N atio n al Science Foun3 3 0 2 7 4 ° — 55------- 4 $ Millions N EW O B L lO A T iO N A t A U T H O R IT Y % of Budget $ Millions % of Budget 1 9 5 6 Est. 2 ,3 1 2 3 .7 2 ,2 8 9 3 .9 1 9 5 5 Est. 2 ,3 1 6 3 .6 2 ,3 1 0 4 .0 1954 2 ,2 4 8 3 .3 2 ,1 9 0 3 .5 1953 2 ,1 8 6 2 .9 2 ,2 1 4 2 .8 1952 1 ,9 2 7 2 .9 1 ,8 6 0 2 .0 1951 1 ,8 3 6 4 .2 2 ,0 2 4 2 .4 1950 1 ,7 1 4 4 .3 1,81 1 3 .7 dation and the statistical and research activities of the B ureau of the Census and the N ational Bureau o f S tan d ard s. Expenditures for specialized education, m edical care, and research in the m ilitary, atom ic energy, an d veterans’ program s are discussed elsewhere in this booklet. 25 PART 2 • B u d g e t E x p e n d itu r e s • • • 3 .6 % of the 1956 Budget or $2,259 Million [ 1 0 .3 % of Budget other than M ajo r N ational Security 3 Agriculture and Agricultural Resources G ross expenditures are expected to be alm ost 7.7 billion dollars in 1956. R eceipts from these p ro gram s, m ainly from collections on loans and sales of com m odities, are estim ated at 5.4 billion dollars, resulting in net expenditures of 2.3 billion dollars. T h e budget estim ates a decline in net price su p port expenditures in 1956 prim arily because of de creases anticipated in the am ount of loans m ade by the Com m odity C redit C orporation, particularly on cotton and wheat, and because increased receipts are expected by the C orporation from sales of cot ton, corn, and wool. Price support an d related program s will account for about 60 percent of the net expenditures for agriculture and agricu ltu ral resources in the fiscal year 1956. T h is com pares with 72 percent estim ated for the current year. Budget expenditures for agricultural land and w ater conservation include technical assistance to farm ers in soil conservation districts, paym ents to encourage soil conservation practices, and Federal participation in upstream flood prevention and w atershed protection projects. O n the basis of the new legislation enacted in the p ast session of the C ongress, work on the upstream soil conservation and flood prevention p rogram will be expanded T h e budget recom m endations for agricultural program s are designed to prom ote a stable, prosper ous, and free agriculture cap able of supplying the needs of our increasing population. T h e program s include research and education to encourage m ore efficient production and m arketing, cooperation with States and local groups of farm ers in soil and w ater conservation activities, loans for rural electri fication and telephones, and protection of farm ers against sharp price declines and production failures. T h e flexible price supports provided by the legis lation enacted last sum m er will stim ulate the con sum ption of farm products at hom e and abroad, and will reduce Governm ent price support expendi tures for buying and storing surplus agricultural com modities. However, flexible price supports will not greatly affect budget expenditures in the fiscal year 1956, since the transition will be grad u al. In the budget m essage, the President pointed out that in future years the new legislation will m ake possi ble greater freedom from G overnm ent direction and control of farm ing operations. Gross expenditures for Fed eral agricultural pro gram s reflect the G overnm ent’s activities in this field better than net expenditures (see p age 3 8 ). E S T IM A T E D G R O S S A N D N E T E X P E N D IT U R E S , F IS C A L YEAR 195 6 [In millions] Gross expendi tures Program Applicable Net ex receipts penditures Farm price support and related program s................................................................................. Agricultural land and water conservation................................................................................. Rural electrification and rural telephone loans........................................................................ Farm ownership and operation loans......................................................................................... Research and other agricultural services................................................................................... $4,632 329 233 2,247 206 $3,296 9 2,077 6 $1,336 320 233 170 200 T o ta l..................................................................................................................................... 7,647 5,388 2,259 26 Agriculture and Agricultural Resources BUDGET EXPENDITURES IN 1956 $ MILLIONS 1,336 F a rm Price S u p p o rt a n d R e la te d Program s A g ric u ltu ra l L a n d a n d W a t e r C o n se rva tio n R u ra l Electrification a n d R u ra l T e le p h o n e L o a n s F a rm O w n e rs h ip a n d O p e r a t io n L o a n s Research a n d O t h e r A g ric u ltu ra l Services EXPENDITURES Fiscal Year in 1956 in cooperation with the States and local sponsoring groups. T h e budget also provides for a larger loan pro gram in 1956 than in 1955 to im prove electric and telephone service in rural areas. T h e scope of the loan program s of the F arm ers’ H om e A dm inistration was expanded last year by legislation which (1 ) authorized nationw ide cov erage for w ater facilities loans, (2 ) m ad e such loans availab le for m any soil and w ater conservation activities, and (3) encouraged p rivate lenders to m ake m ore funds available for farm ownership and im provem ent loans. By placing greater reliance on insured loans, the services of the Farm ers’ H om e A dm inistration can be increased w ithout increasing F ed eral expenditures. In the budget m essage the President stressed the im portance of assisting farm ers, through re- $ M illions N EW O B U G A T IO N A L A U T H O R IT Y % of Budget $ M illions % of Budget 19 5 6 Est. 2,259 3.6 1,288 2.2 1955 Est. 3,130 4.9 2,630 4.6 6.4 19 54 2,557 3.8 4,010 1953 2,936 4.0 1,333 1.7 19 52 1,045 1.6 1,688 1.8 1951 650 1.5 1,228 1.5 19 50 2,783 7.0 3,324 6.7 search and edu cation al activities, to work ou t solu tions for their problem s. T h e budget proposes an increase in expenditures for these purposes in 1956. As farm ers are better able to ad ju st their prod u c tion to consum ers’ needs an d to m ake im prove ments in the m arketing of farm products, the need for G overnm ent price supports, acreage allotm ents, and other production controls will be lessened. 27 PART 2 • B u d g e t E x p e n d itu r e s . . . 1.5 % of the 1956 Budget or $953 Million I 4 .3 % of Budget other than M ajor N ational Security ] Natural Resources an d hydroelectric generation facilities started in earlier years. N o appropriations are recom m ended for new pow er generation units. T h e Authority is giving attention to the possibility of financing fu r ther expansion of its pow er system by m eans other than Federal appropriations. Gross expenditures fo r all of T V A ’s activities are estim ated at 250 m illion dollars in 1956. Proceeds from operations, m ainly from sale of power, are estim ated at 248 m illion dollars. N et budget expenditures of T V A , therefore, will be 2 million dollars. T h e President said in his budget m essage th at legislation will be presented to the Congress to provide th at an ad e q u ate rate of interest be paid to the T reasury on public funds invested in pow er facilities of T V A . T h ere are 181 million acres in our national for ests and 470 m illion acres in the public dom ain, including 290 million acres in A laska. Budget ex penditures provide for the m anagem ent and devel opm ent of the timber, grazing, and m ineral resources of these lands. Paym ents are m ade to States and counties of a share of the revenue from these resources. T h e lands are m an aged by the D epartm ents of A griculture and Interior. M an agem en t of the 56 m illion acres of Indian lands, held in trust by the F ed eral G overnm ent, is under supervision of the D epartm en t of the Interior. T h e economic advancem ent of the In dians is furthered through use of the tim ber, m ineral, and agricultural resources of their lands. Expenditures by the N ation al Park Service, in the D epartm ent of the Interior, are for the m an agem ent and developm ent of our park system, cov ering 24 million acres— including 180 national parks, national m onum ents, and other areas. T h e T h e G overnm ent is encouraging State and local groups and p riv ate citizens to take the initiative in developing our n atu ral resources, with Federal cooperation an d assistance where necessary. U n d er this policy, it h as been possible to reduce Federal expenditures and at the sam e time to strengthen the developm ent an d conservation of our resources. F ed eral expenditures for n atural resource program s are estim ated at 953 m illion dollars in the fiscal year 1956, as com pared w ith 1.1 billion dollars in 1955 and 1.2 billion dollars in 1954. A bout two-thirds of the expenditures in 1956 will be for the developm ent of river basins. T h e B u reau of R eclam ation and the Corps of Engineers will continue work on 152 projects for irrigation, flood control, and m ultiple-purpose development, including power. W ork on 37 of the projects will be com pleted in 1956. T h e budget recom mends funds for the B u reau of R eclam ation to start 5 irrigation and w ater supply projects. In addition, the President recom m ended legislation to authorize construction of 2 large m ultiple-purpose develop m ents in the W est which are beyond the capacity of local initiative— the U p p e r C olorado R iver Basin and the F ryingpan-A rkansas developments. T h e budget also recom m ends funds for the Corps of Engineers to start work on 10 local flood protection works, 2 flood control projects, and 8 beach erosion control projects, an d to resum e work on 1 flood protection project. U n d er the G overnm ent’s p art nership policy, these agencies will also participate with S tate an d local grou p s in w ater resources projects where nation al interests are involved. Construction by the Tennessee V alley A uthority will be largely to continue work on steam electric 28 Natural Resources $ MILLIONS BUDGET EXPENDITURES IN 1956 River Basin D e v e lo p m e n t a n d P o w e r Fo re sts, P a rk s , a n d O t h e r Public L a n d s Fish a n d life In d ia n L a n d s Resources M in e ra ls a n d O t h e r EXPENDITURES Fiscal Y ear num ber of visitors to these areas is increasing each year, and will reach 52 million in 1956. Som e in creases in budget expenditures are recom m ended for increased services to visitors and for extending parkw ays, roads and trails in these areas. 1956 Est. 1955 Est. 1954 1953 1952 1951 1950 Expenditures for fish and wildlife resources en able the D epartm ent of the Interior (1) to operate 87 fish hatcheries for research and propagation of fish and 275 wildlife refuges for conservation of m i gratory w aterfow l and rare birds and anim als, and (2) to m ake F ederal-aid paym ents to the States for their fish and wildlife restoration projects. About 70 percent of the expenditures in 1956 will be cov ered by excise taxes on fishing and hunting equip ment, sale of F ederal duck-hunting stam ps, sale of w ildlife products, and custom s receipts on fishery products. 953 1,1 3 3 1,213 1,358 1/258 1,140 1/058 % of Budget $ M illions 1.5 1.8 1.8 1.8 1.9 2.6 2.7 929 967 1,196 1,396 1,324 1,277 1,207 % of Budget vate developm ent of our m ineral resources by aid ing private m ineral explorations and through basic m ineral surveys and research carried on by the Geological Survey and the B u reau of M ines. T h e budget provides for recom m ended legislation to enable the G overnm ent to cooperate with the State of Pennsylvania in providing facilities for surface w ater drainage in the anthracite coal region. T h e D epartm ent of the Interior encourages pri- $ Millions N E W O B L IG A T IO N A L A U T H O R IT Y 29 1.6 1.7 1.9 1.7 1.4 1.5 2.4 PART 2 • B u d g e t E x p e n d itu r e s . . . 3 .5 % of the 1956 Budget or $2,186 Million [ 1 0 .0 % of Budget other than M ajor National Security 3 Commerce and Manpow er foreign operating costs. T h e C orps of Engineers will initiate 14 new navigation projects. W ork will be pushed on the St. Law rence Seaw ay. In the p ast 2 years, com m erce and m anpower p rogram s have em phasized expansion of private in vestm ent, encouraged greater participation of State an d local governm ents, an d provided for extension o f unem ploym ent insurance coverage. In the fiscal year 1956 gross expenditures are estim ated at 6.9 billion dollars. R eceipts of 4.7 billion dollars are estim ated from postal revenues, loan repayments, sale of defense m aterials to the stockpile and to in dustry, and other sources. N et expenditures are estim ated at 2.2 billion dollars. T h e F ed eral H ousin g A dm inistration insures loans for the construction, purchase, and im prove m ent of hom es. T h e F ed eral N ational M ortgage A ssociation buys and sells Governm ent insured or gu aran teed m ortgages an d the Veterans Adm inis tration m akes direct hom e loans to veterans where sufficient p rivate financing is not available. R e ceipts in 1956, m ainly from m ortgage sales, insur ance prem ium s, and loan repaym ents, will exceed expenditures for aids to p rivate housing. T h e Fed eral Governm ent m akes gran ts to States to cover the operating costs of the joint FederalState em ploym ent service and unem ploym ent in surance program . U n d er legislation enacted last year, the difference between the adm inistrative costs and the proceeds of the Federal unem ploy m ent tax is transferred annually to the unem ploy m ent trust fund to set up a reserve for loans to States which deplete their funds. F or aviation program s, the budget proposes in creased investm ent in air navigation and rad ar traffic control equipm ent, and expanded research by the N ation al Advisory Com m ittee for A eronau tics on m ilitary aircraft and guided missiles. E x penditures for airline subsidies are expected to be 7 million dollars lower than in 1955. E S T IM A T E D G R O SS AND N E T E X P E N D IT U R E S , T h e President has recom m ended extension of the Sm all Business A dm inistration, which otherwise ex pires on Ju n e 30, 1955. L iq u id ation of the busi ness loans of the form er Reconstruction Finance C orporation is well advanced. Expenditures for highw ays, chiefly grants to States, will rise in 1956, as a result of the increased program authorized last year. T h e President also recom m ended a new 10-year p rogram to modernize the interstate highw ay system, but this will not affect budget expenditures in 1956. F ISC A L 19 5 6 [In millions] Program Net ex j Gross ex Applicable penditures penditures receipts or net re ceipts (—) i Aids to private h o u sin g ___________ Business loans and g u a ra n tie s_____ H ighw ays______ _ _________ ____ 1 Navigation aids and merchant m a rine_________ _ __ ___ _ ____ Unemployment compensation and placement. _______ __________ Promotion of aviation. ___________ Urban renewal and public housing _ Promotion of defense production Civil defense and disaster relief____ Postal Service____________________ Other____________________________ Increased appropriation s are recom m ended for the M aritim e A dm in istration to help bring our m erchant fleet up to date and to pay subsidies offsetting the difference between A m erican and YEAR Total_____________________ J 1 Less than 500,000 dollars. 30 $655 39 725 $814 117 640 95 545 341 283 750 638 76 2, 541 220 1 622 522 6 2, 517 28 340 283 128 116 70 24 192 4, 722 2,186 6, 908 C1) -$159 -7 8 725 Commerce and Manpower BUDGET EXPENDITURES IN 1956 $ MILLIONS Net Expenditures Ne» Receipts A id s to Private Housing Business Loans and Guaranties Highways 545 Navigation Aid s and Merchant Marine Unemployment Compensation and Placement Promotion of Aviation Urban Renewal and Public Housing Promotion of Defense Production 70 Civil Defense and Disaster Relief Other (Postal Service, Selective Service, College Housing, etc.) EXPENDITURES Fiscal $ Millions N EW O B L IG A T IO N A L A U T H O R IT Y % of Budget $ Millions % of Budget 3.5 4.0 2.3 4.0 4.8 6.2 6.1 2,846 3,381 2,846 3,867 3,775 5,043 6,915 4.9 5.9 4.5 4.8 4.1 6.1 14.0 Year U n d er the newly-broadened program , the U rban R enew al A dm inistration m akes loans and grants to assist localities in clearing and rehabilitating rundow n neighborhoods. T h e Public H ousing A dm inistration m akes loans and pays ann ual con tributions to finance local low-rent housing. Gross expenditures for the prom otion of defense production are expected to decline from 1,061 million dollars in 1955 to 638 m illion dollars in 1956. T h e G overnm ent’s rubber facilities are being sold or leased, and the budget m akes no provision for the operation of the G overnm ent tin sm elter in 1956. T h e President is recom m ending continuation of the Defense Production A ct beyond Ju n e 30, 1955. N et expenditures of the postal service have been 1956 Est. 1955 Est. 1954 1953 1952 1951 1950 2,186 2,550 1,577 2,983 3,127 2,729 2,401 reduced to the lowest level in 8 years. T h e budget allows for 400 m illion dollars of increases in postal rates which w ould be ad eq u ate to perm it necessary salary adjustm ents and to cover alm ost all of the rem aining deficit. 31 PART 2 • B u d g e t E x p e n d itu r e s . . . 2 .5 % of the 1956 Budget or $1,566 Million [ 7.1 % of Budget other than M ajor National Security ] General Government the D epartm ent of Defense. T h e T reasu ry also pays other claim s as well as am ounts voted by the Congress for relief of private individuals. Property m anagem ent and other central services perform ed by the G eneral Services A dm inistration include the m aintenance and operation of public buildings, the custody of inactive G overnm ent rec ords, the purchase and storage of supplies and equipm ent, and the rental of private buildings for G overnm ent use. T h e budget provides for neces sary rep air and im provem ent of public buildings, for the introduction of central m otor pools in 15 cities, and for an accelerated p rogram for the dis posal of surplus G overnm ent property. U n d er the new long-term lease-purchase authority provided by the last Congress, the G eneral Services A dm in istra tion expects to enter into arrangem ents with private enterprise in 1955 and 1956 to build a num ber of new public buildings which will be purchased through ann ual appropriations for rental paym ents. O ther central services include the governm entw ide personnel activities of the C ivil Service C om m is sion. T h e F ed eral B ureau of Investigation is respon sible for investigating and obtaining evidence in cases involving violation of F ederal crim inal laws. In recent years, a large p art of the B u reau ’s efforts T a x collection and other financial m anagem ent account for m ore than one-fourth of the budget expenditures of 1.6 billion dollars estim ated for gen eral governm ent in the fiscal year 1956. M ost of these activities are carried on by the T reasury D e partm ent, which collects taxes and customs duties, m an ages the public debt, mints coins, prints the currency, and issues the checks to pay the Govern m ent’s bills. T h e G en eral Accounting Office is re sponsible, as an agent of Congress, for auditing the accounts of G overnm ent agencies and verify ing the legality of expenditures. T h e 1956 budget recom m ends increased ap p ro priations for the T reasu ry to extend the audit of tax returns. T h is will increase the Governm ent’s revenues from those taxpayers who are not pay ing their fair share. T h e bud get also provides for resum ption of the G overnm ent’s paym ent, as employer, to the retire m ent fu n d for F ed eral civilian employees. U nder legislation enacted last year, the Governm ent pays for unem ploym ent com pensation benefits to F e d eral civilian workers, sim ilar to the benefits avail able to m ost workers in p rivate industry. Expenditu res for the paym ent of claim s and ju d g ments are largely for certified claim s paid by the T reasury. T hese result m ainly from activities of 32 G eneral Governm ent $ MILLIONS BUDGET EXPENDITURES IN 1956 T a x C o lle c tio n a n d O t h e r Fin a n c ia l M a n a g e m e n t Retirem ent a n d U n e m p lo y m e n t Benefits for C ivilian Em p lo ye e s P a y m e n t o f C laim s a n d Ju dgm e nts P ro p e rty M a n a g e m e n t a n d O t h e r C e n tra l Services F B I , A l i e n C o n tro l, a n d R e la te d Program s Le g is la tive a n d Ju d ic ia l Fu n ctio n s Territories, Possessions, a n d D istrict o f C o lu m b ia EXPEN D ITU RES W e a th e r Bureau a n d O t h e r has been concentrated on m atters affecting the in ternal security of the U n ited States, such as espio nage, sabotage, and treason. T h e Im m igration and N aturalization Service adm inisters basic laws gov erning control of aliens and naturalization, and is in charge of border patrols to prevent unlaw ful entry into the U n ited States. U n d er legislation enacted by the last Congress, the Federal Governm ent is m aking larger annual contributions to help pay the cost of local govern m ent in the D istrict of C olum bia, as well as ex tending loans to help finance a m ajo r public works program in the D istrict. T erritories, island pos sessions, and the Pacific islands for which we are responsible under a U nited N ations m andate are supervised by the D epartm en t of the Interior. $ M illions % of Budget $ Millions % of Budget 1 9 5 6 Est. 1 ,5 6 6 2 .5 1 ,3 0 5 2 .2 1 9 5 5 Est. 1 ,2 2 2 1 .9 1 ,0 5 6 1 .8 1954 1 ,2 0 9 1 .8 1 ,04 1 1 .7 1953 1 ,4 3 9 1 .9 1 ,3 3 7 1 .7 1952 1 ,4 3 7 2 .2 1 ,3 8 9 1 .5 1951 1 ,3 0 9 3 .0 1 ,2 7 3 1 .5 1950 1 ,1 7 3 3 .0 1 ,1 5 2 2 .3 m ation and forecasts for the benefit of agriculture, business, and the general public. T h e 1956 budget provides for the replacem ent of certain obsolete W eather Bureau facilities with m odern observa tional equipm ent an d for the transfer to the W eather B ureau of responsibility for a num ber of w eather facilities now operated by the D epartm ent of Defense. T h e W eather B ureau distributes w eather infor- Fiscal Year N EW O B L 1 G A T IO N A L A U T H O R IT Y 33 PART 2 • B u d g e t E x p e n d itu r e s • • • 10 .2 % of the 1956 Budget or $ 6,378 Million [ 29.1 % of Budget other than M ajor N ational Security ] Interest quarter of interest payments. Interest paym ents in the fiscal year 1956 account for abou t 10 percent of budget expenditures. T h e size of the public debt and interest rates on the debt determ ine the general level of interest expenditures. V ariation s m ay also occur from year to year due to changes in the dates of interest payments. lies. 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. M ost of the rem aining interest is p aid on special B u d get expenditures for interest paym ents in the fiscal year 1956 are estim ated at 6.4 billion dollars. A lthough the public debt is estim ated to continue to increase, interest paym ents on the debt are expected to be 175 m illion dollars less than in 1955. T his decrease reflects prim arily the lower level of inter est rates on the debt refunded in the calendar year 1954; as well as the unusual concentration in 1955 of interest paym ents on p art of the public debt refunded during th at year. issues sold to G overnm ent trust funds. T h e inter est rate for these securities is generally fixed by law, and averages som ew hat higher than the average rate on the total debt. O ther nonm arketable obligations are m ainly bonds held by insurance com panies and other p ri vate institutions for long-term investment, and short-term savings notes generally bought by cor porations with funds set aside for later tax paym ents. Interest paym ents are fixed obligations of the F e d eral Governm ent. U nlike m ost budget expendi N early one-half of the interest on the public debt is p aid 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 another one- T hese bonds are owned by nearly 40 percent of all A m erican fam i tures, they are provided for by perm anent law and are, therefore, not dependent upon annual ap p ro priations by the Congress. 34 Interest BUDGET EXPENDITURES IN 19S6 $ BILLIONS Interest on Pu blic D e b t — M a r k e ta b le O b lig a tio n s Interest on Public D e b t — S avin g s Bon ds Interest on Pu blic D e b t — Special Issues Interest on Pu blic D e b t “ —O t h e r N o n m a rk e ta b le O b lig a tio n s Interest on R efunds a n d U n in ve s te d Trust Fu n d s EXPEN D ITU RES 35 N EW O B L IG A T IO N A L A U T H O R IT Y Fiscal Year $ Millions 1 9 5 6 Est. 6 ,3 7 8 1 0 .2 6 ,3 7 8 1 9 5 5 Est. 6 ,5 5 8 1 0 .3 6 ,5 5 8 1 1 .4 1954 6 ,4 7 0 9 .5 6 ,4 7 0 1 0 .3 1953 6 ,5 8 3 8 .9 6 ,5 8 3 8 .2 1952 5 ,9 3 4 9.1 5 ,9 3 4 6 .5 1951 5 ,7 1 4 1 3 .0 5 ,7 1 4 6 .9 1950 5 ,8 1 7 1 4 .7 5 ,8 1 9 1 1 .8 % of Budget $ M illions % of Budget 1 0 .9 PART 2 • Budget Expenditures 1950-1956 . . . Exp e n d itu re s are being reduced to an estim ated $ 6 2 .4 billion in 19 5 6 - . . . M a j o r N a tio n a l Security expenditures continue to d o m in a te the Fe d e ra l B u d g e t. 36 B u d g e t E x p e n d itu r e s PART 3 Supplementary Information U p to this point, this booklet has dealt m ainly with budget receipts, new obligational authority, and bu d get ex penditures by m ajo r function. T h is section of the B udget in B rief presents a num ber of significant classifi cations of bu d get expenditures which are also of interest. T h ese classifications represent different ways of grouping am ounts already included in the ex penditures discussed in parts I and I I . In addition, this section provides in form ation on other aspects of F ed eral financial operations, such as F ed eral credit p rogram s and transactions of the funds which the Governm ent holds in trust. H istorical d ata on budget re ceipts, expenditures, and the public debt are also included. PART 3 • S u p p le m e n ta r y In fo rm a tio n Gross and Net Budget Expenditures, by Agency T h e 1956 budget continues a significant clarify ing change which w as begun in the 1955 budget. Previously, the totals of expenditures understated the scope of the G overnm ent’s activities in that they included on a net basis the spending by a num ber o f G overnm ent enterprises which are engaged in business-type operation s w ith the public. In carry in g out their functions, these public enterprises receive m oney from their custom ers or clients— interest and collections on loans or paym ents for goods delivered or services rendered. By law, m ost public enterprises m ay use their receipts and collections to carry on the operations for which they were created. As shown in the accom panying table, these receipts and collections from the public are estim ated to total 10.9 billion dollars in the fiscal year 1956. T h e public enterprise activities are carried on through so-called “ revolving funds.” Som e of the enterprises are organized as Governm ent corporation s; others, such as the Post Office, are unincorporated. In the sum m ary tables o f budgets prior to the 1955 budget, the receipts of such funds were sub tracted from expenditures and only the difference w as shown as an expenditure. While the use of either the gross figures or the net figures has 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. When Governm ent agencies engaged in lend ing activities use their collections on old loans to m ake new loans, the net expenditure figure fails to disclose the volum e of new lending and the new risks incurred. (F o r exam ple, see tables on p ages 26 and 30.) In the 1956 budget, as in the bu dget for 1955, the sum m ary tables show the expenditures of the public enterprises on both a gross an d a net basis. T h e difference reveals the m agnitu de of receipts from the public in the revolving funds. M ost of the 10.9 billion dollars of receipts of public enterprises in the fiscal year 1956 will be in enterprises which are p art of the D ep artm en t of A griculture, the Independent Offices of the G o v ernm ent, the Post Office D epartm ent, an d the H ousing and H om e Fin ance Agency. T h e price support program of the C om m odity C red it C orporation is the largest item in the D e partm ent of Agriculture. O v er 70 percent of the receipts of public enterprises in the Independent Offices is in the Fed eral interm ediate credit banks of the F arm C redit A dm in istration; other receipts of Independent Offices are m ainly in the ExportIm port Bank and the Tennessee V alley Authority. T h e estim ates of Post Office D ep artm en t receipts represent the sale of postage stam ps and services. T h e Public H ousing A dm inistration and the F e d eral N ational M ortgage A ssociation account for the largest p art of the public enterprise receipts in the H ousing and H om e F in ance Agency. Gross and Net Budget Expenditures, by Agency [IN M ILLIO NS] Fiscal year 19 5 6 , estimated Agency Applicable re Budget expend Gross expendi ceipts of public tures itures (net) enterprise funds L e a is la tiv e branch The $83 33 9 lu a ie ia rv .......................................................... ... E x e c u tiv e O f f i c e o f the P re s id e n t. • $83 33 9 Fun ds a p p ro p ria te d to the Presi d e n t: 4,700 656 M u t u a l security p ro g ra m ........................ In d e p e n d e n t offices: A t o m i c E n e rg y C o m m is s io n ............... E x p o rt-Im p o rt B a n k ...................................... Farm C re d it A d m in is tr a tio n ................. Tennessee V a l l e y A u t h o r i t y .............. V e te ra n s A d m in is t r a t io n ........................ G e n e r a l Services A d m i n i s t r a t i o n ... H o u s in g and Hom e D e p a rtm e n t o f C o m m e rc e ............................... of 4,700 195 2,000 335 1,985 250 4,705 672 969 425 1,950 248 97 22 3 2,000 -9 0 35 2 4,608 649 966 1,264 6,013 1,223 1,390 3,517 7 -1 2 6 2,496 1,216 ( ') Fin a n c e A g e n c y ........................................................................ D e p a rtm e n t o f A g r ic u ltu r e ........................... D e p a rtm e n t $460 D e fe n s e : 34,000 632 D e p a rtm e n t o f H e a l t h , E d u c a tio n , (l) 89 34,000 543 . 2,055 591 202 515 2,541 150 7,391 a n d W e lfa r e ........................................................... D & n a rtm fin t or lustice« • • • • • » » • * • • D e p a rtm e n t o f L a b o r ......................................... Post O f f i c e D e p a r tm e n t.................................. Fje n a rtm e n t or S ta ts ............................* . * . • Tre asury D e p a r tm e n t......................................... 2 29 1 2,517 164 2,053 561 202 515 24 150 7,227 District o f C o lu m b ia (F e d e ra l p a y m ent a n d lo a n s ).................................................. Reserves fo r p ro p o s e d 34 34 325 325 leg islatio n ana rontinoftncies« ••••••••••••• 73,332 1Less than 500,000 dollars. Note.—Detail may not add to totals because of rounding. 39 10,923 62,408 PART 3 • S u p p le m e n ta r y In fo r m a tio n Trust Funds— Receipts and Expenditures of individual wages subject to the tax was increased effective Jan u a ry 1, 1955. from 3,600 to 4,200 dol lars a year. In addition, coverage of the system was extended to an additional 10 m illion persons by am endm ents approved during the past year. T he initial effect of these changes will be an increased rate of accum ulation in the trust fund. E xpenditures from this fund consist of (1) m onthly benefits to retired workers or to surviving dependents of covered workers, and (2) costs of adm inistering the program . It is estim ated that adm inistrative costs will represent 2.3 percent of all expenditures from this fund during the fiscal year 1956. T h e railroad retirement fund and the Federal em ployees’ retirem ent funds operate generally in the sam e way as the old-age and survivors insur ance trust fund. T h e unem ploym ent insurance trust fund is fi nanced by payroll taxes which the States and the R ailro ad R etirem ent Board collect from employers and deposit in the F ederal T reasury. E xp en d i tures from the fund consist largely of w ithdraw als from the fund by the individual States to pay u n em ploym ent com pensation benefits to eligible workers. T h e veterans’ life insurance trust funds provide life insurance protection for veterans of W orld W ars I and II. R eceipts are mostly from prem ium s M ost of the financial transactions of the G overn m ent are directly reflected in budget receipts and expenditures. H ow ever, some significant activities are carried on through trust funds with the G ov ernm ent acting in the capacity of trustee. T he m ajo r program s conducted through trust funds are old-age and survivors insurance, unem ployment in surance, railroad retirem ent, Federal employees’ re tirem ent, and veterans’ life insurance. R eceipts of these trust funds come m ainly from payroll taxes paid by em ployers and employees or, in the case of veterans’ life insurance, from pre m ium s paid by those insured. Another m ajor source of trust fund receipts is interest received from investm ents in U n ited States Governm ent securi ties. T hese receipts are held in trust by the G ov ernm ent. T h e m oney m ay be spent only for the special purposes of the trust— prim arily the pay m ent, to those eligible, of the benefits for which the fund was established. T o ta l receipts of the trust funds will continue to be greater than their current expenditures in the fiscal year 1956. As in the past, most of this excess of receipts will represent accum ulation in the old-age and survivors insurance trust fund to m eet requirem ents in future years when a greater num ber o f eligible persons will be entitled to bene fits. M ost of the excess of trust fund income over current paym ents is invested in special issues of G overnm ent bonds. By the end of the fiscal year 1956, it is estim ated th at approxim ately 49 billion p aid by the persons insured and expenditures are prim arily paym ents to beneficiaries and paym ents of dividends. In the 1956 budget m essage, the President m ade dollars in U n ited States securities will be held by the G overnm ent trust funds. These investments earned 1,188 m illion dollars in interest for the trust funds d uring fiscal year 1954 and will earn an esti m ated 1,218 m illion dollars and 1,226 million dol two recom m endations with respect to the old-age and lars in fiscal years 1955 and 1956, respectively. T h e old-age an d survivors insurance trust fund insurance program . He recom covered, and (2) collection procedures for incom e taxes and old-age insurance taxes be coordinated is by far the largest, in term s of both receipts and expenditures. It is financed prim arily by a special payroll tax p aid by covered workers and their em ployers and by self-em ployed persons. T he am ount survivors m ended that (1) coverage be extended to m ilitary personnel and to F ederal civilian personnel not now to reduce the reporting burden on w age earners and em ployers and to lessen adm inistrative costs of the old-age and survivors insurance program . 40 Trust Funds r e c e ip t s a n d e x p e n d it u r e s $ BILLIONS FISCAL YEAR 19S6 ESTIMATED Old-Age and Survivors Insurance Unemployment Insurance 1.6 1.0 Federal Employees Retirement .7 Railroad Trust Funds Retirement Fiscal Year 1956 Est. 1955 Est. 1954 1953 1952 1951 1950 .7 Veterans Life Insurance All Other Trust Funds / .4 .6 41 $ Billions Total Receipts 11.3 9.8 9.2 8.9 8.8 7.8 6.7 Total Expenditures 8.8 8.4 7.2 5.3 5.3 3.7 6.9 PART 3 • S u p p le m e n ta r y In fo rm a tio n Receipts From and Payments to the Public [IN M ILLIO NS] Fiscal year 1956 estimated Description Budoet recsiots [naog 8 j ............ ..........................* * * .................................... Trust fund receiots [naae 4 0 )................. ................ * ............* • * ................... Intraaavernmental transactions............ ...................* ............ Seianioraae on silver* ••• ••• «• «• • • • »• • • • • • • • ........................... $60,000 11,283 — 2,455 — 35 Total Federal Government receiots from the Dublic................. 68,793 Budoet exoenditures fnaoe 1Oi. t c.............................* • • • • • «• • ............ Trust fund exoenditures inaae 40) ........................................................ Intraaovernmental transactions«............................... ..................... .............. Net accrued interest and other noncash transactions.............................. 62,408 8,845 — 2,455 — 563 Total Federal Government oavments to the oublie* • • ............. 68,235 or Federal Government receiots over oavments* »• . ................. 558 T o present in form ation on the flow of money betw een the public an d the Federal Governm ent as a whole, a statem ent o f “ F ederal Governm ent receipts from an d paym ents to the public” has been developed. By definition, the public includes individuals, trust funds, such as interest p aid by the T reasu ry on U nited States securities held by the trust funds, are elim inated. T h ey are not cash transactions between the G overnm ent and the public. C ertain other noncash transactions are also elim inated in the consolidation. F or exam ple, interest which banks, other private corporations and associations, accrues on savings bonds is counted as a budget expenditure at the time of accrual. But the inter an d unincorporated businesses. T h e Federal R e serve System , the U n ited States Postal Savings est is not p aid in cash until the bonds are redeem ed. System , S tate and local governm ents, foreign gov H ence, this consolidation elim inates the interest ernm ents, and in ternation al organizations are also defined as p art of the public. F ed eral G overn accruals, but includes the interest paid at the time of redem ption. m ent receipts and paym ents include budget trans certain F or the fiscal year 1956, it is estim ated th at the consolidated cash flow between the F ed eral G o v tran sactions of G overnm ent-sponsored enterprises. ernm ent and the public will show an excess of actions, trust fund transactions, and receipts over paym ents of 558 million dollars. T h e above table shows how the totals of receipts T h is com pares with an excess of paym ents over receipts of 232 m illion dollars in the fiscal year 1954 and from an d paym ents to the public are derived by consolidatin g bud get receipts and expenditures with trust fund transactions. In this consolidation, transactions between G overnm ent agencies and 2,377 m illion dollars now estim ated for the fiscal year 1955. 42 PART 3 • Budget Expenditures in d ic a t in g S u p p le m e n ta r y In fo rm a tio n c o n t r o l l a b il it y FISCAL YEAR 19S6 ESTIMATED $ BILLIONS Major National Security Charges Fixed by Law ( Interest, Veterans, Grants to States, etc. ) Other Expenditures I______ In the fiscal year 1956, expenditures for m ajor national security program s are estim ated at 40.5 billion dollars, alm ost two-thirds of the total of net budget expenditures. T hese program s are dis cussed on page 18 of this booklet. A bout one-fourth of total expenditures in 1956— 14.8 billion dollars— is estim ated for activities in which little or no adm inistrative discretion is per m itted through the annual budget process. T he level of these expenditures depends upon provi sions of the laws which authorized the program s, and on other factors not readily subject to execu tive control. F or exam ple, interest depends upon the size of the public debt and interest rates. E x penditures for veterans’ benefits depend upon the benefit rates and the num ber of eligible veteran applicants. E xpenditures for agricultural price supports are affected by such factors as the weather and the level of world prices. Expenditures for relatively uncontrollable program s in 1956 are esti m ated to be 498 million dollars less than in 1955. Increases are estim ated for Federal-aid highway grants., veterans’ benefits, paym ents of claim s, and resum ption of the G overnm ent’s contribution to the retirem ent fund for Federal civilian employees. T h e sum of these increases is sm aller than the de creases expected in expenditures for agricultural price supports and interest on the public debt. N E T B U D G E T E X P E N D IT U R E S [In billions] Fiscal years Total 1956 (est.)............... 1955 (est.)............... 1954......................... 1953......................... 1952......................... 1951.......................... 1950.......................... $62. 63. 67. 74. 65. 44. 39. 4 5 8 3 4 1 6 Major Charges national fixed by security law $40. 5 40. 6 46. 5 50. 3 43. 8 22. 3 13.0 $14. 8 15. 3 14. 3 14. 9 12. 3 12. 1 15.6 Other $7. 1 7. 6 7 .0 9. 1 9. 3 9. 7 11. 0 All other budget expenditures are estim ated at 7.1 billion dollars in 1956, 412 m illion dollars below 1955. A lthough these expenditures are only 11 percent of the total, they include the great m ajority of the individual ap p rop riatio n item s in the budget. Som e activities in this category are closely related to national security, such as our international affairs and finance program s, the Selective Service System , civil defense, the m erchant m arine, and the p ro m otion of defense production. M ost regular op er ations of the G overnm ent are also included, such as law enforcem ent, tax collection, regulatory ac tivities, postal service, and direct civil public works. 43 PART 3 • S u p p le m e n ta r y In fo rm a tio n Federal Public W orks T h e various program s of the Federal Govern m ent require m any different kinds of works and structures. T hese range from sm all buildings to large river basin developm ents and military installa tions. Som e of these facilities are built directly by the Fed eral G overnm ent as civil or military pub lic works. In other cases, the Governm ent p ar ticipates with States and local governments by m ak ing loans or gran ts to aid in the construction of public works in which there is a national interest. Fed eral construction activities are an im portant p art of the total construction activities of the N a tion. D irect Fed eral public works currently am ount to about 9 percent of total construction, an d federally aided State and local construction represents another 4 percent. F ederal expenditures for public works are p art of the expenditures already discussed in p art I I of this booklet, where 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 total Federal public works activities. F ederal public works expenditures are estim ated to total 4.2 billion dollars in the fiscal year 1956, about the sam e level as in 1955, bu t lower than expenditures in 1954. T h e several program s th at m ake up this total vary considerably during these years. Expenditures for national security public works in 1956 will rem ain at about the sam e level as in 1955, but well below the 1954 level. W ithin B U D G E T E X P E N D IT U R E S FO R P U B L IC W O RK S [Fiscal years. In billions] 1950 actual 1951 actual 1952 actual Civil public works: Direct Federal projects................................................. Grants for State and local projects............................ Loans for State and local projects (net)................... $1.3 0. 5 0) $1. 4 0. 5 0. 1 $1. 4 0. 6 0. 2 $1. 4 0. 7 0) $1. 3 0. 7 -0. 4 $1.2 0. 8 -0 . 1 $ 1 .0 0. 9 0) Subtotal, civil public works..................................... 1. 8 2.0 1 2. 1 2. 2 1. 6 1. 9 1. 9 Public works for national security: Military 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. 1 1. 4 0. 8 1. 8 0. 5 Subtotal, national security....................................... 0. 4 0. 9 2.9 3. 0 1 2. 8 2. 3 2. 3 Total, Federal public works.................................... 2. 2 2. 9 5 .0 5. 2 : 4 .4 4. 2 I 1 4. 2 Program 1 Less than 50 million dollars. may not add to totals because of rounding. N o t e . — Detail 44 1 1953 1954 actual ; actual 1956 1955 estimated estimated Federal Public W orks BUDGET EXPENDITURES IN 1956 $ MILLIONS 1,782 Military Public Works 51 1 Atomic Energy Plants and Facilities 762 Highways and Roads 700 Water Resources and Related Developments 235 Hospitals and Schools 192 , Buildings, Research and Other Facilities this category, m ilitary public works expenditures will increase from 1.4 billion dollars in 1955 to 1.8 billion dollars in 1956, reflecting progress on con struction of bases, airfields, and other m ilitary in stallations. A substantial portion of the military public works projects proposed to be undertaken in 1956 relate to the continental defense program . T h e increase in m ilitary public works is almost equaled, however, by a reduction in expenditures for atom ic energy facilities as the large production plants started in prior years ap p roach com pletion. Civil public works expenditures also show diver and of cooperating with non-Federal interests in a partnership capacity where national interests are involved. E xpenditures for grant-in-aid construc tion program s will increase in 1956, reflecting the F ederal share of the cost of the join t F ed eral-S tate highw ay program . Well over one-third of the civil public works expenditures in the fiscal year 1956 will be for the Federal-aid highw ay p rogram and other road construction. A n additional 700 m illion dollars is estim ated for w ater resources and related develop ments, including flood control, irrigation, n av iga tion, power, and m ultiple-purpose projects. T h e gent trends. E xpenditures for direct F ed eral pub lic works will continue to decline in the fiscal year 1956 in line with the G overnm ent’s policy of rely ing on local public and private interests to assume a greater responsibility for needed public works, rem aining civil public works expenditures will be for other n atural resources program s, and for schools, hospitals, facilities. 45 public buildings, and other PART 3 • S u p p le m e n ta r y In fo rm a tio n Research and Development R esearch and developm ent activities are sup ported or conducted by m any Federal agencies, as a m eans of developing new knowledge or of applying existing knowledge to new uses. Federal expenditures for research and developm ent are part of the expenditures already discussed in part I I of this booklet, where they are included in the m ajo r expenditure program s to which they are related. H ere they are grouped together to show the m agn itude and com position of F ederal re search and developm ent activities. N et bud get expenditures specifically for research and developm ent in the fiscal year 1956 are esti m ated at 2.2 billion dollars. O f this total 2 billion dollars is estim ated for the conduct of research and developm ent and 251 m illion dollars is estimated for laboratories, buildings and other facilities, and for m ajo r equipm ent used in research and develop m ent. T h is does not include substantial costs, p articu larly in the D ep artm en t of Defense, which are associated with research and developm ent but cannot be specifically identified; for exam ple, pay an d allow ances of m ilitary personnel engaged in research and developm ent, or the procurem ent of test m odels of new w eapons and equipm ent. It is estim ated that expenditures of the Federal G overnm ent for research and developm ent now represent approxim ately one-half of the total ex p enditures of the N ation fo r this purpose. Outside the G overnm ent, private industry spends the great est am ount for research, with considerably lesser am ounts provided by educational institutions, re search institutes, and S tate and local governments. C oordination of basic research within the Gov ernm ent and support of general-purpose basic re search are functions of the N ational Science Foun dation. T h e Foun d ation is also responsible for m aking studies of the scientific activities of the N ation. R eports on these studies will provide a basis for recom m ending policies to help guide the Federal G overnm ent in the conduct and support of scientific research. In the fiscal year 1956, research and developm ent expenditures of the D epartm ent of D efense will account for 68 percent of total Federal expendi tures for research and developm ent. T h ose of the A tom ic Energy Com m ission will account for an additional 16 percent. T h u s, 84 percent of the total will be spent on our m ajo r national security program s. T h e am ount spent for research and developm ent in these program s has m ore than doubled since 1950. T h e objective of the research and developm ent program s of the D epartm ent of D efense is to m ake significant im provem ents in the w eapons, equ ip m ent, and techniques of the A rm ed Forces. A bout 60 percent of the research expenditures of the D e partm ent of D efense is for work perform ed under contracts with industry and nonprofit institutions. T h e rem ainder is for work in D epartm ent of D e fense facilities and for the adm inistration of the entire program . A lthough the research and developm ent p ro gram s of the A tom ic Energy Com m ission largely serve m ilitary and other national security purposes, a grow ing portion of the C om m ission’s research program is devoted to developing peaceful a p p li cations of nuclear energy. T h e budget recom m endations for 1956 include funds to begin con struction of a new m edical research center con taining a nuclear reactor designed specifically for m edical research and therapy. T h e D epartm ent of A griculture’s research p ro gram is concerned with the production, storage, Research and Development by a g en cy $ MILLIONS BUDGET EXPENDITURES IN 1956 Department of Defense (Military Functions) Atomic Energy Commission Department of Agriculture National Advisory Committee for Aeronautics Department of Health, Education, and Welfare Other Agencies R e s e a rc h a n d D e v e lo p m e n t —Expenditures i _______ Fiscal Year distribution, and utilization of agricultural p rod ucts, and with hum an nutrition and hom e eco nomics. M uch of the work is done in State agri cultural experim ent stations. T h e N ational Advisory Com m ittee for A ero nautics conducts research for the im provem ent of military aircraft an d guided missiles. T his research also contributes to the advancem ent of com m er cial aviation. In the D ep artm en t of H ealth, Education, and W elfare, the largest research expenditures are m ade by the Public H ealth Service, which conducts or supports research in the diagnosis, cause, and treat m ent of various diseases. In 1956, funds will be pro M ajor National Security Other 1 9 5 6 Est. 2 ,2 1 8 1 ,8 6 3 3 55 1 9 5 5 Est. 2 ,0 7 1 1 ,7 4 6 3 25 291 1954 2 ,0 9 5 1 ,8 0 4 1953 2 ,1 0 8 1 ,9 0 8 200 1952 1 ,8 3 9 1 ,6 3 2 207 1951 1 ,3 4 2 1 ,1 2 5 217 1950 1 ,1 4 3 926 217 penditures of the Public H ealth Service are for re search grants to m edical schools, to other institu tions, and to individuals. M any other agencies of the F ed eral G overnm ent also m ake expenditures for research and develop ment. O f the 125 m illion dollars estim ated for these agencies in 1956, over on e-h alf will be spent by the D epartm ents of C om m erce and Interior. vided for increased research, especially on m ental health, on utilization of professional personnel, and on w ater pollution. A bout 60 percent of the ex- Total $ MtHtons 47 PART 3 • S u p p le m e n ta r y In fo r m a tio n Federal A id to State and Local Governments F ed eral aid to S tate and loca] governments is esti m ated at 3.6 billion dollars in the fiscal year 1956, about 6 percent of total Federal expenditures. T h is aid consists largely of grants-in-aid but includes also shared revenues and loans. In recent years. F e d eral aid has equaled approxim ately 8 to 10 percent of S tate and local governm ent revenues from all other sources. T h e F ed eral-aid expenditures are included in budget categories discussed in part II of this booklet. T hey are brought together in this section in order to provide a com prehensive statem ent of all F e d eral aid to State and local governments. E xpen d i tures discussed in this section include only payments to S tate and local governm ents (including T erri tories an d the D istrict of C o lu m b ia ). They do not include the expenditures by the Federal Govern ment for adm inistering these program s. Thus, some expenditure figures shown here differ from those presented in p art I I for the sam e program s. As in previous years, the largest grants in the fiscal year 1956 will be for public assistance. These grants help the States give aid to people in need, mainly aged persons and dependent children. T h e second largest gran t program is for highway construction. E stim ated expenditures of 669 m il lion dollars in 1956 represent a substantial increase over the current fiscal year as a result of the already enlarged program provided by the F ederal Aid H ighw ay Act of 1954. F ed eral grants of 245 million dollars for the adm inistration of unem ploym ent com pensation and em ploym ent services cover only the adm inistrative costs in the States. Benefit paym ents for unem ploym ent insurance are separately financed from S tate collected payroll taxes, except for benefits p aid under F ed eral laws to veterans and unem ployed Federal workers, which are F ederal expenditures. Fed eral support for school lunches is expected to be larger in 1956 than ever before. T h e over all p rogram consists of a cash grant for the national school-lunch program , contributions of surplus agricultural com m odities, and a new program to encourage increased milk consum ption by school children. F ederal grants of 167 million dollars for hospital construction and health services will aid in the construction of public and nonprofit private hos pitals and certain other m edical facilities, as well as in the control, of specified diseases, the prom o tion of general public health services, and research. F E D E R A L AID TO S T A T E AND L O C A L G O V E R N M E N T S [In millions] Gross expenditures Fiscal year 1950........................................................ 1951........................................................ 1952........................................................ 1953........................................................ 1954........................................................ 1955 (estim ated).................................. 1956 (estim ated).................................. N o t e .— Total Grants-in-aid Shared revenues (1) (2) (3) $2, 279 2, 520 3, 096 3,818 3, 683 3, 848 4, 103 $ 2 , 226 2, 256 2,393 2, 781 2, 986 3, 247 3, 435 C o l u m n ( 6 ) e q u a l s c o l u m n ( 1 ) le s s c o l u m n ( 5 ) . 48 $27 31 38 50 66 79 76 Loans and repayable advances (4) $26 233 665 987 631 522 592 Collections on Budget loans and expenditures repayable (net) advances (5) $10 86 492 961 1,026 597 533 (6) $2,269 2, 434 2, 604 2, 857 2, 657 3,251 3, 570 Federal A id to State and Local Governments BUDGET EXPENDITURES IN 1956 Public Assistance ( Payments | f |^ $ MILLIONS for A i d to the N ee dy ) ^ 669 Highway Construction Administration, Unemployment Compensation and Employment Service 220 School Lunch and School Milk Programs * hum ! 167 Hospital Construction and Health IbbS160 School Aid in Federally Affected Areas 147 Low-rentJHousing and Urban Renewal Grants j 542 Expenditures for school lunch include donation of commodities Other Federal Aid _J____________________________________ shared revenues. G ross expenditures for loans are estim ated at 592 m illion dollars, and collections at 533 m illion dollars, alm ost entirely in the low-rent public housing and the slum clearance and urban renewal program s. R evenues shared with the States or their subdivisions are derived m ainly from the sale of specified F ed eral properties or products or services; paym ents to T erritories usually consist of certain Federal tax collections w ithin or relating to the individual Territory. T h e tem porary C om m ission on Intergovern m ental R elations, established in 1953, is at present com pleting its studies of the division of responsi bilities between the F ed eral G overnm ent and the State and local governm ents. It is scheduled to report to the President and the C ongress during 1955. Aid to school districts in areas especially affected by Federal G overnm ent activities will help during 1955 and 1956 to pay for building alm ost 4,000 new classroom s to accom m odate about 115,000 pupils, and for operating the schools in some 2,000 districts with enrollm ents totaling 5.5 million. A nnual contributions will be p aid to local hous ing authorities to help finance the operation of 354,000 public housing units occupied by lowincome fam ilies. C ap ital grants will be disbursed on an estim ated 98 slum clearance and urban renewal projects undertaken by local public agencies to rebuild blighted areas in our m ajo r cities. O ther Fed eral aid in the fiscal year 1956 will include a wide variety of grant-in-aid program s, as well as 59 m illion dollars of estim ated net ex penditures for loans and 76 m illion dollars of 49 PART 3 • S u p p le m e n ta r y In fo rm a tio n Federal Credit Programs In carrying out several m ajor program s author ized by the Congress, Governm ent agencies m ake direct loans, and guarantee or insure loans m ade by private banks and other credit institutions. F o r exam ple, as p art of the Federal program s for im provem ent of housing and encouragem ent of hom e ownership, Federal insurance or guaranties now cover abou t 40 percent of all outstanding h om e-m ortgage loans. Sim ilarly, credit assistance is an im p ortan t p art of the Federal program of encouraging efficient family-size farm units. F ed eral insurance and guaranties 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. In the fiscal year 1956, disbursem ents on new loans are expected to exceed collections on old loans by about 110 m illion dollars for m ajor credit program s. T h e volum e of “ new com m itm ents” — pledges by G overnm ent agencies to m ake direct loans or to gu aran tee or insure private loans— indicates the level and trend of Fed eral credit activities. T o tal new com m itm ents of 20.5 billion dollars estim ated for m ajo r credit program s in the fiscal year 1956 will be the highest in history. T hus, through credit assistance, the Fed eral Governm ent helps to stim ulate an d m ain tain a high level of private invest m ent w ithout a m ajo r im pact on the current F ed eral budget. C om m itm ents for Federal guaranties and insur ance of private loans account for 80 percent of total new com m itm ents in 1956, and for all of the increase in com m itm ents from 1954 to 1956. F e d eral guaranties an d insurance help borrowers obtain needed funds from private lenders at reasonable rates of interest. T h u s, they stim ulate private business activity while keeping the Governm ent’s role at a m inim um . T h e predom inance of this type of com m itm ent, as distinct from com m itm ents for direct loans, arises from the general policy of (1) m aking insured and guaranteed loans m ore attractive to private lenders and (2) extending direct loans only where private credit, even with Governm ent gu aranty or insurance, is not available on reasonable terms. Five m ajor housing program s supervised by the H ousing and H om e Finance Agency account for 10.1 billion dollars, or about one-half of the esti m ated new com m itm ents, in 1956. (1) T h e F e d 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 h e F ederal N ational M o rtgage Association provides a secondary m arket for residential m ortgages insured by the F ederal H ousing A dm inistration or g u ar anteed by the V eterans A dm inistration. (3) T h e Public H ousing A dm inistration m akes 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 m akes 50 Federal Credit Programs [IN BILLIONS] New commitments during fiscal year Outstandin S and committed at end cif fiscal year Fiscal year 1950................. 1951................. 1952................. 1953................. 1954................. 1955 (est)........ 1956 (est.)........ Loans Guaranties Total Loans Guaranties Total $5.5 4.9 5.2 5.3 4.1 4.0 4.1 $9.9 9.2 9.7 10.6 11.8 14.9 16.4 $15.4 14.1 14.9 15.9 15.9 18.9 20.5 $15.7 15.7 17.4 19.1 17.8 17.8 17.9 $20.1 23.7 27.2 30.9 35.5 39.9 45.6 $35.8 39.4 44.6 50.0 53.3 57.7 63.5 direct loans and guarantees private loans to com m unities for the elim ination of slums and the re developm ent or rehabilitation of blighted areas. (5) T h e H ousin g A dm in istrator m akes direct loans to provide housing for students and faculty m em bers at colleges and universities. New com m itm ents for veterans’ loans g u ara n teed or m ade directly by the V eterans A dm in istra tion are expected to be 4.9 billion dollars in the fiscal year 1956. Practically all of these loans will be used to purch ase or im prove houses. C redit aids fo r agricultural program s, supervised by the D ep artm en t of A griculture and the Farm C redit A dm inistration, total 4.6 billion dollars, or about 22 percent of new com m itm ents in 1956. M a jo r farm credit program s include ( 1 ) price support loans and guaranties by the C om m odity C redit C o rp o ratio n ; (2) loans by the Fed eral in term ediate credit banks to help finance farm p ro duction; (3) electrification an d telephone loans by the R u ral Electrification A dm in istration; and (4) loans and gu aran ties by the F arm ers’ H om e Adm inistration for farm operation an d for farm ownership and im provem ent. O ther m ajo r active loan program s of the F ed eral Governm ent include loans an d guaranties under the Defense Production A ct to exp an d defense p ro duction, loans by the Sm all Business A dm in istra tion to meet the special needs of sm all businesses, and foreign loans by the E x p o rt-Im p o rt Bank and the Foreign O perations A dm inistration. T h e loan program s of the R econstruction F in ance C o rp o ra tion are in liquidation. T h e T reasu ry loan of 3.75 billion dollars m ade to the U n ited K in gd om under the agreem ent of D ecem ber 6, 1945, is being re paid on schedule over a 50-year period. 51 B U D G E T R E C E IP T S AND E X P E N D IT U R E S AND P U B L IC D E B T [Fiscal years. Fiscal year 1915. 1916. 1917. 1918. 1919. 1920. 1921. 1922. 1923. 1924. 1925. 1926 1927. 1928. 1929. 1930 1931. 1932 1933 1934. 1935 Total budget receipts Total budget expendi tures Surplus or deficit Public debt at end of year $746 713 1,954 12,662 18,448 6,357 5,058 3,285 3,137 2,890 2,881 -$63 +48 -853 -9,032 -13,363 +291 +509 +736 +713 +963 +717 +865 +1,155 +939 +734 +738 -462 - 2 , 735 - 2 , 602 -3 , 630 - 2 , 791 $1, 762 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 3, 730 2,888 2, 837 2,933 3,127 3,320 3, 578 4, 659 4,623 6, 694 6, 521 In millions] Total | Total budget ! budget receipts 1expendi j tures Fiscal year 1936________________________ 1937________________________ 1938________________________ 1939________________________ 1940________________________ 1941________________________ 1942________________________ 1943________________________ 1944________________________ 1945_______________________ 1946________________________ 1947________________________ 1948________________________ 1949________________________ 1950________________________ 1951________________________ 1952________________________ 1953________________________ 1954________________________ 1955 (est.)__________________ 1956 (est.)__________________ 1, 2, 12, 25, 24, 23, 22, 22 , 21, 20, 19, 18, 17, 16, 16, 16, 19, 22, 27, 28, $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, 825 64,655 i 59, 000 i 60, 000 $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, 069 39,507 39,606 44,058 65,410 74, 274 67,772 63,504 62, 408 Public debt at end of year Surplus or deficit —$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 , 449 -3,117 -4 , 504 -2,408 : j $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, 071 271,260 274, 300 276,000 1 Reflects tax proposals. B U D G E T E X P E N D IT U R E S , BY FU N C T IO N [Fiscal years. In millions] Function 1947 1948 1949 1950 1951 1952 1953 1954 M ajor national security__________________ International affairs and finance___ Veterans services and b e n e f i t s ______ _ Welfare, health, and education______ Agriculture and agricultural resources___N atural resources____ ____________ . . . . Commerce and manpower_________ General governm ent__________ _____ - Interest_________________ _____ ______ Reserves for proposed legislation and con tingencies_____________ _ ________ -- $14,373 6,531 7,381 1,071 1,243 449 1,314 1,353 5, 012 $11, 771 4, 566 6, 654 1,148 575 631 1,594 1,270 5, 248 $12, 907 6, 053 6, 726 1,367 2, 512 902 2,252 1,070 5, 445 $13,008 4, 674 6, 647 1,714 2, 783 1,058 2,401 1,173 5,817 $22,306 3, 736 5,342 1,836 650 1,140 2, 729 1,309 5, 714 $43, 848 2,826 4,863 1,927 1,045 1,258 3,127 1,437 5,934 $50, 274 2,216 4,298 2,186 2,936 1,358 2,983 1,439 6,583 $46, 522 1,720 4,256 2, 248 2, 557 1,213 I, 577 1,209 6, 470 T o tal_____________________________ Adjustm ent to daily Treasury statem ent. _. 38, 728 +305 33,457 -388 39, 235 +272 39, 276 +330 44, 763 -705 66, 265 -855 74, 274 Total budget expenditures__________ 39,033 33, 069 39, 507 39, 606 44, 058 65, 410 74, 274 1955 1956 estim ated estimated $40, 644 1, 420 4,431 2,316 3,130 1,133 2, 550 1,222 6, 558 $40, 458 1,332 4, 640 2,312 2,2(9 953 2,186 1,566 6,378 100 325 67,772 63,504 62, 408 67, 772 63,504 62, 408 N o te .—D etail m ay not add to totals because of rounding. 52 U. S. GOVERNMENT PRI NTI NG OF F I C E : 1 9 5 5 G lossary of Selected Budget Terms New obligational authority.— T h e total am ount of bu dget authorizations to incur obligations gran ted by the Congress to the F ed eral agencies fo r a given year, usually in the form of appropriations. T h is is the in itial action which m ust precede all budget expenditures. New obligation al authority m ay include a few reauthorizations, by m eans of which unused portions of prior year authorizations are continued after they would otherw ise expire. Obligations.— A ctions taken by the agencies within their av ailab le o b liga tional authority to buy goods and procure services, requiring in due tim e the paym ent o f m oney (ex p en d itu re s). O bligations m ay be in the form o f orders p laced , 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, gran ted either in the current year or in previ ous years. T h e usual procedure is that obligations are incurred u n d er new obligational authority. O bligations are then liquidated by expenditures which som etim es take place within a few weeks and som etim es occu r as m uch as 3 or even m ore years after an obligation has been incurred. E x cludes spending of funds held in trust. Budget receipts.— F ed eral income consisting of personal an d corporate taxes, excises, custom s, and other revenues. Excludes funds received in trust. Budget deficit.— T h e excess of net budget expenditures over bu d get re ceipts in any fiscal year. Budget surplus.— T h e excess of budget receipts over net bu d get exp en d i tures. Unexpended balances of prior year appropriations.— T h e unexpended portions o f prior year appropriations, largely obligated, w hich are brough forw ard an d are currently available for expenditure. T h ey are c o n r m ents for which actual funds were not provided in p rior years and m ust be m et as expenditures in the current or future years. U N IT E D S T A T E S G O V E R N M E N T For sale by the Superintendent of Documents , Price 35 cents E X E C U T I V E B R A N C H T H E G O V E R N M E N T THE PRESID EN T OF THE UNITED STATES ■ S /^ ceI of THE WHITE HOUSE OFFICE [DEPT ° f HEALTH, education, AND welfare r*sf VETERANS ADMINIS TRATION *+*Ki n+"oNal M£d'a r/ON 6° a r d r a il r o a d r e tir em en t BOARD ATOMIC ENERGY COMMISSION fORt*6*4 V \ claims StTTLtMtHl COMMISSION ¡TEM PORARY AGENCIES September 1, 1954 Glossary of Selected Bucket Terms New obligational authority.— The total amount 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 which must precede all budget expenditures. New obligational authority may include 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 within their available obliga tional authority to buy goods and procure services, requiring in due time the payment of money (expenditures). Obligations may be in the form of orders placed, contracts awarded, personal and contractual services ordered, and similar transactions. Budget expenditures.— With a few exceptions, they are checks issued under budget authorizations, granted either in the current year or in previ ous years. The usual procedure is that obligations are incurred under new obligational authority. Obligations are then liquidated by expenditures which sometimes take place within a few weeks and sometimes occur as much as 3 or even more years after an obligation has been incurred. Ex cludes 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.— The excess of net budget expenditures over budget re ceipts in any fiscal year. Budget surplus.— The excess of budget receipts over net budget expendi tures. U nexpended balances o f prior year appropriations.— The unexpended portions of prior year appropriations, largely obligated, which are brought forward and are currently available for expenditure. They are commit ments for which actual funds were not provided in prior years and which must be met as expenditures in the current or future years. U N IT E D ST A T E S G O V E R N M E N T P R IN T IN G O F F IC E , W A SH IN G TO N : 1955 For sale by the Superintendent of Documents, U . S. Government Printing Office, Washington 25, D. C., Price 35 cents